Bits Bucket For November 21, 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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Posted on Fri, Nov. 21, 2008
One Last Thing: The Big Three don’t measure up for a bailout
By Jonathan V. Last
Inquirer Opinion Columnist
…
The thinking behind government bailouts is never strictly, or even mostly, ideological. Conservatives and liberals do not have consistent views on the subject. Instead, the logic of bailouts is pragmatic, based on three key principles:
Bail out generally viable companies.
…
When the housing bubble popped, this caused a financial earthquake. And, as economist James Surowiecki put it, this earthquake triggered a tsunami that swamped the entire global credit market.
…
Bail out the first to fail;
make an example of the second.
…
Bail out companies that are too big to fail.
This is the rule that trumps all the others. If a company or an industry is so big that its failure would trigger catastrophe in the wider economy, the government has no choice but to bail it out. That’s why, despite all the downsides, the Paulson-Pelosi plan had to pass: If the credit markets had frozen solid, it would have been Armageddon for middle America.
…
I just hope the U.S. of A. is too big to fail.
It is currently undergoing stress testing.
The others like Honda and Toyota will likely suffer too; here’s why. We could really use a minivan right now since our Camry wagon is pushing near 160k, but low-mileage minivans are $30k — that’s right, thirty f**king thousand dollars! Note that we have zero debt other than a cheap mortgage, and I have an engineering degree and good productive employment. However, I also have a daughter who will be ready for college in a couple of years, and her future comes first.
Are you saying your household financial situation is driving the market for Japanese automobiles?
The typical family needs four main things to be members of the middle-class: housing, transportation, healthcare and upper education. Inflate them, and consumers have to choose. The automotive industry really needs to look closely at their customer’s budget. I don’t mind stretching a bit for a vehicle, but I’m not signing up to be quartered.
That begs the question, what is middle class, anyway?
Is it owning things, or is it freedom and mobility? I have to say, looking around at my coworkers this morning they aren’t looking very middle class even though they all drove to work in their cars from their houses.
The only thing I really have in common with them is the higher education degree and the health benefits - that’s two of four - does that make me half middle class?
IMHO, middle class - just like retirement - is a social construct meant to keep noses to grindstones.
Yes the good minivans are outrageously expensive. The Odyssey is practically a status symbol in these parts.
RE: The Odyssey is practically a status symbol in these parts.
Minivan Driver = Incompetant, ignorant, “drive in the passing lane” instigator of road rage.
Edgewater,
You have to take all this in some historical content.
We have enough food to eat
We have clean water
We have shelter and its generally climate conditioned
We get to take a vaction every so often
We have lots of art related activities including movies/TV
We have safe parks to visit
Crime is very low
Medical care is quite good and infant mortality rates are low… people are living a long time
Could it be better? Yes. Is this a historical norm? Heck no. War, starvation are normal.
Enjoy it while it lasts.
We have to work but typically only 40Hrs per week. Not bad either.
There is some progress from a society that made things to a society that makes machines that makes things. Its good. A lot of the cheap toys and other nifty stuff was not possible 30 years ago or even 20 years ago. We managed to build lots of housing. Kind of says the price should be lower.
Get a Mazda 5. It’s a pretty sweet ride that drives like a car, looks more sporty than other mini-vans, and gets decent gas mileage. The one caveat is that it’s more like 4-person wagon that has the option to haul lot’s of stuff or seat 6 for short jaunts.
For my wife and I (and our expectant child), it’s more than enough room. If the size of your brood is closer to the Duggar’s, than it will be a little small.
For my wife and our 1 yr old, our little Scion xA is more than enough room. And 37mpg highway when I keep it under 65.
Oh, and our Mazda 5 cost us in the low-20s, fully loaded.
What Low mileage mini-vans are you talking about.
You can get a NEW Dodge Caravan for under $20k
And I saw more than a few low mileage (under 30k mikes) used Honda Odysseys on cars.com in the low 20’s.
Yeah but the Caravan is everything that is wrong with Chrysler over the last 15 years….. Just have to hope the dealerships are around for the inevitable and frequent warrantee work you will need
I own a 2004 Caravan that is problem free with 90,000 miles. I know other Caravan owners, few have complaints. Chrysler makes good mini-vans. Not as good as Toyota or Honda, but those are much more expensive.
I’m not a “only buy American” guy, but the Caravan is a good minivan and VERY affordable.
One of my former Co-workers had a 89′ Caravan. The thing had close to 300,000 miles on it. The interior was shot, but still- 300,000 miles?! Pretty good for something that’s supposed to be junk.
I had 2 Caravans in the late 90’s. Both had transmission failures and tons of other fit and finish issues. My sister had one with the tranny dying at 45,000. I moved into an Oddysey when they changed it (2000/2001?) and drove it, problem free for 100,000.
my inlaws have an 86 chevy astro with over 300k, and they are millionaires (because it was the last new car they have bought). it looks like crap and is uncomfortable and smelly but it still freaking runs - obviously nowhere near as nice as a odyssey but that’s why they are rich
i’d put a few bucks into the camry wagon, its got lots of life left if you can deal with the ragged out nature (that really can’t be fixed, unfortunately)
Re: the minivan situation - faced with the same problem last year, I ended up getting a used Kia Sedona for $17,000 that should be usable for a few years. Not comparable to Toyota in fit and finish, but I loved saving money.
RMS,rebuild the engine.
The motor is in great condition because I change the oil every 2,500-miles. It’s the little things like noisy struts, bad anti-lock brake sensor, one tail light burns out regularly, etc., which add up to a pain in the a$$ when I want to spend my precious free time doing other things. Automobile prices are also inflated due to potential liability and warranty issues; think of the added expense when you buy a step ladder.
i’m with you on the liability stuff… its why they can’t sell 60mpg cars like the late 80’s geo metros and subaru justys anymore. now to even get 50mpg we have to resort to expensive and complex hybrid drivetrains with gas/electric CVT power transfer (which can generally only be serviced at a dealer)
It’s easier to live in a minivan, so there is more demand.
+1
Look, I know that the assembly line people at GM, Chrysler, and Ford probably get paid too much. I also know that while their cars are better (waaaay better actually) that they used to be, the cars still need improvement. We shouldn’t forget that when gasoline was going up they were still pushing huge gas guzzling trucks and SUVs that needed their own zip codes.
So, yes they need to fail or at least be severely spanked for this whole mess. However, I have far fewer problems giving these companies a bailout that I do the real criminals that got us here: Goldman, Bear Sterns, etc. I mean these financial “Masters of the Universe” are going to pay $25 Billion in bonuses with OUR money! There are rumors that this Wall Street bailout is running not at $700 Billion, but is actually somewhere north of $2.5 Trillion when you count up the loan guarantees.
So what’s another 25 billion? We are going to loose it all anyway.
Roidy
P.S. Yes, Virginia! There is a Santa Claus!
The wage for new UAW hires is $12/hr.
Bankruptcy would allow them to dump their pensions on the PBGC and union retiree medical on Medicare.
Its foreseeable in the near future where they would have lower wages than the non-union plants.
Of course, bankruptcy would also mean the senior executives would lose their jobs.
Skip,
That was Frank Borman’s solution when he was CEO at now defunct Eastern Airlines. Well actually it was the aviation machinists union’s “concession”. Throw the newbies under the bus. As well as all the ‘other’ techs the military trained transitioning to civilian life.
The move didn’t save Eastern yet somehow managed to turn aviation maint. into the same level of competence you’d expect at Jiffy Lube. What little remaining that hasn’t been offshored.
Rumor has it that the new FAA Administrator and Oberstar are going to be taking a good hard look at all this off-shored aviation maintenance.
If you want to fly an airline that is trying to keep their maintenance programs in-house, fly American Airlines.
My friends brother was a mechanic for Eastern, he worked in Miami. I remember him telling me that he made more money than the Mayor of Miami. Eastern wanted a 40% paycut for Florida and 20% for NY (NE) workers. The unions turned it down and were soon out of work.
“The wage for new UAW hires is $12/hr.”
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAAA!!!!!
Just like most unions the old timers always give “concessions” on the backs of the newer or yet to be hired employees and rarely actually give much. Teachers do the same thing. The “average” wage is still way off the charts.
Also there are hundreds of thousands of retirees who aren’t 65 yet so they would have a huge health insurance problem in the interim.
I say let them fail, but to me, the UAW, is full of **it and being stupid and very arrogant. They think Obama owes them big time, and time will tell if they are right or not…
If so, then we should let all maxed out cities, counties and states go bankrupt to eliminate all those 24K gold pensions and salaries they got themselves voted. Bring everybody down to about 15 hundred a month. Teachers too! Why leave out high priced medical pensions? Let everybody share the change….. then, house prices will drop rather than be occupied by those fossils on pensions. Plenty of 1 bedroom condos in Fla for them…
However, I have far fewer problems giving these companies a bailout that I do the real criminals that got us here: Goldman, Bear Sterns, etc.
I feel the same way.
Even though the $25 billion is a mere panacea, it’s a drop in the bucket compared to the no-oversight, nonsensical $700 billion sugar pill the Masters Of The Universe earned through repeated ineptitude. At the very least it’s a small morale boost for Michigan, which could use a little.
And, for all their many (many many many) problems, the Big Three do make something tangible. I’m sick of CDOs and their abstract financial flim-flam brethren.
So you only have a problem with gov’t ( city, state) pensions? You rant on about those costs, but UAW pensions are OK? I’d like to know if the UAW pensions contain COLA increases. If so, no amount of money will save the big three. BTW, packaged bankruptcy or bailout, it should define the Obama presidency and the length and depth of the recession. Also, can’t you get a nice home in Detroit for $130,000? why then do UAW workers need $50/hr plus benefits to live comfortably? Unions will always sacrifice the young-uns, but it makes the real savings years down the road.
So you only have a problem with gov’t ( city, state) pensions? You rant on about those costs, but UAW pensions are OK?
Huh?
Maybe that was in response to someone else …
Instead, they told automakers to submit a detailed plan by Dec. 2 of how they will use the funds and how they will return to profitability.
———————————————————————–
the automakers were told to have a plan an they they must undergo “significant sacrifice.” Why was this not demanded from the financials? Just being curious.
