Bits Bucket For November 1, 2008
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My coffee of choice = Don Francisco French Roast.
It’s usually $4.99/can, often less
P’Aquino Caffe Espresso by Trader Joe’s. 16oz = $6.99.
At two shots a day, a can will last 2-3 weeks.
Take that, Starbucks. Tastes better, too.
Almost anything tastes better than Starbucks. OK, maybe not the Food 4 Less house brand. But it’s close.
SBUX is a perverse triumph of American marketing skill–the first to ask consumers to pay $4.50 for a sweetened, non-alcoholic, coffee-flavored 12 oz drink. Is this a great country, or what?
That was just the flip side of the HELOC.
SBUX is in a lot of pain at the current moment.
This is purely opinion, and I have to disagree with you. I drink decaf, and I buy Starbucks whole bean espresso roast because it’s my favorite in terms of flavor. I’ve tried Tully’s, Peet’s, you name it, and I like Starbucks. People love to rail on Starbucks, but their products aren’t all bad. That said, I don’t like the expensive coffee store model for a depression scenario.
My coffee of choise is grown down in my yard = free
Of course you need to hand pick the beans, squeese out the cherries, dry the green beans in the sun for a week or two then de husk them and roast them as dark as I want.
But it is worth the work.
How far south do you live (crash and burn) to get the temps and sun to grow your own coffee?
Almost as far south as you can go and still be in the U.S.A. Hawaii is beautiful this time of year.
October 25, 2008 at 22:56:47
The not-so-invisible hand: How the plunge protection team killed the free market
by Ellen Brown
“Today the Muppets on CNBC were remarking how well our market acted”
That is priceless. Has there ever been a more wretched hive of scum and villainy than what we see on CNBC? Erin Burnett, Steve Liesman, Carl Quintanilla, Larry Kudlow, James Cramer, and on and on. The whole network should fall under the RICO statutes.
“Has there ever been a more wretched hive of scum and villainy than what we see on CNBC?”
Oh yes, but I can’t decide if that would be the Senate or the the House.
Fleas can be taught nearly anything that a Congressman can.
–Mark Twain–
LOL
Love the Stars Wars analogy, CB.
Spot on NYCB. These buckets of puke are no less than economic terrorists.
Erin should get a boob job.
What do you call Jim Cramer?
I know she’s a money grubber, and fake as a three dollar bill, but I love Erin Burnett.
Burnett is repulsive. When the economic terrorists need a yes(wo)man, they wheel out Dingbat Burnett.
You must be attracted to skanks.
LOL, no, I’m not. And, I’d hardly call her a skank. She doesn’t appear filthy, and I haven’t heard anything about her being overly promiscuous. Perhaps you have a different definition of skank?
I kind of like Eric Burnett as well. She is the Queen Bee at CNBC now and she deserves the title. I think she straightened out Cramer.
Opps, I meant Erin.
I’ve been watching too much Southpark.
Dana Perino is pleasing to the eye, but harsh on the ear.
Perino either has to have an empty skull or no shame. Which is it?
Man, I feel like I’ve missed out on some circus stuff not having ever really watched CNBC.
Does anyone think an Obama win might open the door to a MSM expose of the Working Group? One could hope so, as American capitalism’s future survival is at stake.
I don’t think the PPT will be exposed. I think an Obama win will result in millions of disillusioned voters that have pinned so much hope on him saving them from everything. I am not bashing Obama. I want to see the Republicans humbled in this election and I come from a family of lifelong Republicans. I just think that people are setting themselves up for a fall, like they always do. The powers behind the scenes will remain the powers behind the scenes.
Be careful what you wish for.
Too much “hope” on the Messiah. Sure to be shattered.
Wish, sheeple, wish, wish all you want.
The ability to deal with reality is very rare. Most people on this board have as much as can be expected. I am always careful what I wish for. My only wish during this election is that the presidential election provides us with a clear cut winner. I don’t want a repeat of 2000 and the B.S. that followed that. I don’t want to hear the conspiracy theories, after the fact.
I don’t want a repeat of 2000 and the B.S. that followed that.
I had two desires for the election when it all started:
1) That Huckabee would win. Not because of his politics or anything like that, but because I was in Little Rock when Clinton won the first time, and it was the most awesome party ever, except I had to go home before it was all over b/c of curfew and I was too young to drink.
So I wanted to see that again except with me now old enough to rent a room downtown and get obnoxiously drunk in the middle of it all.
2) That we have a repeat of the 2000 drama. I loved that stuff. It was fun watching people get so worked up over it.
One of my most vivid memories, was watching that bald-headed guy from southern Louisiana who works for CNN and is a Democratic party strategist (I don’t remember his name right now) and his wife who was a big time Republican argue on camera about the election. I mean, they (especialy the cajun) were really, really worked up. It was reality-tv gold!
James Carville?
Yeah, that guy.
Man…he nearly blew his top. Those coonasses are excitable anyway, but that really put him over the edge.
Right on, NYC Boy.
I think the political history of the past 30 years has been a massive reaction to the Dems’ overreaching during the Great Society era, with all of its concomitant social and cultural excesses. The Dems became the party of very narrowly defined, angry and self-righteous identity groups: “If you disagree with us, you must be a racist/sexist/misogynist/ageist/fascist/warmonger”.
The Repubs have overreached, and they will be punished badly next week. As they should.
But the Dems’ temptation is going to be to interpret the electoral bloodbath next week as an invitation to a new era of social engineering and government controls. And when–not if–exhorting crowds to “be the change we’ve been waiting for” does not, surprisingly, turn out to be the answer to our country’s infatuation with debt and living beyond its means, there’s going to be a lot of disappointment in the Dems. Barry O just might find himself as reviled as the current Oval Office occupant.
Its easy to see given this countries enormous problems how it could turn out badly for Barrack….On the other hand, if he succeeds if only moderately over the next two years the 2010 mid-term will deal the final and decisive blow to the current group of reps running the show….
I want to see the Republicans humbled ??
I want to see them crushed !!! And this comes from someone who was a registered republican until after the 2000 election..Now a Independent…
“registered republican until after the 2000 election..Now a Independent…”
Wolf in sheep’s clothing.
I agree. Crush the Republicans and send the neocons scattering back under the stove and the dishwasher like a bunch of cockroaches when the lights come back on.
These guys co-opted the Republican party from people like my father, and me. Yes, I have voted Democratic (and plan to again on Tuesday) just to spite the sleazy bastards currently running the elephant party…
A most disturbing thought:
The most successful capitalists in a globalized economy might be those who can profit wildly through bringing down entire countries or perhaps the entire global financial system, then position themselves to use public monies to rebuild it, dipping heavily into the pigman trough on the way down and again on the way back up.
That would be disaster capitalism at its finest, no?
I’ll just argue that the countries generally bring it upon themselves with extraordinarily bad policies.
Shouldn’t get too upset when someone bets against them and wins.
However, there are other cases where the trampeding herd leaves carnage in its wake for no particular good reason.
Impossible to make generalizations. Need a case-by-case on this one.
there are other cases where the trampeding herd leaves carnage in its wake for no particular good reason You left out the case where the herd stampedes itself over the edge of a cliff & all are killed in the fall. I guess carrion scavengers make out OK in that scenario.
Sorry, that one too. Wasn’t aiming to be comprehensive but it seems odd that I missed that one.
“However, there are other cases where the trampeding herd leaves carnage in its wake for no particular good reason.”
Her entire appearance suggested some symbology out of the old Dyonsic Times, honey in sunlight and bursting grapes, the writhen bleeding of the crushed fecundated vine beneath the hard rapacious trampling goat-hoof.
–William Faulkner–
Ever bet the “don’t come” line in Vegas?
We’ve already been there and done that several times, on a smaller scale (save possibly for the Great Depression). For all intents and purposes, each recession and depression is a bringing down and then rebuilding of our economy, to a certain extent.
You’re read “The Creature from Jekyll Island” haven’t you? If not, you ought to.
The key is to not kill the golden goose - which is why I don’t think this downturn will result in a true armageddon-style scenario. That being said, we may have a case of The Sorcerer’s Apprentice, where things have gotten a little more out of hand than intended.
“That being said, we may have a case of The Sorcerer’s Apprentice, where things have gotten a little more out of hand than intended.”
There is a metaphor a viola player can appreciate.
PB, you have been a gold bear of sorts. Do you believe her argument that the sudden decline in the price of gold contracts must have been PPT? Not possibly a confluence of hedge fund managers’ need for USD to pay off disgruntled clients? Why isn’t PPT sustaining the price of oil? Or why didn’t they bring it down before? I can’t buy conspiracy theories unless the likely motivations are well explained.
I am not a gold bear, but rather a gold religion doubter. I would consider buying gold if I did not see it as a losing gamble, as evidenced by the recent 25 percent drop in price off peak. Without any evidence to back the PPT story, I have no reason to buy into it. It seems just as likely that many individuals facing financial hardship are liquidating their gold hoard to buy essentials, even as others are stashing physical gold under their mattresses. I once was in a similar situation, liquidating physical gold to pay for basic essentials. As I recall, I first needed to trade away my physical gold for green rectangles before I could purchase food.
Those that hoard the precious are by definition savers, and the precious few of us that own the precious outright have no need to sell, but the cretins that own imaginary metal are a whole different story…
Once the weak hands are blown out is when the fireworks show ignites.
“It’s at the borders of pain and suffering that the men are separated from the boys.”
Emil Zatopek
http://www.youtube.com/watch?v=3Irnx6Upmkg
gold religion doubter = reasonable observer
Gold is not a religion; it is more like the statue of the saint in the niche in the church, or the image of Mary. It is not to be prayed to for everyday salvation but only besought in times of such peril that only miracles will save the afflicted. You dont pray to St. Christopher for safe travel when you hop up to the 7 - 11 but rather on that mid ocean flight when two engines are in flames and the oxygen masks drop down. We’re a long way from that economically where gold will serve its supplicants well.
“…it is more like the statue of the saint in the niche in the church, or the image of Mary.”
I was thinking it was more like the buried statues of St Joseph which have been an occasional blog topic.
And yet daily they pray.
They pray that the Hounds from Hell be released and society devolves down to Mad Max and gold and barter.
The psychology is endlessly fascinating to me.
