Bits Bucket For November 27, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Start of full-page ad seen in this morning’s SD Union Tribune:
HOW TO GET YOUR SHARE OF
THE $700 BILLION BAILOUT
More than 1 million homes and other choice properties will
be sold by the government for pennies on the dollar.
Here’s how you can be the first to know and first to profit.
Well gee whiz, if it’s gonna be that simple no one will ever have an excuse for being poor again. Next Thanksgiving there ought be no need for donated turkeys or homeless shelters or soup kitchens, right? RIGHT?
“A house for every household, a turkey in every oven.”
Bear,
We went to the Pechanga buffet last night after visiting in Temecula. A guy approached us who was a Platinum gambler who had $200 worth of comp dinner tickets. We wound up getting our all you can eat killer buffet for $12 each.
I’m sure the poor guy lost thousands to get those comps.
Wow - i was going to make comment on that. Local ABC news in Seattle, did a piece on that for local news. Turn out that it was the Robert Allen Institute (slimey instructor for making $ fast).
From hidden camera, they show the instructor talking about cutting deals with folks underwater on their mortgage.
Good for local news … until … they interviewed 2 people in bad shape - and of course, they belonged to ACORN, who were fighting to get them special deals from the bank.
Wishing everyone a nice Thanksgiving.
Greg
-
What’s everyone eating?
(Besides turkeys and crow)
No, and JD Jim Beam don’t count either.
“What’s everyone eating?”
Anything that will cure a hangover.
I’ll gladly go for a Carl’s Junior $6 burger over a turkey dinner. When my mother was alive, she went all out - cooked an incredible feast and started with pies the night before. In her honor, I wish every cook a vacation from being a kitchen slave!
I’m happy enough doing the opposite of what the crowds are doing. Being a glutton is disgusting anyway.
But happy holidays to all.
dude, you’re like the grinch that stole thanksgiving…
No kiddin’!
I love cooking. It’s no more being a slave than any other hobby.
It’s the process, silly!
‘In her honor, I wish every cook a vacation from being a kitchen slave!’
Shoots, bill! Keep your wish. T’isn’t slavery if you like it. And I do. I LOVE making a Feast. And perhaps THIS will be the year that some lucky guest actually has a ‘gasm at the feasting table! It could happen, we’ve come close before, but never quiiiiiiiite reached the Utter Pinnacle of Guest Satisfaction. But that was before I decided to this year try a variation on my famed oyster and wild mushroom stuffing!
So I’m expecting some squeals of joy, yes.
‘Being a glutton is disgusting anyway.’
Oh, Bill, Bill, Bill…*shakes fluffy Olyhead sadly*
You don’t make sense, Bill. In fact, I’m never going to listen to anything you say again, seeing as how you’re crazy.
Yeah, I’m with you on this one.
pussycat and lad are agreeing…
it must be time to go guns and gold.
LOL!
(Finally! You show up. See, I was thinking of you. posted earlier towards the bottom of bits
)
Since NYCityBoy is having Turkey today
-
More of the same?
Israel asks Bush to explain its ’special relationship’ with U.S. to Obama
haaretz.com/hasen/spages/1040967.html
&
Despite Protests, Obama Keeps Gates On As Defense Secretary
inteldaily.com/news/173/ARTICLE/8828/2008-11-26.html
-
You have to make up your own anger, I can’t do it as well as him.
“Special relationship” means if we dont have your administration’s total support, the only option is to show the heaven seekers of the MId East just how quickly they can be given their wish. I love code words.
Can’t we just give each heaven-seeker 72 vestal versions of hotties, on the internet?
Alad, forgive me for saying it, but BO doesn’t seem much different than the shrub at this point, and seems to be getting more similar by the day. The only major difference I see is that his critics will be immediately labeled as racists, thus stifling dissent.
Bill in LA.
Cooking is a joy. Cooking for many is a privilege. You’re welcome to come for the whole shebang…just follow your nose up I-5!
You got my e-dress.
You’re as lovely as they come, my dear.
Actually I had a larger dinner than I decided:
baked potato, steamed vegetables, salmon followed by desert of vanilla ice cream with blueberries.
Thanks all the same Ahansen
And I was not a glutton
Turkey, ham, duck, prime rib, famous fruit salad, potato salad, stuffing, mashed potatoes, green salad, pumpkin and apple pie. Sparkling cider to drink.
We traditional seek out any friends and acquaintances for those with no specific plans and we invite them over. That’s why the huge amount of selections for main course.
Famous fruit salad recipe:
juice from 2 cans of diced pineapple
juice from 2 cans of mandarin oranges.
1 egg
1/4 cup sugar
1 tablespoon lemon juice
2 tablespoons flour or cornstarch.
Mix all that in a saucepan until there are no more lumps, then heat steadily while stirring until it boils. It should thicken to the consistency of pancake batter.
Let sauce cool, it can be made a day or more in advance, and then mix in your variety of diced fruit with sauce and a container of cool whip. I use apples, bananas, and the pineapple and mandarins previously drained.
The lemon juice keeps the apples and bananas from going brown.
“What’s everyone eating?”
Got hold of a pair of two-for-one coupons at T.G.I. Friday’s and the four of us family members had a good time and good meals (ribs, steaks, etc) for about fifty bucks.
As we left they gave us a coupon for five dollars off on our next visit.
Now that the Fed has redoubled its resolve to respike the housing bubble punch bowl, should we expect prices to bottom out some time after next year’s Souper Bowl?
Wall Street Journal
* REAL ESTATE
* NOVEMBER 26, 2008
Fed Aid Sets Off a Rush to Refinance
By RUTH SIMON and JAMES R. HAGERTY
The Federal Reserve’s attempt to stabilize the housing market set off a chain reaction across the U.S. on Tuesday, dropping interest rates and quickly spurring a burst of refinancing activity by borrowers eager to lower their mortgage costs.
Some brokers said it was the most activity they’ve seen in at least one year, although there was no way to determine the volume of refinancing.
Don’t know about bottom, doubt it.
But Alad looks saner every day.
(Though he is mistaken about the Shangri-La that his precious will buy)
I would never buy anything in Shangri-L.A.
p.s.
I only impersonate insanity.
“All right, Mr. De Mille. I’m ready for my closeup.”
Atadinsane,
Personally, I don’t worry about going crazy. Already been there and done that.
You’d be paranoid too, if everybody else was out to get ya.
Happy Thanksgiving HBB’ers!
We impersonated Thanksgiving a couple of weekends ago, but are game to triptophane the night fantastic again…
It’s really the best holiday, in my opinion.
To give thanks, but not gifts…
Actually, I read the tripophane= sleepy connection is a myth. It’s the amount of carbs most folks eat, that overloads the digestion and slows us down to a nap. One thing I do know, is that turkey is a protein, and all that starch converts to glucose (sugar). The tiredness is a sugar crash. I have blood sugar issues, and I know a lot about food. I’m med free! Happy Thanksgiving to all!
Yeah, it’s the carbs.
“But Alad looks saner every day.”
I’ve never doubted that we could hyperinflation (my retirement account (that I can’t touch) was positioned for this until a few weeks ago).
