Bits Bucket For November 12, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Lobbyists Swarm the Treasury for a Helping of the Bailout Pie…
“By the time they get to the community banks, there may not be enough money left,” said Edward L. Yingling, the president of the American Bankers Association. “The marketplace is looking at this so rapidly that those who have the money first may have some advantage.”
Adding to the frenzy is the possibility that the next Congress and White House could change the rules further. President-elect Barack Obama has added his voice by proposing that the struggling automakers get federal aid, which could mean giving them access to the fund — something the Treasury secretary, Henry M. Paulson Jr., has resisted.
http://www.nytimes.com/2008/11/12/business/economy/12lobbying.html?_r=2&ref=business&oref=slogin&oref=slogin
Like no one could’ve predicted this.
Once you open up a $700B fund, everyone and their brother wants a piece of the action.
RE: Lobbyists Swarm the Treasury for a Helping of the Bailout Pie…
Like a horde of rats scuffling over an empty larder.
What was that dumb thing Paulson said…if we don’t get a $700B bailout the stock market could crash to 8500….surprise its here!
Kinda like what Joe SixPack was saying about the Iraq War: “If we don’t go in, gas’ll be $4 a gallon!”
As Michigan’s governor said this morning, “we’re only asking for a FRACTION of that for the automakers.”
What’s another 25-50 billion among friends, anyways???
I would have no problem with the gubmit loaning to or owning GM outright . . . ONLY IF . . . they completely change their fricken broken business model!!
Nobody in DC gets it though (or they are not talking about it), giving more money to them now is just pissin’ it away. I want to see them go Ch. 11 and re-organize . . . they at least have a fighting chance and yes, most of the jobs will remain.
GM is dead anyway. The management and unions will keep making short sighted decisions and are happy to steal another 50B if you let them.
As Ben would note: Of course I don’t have the 50B so why would I care?
Hopefully the govt stalls and GM gets dragged into bankruptcy. It is what needs to happen.
When’s the funeral for the General?
Japan makes better cars cheaper. Hmm what to do??
Maybe Toyota can buy GM and run it properly. no handouts for companies that suck.
Yes, let’s give $2T+++ to parasitic financial companies that make absolutely nothing but trouble. They take other people’s money, shuffle it around, and take a cut. We need to bail them out so worthless lawyers and MBAs can make 7 and 8 figure salaries. We need to destroy the companies that actually produce something because we are shortsighted retards. None of us drive cars, get mail, groceries, or other consumer goods delivered in a truck. None of us need a military that uses jeeps, tanks, APCs, or planes, manned by people who carry guns. All of these things are made by the auto companies(they made all the vehicles and weaponry that allowed us to win WW2). There will never be another war so we don’t have to worry about building these types of things.
People here piss and moan about all our manufacturing going overseas and our reliance on foreign oil. Let the big 3 fail and you will see the last of our industrial capacity vanish here. We will be reliant on other countries for everything, and that will cost many multiples of $50B, not to mention our national security.
Cars, been there done that.
People here piss and moan about all our manufacturing going overseas and our reliance on foreign oil. Let the big 3 fail and you will see the last of our industrial capacity vanish here. We will be reliant on other countries for everything, and that will cost many multiples of $50B, not to mention our national security.
And the UAW cares because??
I agree. Since when does the UAW gives a rat’s ass about doing right by Americans not employed in the auto industry?
that moral hazard’s a bitch aint it.
So is the feeling that if you played by the rules, you were a total chump.
Hard to see how money even has value anymore. Companies piss it away, the government gives them more. What a country!
As long as it is still accepted for goods at your local grocery store, it has value.
the important thing is some much bailout needed money is going to wooden toy arrows…
Regulators urge banks to fight crisis by lending
Wednesday November 12, 10:09 am ET
By Martin Crutsinger, AP Economics Writer
Bank regulators encourage banks to combat credit crisis by lending to credit worthy customers
WASHINGTON (AP) — Federal bank regulators, seeking to address criticism about the government’s $700 billion bailout plan, have issued new guidance to banks encouraging them to continue lending to credit worthy borrowers.
The new guidelines by the Federal Reserve and three other federal banking regulators encourage institutions to work with mortgage borrowers to avoid defaults. The guidelines also encourage the banks to set dividend payments for shareholders and compensation for executives with the current crisis in mind.
The guidelines seek to address criticism that banks obtaining funds from the $700 billion rescue plan could simply use the money for their own purposes rather than helping struggling homeowners and the overall economy.
The problem isn’t credit worthy borrowers (though that is a huge issue for the commercial borrowers). The problem is the amounts they want to borrow. I have great credit. I have no debt. I have good job. I have a large downpayment saved. If I applied for a $500K loan to buy a $600K house with a $100K downpayment, the bank should still reject me.
Good credit + too much debt = bad loan risk. Well, now that the “sell it in two years for 50% appreciation” model is dead, it is a bad loan risk.
If you apply for a loan at a certain amount, and the bank decides against it, do they make you a counter offer? Do they say, “no you can’t borrow $500K but we will consider $250K”? Oh, you mean that would require a human being with some small math and investigative skills doing real underwriting? Heaven forbid!
Lobbyists will also be swarming Mr. Obama’s office to line up for administration positions, as he’s decided to go back on his word that he would not allow lobbyists in his administration.
“Change”
Not to worry, lobbyists are all Republican.
Big government, tax raising Republicans. (see Bush)
Hey! Don’t go hoggin’ all that free money!… Save that gas money and mortgage payment dough that newchimp supporters expect. That was the deal, wasn’t it? They take care of him, he takes care of them. OB better keep his promises to the people that put him in there. We gotta reputation to keep up here!
A rounding error in one handout could set a person up so that his children wouldn’t have to work.
This’ll make the Iraq money distributions look like child’s play
Nov. 12 (Bloomberg) — The U.S. Treasury’s $700 billion Troubled Asset Relief Program will have to be increased to meet the `phenomenal’ demand for government bailouts, according to Deutsche Bank AG strategist Jim Reid.
The extra $150 billion pledged to support insurer American International Group Inc. this week and the prospect of a financial package to rescue General Motors Corp., the largest U.S. automaker, from bankruptcy may drain the TARP fund, Reid wrote in a note to investors today.
“It does feel that the $700 billion TARP fund is going to have to be increased at some point in the not-too-distant future,” wrote Reid, head of fundamental credit strategy at Deutsche Bank in London. Either that, “or another acronym will have to be formulated to deal with the phenomenal amount of government spending that’s still likely as this crisis escalates.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=any3rCKhKtOU&refer=home
Demand for free money is rather phenomenal. I confess to enjoying free money myself. I am looking forward to the next household stimulus check, which I plan to allocate to rainy day savings.
What Mr. Bear…you did not receive an invitation from Cartier for this party of monetary distribution?
Cartier Launches Mysterious India:
http://www.luxist.com/2007/09/27/cartier-launches-mysterious-india/
Let’s see. The govt gives money to people and they don’t spend it. The govt gives money to banks and they don’t lend it. I’m sure if they give money to business (auto sector etc) they’ll spend it though.
There you have it. Give the $700B to the big three. That would pay for 35,000,000 $20,000 cars. Free cars for everyone!
LOL
RE: I am looking forward to the next household stimulus check, which I plan to allocate to rainy day savings.
I intend to spend mine on a new Nikon D40 MADE IN JAPAN.
USA no more NUMBA #1, GI.
Why not the D90? It is not that much, and it is the latest in the Nikon lineup… It is an awesome camera, and if you have older lenses, it will drive them, unlike the D40…
Also, it does movies…
I’m a Canon guy, but the D90 sounds like the Cat’s Meow. Might want to wait one generation to let them work out the kinks, though.
No kinks. This is 3rd generation. I have the
D-70 which is an amazing camera and yet I’m
up-grading to the 90 just because I can…
Plus all my lenses are compatible.
No issues with the video?
I’ve been a Nikon shooter since the 1970s. Still have my FMs, in fact. The D40 is my first digital, and once I make a few photo sales, I’m going to add a D300 to the stable.
BTW, the FM Nikkor lenses work just fine on the D40 — you just operate in the “full manual” mode.
I have a D90, upgraded from a D50. The difference in the sensor alone, made it worth the change. The D40 is a great camera, do not get me wrong but it is still using the same sensor as the D50, and for someone who’s previous camera was a semi automatic Canon AE1 with the 1984 winter olympic cap on it, I have no problem using lenses in fully manual mode, but it is really nice to have the autofocus, the program modes, and if you really need to, to be able to retouch a picture in the camera itself (D90 has a whole bunch of “fixes” like red eye reducer, highlight recovery, active D lighting, etc) that make your pictures look great, but as they say, it is not the camera, but the photographer that matters…
RE: I’m a Canon guy, but the D90 sounds like the Cat’s Meow. Might want to wait one generation to let them work out the kinks, though.
I’ve had AE1’s for years, and loved ‘em.
But for some reason the Nikon just feels better in the hand than the Rebel, which is rather disappointing. I am at an age where I like familiar.
My point now butressed by subsequent posts is; where does the consumer dollar all go now?
So, I put on my Red, White, and Blue consumption sweater then go blow $500 for a Japanese made Nikon from an I-net camera sales mill?
How the fook does that do anything for this country, extraneous from some retail $$$ percentage goin’ to some web discounter?
I just received my Nikon D700 this am. Can’t wait to start having fun with a SLR again but in a new format.
I’d rather have a D9.
http://en.wikipedia.org/wiki/Caterpillar_D9
I’ve always wanted a pond in my back yard plus they’re just cool.
McMansions, favorite chew toys for a D-9.
Rrrrr ]]]]]]]]]]]]]]]]]]]]]]]]]] {crunch} Rrrr]]]]]]]]]]]
]]]]]]]]]]]]]]]]]]]]]]]]] {snap} ]]]]]]]]]]]]]]]]
D40 is made in Thailand, not in Japan as well as all Nikon’s product line
“Demand for free money is rather phenomenal. I confess to enjoying free money myself. I am looking forward to the next household stimulus check, which I plan to allocate to rainy day savings.”
Why don’t the gov give a stimulous check too! . I want my gove bailout of my debts and for them to rework my mort down to 2% interest. Reduce my principal owed on my Cc’s by 40%. And i want it now!!
I am calling my congressperson to scream & demand the gov bail me out. oh i forget i am not a big fat cat wall street shyster. Us small fry do not count.
Us small fry do not count.
Well….
Now that we small fries have stopped “consuming” the PTBs are soiling their pants. One of these days it might get through their thick skulls that declining wages == declining sales.
Gosh, Colorado…
You sayin’ that supply-side economics was a sham????
Who woulda thunk?
How will wall street fund next years’ bonus payments? THAT is the question of the day.
Great question. Along those lines, on 12b-1 fees, if these fees have been generated already, does that mean they are fixed costs to the fund?
Imagine the fund has an NAV of $100 at the start of the year and has generated 1% in 12b-1 fees, if the fund is down 40%, that 1% that’s been spent is now 1.6% of the fund’s year-end NAV.
Anyone know if we’ll see that.
Yes, you will, but I don’t see it being a problem. They’re generally paid out after year end.
don’t buy funds that have 12b-1 marketing fees.
“How will wall street fund next years’ bonus payments?”
Son of Tarp - There is more bailout money ready to fund bonus pools until The Rapture.
The Rupture.
The Rapture is going according to plan…
The good money is being spirited away, and all that’s left is the bad money.
Make sure you don’t get left behind…
The Tarp Trap.
–
My phone has stopped ringing for a long time. All those “Calling Jas Jain” when oil was above $100 and would make a big move up must have been harassment calls. Too many people with phones who don’t know when and how to use the instrument.
Pretty soon deflation, knocking on the door now, would be the reality during 2009Q2/Q3. BTW, I do stand by my forecast of $25 when the US economy is in depression in less than two years.
Jas
An interesting aspect of this plunge is the effect it will have on the budgets of many petro-states. One can quickly think of at least half a dozen such countries that absolutely need those petro bucks to maintain their grip on power.
Listen to their bombast about supporting the $70-$90 range. They’re already squirming.
–
They listened to Peak Oil dopes and started spending like drunken sailors. Dubai is an accident waiting to happen.
Jas
I thought Dubai was a modern miracle, like Las Vegas. Oh, wait, that isn’t going so good. Can they stop deflation? It’s starting to look like they can’t. But they sure are trying.
What do you like, other than cash, in a deflationary environment?
We might be going back to Europe, if we still have jobs, and the European currencies continue to tank. You have to live a little, while you can.
Just one little rocket, applied at just the right point in time and space, and who knows what the price of oil will be.
RE: You have to live a little, while you can
Money comes and goes.
Good memories last a lifetime.
did the NAR use those kinda comments to push buying a house
What do you like, other than cash, in a deflationary environment?
Remington 870 12 gauge. Missed out on a sale when they were advertised for $280 at turners sporting goods here in long beach.CA.
Either a shot gun or a kayak for my next big ticket purchase. Hard choice!
“Dubai is an accident waiting to happen.”
What the heck, let’s just bail out Dubai, too!
float-by-shooting?
“float-by-shooting?”
