Bits Bucket For December 5, 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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Dec. 5 (Bloomberg) — California, the world’s eighth largest economy, may pay vendors with IOUs for only the second time since the Great Depression, State Finance Director Mike Genest said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2TUhalNFDds
Whats most amazing in this article is the statement that the top 1% are paying half of the income taxes!!!!!!! Everyone should have some skin in the game. No wonder why California is so left wing, no one cares if they raise taxes since it doesn’t effect everyone.
We need to go back to where in order to vote you need to have skin in the game. It used to be a land owner…now it should at least be a taxpayer.
This is the surest way to serfdom for the middle and lower classes. Waiting for a handout from Big Brother. It is so sad what the crooksters have done to the American dream!
There is nothing worse than a wage slave pandering for the wealthy elite.
If the wealthy are outnumbered 99 to one, the chances against changing the system are a million to one.
-The top (1%) 300,000 Americans had almost as much income as the bottom (50%) 150 million taxpayers.
-The top 10% of American taxpayers earn almost 49% of the income in our country; while 90% of the rest share all the other half of income.
The problem with your analysis is that there are not 150 million taxpayers.
Of 300 million citizens, there are around 90 million who actually pay taxes and another 45 million or so who file a tax return, but who have a negative net tax obligation.
In other words, the government doesn’t take away from those 45 million, it gives money to them after they file.
In 2006, the top 10% in income paid 70% of Federal income taxes, the top 25% in income paid 86% of taxes and the top 50% paid 97% of Federal income taxes.
The lower 50% of income earners paid 3% of income taxes.
For more detail, see here (pdf):
http://www.atr.org/content/pdf/2008/August/081408ot-federalincometaxandwhattheypay.pdf
Raising revenue on those who have the $$ makes sense considering the top 10% earns half of all income and the bottom 90% have to share the other half.
And then there’s the question of how the ownership of property is distributed.
Well once you have these conditions where the largest voting bloc does not pay any tax, they will have political power for decades.
The only way out is to battle it by preparing for the pendulum swing back away from socialism. Last time we had that was 1980.
Yes it could take a generation to get out of this drab gray socialism. But it will happen because the law of unintended consequences kicks in. Higher minimum wage? Higher unemployment. Higher corporate taxes? Higher unemployment. Higher taxes on the rich? More flight of money out of the states to tax havens and more money out of investing for jobs - higher unemployment. We’ve gone through Congress socialist policies in the 1970s and saw how it caused the economic crisis back then. And now we are repeating their same policies. Santayana was right.
We’ll see how things turn out with Status QuO-bama.
Much better than Buushco, for sure.
I hope the urge to snipe anytime the Anointed One doesn’t live up to someone’s idea of perfection is put in context of the Intransigent One’s management style and track record, otherwise it’s going to be a very long 4 years…
We’ll see how things turn out with Status QuO-bama.
There’s nowhere to go but up after eight years of incompetence and buffoonery.
If the Texas Rodeo Clown didn’t fix us for good, that is.
Better leadership + worse conditions = ????
Plenty of countries with progressive taxation that have better standards of living than the US. There is a great way to prevent people from offshoring their income. Throw them in jail. The difference in income of CEO vs average worker in the US is 400 to 1, at the largest companies it is closer to 1000 to 1. It was around 40 to 1 in 1980. CEO’s, Hedge Fund investors and guys like Warren buffett pay a much lower tax rate than those in the middle/upper middle class. Trickle down economics is a proven failure. Credit propped up the middle class for a while but now that’s gone and we face an economic collapse.
Funny how there was enough money to campaign for/against gay marriage, but now everyone is broke.
I’m thinking that it might help to have a vote on that every couple of months or so.
Actually, quite a bit of that money was stolen from banks! Among the other things I did for my futile No-On-8 work was correlate the donor rolls in Utah, Sacremento, and the Inland Empire with publicly available foreclosure listings.
Of course, one can’t prove exactly that those exact dollars came from home equity loans ore cash-back-at-closing, but I have cases where a person who foreclosed last month donated $5000 to Yes-On-8. Shouldn’t the bank have received that money?
Uh, should those people making more than half the income pay at least half the taxes? Common sense, people.
You’re making too much sense Adam.
Does “common sense” dictate that people making 1/10 the income pay nothing?
Absolutely. “Common sense” says they **can’t** pay income taxes, since they have no money!
Would you rather they live on the streets and starve to death so they can pay taxes…so the elite can feel better about the tax system?
The flip side is–if the government needs to raise taxes to pay for something, it should raise EVERYONE’S taxes!
I’d be happier if Obama proposed to raise every tax bracket, from the 10% to 35% up one point, than to just sock it to the top few percentage. It would lead to a healthier society where everyone understood the cost of things.
raise EVERYONE’S taxes: e.g. for bailing out the WallStreet elite?
Totally agree
“Uh, should those people making more than half the income pay at least half the taxes? Common sense, people.”
From SFJack above:
“In 2006, the top 10% in income paid 70% of Federal income taxes, the top 25% in income paid 86% of taxes and the top 50% paid 97% of Federal income taxes.”
Adamco:
So if SFJack’s info is close to correct, the top 50% income bracket pays 97% of income tax. How does that fact not meet your criteria of “.. pay at least half the taxes?”
Common sense?? What is your definition?
Common sense and fairness dictates that those who earn more should contribute more but they don’t and haven’t for a long time.
I guess facts don’t persuade ideologs like you exeter
The wealthy have never paid a smaller percentage of their income in history. Hows that for a fact?
Including before the income tax was imposed and the 13th Amendment? Including 16th century France? Alfredian Wessex? The Byzantine Empire?
I’d say it was about as unlike a fact as it’s possible to be.
Not altogether unexpected, considering the source.
Run, hide, duck, weave. So typical of a wage slave apologizing for his masters.
Barack Obama will raise the taxes on those evil “rich” people by 15% when he uncaps social security! I know how I’ll respond–by firing my full-time staff and taking a 4-year mid-life vacation.
In case you haven’t noticed the richest 1% own all the money. That’s what should offend you. And they’ve used it to buy all the politicians. Why do you think the system is imploding at this very moment? Because the uber-rich got too greedy and killed the golden goose. They thought they had the perfect scam going, entice the masses into debt-based slavery and convince them it was “prosperity” and collect interest payments forever. Unfortunately the system doesn’t work unless the bottom tiers have at least a little bit of money beyond basic needs to feed back into the system. They don’t and now we are witnessing the implosion. Pitchforks and torches coming soon. Enjoy!