My issue has always been, “why do you want that?”
I too dislike crass consumerism and foolishness, but I do not want the USA to collapse and I don’t really feel like shooting my way to Chile for some bunches of grapes and a glass of water.
But I will if I have to, happy Thanksgiving!
Also, I want to know how Alad, other than some gold sprinkled about the world and a firehose, expects to survive the exact scenario he plans on profitting from.
Alad, do you have one of those guns from Eraser, the exoskeloton from Alien, Dr. Evil’s TJ’s Big Boy superflyer?
What’s the trick up your sleeve?
Muggy, what you don’t understand is i’m here mostly daily to record events past, present and probable, a diary.
I honestly could never keep up a traditional diary, but I thrive a bit on other like-minded people and it opens up my brain pours, and so it’s possible now for me to do so (as I sit curled up next to a feline accoutrement, in bed) pretty effortlessly.
I can think back thousands of years quite easily, so thinking ahead a few years isn’t that hard for me…
“Fluoridation is the most monstrously conceived and dangerous plot we have ever had to face.”
Ripper, Jack D.
I really don’t want an incomplete wreck (see Detroit-Cleveland, etc) of our financial system, as we’ve proved we don’t give a damn about things if the facade is still intact, but the facade of making money is an illusion.
All I want is a return to honesty, not too much to ask for, is it?
But the wreck here in Cleveland is fast approaching the blown out trestle, screeching along the skinny rails, no traction, the passengers cheering for the savior said to be up ahead with bundles of cash. Make no mistake, it will soon be complete. Housing here is dead. Period. All major building either abandoned or still born on the drawing table. Our major bank has been skinned and quartered by the boyz in NYC (was there any doubt that all those pols who visited here every day 4 weeks ago would abando us after the election?). Politicians are being wrung out by hundreds of agents. We really do need a MM DeFarge to keep a diary; you are lucky to have Alad of the Sierras to be that for you in sunny CA. Here, we only have the FBI.
Muggy,
It’s funny, we Barbarous Pirates are looked at from afar as wanting to profit from the misery of others, but never is heard a discouraging word about those that short stocks (far too many of you know who you are) that does in fact cause instant misery, as in people’s 401k’s dropping in value like so many Wile. E. Coyotes.
Why’s that?
“Muggy, what you don’t understand is i’m here mostly daily to record events past, present and probable, a diary.”
O.k.
“Why’s that?”
You tell me. I’d like to know how you reconcile it in your grey matter (playing the market v. betting on collapse).
Oh, yes, that’s right: you generally dislike people.
Nevermind.
Muggy,
Once again you never answered my question, and diverted it back about me.
All the precious that I own (all overseas) was bought and paid for, in full. I actually haven’t seen my holdings in a few years. It makes it very hard to snuggle next to when it many thousands of miles away from me, but it’s safe.
I never hurt anybody financially, when I prudently saved (that’s right it’s just elite money savings, nothing more) my money.
The only difference between me and those with faith in the Dollar right now, is the Dollar has ZERO chance of multiplying in value. Can’t Happen.
My saving plan can multiply virtually overnight.
We are re-experiencing the 1971-72 Gold market again. Gold was tethered to it’s $35 leash and broke free and quadrupled in value.
I expect something similar to happen…
All i’ve done is position myself for success, deal with it.
The quadrupling was nearly overnight and wasn’t the complete story. Eight years after the decoupling, Gold went on to a 25 multiple valuation. Of course it came off that height, but consider where gold might be in five to ten years from now. If history is any indicator, we’re looking at gold in the $20k range. But, I’m not sure unloading at that point will be wise given that this time around (as opposed to 1980), the dollar might very well cease from being the reserve currency. If that happens, who knows where gold will be priced in fiat US dollars.
1980 means nothing as far as Gold is concerned.
It only went up in tandem with the Silver Bubble, and wasn’t much of a performer, compared to the Grey Mare.
1971-72 is much closer to what’s happening now.
p.s. to Argent Provocateurs:
Silver went down to around 30 Cents per oz. in the Great Depression, a ratio of over 100 to 1 to the precious…
“p.s. to Argent Provocateurs:
Silver went down to around 30 Cents per oz. in the Great Depression, a ratio of over 100 to 1 to the precious…”
It sure did. Long before most of the world’s supply was used up. Silver 2009 is not your grandma’s model tea-mobile service.
The fact is, Ag is the best conductor of heat and electricity, and the most reflective of photons , known to man. Also has antibacterial and other medical properties.
It has NOT been the best storehouse of value in the past, compared to mellow yellow. Of course, before the advent of tanks, the horse was the supreme advantage in battle.
Things change. Right now silver is 1/79th
the cost of gold per ounce. I’m not a silver dealer, but I’ve got most of the proceeds from the home I sold invested in Ag and I am very thankful on this day that it is not owned using leverage or margin. I shamelessly recommend some silver lining to everyone’s investment plans. May all HBB’ers live long and prosper!
Not to mention the fact that if you keep you PMs in silver instead of gold, it is pretty easy to make your safe too heavy for a thief to steal it!
500oz. monster box of silver maples weighs in at 38lbs, $5000, more or less.
500oz. monster box of gold maples weighs in at 38 lbs, $400,000, more or less.
A 500lb safe filled with 380lbs of PMs is pretty tough to move quickly.
I’d rather fill a safe with gold, but I’m just not in that league.
Citigroup says gold could rise above $2,000 next year as world unravels
telegraph.co.uk/finance/comment/ambroseevans_pritchard/3526645/Citigroup-says-gold-could-rise-above-2000-next-year-as-world-unravels.html
now that big C is stating the obvious, maybe goldbugs should become nervous
Even a stuck bank is right twice a day.
Keep the hope alive!
As long as FBs have hope then they’ll have the incentive to keep up with their house payments. If they lose hope then they’ll walk and leave us taxpayers stuck with the bill. This refinance bill will serve to extend hope to the hopeless, which makes it a good thing.
Oh, the NAR also offers hope to the hopeless, another good thing. On this Thanksgiving day be thankful to the NAR and their efforts to keep liquidity flowing into the System.
I get your point, but must admit it’s a bit of a bitter pill for me to swallow, but you are right.
Plus, when looking at my ratio of disposable income it becomes ridiculous for me to even think of being envious of these table scraps being thrown to the FBs.
So, where do I get my hands on some of the free money the Fed is printing? Do I have to apply for it? Does everyone automatically qualify for it? Will they just send me a check in the mail? What do I have to do?
Operators are standing by…
1 (800) FED LIES
Call now
If the fed wants to give me a 2% loan and borrow to go on bling fling then i am happy to oblige. I am more than happy to boost consumer spending as i see all those empty desperate shops aching for customers. Walmart empty. home depot empty. Beach resorts dead. Dead. The consumers wallet is empty.
I demand my right to a 2% fed-backed loan to get that Carolina 30 used sailboat. Plus $1000 for sailing lessons. They can also fund the $300 monthly boat dock fee, and all the bling i can load onto that boat.