We spend $25 billion a week in Iraq, so I just don’t understand why saving the auto industry is so difficult to contemplate. And we’re punishing them for building SUVs? Thats ludicrous. There was/is demand for these bloatmobiles, so they supplied it. Isn’t that how the “free market” works? Oh, and the auto industry was poorly managed and didn’t foresee the credit crisis. That didn’t stop us from bailing out AIG. We can stomach paying out robber-baron sized bonuses and pensions to smarmy Wall Streeters, but heaven forbid a blue collar worker get a pension and health care benefits. Talk about class warfare. And lastly, these financial pundits who blather on about how the Big 3 auto industry should take their lumps and go into bankruptcy (though there won’t be any restructuring loans available) and that somehow, presto chango a new auto industry will emerge, just like internet companies and banks. Well, there’s 75 years of brick & mortar infrastructure that would cost billions to recreate. I don’t see some new upstart company building an auto industry out of their garage.
In defense of Detroit, until recently they were selling all the full size trucks and SUVs they could build. And the full size Chevy, Ford and Dodge are STILL three of the top ten selling vehicles in the US. And it isn’t like Toyota, Nissan, BMW, MB, haven’t tried to jump onto the truck/SUV bandwagon (with the financial help of various Bible Belt Govenors and Senators).
For a lot of people, especially those with older kids out here in fly-over country, a big truck or SUV is the ONLY way to travel (and maintain your sanity), especially if you are towing something. Now you can beat people up for living their lives the way they do, but there wasn’t anybody holding a gun to my head, forcing me to buy my F150 or Durango.
Some might forgive them for thinking that some regulatory authority would step in and keep oil speculators form driving the price of gas up to $5/gallon.
And why invest billions into a low profit line of economical cars when nobody thinks they are any good anyway, and you have to sell them at a loss?
The fact that the so-called brain trusts at Cerebus and Tesla haven’t managed to do any better than GM and Ford should tell you something. Were some of these so-called “bone-headed decisions” so bad, considering their options?
Bad decisions have been made in Detroit, but they haven’t been helped by the fact that Federal, state and local governments, the UAW, the health-care industrial complex, and various other entities have been sucking the lifeblood out of the Big 3 for a long time.
Amen!
I’m much less bothered by helping the auto manufacturers than the financial industry.
One actually produces things and benefits workers; the other is meant to suck the wealth from the workers and middle class, and give it to wealthy speculators and executives. Easy choice.
Professor,
I don’t suscribe to your logic. There is no such thing as too big to fail. That is pure propaganda.
Lehman is gone. Was it too big? Did it make any difference? No.
This is ALL about saving the big-player, PAULSON retirement fund and ALL the players on WALLSTREET.
The FED prints money for the Treasury and loans it to banks. The current “BANKS” are insolvent due to their GREED. They best 30-40:1 as Investment Banks and their collateral is crap. IF they put their loans on the books they are B A N K R U P T. Period.
The Treasury gave them money to keep THEIR game going. They are still not lending.
They could have just as easily opened up 3rd NATIONAL BANKS OF AMERICA and began lending money. Unstead, they used the ‘new money’ to pay-off bad debts. It is NOT a credit problem, it is a problem of solvency, and Insolvent companies should be liquidated. PERIOD.
That will bring price descovery back into the marketplace and we can get houses priced appropriately.
I was just quoting a passage scribed by Mr Last. This was not my logic.
OPINION
NOVEMBER 22, 2008
Not Everything Can Be Too Big to Fail
There’s a lot of loose talk about ’systemic’ risk.
By PETER J. WALLISONArticle
There is a really bad idea circulating in the nation’s capital. Of course, that’s not surprising — but when it’s endorsed by the Treasury secretary, we’d better pay attention.
This week, Henry Paulson said in an interview with the Washington Post that he wants the Federal Reserve to be able to regulate and ultimately take over any failing financial institution that it considers crucial — including hedge funds. This echoes a notion that has been endorsed by executives of some industry associations, that to prevent a recurrence of today’s financial crisis it will be necessary to impose tough new regulations on financial institutions deemed “systemically significant.”
…
An institution designated as systemically significant, or “crucial,” would be marked as too big to fail. After all, that’s what such a designation means — that the institution’s failure must be avoided because of its potential impact on the economy or financial system. But once we designate a financial institution as too big to fail, and regulate it as such, a lot of unpleasant things follow.
First, we will have created “moral hazard” and impaired market discipline. The markets will understand that a loan to a systemically significant institution will carry less risk than a loan to an institution that does not have this status. Accordingly, systemically significant institutions will have an easier time raising funds than others, will pay lower rates and grow larger than others, and it will be able to take more risks because of the absence of market discipline.
This in a nutshell is the story of Fannie Mae and Freddie Mac. The two companies were implicitly backed by the U.S. government, which in practical terms meant that they would not be allowed to fail. As a result, they were able to borrow as much as they wanted and take risks with those funds that they couldn’t have taken unless the markets believed — correctly as it turned out — that Uncle Sam would stand behind them.
Second, systemically significant institutions would suddenly have an unfair competitive edge that would warp the market. Why? Because their lower funding costs would make them more profitable than others, and enable them — as it enabled Fannie and Freddie — to drive competitors from any markets they enter.
…
Finally, the support voiced in Washington for the idea of regulating systemically significant financial institutions is based on the fundamental misperception that regulation can prevent them from taking the huge risks their protected status would permit. This New Deal notion should be discarded.
Exhibit A is the banking system, now mired in the worst financial crisis since the Great Depression — even though it has always been the most heavily regulated. Exhibit B is the S&L debacle less than 20 years ago. Thousands of S&Ls and more than 1,500 commercial banks collapsed in another memorable regulatory failure.
It is completely inexplicable — after the blindingly obvious failure of bank regulation — that Washington (and European Union) policy makers would now want to spread regulation beyond banking and into other financial institutions, including hedge funds, brokerage houses and others that the government designates as systemically significant. This would give the government the opportunity to pick winners in each financial industry — ultimately creating Fannies and Freddies everywhere. Among bad ideas, this one stands out.
Mr. Wallison is a senior fellow at the American Enterprise Institute.
Just give us the money
November 20, 2008
“My wife and I are the proud owners of all the common stock in a small company, created originally as a vehicle for supplying consultancy services. Because we are both US citizens, the company is registered both in the US and in the UK. Over the years since its creation, an awareness has grown inside me, that what we really own is a bank: money goes out (quite a lot) and money comes in (not quite enough). All we lack to be a proper bank is leverage and a marble atrium.
To remedy this obvious deficiency, I have decided to submit a request to the US banking regulators (cc’d to Hank Paulson) to grant bank holding company status to our enterprise. If G-Mac can aspire to this status, which gives the qualifying institution access to all the Fed troughs and to what’t left of the TARP, then so can we….”
Willem Buiter
http://blogs.ft.com/maverecon/2008/11/just-give-us-the-money/
A much better idea than mine of buying a crap bank and applying to TARP, then splitting to SA. Just apply as a Bank Holding Company. Don’t even have to split the country.
I understand Circuit City also plans to become a bank holding company.
Who was that said the best way to rob a bank is to own one….
Wow. That’s gold Jerry, gold!
hoz,
Nice find! ( You gotta love those Limey’s sense of humor, eh bloke? )
yeah hoz..good one…I even forwarded to a few friends…
All these blurry lines have me wondering: If I own a restaurant, can I qualify for farm aid?
DO you own a restaurant? And do you serve chalupas at it? I’m starving for a chalupa right now.
Argentine Stocks Threatened by State Seizure of Biggest Holders…
The Argentine Senate last night approved President Cristina Fernandez de Kirchner’s plan to nationalize about $24 billion in private pensions, a move opposition parties called a cash grab and the government said is a way to protect retirees from the worst financial crisis since the Great Depression.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajuNcpt6m_N0&refer=home
2025: the end of US dominance
• US intelligence: ‘We can no longer call shots alone’
• European Union will be ‘hobbled giant’ by 2025
• Triumph of western democracy not certain
The United States’ leading intelligence organisation has warned that the world is entering an increasingly unstable and unpredictable period in which the advance of western-style democracy is no longer assured, and some states are in danger of being “taken over and run by criminal networks”.
The global trends review, produced by the National Intelligence Council (NIC) every four years, represents sobering reading in Barack Obama’s intray as he prepares to take office in January. The country he inherits, the report warns, will no longer be able to “call the shots” alone, as its power over an increasingly multipolar world begins to wane.
http://www.guardian.co.uk/world/2008/nov/20/barack-obama-president-intelligence-agency
In a time of great uncertainty, how pretentious to predict the world situation for 2025. Idiots.
Blue Skye,
Do they mean to say we’ve actually been calling the shots here lately? Do we really need an expensive “report” to tell us ‘that’?
“and some states are in danger of being “taken over and run by criminal networks”.”
You mean kinda like what’s happening here in the U.S.?
Mexico is such a basket-case, that Rosarito Beach (25 miles south of the border) is now a ghost town, bereft of touristo Americano…
Mexico’s main source of income was oil, and not only is the giant Cantarel field rapidly depleting, so is the price of dinosaur juice. but not drugs.
The Narcos call the shots in many a locale, down under.
Earlier in the year, the Mexican army was called in to disarm and disband the Rosarito P.D., as 48 out of 52 officers were on the take.
Earlier in the year, the Mexican army was called in to disarm and disband the Rosarito P.D., as 48 out of 52 officers were on the take.
An impressive ratio of crooks to straight men.
Maybe we can disarm and disband our own financial heavies, who seem to be similarly challenged in the Take, Take, Take Dept.
aladinsane,
Right, I’d recently read the USAToday article as well. Even the mayor has to have a full contingent of bodyguards surrounding him 24/7. The article ‘did’ go on to say that “NO American tourists have been harmed and you ‘can’ get an ocean front room for $29! ( mid-week )
Lord, I remember when you could give your wallet to the bartender and crap out in the bar and he’d give it back to you when you came around.
Legalize it for personal use and tax it…Make it a death penalty for selling it…That should pretty much take care of it….
Make it a death penalty for selling it…
The death penalty for two consenting adults engaging in a transaction not hurting anyone else.
Isn’t it great to live in a country full of people that value freedom? lol
And by the way genius, if there is a death penalty for selling it and assuming that pretty much does away with the trade, what in the H-E-double hockey sticks are you taxing exactly? Do you even have the foggiest idea of what a tax is and how it works?