Yeh tough choice!. Just got into kayaking off the LB? OC coastline and am hooked. Good way to keep my wits in place and escape the economic depressionary collapse all around me , at least in a few hrs paddling . Right now
i rent out from kayak outfits such as Sunset beach Rentals
which is pretty cheap at $13.00 for 2-3 hrs but cannot rent forever.
Off Topic here,
Alad. Is APMEX a pretty good reliable source for buying PMs? Actually have made a purchase already from them online and they seem up to par but i wish for your imput.
Thanks.
<i<Can they stop deflation? It’s starting to look like they can’t.
They could fund GMAC, Ford Credit, Chrysler Credit to offer 0% interest NINJA loans for big azz trucks and SUVs, with 10 year amortization. And thow in those blingy spinning rims for free.
‘Just got into kayaking off the LB?’
Kayaking is sooper-terrific. There’s water EVERYWHERE here in WA, you can’t walk out the door without falling into the sea or a river or a pond…heck, I’m growing my very own pond, there in my driveway.
I got another kayak last week, a bigger double, for guests or if I want to go paddling over and then camping on Hope or Harstene Island. I was going to wait until after Thanksgiving, when people need the money for Christmas, and when it’s been raining for two solid months and no one remembers the sun anymore, but I didn’t wait ’cause it was a good deal. The pouring rain helped my bargaining, and so did having pretty green paper rectangles resting in my hand. I could have really stuck it to him, but he looked like he needed the money, so I only took him down 200. Sigh. What a softy I am. He probably just spent it all on pennywhistles and moon-pies.
Do tell. What kind o’ kayak, OG?
Dubai:
I’ve read that aging rocker Rod Stewart has purchased an island off Dubai that has been moulded into the shape of Great Britain.
Dubai defies all logic and reason.
Dubai isn’t oil money…
But yeah, it will collapse.
Rod Stewart buys an island. Meanwhile, I had to pay $22 for admission to the Rock and Roll Hall of Fame. You would think some of these rockers would give us — you know, the folks that bought your overpriced records — a break by donating to the Hall, so that we aren’t charged outrageous admission. Mick Jagger alone could probably pay the staff from petty cash.
OK sorry end rant.
Dubai was built on oil money. They’ve attracted alot of business and created quite a tourist ecomony using their petro bucks. I’ll give them credit for recognizing that they needed to diversify away from oil. Having said that, I agree Bad Chile, they’ll tank.
Isn’t Haliburton leaving the USA for Dubyai?
aladinsane: Dubyai — I like your spelling, somehow it fits.
Anyway, according to NPR, Dubai is going now going through the RE bubble popping just as we are. The kicker — Dubai doesn’t have the oil, fellow United Arab Emirate Abu Dhabi does, so if Dubai crash and burns, it will be Abu Dhabi that bails them out. Dubai’s biggest assets were investment cash and sand, and they still have plenty of sand.
They’ve attracted alot of business and created quite a tourist ecomony using their petro bucks
The problem is that all of the tourist and businesses are from countries that were floating in petrodollars up until last month.
isn’t dubai part of UAE which has a sovereign fund of almost 1tn usd? and a citizan pool of less than 1m? they should have more than enough money for bailout.
Hmm…
Peak Oil is something different than the last 2 years of oil price volatility coming from the last gasp of the Great Credit Bubble. (Although I grant you it was the “reason” given for recent high prices.)
So yeah, I’m a Peak Oil dope. All of the fundamental issues of Peak Oil still apply, but they will be moving a glacial pace compared to most everyone’s time frame here. Honestly, if I could somehow store the stuff in my backyard for a decade from now, I would…we’re heading towards serious overcorrection right now on prices.
I guess it’s different when you’ve at least been out in the field and realize how hard it is find and get the stuff out of the ground. There are people on this board far more knowledgeable then me but I do have enough geology to know the idea that we’ve burned through the cheap, easy to get to oil is not tin foil hat time.
“One can quickly think of at least half a dozen such countries that absolutely need those petro bucks to maintain their grip on power.”
A few minutes ago I was at the urinal, thinking about that very same thing. It seemed like an appropriate place to be thinking about the oil producing countries and the gigantic troubles they are going to be having. Tap, tap, tap. Take that, Hugo Chavez.
Although Jas and many others have been vindicated on their deflation meme, the long term direction of crude is a big ?. In the short and intermediate term, pressure on Detroit to develop alt-fuel vehicles seems shortsighted. I don’t see how they can make money on electrics with crude trading at $60-80.
TAx gas to 5 bucks a gallon and return the money at the end of the year in the form of a check. Improve market for better efficiency cars. Cut demand for oil. Oil prices fall partially offsetting tax. ie Saudi Arabia helps to pay our taxes.
TAx gas to 5 bucks a gallon and return the money at the end of the year in the form of a check.
—————————————————————-
Once DC prostitutes get your money they keep 99.9% of your money. I would rather keep and spend my own money thank you very much.
Detroit won’t make money on electrics at all, because an electric — and by that I mean something seriously viable, not some feel-good greenwash concept jalopy at the auto shows — has at least a five-year pipeline. When the electric finally hits the showroom, will oil still be $60? Unless we all stop having babies or get wiped out by a plague, peak oil will be a reality, the only question is when.
Meanwhile, Rahm Emmanual insisted that Detroit will play a vital role in “retooling” for energy independence. Maybe Detroit can get out of the Great Recession the same way we got out of the Great Depression: retool factories for electrics/hybrids/turbines/solar now, just as they retooled for tanks and bombers during WWII.
RE: In the short and intermediate term, pressure on Detroit to develop alt-fuel vehicles seems shortsighted. I don’t see how they can make money on electrics with crude trading at $60-80.
The Volt in more money down the GM R&D rat-hole.
These Big 3 idiots needed to do whatever it took to bring their high mileage Euro designs to North America.
WTF? I drove a rental Spanish Altea (nothing special) in the UK which got mileage with a 6 speed standard transmission in the upper 50’s.
And it was a smooth cruiser at 100kph to boot!
Then of course, the mental acuity to run a standard transmission combined with lifting a leg to step on a pedal and moving an arm to move a stick is too much physical exertion for today’s brain dead, fat-f*ck American.
http://online.wsj.com/article/SB122645159441719325.html
Measton is correct. We could have kept a lid on demand had we surcharged fuel during the last oil bust with the proceeds allotted to R&D.
IIRC, fairly libertarian Car & Driver (Patrick Bedard?) had been calling for mucho higher gas taxes as an alternative to the CAFE standards, and an incentive to build more efficient vehicles.
There are other benefits to electric cars outside of raw fuel prices. The maintenance has to be cheaper. And if the battery technology can get there, having huge amounts of torque at 0 RPM could make for killer acceleration.
hd74man
You might look at the Golf TDI, their built on the same platform as the Altea (or rather it’s built on those platforms) and both have a similar powerplant.
The Chevy Volt looks promising and realistic. Only problem is that it isn’t due until 2010 and it will cost an estimates $40,000. Nobody can afford that ( at least not the “average Joe”) in this economy.
Can’t they get a home equity loan to “buy” it, and… oh, wait… nevermind…
what’s the problem with automatic transmission that we get insulted for preferring it. improvement in technology have made them as efficient as the manual. heck i get the same about the same mileage (29-31mpg) from my heavier and newer 2007 automatic 4cyl 2.4l camry as my 1993 manual 4 cyl 1.6l honda civic si.
to me arrogant stick proponents and arrogant apple owners are cut from the same mold.
i never here pc owners or automatic car drivers disparage their alternatives with such venom.
-i drive an aoutomatic car because i live in an area with alot of traffic.
-i prefer PCs because i am a huge gamer and mac game availability is minimal.
i don’t hate either of the alternatives.
when i tell a mac nazi that i prefer PC i get rebuked until i tell them the reason and they always say. “well…yeah if your a gamer i understand”.
It’s an old guy thing……
Back in the day, all the guys with hair on their chest drove four speeds. If you were “good” with a Hurst shifter, so much the better.
Now, everybody is afraid of driving a manual tranny.
(As I recall, something like 90% of the current drivers have never driven a car with a manual). Which is crazy, considering the wimpy clutches they have in most cars now.
But, I can see where a manual would be a pain in a city with lots of stop and go traffic.
RE: i drive an aoutomatic car because i live in an area with alot of traffic.
Dudes who drive standards and own iMacs get laid more.
Russia’s in trouble:
http://biz.yahoo.com/ap/081112/eu_russia_markets.html
Rumors in the markets is that Iran and Hugo Chavez need every penny they can get their hands on. Thus… any cuts by Saudi are being more than made up by other’s cheating.
Oil will go back up… in a few years. Between now and then I see three to four failed states.
Got Popcorn?
Neil
I don’t understand why we have to live in this bizzare mercantilist world. Every country was going to get rich off a favorable blance of trade with the US.
Now the scheme has played out and they are all collapsing along with us. And of course they are pissed off.
Oil might take a lot longer to recover than you think. With the depression; people will be buying smaller cars going forward after getting burned so badly. Normally takes about a decade for the cars to go back up in size.
Some countries that are currently growing will have peaked in population. Europe, Russia, China, US will all be on a downward trend. Its a maybe on the US but Russia, Japan and Europe are already decreasing.
Those SUVs will be around a long long time but will be used less. Hybrids may be here to stay as well.
A few minutes ago I was at the urinal………..
NYCB,
I think you had Chavez by the neck
Mike
Real men bang it against the side of the urinal. …and you think you wanted to open your own market, Iran?
I mentioned this the other day, in the context that when those countries get needy, OPEC will fall apart.
Jas,
I know your a big supporter of the “deflation theme”, and, as this progresses, I am starting to come over to the deflation side more and more.
My question is, in your opinion, what’s the best non-cash asset to hold in a deflationary environment? With all the complex financial instruments that have been developed, there has to be something with more earning potential then cash, right? A double inverse of some index/stock (perhaps GLD)? Bonds? Or just plain ol’greenbacks?
Thanks for any help you can offer!
–
Hello Michael,
My son and I have been big beneficiaries of holding long-dated UST STRIPS (one that my son bought in Jan’07 in his 401-K was up 50% 10-15 days ago!). Gold is an insurance play and not a speculative recommendation. My middle name is Broken Record and the record has been playing the same tune since July 1998:
1. AVOID SCAMS, aka stocks. 2. USTs 3. Gold and 4. Swiss franc
Jas BR Jain
Telling everybody you are going to whack yourself with a metaphorical “2.x4.” is pretty amusing…
–
You have been nothing more than a nuisance. Get lost or get a life!
Jas
Why oh why would you want Swiss Francs*?
Switzerland is all about banking, and bankers worldwide had to stoop morally and ethically to match other bankers levels of depravity, and the Swiss probably stooped the lowest…
“You have been nothing more than a nuisance. Get lost or get a life!”
Jas, my wife must be your scriptwriter.
But seriously, this the HBB Bits Bucket.
Can’t we all just get a loan?
oh dear, I thought jas meant avoid all 4?
I read somewhere the other day that the 2 financially riskiest countries currently are:
1. Australia (tied @ the hip to China)
2. Switzerland
How many holes are in the Swiss Cheese?
UBS & Credit Suisse were #’s 2 and #4 in European bank assets relative to host country’s GDP…
Behind # 1 Kaupthing and #3 Fortis, both problem children as of late.
http://ftalphaville.ft.com/blog/2008/11/12/18122/spot-of-swiss/
3. Gold and 4. Swiss franc
the swiss franc often tracks gold
No it doesn’t. Today a Euro is worth 1.48 CHF. In January 2001 a Euro was worth 1.52 CHF.
The CHF has always been on a virtual peg to the Euro and it will stay that way.
FWIW, I have Swiss treasuries and am down about 10% so far. Nothing is safe right now.
Keep in mind that deflation will be followed by hyperinflation because anyone in debt during deflation will default, including the government. When the government defaults, it takes it out of the currency.
The US isn’t the Weimar Republic, however much you wish it to be.
I think we have to pass through Argentina first on the way there…
…right. We have guns. Big ones.
Be sure and buy your wheelbarrow now to carry your future pay check to the store to buy a loaf of bread otherwise you may be priced out forever.
Depends on how the government decides to default. The smart thing would be to just do a cram down on the debt. I also think that if the US defaults, everyone else does also. Rebooting the debt every 100 years or 2 is probably a good idea anyway. Teach people to invest in productive activities, not loaning out money.
hmm. i have yet to see hyperinflation in japan after more than 15 years.
Keep in mind that deflation….
Is not going to happen because Bernanke will be dropping sacks of money out of helicopters if he has to.
I’m talking about consumer price deflation. Asset price deflation is happening right now, and has happened often before - it’s better known as a bear market. And during times of high consumer price inflation such as the 1970’s.
I call it Tsunami Economics. Hey where’d all that ocean/money go? Go run out there and grab some shells! These people are idiots. If there was a tsunami coming then why is the ocean receding/deflating?!
http://online.barrons.com/article/SB122633310980913759.html
Uncle Sam’s Credit Line Running Out?