That is what i call boosting the economy.
my daughter said the local news station here in Bakersfield conducted a poll to see how many people were planning to Xmas shop tomarrow. The results showed that 87 percent were planning to stay home. I’m glad to see an end to the madness called black Friday. Maybe there’s hope for people after all.
It also took me by surprise to see those news clips yesterday showing rather empty air terminals. Granted, more people have begun to take the entire week off, but still, those terminals were lightly trafficked.
I was looking at tickets from Norfolk to Florida (Orlando and Tampa) and while I could easily get a southwest flight there, the return trips were all booked for Sat/Sun.
So I drove and listened to economics podcasts, skeptic podcasts and a music podcast or two.
WHAT……no lines at Wal mart at 3 am? blasphemous
The thought of not having to punch and push someone in the back to get out my F***ing way for my $99 blue ray player ….What are people going to do for fun tomorrow morning?
Like stay home and cuddle with you significant other?
Del Amo mall was crowded on Wednesday. Costco in Torrance also.
Around these parts it looks like there is no recession.
B.i.L.A.bong,
As you are aware, that area is ringed by the military-industrial-complex, and you might possibly be in their employ @ present.
The M.I.C. has been making money, hand over fist.
2-front wars make for good business, for now.
Costco is always a madhouse, with the exception of Mondays. Word has it, that people are changing their grocery store shopping habits, and buying less variety, buying bulk items. Not everything is a great buy at Costco, but most food items are.
Neighborhood Centers anchored by grocery stores are showing signs of weakness. 99C Only Stores, Dollar Trees, etc… are having a surge in food sales.
We sold 99 Cent stock for around $14 a share in 2007, it went down to $6 about 6 months ago and has since risen to almost $11.
Of the 30 or so stocks (quite varied) we sold in 07′, this remains the best performer of all of them. How sad is that?
I have a friend whose daughter and son-in-law belong to Sam’s Club. She said she went with her daughter about a week ago (can’t remember which day of the week it was — either a Sunday or a Tuesday).
Anyway, the place was packed, according to her report. The main reason, she said, was that on that particular weekday they have numerous vendors in the store giving out free food samples. She said people are lined up at these stations, cart after cart, to get the free food. She said every time she looked around to see where her daughter was, she was standing in another line for free food (note: her daughter and son-in-law own a karate studio — but that’s another story).
A relative is a mgr for Michaels ( the crafts/chatsky store). They are having a pre -Black Friday sale, tonite, Thanksgiving day! Enjoy the change.
Well, don’t go out Saturday then.
I can imagine people deciding to be virtuous by staying home Friday.
I can’t imagine them lasting past Saturday morning.
Woolworths goes bust… Pension holders to stand in line along with the chains creditors….
November 27, 2008
Woolworths stores to close after Christmas
High street retail chain has debts of £385 million
Woolworths went into administration last night, putting thousands of high street jobs at risk despite last-ditch government efforts to save it.
The retail chain, which opened its first British shop almost 100 years ago, has debts of £385 million. Its 800 outlets will open as usual today, but many are expected to shut for good after Christmas.
The decision to call in the administrators was taken despite the intervention of ministers anxious to save the jobs of almost 30,000 people who work for Woolworths.
Baroness Vadera, a minister at the Department for Business, Enterprise and Regulatory Reform, the department run by Lord Mandelson, called Woolworths’ banks on Tuesday night to order them back to the negotiating table to try to stave off collapse.
GMAC, the financial arm of General Motors, and Burdale, a division of the Bank of Ireland, which were leading negotiations with Woolworths on behalf of eight lenders, was contacted. Lady Vadera also spoke to Barclays, another lender, in an attempt to keep stores open over the crucial Christmas trading period.
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5241228.ece
I remember when they had Woolworths in America with the soda counter and everything . I guess they didn’t have insurance on their Pension funds ,so they have to wait in line like any creditor . I just don’t get how any government allowed underfunding of Pension Plans .
If your going to offer a benefit to employees ,as a Corporation ,you should not be able to play with the money or underfund obligations . The Corporations have gotten their way with governments for to long .
Yes there used to be Woolworth’s stores here in middle America decades ago. Haven’t seen one in probably 20 years. I thought they’d gone out of business long ago. Surprised to hear they were still around…
Property and the First Thanksgiving…
At Thanksgiving, Americans reflect on their blessings and hope for uplifting family gatherings of togetherness and unity, with the Pilgrims used as examples of peace, harmony, and thankfulness. However, while the Pilgrims’ 1623 “way of thanksgiving” represents what we wish to infuse in Thanksgiving, Plymouth Colony before 1623 was closer to a Thanksgiving host’s worst fears – resentments surface, harsh words are spoken, and people turn angry and unhappy with one another.
The Pilgrims’ unhappiness was caused by their system of common property (not adopted, as often asserted, from their religious convictions, but required against their will by the colony’s sponsors). The fruits of each person’s efforts went to the community, and each received a share from the common wealth. This caused severe strains among the members, as Colony Governor William Bradford recorded:
” . . . the young men . . . did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. The strong . . . had not more in division . . . than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labors and victuals, clothes, etc . . . thought it some indignity and disrespect unto them. And the men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it.”
http://www.lewrockwell.com/orig5/galles10.html
Isn’t it peculiar that every last banknote in your pocket or purse is a Federal Reserve Note…
What is the Federal Reserve?
Let’s discuss what they can and can’t do (old rules now, anything goes)
“Isn’t it peculiar that every last banknote in your pocket or purse is a Federal Reserve Note…”
Not quite true. I have in my posession a $2 bill that says across the top:
“United State Note”
and across the bottom:
“The united States of America will pay to the bearer on demand Two Dollars”
It is not a Federal Reserve note nor a silver/gold certificate. This note was issued in 1953. At that time as I understand the US Government was attempting to usurp the Fed’s funny money by issueing dollar notes just like Lincoln did during the Civil War. The issuance of these notes continued until shortly after Lyndon Johnson assumed office. Had they been successful the Fed would have been disolved by now.
Big wahooza…
Silver Certificates and Gold Certificates are only faith value now, same as FRN’s.
As if by the wording “United States Note” Your deuce means anything different.
My point is that this note was not printed by the Federal Reserve and that money does not have to be exclusively printed by the Fed.
Don’t you find it the least bit odd that supposedly only the Fed can print money yet here exists proof to the contrary?
When was the last United States Note printed?
A long, long time ago…
The issue is overwhelming housing indebtedness, indebtedness beyond income. Adding more FRNs to the system does not magically increase one’s ability to overcome overwhelming indebtedness. Unless they are used to produce income, these FRNs only provide opportunity for more indebtedness. Debt is not income.
The Treasury Seal on the face of the bill identifies what type obligation of currency it was issued under.
Blue Seal = Silver Certificates (redeemable in silver)
Green Seal = Federal Reserve Note (issued by Federal Reserve Bank)
Red Seal = United States Note (issued under US Debt obligation authority)
Gold Seal = Gold Certificate (redeemable in gold)
Today, any currency note is considered to be equal in its face value, regardless if SilverCert, GoldCert, FedResNote, or USNote.