This is why the system is going to be destroyed rather than repaired. It’s too late. Too much petty B.S. of voting to take away the property of others, and not an even equal treatment under the rule of law. The “classes” are divided against each other rather than united against a tyrannical government. So be it.
Everyone who isn’t a Libertarian pretty much deserves starvation and death anyway. 90% of the population has deluded themselves into believing they aren’t criminal thieves, regardless of any income level. Guess what? In a free society, it’s nobody’s business what anyone’s income is.
Those of you about to die, I /salute you!
The “classes” are divided against each other rather than united against a tyrannical government. So be it.
—————-
WTF?????
The upper class IS the government!
How about the class warfare whereby the rich want to take away workers’ right by eliminating/weakening unions, taking away — piece by piece — all the benefits that used to go to the middle class? You know, health care benefits, defined-benefit pension plans, job security, etc.
How about the “rich” who ensure we will never see immigration reform because that might take away one of their sources of cheap slave labor (and the taxpayers subsidize these cost when we pay for the illegal immigrants’ healthcare, education, legal and law enforcement expenses, infrastructure costs, etc.).
Quite franky, it’s high time Americans wake up to what’s been happening to them over the past few decades. I hope it’s not too late, but we need a balance of power between the corporate interests and the workers’ interests. The workers have been placated by the availablity of EZ credit and rising housing prices.
Time to wake up.
I live in the Bay Area, and there are some FILTHY rich people here. Rich as in it isn’t at all unusual for me to see at least 3-4 $300,000-$500,000 cars driving to work on 101 daily. Rich as in they live in 10,000 Sq mansions that cost sometimes hundreds of millions of dollars. Rich as in operating the wealthiest, most profitable companies in the world. The rich are in part reason why people like me and my Wife, who warn pretty good wages have effectively been priced out of the market up until recently once the prices started crashing.
So in a way, I don’t exactly feel sorry for any of these people who pay more taxes than me. Its apparent from the way they live that taxes or no taxes, they live quite luxurious lives. So let them pay.
On the other hand, California has the stupidest laws in regards to taxes. The worst is Prop 13. Everyone here whines and complains about schools, roads, and so on. All because we enable little old ladies who bought a house in 1957 to pay $200 a year on her now million-dollar house in Palo Alto while the next door neighbors who just bought the same house pay $15,000. There’s definitely something bad about that, but of course- nobody wants to change it.
California is basically in a state of gradual decay from its own self-inflicted legislation.
You have to back away from the things like Prop 13 slowly.
We are in a bad market. If you jump taxes up on a bunch of very old people you will just add more inventory and make values go down.
Why? The old people will not be able to pay anymore and will lose their homes. The net effect might be a drop in revenue as the increased number of forclosures drop market prices even more and taxes are adjusted downward.
So you want to kick a nice little old lady out of her home because enough people were crazy enough to pay $1M for a similar small houses on the same street? That’s not fair, either.
So what you’re saying is disenfranchise half the American population because they’re not net tax payers? That’s totally cool by me, I’m neither young nor old nor poor, so I’m set.
‘We need to go back to where in order to vote you need to have skin in the game. It used to be a land owner…now it should at least be a taxpayer.’
Yeah! And you should be a pretty taxpayer person, because ugly people so frequently make poor decisions. Also, you should have good taste in shoes, because poorly shod persons will make bad choices. That’s obvious.
Oh, one more thing. Anyone who ever watched ‘American Idol’ more than during the tryouts, so they could laugh at the horrid singers, anyone who EVER watched ‘American Idol’, on purpose…well, that’s an automatic lifetime voting ban, right there. Maybe automatic execution, even.
Or if you like Surinam toads. I HATE Surinam toads. I can’t stand them, they make me just ape-poop crazy. Normally I love amphibians so very dearly, but this is one exception.
So, if you as a pretty, taxpaying, well-shod, non-Idol watching voter, if you somehow like Surinam toads? Nope. NO vote for you.
Is what I say.
I may have some more good ideas on this subject later. I can tell today is going to be one of my Super Good Ideas Days.
clearly, you have ideas a-plenty.
I would be with you on the American Idol thing, except then I’d have to kill my favorite niece.
Very well then, we shall spare your niece. Because she is your niece.
But she still cannot like Surinam toads. That’s one I’m gonna stay firm on.
Do you like rough skinned newts? I heard they make really good coffee. Your dad might like that.
“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. ”
Thomas Jefferson
But you know more Olympia, what did he know….
90% of people interviewed on the street by comedians are in favor of ending the women’s suffrage. Why must such suffering persist!
All government should be capped at a maximum of 10% taxation. Then you can work exemptions backwards down to 0%. Also change the tax due day to match the election day, rather than having the two separated by the almost maximum length.
The point above is the moral hazard for voters who do not contribute to paying the costs of their decisions at the ballot box.
I’ll spare you all the famous quote and just note that we may be at the end stage of ballot-based budgeting and policy-making. As usual, California leads the way.
The initiative thing in California is so out of control. On election day, our ballots are 5-6 pages long.
Our government was intended to be a representative democracy, not a direct democracy.
And so we get the general population making dopey decisions like Prop 13 and Prop 8. Because folks with deep pockets spent a lot of money convincing Joe 6 pack and Jane Doe to vote with them. Because people, en masse, are dumb.
A smart electorate would be nice, but in lieu of that, I prefer smart people in office. I liked the idea that Bill Clinton would do the Sunday NYTimes crossword in pen. Or that Obama was president of Harvard Law Review. You don’t have to agree with their politics, but you gotta agree that an intelligent person in office is better than a numbskull.
Anyone see Harold and Kumar Escape from Guantanamo? Bush’s appearance is a laugh!
Obama’s quote on one of the conservative talkshows is pretty funny too. Interminable seconds of ah, uh, oh, uh, OK, uh… Let’s cut him some slack though. He doesn’t even have any gray hair yet.
I’m thinking about issuing registered warrants to pay my mortgage, electricity, gas bills rather than cash. By my calculations, my 401(k) should be out of cash by March, too.
My spare change jar has been outperforming my 401k for a while. I’m going to increase my jar contributions.
Management fees on the jar can’t be beat.
Our seat cushions have outperformed most 401k plans.