The Treasury yield curve — from two to 10 years, which is how the bond market tracks it — has rarely been steeper. The spread is up to 250 basis points (2.5 percentage points, a level matched only in the past quarter century in 2002 and 1992, at the trough of economic cycles.
Yes. It is mighty hard to figure out how best to surf on tsunami waves.
Charlie don’t serf.
Deflation —–> Hyperinflation?
Credit tsunami trough –> credit tsunami crest
Energy agency warns of supply crunch…
Over 2008 to 2015, it predicts the price to average $100.
http://biz.yahoo.com/ap/081112/eu_world_energy_outlook.html
a horizon of 20 years and it looks like these guys are still assuming that 99%+ of land transportation will still be running with their petrol. oh well.
Jas & Mike
What kind of job do you think would be the safest to have? I’m really aiming low eg Re Auction companies, Self Service Storage (ever seen one go out of business?)
I’d rather not do anything like gas stations or driving a cab, don’t want a gun at my head for the $50 in the register, and after my father was ill and passed away. I realize dealing with sick people all day is not for me so hospitals are out.
It seems everything is tied to the free flow of money and credit. Every week here in Long Island City Queens i am noticing another building with a for rent will subdivide sign on it.
even came across this on CL
struggling small business (need advice) 11/11 20:49:37
For almost 23 years, I have worked in the private security/investigative industry in some capacity. About 4 years ago, I opened my own agency. The current economic situation which seemingly affects us all, will likely be the end of my company. I can only afford to keep from losing it for at least another month and a half. My work is my life.
Nevertheless, I need to come up with new strategies to market my services. People that could afford my services in the past are likely experiencing financial uncertainty, which in turn, prevents my telephone from ringing as much as it used to. Potential clients desperately in need of a child custody investigation, for example, cannot afford such an investigation because they are trying to put food on their tables, or maybe struggle with some other worry about how to have enough money to keep their homes or vehicles.
As far as my agency’s future, it is just as uncertain, unless someone can help me discover a way to keep my ship from sinking. It is my hope that someone can send along some good business advice. I thank you, in advance.
“…For almost 23 years, I have worked in the private security/investigative industry in some capacity”
If you’ll able to relocate…Blackwater USA has a good paying job 50 feet outside the “green zone” on Iraq:
http://www.blackwaterusa.com/company_profile/careers_Overview.html
Get out of Dodge. Unless very strong family ties are keeping you in the high rent district, a change of scene to some low cost venue might do you a world of good. Where? Doesnt matter. Go where they still speak english and your music is appreciated. Ohio has numerous sites: Akron, Columbus, Cleveland. Places where they’ve been living in a recession for decades so that these times arent all that much different. Im sure there are hundreds of similar places. They need people like you with ambition and desire to work. Maybe you’ll do each other some good. Its obvious you’re not likely to succeed where you’re at. You’ll get a different perspective at the minimum.
–
Plain-clothes Private Security Guard, especially, for the rich and famous. Believe it or not, someone took me seriously and got one that pays very well. If you look like a respectable and mature white guy that is a big plus in that line of jobs.
Jas
Handyman for single moms with reasonable rates.
and certain fringe benefits…..
handywoman for single dads might have prospects as well.
handyman for rich gay guys. (just filling in the gaps here!)
“just filling in the gaps here!”
…so to speak…
LOL
You’re all sick, I’m leaving and not coming back…
goofy jokes aside, if you’re able to do minor repairs and house upkeep (including gutters & roofs), you could build a good business.
I thought about that myself. Huge amounts of construction workers are or soon will be out of work. I doubt that an illegal working under the table will be underbid by someone playing by the rules.
Bartering for services works for me.
what do you have to trade?
trade goods:
http://www.youtube.com/watch?v=IVTutjfb22s
Blano and Bronco, the Magical Pleasure Duo™ (servicing men, women, couples; all fetishes welcome.)
Just curious…what is your idea of a reasonable rate?
Reasonable rate would be what I pay alfredo from phillippines. He gets 10-12 bucks an hour plus lunch. This guy has helped me move three times and he just regrouted my yicky turkish bath. I feel like a star when I take a shower now! I almost just wrote plush lunch. What’s up with my miss spellings? It could be jangled nerves over this unending daymare.
Annie needs a laugh and a no worries day.
“Reasonable rate would be what I pay alfredo from phillippines. He gets 10-12 bucks an hour plus lunch.”
This is not meant as an attack on you, but is precisely what is wrong with this country. People want skilled labor, but they don’t want to pay for it. It takes years for carpenters, etc. to hone their skills. $10-$12 per hour is a joke, especially in your area.
I might add that perhaps we have a different idea of “handyman”. In my book, a handyman is a jack of all trades. He can cut into your bathroom wall and replace a mixer valve, he can flash a chimney or repair a leaky roof, he can do light electrical work, build decks, fences, and anything else you might fancy. $10-$12 bucks an hour? LMAO, not a chance. He should get at least $240 a day in your area, if not much more.
*snickers*
My husband runs his own small handyman/home repair/plumbing business that keeps him busy. I’ve always said that if I’m ever out of a job, I’ll go into his business as an assistant. Yes, its a dirty job, and its hard work, but the pay is decent, and realistically, alot of the stuff you need to know for can be done with on the job training.
I live in Las Vegas and I’ve heard the pay for armed security guards…the kinds that patrol the casinos and various businesses pay decently. Most of the security companies that hire these guards however, give preferences to people who are ex-military, ex-police, or ex-prison workers (i.e. people who know how to already use a gun).
And this is just my speculation, but…I think anyone with a mathematical bent who likes to sit and crunch numbers all day would probably do well to go into forensic accounting. With all this loan and real estate fraud going on, plus what ever related business they are tied into, I’d bet an investigative forensic accountant would probably be in demand.
FPSS,
Who?! Where!?
aNYCdj….FWIW…
I can understand not wanting to work in the hospital, retirement homes etc., industry but the facts show that’s where the employment growth is…Here is a idea…
My mother-in-law (87) had to spend 3 days in the hospital with a bad ankle…When they released her there was no realistic way to get her home since she was going to be wheelchair bound for awhile…Kiser gave us a name of a private shuttle service…This young guy had a van with a wheelchair lift…For the next week or so he shuttled my mother-in-law from her house to the rehab center and back…It was very inexpensive…$50. each way I think…Anyway, he said the demand was such that he could work 12/7 if he wanted…
I’m thinking along the same lines. Luckily, my job appears secure for at least another year. Me and my Wife have been saving for 5-6 years now. We live in California and rent. My plan-however stupid sounding- is to keep working, save, and then move somewhere rural and cheap, as in rural TN,NC,AL, or some other less than desireable place that’s at least a driving distance from a medium sized metro like Raleigh, Huntsville, or Atlanta. We plan on buying the cheapest house possible, as in no more than 150k. We will buy it outright, have no other debts, put the remainder in ultra-low risk funds and cash, and as far as jobs, well who cares as long as it pays the bills. We will have few obligations at that point. So we could get crappy jobs if we had to. We have enough to do this now, but since we both have some job security, we figured we should keep on saving as the economy collapses.
So if you ask me, living in an expensive metro right now and perhaps for the next several years is a liability. Get out of the city. Find ways to live cheap that isn’t dependent on profession. Just avoid debt and avoid putting yourself at risk.
I think that’s a fine plan. I’d consider a home on small acreage, so you can grow a lot of food, etc. Also, pick a place that’s not too far out of a decent sized city, say less than 25 miles. And, you can scout ones which have lower unemployment rates, and would best suit your job skills. Good luck.
In the DFW area there are several self-storage chains that have managers that live on site. I ran into this when I helped a friend who was moving temporarily store his belongings. If you have a spouse that works, it might work out.
Also, I think you get first dibs when people’s stuff when they stop paying the monthly rent.
I used to store stuff at a self storage facility in Bakersfield , CA that was very nice and very clean in a nice area of town. They husband and wife team that ran the place for the company were given great living quarters. What other bene’s they were given I can’t attest to, but I do know that they had had a similar position somewhere in AZ.
don’t all the bk lawyers need you
also for the arson coming up
If I were you I would try fireman or policeman.
He’s too old.
Look to work for a defense contractor, in their own facilities security. All secured facilities have their own security forces, very professional and separate from local government security forces.
I still believe in peak oil, and this shows why we won’t be ready for it. Demand and supply are so inelastic that small shifts mean big moves in price.
This will kill off alternative energy and efficiency and leave us even more vulnerable to an upward spike.
I agree with you. It’s a tough world that we live in when MANY people believe financial theory trumps physical reality. So far in this world the laws of nature have proven to be immutable. Financial theory, well, not so much.
The beatings will be long and brutal for people that display such hubris.
Our present financial structure is akin to holding a tiger by the tail. Go ahead and keep holding on, I’m sure the tiger will lie down soon.
I’m buying
no drilling
no nukes
= higher oil
The end of the construction boom killed the oil bubble. It will be a while before either comes back.
It will be a while before either comes back ??
Not sure about the oil thing but you are correct about the construction side and the job prospects for that group of unemployed are relatively limited…Home depot, Lowes, plumbing supply house etc…It’s the only skill set they have…
Two years ago my son was working long hours in construction. He shifted pretty easily to a job as a mechanic.
I think that the construction mania sucked up so many energy inputs that it distorted oil consumption far above norm, now it has shifted the other way. The oil producers are cutting back because they can’t sell all the oil they are producing. The BS about cartelling the price is PR for their own people.
I’ve worked as a bike mechanic and in construction. The skills are quite interchangeable.
Oh the market conditions are frightful
But the schadenfreude is so delightful
And since we’ve no place to go
Let It Blow! Let It Blow! Let It Blow!
It doesn’t show signs of stopping
And I’ve bought some corn for popping
Expectations are turned way down low
Let It Blow! Let It Blow! Let It Blow!
When we finally kiss it goodbye
How I’ll love watching sheep being shorn
But if you think that money’s tight
It’s because of the Wall Street whores
Wall Street is slowly dying
And, my dear, people are still denying
But as long as you’ve hidden away your dough
Let It Blow! Let It Blow! Let It Blow!
Thanks for brightening my day
As I prepare for a trip to LA.
Professor, you wouldn’t happen to be attending CAIR?
Nice twist on a Sammy Cahn (lyrics)and Jule Styne (music)song. They are smiling from above.
I’ve just gotta borrow this.
Imagine that!
The United States may be on course to lose its ‘AAA’ rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.
“The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system” and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.
http://www.cnbc.com/id/27641538
Interest rates on Treasurys of all maturities will have to start climbing sooner or later. I predict sooner.
Thats what I am betting on….
Curious - what would one invest in now if one expected treasuries to rise later? Or would one just hold cash and buy treasuries after rates go up?
USG cannot declare bankruptcy:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
14th Amendment.
It can, of course, just destroy the real value of the debt by inflation. It’s been doing just that for decades.
How much longer before we start hearing about professional sports teams that can’t pay bloated athlete salaries and have to go bk.
I dream of all field-no hit shortstops pulling down $125k a year, in the not too distant future…
Here in Chicago, last year the State of Illinois had been trying to purchase Wrigley Field - thankfully it fell through. I smelled a big rat - gov’t always buy things just before things fall apart.
Sam Zell bought a big bloated turd — the Tribune Co. — and has been trying to piece out the assets ever since.
Wrigley Field and the Cubbies themselves are two of the jewels lodged in the turd. Zell’s also mentioned the possibility of selling the Tribune Building on Michigan Ave. and moving the reporting/editorial staff into the huge printing facility in River North. (Gah!)
Last year, I think the estimate for Wrigley itself was $90 million, but obviously that’s contingent upon current “market conditions.” I don’t trust Zell to do the right thing at all. While I agree that city ownership isn’t optimal, I think the city was rightly trying to protect an iconic landmark from other numbnuts disguised as corporate titans.
The city of Arlington tried to sell the Ball Park in Arlington for $1 a couple of years ago to Don Hicks owner of the Texas Rangers and Dallas Stars.
He said no way.
edge,
Too true. I hadn’t heard that but you’ve got to believe that would be the kiss of death. I think the private sector record belongs to Wachovia paying $25 bil. for Golden West and their subprime slime! ( Worked out well for Herb and Marion though? )
Not soon enough IMHO…
Professional sports are in big trouble. Anything that depends on the model of “5 minutes of programming, 10 minutes of commercials” is in big trouble.
Frankly, the pros are just grossly overpaid, they would do the same job for 1/10th the money, and would be happy about it! More and more people turn to alternative media sources (that don’t have ad revenue), which will further drive down their earning potential.
The days of commercial television are numbered; there’s probably another 5 years that they can milk it; and then it will be over, and over forever. Digital technology is already to the point (most people just don’t have it) where you can record all your shows without even recording the commercials (not skipping them, they are just ripped out during the recording). It’s not long before that technology gets perfect, and all their target customers (lower/middle income and above) have devices that allow all commercials to be removed. Once that happens, ad revenues will plummet, and the end of commerical TV will be upon us (thank god).
Sports will be one of the big losers in this shift, they will see their salaries cut dramatically as the ad revenues continue to fall away. Which, frankly, is the best thing for our country, and for our children. How many children need to throw their lives away training to be a “balla” before we realize that this idol worship of sports figures is counterproductive?