Gold Certs were withdrawn from circulation in 1934 after FDR confiscated gold.
Silver Certs were withdrawn after 1968, and could no longer be redeemed for silver.
USNotes withdrawn but still full legal (fiat) tender.
Federal Reserve Note (FRN)–what we’ve got today. And as cambotechie reminds us,
they are currently King of the (dung)hill.
Great post Mormon_tea!
On my coffee table I keep two one-dollar bills: one from 1957 and one from 2006.
The old one is a blue-seal “SILVER CERTIFICATE” that “certifies” there is a dollars worth of redeemable silver on deposit in the Treasury of the U.S. (Payable to the bearer on demand).
The new one is a “FEDERAL RESERVE NOTE”, with ONE DOLLAR written on it, signed by Hank Paulson. Nothing to certify, nothing to redeem, not even a winking smiley face after his signature.
It reminds me of the Itchy & Scratchy cel that Bart Simpsons bought with Homers credit card. It turned out to be some anonymous body part. The Comic Book Guy whips out another cel of actual value:
“let me show you something. This, this is a Snagglepuss drawn by Hic Hiesler, it is worth something. This, this is an arm drawn by nobody, it is worth nothing.”
How is buying 600 billion dollars worth of GSE notes any different than what they typically do to lower interest rates? Precious is not elastic. In times like these, we need elasticity. Be thankful.
This’ll be a great Thanksgiving for me. After being laid off a couple of months ago, just got a good job - got the offer on Tuesday and accepted yesterday. It’s been a very eventful two weeks - we’re having the (very big) family up for the weekend. Two weeks ago I just ran my first marathon. Quite a whirlwind.
I know there are a couple of others at least on the blog that were also laid off recently - good luck on your search! My thoughts and prayers are with you.
God bless all this day! Have a great Thanksgiving. It’s the one time where it’s great to “consume mass quantities”.
Congratulations Packman.
Happy Thanksgiving to you and your family.
Hey packman…where are you at (for some reason I think you’re in CA?)? Also, what industry?
I’ve been looking for software jobs, and the trend I’m seeing is fewer permanent employment and more contract gigs. Curious what your experience has been.
Thanks.
I used to be in CA (north of SF), but now in northern VA.
I see a lot of contracts as well, though it’s hard to say what the trend is, since it’s the first time I’ve looked in this area, and the first time I’d looked in the past 10 years.
I work in telecom - historically for equipment providers (Nortel and the like) but now for a satellite applications developer. In general business is very rough for equipment providers - competition is fierce with margins very low, and pretty much every company is shrinking (Nortel, Lucent, Alcatel, Ciena, Tellabs, etc.). Even Cisco is having troubles, with layoffs ongoing.
Congrats, PM.
This is not a good time to be out of work.
I hope the new gig is fulfilling both financially and personally.
There is no better gift in life than to love your work and get paid well to do it.
So happy for your wonderful news, packman!
Happy Thanksgiving, today and every day.
Congratulations! Loads to be thankful for! I am retro-reading, as usual, but have pleasant thoughts about all of your nearest and dearest being at hand to heap their congrats upon you.
“…There are thousands of such tools, big and small, being created by scientists and inventors in research labs all over the world every month in scores of different industries. Each one allows the next group of inventors to create even more and better tools and ultimately products. Globalization is not just a manufacturing and sales process. It is also an intellectual process, as scientist from many parts of the globe can collaborate on a project, each bringing their specialized knowledge to the project. That allows scientists in smaller countries or in countries without significant resources to add to the sum total of brainpower being thrown at a project.
All this means change is going to come faster than ever before. And with these new changes will come renewed economic growth, and millions of new jobs in the US and all over the world.
Today’s current crisis will pass, just as past crises have. And this will not be the last crisis or recession of our lives. We will sadly create whole new ways to foment a crisis. But in 20 years, no one is going to look back and say I wish I could go back to the good old days of 2007. We will then be living in the most exciting age in the history of man….”
John Mauldin
Nov 26, 2008
Happy Thanksgiving!!!
“It is time for us to realize that we’re too great a nation to limit ourselves to small dreams. We’re not, as some would have us believe, doomed to an inevitable decline. I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. So, with all the creative energies at our command, let us begin a new era of national renewel. Let us renew our determination, our courage, and our strength. We have every right to dream heroic dreams.Those that say we are in a time when there are no heroes, they just dont know where to look.”
…”You and I as individuals, can, by borrowing, live beyond our means. But only for a limited period of time. Why then should we think that collectively as a nation, we’re not bound by the same limitation.
We must act today to preserve tomorrow.”
Ronald Reagen first inaugural address January 20th, 1981
HAPPY THANKSGIVING ALL !!!!
We must act today to preserve tomorrow.”
The road to hell is paved with good intentions. How can we preserve tomorrow when the powers to be are hell bent on destroying it. It would have been some what heroic to let the markets decide the fate of people who took foolish risk. We would have come out of this mess stronger and sooner. Now the ptb have decided to stack the deck as they wish and will force us to play their games. The out come of their shenanigans will be that innocent people will get hurt. It is nice to get all holiday up, sentimental and hopeful but the reality is there will not be as many opportunities as people on this blog tend to believe.
Rant/off
Dear Meat Headlights,
You are not a helpless creature, rather I suspect a free man to choose a path that creates instead of destroys, rises instead of fall, lives instead of dies.
“The stuff that dreams are made of.”
Good posts from Hoz and clue. Most of the rest of us see the glass as half empty, limits to growth, etc.
Human creativity will never be stopped as long as there are humans. I am putting $55,000 into stocks and stock mutual funds in 2009. The same in 2010, 2011, and beyond.
This new socialist era will pass in 8 years and as a whole, we Americans will have a taste again for deregulation and capital gains tax cuts.
Buy and hold for 8 years.
How’s your buy and hold position hanging, or in stocks?
Surprisingly well outside my tax deferred funds.
Outside my tax deferred investments here is my allocaiton: Hedged against inflation with 25% gold, hedged against deflation with 50% government securities, mostly savings bonds, and the rest in stocks and stock mutual funds (hedged against negative people).
That’s exactly what the traders in Rome were thinking circa 476 CE: “The market always comes back!”
Yeah, except when it doesn’t or somebody else owns the market. Not planning to get anything at “the market” but my ferry ticket home tomorrow!
And there are limits to growth, sorry. Flying into an environmental cul-de-sac at 800 kph. And don’t think about throwing up Malthus to me.
Happy Thanksgiving to all.
No need for you to apologize, but there is a need for you to prove that there are limits to growth.
Natural resources will prevent that future from happening. As soon as there is an uptick in economic activity oil prices will go to the moon. Governments will squable about who gets what and cooperation will end.
I keep reading calls for Keynesianaism. Yet, housing has benefited from Keynesianism for decades. Judging by the size of home financier bonuses and home builder CEO stock sales, they’ve benefited handsomely too.
What’s changed over the last decade is industry’s ability to fully exploit housing related Keynesianism. It’s ironic these same captains are calling for even more Keynesianism to solve the problems they created. What’s worse, Washington and the Fed appear determined to oblige. Is Keynesianism lighting the path to serfdom?