LOL - as I recall, the tax laws are already on the books in order to include the infamous tax evasion charge on every arrest.
I’m sure the druglords would be happy to retrain for work in nursing homes or call centers to replace the lost income.
/sarc
It’ll always be something.
“The death penalty for two consenting adults engaging in a transaction not hurting anyone else.”
This statement is asinine. When somebody buys heroin, meth, coke, or any other drug that comes from Mexico, they are a contributing to the corruption and slaughter which is taking place. Without them, the customers, there would be no drug lords.
Odd that we don’t have any alcohol lords. We used to, in the twenties. I guess some people don’t learn even from the most obvious of examples.
You’ll note we don’t have any “lords” in other non-illegal consumable markets; like rice, soybeans, pork, houses, etc.
Violence follows illegal markets, not the other way around. When govt makes entire markets illegal, they create competetive advantage for those willing to commit violence in the context of those markets, get it?
I’ve got a question for all you “pro-legalization” boosters.
I, being a “critical safety-related” person, am currently required to submit to mandatory drug and alcohol testing. If I refuse to take the test, I can be terminated, and my certificate revoked; no hearings, no grievances, guilty until proven innocent.
Are you still going to use any kind of public transportation, knowing that the legal groundwork for this requirement has had the legs kicked out from under it?
and alcohol testing
Making drugs legal would presumably put it on approximately the same footing as alcohol for which your use of is currently tested. So what’s your question again?
These are frankly unrelated issues. If a company wants to maximize safety by only hiring people who, say, don’t smoke weed, then they should certainly be allowed to do that and we don’t need national laws making entire nonviolent activities illegal to accomplish that.
Furthermore, even if you still want to take the position that weed must be illegal to maintain airplane safety, it does not then become legitimate to place the blame of the results of those policies (increased violence) on the shoulders of people who are participating in otherwise nonviolent activities (buying and selling).
Are you still going to use any kind of public transportation, knowing that the legal groundwork for this requirement has had the legs kicked out from under it ??
Its Illegal for a public transit employee to drive while intoxicated also…Just because something is “legal” does not necessarily mean it is “allowed” within the scope of employment
And as for you “Blew print”,
And by the way genius, if there is a death penalty for selling it and assuming that pretty much does away with the trade, what in the H-E-double hockey sticks are you taxing exactly? Do you even have the foggiest idea of what a tax is and how it works ??
Maybe I got to boil it down to Cat, dog, lawnmower for you;
Selling it Illegally is my point you moron….Sell it “Legally” through the power and taxation of the government and be punitive if you sell it “Illegally”…You eliminate ALL illegal drug cartels immediately because there is no fricken profit in it….
You mean like this:
2 at T may be fired in crashes
Tested positive for substance use; Agency defends screening process
By Noah Bierman
Globe Staff / November 21, 2008
Two members of the MBTA crews involved in separate Green Line accidents over the past week tested positive for drugs or alcohol, raising questions about the level of substance abuse among the employees responsible for ferrying hundreds of thousands of commuters each day.
The two employees, who by policy were tested immediately after the incidents, have been suspended without pay while the T completes the formal process of firing them, said Joe Pesaturo, spokesman for the MBTA.
As a former supervisor of a large crew of mechanics, line service, and avionics techs, I can tell you that in the “real world” of unintended consequences (not the perfect world that little kids and liberals believe in), identifying a person too drunk to work on airplanes is a hell of a lot easier than identifying someone too “high” to be working on airplanes.
And, if it is legal, who is going to decide how high is too high? I can guarantee you that a zero-tolerance policy for a “legal” substance will get you into a lawsuit.
You pretty much don’t want me fixing airplanes, methinks.
“And, if it is legal, who is going to decide how high is too high? I can guarantee you that a zero-tolerance policy for a “legal” substance will get you into a lawsuit.”
It’s quite simple, really. Judge people on their quality of work. End of story.
We’re getting rid of the crime syndicate in another 60 days.
“We’re getting rid of the crime syndicate in another 60 days.”
.. and replacing it with a new crime syndicate.”
And it’s acceptable so long as the least among us benefits.
You mean, like Pirates?
“taken over and run by criminal networks”.
Hey fat boy…
“come see an old one eye fat man sometime!”
Rooster Cogburn…True Grit
RE: 2025: the end of US dominance
• US intelligence: ‘We can no longer call shots alone’
• European Union will be ‘hobbled giant’ by 2025
• Triumph of western democracy not certain
Certainly, none are good reasons to be holding a high six figure mortgage on some locationally or energy obsolete McMansion that’s fer sure.
The falling value knife will last for decades.
holding a high six figure mortgage on some locationally or energy obsolete McMansion ??
“and some states are in danger of being “taken over and run by criminal networks”
S.P.E.C.T.R.E.?
Oh what a load of crap.
I mean criminals are not capable of discipline and producing anything. How long do they last in power?
Raise of dictatorships is possible. Iran, Russia, Africa all worry me.
Heck, technology will be so different then.
Do you remember when we all had dial up? Not long ago.
Its almost totally impossible to have a clear vision of 2025 except by extrapolating trends of the current time. How well did that work out for real estate? Heck, how did it work out for climate modeling.
Markets ‘in panic mode’
By Tom Petruno and Walter Hamilton
November 21, 2008
Reporting from Los Angeles, Tom Petruno and New York — An intensifying panic has gripped the stock market, sending share prices to new depths and leaving investors afraid that they’ll never be able to recoup their losses.
The latest teeth-gnashing plunge Thursday virtually wiped out the remaining gains from the five-year bull market that began in 2002.
Can capitulation be far behind?
I get the feeling that the “I Like Ike Generation” and the “Wookstock Generation” are getting ready to crack and sell everything. And since the have almost all the money in the U.S., there is no one for them to sell to.
My “I Like Ike” parents got out, fortunately. I talked them into getting out in 2007, someone else talked them into going back in, they took losses but got out again at S&P 1200.
Remember those hip, snarky “Talk to Chuck” commercials? There’s some 1960s attitude. Haven’t seen one in the last couple of months. Look folks, you crammed 10 of you into a VW bug back in the day, think you can manage that lifestyle again?
WT Economist,
To which ( and nothing “personal” to the folks ) but all “I” can say is; good riddance! We’ve lived under the constant threat of “the boomers cashing out” for at least the last 10 years. Now that it’s happened we have a better idea of what the markets and the world will look like without them.
( Let me know how that fixed annuity is workin’ out for you aging hipsters will ya’? )
“We’ve lived under the constant threat of “the boomers cashing out” for at least the last 10 years.”
Every time I look at a long-term index chart I can’t help but see the pig in a python.
Kind of like the Hidden Pictures game in the old Highlights magazine — even a 5 year old can see it!
Frank,
I’ve never doubted that for an instant. What I ‘am’ saying is that this is no different than the boomers all running and screaming for the exits to dump their primary/2nd/vacation homes all at the same time.
That was fairly graphic too. In truth, their “temporary at best commitment” has distorted the market all along. There was never an intent to leave those 401k or rollover $’s “in play” long term.
What this ‘does’ provide is a stock market that will be appropriately scaled for younger generations to participate in long term. Their ROI will likely look more like their grandparents returns and expectations will moderate accordingly.
I’ve been babysitting a friend’s lizard the last few weeks. I now know what comes out the other side after that pig makes its way through. Horrendous!
Dinor, we’re 100% in agreement. Last time I did some thinking about it, I pegged the stock market to return to early 90s pricing.
In the last 20 years, we’ve had personal computers, cell phones and the Internet bail us out of a reckoning [financial skullduggery aside]. These industries have added real jobs and production to the economy. But we ran up a bill for all this cool stuff, and we need another invention to get things going again.
‘Kind of like the Hidden Pictures game in the old Highlights magazine — even a 5 year old can see it!’
Oooh, Frank, I loved those. My gran had a big pile of years worth of Highlights in her bookshelves for the grandkids and when we visited I would haul them out and pore over them until I had found all I could. I also enjoyed ‘Goofus and Gallant’. Then I’d go downstairs to Uncle Dan’s room and read ‘Fu Manchu’, you know, that dastardly Oriental criminal with his truth serums and kidnapped white maidens.
Goofus and Gallant and Fu Manchu. Yes: the mental formation of Olympiagal.
That, and goats.
( Let me know how that fixed annuity is workin’ out for you aging hipsters will ya’? )
I was under the impression that fixed annuities pay a fixed amount similar to bank CDs?
Don’t the variable ones also include a minimum payout?
Why would that be a bad deal now?
Skip,
I didn’t mean to imply it would necessarily be a bad thing? It’s just that they’re terribly expensive and in return for that “guaranteed income” ( the ins. company basically keeps the upside )
Moreover, you’ll need an amount significant enough ‘to’ annuitize!
My favorite commercial currently is the Charles Schwab one, where computer generated human beans* tell us what to do financially…
* if an actor utters a word, he or she gets paid big money-but voiceovers don’t get paid much.
Mucho irony.
My Dad gets the AARP magazine now. (Our motto: “It’s great to be old! Really! And we’ll say it every month!”)
Anyway, they had a top 50 list of why it’s super terrific to be over 50. Squished in between a ton of fluff was a jaw dropping statistic of the ages of asset ownership in the US. I don’t remember exactly, but it was something like people over 50 owned in the range of 80-90% of all the assets in the United States.
It’s not surprising as people just starting out don’t have assets. On the other hand, who do you sell your assets to and at what price when you go to sell is somewhat of an issue with such a large concentration in a generation. It would be interesting to find out if other time periods had the same concentration of assets in that age demographic.
the idea is to sell them to immigrants. illegal or not.
that’s why neither party cares about closing the southern border IMHO.
“…it was something like people over 50 owned in the range of 80-90% of all the assets in the United States”
So we use the new F35’s to protect NYC & Los Angeles humanoids….but not the empty land in between?
Singing: Home , Home on the range…
People my age (62) are (a) too frightened to give much away, and (b) hoping to leave assets to kids, who by then will already be over 50. To hope for an inheritance is always a gamble, but most of my friends in my age group have now inherited SOMETHING — often less than the assets they had already accumulated on their own, but still not trivial. I think this goes a long way towards explaining the concentration of wealth in the hands of 50+ group. Even Social Security reinforces the concentration, since it is not means-tested. However, if the SS system survives, you too will find yourself not wanting it to be means-tested, since you’ll remember your “contributions” to it.
az_
Are you taking your SS payments @ 62, or holding off for more money, down the road?