“How many children need to throw their lives away training to be a “balla” before we realize that this idol worship of sports figures is counterproductive?”
Besides, the strength, agility, and endurance of the young may be needed for “competition” on other “fields”…if you catch my drift.
I hope you don’t mean fields as in Flanders Fields. That is, if that is what your are thinking, I hope you are wrong.
I just read “Somme Mud”, an Anzac’s 1916-19 memoirs of WW1 written in the early 1920’s, when the horrors of war were still firmly entrenched in his mind…
Recommended!
Besides, the strength, agility, and endurance of the young may be needed for “competition” on other “fields” ??
Exactly Ewaterj…IMO, Competitive sports teaches and develops many life skills…
Competition is highly overrated and leads to many a broken life.
I suppose I’m athleticky, so to speak. I kayak all the time, I climb trees, hike, stuff like that. I was never any good at team sports, though. I would get a good idea and run away to execute it, whether or not we were in the middle of one of those ‘inning’ thingies, or else I would see a daisy and examine the thing. Sigh. It’s that cursed ADD again.
But I am great at Brockian Ultra-cricket!
I also excell at jumping off things and not getting hurt too bad. You’d all be simply astounded how far I can fall and then get up and say ‘Hey! Where’s my d*amn tiara?’
Didn’t know you were so talented, Olygal. Sounds like you would be great a parkour!
Girl parkours are referred to as ‘traceuses’. Or else referred to thusly: ‘Jeeze, what an idjit! What’s she gonna do NOW?’
That last one is mostly the one I get tagged with.
RE: they will see their salaries cut dramatically as the ad revenues continue to fall away.
Couldn’t happen to a better group.
Years ago, I’d never miss a televised NFL game. However, the sheer volume of repetitive commercials now make the programming virtually unwatchable. I’m now lucky to make it to halftime of a 1:00 kick-off. You can virtually forget primetime…
Likewise. I like to TIVO the game and hit the ‘30 second fast-forward’ button after every play. I can watch a whole game in 20 or 30 minutes.
Once you start skipping commercials with TIVO, the idea of watching them is totally unbearable.
Michael Fink,
Spot on. While we’re at it, with all the financial firms going belly up, who’s going to advertise on CNBC etc. in the brave new world?
You’re right, the outrageous sums paid for “broadcasting rights” for sporting events will dwindle right along w/ ad revenues. I believe the future lies with “custom programming” where the subscriber tailors their ‘own’ entertainment/information package.
I think that the future is multi-step.
The first is product placement. So, instead of Ross (Friends) picking up a non-descript drink, he will pike up a Coke (and so on). That’s already happening to some degree, and it will continue to happen. Sports players will have bigger emblems on their uniforms (think NASCAR) which will provide some ad revenue there as well.
However, the other (and larger) part of this is that the salaries for all people involved in this field need to drop dramatically. No more 10M dollar a year salaries, the best players will make 250K a year and be very happy about it. No more 100M dollar movies, they will be done for 10M dollars and be just as good (or better) because everyone will take a massive paycut. It’s not like Tom Cruise is going to take a job working at Home Depot if he doesn’t get 10M dollars for his next film; if nobody will pay him over 200K, that’s what he will take.
The profit margins in all these industries is obscene. Sell a 10 cent DVD for 20 bucks? A 200X markup? Seriously???
Thank the lord that technology is slowly killing these industries (or at least killing the gross excesses) and bringing them back down to earth. There’s PLENTY of money to be made making movies and selling movies. But nothing like 1990-2005, that’s never going to happen again.
The future lies in product placement, pay TV (think HBO), and in better advertising techniques (that are MUCH less expensive).
The other thing that I wish would happen right NOW? Outlaw advertising for all prescription drugs (with the exception of medial journals). There’s NO reason that I need to see ad after ad for drugs that I need a doctor to tell me I NEED. That’s why they are prescription! This drives up (massively) the cost of these drugs; it’s something that should never have been allowed in the first place, and now experience shows us it’s a very bad idea. People whine and whine about how expensive drugs are. Want to make them cheaper? Outlaw advertising for the drugs, and outlaw pharma sales reps. Viola. Cheaper drugs!
‘There’s NO reason that I need to see ad after ad for drugs that I need a doctor to tell me I NEED.’
Testify!
As for me, I am just really tired of seeing oldsters in bathtubs on the beach. (Cialis) Are they getting super extra clean before getting it on? What? Who the hell ever encounters matching bathtubs on the beach, for one, and for another, the water would get cold really quick. You’d get bugs in the water, too, and have to gingerly fish them out.
Now, I’m not objecting to bathtubs or the extra scrubbing of one’s hide in the expectation of getting some action. I like my bathtub lots and spend many an hour in there with scented soaps and loofahs and other girly nonsense, singing and splashing and playing with bubbles and my squeaky penguin and such, but I do it in the house, not out in the wilderness scaring the terns and harbor seals and disrupting their migration patterns.
Show some respect for nature, horny old people!
How come nobody has mentioned the massive shift of public dollars into the pockets of the wealthy owners of these sports teams?
The taxpayers of Arlington Texas are spending $500+ million just for Jerry Jones to have a place for his team to play.
Will cities and states in the future be able to give such huge amounts of welfare to the rich owners of these sports franchises?
“There’s NO reason that I need to see ad after ad for drugs that I need a doctor to tell me I NEED.”
Yeah, but you’re not the drug dealer. Big pharma knows that if they create a problem with symptoms that everyone has had, you will be able to identify with that symptom and badger your doctor for it until he writes the prescription. Okay, maybe not you but the weak ones. The ones most likely to succumb to commercial advertising to begin with. One reason my neighbor doctor decided to retire early.
Michael Fink,
When they approved advertising for drugs, frankly I was shocked? How does that make ‘any’ sense?
I’m suspicious of these “big budget films” along with the amazing sums the actors are supposedly being paid. Always have been. If the level of profitability was anywhere near what they claim, they wouldn’t give a rip about Napster, pirating etc.
It wasn’t that long ago Sony and others were whining the blues over bootlegged knock-offs hurting their earnings. Did it ever occur to them that have cr@ppy “artists” and product?
But….if you ban advertising, how will I ever be able to decide which erectile dysfunction prescription I should get?
OT…..I’ve been trying to organize “National Let’s all whistle the Enzyte Theme Song” day…on the appointed day, every guy in the US whistles like the guy on the Enzyte commercials.
I suggest March 12 (Ron Jeremy’s birthday)
Professional sports are in big trouble. Anything that depends on the model of “5 minutes of programming, 10 minutes of commercials” is in big trouble.
This is what I really hate about “American” sports (baseball, basketball, American football). At least in soccer you get 45 minutes of commercial free viewing.
Of course, with our short attention spans, few Americans can endure more a than a few minutes of viewing without a break.
Everything is in a bubble now. Salaries for everyone, not just sports figures.
Everyone.
As soon as advertisers can’t afford the commercials and fans can’t run up tickets on their HELOC its over. How many people can afford 2-3K per season on a sport in this enviroment? Not that many.
In the falling revenue enviroment the debt service on many teams will be unsustainable.
Not going to happen Alad…The American people have their priorities and the super hero’s come first….Tiger Woods I believe just broke through 1 bil in earnings…
As much as I admire Tiger Woods, I predict he’s at his earnings peak. Despite his recent heroics, I have no doubt he’s won the vast majority of major tournaments he will win in his career and that his super-hero status will soon fade.
I also imagine Woods is more interested in his net worth than his earnings, and in that sense his net “earnings” (marking to market) are probably negative for 2008. Woods is almost certainly losing hundreds of millions, if not billions, on his investment portfolio. There is simply no place to hide: money is either easy to get, and worth very little, or hard to come by and worth something. And yes, money is still way too easy to get for professional athletes.
Gates and Buffet made as much as ten billion during one or two of their peak years, but both are now losing tens of billions in 2008 alone.
Woods also can’t be happy that Greg Norman just lowered the price on his Jupiter Island villa by $17 million (according to the last comment in yesterday’s bits) after having been talked into buying there by Norman himself. Camilo Villegas, who is more likely than Woods to be top dog next year, wisely bought on the mainland, and lives in a house that is said to resemble a fitness center.
Electronics retailer Best Buy reports 7.8% drop in U.S. same-store sales for October and lowers earnings outlook amid “rapid, seismic changes in consumer behavior.”
WSJ: Breaking News
“In 42 years of retailing, we’ve never seen such difficult times for the consumer,” Brian Dunn, president and chief operating officer, said in the statement. “People are making dramatic changes in how much they spend, and we’re not immune from those forces.”
Bloomberg
During the last recession, as we all know, consumers were able to refinance or tap home equity to stay afloat. Stock markets are getting technical support at previous recession lows. This time it’s different, however. When the markets acknowledge the differences between then and now, we go lower.
“During the last recession, as we all know, consumers were able to refinance or tap home equity to stay afloat.”
Back in the seventies you could also start a father and son business, and purchase the liability insurance necessary to get real work. Today, that same insurance is only viable to small businesses with 10-12 workers or more; father and son will now be two of those 10-12 workers, and they will earn barely enough to feed themselves. The father and son loop hole was closed when Reagan opened the doors to cheap Mexican labor.
rms…Nice post…
liability insurance necessary ??
Try this one…When you do a PUD with a HOA in Silicon Valley the only way the developer can get subcontractors is to provide a umbrella policy for all sub’s for liability and construction defect coverage…The subcontractors insurance carriers will not provide insurance for these projects…To many law suits…A good friend of mine just did a small 5 house project…Insurance premium…$247,000. !!!
Back in the eighties at the dawn of Reagan’s second term the “deep pockets suing” or “joint and several liability act” allowed for 100% of an award to be paid by someone who might have had only partial responsibility for some accident; the new fairness. It wiped me out in one fell swoop as my liability insurance increased 5x in 18-months, and I couldn’t pass along the increase to my clients who balked. However, it did succeed in driving me back to school, but the experience left me very bitter and highly skeptical of anything advertised as competitive or free-market; it’s all rigged, IMHO.
As Hedge Fund Manager (who used to post here) was fond of saying, “The house always wins.”
WSJ
* BUSINESS
* NOVEMBER 12, 2008
New AIG Rescue Is Bank Blessing
Buyers of Insurer’s Default Swaps Would Recover Most of Their Money
By SERENA NG and LIAM PLEVEN
Banks in the U.S. and abroad are among the biggest winners in the federal government’s revamped $150 billion bailout of American International Group Inc.
He was an analyst. Wonder if he’s even employed.
Even if not, he’s probably young. Made enough to leave New York and do something else.
It was a “gold rush” and its over.
WSJ
* HEARD ON THE STREET
* NOVEMBER 12, 2008
New Bailout Again Raises Moral Hazard
By DAVID REILLY
Another day, another bailout: This time homeowners get to benefit from mortgage-modification programs, designed to stem the tide of foreclosures by making it easier for borrowers to stay current on their loans.
But the latest plans from Fannie Mae and Freddie Mac, joining banks such as J.P. Morgan Chase and Citigroup, hold plenty of risks.
Take investors in mortgage-backed securities. Modifications to mortgage holders’ interest rates could leave some MBS holders with reduced interest payments. Forgiveness of principal, meanwhile, could lead to capital losses.
A bigger worry could be that these modification programs are too effective. In that case, “many current borrowers will wave the white flag of surrender and also try to get a modification,” Rod Dubitsky, a senior strategist for asset-backed securities at Credit Suisse, wrote in a recent report.
“will wave the white flag”
I got a call yesterday ( in clear violation of the National Do Not Call list ) but I “entertained” it anyway. It was a guy from MySafeHouse911.com. O.K, I’m a sport, what’s your pitch?
“Well we help homeowners that are behind or their mortgage payments or think they got a “raw deal” on their mortgage! Do YOU… feel like you got the shaft on your mortgage or were treated in any way unfairly?
Gosh, uh… no but… “Well even if you have a decent rate, WE… can get you down to under 5%! Do have a “hardship”? Well, gosh no actually I don’t ( and I’m not kidding here!! ) “We can “create” one for you!” ( Actual call, I’m *not making this up )
Professor Bear,
I think you may have gotten the wrong impression yesterday? I’m in no way married to the notion that the bubble ‘may’ have been very limited geographically. Ben’s posted plenty of bubble stories from far flung places and I don’t feel ‘any’ area was entirely without guilt.
I like your example of Manhattan and I’ve no doubt it will be painful there too. Yet we don’t get a lot of examples like the Ukranian 23 y.o MB that bought TWENTY homes there as we did in PHX? There the dollar amounts involved just on a single purchase seemed to preclude ‘too’ many pikers from trying to cash in on the craze. No gauntlet, just thinking aloud.
Last time I visited Manhattan a couple of years back, my host told me two personal stories that seriously biased my views. Nothing I have heard from Roubini or others has challenged the initial impression. Story 1: His hairdresser was flipping Manhattan properties on the side. Story 2: His friend who worked for Mackenzie (economics consulting firm) had sold his Manhattan apartment and was waiting for the market to crash before buying again.
So. Sad.
Filing this on under -
Ya just can’t make this stuff up!