I was talking with a guy the other day who fancies himself a trader. We were talking about SKF and I told him it was my best money maker this year.
He said to me, “You made money this year?”
(nod to FPSS)
BWAHAHAHAHAHAHAHAHHAHHAHHAHHHAAAA!!!
It’s funny how when you set aside delusions about the market always going up, you can actually make money when it doesn’t.
“You made money this year?”
I’ve made about 2-3% so far this year. It looks pretty sweet compared with the negative 30% or so enjoyed by my lazier co-workers who couldn’t be bothered to move their money out of stocks, and have moaned loudly as they watched their net worth evaporate.
Serf’s up…
If everybody had a home loan
Across the U.S.A.
Then everybody’d be serf’n
Like Californi-a
You’d seem em swearing @ their leaders
Financial scandals too
A Bush-y Bush-y bomb, we’re screwed
Serf’n U.S.A.
You’d catch em serf’n in their cars
Soup kitchen lines
Santa Claus ain’t coming
Austrian bold faced lies
All over the island of Manhattan
And down in every way
Everybodys gone serf’n
Serf’n U.S.A.
We’ll all be planning that route
We’re gonna take real soon
We’re waxing down our home equity
We can’t make it past June
We”ll all be gone by the summer
We’re on serfari to stay
Tell Arnold we’re serf’n
Serf’n U.S.A.
http://www.youtube.com/watch?v=gbRKfieMsdQ&feature=related
Laddie,
That is very funny. I especially liked “Austrian bold faced lies”.
Mike
Holey Roaming Empire?
I kid the Austrians…
And we draw closer to “Mission Accomplished” with each event like this. The Great Recession is here…
Washington’s New Tack: Helping Homeowners…
WASHINGTON — After pouring vast amounts of money into financial institutions of almost every type, and having little to show for it, the Bush administration and the Federal Reserve are suddenly taking a new look at ordinary homeowners.
http://www.nytimes.com/2008/12/05/business/05housing.html?_r=2&ref=business
“We believe that the only way to really address the housing situation is to increase sales,” said Lawrence Yun, chief economist for the association.”
My response is really too violent to post. But I’m sure he’s just thinking of the children.
Thge NAR is the taxpayer’s friend. Learn to love the NAR.
That’s some nice short-term thinking there, combo.
Not short-term at all. The more FBs that can be convinced to keep up with their house payments instead of walking away and leaving their houses to be forclosed on by the banks the the better it is for the rest of us.
They will walk anyway. This just lengthens the disaster and throws good money on bad. I don’t see how more bad decisions, predicated on lies, will help solve the problem.
Maybe they will walk in the end, meanwhile, as long as hope is kept alive they’ll keep up with their payments. Every dollar the FB sends to the bank is one less dollar taxpayers will have to shell out.
This hope is kept alive by the NAR; That makes the NAR the taxpayer’s friend.
“Every dollar the FB sends to the bank is one less dollar taxpayers will have to shell out.”
Pass the bong, combo.
King,
You are asking people to commit financial suicide, is that a good thing?
I didn’t ask anyone to commit financial suicide. I spoke against this bubble for years to no avail.
Don’t put the blame on me, these people screwed themselves.
“You are asking people to commit financial suicide, is that a good thing?”
Yes. It will mean we pay out less money. CityBoy scratches head and belches. I, too, don’t understand how continuing to destroy home balance sheets will strengthen the economy. But I’m not a Cash Expert so I am probably missing something.
Combo is right, other than perhaps the dollar for dollar ratio. Another 50% drop in home prices in 2009 will result in the presumed need for more government bailouts, and result in whipsaw effect layoffs and bankruptcies, requiring the government to shell out even more tax dollars. As between ignorant home buyers footing the bill through a slow bleed, or prudent renters paying for massive bailout plans, I also support ignorant home buyers doing so. In 6 years we will be in the same place, however, not all roads thereto are created equal. I don’t know how anyone could be against accountability.
“Don’t put the blame on me, these people screwed themselves.”
yea they sure did
“We believe that the only way to really address the housing situation is to increase sales,” said Lawrence Yun, chief economist for the association.”
Mr Yun must have a MBA maybe even a Phd
I believe he is, in fact, Dr. Larence Yun.
King, is you or isn’t you Larry Yun?
““We believe that the only way to really address the housing situation is to increase sales,” said Lawrence Yun, chief economist for the association.””
What’s wrong with this? I totally agree. And as we all know the only way to increase sales is to lower the prices. Now all we have to do is figure out a way to get him to state the obvious other half of the equation. Which granted, could prove a little more difficult.
Want a real blood boiler? Go snoop around the mainstream financial boards and read posts that say the best way to get people back to work is to build more houses.
Seriously, even at this stage, many people still think that.
Here’s a better idea. Instead of building houses why the F*** don’t we start building factorys so this damn country can actually start doing some honest work for once? The lazy, self entitled American doesn’t have my pity this AM.
Not to be a fatalist, but it’s kind of nice (in a darkside way) to see the build up of cars and Chinese cr*p at the ports. Long Beach Port is busting at it seams with stored goods and cars.
why don’t we start building factorys ?
what factories? the average Joe cannot start his own factory and it’s not because he is stupid or lazy. Industries with factories such as the automobile and airplane business are precious resources which cannot be replaced. They must be managed and operated with dedication. Although I don’t agree with James Howard Kunstler on many things I do agree that an expanded railway system is needed. America and Canada are not going to be able to maintain their existing road network.
Take a picture and post here, this would be something to see, it should be circulated as well.
There were some good pictures recently in the NYT of the inventory pile up at various ports.
You know though, there is irony here. I went to the lot of a local dealer looking for a specific thing, and they didn’t have one on the lot!
UH we have the factories sitting IDLE right here in Long Island City…its a ghost town after 6pm and weekends and holidays..all those plants IDLE
We need to create 2nd and 3rd shift jobs in America…most of our infrastructure is maxed out during the day and rush hours…so we need millions of NON prime time jobs
========================================
Here’s a better idea. Instead of building houses why the F*** don’t we start building factorys so this damn country can actually start doing some honest work for once?
Because then the unions swoop in and those new factories go bankrupt before they even get off the ground. Especially once the card check bill passes.
Because we have the EPA, UAW, SEC, City Building dept, County Building Dept, Beaura of Land management, Sierra Club, ACLU, NOW….etc etc
Oh by the way the highest corporate tax rate in the G7!