I don’t get either side of this gold debate, but I love reading it. The name calling is fun. I don’t worship the golden calf. I also don’t completely poo-poo those that worship the golden calf. In the past two months we have seen many instances where citizens of certain countries would now be much richer if they had gold and silver, instead of their local currencies. The list includes:
Iceland
Russia
Argentina
Brazil
Korea
etc., etc.
I never scoff at cancer, just because it hasn’t happened to me, yet.
“The psychology is endlessly fascinating to me.”
Same here! I could give a rat’s arse whether gold prices go up, down or sideways, but I sure enjoy the steady stream of rationalizations which sound oh-so similar to ‘real estate always goes up, in the long run.’
Lol! Me too.
I do own the metal, but not hoards of it. However, many more ounces than 99 percent of the households in this country, certainly. I don’t know if it really is rational to own gold. It doesn’t seem rational not to own some, though, in times like these. Other than also being aware that French households that had some gold louis and the rooster ( as I recall ) secreted away survived WWII/Nazi occupation times far more successfully than those that did not. They probably had the gold coins for many, many years prior to WWII, stored away against “what if” times. I know that their psyche had been shaped by a century of rise and fall of governments every 20 years or so, and they needed security.
“And yet daily they [goldbugs] pray.
They pray that the Hounds from Hell be released and society devolves down to Mad Max and gold and barter.
The psychology is endlessly fascinating to me.”
It could be argued that these people are the purest form of evil and greed, more so than all bankers, politicians, and businessmen combined, for it is their hope to benefit financially from the absolute misery of the masses.
I don’t know anyone who actually “hopes and prays” for Mad Max, but just because they hope to do better than everyone else when it happens does not make them more evil than the banks/governments that CREATED the mad max scenario in the first place so that they could make a few more bucks and gain more power.
PB,
If your definition of a (pick your asset) religionist is one who buys only one asset so as not to be guilty of worshipping competing Gods, then very few of us gold buyers are gold religionists.
For instance, one who puts only 20% of his assets into gold is not a gold religionist. Just a wise individual who is hedging against the socialism that’s on the way because the duped are voting for big government the next 4 years.
I see no problem with gold as part of a diversified portfolio strategy. It is those who concentrate the vast majority of their wealth in gold and then endlessly attempt to convince themselves and everyone else that they have outsmarted all the other smart folks on the planet who raise my hackles.
You have hackles? That’s weird.
They beat dingleberries any day.
LOL!!!
One correction - gold is not actually down 25%, more like about 10-15% off peak.
Otherwise if you can find gold for less than $800 an ounce - let me know and I’ll gladly buy some from that source.
My dealer has one ounce gold Krugerrands for sale for under $800 per ounce. I’m sorry but I don’t want to name this one. I’ll let someone else (Alad) name it. It’s in “El Lay.” He also has British Sovereigns, which I occasionally buy. Most other types are not available at this time.
According to the most recent completed auctions on ebay, it is impossible at present to get ounce-sized coins for less than $850 or so, and small fractional coins are going for around $1000/oz.
gold is down over 25% from the recent (all time) high in US$, but far less in most other currencies. Measured in euros gold made new alltime highs just a few weeks ago and is holding up quite well - just like the ‘gold bugs’ were expecting. I think the same will apply in the US once the current dollar squeeze ends.
I called four local coin dealers this AM and none had any gold bullion or silver coins in stock.
Not to mention all the hedge funds liquidating gold to raise capital….
Gold has been a joke since Nixon took us off the standard.
A better explanation of the gold crash, IMHO, is that it is part of the larger story of highly leveraged gamblers trying to cover failed bets during an unfolding financial panic. Anyone who is long leverage in the face of monstrous volatility faces one of the great shakedowns in financial history. There may have been few times in modern history when it was better to live within one’s means.
Finance and economics
Market turmoil
Bad vibrations
Oct 30th 2008
From The Economist print edition
Violent moves in markets are forcing investors to sell assets
Man, I’m getting pretty sick of all of these clowns who think we’ve had anything near a free market in our lifetimes.
As someone at mises.org pointed out this week, there are 9 federal cabinet departments and over 100 federal agencies and commissions whose job it is to interfere with the economy (not to mention the Fed). And with this, our economy is somehow “free”?
FEDERAL RESERVE
The bigger their egos, the harder we fall
Headshot of Neil Reynolds
NEIL REYNOLDS
reynolds.globe@gmail.com
October 31, 2008
“How could Mr. Greenspan have been so wrong? How could Mr. Bernanke have been so wrong?
Based on the clues found at the scene of the crime, you can’t escape a verdict of willful intellectual arrogance at the Fed, of overweening hubris - the sad human propensity to think of one’s self as god-like and therefore not apt to err on any judgment of importance. Mr. Greenspan could not imagine a risk that thousands of others had already imagined. Nor could Mr. Bernanke.”
Have we really established that Bernanke was wrong. An arguably correct summary of the situation when he came to office was that there was a huge bubble and there wasn’t much the Fed was going to be able to do about it except maybe get it to deflate. Bernanke then raised interest rates until there was a thud, brought them back down, and didn’t do much more than provide liquidity and help mop up messes. Expecting the Fed Chair to be a hero is too much of an expectation. Basic awareness is probably going to be enough.
If the Fed Chair were as clever as you, what would their actions be? Dissolve the Fed immediately? It isn’t hard to see why those appointed to that job don’t start with that move.
Be careful Mole Man, if you show any compassion for Bernanke’s situation, you might get Flammed by other posters here that cannot see what Bernanke was left to deal with after Greenspan’s departure.
I have never seen a system regain trust through lying. When this all started Bernanke stated that the mess was contained and might cost $100 billion or so.
Either he lied or he is a complete f—ing incompetent. Either way I see no reason to respect him. The concept that public figures need to lie to us to protect us is complete bullsh-t. “They can’t tell the truth and crash the market.” Well, the markets crashed any ways and now the system is so devoid of trust that there is nothing left upon which to build.
You might like Bernanke. That is your right. I won’t be coming along with that stupidity, though. Let him tell the truth, even once, and I might reconsider. Until then he is just another mindless little aparatchik and I will keep on “Flamming” him.
“The concept that public figures need to lie to us to protect us is complete bullsh-t.”
Apparently either Mole Man thinks this is a good strategy, or else he somehow missed the disconnect between all these announcements and the perpetually ‘worse than expected’ developments.
Which is it, oh wise one?
Mole Man is the blog’s resident Fed apologist. Bear with him if you are able to do so.
We’re in the “bear” camp anyway so we have to “bear” with him.
NYCityBoy : “Either he lied or he is a complete f—ing incompetent.”
or? my vote is for AND.
I second that motion. All those in favor, say “aye”.
Aye!
We haven’t so far but there has been plenty of overwhelming hubris on Ber-spanky’s part.
For example, he said:
A determined central bank can always create inflation.
To which I retort:
[1] Only if you control the Shadow Banking System (which you don’t)
[2] only if you control the derivatives origination system (which you don’t), and
[3] only if you didn’t let the system get so out of hand that you cannot possibly inflate that much in so short a time (which they didn’t.)
So blow me! He’s a total tool.
The arrogance that they are actually in control of anything is out of hand. They couldn’t stabilise the dollar and they let a commodities bubble take place on their turf.
Hear hear.
The financial mess is too great and now too wide spread even for the shadow banking system to control it. They might be able to manipulate a few days or weeks but ultimately even the suckers will realize something isn’t right.
“The arrogance that they are actually in control of anything is out of hand. They couldn’t stabilise the dollar and they let a commodities bubble take place on their turf.”
Exactly. That piece of dung Bernanke was talking about preventing future bubbles at the same time commodities were on an insane run up. Nice job, bonehead. These guys need to be fired.
“Have we really established that Bernanke was wrong.”
If the Fed chair were as clever as you, then I am pretty sure he would not have given a speech that tipped the world to the helicopter drop plan, or repeatedly insisted that ’subprime is contained’, then thrown out a laughably low-end damage estimate of $200 bn for the scale of the subprime damage (summer 2007 to my recollection), then carted out one after another extraordinary rescue package, none of which seems to have fixed much. I don’t claim to be as smart as Bernanke, and there is no question that you are smarter than me and everyone else on this blog, as evidenced by the highly condescending tone of your annoying posts, but I am at least smart enough to know that hubris is a poor match for the crisis at hand, and hubristic insinuation that the next in line to a long string of failed remedies will somehow fix everything has a tendency to undermine credibility over time.
The poll on CNN last night asked if people thought the government should use taxpayer dollars to pay people’s mortgages.
Yes: 18%
No: 82%
Something tells me the 82% will not be represented in this representative republic. If only we could vote the bums out. Unfortunately, there are many more power hungry, soulless bums that would take their place.
NYCB, we must prevent home prices from falling. The boomers deserve Carnival Cruises, 2nd homes in Florida, Steak Diane, The Clapper w/remote, heated tile floors in their bathrooms, affordable non-allergenic plastic Christmans trees, low-cost airfare to Ireland and a CVS on every street corner.
Don’t forget about fake boobs for everyone. That is a god given right. And I don’t even like fake boobs. They seem so fake, just like this economy.
No doubt. Can you believe I can say this and it’s true: There are people who HELOC’d there homes for fake titties.
Vive’ le bust.
Hardy-har.
Jesus, I actually wrote “there” instead of “their.” I’ve been in Florida too long.
But the new plans being floated about would also ensure mortgages that include HELOCs. The FDIC doesn’t want all of those funbags getting repossessed.
insure?
Insure, or Ensure…it Depends
And a granite countertop to rest the fake boobs on!
(I wonder if you can use the radioactivity from the granite countertop to do a low-cost mammogram…)
Tit for tat?
I have a co-worker that utilized her 401 K for her fake
b–bs! I cannot believe the idocy of some people! However, in my work place, daily, I am shown again and again. Several other co-workers bought into buy now or be priced out forever BS and are in dire straights. $525,00 for a house in Santee (AKA KLANtee)?!? Are you kidding me? High $300,000’s for a POS SMALL (maybe 1200 sqare feet?) house in Santee? And kid number three on the way! High $200,000’s for a condo in Eastlake? GAH! The stupidity! And they are SMUG about it! Well, all except the $525,000 people who are now struggling…husband works in the (you guessed it!) construction industry!! BWAHAHAHAHA!!! I cannot wait until we FINALLY buy our home (to live in for at LEAST 10+ years) for less than half of what thay all paid and in a MUCH better area. We sold at the height of the market and now rent. I am looked at a the pathetic one for doing so by my co-workers. We will see who ends up in the better position!