Leigh
CNBC (if I heard correctly this AM) was reporting that 40% of re-modified loans go into default.
If 100% of remodified loans would have gone bust if they hadn’t been remodified, then a 60% prevention rate is decent (not spectacular, but decent). Might this demonstrate that banks realize that house prices will decline further… otherwise they would be more willing to take what they can get, so to speak, no?
Kim,
Just reading through the “SMP” ( Streamlined Modification Plan ) and our firm feels it is loaded with moral hazard. However your point stands and we have no other choice but to assume ‘that’ is exactly their motivations.
Remember Fannie and Freddie only own 20% of the outstanding mortgages. Those are the loans that were uncut into securities and not sold as tranches. Right off the bat, 80% of outstanding mortgages will be completely unaffected from modifications.
Despite the obvious root cause of an excess supply of overpriced McMansion, some folks think govt subsidies should be used to encourage more oversupply of homes for which there is no fundamental demand to speak of. Meanwhile, roads and bridges crumble due to a lack of public construction investment. How many vacant homes are there, again???
WSJ
* REAL ESTATE
* NOVEMBER 12, 2008
Toll Brothers Sales Sink to New Low
Luxury Home Builder Cites Wave of Late Cancellations, but Strong Liquidity Staves Off Need to Slash Prices
By MICHAEL CORKERY
…
Industry executives say recent efforts by banks and the federal government to stem foreclosures by modifying billions of dollars of mortgages will not go far enough to put a floor on falling house prices, which they believe are at the root of the financial crisis.
As part of an industry proposal called “Fix Housing First,” builders are asking Congress for a tax credit of up to $22,000 on houses bought over the next year and an interest rate buy-down that would reduce rates on new, 30-year fixed mortgages to 2.99% for houses bought through June 30, 2009. The proposal could cost up to $268 billion, according to the National Association of Home Builders, though the group may scale it back.
Home builders are joining auto makers and financial institutions in clamoring for government assistance. While the builders are asking for measures that spur demand for housing generally — not just for new homes — they hope such measures will eventually spur new construction.
Nationally, single-family housing starts in September fell to an annual rate of 532,000, from an annual rate of 1.8 million during the January 2006 peak of the housing boom.
“I hope government realizes the scale and urgency of the problem,” said Mr. Toll, who spent several minutes of a conference call with investors Tuesday promoting the concept of federal aid. “We certainly need new tunnels and bridges, but they will be bridges to nowhere if they lead to places where there are empty homes.”
“We certainly need new tunnels and bridges, but they will be bridges to nowhere if they lead to places where there are empty homes.”
Is he proposing that we buy people and put them in the empty houses? That’s a solution to the housing crisis which I simply hadn’t considered before.
I would be happy if they repaved I25 from Ft. Collins to Denver and expanaded it to 3 lanes.
If they added a commuter train from Ft. Collins to Denver (with a few stops along the way of course), that would be great too!
I mean, if we are going to print and spend, lets print and spend on something that might actually be useful. Plus maybe Ford/GM/Chrysler could build the trains.
My pet project is a bridge from somewhere around Sarasota to somewhere around Corpus Christi to avoid those pesky drives up the Florida peninsula when driving to Texas and west. This could employ hundreds of thousands for decades, and think of the fun during hurricane season.
If you’ll pay me to go there and I can live there for free, count me in!
“Nationally, single-family housing starts in September fell to an annual rate of 532,000, from an annual rate of 1.8 million during the January 2006 peak of the housing boom.”
Been watching this data. It’s almost a record low, but not quite. Lowest is 523,000 in 1982.
I look for October to beat the record, since that’s the month when people *really* freaked out and probably canceled or postponed a lot more contracts than normal. November will probably be bad also.
Here are links to the data BTW - the graph is quite… shocking.
http://research.stlouisfed.org/fred2/series/HOUST1F
general housing starts:
http://research.stlouisfed.org/fred2/series/HOUST
Isn’t this the perfect supply/demand correction? I would take this as very GOOD news, not bad. Unless of course your entire business is selling/building inventory into a wildly (already) oversupplied market.
Yeah - guess I meant “bad” from a homebuilder industry perspective. I’m shocked actually that there haven’t been any significant homebuilder bankruptcies yet. There will be, really soon I’m sure.
Since I’m short several homebuilders - it’s good for me. Really, really good.
Also as you say - it’s good for those that want to buy a home down the road.
Agreed, my comment was aimed at Mr. Toll’s total disregard for basic economics (which probably served him well on the way up). I’ve never been bold enough to actually short stocks though I do own some double short ETF’s as I let them figure it out for me and I can’t get “squeezed” beyond my original investment when I inevitably guess wrong.
In 1982 the population was a lot smaller than it is now.
Yep - all the more reason why breaking a record (on the downside) is astounding, and points to just how badly overbuilt we became.
WSJ
* BUSINESS
* NOVEMBER 12, 2008
Even Debt Collectors Have Hit Hard Times
By WILLIAM M. BULKELEY
This should be the best of times for America’s debt collectors, since never has a society been so in hock. But ironically, much of the debt-collection industry is struggling because there’s little cash left to squeeze from strapped consumers.
“People joke with me that my business must be great,” said Mark Neeb, president of Affiliated Group, an Omaha, Neb., collection agency. “I would say the opposite is true. Our business flourishes when the consumer has money.”
Blood from a rock and all that jazz.
Come to think of it I have not recieved my daily call from the collectors looking for sheldon leonard in about a week!
I before E except after C.
“I before E except after C.”
And sometimes Y.
Learned via Mrs. Wooten, teacher, 5th grade, 1955.
We also diagrammed sentences fluently.
Those English rules are weird!
…or when pronounced AY, as in neighbor or weigh…
Either, neither, leisure, seige are a few exceptions, if you please.
CIBC calls it ! “Markets near bottom.”
http://micro.newswire.ca/release.cgi?rkey=1611117283&view=92835-0&Start=0
Full report linked in article.
Thank goodness. I was beginning to worry……
I just wonder which “bottom” they might be talking about…are the markets holding a JT as they approach this bottom.
Emperor of the North III & Sarah the Barracuda in 2012!
Jeb Bush / McDame
“…She is scheduled to speak about the GOP’s future at Thursday’s meeting in Miami,”
I think Cheney would have found pleasure in using his “Shadow Office” paddle on Ms. Alaska, of course she have to remove those GOP owned clothes first.
Palin puts ‘brutal’ 2008 behind her, looks to 2012:
http://news.yahoo.com/s/ap/20081111/ap_on_el_pr/palin
Can the media just stop with the Palin stuff already? Enough is enough for a lifetime already or whatever.
Hot-diggety mama! We won’t talk about her tonsil hockey again.
I have enough hillbillies in my family to keep me busy…
It’s just that it’s sooooooooooooo … easy, and now that the trolls are gone, we have so little entertainment around here.
We need to exercise our linguistic muscles somehow!
She’s a bit tougher than Dan Quayle, eh guys?
Lost in Utah,
Thank you.
Not meant for you, HD, but the media…
Whoops, I mean HWY…more coffee, please, Ms. Palin…
Coffee, tee, or Palin?!?
Sarah Palin is probably more popular in the media than she is in Alaska right now. She’s more interested in capitalizing on her celebrity than she is in running the state, from what I can tell.
It was a tale of 2 titties.
Opportunist par excellance.
par excellence, jeez, where’ my coffee??
MMIIZZZ PALIN!!! Get off the dang phone…what, yet another outfit? That’s three already this morning, for cryinoutloud…oh wait, I have French President Sarkozy on the line for you…
Geez, I’m worse than the media…
me and Sarah, one-woman shows…
lol. But you are sooooo much more intelligent than she is…
(Maybe a dubious complimint…compliment dang keyboard…)
Oh shoots, somebody from Alaska is trying to call me… wup, c’mon dogs, time for our hike!
It was my uncle in Fairbanks, he’s kind of a mover and shaker, inviting me to a Sarah Palin fundraising dinner.
OK, OK, I’ll get a life now…
Oh puhleeze. The only time B.O set foot in IL ( that’s spelled Illinois ) in the last TWO years was for campaign stop-overs.
( Sometimes the bias is just overwhelming )
How many votes did he miss?
Hey Popsicle, you say’in that the democrapic senator is in charge of the day to day Gov’t operations of Illinois? Because I remember McVague say’in he did’nt do nothing, you betcha bygolly!
But can she name herself to Ted Stevan’s Senate seat if he goes?
Peak Coffee!
Starmucks $9.99 a bag …on sale… at the local store.
Starmucks profit falls 97% on fewer customers and rising costs:
http://www.latimes.com/business/la-fi-earns11-2008nov11,0,2508623.story
I buy excellent free trade organic coffee for $6.30/lb, free shipping. Starbucks can’t match that, even on sale, I bet.
Can’t say there aren’t those that feel a certain sense of vindication over this? All the time this stock rocketed to a P/E of 60, we kept saying “It’s just a fad!”
For a lot of years we were just plain wrong and a lot of people made a LOT of money. Like Home Depot, they became their own worst competitor.
I like Trader Joe’s coffee brands. Also I LOVE their little sesame cracker discs. I could eat a whole bag of those at one sitting. I often do, in fact.
You guys are makin’ me feel deprived, no TJ out here in the wilds. Hey, NYDJ, there’s your new job!
+1
Just picked up some TJ’s coffee which has actually come down in price the past few weeks, although it was much darker roast than I was hoping…And I think I know of (and also enjoy) the crackers of which you speak. White/green box?
Wait a tick. Who you callin’ cracker?
‘White/green box?’
Yeah! I LOVE those! Oh, I want some super bad now! *casts aside bag of Twizzlers disdainfully*
Even better is SF Bay Coffee Roasting Co. at Costco. You get 3 lbs. of French roast whole-beans for $13. And it’s better tasting than the “burnt” Starbucks equivalent.
never understood the whole coffee fad.
“i make a pot about once a week whether i need to or not.”
quote from “no country for old men”.
After the election people will have to find another topic to disagree on and trash each other over. Coffee works for that as well as anything else.
What’s a per square foot construction cost in CA?
–
What parts of CA?! It is heading towards $50 in 80% of the areas. I am not an expert in the area and my forecast is based on deflation in labor and material costs. Land will be at 10-20% of the peak prices.
Jas
Northern CA, how about Tracy, CA and Stockton, CA?
–
You mean in the California’s pits? No one is insane enough to give an estimate for the pits. We should cede these areas back to Mejico.
Jas
From what I saw in Cali in 2006, they already have been….
Northern CA, how about Tracy, CA and Stockton, CA ??
heaper but again must have parameters set..Are you using un-insured workman from the parking lot of home depot or a fully insured licensed sub-contractors ?? Fully insured licensed competent contractor with Home depot materials you probably around $110. per foot foundation up to turn key…
You are way to optomistic Jas.
What was average construction cost in 1980? I think it was less than $30 psf. The 1500 sqft ranch will full basement on one acre I bought in 1978 was $27K (probably 2.5 x median income). If oil goes to $25 as you expect, construction cost should follow.
Of course, take home pay was something like 75%. Now it’s 50%. In the future it will probably be something like 25%. Maybe houses then will have to be priced at 1 x median income?
Lumber is off 60-70% already. Construction costs are going down down down.
What’s a per square foot construction cost in CA?
When you ask the question there also must be parameters…There are to many varibles…If you are asking from the foundation up to turn key for “Home Depot” quality “In Silicon Valley” its about $130. per foot…Remember, that does not include anything else..Permits, fee’s, infrastructure, landscaping off-site improvements, Ins., etc., etc.,…
I was looking for a replacement cost estimate to estimate bottom for Tracy, CA and Stockton, CA homes. This will do it. Thanks
yes this sort of thing would be nice to know when adjusting your homeowners’ insurance premium. Ask a contractor or local insurance guy and you get the ‘well it depends‘ crap. Of course it depends. No one knows, yet these ballpark estimates seem to be out there somewhere. Are they secrets between developers and the REIC?
And sure it might change drastically by the time I have to actually replace my home, but it would be nice to have some sort of benchmark.
Faith has morphed into indifference.
Comfortably numb
Gold is trading in a tightening narrow band. Looks like it is due to break out soon, likely the next leg down to $650. $700 is already busted, if/when 650 pops it could be look out below. Sure, it could take another moon shot any moment now.
My junior minor stock is in the toilet.
Interesting times.
Mining stocks were mostly scams back in the days that Mark Twain wrote about them way back when, and most still are.
This one was profitable when the commodity prices were stable.
The main problem with mining stocks is they are all tied into the credit bubble and it takes a lot of money to extract ore out of the ground, and once the money spigot stops flowing-game over.
Most mines have stopped selling forward, because they don’t know if they can deliver ore not.
This is why above-ground ore is worth so much more…
A mine that can get one ounce of gold out of one ton of ore (raw material) is considered a “high producer.” Some mines in the past have operated at a rate of 1/4 ounce per ton. With regulations and reporting requirements, you better get one ounce plus per ton if you want to make any money or even open for that matter.
A classic, Mark Twain’s “Roughing It.” Just reread it. He really exposes the particular brand of scam that was/is gold/silver mining.