They are burning the furniture, pure and simple. No one in DC even thinking about sawing wood, hammering nails, or sewing upholestery. They have a box of matches and that’s about it.
When all you have is a blowtorch, everything looks like a bonfire.
What’s changed over the last decade is industry’s ability to fully exploit housing related Keynesianism
Keynes advocated that governments run a surplus during times of low unemployment and a deficit during times of high unemployment, incurring no extra debt in the long run.
What you are talking about is Chenyism - “deficits don’t matter”.
A doubling of the national debt in 8 years, an era of super Keynesianism as evidenced by NINJA loans and the like, and we’re still heading into a severe recession. How do Keynesians square this circle?
We’ve never see an example of Keynesian economics in practice. Politicians are too weak willed to run the surpluses; they give into the temptation to buy votes.
Yes we have. During the 30’s and WWII the USG ran a deficit, but after the war it ran a surplus and paid down the debt. That kept going until the Vietnam War upset the fiscal applecart.
That is what Keynes actually recommended.
How do Keynesians square this circle?
Keynes said that governments should run surpluses during times of low unemployment, jackass. You know, like in the late 90’s under Clinton.
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism….”
Everything that has happened since 2001 is the exact opposite of what Keynes stood for.
Try po-mo-keynes. moslereconomics.com. he’s the future, like it or not.
We saw “Enron-The Smartest Guys In The Room” a few years ago, and it’s a good movie, and what lingers most about it, was a lineman for the county in Portland, Or., that had his very conservative pension switched over to Enron stock, when the utility he worked for got bought out.
He ended up with nothing.
There’s a lot of people in his position right now in the Enron State of America.
Enron-by-the-Sea (aka San Diego) is one place where lots of people are in his position right now, given the SD city govt pension’s $2.7 bn funding deficit.
That’s what happens when you let the 1st National Bank of Tijuana-adjacent handle your pensions…
On the subject of books and movies, I saw a documentary called “Who Killed the Electric Car?” last night. Holy cow! Its the story about GM buried its EV1 (electric vehicle car). Its a few years old, but if you haven’t seen it, I strongly recommend it.
After seeing that, I’m even more furious that our Congress is considering lending the auto industry a single dime.
Interesting documentary, but they purposely neglected a fact. That fact is that the NTSB gave the auto manufacturers a pass for a few years to have those vehicles on the road without any crash test safety tests being performed or passed. This is why they were taken back and destroyed, because they agreed to do so before they put them on the road. But I believe there is a market for rechargable cars, assuming the batteries can go past 500 charge cycles.
I have rented it out and not seen it. Somehow, I can never get myself to watch something brainy like a documentary before going to bed. Last night I watched “Mongol”. Breathtaking. These Russians know a thing or two about “epic”.
“House price falls could double next year, warn experts as Nationwide figures show another drop”
telegraph.co.uk/finance/economics/houseprices/3530922/House-price-falls-could-double-next-year-warn-experts-as-Nationwide-figures-show-another-drop.html
It will be a sweet thing if we see a doubling in price drops. That would make real estate more affordable to young people with kids. The media deems it a bad thing and causes a nation to be gloomy. When can having more money to spend on other things than housing be a gloomy thing?
Morning in America!
(Updated for market conditions)
Owe Canada!
Your home and bubble land!
True profit love in all thy sons command.
With crowing hearts we see thee demise,
The True North’s weakened knees!
From far and wide, Owe Canada,
You stand up owing quite a fee.
Got to keep the oil price up, so it isn’t free!
Oh Canada, we stand en guard for thee.
Owe Canada, we stand on guard for thee.
On December 16, 1620, the tiny ship loaded with “tools and weapons, a stock of dried and salted foods, a few goats, pigs, and chickens” landed at Plymouth Rock. Their hardy Christian faith and work ethic enabled them to hang on with tenacity, despite battles with the elements and Indians. The Pilgrims also experienced the devastating “Starving Time” when half of them perished from malnutrition, pneumonia, and tuberculosis. This time of want was due primarily to their unbiblical economic system.
For the first two years of the settlement, the colonists labored under an economic system that they called, “The Common Course and Condition.” This was a primitive and simple form of socialism. The family households commonly shared whatever products they could produce. If one family worked diligently, rising early, working hard until sundown, and produced a bumper crop, while his neighbor lay in bed until noon and produced little, they shared equally the sum of both. There was no incentive to work hard and apply one’s God-given talents and abilities. This system produced consistent shortages. There was never enough food for everyone. It also produced squabbles among the colonists. There was resentment and envy—predictable results in socialist economies. Fortunately, the colonists had elected a young, but wise and godly governor for the colony—William Bradford. In 1623, Bradford recognized the failure the “Common Course.” Bradford would later write that this failed economic system “was found to breed much confusion and discontent and retard much employment.”
Bradford had a better plan. Each family would be given a piece of land based on the size of their family. Larger families received larger tracts. Each household was allowed to grow corn for their own families and to do with it what they wished. The results were phenomenal.
“This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use.”
While under the original system, the women of the colony had complained that they were “oppressed.” The Pilgrims experience proved that a biblically based economic system could provide liberty and a “family-friendly” means of production: “The women now went willingly into the field, and took their little ones with them to set corn.” Bradford had recognized that “the primary agency of economic planning is the family, as the primary owner of property.” Bradford realized that the family and ownership of the means of production were an unbeatable economic formula. This recognition caused the economy of the fledgling settlement to flourish and when 60 more settlers arrived in 1623, there was more than enough food for them as well. And despite continued challenges from Indians, pirates, and sometimes harsh weather conditions, the little colony prospered as God blessed their steadfast faithfulness.
A group of Puritans would also establish a colony in Salem in 1630 and the economic foundations laid by these two groups would eventually make America the financial powerhouse it is today.
William Bradford went to be with his Savior on May 9, 1657 at the age of 68. The lessons Bradford and the Pilgrims have taught us have allowed them to become “stepping stones to others in the performance of so great a work” and made America the primary source of funding for missionary endeavors around the world. It is a lesson our nation so desperately needs to revisit.
Happy Thanksgiving
The cut and paste above was originally written by known white collar criminal Rick Williams. He’s been admonished by every known Christian leader since he wrote it at the height of the religious distortion era, 2005.
I challenge you to provide chapter and verse anywhere from the new testament of a “biblically based economic system”.
In the meantime, I encourage you to get up to speed on what Jesus actually taught by first reading;
The Rich Young Man, Matthew 19 verses 16-29
The Moneychangers(Banks), Matthew 21 verses 12-16
Your obligation to pay tax, Matthew 22 verses 15-22
No longer will the economic terrorists be allowed to distort a religion for their own economic benefit. You know…. it’s time for personal accountability.
Since NYCityBoy is having Turkey today
-
More of the same?
Israel asks Bush to explain its ’special relationship’ with U.S. to Obama
haaretz.com/hasen/spages/1040967.html
&
Despite Protests, Obama Keeps Gates On As Defense Secretary
inteldaily.com/news/173/ARTICLE/8828/2008-11-26.html
-
You have to make up your own anger, I can’t do it as well as him.