/Rant off
sorry it just drives me mad!
Stars End
Don’t forget about fake boobs for everyone
I’m sure my wife will kill me for this, but that was the one good thing to come out of the “home-equity withdrawal” craze… please don’t take that away.
Just enjoy the Bubbly™ and Jiggly™ until they deflate.
Deflation! Don’t be a b00b about it.
“I have a co-worker that utilized her 401 K for her fake
b–bs! I cannot believe the idocy of some people! However, in my work place, daily, I am shown again and again.”
She shows them to you daily in the workplace? Cool. Kidding.
It would be even cooler if she would allow you to motor-boat them once in a while.
If only we could vote the bums out.
For the love of god, PLEASE DO vote out your congressmen and senators who voted for the bailouts. We all should.
I’ve heard and read discussions in several places that if a program allows those who “can’t” make the payments to have lower mortgages, many more people will decide they “can’t” make the payments. The only losers, in that case, will be those with savings, or at least savings they can’t hide.
Test case for what will happen when they means test Social Security and Medicare.
Tax receipts will fall drastically as everybody and their mother has a huge incentive to hide income. The morons that run the show never think anything through. They are kind of like the morons that elect them to public office.
also, alot of people pulled money from bank accounts to keep in their mattresses. The government wont be getting taxes on the interest income from those monies.
on the other side: doesn’t the full guarantee on savings and MM accounts encourage some people to move black money (from uninsured accounts, possibly overseas) to official US accounts?
in Europe this is going to be an issue as well I think; wealthy Europeans have loads of money in offshore heavens, or banks that are running the risk of going bust. Sarkozy has proposed cutting the ties to banks in offshore tax heavens when EU banks are supported by government money.
Suddenly a taxfree return on the money might look less attractive than the taxed return of the money; some EU countries already offer special programs for volutary repatriation of black money (with little or no taxes paid, at least for this year of course …).
NYCboy:
Pres Bush is the greatest president in creating underground jobs, i have ever seen. It’s next to impossible to get an employer to pay you on the books and take taxes out…even as a 1099 you hide it.
But here is a thought with so many people not paying into SS, their benefits will be a lot lower, maybe they planned it that way to stave off bankruptcy of the ss system another 10-20 years
creating underground jobs ??
People earning off the books is not a epidemic its a pandemic…I think it just SCREAMS for a flat or value added tax system…Something that is talked about but never delivered upon….Maybe Barrack will suprise us with bold changes..Will see…
Dave - the only problem with such a change is that they will never, no way, no how, let go of the income tax completely. They will first require a “transition” period. Then there will be an urgent need to keep it going. Eventually we’d end up with both, just like in England, for example.
Not here in fly over county Cuyahoga; the auditor isnt going to do his every three year price adjustment as the law requires. Says it would be too jarring. He’s going to send out the old market values from 3 years ago and let everybody fight it, if they dare. I think its brilliant. How many HELOC dependent mortgagors will risk lowering their values and have the bank cut them off, or worse??
Wow….that’s some auditor. I wonder if he will end up fearing for his life. Literally.
Test case for what will happen when they means test Social Security and Medicare ??
Right on the fricken money WT…I fully expect this…It will be a easy way help solve the problem…The only question is how do you test…Income ?? Gross income or net income ?? Pension vs. still working ?? Assets ?? Net worth ?? If you own a home ?? Cash on hand including 401k ??
I agree - I think the future in the U.S. has “means testing” written all over it.
I have another theory that may not find many takers - that whomever is in power will have to consider suspending the minimum wage for a period of time, or else come up with a fancy way of doing so while saying they aren’t. In a bad recession, recently-raised minimum wage rates will prolong the pain and these people will want to hope they are re-electable.
Oh oh… economic weather forecasters have noticed that it is raining cats and dogs outside the windows of their ivory-tower offices, with hurricane force squalls driving the pelting rain.
Economists see chance of long-term price slump
By Peter S. Goodman
NEW YORK TIMES NEWS SERVICE
November 1, 2008
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy – the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.
The word for this is deflation, or declining prices, a term that gives economists chills.
Deflation does have a silver lining that economists seldom mention.
More Business news
Gas less than $3 per gallon for regular at S.D. stations
Prices may keep falling, consumer advocate says
By Onell R. Soto
UNION-TRIBUNE STAFF WRITER
October 31, 2008
San Diego gasoline prices averaged below $3 a gallon yesterday for the first time in more than a year thanks to slipping demand and falling oil prices.
“We’re not sure where it’s going to go or when it’s going to stop, but the downward pace has accelerated,” said Elaine Beno, a spokeswoman for the Auto Club of Southern California.
…
Several stations in the county were selling gas for less than $2.50 a gallon, Gasbuddy.com reported.
My sister reported paying $2.09 in Minnesota. I haven’t seen a gas price in weeks so I don’t know what it is here. That $2.09 seems like a plus for the middle class. But I’m sure they will f–k it up like they always do. It will drop below $2.00 and they will load up on SUVs and pickup trucks once again. We whine all the time for the middles class. It would be nice to see them, for once, not take the bait and jump right into the fisherman’s boat.
Jumping into fishermen’s boat myself today by buying four lobster for personal consumption. Finally understood that the problem is not YOUR refusal to buy them (NYCityBoy), but rather that the Canadian distributors who used to send them to Red Lobster etc are now lacking their previous Icelandic credit source. This seems to me to be a temporary dislocation. If people still go to Red Lobster, and still order lobster, some cash-rich person will find it convenient to set up a lobster-distribution business pretty soon. Considering that lobster here is cheaper than hamburger. Anyway, speak no ill of fishermen and their boats!
Those insect like turds at RedLobster is nothing like the north atlantic lobster I know.
I love lobster. Mmmmm, mmmmm, good.
I’m about tired of all of this cheap lobster talk, because it so happens there’s none of it in my immediate vicinity.
In the Phoenix area, I have noticed an uptick in traffic since gas dropped below $3. Especially the crowd with the full-size trucks who floor it in between stoplights and carry nothing in the bed.
Of course, road work on nearly every surface road route that I take does not help either. I hope that they finish up before the money runs out.
My husband just filled up our car for just under $2 a gallon here in Texas. That’s the bright side of a global economic meltdown.
Enjoy the cheap gas while you can. Oil companies all over the world are cutting back new exploration and projects at the same time existing wells are depleted at a 9% annual rate. Projects to bring new oil online for next year and after are being shelved.
The US may have cut back demand a few percent, but China and other countries are still growing demand.
The price of oil will snap back and snap back hard. $150 a barrel within 12 months. And next time it wont just be high prices, it will also be shortages and disruptions.
Here… I’ll say it for you to spare you the effort.
“We’re running out of oil, water, food and gold always go’s up”.
You may be right, but not likely, the last price spike set a number of things in motion that will begin to erode the overall demand for traditional use of petrochemicals and trim usage along with demand for the foreseeable future. Not taking notice of some structural shifts is the same as realtors that talk about permanently high plateaus for housing prices due to phantom future demand, ignoring structural changes in their local economy due to initial price spikes. The same arguments were made about coal 80 years ago, copper 30 years ago, etc. Static analysis and linear projections.
We are still running out of cheap oil, just maybe not quite as fast as we were.
I agree.
We may not see $150 oil next year, but we’ll certainly see $120 again…
From the NY Times website:
November 1, 2008
Specter of Deflation Lurks as Global Demand Drops
By PETER S. GOODMAN
Consumer cutbacks could lead to falling prices, suffocating investment and worsening joblessness for months or even years.
Yep.
Cash: Those with will rule over those without.
with will rule over those without ??
We are already there….
“Consumer cutbacks could lead to falling prices, suffocating investment and worsening joblessness for months or even years.”
I would change it to, “consumer cutbacks need to lead to falling prices, suffocating investment and worsening joblessness for months or even years.”
Unfortunately, that is called the healing process and it will be painful. If you are not in the top 1 percent you will not be immune to the fallout. And even some in the top 1 percent will squander away what they have. Buckle up everybody. In some cases opportunity will come disguised as disaster but knowing the difference won’t be easy.
Financing gone for Trump-named Baja towers
By Leslie Berestein
STAFF WRITER
November 1, 2008
The developers of the Trump Ocean Resort in Baja California have lost their financing for the project, and it’s unlikely a new lender will be secured until the economy halts its downhill slide.
Baja-hah-hah?
Like this:
Bajajajajajajajajajajajajajajajaaaaaaa!!!!!!!!!!
Hahahahaha! Funny!
Trump in a soup line
Things going from bad to worse in Baja: Police in Baja under the gun at the Primo Tapia substation, officers were visibly nervous, grabbing their weapons and crouching for protection one recent afternoon each time a passing vehicle slowed down.
“When it comes, I don’t know where it will come from,” one officer said.
At some point this level of violence will have to spill over the border and into the USA.
We’ll just have to tear down any “useless” boundary that never-the-less keeps families of drug terrorists apart.
“There actually has been a lot of work done on the project, foundation work, site work,” Fisher said. “That money has been put into the project.
Change “the project” to “our pockets” .
I just drove past this site 2 days ago.
Lots of dirt, one sleepy guard.
Oh, and the Donalds smiling face above on the billboard.
“With a name like Trump, we figured it was good,”
Chase says it will work to prevent foreclosure
By Vikas Bajaj and Eric Dash
NEW YORK TIMES NEWS SERVICE
November 1, 2008
Even as political pressure builds in Washington for a sweeping program to help struggling homeowners, some banks are realizing that it may be good business to keep borrowers in their homes.
Yesterday, JPMorgan Chase became the latest big bank to pledge to cut monthly payments, by lowering interest rates and temporarily reducing loan balances for as many as 400,000 homeowners. Early in October, Bank of America, which acquired the large lender Countrywide, announced a similar effort aimed at 400,000 borrowers as part of a settlement with state officials.
Here goes ambitious plan number ??????????