Wonder why they go offshore?
Wonder why they go offshore?
—————–
Nope. Actually, it’s pretty obvious. They can pay American workers $10/hr or pay some third-world slaves $.02 per hour.
Hmmm, difficult choice, no?
Of course, they still expect to ship those products back over here so the American consumer can buy it, and make the corporation lots of money! See, take the low costs of production, mix with the high price of the final product (sold to Americans “rich” with lots of EZ credit), and voila!!! The largest profit margins in history!!!
Too bad the supply-side idiots couldn’t figure out that if they bled their customers dry (that would be former American employees, who have been losing good jobs for decades), they would also go out of business, but why should we expect anyone to think around here?
Kill the plankton, and you kill the entire food chain, eventually…
That is where we are today.
More reason to hold off on buying for two more months.
“Honey, let’s wait for that government mortgage program to kick in….”
how long before Heli Ben hands out $100K in cash for everyone who supports the US economy by buying a home? Or maybe the FED can make a nice deal with Detroit, so you get two free cars with every home purchase?
That is thinking outside the box!
I’m calling my congressman right now.
Wheel Barrows full of cash…….
Oh, right.
NM
He won’t give the money to prospective homebuyers…just those who already have houses and promise to HELOC the money. All the bailouts are directed at the deadbeats…see no reason to change that now.
Hyperinflation - it has what plants crave!
There’s that f@g talk again!
I like money….
This keeps getting fuglier. It’s still a misnomer for taxpayer-subsidized housing. The result always destroys the value of the best and results in more slums.
I’ll keep renting as long as we have this mentality in the U.S. Could be the rest of my life.
Hi Bill I bet we’re in the middle of the bad news and pass the middle of the stock market crash.
I watch TBT to see when fear starts to go away. Next year might be a good time to go long stocks ? And out of treasuries?
enjoy that beach !!
“I’ll keep renting as long as we have this mentality in the U.S. Could be the rest of my life.”
Good point, agreed 100%. None of the actions of the PTB should give one a reason to tie themselves down with a house. There’s too much fallout left to come.
Rapes of Graft…
Rob a liquor store @ gunpoint for $77, get caught and you’ll do 10 years in the slammer, but rob America @ loan point for $7.7 Trillion and nothing happens.
It’s what we’ve become. We’ve been led here all in the name of “free enterprise”. It’s become acceptable to lie and steal in the name of doing business but don’t even consider doing so if you’re the average joe.
Ah, yes, innocent average joe. He didn’t do any lying or stealing during the Housing Bubble. He was just another victim, in a society of victims. I feel bad for poor Casey.
I know. Those poor banks were taken such advantage of by Joe6Pack…. Maybe all the banks should organize and go out and protest. After all, banks have been so altruistic, honorable and kind. Maybe some affirmative action on behalf of the banking community in conjunction with more bailouts. That’s it! Hold powerful joe-6-pak accountable for the way he’s persecuted banks. Make J6P pay!
Man, you’re not very smart are you.
We’re going to have a moment of silence for the poor banks. Nycb, please lead us in prayer.
Maybe j6p and the banks have both been dishonest and neither are victims and they deserve each other.
Why does it have to be one or the other with you?
no, he’s not
First, the hypocrisy is mind numbing. Second, it’s called balance of power, or lack of it. If the fact that banks are the most powerful organizations just ocurred to you, I’ll understand.
This is the big problem! The banks were irresponsible and unethical. But for their plan to work, they needed a pool of dishonest borrowers and appraisers to sign for mortgages and value houses! In fact, it may be the case that the only people who technically broke any law were the J6P borrowers lying about their income, or their plans to occupy the house!
So when I see and hear of people whining: “Don’t bail out the banks! Bail me out! I can’t afford my mortgage” I just want to puke.
And even folks who weren’t outright fraudsters were speculators. Anyone who got an adjustable mortgage is a speculator! They were betting that one of three things would happen:
1. interest rates would go lower than the teaser rate that made the house “affordable” for the first year
2. Their income would go up
3. The house would be worth so much money relative to other houses that they’d be able to sell it and cash in.
I don’t expect a bailout for bad stock purchases, or other speculations. Why do these folks (and most of our Congress) feel that a speculative real estate investment has a guaranteed rate of return backed by Uncle Sam?
The only victims were NEITHER borrowers or banks: they’re the savers, renters, and people who own their houses outright, and people who bought homes they can actually afford. And NOBODY cares about them, even though they may actually be the majority!
“Why does it have to be one or the other with you?”
That’s how partisans view the world.
First, the hypocrisy is mind numbing.
What hypocrisy, exactly? Pointing out one bad actor in a play does not indicate support of the other actors.
I don’t think you understand the meaning of the word hypocrisy.
Second, it’s called balance of power, or lack of it. If the fact that banks are the most powerful organizations just ocurred to you, I’ll understand.
J6P has yielded his power in the name of one distraction or another. The one that got you appears to be your hatred of “rich people.”
Which of course just means “people who make more money than me”. This is especially ironic in light of your preachy (yet vague) “hypocrisy” comment, considering you have publicly stated you earn a 6-figure income; far, far better than most of the rest of the world. Are you sure you aren’t one of them rich people we’re all supposed to loathe?
It’s also funny that you don’t like “the powerful banks” but continue to support the same idiots that have delivered you into their hands. You are critical of the repubs but so blinded by the brainwashing you missed Pelosi, Frank and Dodd tripping over each other in a race to see who could get their nose the furthest up Paulson’s (and the moneyed interests he represents) a*$*$ first.
Just keep banging that blue drum. lol
You don’t need dishonest borrowers just borrowers who have been brain washed by the TV adds/news telling them that realestate only goes up and they better get in before they are priced out for good. The realtor and mortgage broker who tell them you better buy now and buy as big as you can prices only go up. The guy who bought my house went through his brother who was a mortage broker. He put 2% down and financed the rest with fixed rate and adjustable loans. I think he had three different loans. My guess is his brother made a commission on each one of those. If he did this to his brother you can imagine what he did to the guy who walked in off the street.
First, the hypocrisy is mind numbing.
What hypocrisy, exactly? Pointing out one bad actor in a play does not indicate support of the other actors.
I don’t think you understand the meaning of the word hypocrisy.