Dug In Like An Alabama Tick.
From The Daily Reckoning
The Turkey’s Revenge
“You can understand how fraudulent most economic analysis is,” Nassim explained, “just by looking the life of the turkey. The animal is fed for 1000 days…and then it is killed. So, if you plotted out the turkey’s life on a chart, it would look great for 1,000 days…each day, the food arrived reliably, and each day, the turkey gained weight. The turkeys would look around and say they were enjoying growth and a bull market. Momentum investors would see it as an opportunity. The quants would run linear regressions on the data and prove that the risk was minimal. ”
Ben Bernanke would describe the turkey’s life - with no setbacks - as the product of a “great moderation.” Turkey stockbrokers would assure their clients that nothing had ever gone wrong in the turkey’s life. Turkey econometricians and theorists would come up with explanations for why the turkeys’ growth would continue forever and they’d pat each other on the back for having finally mastered the “turkey cycle.” Turkey politicians would run for re-election on the grounds that they had helped create a better world. And turkey economists would project further weight gains…until the turkey was the size of a hippopotamus
Then, come Thanksgiving, and all of a sudden, something goes wrong. Alas, all the turkeys’ theories, models, and conceits were for the birds.
Lots of turkey investors were led to slaughter this year by the Fed’s policies. Heck-of-a-job, Ben Bernanke and friends!
What do you think will happen with the turkey investor after January?
Will Obama continue on the path of respiking the punchbowl with more stimulus packages, trying to fix a broken dam with more water?
Looking at his pick for Treasury secretary, Geithner, one can guess that we will see more of the same. On the other side, today Obama appointed Volcker to head his economic advisory board.
This is what Volcker said back in 2005:
“Altogether, the circumstances seem as dangerous and intractable as I can remember.”
“Boomers are spending like there is no tomorrow.”
“Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.”
“I come now to the heart of the problem, as a Nation we are consuming and investing, that is spending, about 6% more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 Billion per day.”
Even more were led to the slaughter by the travesty that is MPT (modern portfolio theory).
Standard deviation is risk? Dont’ make me laugh.
DCA. Buy and hold. Efficient markets? No intellectually honest person could swallow this steaming pile of h*rseshit.
There was an article/post on 2 people on an island buying/borrowing/selling back and forth until the Value goes up. Does anyone know where that was posted or a link ? Thanks, and yes I am very Thankful I did NOT buy a condo 3 years ago as the NJ realtor recommeded to me in Edison.
You’re a mean one, Mister Pinch…
Bargains are there, but few buy
Stores desperate to shed inventory cut prices up to 70%
By Anne D’Innocenzio
ASSOCIATED PRESS
November 27, 2008
A.J. MAST / Associated Press
Anna Shepherd placed merchandise on a rack at a Liquidation Services warehouse in Plainfield, Ind. The online auction company sells surplus goods.
NEW YORK – The holiday shopping season begins tomorrow with a blitz of early-morning specials. For some merchants, though, it’s practically over already.
Piles of jewelry, clothing and electric drills are bypassing store shelves and heading straight to liquidators by the caseload as stores try to save as much cash as they can.
The crazy thing about this, is these retailers will have to pay a lot more for the same goods, upon the next? shipment F.O.B. China…
The idea that they are willing to blow them out for bupkis now, shows you how short-sighted their thinking is.
How can MSM commentors distinguish between confidence and a reasonable fear the Fed’s never-ending series of surges in the War on Savers will succeed beyond their wildest dreams?
Confidence translates to a boost for stocks
Obama’s speech helps reverse early-session trading losses
By Tim Paradis
ASSOCIATED PRESS
November 27, 2008
NEW YORK – A stock market gaining confidence in the nation’s financial system bolted higher yesterday, propelling the Dow Jones industrials and Standard & Poor’s 500 index to their first four-day advance since last spring.
It appears grandmas and grandpas on fixed-income pensions are going to involuntarily pay more than their fair share for the Fed’s efforts to shore up the banking industry’s profligacy. Why is the AARP so conspicuosly silent at the moment?
Food costs likely to continue climbing
Meat, poultry prices expected to lead way
By Andrew Martin
NEW YORK TIMES NEWS SERVICE
November 27, 2008
For more than a year, food manufacturers have been shaving package sizes and raising prices, declaring that they had little choice because of unprecedented increases in the cost of raw ingredients such as corn, soybeans and wheat.
Now, with the price of grains and other commodities plunging, it may seem logical that grocery prices will follow. But while some grocery items such as milk and fresh produce are dropping, the prices of most packaged items and meat are holding firm or even increasing. Experts warn that consumers should not expect lower prices anytime soon on most items at the grocery store or in restaurants.
Because AARP is filled with people whose only job is to ensure their own salary. They are not paid to have a clue.
Just like pension-fund managers.
There’s no incentive to “do the right thing”. If they keep their clam shut, they keep raking in the moolah and benefits.
I consider myself a student of both engineering and economics, and I have been a car nut pretty much since I got my first one at age 17 (a 94 Civic DX hatchback 5-spd). In 1999 my college roomate and myself (both engineering students and Honda drivers at the time, and tired of losing races to Mustangs and Camaros) decided to introduce ourselves to the world of real power and purchased a non-running 1984 6-cyl automatic Camaro and a junkyard 350 Chevy, which began my fascination with the American small-block V8.
We rebuilt the 350 with a big solid-lifter cam, some off-brand aluminum heads and a junk Autozone 750 carb and installed it in the Camaro in front of a Tremec TKO 5-speed transmission (I don’t know exactly where he got the money for that tranny, but somehow he procured it; it was probably worth more than the car or the engine) and since then I have been addicted to the raw power and soul of the American pushrod V-8, despite being an engineer in a high-tech field more associated with plug-in Prii and yuppie wine tasting than muscle cars. Don’t get me wrong, I do appreciate the engineering that goes in to a good plug in hybrid, and my other hobbies are gourmet cooking and golf, so I guess I am a living contradiction.
The reason that I am writing this is mainly because I feel that we are on the verge of the death of GM and possibly Ford, and since I very much respect the opinions of the posters to this blog (have been lurking since around 2003) I was wondering what you think this means for the future of the country (after all, nothing is as American as Chevrolet and apple pie). I cannot deny that GM and Ford have been horribly run companies, and I hate the idea of a bailout, but I quite frankly love the cars and it will kill my soul to have to drive a Camry (even though I have no doubt it is a “good” car). Will the brands of the “Big 2.5″ be gobbled up by Toyota and Honda leaving us with Cobalt SS’s that are Civic Si’s and Camaros that are Scions?
I currently drive a 2002 Camaro (last of the breed, who knows if the 2010 will make it before the General breathes his last) with the LS1 V-8, which achieves an honest 25mpg at 75mph despite its considerable 350 horsepower output in stock form (these were known to be grossly underrated from the factory for the sake of Corvette sales).