Wall Street Journal
* REAL ESTATE
* NOVEMBER 1, 2008
Massive Effort to Save Mortgages
By ROBIN SIDEL
J.P. Morgan Chase & Co. launched an ambitious plan Friday to modify the terms of $70 billion in mortgages for borrowers who are behind on their payments or soon could be.
unbelievable.
Before this all ruins my weekend, I will wait until the specifics surface. My guess is Paulson stipulated a certain percentage must go to reducing foreclosures, lowering interest rates, reducing principal, including Credit card debt for banks receiving bailout funds. Bankers are not inherently an altrusitic bunch and the actual help to each homeowner/borrower will be more show than substance IMHO. My guess is we will see 3-4K principal reductions, 10% reductions on credit card debt, milk money type of transactions. Banks will do just enough to meet the bailout guidelines and fill out the forms showing they “complied”.
“Even as political pressure builds in Washington for a sweeping program to help struggling homeowners”
Pressure from whom? It certainly isn’t coming from “the people”. As I posted earlier 82% of “the people” stated they didn’t want taxpayer dollars to go to paying other people’s mortgages. Burn down the Washington swamp.
Anybody here see the farce in JPMChase line of BS? They see the handwriting on the wall(election) and this “bailout” is nothing more than a feeble attempt at getting ahead of the retribution they know that’s coming. They deserve a smackdown regardless of their phoney penance.
How We Became the United States of France
By Bill Saporito Sunday, Sep. 21, 2008
It’s pretty hilarious for McPalin and Cain to be out stumping against the evils of socialism whilst the greatest nationalization of the U.S. economy since at least the 1930s plays out in plain view to anyone with a high school education.
Xactly. McCain and Palin make free marketeers sick. Calling Obama a socialist is like the pot calling the kettle black. They think they can get more votes by adopting Joe the Plumber? McPain wants to use $300 billion of taxpayer dollars to buy foreclosures. How is that NOT socialism?
The Republican Party is sick. Maybe it will start healing during the socialist messiah’s single term though:
The Ron Paul revolution is continuing with the candidacy of BJ Lawson for Congress - http://www.lawsonforcongress.com/
Lawson is nice, but it’s really really sad that Murray Sabrin lost his primary. That guy would have been great to have in the Senate… which I’m sure, is why he lost.
I’m losing on my TIPS. I guess I’ll just put them in MM. Is anyone else also in the clutches of the FRS? I’d rather they just send me a damn check and let me invest for my retirement. Instead, I have to invest in one of their 20 lame-ass “investments.”
The whole thing is a freakin’ scam.
TIPS are unlikely to fare well in a deflationary environment.
The key to surviving these troubled times is liquid assets. That is why, at noon, I will be running out to load up on beer. I want to make sure I have plenty liquidity as I watch the bullshot articles roll in. Sheila Bair alone makes me think I need more liquidity, a lot more liquidity. Thumbs down to Sheila Bair. Thumbs up to Jack Daniels.
The key to surviving in these troubled times is detachment.
Put your money into MM funds then kick back and relax as you watch events unfold. Allow Mister Market to do his
S&M thing, then step up and buy when the investing public’s perception is all is lost.
“Put your money into MM funds”
While you wrote this, I was doing just that.
Smart move.
The explicit guarantee of MM funds has changed the game considerably.
Only “temporary” but it will get extended.
This game’s gonna go into overtime.
I thought the guarantee for MM funds was for funds invested as of a certain date. Does it cover all monies in MM funds now?!
From what I understand it covers only certain participating funds. I’d do some reasearch before buying…
Thanks Bear, I thought we’d see a little more inflation first. I was wrong.
You win some (Didn’t buy a house in Florida!) and you lose some (Put retirement in TIPS).
lol
Global Economic Forum
United States
The Coming Deflation Scare
October 29, 2008
By Richard Berner
“…Fast forward to today: Similar to five years ago, four ingredients likely rule out deflation. First, it’s critical to remember that the current inflation decline largely represents a reversal of the inflation spike of early 2008, rather than ushering in a new era. In fact, it may seem bizarre to discuss deflation now when inflation was a dominant worry this summer. So far, there’s scant sign of deflation in any price measure or in inflation expectations. Although headline prices likely will decline sharply incoming months, underlying inflation over the past three months is elevated at between 2.7% and 3.3%. Surveys of one-year ahead inflation expectations are still over 4%….
Nonetheless, the ultimate bastion of defense against deflation is a Fed committed to avoid it at all costs. There’s little doubt in our mind that policymakers appreciate both the potential costs and the need to act aggressively to prevent such a potentially disastrous development. Citing the lessons from the Japanese experience, six years ago the Fed staff clearly laid out the case for aggressive action when inflation is low and falling (see Ahearne et. al., “Preventing Deflation: Lessons from Japan’s Experiences in the 1990s”, International Finance Discussion Paper No. 729, June 2002, and the transcripts from the January 29, 2002 FOMC meeting). …
How should investors play deflation? Near term, even if the FOMC holds off this week, investors should buy the front end of money-market curves as we expect easier monetary policy. For now, investors should also buy bonds, defensive currencies like the yen and investment-grade credit. Longer term, since we think deflation is unlikely, investors should buy TIPS; they are cheap inflation insurance. Real yields are approaching 3% and 5- or 10-year inflation compensation is well below 1%. And disinflation should ultimately be good for stocks, but not until the recovery appears.”
Oct 29
Morgan Stanley Global Economic Forum
http://www.morganstanley.com/views/gef/archive/2008/20081029-Wed.html#anchor7108
The scariest scares are the ones where the scary think actually happens.
Damn Freudian slip — “thing” not “think”…
“So far, there’s scant sign of deflation in any price measure or in inflation expectations.”
This Richard Berner guy sure doesn’t seem to get out much.
Richard Berner is a Managing Director, Co-Head of Global Economics and Chief U.S. Economist at Morgan Stanley. He co-directs the Firm’s forecasting and analysis of the global economy and financial markets and co-heads the Firm’s Strategy Forum.
Before joining Morgan Stanley in 1999, Dick was Executive Vice President and Chief Economist at Mellon Bank, and a member of Mellon’s Senior Management Committee. He also served for seven years on the research staff of the Federal Reserve in Washington.
Dick is a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, a member of the Panel of Economic Advisers of the Congressional Budget Office, and a member of the Executive Committee and a Director at large of the National Bureau of Economic Research. He is the 2007 winner of the William F. Butler Award for excellence in business economics.
Dick received his bachelor’s degree from Harvard College, and his Ph.D. from the University of Pennsylvania. He researched his dissertation under SSRC-Ford Foundation grants at both the University of Louvain, Belgium, and at the University of Bologna, Italy. He speaks French and a little Italian.
ditto
Sound like one of the smartest guys in the room.
Paging Dr. Hiaasen!
Dick and his Bologna degree were in charge of the Mellon.
Give this Dick a break; nobody could have seen possibly seen this coming.
(snort)
have seen possibly = have possibly
I’m always amused by the proles on here that tell us just exactly how they are planning to go about fulfilling their financial destiny, via money market funds..
$uicide notes
OK, Mister Lad Insane, what’s wrong with MMs? I have a lot of money there and would appreciate your critique. Is it that you don’t believe in the deflationary scenario, or is it that you don’t believe in the safety of MM principal? Or is it something else?
You’ve been an interesting HBB poster over time, so I look fwd to learning your opinion.
az_
Everything, and let me say it one more time, EVERYTHING, is interconnected in our financial system, and it’s falling apart.
You lost your ass/ets playing the Carry-Trade, lured in no doubt by the promise of healthy returns from the likes of Australia, Iceland and Brazil, and now you and others have got lured in by the promise of safety* in money market funds.
Good luck, and good night…
* past performance is just that-Past Performance, not current performance or future performance
Yeah, az_lender, always put your money on the Mad Max Scenario™.
That’s bound to be a perpetual winner. You also get to whine about the PTB daily as a free added bonus.
As NYCB pointed out, the world didn’t go Mad Max in Iceland, Brazil, Russia or many other places that are having financial meltdowns, but if you owned the precious, instead of being a slave to fiat inflation (18% in Iceland-yowsa!) you’ve got a tremendous advantage over those held hostage by blind faith.
Or you can just figure out the system, and its edges.
Anyone who borrowed in krona (=short position) made out like a bandit.
People were screaming for the unsustainability of these economies for at least three years. If their citizens are so foolish, who can help them?
You behave like my dad. Just because he doesn’t understand something, he just assumes that nobody out there knows anything and everything must be out of control and end badly.
Am I the only one that thinks that people that are jumping into the yen right now are the next set of people to get skinned alive?
Yen/dollar could go either way AFAIK. Which populus has the greater capacity to spend next to nothing? Probably theirs, not ours. But you could be right anyway.
AZ, like fundamentals matter? I think we’ve seen that the big boys can twist this stuff at their will.
When are you back in town? We have found some restaurants lately that we really like. Let me know when you’re in town. We’ll go out.
“Citing the lessons from the Japanese experience, six years ago the Fed staff clearly laid out the case for aggressive action when inflation is low and falling…”
Since they learned their lessons so well and were prepared years in advance, the plan is presumably already up and running. So how come them California home prices keep plummeting? Not to mention the forty-percent or so decline in stock prices?
Oh yeah — asset prices do not inflate or deflate, but merely create wealth effects.
I’m simply amazed that these world renown economists still haven’t changed our core inflation model… “it’s housing stupid”… that’s it, that’s all that matters.. why ? well, if it were not, we wouldn’t be in the pickle we are in today…
Interest rates should be mathematically set using some algorithm that factors in house prices and rents and that’s it.. maybe, just maybe some factor for wages (perhaps house price to wages ratio) and be done with it.. we would have had 25% fed rates during the bubble if that were the case and it would have choked off this monster years ago.. it would remove the gross speculation that has become wall street and put the Fed Chief back in his place, where he belongs.. Remember, he’s human and has an agenda, so therefore cannot be trusted with things so important as setting interest rates… Nah, I’d trust a model.. hell, I could easily develop an inflation and interest model that would easily trumped the existing CPI/PPI models…
TIPS are unlikely to fare well in a deflationary environment.
Not the TIPS with a fixed rate of return. 1 3/8 % is better than negative in a deflationary environment.