Second, it’s called balance of power, or lack of it. If the fact that banks are the most powerful organizations just ocurred to you, I’ll understand.
J6P has yielded his power in the name of one distraction or another. The one that got you appears to be your hatred of “rich people.”
Which of course just means “people who make more money than me”. This is especially ironic in light of your preachy (yet vague) “hypocrisy” comment, considering you have publicly stated you earn a 6-figure income; far, far better than most of the rest of the world. Are you sure you aren’t one of them rich people we’re all supposed to loathe?
“We’re going to have a moment of silence for the poor banks. Nycb, please lead us in prayer.”
I’m not defending the banks but your extremist way of thinking has to come to that conclusion. You are George Bush, only from a different philosophical pole. I’m not defending the banks, real estate agents, appraisers, fraudulent buyers or anybody else that committed crimes. You really are messed up.
Reuven …..I agree with you because it’s clear that the bulk of
home-buyers who claim they were victims were speculators .
What do these buyers have to lose with no skin in the game and a teaser rate ? The Industry sold this investment scheme ,
yet Congress/Senate will not admit that this is what it was .
The real victims were renters who were priced out who had rental rates raised on them ,the people who did put a big down payment on a house and could afford their payments, savers ,and anybody else that was on the up and up . Law-abiding Citizens are the most harmed by all the bail-outs ,can you imagine that .
Some talking head was saying yesterday, in essence, that you can’t prosecute people or companies unless you can prove that there was intent to commit fraud ,verses just mistake .
A loan Company or Wall Street firm that breaches their duty to underwrite loans and knowingly passes on loans to the Secondary Market is no different than a car manufacturer
putting a car with no brakes on the market . I think one of the biggest reasons for this Obstruction of Justice is that the government knows that all the Lenders and Investment firms and Government would of been sued anyway . In terms of cost effectiveness ,the Powers think the bail-outs are more cost effective .
No you just continually bash those who were led to the slaughterhouse and never a peep about the slaughterhouse operators but do keep making excuses for them.
From vocabulary to banks to “I built my house” and still amounts to a big fat nothing.
never a peep about the slaughterhouse operators
Comment by bluprint
2008-12-05 09:56:32
Paulson’s (and the moneyed interests he represents)
don’t take it person….it’s just business.
I’ll take free enterprise over un-free government any day. Take your meds today?
You think this is free enterprise?
Regulators were trying to stop the predatory practices years ago, but were stopped at every turn by lobbyists from the financial industry.
And now, we are expected to bail these same a$$holes out?
You think that is free market?
I was at a meeting and met one of the top heads of the NYS prison system. As a concerned citizen as well as just trying to make chit chat I happen to ask this individual how was the crime rate. He put a big ass smile on his face while simultaneously sticking his thumb up and said “it’s up”. Then he commented “Job Security”. It was not what I wanted to hear.
How lucrative are “prison industries”, and to what extent does mandatory sentencing guarantee a large pool of very cheap labor, and growing profits for the firms that run prisons? Think no bid contracting.
Many hotel sheets are washed by prisoners.
How lucrative are “prison industries”, and to what extent does mandatory sentencing guarantee a large pool of very cheap labor, and growing profits for the firms that run prisons?
Oh, the prison industry is going gangbusters. Lots of growth potential.
What could possibly go wrong with an underregulated industry that’s constantly trying to cut costs and grow profits based on locking poor people away?
What could possibly go wrong with an underregulated industry that’s constantly trying to cut costs One thing seldom mentioned is the power to pardon and commute given to most if not all state governors. Any day we’ll hear of a state governor sweeping out the less risky prisoners onto the streets to cut state prison costs quickly.
It wouldn’t bother me a bit if we were to end the war on some drugs today and release everyone that is in prison ONLY for the possession or sale of those drugs. We can no longer afford the luxury. I have seen statistics that say the majority are in prison for just these reasons.
Thanks. I just had visions of the laundry-room scene in “The Shawshank Redemption”. Think I’ll avoid hotels for a while.
Just watched Cool Hand Luke the other day. Regulations we don’t need no stinkin regulation.
You wonder if America would be better off if they prosecuted the 2 Million or so Americans who committed mortgage fraud and spend a the same bailout billions putting them in jail for a year (assuming our existing laws permitted such sentences).
It would have created jobs while building the prisons, and send a great message:
1. To responsible Americans, seeing their wheeler-dealer greedy neighbors locked in the slammer would bring the feeling of peace and joy that comes from seeing Justice served
2. To less responsible Americans, it would have scared the Bejeezus out of them to get off their lazy rear ends and be productive, lest they get the same fate.
And no, I’m not *completely* joking about this.
How many foster kids you going to put up in your house while their parents sit out a year in prison, Reuven?
Zero! We’ll build orphanages!
I’d be happy if we put just one CEO in jail for all this. Where are the investigations. I’d like their emails and stock sales reviewed and presented to the public. The victem BS would immediately be revealed. They knew exactly what was going on and how they would play things when the system collapsed.
Victimhood for the most fortunate, penance for the least fortunate.
Cool system huh?
You know what measton, I’m inclined to believe that investigations will prove the majority of execs were more incompetent than they were dishonest. It was probably pretty late in the game before they started realizing what was going on. By then it would be too late to turn their respective Titanics around. The only question is whether they used their insider knowledge when they finally realized how much they had f***ed up.
From today’s ohio DOT com: “Former Evergreen Corp. President David B. Willan was found guilty this morning of all charges in a 68-count indictment for widespread mortgage and securities fraud, aggravated theft and theft from the elderly. [Willan's attorney] said Willan followed the advice of the law firm he hired, Roetzel & Andress, to work closely with the Ohio Department of Commerce’s Division of Securities in making sure he was in compliance with the state’s financial laws.
”He did everything his lawyers advised him to do. He went above and beyond everything that the Division of Securities asked of him,” Whitaker said.”
Lot of our prisoners have no right to be here in first place. Deport ‘em; they can take their sheets and cots with them. Step two: put National Guard with military powers on the border. Taxpayer savings: immense.
Agree!!
And if we don’t have enough Guardsmen, we can hire more…more jobs for American workers!
I kind of wonder what’s going to happen if California can’t pay the nut for their prisons and upkeep of the downtimers?
I like to say I live on just the other side of nowhere, which in this caes is somewhere.
The Sierra Nevada has my back, but less than 200 miles to the west of me, i’m pretty much surrounded, albeit from quite a distance.