Looking at the 2002 Camaro offers some clues as to why GM may be failing; it is not a comfortable car, in fact it is quite scary to drive at times (Posi rear end in the rain keeps you on your toes), so I can understand why despite its brutal power and surprisingly good fuel consumption it was not a good seller. It has been fairly reliable, as has my 2001 F-150 (each at least as good as the Civic I had first), so I don’t think thats really the problem (I am young so I think I missed the supposed terrible cars of the 70’s and 80’s, though my family always had Fords and Chryslers growing up and I don’t remember a lot of issues).
I think the problem is that my Camaro is a true car nut’s car, with no compromises for people who just don’t really like cars (and that is probably 95% of the population). My F-150 is much more refined, despite being a work truck model with V6 engine and manual transmission, and it is how Detroit stayed in business the last 20 years, but now the market has moved on and Detroit is left behind with cars that do not appeal to the masses. I did recently have a 2008 Malibu as a rental while on vacation, and it seemed to be a nice, refined car (not what I want, but what most want), but I think it is too little too late.
I am certain Honda and Toyota build great cars, and these days they do build them with American labor (and even American design & engineering, like the new Tundra, which will probably die with Detroit as this country can no longer afford 12mpg $40k commerical vehicles to go to and from work and the mall and Lowe’s).
Thank you for reading my essay, I enjoy to write and have some time to kill on this Thanksgiving day. My point is this: will Honda or Toyota or Hyundai ever build a 1955 Bel-Air, or a 1965 Mustang, or a Viper or a Hemi Charger or a Jeep Wrangler or a Corvette ZR1? The answer is almost certainly no, they do not build cars with an American soul. A piece of our national history and identity may very well be dead and it will not be coming back, and I am sad to see it go.
” I feel that we are on the verge of the death of GM and possibly Ford, and since I very much respect the opinions of the posters to this blog (have been lurking since around 2003) I was wondering what you think this means for the future of the country ”
It means that the last vestiges of WWII’s “arsenal of Democracy” are vanishing from the United States. No one in any recent administration seems to give a damn about America’s ability to manufacture things.
We looked for a used car six years ago. Spotted a 1997 Toyota RAV4 at a good price from a private party and bought it for $7,300. Sold it after 4 years at a $2,500 loss after 75,000 additional miles. Bought a 2003 RAV4 with 70K miles for $12,450 and it still books at that price for private party in good condition.
GM, German-owned Chrysler (which we bailed out once), and Ford, (I liked the three AMC vehicles I owned) should go through bankruptcy proceedings.
Triumvirate of blame? Maybe. Greedy companies, unions, and dealers. How to properly assess the blame? I hate the blame game. Give me a 125% No-Doc Loan with a start rate of 1.25%
How can I lose when you can make such a great commission???
“will Honda or Toyota or Hyundai ever build a 1955 Bel-Air, or a 1965 Mustang, or a Viper or a Hemi Charger or a Jeep Wrangler or a Corvette ZR1? The answer is almost certainly no, they do not build cars with an American soul. A piece of our national history and identity may very well be dead and it will not be coming back, and I am sad to see it go.”
Not much more to add, is there?
The American autoindustry is going the way the British autoindustry did. Unfortunately Detroit has already reached a point of no return. Look at the pathetic fate of once mighty Jaguar brand for a clue of how Detroit will look in the future.
great post jrm1493 (not-so-great handle though, am I supposed to pronounce it “germy”? :-D) I nearly bought a house in 2005, but thankfully I found this site in time & talked myself out of it, and instead I bought an old Ford (67 TBird) and set out to figure out how to restore it. It I’d have suffered the death of a thousand cuts had I spent the past 3 years in an underwater house!
Spend some time in an old American car, or especially under one, and there’s an undeniable feeling of being part of our countries heritage. The two biggest purchases in most peoples lives are their house and their car: since houses don’t get imported, then cars are pretty much the biggest, most tangible thing left that we manufacture. And due to the incredible overhang of new construction and all the foreclosing of recently-built homes, that business won’t boom again for years.
We need to save the automakers regardless of cost. This bailout scheme is not being put to any kind of good use: Goldman Sachs receives 12 billion of it and hands out 14 billion in bonuses. That right there is half of what the automakers are requesting, and it’s happening right under everyones nose. We don’t NEED any of the Wall Street wizardry that has put our nation into these dire straits. Whatever those GS employees are being rewarded for, I’m sure it’s something we could all live without, and probably did before the deregulation of the late 90’s.
What we DO need is a solid manufacturing base. Building and maintaining automobiles is a huge business that will always be in demand. This could be a golden opportunity to rethink the American auto industry. Get rid of the shyster middle-man bullshit of buying a new car. Do a from-the-top-down salary structure reform. Pay line workers a decent living wage for Detroit (home of the 10,000 dollar home), with performance-based incentives and things.
I don’t know much about that kind of thing, but I can suss from it that the big 3 are crippling themselves with their salary/insurance/pension plans. That’s money that would be better spent on making their cars better and more reliable, which would make people more willing to buy them. Most people buy cars based on looks, price, and reliability. No matter how a car looks, if it’s overpriced and unreliable then people won’t buy them.
It looks as if the $700 billion is going to get robbed from underneath us. The recipients are worse than cancer: they can kill the host yet continue their life of luxury. That’s not true of the automakers: if those people get laid off, they are f***ed. We don’t need the moneymen- they’ll be regulated back out of existence eventually- but we do need the manufacturing base and the millions employed by it.
Time to carbo load, happy turkey day everyone!
My first car was a Ford Tempo, brand new. Electrical problems crept up. Then the air conditioning failed. I had it fixed under warranty, but of course it broke again right after the warranty expired. A very expensive quote was given for repair (much more indepth than the repair done under warranty). Then the transmission failed.
Then my next car was a Honda accord. Granted it’s a much more expensive car. They hold their value (along with the civic) much better. The only electrical problem has been the alternator, which oddly is made in the USA and similar to those used in American cars. It’s been far more reliable, it’s far tighter. The paint job isn’t as good but it’s still a good car to me. Sure I’d love a M3, and a GMC Typhoon, and a Volvo S60R, and other cars.
Those old American cars are the memories of our older generations in the country. The newer kids will have fond memories of their Nissans and Civics.
Like I think I said in the post, Detroit neglected “regular” cars like your Tempo since probably the late 60’s with only a few exceptions (the original Taurus was groundbreaking when it came out). I think that is why they are dying. They built (and still build) great trucks and performance cars (Vette, Mustang, Challenger, CTS-V, and even Cobalt SS which outperforms AWD STi’s and EVOs on the track) but they ignored the middle of the market for so many years that nobody can blame you for choosing the Accord.
Somehow they managed to convince the consumers that the Pickup/Body-on-Frame SUV was a family car for a few years there, and prolonged the inevitable. The idea of a luxury truck or truck as a commuter is just laughable if you take a step back and think about it; why couldn’t the management have seen this coming (all they had to really do was look at what they sold in Europe - Ford and Opel/Vauxhall are huge there)? I guess when you have a golden goose named Escalade its hard to see past it.
What an evocative post, jrm. Two words for you.
Porsche.
Maserati.
Excellent post, jrm!