However, if the SS system survives, you too will find yourself not wanting it to be means-tested, since you’ll remember your “contributions” to it.
SS is the only tax system where people expect their money back at some point.
I agree with you. I’ve met people who would be probably still qualify for benefits under means testing who are adamant about keeping it universal. I have a feeling means testing might make SS too close to welfare for comfort, but I digress.
Unfortunately, as you allude to about SS survival, I don’t think we’ll have a choice on means testing. It might come later rather than sooner but at some point the retirees will overwhelm the system. At that point, the only choices will be to jack up SS contributions to those higher than income taxes. Outrageous tax rates might happen but then again, a too high tax rate seems like it start to force most of the real economy underground, where the taxes are 0%.
Inheritance? Anyone whose parents don’t end up destitute is ahead of the game, even as the massive federal, state and local debts leave them behind.
Inheritance?
About ten years ago I received $1,500 when an aunt passed away. I’m 47. Meh…
Think of that fast approaching gray and cold blustery Janaury day when they’ll open their 4Q/year end statements - all alone in the chill - the holiday buzz a rapidly fading away - nothing ahead but a long cold winter.
“…rapidly fading away”
Much like the Cheney-Shrub bumper stickers.
Vermontergal,
Likely that “factoid” has remained true for many generations and probably isn’t unique to the U.S.
Here’s the difference, unlike the the WWII gen. ( that amassed wealth ) the boomers amassed debt that they leveraged against their folks… wealth.
My point is that all of this was “hot money” to begin with! They were NEVER long term investors. There was a very different mindset involved. Boomers ( as usual ) were simply there as for the good times. Trust me, their folks faced plenty of challenges too and “the only “easy” day was yesterday”.
REAL wealth is able to remain in the market in the down times. The boomers never saw the market as anything more than a way to fund their lifestyle. With them there never was any “multi-generation plan”.
“the boomers cashing out” for at least the last 10 years ??
But it was not suppose to happen until their mid 60’s….oops…A nasty recession has changed all that…Was with a friend last night eating pizza and a few beers….30 year “Coke Inc.” retiree….his portfolio was well in excess of 1 mil…Sold it all last week and went to cash…He told me he will never buy stock again and that the after tax cash he has will easily get him to the graveyard….
scdave,
I rest my case. Anyone fortunate enough to have the same job ( let alone during KO’s most aggressive expansion era ) can’t have a beef in the world.
Collectively had they converted to bonds in unison it would’ve driven yields through the floor anyway. Glad at least Ben’s posters are financially able to go out and support the economy! Beers on ‘Thursday’? Been TOO long!
‘ Beers on ‘Thursday’?’
The local watering hole occasionally has on it’s marquee:
Free Beer on Thursdays*
* the bar is closed on Thursdays, in the wintertime.
“I talked them into getting out in 2007, someone else talked them into going back in, they took losses but got out again at S&P 1200.”
You and I had similar experiences. I convinced my 80 year old dad to unhire his investment adviser and cash out of the stock market in spring 2007. I was recently disturbed when he reported losses on stocks that I thought he had sold. It is hard to get an 80 year old to follow through with prudent financial moves.
I tried to get my mom to sell her stocks, but no dice.
She’s down 54% since last year…
I got my BIL out of his stock category in his 401K — saved him about $40,000 dollars.
Ben Jones, of course, is the champ for saving many people from ruining themselves financially — and if it’s not too corny:
THANK YOU BEN!
Getting your elders to follow sage investing advice is about as easy as herding cats, it seems…
It was like herding Cheshire Cats, in my particular case.
Good and interesting data on the petro markets:
http://tonto.eia.doe.gov/oog/info/twip/twip.asp
Mr. Peter Schiff on CNBC Thursday Nov 20
http://www.cnbc.com/id/27823932
I agree with Schiff especially on gold.Here is a good way to look at gold.
Gold peaked out at about $1000 back in March, it was only over $1000 for a few days. At that time the dollar was at about 70. Today, gold is $751 and the dollar is 88, so gold has dropped 25% and the dollar has risen 26% (18/70=.257 or 25.7%).
In-other-words, one ounce will get you 25% fewer dollars, but those dollars are worth 26% more.
In March of this year your ounce of $1000 gold bought you approx. 9.3 barrels of $112 oil.
Today your ounce of $750. gold buys you 15 barrels of $50. oil.
So gold is gaining purchasing power.
Are you trying to say that the price of gold in things dollars can buy is off 50%?
B.S.
You aren’t that dense, are you?
I guess I am supposed to say “sarcasm off”.
The time to roll out reasoning as above is when the dollar and oil are both falling against gold. At present it is not a credible argument for gold vs dollar holding.
B.S.
BP
Add another 6% today. Gold is up AND the dollar is slightly firmer against most foreign currencies. Gold is at new highs in almost all major currencies right this moment, and rising.
Schiff nailed it - gold has been completely disconnected from other commodities for awhile (proving it is more than just another commodity) but it’s strength has been masked by the relative strength of the dollar.
Schiff’s only mistake was the lure of commissions in promoting foreign denominated stocks & bonds, otherwise he’s been dead on.
Gold is world-wide money, and some of you are about to learn what it’s like, being the Dollar bagholders when nobody wants them anymore…
Yes, yes, we’re all about to learn, and since we are mensch not mice, we won’t come crying to you.
You’re probably a gold dealer a.k.a. p*mp for gold just like the NAR rascals.
If I were a pimp, where are the whores?, Pussy Galore
“Mr. Peter Schiff…”
Nice of you to preface with Mr.; you’re a true gentleman, Hoz.
The only question I have for schiff is if interest rates are going to skyrocket how is it that the dollar is Going to collapse?? I would think that higher interest rate would strengthen the dollar…
You’re confusing nominal and real interest rates - something easy to do when inflation is low.
interest rates meant something in the early 1980’s, but they don’t mean diddily squat now.
Did you see Louise Yamada just after Schiff on CNBC last night?…she also has been dead on,and basically said I agree with what Peter just said..Huge dollar unwind,and still firm on her gold call..Dow could go to 5K, and SP 4-6.
Also, Perth mint just shut til after the new year..seems there’s a further rush into the physical with supplies dwindling, or gone?. The article I read last night was if/when China decides to actually add reserves up to 5% that would be an one half entire years world output. That is if they could get it…Yes, interesting days indeed.
Huge dollar unwind
Unwind into what is the question… a dollar collapse is a relative event and so something else must be rising in value. Is gold going to 2000/oz.? Yen to 1/50 USD? Euro to 2 USD? Oil to 200/barrel?
“Unwind into what is the question… ” If I knew that then….
You pay your moneys,and you take your bets, but look at the US$ chart…anytime I see a short term spike usally ends ….well back to the long term mean. Gold may or not prove to be the insurance I hope, but putting all your faith in the dollar at this point seems pretty trusting, and foolish. I think there are a lot os smart people bailing into treasuries, and I don’t beliece it will end well.
” Brother can you spare a dime? ” …well at least 300 Billion, you see I’m kinda down on my luck, and any day now…..
http://tinyurl.com/5g9d7p
“…Spreads on investment-grade bonds closed on Wednesday at 606 basis points over Treasuries, just 12 basis points shy of a record 618 basis points hit on Oct. 29, according to data from Merrill Lynch.
The high-yield credit default swap index is reflecting a 55 percent five-year cumulative default rate, JPMorgan said. The index widened by 40 basis points on Wednesday to a record 1,387 basis points, or a $74.63 price, the bank said….”
http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN2040421520081120?sp=true#
I love flight to safety! People are stupid and I am getting convinced Americans are the stupidest.
Nah…. In certain Latin American countries, they just dismantled huge pyramid schemes that were used for money laundering… And people are out on the streets protesting… People are dumb all over the world.
LOL
We are just another Banana Republic, only we’re the largest banana republic ever in existence.
“Insurers Seek to Buy Thrifts To Get Piece of Bailout
Paulson Cautions Such Moves Won’t Assure Assistance
“…We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability,” Ramani Ayer, chairman and chief executive of the Hartford Financial Services Group, said in a recent statement. ..”
WaPo
Experts agree that free money is the best kind.
Don’t you have to grow bananas to be a banana republic? I’m afraid we have to import our bananas. The closest we come to being in the banana business is the clothing store found at your local mall….
Calling the USA a “Banana Republic” is an insult to bananas.
And to “Republics”
If you don’t like the declining housing value statistics, just remove the subprime foreclosure sales from the data!
http://online.wsj.com/article/SB122722235538745845.html
Only One Person Knows a Home’s Value: Its Buyer
The good news is your home may be worth more than the rock-bottom price that your neighbors’ houses fetched. The bad news: No one but you might think so.
As the home market surged earlier this decade, the two leading indicators of home prices diverged. One didn’t count homes sold with exotic or subprime mortgages, which fueled much of the bubble. These same properties are often the ones going on the auction block today at severe discounts, pulling the other home-price index down — some say to unrealistic lows.
To address these discrepancies, indexes are going increasingly local. Other, less-well-known measures of home prices — some of them available only to paying customers — are adjusting to exclude homes sold by banks.
Sales of foreclosures and other distressed properties accounted for 35% to 40% of transactions in the third quarter, the National Association of Realtors said this week. The discount on such properties, often sold by banks that need to clear inventory quickly, can be 30% to 40% compared with similar properties sold by the resident, according to Damien Weldon, a vice president of credit-risk products and analytics at First American CoreLogic. The company’s Loan Performance division is producing a new index without these discounted sales, a distinction that was “not important a few years ago, but now it’s very important,” Mr. Weldon says.
But the indexes may be leading everyone astray. Just as respondents to election surveys are meant to stand in for the broader electorate, the homes being sold need to represent all homes. The problem is, producers of these price measures aren’t sure that sale prices reflect the values of houses not on the market.
How 1984-ish.