The nowheres are massive prisons mostly hidden away from public view, an industry that grew even bigger than the housing bubble, as the Big House needed to be built and manned 24/7 forever.
Call it the Prison Bubble…
That brings up a point I’ve wondered about.
A lot of folks hold very sensitive jobs where honesty and integrity are crucial for the protection and wellbeing of all. Think: prison gaurds, police, fire, even your bank teller for that matter.
A lot of these same folks dipped deeply into the koolaid. Will this have an effect on their job performance?
Bankruptcy and bad credit eliminate you from a lot of jobs. I’m sure it is based on some sort of empirical evidence.
Can you post the coordinates for an aerial/satellite view?
The prison highway in the central valley runs inbetween 5 & 99. That’s where a bunch of them are…
Timberrrr….
http://maps.google.com/?ie=UTF8&ll=36.057773,-119.548931&spn=0.023557,0.04549&t=h&z=15
is one, for starters. Yes I found this just “flying over” the area you referred to ‘lad.
Wow you’re right! Another one http://maps.google.com/?ie=UTF8&ll=35.781614,-119.309464&spn=0.023639,0.04549&t=h&z=15 not far from the previous one I found.
And one across the street from the above:
http://maps.google.com/?ie=UTF8&ll=35.766294,-119.325128&spn=0.011822,0.022745&t=h&z=16&lci=lmc:panoramio,lmc:wikipedia_en
Jeez!!!
That’s only the tip of the iceberg, sadly.
I wrote about what has happened in this post calling it a white collar riot.
http://www.r8ny.com/blog/larry_littlefield/the_white_collar_riot_the_bush_era_national_orgy.html
I have a somewhat ominous new nickname for Hank…
H.P. Loancraft
He’s an underwriter of horror & fantasy stories.
D-d-d-d-don’t m-mm-m-make f-f–fun of my b-b-b-bailouts!
Paulson: Now look here, we got all these bankers & financial guru rulers of the world shoelaces locked up here at the FED in a safety box…what better collateral do you need? So, I’ve decided that those velcro laced blue collar industries shoe fasteners just don’t make the grade for the type of S&P/Moody’s AAA+++ collateral that we are obtaining from the “Financials”…we start with GM, then comes PEP Boys, then the company that makes car window folding sun blocks, I mean come on, I can only help so many… it just a coincidence that they are wealthy well connected friends that dwell in the venn diagram of our exclusive society.
Paulson’ theory: “I love you …I love you not”
“…Fed officials have an aversion to extending the too-big-to- fail doctrine beyond financial institutions. Obstacles involved in lending to carmakers might be finding large pools of collateral for the Fed to loan against.
“…Paulson has repeatedly said he hasn’t decided whether he will ask for the remaining funds. Most of the money has gone to injecting capital into financial firms in exchange for preferred shares and warrants.”
Dodd, Frank Warn Paulson May Not Get TARP’s Next $350 Billion:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad0zAYvGDuvc&refer=home
Does he really care? He will be gone in January. That threat has no teeth.
Finally the great global economy of the new world order has completed the total shut down of the steel industry in Cleveland,Ohio. No more rust here; now we’re all service , health care and FIRE. Thanks World Bank, NYC Finance and merger specialists, NAFTA, Washington, China. If you’re thinking 4.5 % mortgages will be the answer, poll the last 450 to walk out of the gates yesterday; you might get a different take. Anyone having the fantasy of the Midwest going anywhere but down is dangerously in need of medication. The Coasts are going to have to bail out themselves.
What plant was that Carlos?
Yeah but Cleveland has one of the top 10 medical centers in the country, I think they employ something like 40K people, but they do have other sites in Fla, Canada, Abu Dhabi etc. Thats a growing business, every time I go over there I see a big new building going up. You can hardly drive in downtown C because of the construction.
If those who took out weird, exotic mortgages which they pretend not to understand get a 4.5 percent fixed rate mortgage, then I want it too. Why should we be paying 5.75 percent on a 30-year fixed when we could get it for 4.5 percent. Why shouldn’t posters who have been renting all these years patiently waiting for housing prices to go down be able to get that kind of interest rate too ? This is rapidly turning into the biggest bull—- I’ve ever seen. If the govm’t is complaining about pumping the $ 150billion into the auto industry as too high ( what it was estimated yesterday that it would really cost to keep them out of bankruptcy ), as being described as 2 % of the GDP ( I have no idea if this is accurate or not ), then what about the $ 7 TRILLION that was spent already ? Let the autos close down - all three might - and just wait for the repercussions throughout the economy. It really will take 13-14 more years to recover. If AIG and the Wall St. Yale/Harvard buddy financials get saved, then why not GM and the taconite mines in Minnesota ? What’s the difference ? Everyone pull up to the trough and get a good bellyfull on the taxpayer. If the pigs are all feeding from the trough, then I want my local big pigs to be fed, too. Screw Wall St.
Hey! I paid off my house in 15 years. I might not have done that if I were only paying 4.5%! I want a handout, too!
Dubai bubble update: Dutch realtors in Dubai (probably lots of Dutchies working and speculating over there …) report that sales are down about 50% from last year. Enjoy, you can now buy that 1M ocean villa at a discount!
Luxury car maker BMW today reports november sales are down 25% from last year. Even the rich are not immune, or maybe they are just holding their cash because they expect even higher discounts down the road?
maybe the rich always look for better deals down the road.. and that’s how they get rich.
BMW became a status symbol and my guess is at least half their cars are purchased by people who otherwise wouldn’t buy one, and in these tough times won’t buy one. If this is reasonable, it’s reasonable to expect BMW to shrink 50%.
I bet less than 10% of BMWs are purchased, I bet the vast majority are leased.
10%? That could be true, not that it makes a difference to BMW, which has to build one car in either case.
here’s a pretty well written and informative (imo) consumer’s guide about leasing cars.. claiming:
As recently as ten years ago, most automobile consumers had never heard of leasing, much less done it. Now, approximately 20%-25% of all new cars, trucks, SUVs, and vans are leased. Approximately 75% of luxury cars are leased.
http://www.leaseguide.com/lease01.htm
i know i flubbed a close italics or bold
Most (90%+) of the people buying BMWs are not rich, they are financed to the gills. I would guess that the median salary of a BMW buyer is only a bit higher then the national median.