If you’ve never heard of Diamond Mountain in NW Colorado, more of the same, except with planted diamonds. Completely wrong geology yet the swindle worked perfectly.
Plus ça change, plus c’est la même chose and all that…
..
From Mark Twain:
” A gold mine is nothing more than a hole in the ground with a liar on top. ”
LOL.
..
Norman reduces by $17.5 million asking price of Jupiter Island home
Click-2-Listen
By NADIA VANDERHOOF
TCPalm.com
Wednesday, November 12, 2008
JUPITER ISLAND — The housing slump is affecting even the most luxurious properties on the Treasure Coast.
Professional golfer Greg Norman has slashed the price of his famous barrier-island estate that gained worldwide fame when then-President Bill Clinton injured his knee there in 1997.
Xmas has always been the hail mary catch at the end of the year for retailers, and a funny thing is happening…
Instead of trying to count coup, they are headed for the exits 6 weeks before the main event.
Stick a fork in retail, it’s done.
Maybe this will be the death of xmas? Far too many companies operate on this business model.
But then again what would we do with a couple of million barely educated unemployed sales clerks.
Gosh, wouldn’t it be horrible if Americans are finally forced to understand what the true meaning of Christmas is.
America sold out it’s solstice so long ago, it knows no other way…
Exchange Halloween for Christmas and maybe you’ll get the gist of what darth is expressing.
For sure, they need to learn that it’s the big dinner that counts, not the material junk.
“Gosh, wouldn’t it be horrible if Americans are finally forced to understand what the true meaning of Christmas is.”
What would that be? The baby Jesus in a cradle fable, or the fellow in the red suit who needs to diet lie? Yeah I know..I’ve just gone and pissed of the flock.
I like you, Ria. Well said.
I think Linus says it better than I could. Something along the lines of ‘peace and goodwill to all men’….that kind of thing.
The horror! Setting up nativity scenes. Observing Advent. Going to midnight Mass/service. Singing carols. Spending time with family.
Ordering pizza and b@nging the pizza boy. Whatever floats your boat really. It’s all basically good.
‘Ordering pizza and b@nging the pizza boy.’
What?! That’s YOUR Christmas tradition? Jeeze.
Well, I hope you wear a Santa hat throughout, at least. And give an extra good tip.
Bonging?
It’s not MY tradition. Just throwing it out there as an option.
And I would most certainly wear a Santa hat were I to partake. I’m not insensitive.
I am seeing my whole family this weekend and doing xmas at my mom’s b-day. I spent 60 bucks at Ross for
8 people. I make goodie bags full of spa stuff and little candies. Plus I make prints which is my forte’.
My mom gets boxes of trader joes cereal, crackers and gourmet cookies all of which I bought during the grain crises. Everytime I see my mom I always give her a goodie bag full of fun things. Last time I saw her she went gah gah over some maple cookies i found at Ross.
See maybe we are moving back toward at least a lower key Xmas.
Weren’t oranges a popular gift back in the day? I think me pappy used to tell us about how that’s what his parents got him back in the 30s.
When I lived in Florida I used to send a bushel of navel oranges to each of my siblings for Christmas. It was a big hit.
I just keep having a difficult time seeing where the long-term bottom is. This recession will last well into the retirement of the baby-boomers, which will run right into peak oil. Everybody keeps talking about cycles and bottoms, but I just don’t see it.
Peak oil is over for this megacycle. The boomers will not live to see the next oil peak, and many of them will not be retiring soon.
Historians say that the US really didn’t “recover” from the Great Depression until 1950. Might be better to stop looking for a bottom and develop a long term strategy for thriving post-peak oil and post-peak credit.
It’s not too dificult to live like we lived in the 30s, 40s and 50s. The sooner you start adjusting, the easier it will be.
Can you imagine the stories the old grampy Boomers will tell their great-grandchildren about the good old days? Man, them was the days, kids.
The boomers will not live to see the next oil peak..??
I tend to agree….
None of these manias that we’ve experienced in the past ever live up to what the liars, cheats, thieves and loonies characterize as a can’t lose infestment.
Gold
Tech
Housing
Oil
Nominally, Nasdaq is trading at 1997 levels. Adjust for inflation and you got a complete loser deal no different than buying gold in 1980.
Take note housing nutjobs. You’ll be dead and stinkin’ by the time housing ever hits inflation adjusted fantasy prices of 2005.
I’ll believe that money has regained it’s value for practical purposes when I see the price of art drop. So far, a market built purely on aesthetics and speculation has been stable.
RE: It’s not too dificult to live like we lived in the 30s, 40s and 50s. The sooner you start adjusting, the easier it will be.
Hmmm…My head’s been stuck in ‘64 for 45 years.
Life is goooooooood!
http://www.youtube.com/watch?v=3QCZ_bv9aLc
Umm..Peak Oil is not a normal commodity cycle.
Basically, all oil fields become depleted. Pennsylvania used to be an oil exporter. The United States used to be an oil exporter. Does anyone think of Pennsylvania as an oil state now? Or the US?
We have not found any new major oil fields in 2 decades. Almost all the world’s oil fields are nearing or just beyond their peak production period. Meanwhile, world demand continues to increase although it’s already slowed thankfully.
Running out of cheap oil is “Peak Oil” - and I really hope we find some new oil pockets or technology to overcome it.
“Running out of cheap oil is “Peak Oil” - and I really hope we find some new oil pockets or technology to overcome it.”
How can we find new oil when we are not allowed to look for it?
Ohio running low on unemployment money
COLUMBUS, Ohio (AP) — With unemployment rising, state officials warn that Ohio’s fund for paying jobless benefits is dwindling and could be empty by next month.
When that happens, the state will be forced to take out a federal loan to keep the unemployment checks flowing, for the first time in 26 years.
Gov. Ted Strickland says he’s asking Congress for federal aid to replenish the fund, so the state won’t have to borrow. If Ohio were to have trouble paying back a loan, it could face high interest costs and the threat of automatic tax increases on the state’s employers after two years.
A recent report from the National Employment Law Project said Ohio was one of five states that could run out of unemployment money within three months.
We run out completely here in South Carolina in December. So where are we going to get the money?
Same place everybody else is going…….the feds, aka us.
Just ask the pirates, matey.
Print it.
How difficult is it to see that the state should “automatically” raise those taxes now rather than in two years?
26 years ago in Ohio. I remember 1982 well:
“Hey Dad, isn’t it AWESOME how that huge block of cheese came from the government today??. That thing is cool. Oh, it’s not. Oh, that’s why it came.”
We used to buy those 5 lb blocks of cheese in 1974. I don’t know if it was Canadian cheese, or American cheese that was sold on the black market, but Canada does not have a cheese program.
Aunt Mary always had extra government cheese when I came to visit her with my kids. I’d cut her lawn and rake the place while she made a dozen toasted cheese sandwiches for the our lunch; made the best I’d tasted. Then they gave all the surplus cheese and better to Mexico to calm the populace in the 80’s; we even lent them the money to “buy it” at about 1 percent for 30 years or so. In return, Mexico gave us 30 million illegals.
OT - why sarbanes-oxley needs to be retroactivley repealed today.
auditor comes to me looking for documentation. the documentation is prepared and signed by the assistant manager. my SOX documentation says the documents are prepared by the manager. i explain that my manager was on medical leave for three months.
i now have to meet, explain, and probably update my SOX documentation to reflect the temporary change.
COMPLETE WASTE OF FRACKING TIME!!!!!!!!!!
yet mozillo walks free. go figure.
michael,
James Freeman ( OpinionJournal “WSJ” ) said it in terms only people ‘in’ the industry could understand the other night on Lou Dobbs.
His take was that it wasn’t a lack of regulation, but a lack of enforcement. He also made the distinction that ( yes ) nearly all of our woes can be traced directly back to DUMB home loans and those ’should’ have been monitored on the STATE level before they even get shipped off to Wall Street!
So he was kind of laughing at Lou for simply not getting it, which he wasn’t. Just like everyone else that’s in a perpetual state of outrage w/ Wall Street? As for hedge funds, he basically said, “they’re on their own” when it comes to facing scrutiny ( which I understand they now are ) Hang in there!
“He also made the distinction that ( yes ) nearly all of our woes can be traced directly back to DUMB home loans and those ’should’ have been monitored on the STATE level before they even get shipped off to Wall Street”
I believe several states were taken to court by the Bush administration for trying to monitor/regulate banks that were making fraudulant loans.
Ohio sued; court said no, we couldnt stop toxic loans if fed rules were met. What fed rules!??! There were none!
While you’re at it, repeal HIPAA…it’s a complete waste of a huge amount of federal resources to battle a very small problem, and is part of the Federal Government’s war on medical professionals.
Why does Uncle Sam have to threaten 1 year of jail time and 50K penalty for not shredding a document saying Aunt Mabel has hemorrhoids, but someone who ruins your life by stealing your identity gets a slap on the wrist?
Clinton’s worst abuse of federal power, IMO.
Excellent point. Also, it would be most appreciated if every financial company on the planet could stop sending those privacy policy statements ad nauseum. What an absurd waste of paper!
Let’s get rid of the pesky rules on getting rid of radioactive waste. Electricity would be much cheaper. Let’s do away with rules against lead in paint, kids toys would shine much brighter. And food safety. Please.
the documentation is prepared and signed by the assistant manager. my SOX documentation says the documents are prepared by the manager.
I bet you work for a mortgage financing company don’t you?
“Kenny Rogers moved into Mountain House last year, buying a foreclosed property on Prosperity Street for $380,000. But the decline in values has been so fierce that he too is underwater.”
This will kill the foreclosure market and begin a whole new leg down for the market. The number of investors still speculating in the SFR market is very high with numbers that look very similiar to the bubble years, that is the market is still overly speculator driven.
In my northern Calif location these investors continue to multi-bid properties acting as if these so called low prices will disappear next week!
Grim!
Sounds like his song “The Gambler” was pre-autobiographical.
ron,
Same thing here in So Cal (San Diego area). Lots of speculators/investors.
We are nowhere near the bottom, IMHO.
From Barrons:
If he came back, (James) Carville said he would want to come back as the bond market so he could scare everybody.
lol
I love cajuns.
I’ve heard it before and it’s actually a very good quote because it is witty, memorable, and actually bang on target.
I thought his face would suffice.
Wall Street losses steepen as Paulson unveils plan to not buy distress bank assets
NEW YORK (AP) — An already disheartened Wall Street turned sharply lower Wednesday after Treasury Secretary Henry Paulson said the government won’t buy banks’ soured mortgage assets after all, disappointing investors who hoped to see the bad debt wiped off companies’ books. The Dow Jones industrials fell more than 270 points, and all the major indexes dropped more than 2 percent as the market retreated for a third straight session.
http://biz.yahoo.com/ap/081112/wall_street.html
Sounds like good news to me…
I agree. Now the taxpayer has at least a 1% chance of getting all the bailout money back, as opposed to 0% with the MBS.
Yep, Until B.O. gets in and kicks Paulsons ass out and installs some new thieving liar to change that and start buying up bad mortgages.
From the article:
AmEx, the No. 4 U.S. credit card issuer, won approval Monday from the Federal Reserve to become a bank holding company, which gives it the ability to grow a large deposit base and access financing from the Fed.
How can they anticipate growing a Large deposit base during this down turn? Isent that one of the major factors? Nobody has any money, just debt.
The Troubled Asset Relief Plan will purchase no assets? What next???
“I-I-I-I th-th-th-innk the b-b-b-b-bailout is working.” - Hank Paulson
LOL!!!!!!!!!!!!!!!!!! Everytime he studders, he’s Lying Thru His Teeth!!
Hank Paulson says that they won’t be buying troubled assets!
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown
“Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.”
I guess this means all their buds have gotten their money out?
I’m renting a house that’s actually really beautiful, first occupant. It was built partially from a kit, you know, the kind where they deliver the walls all prefabbed and you put it up in a week.
So I got on the internet and checked out the price for this particular kit, 2,000 sq. ft., about 60k, that doesn’t include much except the walls and basic structure. The contractor came over to do a few touchups and we got to talking, how much does the owner have in this place? About 400k, took 15 months to build, and that doesn’t include the land or infrastructure.
He finished it just in time for the bust, though it actually was built for family, which didn’t work out. He already owned the land. A nice modular would’ve cost about 80k. Kind of sad, really, as the guy is now having to do a balancing act.
This house has the best of everything. Funny how having the best can trump common sense, a modular would’ve suited me just fine and he probably could’ve rented it for about what I’m paying, I’m here for the location. Ouch.
I need Obama to take over the White House. The new blackberry is coming out in a few days, and I want it.
I need the goverment to send me a stimulus check so I can buy it.
Oh, yeah! It’s only available through Verizon, so I need the government to bail me out of my Sprint contract.
We’re nearing trading range lows. Unless sentiment has changed, the market should bounce up again.
The way the market has been lately, I won’t be at all surprised if Wal-Mart reports good earnings tomorrow, and the talking heads will declare that “the consumer is not dead after all”, and we’ll have a rally just on that. It doesn’t make sense fundamentally, but that’s the market for you lately.