How stupid ….When you have that many foreclosures ,than those comps become the market . Why would a bank take the highest comps ? In addition ,to think that people will buy a regular listing at 50% more price just because it might not have some work to do because of your typical foreclosure damage ,is absurd . Sure some of those foreclosures are really trashed ,but many just have minor damage . The 2 foreclosures that sold near my house had minor damage ,yet the buyers got a great price . And what about the demand right now in that demand is low . The Laws of Supply and Demand are really operative in this real estate market .
Housing Wizard,
Right, having squatters take over your 89 y.o mother’s former residence makes for jolting headlines ( dusty and empty don’t ) My guess is the problem with the brunt of foreclosures is neglected landscaping ( kind of like when you’ve been on vacation? )
Adler Tag happens just a week from now, when the shorts get handed theirs, on Comex.
Options close today.
Just to continue Hank’s great record for killing my puts on closing Fridays, today I expect announcements confirming:
an auto bailout,
government covers everyone’s mortgage,
shorting to be made illegal for 6 years,
banks no longer have to pay taxes,
Markets to shut down automatically if stock prices go down at all,
…
shorting to be made illegal for 6 years
Well, what we really need to do is make it illegal to sell things for less than you paid for them. That should fix all this nonsense we’ve been hearing about great depressions and such.
Alder?
Have we reached peak panic yet? I am thinking the stock market yo-yo may have bottomed out. After walking the dog for a few days, I am thinking the stock market will rocket up in another mother of all short squeezes.
INDICATIONS
U.S. stock futures rise after Citigroup sale report
By Steve Goldstein, MarketWatch
Last update: 8:35 a.m. EST Nov. 21, 2008
LONDON (MarketWatch) - U.S. stock futures surged on Friday after a report Citigroup may put itself on the block and following upbeat results out of Dell and Salesforce.com.
Well, that didn’t last long. Dow already back down to +60.
No way there can be a short squeeze at this point. Due to the recent free-fall, short sellers have way too much cash now to be squeezed out of anything. I speak from personal experience. The market could jump up 20% and I still wouldn’t be sweating.
The time to short squeeze is when the market’s been flat for a while, not after it’s been nosediving.
The stock market the past few months has been pretty much trench warfare, shorts v. longs.
Verdun deal.
Verdun deal.
One of your best turns-of-phrase, methinks.
Verdun’s an erie place to visit, more soldiers were killed there in just a year’s time on a miserable piece of ground, than American soldiers killed in both World Wars 1 & 2…
Wow - I didn’t know about Verdun until just looking it up on Wikipedia. Ugh.
It’s amazing how not-well-versed we are in WW1 history vs. other wars. Myself included, I’m ashamed to admit.
packman,
I had hoped our leadership understood what they were getting into with our current 2-front war, but everybody always believes that wars can be short and sweet (Iraq War 1), and forgets the reality that most are just meat grinders of men, money & morale…
“…upbeat results out of Dell…”
ROTFLMAO….& spitting out $1.00 Starmucks coffee over my $100.00 notebook computer.
good guess, except that the rocket up today is in gold and not in the stock market
Turkeys will drop from the sky.
Just like in Cincinnati?
Best episode of WKRP. Ever.
“With God as my witness, I thought turkeys could fly.”
Bernanke is the Les Nesman of the financial world.
Financial turkeys dropped from a helicopter have pretty much the same aerodynamics in Citinatti, as they did in Cincinatti.
Like Maryann over Ginger, Loni Anderson couldn’t hold a candle to Jan Smithers.
Bailey, take off those glasses! Yummy!
Wild turkeys do fly. Not for long distances mind you and they do make a racket when flying.
Even tame turkeys can fly a bit, if they try it when they are young and haven’t yet grown that enormous out-scaled white-meat breast we’ve bred them for. I know this because my neighbor, a vet with a passion for fowls, has some turkeys and I was taking care of them one time when they were gone and I decided I wanted some tail feathers for calligraphy. Just a few, sheesh, but they selfishly wouldn’t share. They all got away.
No, I didn’t WANT one from the ground. I wanted one fresh from a turkey’s fluffy bum. Then it would be nice and warm and soft and easily carved into a quill. Also, I felt like chasing a turkey. It was a whim.
If you happen to be into fowl, as in owls, there’s a terrific new memoir out called Wesley the Owl, about this young Caltech biologist who raised a barn owl in her bedroom for 19 years. It’s been described as Marley & Me, but with wings. I’m a big softie for animal stories, still haven’t gotten over Charlotte the spider dying.
They can fly over our 8-foot chin link fence. One here also likes to roost up in one of the big trees, every evening around sunset.
Went to water my fruit trees just now and i’m sad to say that the Fuji Apple I planted last month no longer exists thanks to my nemesis. the gophers.
It was listing to port, gnawed off.
One afternoon I watched a dandelion bounce up and down in my backyard and when I stooped down to investigate, a gopher sucked the little weed down into a hole underneath. Like a scene out of “Tremors”. Even my outdoor cat was afraid of those little beasts.
My life is kinda like Caddyshack, sans golfing.
‘It was listing to port, gnawed off. (by gophers)
*Gasp!* Dreadful! You shoulda chased the little fookers, alad, and made writing implements outta their little fooker bums!
I myself am often surprised by what one can write with, if one really wants to.
Carl Spackler: [preparing to dynamite the gopher tunnel] In the immortal words of Jean Paul Sartre, ‘Au revoir, gopher’.
‘I myself am often surprised by what one can write with, if one really wants to.’
‘Course, the letters can be kinda smeary.
“…the Fuji Apple I planted last month no longer exists thanks to my nemesis. the gophers…It was listing to port, gnawed off.”
I was inspecting my garden this morning, and was quite horrified with the results. It seems the white tailed deer have made it their personal buffet. They’d behaved quite well up until recently, sticking to native vegetation along with the plentiful grass available. They’ve deviated in an ugly fashion.
Did Mucho Stinko jump off a building?
Cosmic. I downloaded the entire WKRP television show from the internet the other night and started watching the episodes. I noticed the Turkey episode but haven’t watched it yet.
Hilarious.
Not to be missed. I remember that episode as a stand out.
The markets are too damn optimistic these days for their own good! Falling knives consequently remain difficult to catch.
MARK HULBERT
Where’s the pessimism?
Commentary: Contrarians still not sounding the ‘all clear’ signal
By Mark Hulbert, MarketWatch
Last update: 11:41 p.m. EST Nov. 20, 2008Comments: 64
Mark who? the one who predicted a Gold plunge?
Volcker Gives Baseball an Update on the Economy
At the moment, baseball is bucking a trend. Teams are about to start awarding free agents lavish contracts that, in at least two instances, will almost certainly top $100 million. Meanwhile, the stock market continues to sink, retirement accounts are disappearing and the Big Three automakers are on the verge of bankruptcy.
With that as a backdrop, the 81-year-old Volcker went to Major League Baseball’s headquarters Thursday morning and addressed team owners and baseball officials for roughly 45 minutes. According to several people who attended the meeting, Volcker discussed what led to the current economic plight and where things might be headed. His assessment was not upbeat, the attendees said.
http://www.nytimes.com/2008/11/21/sports/baseball/21mlb.html?_r=1&ref=business&oref=slogin
====================================================
Say it ain’t so, Paul.
“some states are in danger of being “taken over and run by criminal networks”.”
—–
They mean just like the U S of A is right now???
FutureExpat, how soon do you plan to leave? Where ya going?
I’ve kinda thought that if the US descended into a Mad Max type of world that all the other “nice” places to live would also be (generally speaking) experiencing the same conditions.
For instance, can you imagine a world where the social fabric in the US has fallen apart but somehow Canada continues on “normally”?? (Hey, the mafia has taken over everywhere south of the border - let’s go to Canadian Tire and look at some furniture!) Seems improbable, but it could happen, I guess.
(By the way, I’m not saying that the Western World is dependent on the US for peace. Rather, they exist and prosper in the same set of “environmental” social conditions.)
Many of you are in for the shock of your lives when you find out that a well armed populace combined with false entitlement and concealable weaponry is a recipe for disaster
Most 1st world countries* exist sans handguns, and sans violence.
* rifles and shotguns are allowed in most countries, for those of you that believe the rhetoric from a curiously named group called the “National Rifle Association”.
ZZZZZZZZZZZZ
Okay, I give up. You are right totally right. The US is will melt into choas because states allowed concealed weapons. The NRA is evil and there is absolutely no violence in 1st world countries that have more restrictive firearm polices AND there was never any violence before the invention of guns.
And New Zealand is the bestest place ever. *sigh*
Vermontergal:
You related you’ve never been outside our country, and maybe it’s time for you to go see how everybody else lives on our planet…
I never said there wasn’t violence in other countries, but there’s a world of difference between shooting somebody from 20 feet away and not getting your hands dirty, versus sticking a 8 inch knife into somebody’s belly.
The later approach requires physical contact and the possibility that said weapon will be used against you.
One might think in dozens of 1st world countries, that there would be lots of homicides done with cutlery, in compensating for lack of firepower, but it just isn’t the case…
I have to agree that New Zealand is an excellent place to live (except maybe for folk who are lazy, they better move to the Netherlands). Only their currency exchange rate is starting to spell some trouble ahead …
Mad Max scenario will never happen. The police state is quite capable of enforcing curfews and crushing unrest even in countries like Argentina and Zimbabwae which have fewer cops to exert control of the populace. New Orleans was allowed to fail but you can bet that Washington, Chicago, etc. will not be allowed to burn down. You may starve in your home but you won’t be out rioting in Manhattan.
Who is going to pay for the CONstabulary to keep the peace?
We are not only broke, we’re also in debt $10 Trillion…
Lad, I’ve always felt that the notorious phrase “Guns don’t kill people, people kill people” should be modified to “Guns don’t kill people, but they make it a hell of a lot easier for people to kill people.”
Anybody ever have a loved one or a friend killed by handguns?
Here’s my story:
About 20 years ago, a friend’s fiance was over at his sister’s house, and despite a restraining order from my friend’s sister’s estranged husband, he showed up at her house, got into an argument and shot her dead.
My friend’s fiance was frantically calling 911, when he shot her dead as well.
In the movies and tv, people get murdered all the time by handguns, but seldom is there any time for grieving, and my friend was a emotional wreck for years and in many ways has still never recovered from it…
Why do glorify violence?
“Anybody ever have a loved one or a friend killed by handguns?”