There’s no doubt the auto manufacturers are being raked over the coals while the financial institutions are patted on the head and handed billions/trillions of dollars without any apparent scrutiny.
I would much rather save the U.S. manufacturers (pensions and all!) than save a single Wall Street firm. God forbid we actually produce anything of value in this country.
It’s a very sad time, indeed.
Yep that is one thing that upsets me. I’d really rather not see any bailouts, but if the government is hell-bent on dumping money in the system, why not give it to the folks that actually MAKE something rather than move money around and scam people. The big 3 are badly run and have built both good and bad cars, but at least they make a real tangible product that has a use.
We saved the world from tyranny in WWII in large part because of our ability to out-manufacture our opposition, which was party due to our vast human and natural resouces and isolated location, but it would not have been possible without GM, Ford, and Chrysler who stopped building cars and built trucks, ships, tanks, ammo, and airplanes.
We certainly have financial fascism going on all over the world, no doubt.
But what got us here was ignis fatuus, more ‘fatuust” than fascist.
==============================================
ignis fatuus meaning: Something that misleads or deludes; an illusion.
So what do you think will happen after January?
Will Obama continue on the path of respiking the punchbowl with more stimulus packages, trying to fix a broken dam with more water?
Looking at his pick for Treasury secretary, Geithner, one can guess that we will see more of the same. On the other side, today Obama appointed Volcker to head his economic advisory board.
This is what Volcker said back in 2005:
“Altogether, the circumstances seem as dangerous and intractable as I can remember.”
“Boomers are spending like there is no tomorrow.”
“Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.”
“I come now to the heart of the problem, as a Nation we are consuming and investing, that is spending, about 6% more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 Billion per day.”
Madmen on the Loose
blog.mises.org/archives/009017.asp
The madmen in question are like Bizarro World Chicken Littles, as in the sky is always rising.
“AP
Meltdown far from over, new mortgage crisis looms
Thursday November 27, 1:17 pm ET
By Matt Apuzzo, Associated Press Writer
Malls, hotels next victims in mortgage crisis as signs show meltdown far from over.”
Want a link? Have one with turkey and gravy:
http://biz.yahoo.com/ap/081127/meltdown_coming_soon.html
Ya beat me to it…….
Why not use the Circuit city Lines and things empty stores for homeless/ emergency shelters…welfare offices…maybe the offices for emergency family shelter and single people in the main floor?
most strip malls are on bus subway lines you have lots of parking, plus usually some type of supermarket food stores close by
they usually have multiple bathrooms and tons of security cameras already in place.
It will be years before they get re-rented, and if they file BK the city state can pick it up on the cheap….
Plus most cities have maintenance crews so construction costs should be less using in house help
And in T-Day tribute to financial mania bloggist extraordinaire BenJonesCo:
Modern financial history is a long series of spectacular asset bubbles followed by equally dramatic crashes. Before, during, and after, the question always arises — whether it’s stocks, bonds, real estate, or collateralized debt obligations — what is the cause of such, as it appears in hindsight, folly?:
http://mises.org/story/3228
11/27/08
LA GUAIRA, Venezuela (AP) - Russian President Dmitry Medvedev agreed to help start a nuclear energy program in Venezuela and then departed for Cuba Thursday in a tour aimed at restoring ties that have dwindled since the Cold War.
Medvedev used his visit to Venezuela — the first by a Russian president — to raise Russia’s profile in Latin America and deepen trade and military ties. Chavez denied trying to provoke the United States, but he welcomed Russia’s growing presence in Latin America as a step away from U.S. influence toward a “multi-polar world.”
The two leaders toured a Russian destroyer docked in a Venezuelan port, one of two large Russian warships that arrived this week for training exercises in the first deployment of its kind in the Caribbean since the Cold War.
Chavez saluted the captain, and while touring the vessel joked to reporters from the deck: “We’re going to Cuba!” The warships will hold joint exercises with Venezuela’s navy next week
From “Follow the Money”
Why is China slowing so sharply? Simple, real estate investment has hit a wall. After growing at 20% y/y for a long time, real estate investment stalled – with a y/y growth rate of around 0% (Figure 5). That means that China is in turn producing more steel and cement than it needs, and producers of steel and cement are cutting back. That in turn hurts iron ore exporters.
some observations from Europe:
France:
music shop owners told me that in the last few months customers started using cash instead of plastic.
Holland:
but they had the shutters down. Maybe the sheep was busy…maybe our resident Dutchman can explain this one to me.
OT but good: on the way to the gig in Rotterdam I drove down a busy high street, with cafes, restaurants, shops. And a sex shop with a big shop window that had a meadow and a life-sized sheep in it. Drove by again after the gig (to take a picture, mind you
Germany:
Not much bubble talk here as such and at least in the music retail industry people seem to be spending normally. I guess house prices haven’t gone through the roof as much there. One thing that stuck out from a news broadcast though: even banks not really in trouble are talking about asking for government assistance so they can also offer loans at ‘competetive rates’.
Ireland and UK:
Much different here - I was surprised by how fast everyday conversation turned to housing. I haven’t noticed any real difference in attendance or merchandise sales at any of my gigs but apparently many people are really hurting for money. Story in the newspaper on how to haggle. Reminded me of “But the parrot is dead”.
Quite a few small businesses are having a really tough time and even big ones like Woolworth’s are folding down. One major difference between the UK and the US is that English FB’s haven’t really started capitulating like they started to in the US. No jingle mail here yet.
interesting tidbit: most of the Northern Irish bank notes (pound sterling notes from the Bank of Ulster and the other ones, forgot the other names) have the fabled silver promise on them. I think next time around I will go to their main offices and ask for Ag just for the hell of it.
Thank you for posting your observations from afar.
Sounds like we are in a holding patter for the time-being.
Must follow up on the sheep and let us know what that was all about.
who’s Duch here? Hoz?
nhz is Dutch.
Florida cracks me up. My redneck neighbors are setting off an arsenal of fireworks.
WASHINGTON – The full scope of the housing meltdown isn’t clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts nationwide.
Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.
Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.
That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies’ credit
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Best line
The system has never been tested for a deep recession,” said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.
One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.
“He’s created havoc in the marketplace by changing the rules,” Rosen said. “It was the stupidest statement on Earth.”
Uh Ken changing the rules occurred when he first started bailing out banks, sorry that your charity check hasn’t arrived.
http://news.yahoo.com/s/ap/20081128/ap_on_bi_ge/meltdown_com
ing_soon
Here is something I heard today regarding gaming the FICO system.
For those who have bad FICO scores the tactic is this.
Pull your score from all three agencies. Pick one or two of your biggest problem accounts and dispute those entries. The theory is that the creditors are so overwhelmed right now that there is a chance that they will not be able to respond in the allotted number of days (30-60-90??) and that line item will be removed from your credit report. Recheck in 60 days and repeat the process.
Now I do not know if this is reasonable or would do anything, or even if it is legal because it is a form of fraud, but I did find it interesting that I was told this by someone who has terrible credit and seemed to have no reservation about gaming the system to improve her credit score. I would think that any creditor would have a streamlined process in place to maintain active status on owed monies.