I don’t see a rally starting today, though. I’ve been wrong before. I have two open orders that may hit my bids if they run this thing down into the close (as they do more often than not of late).
I make it a personal rule not to touch the SKF over $150, so I’ve missed the last two days.
I have a similar feeling.
They’re gonna run those monkeys up all the way into the Christmas season. That’ll be the time to short.
Cat, do you base that on a gut feeling, or on some prior trend?? Just curious, as I’m hesitant and therefore on the sidelines. Thanks.
No real news, light volume, large move.
This speaks of a demand-supply issue not something fundamentally changed.
Good call! Wal-Mart discounts for everyone!!!
latest news
[WMT] Wal-Mart fiscal Q3 Sam’s Club sales $11.62B vs $10.83B
Wal-Mart’s quarterly profit rises 10%
Inventory control, value message evident in results; full-year range tightened
By MarketWatch
Last update: 6:41 a.m. EST Nov. 13, 2008
LONDON (MarketWatch) — Wal-Mart Stores Inc.’s third-quarter profit rose 10%, helped by inventory control and a value message that’s won new and repeat shoppers worried about the economy, the No. 1 retailer said Thursday.
Sentiment became markedly more bullish last week, according to Barrons, which probably explains some of the weakness this week.
Oilpatch update:
Have a friend who runs one of the larger charities in Grand Junction, Colorado, oilpatch central. She says it’s turning into another Grapes of Wrath there, as people are coming from all over seeking work and there isn’t any. A lot of new homeless resulting from this. So…if anyone’s thinking the oilpatch is the answer to your job search, make sure you have the job before you migrate.
Yes, another classic bubble. Here’s a video flashback to the days (just a few months ago) when operators were offering $25,000/acre for a Tarrant County (Texas) drilling lease:
http://www.askchesapeake.com/EN-US/Pages/NoBustVideo.aspx
Now, for those that are still offering at all, it’s more like $5,000/acre.
A year ago construction guys out of jobs in their neck of the woods could always be counted on to say something like “I’m headed to Vegas, there’s plenty of work there”.
During the Great Depression, men chased jobs real-or-imagined, all over the country… and it’s happening again.
For those of you who can read Spanish, the real estate crash has officially arrived in Argentina (and prices were inflated, but not as overinflated as prices in safer, neighboring countries like Uruguay and Brazil). I won’t even get into all the avoidable other messes we’re in, cause the people in this blog are too smart to be preached to. Thank God, for those darling Icelanders. They take first prize and made us runners up in the stupidity tournament for once. For us, it’s an improvement
On another note, the government just passed a budget counting on soy at around $400. Last time I checked soy was at around $320 and we have already 500,000 LESS hectars of first quality wheat sowed for next year thanks to our lady president’s visionary policies. The export tax for soy still stands at 35%. Cattle ranchers are sending wombs to market like there is no tomorrow. Many small farmers are going down, which is exactly what the government wants (they are prone to vendetta and they still can’t swallow the strike). Land was always cheap by American standards, although it had gone up in prize with the commodities boom, but it will get cheaper soon. If you’re into some of planet earth’s beast farmland and have stomach for all of the above, you might get a lot of hectars for your buck….
http://www.lanacion.com.ar/nota.asp?nota_id=1068640
For those of you that know Rick Santelli at CNBC ,he was so right on
about 10 minutes ago . The group was talking about the Paulson speech about how he changed the Tarp program and they were going on and on .
When they came to Rick Santelli he just held up 2 signs that said
BAIT ,SWITCH ,regarding Paulson and the Tarp Program . I had to laugh.
I think the government should issue low interest credit cards so all the money on high interest credit cards can be moved over to the government credit card. This will free up the money going to monthly payments on the high interest cards and free up money for more purchases. Also, the government credit cards should have a high limit.
I heard him but never saw what he said.
I thought he put up a zero.
Glad to know he can’t say ‘bait and switch’ out load.
loud.
Paulson wants to use some of the money saved from not buying mortgage assets to shore up the market for credit-card receivables, auto loans and student loans.
Paulson has Barney Fruit flaming mad now, the old queen is drooling all over himself this afternoon. Saying it was their money and Paulson didn’t do what he said he would with it. LMAO
I love it when someone dares to question barney.
He really is the true term of pompous. Glad he is a queen instead of the King.
King of Queens.
Wait, the govt is actually *saving* money? Finally!
I absolutely adore Rick Santelli!!!
Market’s gonna bounce, but the question is “how”
We have to keep an eye on that instead of blindly waiting for it to happen.
HBB word puzzle #2 :
TARP
(Troubled Asset Relief Program)
Reverse (As in Paulson changing direction) the two middle letters =
TRAP (Toonville Revolt Against Paulson)
T…as in…twinkle toes
T…as in…trickster
T…as in…Timeo Danaos et dona ferentes… I fear the Greeks, even when they bring gifts. (Virgil)
The Greatest Tarp Trap Ever.
The greatest trap has how many chapters now?
I think we need to include BS, AIG, HOPE, SIV,
CDS rescue, and how many banks?
Sorry but this tarp reminds me of the that quilt for AIDS, it just keeps getting bigger and bigger. I loved that quilt because it had a life of it’s own.
This Tarp is Vexed from hell with the death of America looming large.
I’m off to buy a gun and a safe.
The Atlanta Journal-Constitution has an article today which quotes a developer organization as predicting a “bloodbath” in the tony Buckhead section of the city. Builders will not stop building so long as somebody is willing to lend them a dime.
http://www.ajc.com/business/content/business/stories/2008/11/12/atlanta_real_estate_report.html
“Tony?” I grew up there, and while the trees and other flora are beautiful, I would hardly describe it as “tony.” Who came up with this rubbish? Realtors? Of course. These are rhetorical questions.
As long as some human mortals continue to delude themselves into believing they are somehow of a higher class than everyone around them, or can achieve a higher class than everyone around them, this nonsense will continue. I love the beauty of Buckhead, but I hate the traffic and grotesque pretentiousness. It’s just another part of Atlanta, albeit with great typography, and no more elegant than anywhere else. Most of the original Atlanta (leaving out all the counties later added) is gorgeous, but who wants to put up with Los Angeles style traffic, no matter how beautiful the surrounds?
May all corporations that outsource customer support die and go to the end of the help line queue.
Have been trying all morning to get resolution from Adobe S/w, they barely speak English. Next time, I go with Quark.
Quark?
Hah!
Quark has been trying to dig itself out of a self-constructed hole for years now. Their once imperious We’re The Only Game In Town attitude has been been replaced by faux humility as they try to woo back all the users they lost to InDesign. I don’t think they can do it, frankly. I’ve had cold-calls trying to talk us into trying Quark 8, and I tell the salespeople point-blank they lost us with the half-baked, buggy release of version 7.
Meanwhile, last time I had to deal with them (a year or two ago), Quark’s tech support was A.) based in India, B.) not well-trained, and C.) not that helpful.
Ha, you should have the pleasure of dealing with QuickBooks (Substitute the letter D for Qu)…sold in America, service in India…I hope Google comes out with GoogleBooks.
PS, I was trying to help a friend translate Mac 4.0 QB company with 6 years of data to a windows file…ask me how helpful QuackBooks was in helping me resolve this little task. Oh, and they keep telling me to update to QB2009 for $199.00 USD, now why would I want to do this I ask?…because it has more bells & whistles & it’s more accurate they tell me…I say: “I not be understanding what you want more money from me, when I’m perfectly fine with the program I bought 6 months ago, so soorry, I have to go…have running poopey…bye, bye.”
they barely speak English. Next time, I go with Quark. You speak Quark?
LOL!!!
I barely speak English w/o my morning cuppa mud.
It takes my morning cuppa mud to evolve from vegetable to animal status. It takes a 2nd cup to get to human status. The 3rd cup gets me to superhuman status…
IIRC, Quark has pretty much offshored everything as well.
Wow, Adobe used to have great service…10 years ago.
I finally got through to a native of my own country (USA). They’re fixing everything.
I told him my name was Sarah Palin.
All this mining and gold and stuff discussion gives me nostalgia. I love nostalgia on a rainy day, with a cup of coffee and some Hersey’s Kisses.
Ooooh, you know where I love is Topaz Mountain out in the wilderness by Delta, Utarr. I used to go there lots, and you’d hop out of the jeep and rub your bum ’cause it’d be bruised from the long ride and all the bouncing down the rough roads and there’d be glittery specks everywhere, all over the place like confetti. It looked like some crazed vandal crashed bottles simply everywhere, but it wasn’t glass, they’d be wads of little topaz crystals! You’d scoop them up, keeping the bigger ones–which still weren’t very big, really–getting all dusty in the sagebrush and juniper. Then you’d all set up your tents and build a little campfire and everyone would sing, poorly, or else drink cold beer and then sing, even more poorly than before. I like tin-foil dinners. Hot dogs, of course, are so easy and resist drunken mistakes. Of course bags and bags of marshmallows.
Then that stupid dog Murphy, a large golden lab also known as ‘Portly McFatty’ would be caught in one of the tents, lying his stinky fat self across a snowy white pillow, almost always MY pillow, and would be ordered out, and he would go, sheepishly and with his ears down to indicate shame, but not before filling up the tent with the odor of incredibly nasty dog farts. Then you’d drink more beer and look at the flames, beneath the huge Utarr night sky jammed with stars.
Good times.
I posted before about selling my house with a discount broker. I haven’t done that yet, but did get a response from a craigslist ad. I offered 4% to a broker in the ad. A broker came buy and now want to come by again with a client. I did have a regular realtor come by with comps showing that it should sell for 215k, if I put about 5k into the house. The houses has had a lot of remodeling, but there are still some more minor work to be done. How low of an offer should I accept off of the craigslist ad? I posted that I was asking 199k. So if I back in from 215k (comp with some repairs), take out 4k for paying 4% commission instead of 6% and take out 5k for repairs, how low of an offer should I accept? I know the economy is only getting worse and most buyers are going to want to shave off another 5k from the price of any house.
Go as low as you can, sell the darn thing while you’re able.
My loan is only 100k, so I can sell for whatever it’s worth. At 200k it is the lowest price house on the market, not including the houses on the busy streets, which have a couple at 200k. I just don’t want to waste my time and effort doing the final repairs, just to put it on mls and get the same or less. Houses get sold in 60-90 days in my neighborhood for close to asking, but I’m sure things will get worse, not better, so I’d rather get the sale done and over with, even if it means selling for a little less.
Based on this post, I think you already know the answer.
For what it’s worth, many investors that I know (yes, I recognize that yours isn’t a flip) are going with the “pre-hab” strategy, as opposed to rehab.
They are putting little effort into the homes they buy that they plan to resell. Instead, at the low to lower middle end of the market (this market, anyway), they are finding that people like to do their own projects in their new homes.
So, investors are making the homes livable and leaving the other repairs for the buyers. In this way, they can stay priced well under the market and move the place quickly.
Yeah, that’s exactly it. The house has had some major tear up kind of remodeling, that was mush needed, but I’m leaving a list of smaller things that would make it in near perfect condition. So people can move in as is, but will probably having more work done. I’d rather keep the price lower, than do more work and expect more.
I can’t do a comp here from internet land…but I can reliably offer that how much you pay in commission has nothing to do with the sellable price of the house.
And if an agent calls saying they have someone interested and would you be willing to “work with an agent”, don’t pay any more than 2.5%. 4% for that one agent is a helluva deal. Better for her than if the house had been regularly listed with another agency.
Yeah, I know 4% is a lot. That means it would cost me 3k more than at 2.5%. That was the only response I got from my ad, even with the price being lower than any house that would be comparable that was sold recently or is listed now. Paying 3k more isn’t an issue for me, if it means I have a buyer. The value could easily fall that much or more in a couple months from now.
“Why we love America!”: An export dissertation on the global economy, field study report, India to China…the Orient Express circa: 2009
“…Last year, U.S. Customs rejected 64 shipments of radioactive goods at the nation’s ports, including purses, cutlery, sinks and hand tools, according to data released by the Department of Homeland Security in response to a Freedom of Information Act request. India was the largest source, followed by China.”
Made in China = Toxic Label Warning
Made in India = Toxic Warning Label
http://www.latimes.com/business/la-fi-radioactive12-2008nov12,0,2329473.story
And that’s just what they found in the 5 % or so of containers that actually get inspected.
Imagine what was let into the country in all the ones that did’t get inspected.
Oh China, I wish I could quit you and your toxic, sweatshop-labor-made goods!
3-Month 0.000 02/12/2009 0.15 / .15 -0.27 / -.274
yep, 3 month at 0.15
dont forget peak treasuries.
Don’t blame me; I voted for Ron Paul:
http://www.cnn.com/2008/POLITICS/11/11/paul.republican/index.html
Some credit where it’s due, concerning baseball (article written in Sept. 2007 - not sure if it was posted on HBB or not):
Are we headed for an epic bear market?
The credit bubble is just starting to unwind, a credit-derivative insider says. And while U.S. borrowers are being blamed for the mess, they were really just pawns in a global game.