Interest rates again at record low so the deflation phase should not last long before it turns to hyper inflation. Good to be both in gold bullion and TIPS in this deflationary/hyperinflationary environment.
Question: When interest rates drop, more money is printed, hence inflation. However during that same time prices could fall as we are seeing in gasoline, real estate, and the like. It takes a few years for the monetary inflation to show up in general price inflation. When will it really be known? When the rate of wage increases (note ‘rate”) increases substantially. We could see for instance, wages increase by 3% in 2009 and 6% in 2010. That’s a 100% gain in the rate of wage increases. I don’t think we’ll see rates like that until maybe 2011 though.
Re: TIPS.
The question for me is timing. Do you try to time the beginning of the next round of inflation, or just buy and wait? It looks to me like TIPS funds (like VIPSX) are cheap right now. The yield on VIPSX was 5.92% as of Sept 30th, it looks like it might be higher by now.
You ought to know me by now sm_landlord! I don’t time. Instead, I allow time to be on my side. In 2001 I had 95% of my assets in stocks. My net worth dropped about 40%. From that lesson I decided to gradually reduce my exposure to stocks and buy precious metals and government securities>.
Besides series I bonds the other type of TIPS I do is 5 year and ten year TIPs from the http://www.treasurydirect.gov site. It saves me the 15 cents per $100 or whatever that Vanguard charges. But I still think that IPS fund of Vanguard’s is good and think anytime is a good time to buy shares of it. I still like Vanguard for its non-government funds.
I’ve been buying VWESX shares monthly, and its yield is currently about 7.5%. It’s always nice to see my dividend increase over time.
–
November 1, 2008
Specter of Deflation Lurks as Global Demand Drops
By PETER S. GOODMAN
http://www.nytimes.com/2008/11/01/business/economy/01deflation.html?_r=2&oref=slogin&ref=business&adxnnlx=1225543027-7xUpj7ZuVWMyt9ijknMfxQ&pagewanted=print
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.
The word for this is deflation, or declining prices, a term that gives economists chills.
Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s — a period in which some experts now find parallels to the American predicament.
“That certainly is the snapshot of the risk I see,” said Robert J. Barbera, chief economist at the research and trading firm ITG. “It is the crisis we face.”
…
Who could have seen this coming? Wasn’t Burn-ass-ke put on the hot metal chair (with burner underneath) to prevent deflation and depression???
Jas
–
Sorry, I missed the link posted above on first look.
“”Specter of Deflation Lurks as Global Demand Drops”"
Global demand drops? Try this on for size.
Oct. 30 (Bloomberg) — In the third quarter of 2007, Volvo AB booked 41,970 European orders for new trucks. Guess how many prospective purchases Volvo, the world’s second-biggest maker of heavy rigs, received in the third quarter of this year?
Here’s a clue. Picture a highway gridlocked by 41,815 abandoned trucks — because Volvo’s order book got destroyed to the tune of 99.63 percent, with customers signing up for just 155 vehicles in the three-month period, the Gothenburg, Sweden-based company said last week.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a7AhRhE4NJlM&refer=home
When will deflation end?
1. When gov stops wasting money bailing out banks and puts that money to work building infrastructure creating high paying jobs for all of the construction and auto people that are out of work.
2. When tax cuts go to those that will spend it, ie the middle class.
3. Only after the excess housing has been taken off the market by people who buy the houses to live in not as speculation. ie this requires 1 and 2 or dramatic drop in interest rates.
Pumping cash into bankers hands will not fix the problem, until someone in government realizes this deflation in wants will persist. They may push enough cash into the system to create inflation in needs but that will only worsen deflation in wants.
“1. When gov stops wasting money bailing out banks and puts that money to work building infrastructure creating high paying jobs for all of the construction and auto people that are out of work.”
The amount of corruption during this phase is going to be massive. That’s what sucks. You know there are things that can be done that would help the country. But you also know the thieves are going to steal and cronyism and nepotism will run wild. Billions more will be pi$$ed away.
Wow….
From the article: “Earnings expectations still look optimistic, with analysts projecting 2009 earnings for the S&P 500 rising by 19 percent.”
OMG.
History has always been my pursuit, as I like to look back to the past, to be able to best figure out the future, and Studs Terkel was one of the finest @ allowing me to take a peek at how the average guy or gal fared in remarkable times such as the Great Depression or World War 2.
He’s gone, but still with us in his writings, and I recommend Hard Times and The Good War as primers of what oral history is all about…
“I like to look back to the past, to be able to best figure out the future”
I am more a uniformitarianist… I don’t think anyone can predict the future, and I think the past is understood in the present. I follow some of the Earth sciences and I can’t believe the shit that changes day-by-day.
Basic human nature never varies all that much…
Imagine what the French must have been thinking about John Law almost 300 years ago?
He was very much the Henry Paulson of his time..
http://en.wikipedia.org/wiki/John_Law_(economist)
Here is how your thinking plays out:
On Earth, it sometimes snows. When scientists looked for evidence of snow on Mars, they found none. Then they looked up and realized it does snow, it just vaporizes before it accumulates on the ground.
By believing that you are predicting the future, and understanding the present by examining the past, you are looking for snow on Mars on the ground.
I’m just sayin’…
Thanks for that bit of interplanetary advice, i’ll put it to use upon my next visit to the Red Orb.
Mellow out, dude.
Compare Uranus.
Aladinthong, you’re in a better position, since you and your gold are going “to the moon!”
Muggy,
I’m pleased that you are following combo in giving your money to complete strangers, to care for it.
Believe me, I am not happy about being unable to totally control my retirement funds that I have through my employer.
What I don’t understand is how we’ve spent years bashing the “didn’t see it coming” crowd, but now suffer from some of the same presumptions. You don’t have to put a disclaimer at the end of every post, but a “I could be totally wrong” thought might be nice every once in a while.
I understand you’ve picked your position and you are going to stand your ground - and that takes serious balls - but if there is one thing the bubble has taught every reader of this blog, is that there are some truly unpredictable events unfolding right now. I don’t believe history always repeats itself. I believe humans may respond in ways that are measurably predictable, but you’ll always have an X factor.
Today BayNews9 was interviewing a guy who saw a manatee in a canal in his backyard. The theory is that the flood waters at high tide from hurricane Ike allowed the manatee to pass from an estuary into what is basically a large drainage ditch. This isn’t exactly crazy, but it’s fair to say that sometimes weird shit happens. I guarantee there is a resident on that ditch that thinks it’s some sort of mythical sign or something.
I used to live in a townhouse where I’d regularly find fishbones outside my window on the patio roof. I was going to approach some neighbors whose kids fished in my backyard, but then saw a bird eating a fish on my window sill.
I could go on with these examples forever… My only take on you is that you are diversified and are taking a gamble (that is a reasonable % of your overall portfolio)on gold. I can’t believe that someone as intelligent as you is “all in” gold.
You have to know that sometimes things aren’t always what they seem. Yes, it’s funny when you say things like Weimar*t, but it’s nothing more than clever writing.
Either way I enjoy using “thong” and “satchel” in the same sentence.
Muggy,
I don’t know how to break it to you, but manatees, birds and fishbones mean nothing economically.
You and many others like you will be squashed like a bug, as you can’t see the forest for the trees.
Hyper-inflation has happened perhaps a hundred times in the past 100 years, and the savers of every country so afflicted, oh how they suffered, in most cases, complete and utter destruction of their wealth, gone.
This is the sort of oral history that I love…
Check out this Argentine’s website, he’s been through the hell of hyper-inflation, and has much to tell us about what to expect here, when the dogs of financial war show up @ our door.
http://ferfal.blogspot.com/
He worked until very recently. I won’t complain about his sucking money off future generations to ride around on cruise ships!
The Greatest Generation is passing on. We are what is left.
The New York Times’ astute reporters pick up on everything we’ve noted here…6 months later.
From today’s NY Times: Mortgage Plan May Irk Those It Doesn’t Help
(Close italics)
–
Home Prices ARE Falling at the Fastest Annual Rate Ever Led By Northern California
In the listed areas and the US as a whole.
Metro Current Trend (AR) YoY Trend
25 Composite -23.4% -18.0%
Denver, CO -34.9% -13.8%
Detroit, MI -11.6% -17.8%
Miami, FL -34.9% -24.7%
Phoenix, -35.3% -29.3%
Sacramento, -47.4% -32.8%
San Fran, -41.6% -29.2%
San Jose, -41.4% -23.4%
Tampa, FL -26.8% -19.9%
Washington, -31.2% -19.5%
Original Data Source: Radar Logic
Yeah, yeah, the policymakers will fix the problem? They sure know how to screw a bad situation into a worse one.
Jas
Isn’t it amazing how all the bluster and hot air has utterly failed to stop California home prices from crashing and burning? (NOT!)
California must have exported their hot air and bluster to the East Coast. I think we have twin Hot Air and Bluster bubbles formed in this part of the country. But those, too, are popping. I love the headlines about Westchester feeling the pain.
New York City invented hot air.
I don’t think NYC invented hot air. They just perfected it.
California imported it from NYC, and the hot air leaking out of the housing bubble is beginning to more closely resemble an implosion.
It wasn’t so much hot air, more like packaged air.
Not all of California is crashing, as much as I’d like it to. And no, I’m not talking Malibu, Beverly Hills, or Pacific Palasades. Lower middle class Eureka on the north coast is only down 15% from the peak, and the recent price trend has been UP.
Reminds me of a song:
“And I’m free, free falling
Yeah I’m free, free falling
Free falling, now I’m free falling, now I’m
Free falling, now I’m free falling, now I’m”
Did the Peter Schiff book get sent to Ben? Who had it last? I started passing that book around last September. It needs to get shipped to Mr. Jones, if it hasn’t already.
–
How has the Peter Schiff portfolio doen since the Commodities Bust? Anyone has any data/link? Thanks.
Jas
I don’t have a link but I would guess not very well. The dollar’s miraculous impersonation of Lazarus has also gone against Schiff’s ideas. That is why this environment is not one for investment. The governments, and their creatures, can change the rules at any time.
Just remember,
real estatestocksgold prices always go up, in the long run.Some people have been waiting since 1981.