If you’re rich, you buy a Maybach. If you’re trying to play rich, you buy a 3 series (by far their most popular model, IIRC).
Hey, I bought a used Taurus station wagon on ebay, and my salary is above the median and average salaries for my area. I know all my friends are just green with envy.
My ‘97 Taurus is going strong at over 100K miles. Of course, I bought it used in 2001 (retiring fleet car from my former employer) for under $5000 so this baby doesn’t owe me a penny even if it died tomorrow.
Best way for the little guy to own a Maybach is to pony up the $20 for the car show and just walk around it and drool.
I prefer buying a one year T-bill that, at maturity, will be deposited back to my bank so I could pay the January 2010 rent payment.
well, the sales numbers for Rolls Royce were also down 18%. Less than the beamers, but still a significant decline. I don’t know about the US, but in Europe most people who buy Rolls probably have lots of cash, and not just debt …
“…but in Europe most people who buy Rolls probably have lots of cash, and not just debt.”
European terrorist #1: “Hey what kinda car is that coming down the road?”
European terrorist #2: “dunno, lets hit it with a rpg and see if the driver or passangers have any $$$$$ US Dollars, AMEX or at least an iPhone.”
Bling me the head of Alfredo Garcia…
1978 was my first Auto Show.
At that show the likes of Rolls, BMW, Mercedes, Jaguar, etc. were displayed only as curiosities/novelties by an exclusive dealership/importer.
By 2000 each of those names (and more) had its own huge section for the masses to smear their fingerprints over dumbed down replications of the classics. Eager salespersons stood ready to answer the every question of the pro-sports apparel crowd.
Was population growth behind this expansion? Hardly - the greatest credit bubble in history was already rapidly inflating.
probably it is also for practical reasons: you can’t judge a potential multi-millionaire customer by the look of his/her clothes nowadays. This is partly a result of various recent bubbles, but also of social changes.
My ride is a bit beat up, but gets me where I want to go…
I could easily hit up people for money outside of a supermarket-just hanging out by it.
Bling is going to be dangerous, soon.
‘you can’t judge a potential multi-millionaire customer by the look of his/her clothes nowadays.’
I have a rich friend I go yard-saling with. Seriously, you should see the exciting cat-fights that result from both of us spotting a busted up wooden chair at the same time. Yeowwwww!
It has been my experience those of us who are rich have no need to flaunt it.
Read somewhere that 1/2 the clowns you see driving a Beemer are leasing them. Makes me wish everyone was forced to wear a sign on their forehead telling the world how much in the hole they are. I bet 50% of America would never leave their houses in shame.
Leasing a car in most cases makes perfect sense. After all is it better to “rent” or “buy” a depreciating asset? It makes no difference whether it is a car or a house, if the asset is likely to depreciate it is better to rent/lease it then to buy/own. Makes sense, no?
It really depends. The lease sets the future value of the car at some predetermined number. That number is almost always LESS then the actual resale value of the car at that time (if it were higher, which does happen, you would buy out the lease, sell the car, and pocket the proceeds). Leasing is just a way to lay off the depreciation risk in an automobile; and in most cases, the house wins.
There are some people who made out like bandits on leases; that’s for sure! Think of the guy who leased an H2 in 2004 and turned it in 2007. That lease was probably 1/2 the cost it should have been!
However, the house always must win more then they lose.. So, most people are paying more then necessary to lay off the depreciation risk on an automobile; if they weren’t, all the leasing companies would go out of business.
Do the math.
I agree that in some cases it saves money to lease, i.e., taking the full lease as tax deduction, must have new car every 2 years.
The least expensive way to own a car is to buy a 3 year old low miles vehicle with cash, or gold coin if you can find a dealer who will take it.
Its illegal to pay cash for a car in many places.
Fine, you can write a check or whatever.
Says who!!! I just did exactly that 7 months ago. There were no problems at all completing the transaction.
The last time I bought a car, in 2004, the dealership insisted that I finance it. After “negotiating” the purchase price, it turned out that said price was only good if I took out a loan. The blame was placed on Toyota’s financing division. I paid off the entire “loan” after 1 month. Toyota was happy, and I didn’t pay any interest on the loan. Not sure what the whole point of signing loan papers was, but I got my car at the price I wanted to pay.
It still doesn’t make any sense to me, though.
Elanor,
They just hustled you. If you had walked away, they would’ve taken a check.
Next time I’ll do that, FPSS (in about 8 more years, when I’ll be in the mood to buy another car). They told me up front I could pay off the entire balance without penalty, so it beats me what the advantage was. Maybe it gives the financing arms of car companies a raison d’etre?
They probably get a percentage back. Next time, ask them what the percentage is, and threaten to walk away.
Tell them they get a chance between a sale and some money, or no sale and zero money.
Then watch them backpedal.
Assuming that car dealers exist in the current form in 8 years (doubtful!)
I suspect you will walk up, and punch buttons in the clowns belly.
No. Leasing a car makes no sense whatsoever unless you hold it short term and can write it off as a business expense. I bought my vehicle in 1989 and paid it off in 1993. It stopped depreciating in about 2000 when I could sell it for about $1,500. Today, I could still sell it for about $1,500. At $300 / month lease payment, that’s $54,000 since 1993 I’ve saved by not leasing a car.
It is generally better to buy than rent and asset if you carefully choose the asset, and hold long term.
I had this discussion with my Dad recently. He just sold his house for more than 20 times what he paid for it in 1968. He thought he made a killing. I told him not really as it was a depreciating asset just like anything else. The reason he made money was because 1) he bought the right asset (good house in excellent location) and got a good deal at the time, and 2) over the years he fastidiously maintained it in very good condition at considerable expense to himself.
As exanmple I used a car as an analogy. Everyone thinks a car is a depreciating asset right? Well, I argue, not necessarily. Take for example, a 1968 Ford Shelby GT500. If you bought it new, and maintained it in very good condition at considerable expense for the last 40 years, it would be worth at least 20 times what you paid for it today.
So, with any asset, it is pretty much all about buying the right asset at the right time, and now is not the right time to buy a house. Not yet.
Yeah,
What would my puke-green 1974 Pinto be worth now?
Whether an asset generally appreciates or depreciates has no bearing on the formula for buy vs. lease.
There are only three reasons to lease anything:
A. You plan to use it for a short enough time period such that the overhead costs of buying and selling outweigh the penalty of leasing. Good examples of this are hotel rooms and rental cars.