Has anyone successfully executed a strategy for renegotiating their rent? While we can technically afford our rent, changed circumstances (one income diminished, stock portfolio trashed, asking rents down and homemoaners all around living rent-free while they await modifications) tell us we are grossly overpaying. [Also posted in Forum; will look there first for response.]
Move.
Only way I know to renegotiate rent. They count on the fact that it is too convenient not to move but in a market like this, the move will save you a lot of money.
Yes, your backup plan should be to move. But I am in the same position as you and plan to take a shot at it. Here’s my strategy:
1. Start getting “comps” off of Craigslist.
2. Be a model tenant. Make all payments on time, maintain the house and yard well.
3. Make at least one “improvement” on your tab. In our case, there was a tiled floor that was filthy and covered with accumulated wax from a past project that went south. My wife and I spent an entire day on our hands and knees cleaning the thing up so that it shone. It would have cost about $600 to have it done professionally but it cost us about $50 for the cleaning supplies (plus labor, of course). The job is still not finished, but we intend to leave a section untouched so a comparison can be made (photographs or visual inspection).
4. About 3 months before the lease expires, write a nice letter indicating that we’ve really enjoyed the house, etc., praising his property to the hilt, but unfortunately that financial circumstances have changed and we would like to get a reduction. Use the accumulated comps to justify the reduction being requested (hopefully they will), and point out #2 and #3 in a non-threatening way. Ask for a rent slightly lower than you hope to settle for (in our case we currently pay $3500 and I’m thinking of asking for a reduction to $2900), in the hope that the landlord will come back at your desired rent. Offer to pay 2-3 months rent in advance at the reduced rate as a sweetener.
5. Be ready to move (to one of the comps) if the ll gets nasty or in fact increases your rent. If he simply says no to any reduction, then weigh the cost and hassle of the move against staying put.
I have a friend who did this successfully; after his 6-month lease was up he asked for a reduction from $5000 to $4000, and the landlord immediately came back at $4100. One of his tricks was setting up a direct-deposit into the landlord’s bank account on the same date each month. The landlord loved it, and didn’t want to lose him as a tenant.
I think we have a shot, as throwing 3.5k a month away on rent is not something many people would gladly do.
Lesser Fool, thanks for the advice. In my 14 years renting the same condo, I have replaced the drier and dishwasher on my tab (the landlord, a truly nice guy, was in his deathbed when the machines went poof and I did not have the heart to bother him or his family). Since my LL’s death, the son has increased our rent, but it is still well within the market rates in our area. What I’m noticing, though, on Craigslist, is rent asking prices going down $200 or $300 within days of being first posted. I still haven’t seen anything to truly fall in love with, but who knows, I may not fall in love with a house but I might indeed fall in love with the price of a real house, not condo, renting for about as much rent or little more than I’m paying now. Patience, Cassiopeia, you’ve waited so long.
Thanks, LF. Good thoughts. I should have made it clear that we are only at month six of the current two-year renewal term. Been here four and one-half years and the rent has gone up about $100/month per year, to the current $3000.
Sure, call up your landlord. The lease is a contract, it can be altered by mutual agreement. If your landlord is not an FB and is a decent human being and if you’re a responsible renter you have a chance to work something out.
My father in law has done things like this for good tenents. If they pay on time and don’t rebuild a motorcycle in the living room he’s willing to cut them some slack.
My wife and I are paying about $300/ month over market so that we can avoid the move. Too much longer and it’ll be a wash, but so far it’s cheaper, especially since I had a severely ruptured disc in July and can’t lift much yet.
Climber, I hear ya. My moves must be made when my tendonitis is not acting up. actually i get it from moving, lifting and packing. My lease is up and tempted to ask manager for a big ass favor.
Climber, But where does our leverage come from? If you assume that ultimately we’re good for it, but pissed off to find ourselves paying over market. (Blame it on the current bailoutitis.) In any event, hope you’re back on that mountain soon.
American Express… like Shrub…seems to have run out of “Capital”
American Express shares plunge on bailout report:
AmEx shares fall 9 percent on report its seeking $3.5 billion from government.
“…American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company’s profitability.”
http://finance.yahoo.com/news/American-Express-shares-apf-13547722.html
AMAT to lay off 12%, or 1800 people.
So much for being saved by solar.
Yeah, this was inevitable.
However, they are my top candidate for recovering from this mess. I like their stock (just not at the current price.)
They supply the Kool-Aid; they don’t drink it themselves. They are well positioned.
What are some of you seeing as far as an impact from the recession so far? I’m starting to see some serious fallout in and around the Bay Area, SF area and even more so in smaller towns outside. I spent the weekend in the Sierra Nevada mountains. There’s a few towns like Grass Valley and Nevada City. During the boom, a lot of the stores got turned into upscale boutiques. Fancy furniture, expensive cookware, and wine shops. In other words- they focussed almost exclusively on the upscale. That and there were TONS of real estate offices. We went last week and just a year later, most of the RE offices are gone, many of the stores are closed or looking like they will do so any day. In the mountains, it seemed like every other cabin had a trailer complete with jet skis or snowmobiles for sale. That and loads of other toys: various motorbikes, campers, and boats.
Several stores in and around my Easy Bay hood went under.Several nice Restaurants are closed Sunday-Tuesday. The specials promote cheaper dishes. Traffic is getting better because there are fewer and fewer construction vehicles.
Lastly, homes just sit and sit and sit. One home sold on my block. The rest just sit. But the prices aren’t really steals either. The owners are still being stubborn. Then again, nothing sells either.
The National Science Foundation is cutting the nuts off of their science research programs.
Now, I fully understand that not every science grant is useful. Many are not. Still, they have the potential to be very useful and transferable to a new product or business venture. So, we are eating the feedstock.
Roidy
P.S. Money is the mother’s milk of science.
I’m seeing prices go down at my local, upscale Gelson’s. Yesterday my kids were off school and I took the opportunity to go shop for shoes for them (they grow so fast, I can no longer keep track of their sizes). It was a wonderful shopping experience. The salespeople were actually helpful and thankful. There were many people hanging out at the mall with their kids for the holiday, but I did not see many carrying shopping bags. I got some looks…
As one of these layaway louts who is a product of the NSF grant system, I opine that most grants are a waste of the paper they are written on.
The academy sold out a long time ago; the Cold War is long over; and you basically have a really buncha people clamoring for cheese. It’s a lot smaller than TARP, I’ll grant you that, and there is some amazing work done in each field but we’re talking about the difference between the average product today, and the average product 30 years ago.
Ever ask yourself who the people working for the NSF are? They are scientists who wouldn’t even get a tenured job at Bumblef*ck State.
Look it up! This is all public information.
Puddytat, did you write the grants or get the grant goodies? I used to write grants, just wondering…
Mine were in the geological arena…you know, rocks.
And funny, I have a faction book going to press soon that starts “I dream of rocks.”
This is true. Honest.
Graduate student. I was one of the best too (yeah, I’m tootin’ me horn so what’s new, huh?)
I even wrote some grants myself. Got them too.
Whatever. The whole thing was beyond silly. That’s when I left the academy.
Yeah, I wrote one for an eastern state I won’t name (has a lot of skiing) for 500k to export their environmental technologies to S. America that made even me feel like a piker. They got it and I felt kinda bad…
Lots and lots of marketing BS.
On the jobs front in my hood, a neighbor told me she was let go from her job she’s been at for 5 years in the medical supply field a month ago. Since then I’ve noticed 3 more neighbors not going to work in the mornings anymore. One of these days i will strike-up a conversation about the job market and get the skinny on what happened with them. I do know at least one of them had their electricity turned off due to non-payment, and i saw a tow truck in the hood a few times now, searching for a car to repo?
Moab is DEAD, hardly any cars downtown, nobody shopping. Granted, we’re going into the slow season and maybe this weekend will see some tourists from Salt Lake or Colorado, so this isn’t much of a scientific study. I was just surprised at how quiet it was today.
And jetson boy, you just described most of the mtn towns in Colorado, even the ones w/o skiing, everyone tried to go upscale and attract the winery crowd. I mean, little towns with absolutely nothing going for them tried to turn into the latest kitschy (sp) cool places to go and spend money. Good riddance to the whinery crowds.
I posted a few days ago a piece from the Telluride Foundation’s website, they’re losing donors and money and sound quite worried.
Good riddance to the whinery crowds.
Oh yeah…
I’m kinda hoping the hotel industry will stop building for the “luxury” crowd. I’ve felt that most hotels rooms have been over priced for several years. (C’mn folks: it’s a bedroom, bathroom, and a TV and there are a billion rooms everywhere. How can they all be worth more than $120 a night??)
Another awesome article from Portfolio:
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom/?refer=email&print=true
Will re-post tomorrow. It’s definitely worth a read.
Bend it like Buffett…
HaHaHa — I don’t revere any of these fellers…They just strike me as a few guys whose bets panned out longer and better than those made by the rest of the bull herd.
Maybe that is why I don’t feel like I am getting dragged down on their coat tails?
DAVID WEIDNER’S WRITING ON THE WALL
A week of historic desperation on Wall Street
Commentary: Current conditions have that 1929 feel
By David Weidner, MarketWatch
Last update: 12:01 a.m. EST Nov. 13, 2008
NEW YORK (MarketWatch) — John Kenneth Galbraith called it the “nature of mass illusion.”
The late economist, interviewed in a revival of the PBS documentary on the 1929 crash, was talking about the speculation in the markets in the 1920s, but he could as easily have been talking about the last three to four years on Wall Street — an era people will look back on, observe our naiveté and chuckle.
After all, isn’t that how we viewed those suckers of the 1920s?
Back then, the great investors of the day were people like General Motors Corp. (GM 3.08, +0.16, +5.5%) founder William Durant, National City Bank’s Charles Mitchell and Michael Meehan. They were revered in the same way Wall Street idolizes Berkshire Hathaway’s (BRKA 103,333.00, -3387.00, -3.2%) Warren Buffett, financier George Soros, Legg Mason’s (LM 15.78, -2.87, -15.4%) Bill Miller and Blackstone Group LP’s (BX 7.01, -0.30, -4.1%) Stephen Schwartzman.
Like the investing elite of 1929, today’s celebrity investors are taking a beating. It’s no wonder some of them, such as Buffett, have been urging investors to buy U.S. stocks because they look cheap. Stocks looked cheap on Oct. 25, 1929, as well, after banks led by J.P. Morgan & Co. (JPM 34.57, -1.78, -4.9%) tried to stem the tide by buying.
The annualized rate of foreclosure filings projected off the October rate is 12*279,561 = 3,354,732. Is there enough money in the U.S. Treasury to rescue all of these folks, and AIG, and Detroit, and the remnants of Wall Street, and the U.S. consumer, and anybody else who is feeling a bit pinched for the moment?
Special Report Mortgage Meltdown
85,000 homes lost to foreclosure in October
As government and industry scramble to reverse the tide of foreclosures, filings jumped 25% in October.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: November 13, 2008: 6:07 AM ET
NEW YORK (CNNMoney.com) — As government and industry scrambled to stem the housing crisis, another 84,868 homes were lost to foreclosure in October, according to a report released Thursday.
Last month 279,561 struggling borrowers received foreclosure filings, including default notices, notices of auction sales and bank repossessions, according to RealtyTrac, an online marketplace for foreclosures. That’s a 5% increase from September, and up 25% from October 2007.
“October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year,” said James J. Saccacio, chief executive officer of RealtyTrac, in a statement.
This seems pretty hollow after the low blows Sarah Barracuda delivered during campaign season. Never too early to try to get back into the game for 2012, I suppose…
Palin: I’m proud of Obama and pray for him
* Story Highlights
* Sarah Palin on Obama: “I pray for him, his family, the new administration”
* News coverage of her family was often unfair, Palin tells Larry King
* Palin says she doesn’t believe she hurt the GOP presidential ticket
(CNN) — Former Republican U.S. vice presidential candidate Sarah Palin has said she is optimistic about Barack Obama’s incoming administration and that she prays for the president elect and his family.
Palin drew huge crowds at her campaign stops, garnered intense media interest and brought big ratings to “Saturday Night Live” as comedian Tina Fey impersonated her in several political skits.
OECD Forecasts Recessions in the U.S., Europe, Japan (Update2)
By Jurjen van de Pol
Nov. 13 (Bloomberg) — The Organization for Economic Cooperation and Development cut its forecast for global growth in 2009 for the second time this year and urged governments to take more stimulus measures to fight a recession.
The economy of the OECD’s 30 members will contract 0.3 percent in 2009 after expanding 1.4 percent this year, the Paris- based group said today in its latest economic projections. The OECD in June forecast that economic growth among member nations would slow to 1.7 percent next year from 1.8 percent in 2008.
“The OECD as a whole is currently in recession” and will start recovering in the second half of 2009, Jorgen Elmeskov, the OECD’s director of policy studies, said at a press conference today in Paris. “Underlying the projections is an assumption that the extreme financial stress since mid-September is short-lived, but will be followed by an extended period of financial headwinds through late 2009,” the OECD said.
For the record, how well did Hank Paulson’s December 2007 “no recession in 2008″ forecast pan out?
I think he crapped out and lied to us.
Thanks Hank.