Yes, but those situations, unfortunate as they are, doesn’t excuse trampling on my right to own as many as I want and protecting my property with it if necessary with deadly force.
Long live the CCW permit.
Blano,
Nobody’s taking your hand cannons away, and there’s hundreds of millions of them in the hands of people like you, as testimony of it never happening.
How sad are things?
The only growth industry in our country @ present seems to be handguns…
Why do glorify violence?
Maybe because it’s our cultural heritage.
Maybe because we as a species revel in it.
Maybe because we’re so darn good at it.
Maybe because not enough of us have seen the very messy Real Thing instead of the videogame version.
RE: Anybody ever have a loved one or a friend killed by handguns?”
Dr. Bill Petit of CT was a follower of the anti-gun dogma.
Too bad for his wife and young daughters.
http://www.nytimes.com/2007/08/07/nyregion/07slay.html?_r=2&pagewanted=1&hp&oref=slogin
Gun ownership does not equal glorifying violence. I own guns and do not kill people. I feel safer on the firing range than on the freeway driving to the range because I am much more likely to die by car than gun. If someone vehemently opposes the private ownership of guns there are, as you say, many countries where one could reside. I doubt there are no guns there, but there are no legal guns there. Gun possession is harshly punished in Mexico, but do you feel safe there?
Your original question is more interesting. You asked what will happen in a country with guns in an economic collapse. I think the same thing as in countries without legal guns; it depends on the nature of the popluation. The spectrum ranges from Iceland to Argentina to Mexico. In no example outside Africa have we ever had a Mad Max.
When I was a lad, we had a steady diet of cheap-rent fake violent sports on tv, wrestling & roller derby dominating the action, and by the time the 1980’s rolled around, roller derby was gone, but wrestling upped the ante with showmanship and added gratuitous faux violence, and learned it could make pretty penny doing it via pay-per-view.
People bored of wrestling-not unsurprisingly, and they upped the ante by delivering real violence vis a vis UFC, where for just $44.95, you too can watch a couple of morons beat the snot of one-another in a caged match, where never was heard a Marquess of Queensberry rules word…
In a country suffering economic collapse, the men with the guns rise to the occasion; think Zimbabwe, Russia, Afganistan, Iran, South Georgia, Sudan, Venezuela, Argentina, Bolivia, Burma, Cambodia, North Korea (and many others if you want to go back beyond our own lifetimes). Notice who is in power in each of these countries. Our housing/financial “problems” pale in comparison to those being lived every day in those countries, many times for decades. How many decades of “problems” in a country with an armed populace would its citizens tolerate what we are experiencing. Politicians should be asking themselves this question. I know that many are. I’m trying to avoid it, but, when at wallchina, I get the uneasy feeling that I could still use some more batteries, or a few more cans of propane, or…..
Guns:
1. Because guns are fun.
2. But, much MUCH more importantly, because I’m a skinny little maiden living in the deep dark forest, far away from any handy cops, and I don’t feel like ever, ever begging or pleading for my life or for anything else I value to not be taken from me without my permission. I grew up among scary violent people–I shall not address the subject at this time–and I have more than once observed that a gun can really help redress an unequal balance of power.
Jeeze, just ’cause you have a gun doesn’t mean you chase down and eat the postman and handy babysitters! Relax. Let’s not over-react here.
Shoots, have some popcorn. And if it won’t pop right, I’ll shoot it with my gun.
Hahahahaha!
As the bumper sticker once said:
“Ted Kennedy’s car has killed more people than my Assault Rifle”
I always found that those with the loudest mouth in support of sidearms are the same clowns who are defenseless without them.
I’m not saying that the Western World is dependent on the US for peace ??
I am….They just don’t pay for it…
I would rather say that the Western World is dependent on the US for war.
and they pay for it thanks to the dirty tricks from the FED and its WallStreet soldiers.
An armed society is a polite society.
People can bemoan handguns and other weaponry to their little hearts delight until the day somebody kicks in their door and holds them at gun point.
Truth of the matter is this, criminals will look for the path of least resistance. They will attack targets which are least likely to strike back, it’s self-preservation. If a criminal knows you are armed or knows you have a big terrifying dog they are more than likely to go after your neighbors. This is true now and it will be true if things get worse. If people show up in your yard armed and you start shooting they are more than likely to flee. They won’t be looking for a gun battle, they will be looking for easy pickings. Common sense.
buh bye!
Random market thoughts this morning\
Due to the US bond market dysfunction, it is possible to buy US 1 month to 1 yr TIPS that have apr yields ranging from 9% to 2.5%. For these to fail, deflation would have to be -10% or so. The Feb, 2009 TIP was yielding 11.45% apr.
The corporate bond market is in even worse shape, buy the bonds and buy the swaps for 3% apr - in theory riskless. (risk is who is writing the swaps)
Berkshire Hathaway’s sold derivatives (swaps, Put Options etc.) do not have collateral provisions ergo the risk of owning Berkshire stock. Unquantifiable risks from a balance sheet perspective. There are less risky stocks to buy than Berkshire.
“…There are less risky stocks to buy than Berkshire.”
I sent an email to the Pep Boys CEO…I suggested that they follow Amex and register as a bank.
It’s hard to imagine a riskier stock than Berkshire. It is essentially a hedge fund doubled down on the long side because of its 1-10 put bet (equivalent to betting on Secretariat to show at the Belmont and now finding him running dead last a quarter mile into the race) selling at a 30% premium to its underlying asset value.
www dot arkansasbusiness dot com/article.aspx?aID=110037.54928.122175&cID=h
Less than three weeks later, the cash deal closed and the Dooleys walked away from the table smiling with a 2,700-SF home built in 2007 for $172,500.
That was more than $100,000 less than it originally sold for, and averaged out to around $64 per square foot.
The house my wife and I bought in ‘98 in central Ark we paid $62. I remember at that time you could figure to pay about $60 for a decent new place (nothing fancy) and if you paid $80 that was a very nice house.
Japanese intervention threat hits yen
By Peter Garnham
Published: November 21 2008
The yen fell from three-week highs against the dollar and the euro on Friday as a rebound in equities soothed investors’ nerves and Japan’s finance minister warned over volatility in the currency markets.
The yen rallied strongly on Thursday as sharp falls in global stock markets fuelled risk aversion, sending currency investors to the safe haven of the low-yielding yen.
However, Shoichi Nakagawa, Japan’s finance minister expressed concern about market turmoil on Friday, saying he would cooperate with the Bank of Japan on possible measures to prop up Japan’s stock market and economy….
But Lee Hardman at Bank of Tokyo-Mitsubishi UFJ said unilateral intervention was unlikely to prove successful in reversing the yen strengthening trend, and at best would only slow the pace of further yen appreciation.
“We remain confident that the yen will strengthen further in the coming months as risk appetite remains fundamentally impaired fuelling yen demand,” he said. “It is becoming increasingly evident that the sharp deterioration in financial market conditions which occurred over the past couple of months is negatively impacting economic activity.”
FT
Where is the profit’s trough?
Lower lows descending in fog.
O’ never again!
Cassandra
How much longer will our country allow piracy on the high seize, to go on?
Relax…India’s out there kicking the snot out of them, Cheney should have had Haliburton move to Bombay instead of Dubai.
Is there any chance that we can lure away a few Somalian Henry Morgans to work for the A-Team?
Is it inevitable that the US enter the era of Mercenary economy? I mean; hey guys, we’d love to defend you, but we need paid.
My own folks did this for generations. The Scots were a middle eastern tribe who migrated to Greece. They found it hard to maintain a foothold among the waring tribes of Greece and took to excelling in the martial arts. Legend is they farmed out as the mercenary army of the Pharohs for some 200 years.
It’s a way to make a living, when our credit dries up.
Legend is they farmed out as the mercenary army of the Pharohs for some 200 years.
It’s a way to make a living, when our credit dries up.’
How about those of us with dainty twig arms? What are WE gonna’ fight? Midgets and kitties? Nohow! I WON’T hit a darling little kittie, so you can just forget about it right now, Mr. McHittyPants!
Oly,
We needn’t send the flower of our homes into the disfugurement. You can make salves and bandages.
Welllll, okay. But they have to be cute bandages.
Also, please note that I said I refused to hit kitties but I did NOT refuse to hit midgets. Although of course the midget would have to deserve it.
With the Pirates, forget about reliving the great depression, we’re skipping that and going right back to the 1700’s.
Start practicing your sword skills.
ah, the 1700’s - when most high level politicians in my area made a fortune by operating pirate companies. The clever thing was that they had their ships paid for by the government (part of the ongoing war / trade efforts) and could keep all the piracy loot for themselves.
I don’t think much has changed, except that the current day pirates like those from WallStreet and London City have a far more comfortable living.
come to think of it, I guess that Dick Cheney must have some Dutch ancestry. He understands exactly how you can run the most profitable businesses.
‘I guess that Dick Cheney must have some Dutch ancestry.’
Well, so do I. Quite a bit of it, in fact. Yet IIIIIII have not chosen to be a cunning, wicked, sneaky, systematically–looting and wretched pigman pirate.
I just have some old cute little wooden clogs I ended up with from my gran’s stuff when she died. They’re red, with flowers. I don’t know if anyone ever actually wore the things, or if they were always just some sort of memento. It seems to me that the ‘clunk, clunk, clunk’ racket you’d get if wearing them would drive a person completely mad.
No way I’m buying you’re not cunning and sneaky…and proly wicked too when you set your mind to it.
‘With the Pirates, forget about reliving the great depression, we’re skipping that and going right back to the 1700’s.
‘Start practicing your sword skills.’
LMAO…picturing Errol Flynn or Cary Elwes blended with the Sharks and Jets choreography in my head.
actually, I think the real pirates are those who forced these people to become pirates.
Most of these pirates are poor fishermen who lost their income and food, because huge fishing warships from Netherlands, Korea and some other wealthy nations kidnapped all their fish and destroyed the ocean environment. So they decided they are going to catch some bigger fish … like tankers with ‘honestly stolen’ oil (e.g. loot from Iraq).
I’m not even starting on what the Wall Street pirates are doing to countries like Somalia …
I don’t want to defend the use of brute force by these people (and there is a little more to the story), but I can understand their frustration and desperation.
Somalian Pirates ply the high seas.
Wall Street Pirates ply the high seize.