1881
You’re half right. Gold prices always go up in the long run, when priced in fiat currencies. Fiat currencies always fail, although the average life span of a fiat currency is longer than that of a gold bug.
While I like Schiff, I never understood how he figured that countries like China would continue to grow if he expected the U.S. economy to collapse. I think one thing that the most recent series of economic events has disproved is the theory of “de-coupling”. The Asian countries, for the most part, are still export based economies.
http://www.chinastakes.com/story.aspx?id=772
From the article:
“The world financial convulsion is seeping into the Pearl River Delta, base camp of MADE IN CHINA, via Hong Kong. Toy export processing businesses, many owned by HK businesspeople, are closing their doors or going bankrupt because of order reductions from the United States and Europe, or huge losses from inept speculation in financial derivatives.”
“Following the bankruptcy of three mainland factories of Smart Union Group, a global toy manufacturing giant based in Hong Kong, a number of listed companies in Hong Kong such as BEHRINGER, Tailin, U-Right, 3D-Gold have applied for liquidation. According to Yu Wenfeng, head of the Assembly Department of Smart Union Group’s Po Shan factory, located in the town of Zhangmutou, Dongguan, orders have actually been pretty good even in early September, and workers have sometimes needed to put in overtime. But insiders disclose that in 2007 Smart Union Group invested and lost 100 million yuan in Fujian Tiancheng Mining, which, along with another HKD 200 million lost in the stock market by some shareholders, brought down the company.”
REPUBLICAN SOCIALISM EXPOSED
FDIC Plan Tests Limits of Leniency
IndyMac Federal Bank has become a laboratory test of whether the FDIC’s aid program can keep people in their homes.
There was a costume party in Washington D.C. last night. Sheila Bair showed up in a devil costume. The Devil showed up in a Sheila Bair costume. Apparently the likenesses were remarkable.
This is the first article I’ve seen that gives some actual numbers behind the amount of modifications that have been done through by the FDIC since it took over IndyMac. If this is the best that can be done, it doesn’t seem to be worth the effort.
From the article:
“In addition, the FDIC has sent letters to another 19,000 borrowers for whom it had no recent financial information. It asked them to get in touch with IndyMac and provide financial information to determine if they qualify for a fast-track modification. So far, just 10% have responded, less than what the FDIC would like to see.”
A 10% response rate would likely translate to at best about 1/2 of those borrowers getting modifications, and it is likely that many of them will default anyway, even with the modification.
Another quote:
“In total, IndyMac services about 653,000 mortgage loans on behalf of itself and other investors. About 65,100 are “seriously delinquent,” generally meaning at least 60 days late. Of those, the FDIC says roughly 47,000 might meet its criteria for a new loan.The FDIC has already completed loan modifications for 3,500 borrowers.”
These numbers are small in relation even just to IndyMac’s total loan portfolio. Many of those eligible for modification will not be able to afford a mortgage at any price, due to job loss, income declines etc. This effort is not so much about saving homeowners as it is a PR effort to “do something”. In many cases people like Sheila Bair are acting against the financial interests of those they are trying to help. Many of these borrowers would be better off going through foreclosure, not paying their mortgage for the 6 months or so it takes to foreclose and moving to a cheaper rental.
I wonder how many are avoiding these attempted contacts due to the fact they lied on their applications to get the mortgage? If I had committed fraud on my application, then i would not want the government digging-into it.
The thing they never discuss in these articles is the impossibility of ramping up these operations this quickly. You need to have I.T. infrastructure. You need to have qualified managers and staff. You need to have people trained.
This is a massive undertaking that would take years to put together the organization to handle an effort of this scale. But all of these jerks, like Bair, and The Fed, live in a theoretical world. They try to not let reality get in the way of their Plans.
See, only 10% even bothered to respond. More proof that FBs are not an effective voting block. So then, why are the pols making such a fuss? We seem to know two things:
1. The overwhleming majority of people don’t want gov’t meddling in this
2. FBs are remarkably inept at taking even the most basic steps to “save” their houses - why would they even bother to vote?
Obviously then, the pols are pushing an agenda upon us, because if there’s any widespread popular support for their actions - where’s it coming from?
I’ve wondered that myself. Why is there so much bipartisan support for plans that are universally unpopular? I can’t understand why someone like Mccain, who it is very likely will lose this election badly, didn’t take a position against these bailout plans and for letting the market clear. There is an attitude about real estate prices that rivals religious zealotry, no amount evidence or data can convince people that the problem was high prices, not that they are falling in line with what incomes can support.
didn’t take a position against these bailout plans and for letting the market clear ??
“Come-Back-Kid” pandering for votes…
McCain just wants to help destroy the Republican Party and get the socialist Messiah elected, and he’s making a good job at it.
My point is that he is pandering in a way that is likely to lose him votes, not gain. I think a way to differentiate himself would have been to vote against this bailout. His campaign has been stunningly incompetent (although I think he would have lost even if he ran a good campaign).
Yeah. Since McCain likes to consider himself a maverick, he should have walked the walk and differentiate himself from the status quo bailout types. Very sad. So he certainly ran a stunningly incompetent campaign.
It’s painful that being “all things to all people” seems to be the way to run a campaign these days.
32% of the people are renters. Another 50% are probably homeowers who have fixed mortgages and are honest savers. That big bloc was p.o.d about the bailout. It was a tremendous opportunity and the last one that McPain could have grabbed and taken into the end zone. Instead he supported the bailout and lost the vote of the angry savers. Sad.
We’re headed into the abyss for the next 4 years because the Republican Party shot itself in the foot. Too late to distance themselves from the disastrously incompetent George W. Bush.
Socialist John McCain suspended his campaign to return to DC and lead the nation in a $800 bailout of the wealthiest of wealthy.
Now back to your regularly anticipated program of hypocrisy.
I think there’s a closed loop with the media happening. The media show these sorry ass sob stories as an excuse for “news” then inquire*what the candidates propose to do about the problems. I’ve seen it over and over. It’s a formula the network news shows have used for decades now and I’m sick of it.
I don’t think any real FB ever expected to have his mortgage renegotiated, but now they’re so brainwashed it doesn’t take much to get them to say yeah do something about mortgages (in order to sound smart).
And even more sterling ponderings from the Mogambo Guru:
http://www.silverbearcafe.com/private/10.08/bull.html
“The most interesting news item recently was found on the cover of the Financial Times newspaper, where we learn that a guy named Lahde “made tens of millions of dollars from betting against the financial and property sectors during [the] past two years”, and he now wanted to thank “the low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA” who made it all possible for him to find enough suckers.”
Exeter, if you are awake, the reference to preppy politically correct Ivy League idiots with no business sense is purely coincidental.
So proclaimed Mormon_Tea, an ipsedixitism if I ever heard one.
I hope after the dust settles that those preppy PC ivy league grads will be treated like everyone else and start at $30K
Making the schools basically a waste of money and that degree will hopefully lose tons of “prestige value “
People w/ undergrad degrees from schools that are very, very, very hard to get into will always have an advantage. It’s not what they learned at college, nor even who their connections are (though that plays a part); rather it’s that employers know these kids were smarter going in, than their cohorts.
I think we already know that the actual value of an education at any of the high-priced institutions ($40K-$50K annual t+r+b) is much lower than the cost.
“It’s not what they learned at college, nor even who their connections are (though that plays a part); rather it’s that employers know these kids were smarter going in, than their cohorts.”
Hey, AZ, that Bush fella went to Harvard. I think the connections thing is pretty important in a lot of cases.
Pretty sure it was his pappy’s connections that got him there in the first place. I mean really, you have heard this man speak haven’t you?
AZ lender:
SMARTER………HAHAHA
No not smarter its just they followed the RULES better then anyone else……….Think about it…..
Follow the rules to the t. dot every i. Don’t think i haven’t met my share of these “highly educated ” people. My take is the same as his in the artice.
If you had the time the parents with the MONEY to pay for the schools, I’ll bet even the DJ would have had a fair shot of getting in….but alas AZ lender you have to be fully indoctrinated into Following the rules…and I ‘m not a rule FOLLOWER…
….”schools that are very, very, very hard to get into ”
I think the very,very, very hard part has little to do with intelligence or capability; just money, connections, political or minority status, or a combination. If you think these Ivy League babies are our de facto best and brightest, I have a bridge in Brooklyn that is on the market again at foreclosure level pricing.
If the USD were to become worthless pieces of paper, does that mean any debt you have also goes to 0?
I keep hearing that cash is king but if its value keeps dropping, wouldn’t it be better to be buying homes/remodeling/clothing…?
And if the govt wants to inflate its debt away, wouldn’t that be terrible for those on fixed incomes or have declining wages?
Basically my question right now is, “what is the benefit of being in cash if your current lifestyle is about living under (instead of within) your means”? The sacrifice must be good for something.
Thanks in advance.
“If the USD were to become worthless pieces of paper, does that mean any debt you have also goes to 0?”
If the sun died heat death, would the world be incinerated into a black lump of coal?
Weimar Germany’s war reparations debt was denominated in the victor’s currency, vs. our debt being denominated in our own currency…
One might say we’ve got more reason to go Weimar, than Weimar did.
Actually, you have less reason to go Weimar because everyone knows that the nuclear option exists at all points in time.
It’s called deterrence.
Is that the “bazooka in the pocket” theory?
Pack your bags, Alad, you and your gold going to the Moon!
And if the cloud bursts, thunder in your ear
You shout and no one seems to hear
And if the band you’re in starts playing different tunes
I’ll see you on the dark side of the moon
Weimar did not have nukes, much less a viable military force, to back up its financial options.
I was referring to the “nuclear option” of just “printing money” to pay it off.
There is that, too…they seem complimentary, no?
It takes two to tango.
And two to contango (ok, that was the geekiest joke I have ever made here!)
Too bad financial literacy has been in backwardation.
Wait a minute, anybody hear that if you don’t want to pay more tax then you are just plain selfish?
I’d rather be a starfish.
Yes, and as a starfish, one might be able to grow back that arm that was cut off. This might prove useful in the current credit environment.
LOL
–
Deflated Expectations By DEBBIE CARLSON
Unusual action in gold futures has many experts wondering…
SO MUCH FOR INFLATION WORRIES. Just this summer, the world was fretting about record-high energy and grain prices. Now, heading into the winter of our economic discontent, crude oil and corn prices are half of what they were, and the Dow Jones-AIG Commodity Index, a basket of 19 commodities, decreased 21.34% for the month of October and is down about 33% for the year.