“actually, I think the real pirates are those who forced these people to become pirates.”
Yes, lets just all go down and give them a hug and some candy bars. Greed couldn’t possibly be the reason, they are just misunderstood.
We need to send in ninjas!
With oil at $50/barrel the US doesnt care too much. If oil, was $147; our navy would have been there in 30 minutes.
RE: How much longer will our country allow piracy on the high seize, to go on?
Looks like more gunslinger jobs for the BlackWater boyz…
Talked to a gentleman here yesterday who bought a home in 2006, put $200K down, and now said that the whole $200K equity is gone.
More small businesses going out of business.
Walked along the ocean from Pacific Grove into Monterey and only met two people along the walk/bike path. Nobody along ‘cannery row’.
Weather great for outside activities.
Well considering he has a cheap mortgage … he might as well resign himself to the fact he will DIE in that house.
His kids will be pissed at him for squandering their inheritance.
Well, he could have camped in Veteran’s park and had $200,000 earning .00345% interest in a passbook savings account…Hoz is on to something about the intelligence level thing. Hey Hoz, are the Amish exempt from your Americans are stupid or do they also qualify since they don’t have passbook savings accounts?
Same inviorment in downtown Pismo last week….
Damn! I was supposed to go down there for the T-day week. Visit the aquarium. Go to Big Sur. Normally those areas are packed. Sounds like now is a great time to be there.
Of course, I’m part of the reason it’ll be empty. Saving money for a bigger trip next year.
Nouveau word:
‘Fedoucheiary’
usage:
What is the Fedoucheiary responsibility, exactly?
If you bought C at 30, you are going to love it at 3.50. It’s not safe to dance.
And just last week they have ads with a signing bonus for tellers who speak any language other then English
It was a year ago that a research analyst at Citigroup issued a sell rating on E*Trade. they said it was at risk of bankruptcy and customers were going to pull their money. The head of ETrade said it was irresposible for the head of citigroup to be causing a panic and pointed out that the finances of C werent so solid either. The big difference being that C was too big to fail.
Based on this i bought some long term C put options, which are now worth 20x what i paid for them.
New NASDAQ low — 1295.
Oh my, Cramer’s at it again!
Cramer’s New ‘New Deal’
http://www.cnbc.com/id/27826519/?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
Puke Alert!!! Down right sickening!!!
FHA-Backed Loans: The New Subprime
http://biz.yahoo.com/bizwk/081121/0848b4110036448352.html?.v=1
I just got back from our yearly national sales meeting. Sales peoples dealing with a broad spectrum of heavy industries.
Bottom line from all these guys on the ground across the country: The plan for 2009 is Prozac.
plan for 2009 is Prozac ??
No clarity…The only obvious is higher unemployment and the only unknown of the obvious is how high ??
Blue:
NOW is the most important time to make sure you have the best repair people possible. Even increase their pay or give them some perks…sure the sales and other people will not be happy…but if sales dive who is bringing in revenue and potential new business…they guy with the oily wrench in his hands
I agree dj, and we do have good people there. We will weather the storm as we have a strong and loyal customer base. Our problem is that we planned on permagrowth and that ain’t happening!
I think i was the only one in the room without a mortgage.
FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.
With retail and wholesale clients around the world stocking up on the precious metal, the Perth Mint has been forced to suspend orders.
As the World Gold Council reported that the dollar demand for gold reached a quarterly record of $US32 billion ($50.73 billion) in the third quarter, industry insiders said the race to secure physical gold had reached an intensity that had never been witnessed before.
Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.
http://www.theaustralian.news.com.au/business/story/0,28124,24687337-643,00.html
What do you think will happen to the price of gold when this record level of fear subsides?
Fear subsiding?
ha ha
I called a big online dealer to see how long the backup was to get delivery. He said he had 30,000 orders waiting for product. Quite a wait.
Fear will not subside until after the stock market rockets up for a while. Pretty soon thereafter, all the fools who got stuck long in cash they were stuffing under the mattress will wonder what happened to make the stock market rocket up, against a backdrop of rising unemployment. Fear will give way to frustration when people percieve they have been (again) priced out of the stock market after unloading their holdings at the bottom.
I’ve seen this movie before, and I expect you have as well.
I think by the time fear subsides we will be on a gold standard, at least internationally. Fiat failed. As long as I am making predictions here is one for deflationistas to deride; the gold/dow ratio is going to 1:1 again.
the SP500/gold ratio was at 1 today and will probably stay below that; some rehearsal for the real thing
AU over 800. Can I get a booya?
I’d be surprised if it didn’t hit 850 pretty soon.
I still wouldn’t buy the Dow.
Given that gold has been a very stable store of value over time, wouldn’t your prediction imply the deflationistas were right?
Save your breath.
He’s probably a gold dealer p*mping gold just like the NAR douches p*mped houses.
I had my fun with the house pimps and the stock pimps, and nothing short of a blacklisting by Ben Jones himself will stop me from having my fun with the gold pimps.
Nice toss for a pile-on Bear. Fear seems to have momentum. It could be a long cold winter.
You can get a pretty good clue how far down the steps a thing can fall by looking at the shape of the mania updraft.
Buy what Ahmadinejad buys, there’s a bipolar strategy if ever was one.
B.S.
So by owning the precious, am I willfully palling around with terrorists, according to your twisted logic?
BP,
You are projecting again. I surely wouldn’t expect you to pal around with such a person. Nope. He just seems to be the latest to pile on the strategy. Nothing personal buddy.
B.S.
Not that you’d know, but Persians have a long and storied history of Gold ownership being ingrained in their culture…
BP,
That is special. Not like they were unique in that, is it.
Ahmadinejad is a looser. Got out of USD when it was down and into Euros when they were up. Now the Euro is down so he is buying gold high.
B.S.
Iran has been selling to Japan mostly, and i’m not if you’ve been keeping up, but the Yen is the strongest currency in the world.
Please try some other angle of attack…
==================================================
Iran demands oil pay in yen not dollars
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2070938.ece
Interesting. Thanks for the correction. You needn’t be so caustic, but it is obvious you have no control over the antisocial rage stuff.
Mommy told me never to suffer fools…
Leverage and Pain
http://www.forbes.com/free_forbes/2008/1208/182.html?partner=yahoomag
Great article. Especially the last sentence.
The word pain is popping up across many media outlets. Oh, the pain.
We’re approaching the hour. Will sellers outnumber buyers or buyers outnumber sellers? Right now the markets are Doji, equal sellers and buyers. Let the battle begin.
Left right, left right, knee to the head, knee to the groin…
Lol!!!!
Ok Maven, either I’m still a bit dense on this subject (thank you for not flaming, folks) or it still hasn’t been adequately explained to me….if there has to be a buyer for every seller, how do you tell if one outnumbers the other?? Thanks.
If sellers (100) outnumber buyers (75), buyers get to chose price, leaving a subset of sellers unable to sell unless they lower price. If buyers (100) outnumber sellers (75), sellers get to chose price, leaving a subset of buyers unable to buy unless they increase price.
I understand that part, but maybe I’m just looking at volume and not something else. Where does one go to see the actual number of buyers and sellers?? Thanks again.
You can’t otherwise it would be all to obvious to make money.
I can’t see how it matters how many people there are buying or selling. The dollars are the same on both sides, aren’t they?
The stock market is getting more efficient by the minute. It is a fair coin toss whether it goes up or down from now to the end of the day. The only thing for certain is that it is a loaded spring — any decisive move up or down is likely to fuel a massive pile-on effect. Volatility and fear are kings.
My bet is down today, only because I just closed out a bunch of shorts. I think the market’s oversold, at least temporarily, and we’re due for a good-sized bounce.
Options expiration today as well, could be very interesting in the next hour.
Another good call, packman. Looks like the market got the catalyst it was hoping for with the treas. sect’y appointment. Resistance back at the old lows?
Cripes I must be living a charmed life. I’m up friggin 60% this year in my play account (which is growing big enough to not call it a play account much longer!) through mostly dumb luck.
My guess would be we get another big up on Moday and remain high through Thanksgiving. Next big round of bad data sends us plummeting back down again; maybe the November unemployment report or thereabouts. A few retailers, plus Toll Brothers, have earnings out the first week of December - that may be a trigger too.
I’ll be looking to get back in short next week, hopefully Monday.
Doesn’t Goldman Sachs report earnings in early December? That could get ugly too…
I know it’s not the only solution, but you’d think giving up a jobs bank where people are paid while NOT working would be a no-brainer before now. But no!!! They’re “thinking” about it.
http://www.freep.com/article/20081120/BUSINESS01/311200023
Democratic leaders demanded that automakers submit plans by Dec. 2 for how the loans might be used to transform them into viable companies
Here’s an odd thought, how will the congressional critters know whether the plan presented is a viable one or not?
For extra points: Reconcile your answer with the fact that neither part of the legislature is capable of running a profitable restaraunt.
Only a politician would find it believable that an industry that couldn’t get a clue for three decades - could come up with a viable plan in less than two weeks.
Just like the $700B b.s. - the first attempt was just to make the masses think there is some measure of due diligence.
Concisely put, thank you.
looking at bond mutual fund performance
Corporate bonds down about 10% YTD treasuries up about 10% YTD
10 year bonds.
I think TIPS were all down as well investors showing little fear of inflation .
Investors they move in herds
Geitner for Treasury.
Clown network.
Shorts getting squeezed, new boss same as old boss. No effing change!
yes, Yahoo finance says the last minute surge in the stock market was because of Geittner as the pick. Same as the old boss. Oh yes, more of the same will rescue the stock market!
Ha! Who is writing the Yahoo finance headlines?
The DOW just spiked 200 points in the blink of an eye. Unreal.
Geithner is Wall Street’s man. The clowns are smiling on CNBC.
Buy DXD, once the Geithner effect wears off on Monday, we are left with the same cra@@y economy…..
Was it really that announcement - or just a belated squeeze?
Options expiration.
If you have any doubts the game is rigged for insiders by insiders, allow me to explain. AM is married to one AG who works at Pimco. AM broke the story at 3 pm today, heading into the close. It’s Friday, the eve of a long holiday week, a thinly traded market. If you want to move a market, you do it when volume is low and you can run out the clock. CEO of Pimco, el Erian, was just on the clown network acting surprised and praising the choice. Coincidence?
Thanks for being the voice of reason.
Andrea Mithcell broke story on NBC; claims Geithner represents change. LMAO!
Seems like Geithner as head of the PPT will represent a continuation of close working ties between the Fed and the Treasury. Did Andrea Mitchell mention what kind of change she anticipates?
Can he walk in circles &toss daisy petals in the air as well as Paulson?
Ignore post below…
I’m getting up to speed on Geithner, and his history is really similar to Obama’s (went to high school in Thailand), and he’s almost exactly the same age as the President-elect, both vintage 1961 models, born just a fortnight apart.
He’s wickedly intelligent and is very even tempered, and it looks like he was involved quite a bit in Credit Default Swaps activity, which is both disconcerning and perhaps helpful @ he same time, as he knows the lay of the land, somewhat.
===================================================
“High on Mr. Geithner’s to-do list is understanding and monitoring the $26 trillion credit derivatives market — twice the size of the United States economy — the fastest-growing financial market there is. Its explosive growth has greased the wheels of the global economy, increasing liquidity, spreading risk and minting money for Wall Street along the way. But it has surged at a time when volatility has been low, debt has been historically cheap and defaults have been virtually absent. When this market gets tested, no one knows for certain how it may react.”
http://www.nytimes.com/2007/02/09/business/09credit.html
He’ll be walking funny and asking for Preparation H before too long.
Reducing risk for the sake of risk reduction is a key factor which recently brought the global stock markets to huge overvaluations relative to fundamentals. Getting back to this practice is the first order of business for Mr Geithner. He speaks like a Greenspan disciple, as it was Greenspan who gratefully patted himself on the back for doing a heck of a job in building false confidence by eliminating the perception of market risk.
The risk-reward tradeoff is a key mechanism by which unimpeded free markets separate worthwhile projects from those which are likely to lose money (e.g. subprime loan securitization). Artificially suppressing risk premiums may have the short run benefit of making us all feel better about our investing savvy, but in the long run it can destroy an economy by undermining the market’s ability to signal which projects are unlikely to succeed.
Financial Times
Reducing risk in the financial system
By Timothy Geithner
Published: June 8 2008 23:30 | Last updated: June 8 2008 23:30
Since last summer, we have lived through a severe and complex financial crisis. Why was the financial system so fragile? What can be done to make the system more resilient in the future?
The world experienced a financial boom. The boom fed demand for risk. Products were created to meet that demand, including risky, complicated mortgages. Many assets were financed with significant leverage and liquidity risk and many of the world’s largest financial institutions got themselves too exposed to the risk of a global downturn. The amount of long-term illiquid assets financed with short-term liabilities made the system vulnerable to a classic type of run. As concern about risk increased, investors pulled back, triggering a self-reinforcing cycle of forced liquidation of assets, higher margin requirements, increased volatility.
The only ‘change’ there will be is from bad to worse, stink to stank, horrible to horribler, crap to crappier etc, etc, etc…. and that you can ‘believe’ in. Hell, B.O. is basically appointing everybody from Clinton’s second term. Gotta pay back his money sources.
Meh, look on the bright side. Cramer was railing against Geithner last night so maybe it was the right choice.
Then again, seems like Cramer’s been a little more sober and truthful lately.
Yes I agree. I hate to say it, but Cramer has become the “voice of reason” on CNBC of late. He’s not pulling any punches and he tells it like he sees it, which is refreshing.
I usually tune in for the first 10 minutes of his show lately to catch his spin on what he sees going on. It’s entertaining as well as educational…
horribler ??
Don’t you just hate it when bad things happen to good sentences!
Down here in Dixie we say things like that. Stupid & stupider!
Can he walk in circles &toss daisy petals in the air as well as Paulson?
Flip homes for profit even now
By Carole Moore • Bankrate.com
If flipping a house in today’s real estate market seems riskier than trekking with a ragtag band of hobbits to Mordor, take heart: Home flippers can still find plenty of opportunities, though they’re not entirely without risk.
It may seem counterintuitive to invest in real estate when the housing market is in its darkest hour. But in fact, it may prove to be the most optimal time for such a venture. According to RealtyTrac, a seller of mortgage default data, the foreclosure rate reached its highest level in 50 years in 2007, and has since risen to record numbers in the third quarter of 2008. Real estate investors are finding bargains everywhere, particularly in formerly hot housing markets such as Florida, Nevada and California.
Are you trying to bait us?
If so, it’s not working.
Here, have a beer (or seven.)
YAWWWWWWWWWWWWNNNNNNNNNNNNNNNNNN.
“JP Morgan / Goldman Sachs / Amex…I love you…
GM / Ford / Las Wages Sands…I love you not.”
Dominos locations in the city of angles could be suppliers of a little “Downey-Soft” comfort food action tonight, perhaps?
Not so far tonight. Maybe the FDIC is waiting for their Irvine operations to be up and running before shutting DSL. Give it another month and it will be a pleasant holiday gift.
I stand corrected. DSL is down for the count, another bout without a doubt.
The pizza man cometh…
Hello Dominos? Yes, I’d like a pie with all the trappings of a failed bank, extra fraud, and a line of coke to go.
Obama promised change,yet one of his top picks is Hilary,get rady for more of the same old thing.yes,she will be good at the job,but there has to be others in this country that can do this job…
Enjoy, “hope”-droids!
Geithner and Hillary.
Yeah, you can hope all right, hope to get fleeced raw.
lol
The clintons no doubt will be worth 4 times what they are now when this is all done. Can you get some call options on clinton inc yet?
One of the most brilliant moves the Clintons made was buying Bill’s office in Harlem right after his presidency.
They got major political brownie points, and made out like mad money bandits when they sold it finally (during the boom.)
Actually, it’s perfect. Put her in a G5, and send her out of the country about 80% of the time.
That’s why FDR picked Joe Kennedy as ambassador to the UK.
To get Joe Kennedy out of town .
But seeing the retardicans suffer the humiliating defeat they so richly deserve makes it all worth it.
In general, I don’t like Hillary. But I agree this is a great pick on Obama’s part. Keep your friends close and your enemies closer — she’s nothing if not ambitious. And I wouldn’t want to be sitting across the bargaining table from her…
Who could be comfortable with 500 point swings on the Dow every other day ? I hate to break it to you all ,but those kind of swings ain’t normal ,it’s a joke . I don’t know who is making money off these swings ,but its
not sane . This zig-zag pattern is getting on my nerves ,it’s nuts . Sure
a person could make money on these cycles no doubt ,but roller-coaster rides aren’t my bag and it’s crazier than real estate . UpdownUpdownUpdownUpdown .
I
I think Bush should resign, then Cheney would become President, the Cheney should resign, then Condaliza Rice becomes the first black female President, and is at the swear in in January, 2009.
the start of the Great Depression II, in living color.
Im only posting this because I got to see last nights information feed from last nights true postings.
http://www.youtube.com/watch?v=bNmcf4Y3lGM
Is this old? My brother, who bought in 04 and let the bank take back in 08, sent it to me.
OMG! This was outstanding.
Two Big S.&.L’s in California Are Shut Down by Regulators
By THE ASSOCIATED PRESS
Published: November 21, 2008
WASHINGTON (AP) — Federal regulators shut down two big savings and loans based in Southern California on Friday, saying they fell victim to the acute distress in the housing market in that state.
The two companies were the Downey Savings and Loan Association, based in Newport Beach, and PFF Bank & Trust of Pomona. Their closings brought the number of bank failures this year to 22.
The Federal Deposit Insurance Corporation was appointed receiver of the two thrifts. U.S. Bank, based in Minneapolis, acquired all the deposits of both institutions.
Downey had assets of $12.8 billion and deposits of $9.7 billion as of Sept. 30. PFF had assets of $3.7 billion and $2.4 billion in deposits.
Potential downside of being too-big-to-fail: If the government does not buy you out, chances are nobody else would even be able to afford to do so.
Woes at Citigroup Began With Failed Bid for Wachovia
By BEN WHITE and VIKAS BAJAJ
Published: November 21, 2008
Less than two months ago, Citigroup emerged from the wreckage of the financial crisis as one of the last titans left standing on Wall Street.
Now, in a stunning turnabout, the banking giant has sunk to its knees after a series of blows that have driven its stock price to a mere $3.77 on Friday — and left it running short on time and options.
In the decade since Citigroup was born from the merger of Citicorp and Travelers Group, it weathered many storms that threatened to pull it apart. But the current turmoil can be traced back to the last weekend of September, when it sought to reassert itself by swallowing Wachovia, the stricken bank based in Charlotte, N.C., whose vast deposit base would have turned Citi into one of America’s dominant lenders.
As the global financial crisis drove Wachovia toward collapse, the government frantically engineered their marriage. At a bargain price of $1 a share, Vikram S. Pandit, Citigroup’s chief executive, was happy to oblige: The deal would have greatly enhanced Citi’s retail banking presence and added more stable consumer deposits to a balance sheet staggered by billions in write-downs on bad mortgage loans and related securities.
But like so many other things for Citigroup over the last several years, it fell apart. Less than a week later, Wells Fargo, the powerful San Francisco-based bank, swooped in with a higher offer. Citi was left in the lurch, without a business that was vital to its future.
That collapse began a steady decline in Citigroup shares that snowballed this week as speculation grew that the bank might require a government bailout, a forced merger that would crush common equity holders, or an ouster of Mr. Pandit.
In the last five days alone, more than half of Citigroup’s market value was vaporized, and investors and analysts intensified calls for the bank to find ways to lift its stock price, including splitting the company, selling pieces or selling itself outright.
“They don’t have the sovereign wealth funds or other big investors to turn to anymore,” said William Fitzpatrick, an equity analyst for Optique Capital Management. “There are two remaining options: a federally forced merger or nationalization.”
Darn ,I have some money if PFF ,a fixed CD ,small account , due next month ,I was going to take it out . It sucks when your one month away from the due date and I was going to transfer . That Company sent me a letter six month ago saying another bank was
buying them ,what liars . Ok ,wonder when they will let you pick up the money .
Also, I always though Downey would fail before WaMu . I told someone the other day that I couldn’t understand why Downey hadn’t failed yet ,but I thought it was next . Hope I don’t have to wait in a line for the PFF account and I wonder if I get burned on any interest . Has anyone gone through it yet ?