Consumers certainly are happy to see lower pump prices. But a lot of market-watchers are wondering if the weakness in commodities is a harbinger of deflation — or falling prices — in the broader economy. While analysts say that changes in fiscal and monetary policy by many nations should stave off negative growth, the financial crisis and sputtering global economy, combined with the losses in equities and commodities, have many thinking of the D-word.
Could it be the reason gold hasn’t revisited its March all-time high, $1,014.60 an ounce, despite the worrisome economy? On Friday, December contract gold on Nymex’s Comex settled at $718.20 an ounce, down 1.657% on the week.
…
http://online.barrons.com/article_print/SB122549287954389335.html?mod=9_0031_b_this_weeks_magazine_market_week
Jas
I will say it again: outside the US (and UK?) there is no sign of deflation, not in general prices (except maybe a little at the pump) and not in the price of gold either. Official inflation in Europe is now 3.2%, a tad below the 15-year high of 3.4% registered in august/september (of course these CPI numbers are just as distorted as those in the US). Gold in euros and most other currencies is holding up quite well and even made new alltime highs a few weeks ago.
‘Deflation’ is a distortion caused by a US dollar shortsqueeze; just wait until the dollar resumes its plunge and check again.
Don’t make it a virtue to be selfish.
Almost all financial instruments have needed to be guaranteed against failure in the past couple of weeks, except Gold.
Why’s that?
Maybe because these financial instruments matter a lot and gold doesn’t mater at all.
King,
I know you’re cool with a one-size-fails-all guarantee, but who’s the bagholder for said guarantee?
Isn’t “mater” the Latin word for “mother”? So, gold doesn’t mother at all? Interesting.
I have come to the conclusion that our nation’s, if not our planet’s, economy is based on derivatives of such an order of magnitude as to be phantasmic, and soon, unenforceable. Have any of you come up with a reasoned-yet-radical alternative to trying to tweak the mess we have now into something workable?
For example; just declare all debts cancelled, nationalize private holdings over say, 10M USD/?, and start over with an energy unit?
Or, declare a credit moratorium for a season and let the chips fall where they may–which would encourage a black market, hence a civil war that sends our aristocracy fleeing to Dubai.
Or????
Does it have to be inflate or deflate? Couldn’t it be incinerate?
This blog has some of the most insightful and creative approaches to life’s exigencies on the web. We’re all gonna have to do SOMEthing…might as well be (dare I say it,) rational….
Any links or thoughts would be appreciated. Thanks!
ahansen, National Metaphor
Legalize illegal aliens immediately and
give them government jobs.
Have them help with the massive transfers of citizenship. Government jobs for all who speak non english!
Option # 2
I say we tax all the states the same state tax rate.
Let’s say everybody gets to pay the same tax as say California, 10%.
That ought to fill the coffers.
Option 3
Increase the national sales tax to include the same tax for every state. 10%
Same interest rate for banks and corporeal people:
0% (unless more negative rates are required)
Does it have to be inflate or deflate? Couldn’t it be incinerate?
Good One…:)
ahansen,
I can see no other way other than inflation, as it’s the coward’s way of kicking the financial can down the street aways, until it’s the next President’s problem, come January…
In many ways, our country will be much more like Germany in 1919, vs. the Germany of 1946.
The Germans lost the 1st war, and yet their infrastructure was mostly intact-along with their cities, and yet they were a financial basket-case. Hyper-inflation showed up in the early 1920’s and destroyed not only the people’s trust in their government, but also any faith in paper-money.
The Germany of 1946 had virtually every industry being either a partial or complete wreck, and it wasn’t an easy task. but Germany had to rebuild from the ground-up, which was easier than having to work with what was left standing, and also allowed them to install state-of-the-art equipment, as opposed to American factories, which were already 20 to 50 years old, as they rebuilt.
Like everyone else I’ve been intrigued by the inflation/deflation debate. In fact, like some politicians, I’ve found myself arguing on both sides of the issue. The best arguments I’ve read goes something like this:
If the government borrows all or most of the available capital and gives it to the people to spend or spends it itself and none of it goes toward the production of goods and services, then inflation is a likely outcome.
On the other hand, if entrepreneurs borrow the capital and use it to produce goods and services and no one can afford or has access to credit to purchase them, then deflation is a likely outcome.
It’s best to stay engaged. It could go either way depending on the actions or inactions of all involved. This is a live event.
I spoke to an old school friend of mine who is in the mortgage industry. His illustrious working career started as running a bookmaking (bookie) business before Johnny Law shut him down. Easy transition into the mortgage industry, I guess.
As a mortgage broker, he rode the Subprime/Alt A wave, and is now banking on a “service” that strong arms lenders into new terms. Get this - he said that he typically negotiates existing toxic mortgages into 3% fixed term. Better terms than I could get with 20% down and a stellar credit rating.
A few years ago I bought a book called “The Cheating Culture”. I read it with disgust. Now I am thinking that I should have read it as a guide.
I simply don’t believe the 3% fixed. I would want to see the actual contract before I believe this.
There’s some adjustable- or option-payment catch somewhere.
I hate it but and I would rather let the market work but from a lenders stand point it makes sense…If you can keep the mortgagor in the house even @ a 3% rate on a property that is underwater you have the potential to receive more return of principal in the future…The question will be, even if the mortgagor can afford the payment, will they stay if there is little likelihood they will receive any tangible benefit for the foreseeable future…
From the perspective of a lender, I would rather have 100% return of capital at 0% interest, than have 50% of my capital returned at 0% interest (foreclosure).
Not that I like the idea from a renter’s perspective, but a 3% loan sounds like a possibility for the FB.
It’s difficult to create a mania when everyone is shell-shocked or depressed. What’s more, even if Americans were willing to take another trip to bubble-land, it would be difficult to get global lenders to underwrite it. Credit is trust. Trust is de-leveraging. Credit is being sucked out of the system so fast that the only direction for asset prices is down, down, down. Temporary jenga-like infusions of credit is not going to keep asset prices propped forever. After removal, the house of cards will still go down.
“…even if Americans were willing to take another trip to bubble-land, it would be difficult to get global lenders to underwrite it. Credit is trust.”
And in the absence of trust, Cash is KingTM CambotechieCo MMVII
And during the reign of King Cash, his subjects suffered much, and began to murmur and turn from his countenance, and lo the Lord Bankers began plotting his end…TM MormonTeaCo MMVIII
there is no place to hide.
“in deflation”, means just that. Deflation is now.
The now part is going to change, when is anyones guess.
However, I suspect that the rest of the world has grown tired from the encumberance of American assets as the model for securitization, aka- debt time bombs, and will continue the process of selectively rejecting these goods.
If history is an indication, all thingys should and most likely will continue down this meatgrinding path of “lower prices.”
This process will abate at such time that a US savings rate, US exports, job creation, and household incomes are in equilibrium with expectations. Expectations are still being manipulated with obfuscation techniques, Orwellian in some cases, by the PTB. The industrial base of the US economy must come forward out of service and consumption towards a more sustainable model involving promotion of work for infrastruture designed around a 21st century rather than the 19th.
Push meet shove. FFR is at the zero bound?
Supply exceeds demand. Supply side failure?
Expectations remain in a conundrum. CPI and PPI are negative?
This economic landing has been an absolute disaster on all fronts.
my 2 cents.
Hasn’t much of the world economy turned out to be driven by US consumers buying stuff they didn’t really need while totally neglecting to save a part of their own income? If the US alters its consumer-driven economy more toward enhancing its infrastructure, won’t the rest of the world suffer even more than it is now?
No. We’ve been living in a homeowner’s equity debt-trap economy. They produce. We borrow and spend. If we produce and they produce and we trade goods and services, we all win. That’s what has been missing from the equation. As a result, we are all losing, some more than others.
I am not sure if it was on this board or on Mish’s, but someone recently reminded me of the 1983 film <a href=”The Survivors. Robin Williams, Walter Mathau, and Jerry Reed in a comedy about hard economic times and extremists/survivalists.
I managed to get a copy from Netflix. Very funny dialogue and premise - especially for those who remember the early 80s recession. Kind of takes the edge off of some of the tin-foil line of thinking.
Does the recent steep fall in the price of Treasure Inflation Protected Security reflect market expectation of deflation. or is it market expectation of true inflation and government will lie about the numbers?
thank you in advance for the answer
Lowered inflationary expectations have cause treasury investors to prefer regular treasuries over TIPS. I do not think that TIPS are currently pricing in deflation, just low inflation, like ~1%.
I did it.
I bought a house.
Started out about 6 months ago at 117,900.
Dropped to 89,900
Dropped to 84,900
Dropped to 79,900
Offered 60,000
Counter offer at 77,000 I said NO.
Two weeks later offered 60,000
The bank took it and ran, was a foreclosure.
5 bed 3 bath 2400sq ft 4.5acres Northeastern Colorado.
Needs a new roof.
buh bye
congratulations !
Congratulations. It seems to me that you got GREAT value for the price.
Congratulations! Yours is one of the first of many similar posts I expect to read over the next few years of HBB readers who were justly rewarded for their patience and prudence.
Congrats on your new home. Time to change your handle now…
The Theo-Neo-Cons are pulling out all the stops…
righty-tighty drudge headline is: “Obama Aunt Illegal Alien…”
They really have no shame, do they?
If McCain had a relative living here as an illegal we’d sure be hearing about it. This story about Obama’s aunt was dug up by independent snoops and isn’t part of McCain’s campaign. Drudge does what he wants.
Oh Come On… This moron B.O. doesn’t ‘know’ anything right? Doesn’t know his aunt lives in the ghetto, doesn’t know his bother lives in a box in Kenya, doesn’t/hasn’t ever heard Rev. Wright spew hate and racism, give it a rest already. This trud doesn’t know his ass from a hole in the ground, BUT WHAAAAAA the neocons are being mean WTF!
Amen !
I`ll duck now.
Stupid rant.
CHICAGO (AP) - Democratic presidential candidate Barack Obama said Saturday he didn’t know that one of his relatives was living in the United States illegally and believes the appropriate laws should be followed.
The Associated Press found that Obama’s aunt had been instructed to leave the country four years ago by an immigration judge who rejected her request for asylum from her native Kenya. The woman, Zeituni Onyango (zay-TUHN on-YANG-oh), is living in public housing in Boston and is the half-sister of Obama’s late father.
A statement given to the AP by Obama’s campaign said, “Senator Obama has no knowledge of her status but obviously believes that any and all appropriate laws be followed.”
Onyango is part of Obama’s large paternal family, with many related to him by blood whom he barely knows. Obama first met Onyango when he traveled to Africa as an adult - he referred to her as “Auntie Zeituni” in his memoir
Legendary Swiss Secrecy? ha ha
=====================================================
The legendary secrecy of Swiss banks has come under fresh assault lately from U.S. and European authorities who say their citizens have used the privacy to hide assets and dodge taxes.
The U.S. effort to capture back taxes targets Americans who hold undeclared accounts at UBS, one of Switzerland’s largest banks. The developments could put UBS in legal jeopardy and undo the reputation for confidentiality that has helped make a small nation in the Alps a magnet for international deposits.
Over the summer, the IRS won permission from a federal court to demand that UBS turn over the identities of an estimated 19,000 American clients who have failed to disclose their Swiss-based accounts on U.S. tax returns. It remains unclear what has or will come of that effort. Swiss law restricts the bank’s ability to breach client confidentiality. Swiss law also gives clients the opportunity to oppose the release of their names through a judicial process that could slow any disclosures.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/31/AR2008103103727_pf.html
from what I have read in the EU press, the Swiss have made a special exception for Americans because they were severely blackmailed by the US Administration. The US has used similar pressure on other EU countries, e.g. by using its control of the SWIFT network and the latest anti-terrorism laws (as a result, EU banks are now building and using an EU-only SWIFT network that is outside US jurisdiction).
For other customers of Swiss banks the situation remains that the Swiss will only cooperate with foreign authorities if they have proof that the customer committed a crime - which is next to impossible with tax crimes if you don’t have the banking data to begin with.
Confuseus say:
“Country which try to soak the wealthy will have to work ever harder to collect.”
Also,
“Capital goes where it is treated well, and stays where it is well treated.”
– Walter B. Wriston
IMHO we are about to witness more capital flight from the U.S. It’s going to take some time to set up whatever new mechanism emerges, but it will happen. Already you see corporations needing to borrow to support their U.S. operations because it’s cheaper than repatriating capital from their overseas operations. Wealthy individuals have already set up overseas operations at UBS in Switzerland, and now they’re going to have to get smarter about it.
Same stuff, different day.
Hopefully, those wealthy pukes leave along with their capital. It would be such a cleansing.
Not so fast sm_landlord, the IRS will track you down even in Switzerland.
IRS, Justice Target Undisclosed Assets In Swiss Accounts
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/31/AR2008103103727.html?hpid=sec-business
One more vacant house
CHICAGO (AP) - Democratic presidential candidate Barack Obama said Saturday he didn’t know that one of his relatives was living in the United States illegally and believes the appropriate laws should be followed.
The Associated Press found that Obama’s aunt had been instructed to leave the country four years ago by an immigration judge who rejected her request for asylum from her native Kenya. The woman, Zeituni Onyango (zay-TUHN on-YANG-oh), is living in public housing in Boston and is the half-sister of Obama’s late father.
A statement given to the AP by Obama’s campaign said, “Senator Obama has no knowledge of her status but obviously believes that any and all appropriate laws be followed.”
Onyango is part of Obama’s large paternal family, with many related to him by blood whom he barely knows. Obama first met Onyango when he traveled to Africa as an adult - he referred to her as “Auntie Zeituni” in his memoir
Does anyone have an estimate for how many full time campaign workers will be laid off next Wednesday?
If I’m not mistaken this has been the most expensive election in history. I wonder how many ex realtors and MBs spent the last 6 months working for Barry or McOld.
Does anyone have an estimate on how many campaign contributions were made by credit card that will never be repaid ?
Finance and economics
Porsche and VW
Squeezy money
Oct 30th 2008
From The Economist print edition
How Porsche fleeced hedge funds and roiled the world’s financial markets
Wall Street Journal
* NOVEMBER 1, 2008
Essay
Will This Election Be Stolen?
As both parties battle over just how fraud could taint this election, two analysts with very different viewpoints look at voting abuses from the beginning of the republic to the present day.
By MARK CRISPIN MILLER
The GOP’s attack on the integrity of voters, carried out by party leaders — a sitting president included — on the eve of an election, is unprecedented.
The comments to this story are a stitch! Here is a sample:
tehrooni
Nov 1, 2008 10:23 PM GMT I do not feel one bit guilty for defaulting on my mortgage. In fact, a few months ago I decided to pay only when I had some extra money. Last august, me and the wife used the mortgage payment for a trip to Europe. It was great! September, we used it to off some credit card bills (from the Europe trip). I have 5 letters from the bank now, saying I am late! Don’t I know it??? I sent a partial payment in Octobre, but am thinking of using the money for Nov and Dec to have a good Christmas. We are all ready to be foreclosed, but now they want to make a deal? Good! Let them come, and we can see what they have to offer. This house took a huge hit. I paid 285, and is now hardly worth half of that. Is that my fault they created this bubble? Why should I take the loss? They are the ones who profited from this after all. Then they broke it, so LET THEM FIX IT.
P.S. Option ARMs were a key factor that helped prices get up to peak bubble levels. Without them, it will be impossible to get prices back to anywhere near the home price to income ratios that were seen back in 2005 (and which have already deflated).
does this mean we need to start buying stock in retailers? Also, where is this guy going to keep all the junk he plans on buying for x-mas?
Check out this rant (from the comments to the BusinessWeek article I just posted):
Revolution
Nov 1, 2008 7:52 PM GMT
I urge every home owner to IMMEDIATELY stop all their mortgage payments. We have all been robbed. House homes are worth 20 to 50% less than they were only 12 months ago, and they will be worth even less in 12 months time. If we all stop paying these thieves, they will go bankrupt, and we will be free to keep our homes without having to pay any more mortgages. Stop paying and DO NOT sign any new deals. If we all stick together, this crisis will be over in a few months and our homes will be ours clear of debt.
I can’t quite get my brain around parts of this dude’s logic:
“If we all stop paying these thieves, … this crisis will be over in a few months and our homes will be ours clear of debt.”
I can follow this commenter’s logic much more easily:
Nov 1, 2008
6:16 PM GMT
I just read a story in the NYT about a guy who wants to remain anonymous because he’s about to get his $400K mortgage written down to 95% of his home’s actual value ($200K) and his $200K home-equity loan will just be written off completely. Step back and do the math: This is not a write-down, it’s a $210K handout so a “Joe the Plumber” can keep his house, boat, riding mower and plasma TVs. As a highly-compensated and highly-taxed renter in the San Francisco Bay Area, I’m furious that the bubble and tightening credit market has put a first time home purchase out of my reach for many years to come. What about Jeff the Renter who’s paying for Joe the Plumber’s free house?
BTW, a 1.1 pct decrease for one month translates into an annualized rate of decline at ((1-1.1/100)^12-1)*100 = -12.4 pct. I expect the pace of declines to increase after the October episode of the Nightmare on Wall Street.
From Times Online
October 28, 2008
US house prices will fall 30% before upturn
Suzy Jagger, New York
American house prices fell at their fastest rate on record in August as Wall Street braced itself for at least another year of real estate misery.
According to the S&P Case-Shiller US index — widely viewed as the most authoritative measure of American residential real estate values — house prices across the 20 US cities surveyed fell by 16.6 per cent in August compared with the same period the year before.
Economists who were interpreting the data reckoned that house prices in August had slipped 1.1 per cent compared with July.
Voice of San Diego
Pension Problems: They’re Back
By DAVID WASHBURN
Thursday, Oct. 30, 2008 | Recent snapshots of the city of San Diego’s pension fund have revealed staggering investment losses stemming from the world-wide stock market meltdown.
An unaudited report to the San Diego City Employees’ Retirement System’s investment committee early this month showed fund assets of $4.22 billion on Oct. 2. That is a $440 million drop from the fund’s value on June 30 and $830 million less than it was at the end of 2007, according to figures released by City Attorney Mike Aguirre.
And by Oct. 14, the fund was down to $3.92 billion — a $1.1 billion drop from the end of last year — according to notes taken during a presentation by Doug McCalla, the pension system’s chief investment officer, to the City of San Diego Retired Employees Association. Pension officials have declined this month to release updated information on its investments to the public, saying the information will be released at the proper time.
((1-1.1/(3.92+1.1))^(24/21)-1)*100 = -24.6 pct projected annual rate of return. Oops!!!
A loss from just over five billion to below three billion would be a 40 pct decline — worse than the story posted above suggested.
KPBS News
San Diego City’s Pension Fund Drop Disclosed
Oct 27, 2008
Alison St John
The City of San Diego’s pension fund is falling, along with every other pension fund in the nation. City attorney Mike Aguirre wants to make sure the growing deficit does not escape anyone’s notice. KPBS reporter Alison St John has more.
The city of San Diego got into trouble five years ago for not revealing its pension deficit to investors. It was barred from selling bonds on Wall Street.
Now, just as city officials are preparing to reenter the bond market, the pension fund’s bottom line plummets again. The city has a bond disclosure attorney, who says this time the city is revealing monthly pension figures. According to information released by pension system officials, the fund has fallen from just over $5 billion to under $3 billion so far this year.
City attorney Mike Aguirre wants the mayor to reveal how this will affect the budget.
Radar Logic shows price per square foot for San Diego homes has returned to January 2003 levels:
1/3/00 $134.24 (first date shown)
1/8/03 $221.06
5/17/06 $356.16 (bubble peak)
8/13/08 $222.42 (most recent date shown)
Increase from first date shown to bubble peak
(356.16/134.24-1)*100 = 165.3 pct
Decline off peak price per square foot through August 2008:
(222.42/356.16-1)*100 = -37.6 pct
Additional decline needed to get back to January 2000 level:
(134.24/222.42-1)*100 = -39.6 (maybe not so bad if inflation is taken into account)
I can only guess the declines have continued to date from August 2008…