B. You can’t afford the item, but really need it. An example here would be office space for a small or medium-sized business.
C. The market conditions of the item are such that it’s on the backside of a bubble. Housing is in this condition right now - i.e. it’s better to lease now, and then buy later when the bottom is reached. Actually you could make a case that cars are here now as well - they’re getting a lot cheaper due to the economy, so you can make a case that it’s better to lease now, if you anticipate the price of a given car to come down significantly within the next couple of years, and then plan to buy.
In general though - under normal market conditions - you’re better off buying a car. Not only that, but you’re usually better off paying cash rather than financing.
Same’s true of a house, if you can do it. In reality a home mortgage is nothing more than just a lease with an option to buy, that’s exercised over time.
I just have to chime in here. By far, the absolute dicks of driving are behind the wheels of Audis. Bar none, these wanna be a race car driving douches are the biggest pricks on the road. I see these guys coming and just stay outta their way. The sight of wrecked Audis brings me so much joy.
Expected job loss 325,000, report came in at 500,000. Ouch!!! In a rational market today should be ugly, lets see what the PPT can do today. Emergency rate cut (do they have any left
)
Downsizing.. layoffs.. restructuring.. these help a company become more efficient.. costs fall and maybe profits rise.. investors often appreciate it.
Seems more reasonable to discount the companies that refuse to downsize in bad times.
I have often wondered at the truth in this. I would expect a company with less employees to produce less product, and to have less business. Now on the other side, there are a lot of corporate “employees” that can be cut with inpunity for a little bit. Sales and IT are prime examples. They both tend to be cut first, and IT outsourced to some hole in Bangalore.
1 year later, Sales is hired back, as the company is in dire need of new business, and IT is desperately looking for someone to actually speak english and be able to fix a broken computer. Then the cuts end up costing way more than what they were supposed to save. Flip side is that they hire some outside contracting company to backfill, and they get the living dead…
With the re-org, you get people that are doing a job, and shift them to a dpt that they know nothing about, with new people, that do things in a different way, so how is this good for “efficiency”….
I just think that we have been rearranging the chairs on the titanic for so long, that we thing that this sinking business is quite normal.
I’m talking about the efficient use of a business’ spendable dollars..
If orders decrease by half and the business doesn’t lay anyone off, doesn’t move to smaller buildings and downsize production lines, output is only half of potential output while production costs remains the same… twice as high as is necessary.
That sounds good in theory… Have you ever tried to break a commercial lease? If you desperately need to reduce staffing/expenses 50% because of a 50% decrease in orders, it takes a hell of a lot more than just laying off 50% of the staff. Most companies are unable to do so, as their fixed costs are quite inflexible (leases, Interest payments on short/medium/long term debt, Pension plans, health care, insurance, etc). That is the problem the big3 have right now, is it not? They are literally stuck with a drop in orders, but no where else to cut.
And if it gets that bad, it is managements’ constant porn site surfing that got them there, as they were asleep at the switch, and they are the ones that should head out to the unemployment office first, but that rarely happens, now does it?
i’ve no argument with that.
Not all businesses are flexible enough to do it, not all that do it instantly become more profitable and, therefore, not all companies that downsize are the best candidates for investment. But some can and therefore are.
The notion that started this thread seemed to imply that layoffs/downsizing inevitably causes investors to shy away from investing, and only the actions of an all powerful PPT anti-market conspiracy could cause otherwise.
Alls i tried to point out is that such need not the case.
Do I like Ford or GM at around $2/share after massive layoffs and restructuring? Yes.
The most efficient companies have no employees at all - just a half-dozen executives getting big bonuses from playing with the stock value!
I work for a very efficient and optimally structured company that does nothing but pay their employees and manage their benefits. It is small, has offices in a poor area (though their employees all work in the 6th largest city) and is owned by a w*****, and hence is inherently more worthy than other companies to manage this type of work.
The FFR is so close to zero now that there does not appear to be much room to cut it further from here. The talk at the Fedury is now of taxpayer-subsidized mortgage rate reductions, and the l-t T-bond rate has mysteriously plummeted as of late, greatly enriching anyone fortunate enough to be long l-t govt bonds.
I was thinking about the plunge in long term yields recently. I don’t believe it’s that mysterious at all. I’m guessing its just the newly released TARP money being dumped into safe haven treasuries. Anyone else?
Since the government hasn’t been in the black, since, ever, they have to issue bonds to raise part of the money.
So they’ve issued government bonds and used the money to buy government bonds?
My head hurts. I’m gonna go lie down now.
It’s times like these when you need to ask yourself where those green pieces of paper really come from. I’ll let Mr. Aladinsane, fill in the rest.
5% of the Comex Longboarders opted to take delivery last Friday…
It’s usually 1/2 to 1%.
I have a feeling there are and have been many a birthday suited shorts the past few years, the usual household names that were keeping the prices down.
Gold’s gone from $250 to $1030, and in any normal bull market, the shorts wouldn’t allow themselves to be punching bags, but if all that’s in the vault is packaged air, why would they care?
Push meets shove.
Shorts get to decide when to make delivery during December and the shorts are making early delivery on the Dec2008 gold contract. They don’t have to deliver until the end of December; either the 29th or the 30th is last notice day. I suspect that the near term price outlook for gold is poor if the Dec2008 shorts are so eager to deliver.
533,000 lost jobs but unemployment only goes to 6.7%. I guess 2 + 2 really does equal 621.
Is “capsizing” bad.
Dec. 5 (Bloomberg) — U.S. employers eliminated jobs in November at the fastest pace in 34 years and the unemployment rate jumped as the year-long recession engulfing the world’s largest economy deepened.
Payrolls shrank by 533,000 workers last month, the biggest loss since December 1974, after decreasing a revised 320,000 the prior month, the Labor Department said today in Washington. November’s job losses exceeded all estimates in a Bloomberg News survey of 73 economists. The jobless rate rose to 6.7 percent, the highest level since 1993.
Job losses are likely to keep cascading into next year as the collapse in credit and slump in spending hurt companies from General Motors Corp. to Citigroup Inc. and AT&T Inc. President- elect Barack Obama, confronting what he called a “crisis of historic proportions,” announced a plan last week to save or create 2.5 million jobs in two years.
“The labor market capsized in November. Layoffs are accelerating as businesses are aggressively cutting costs,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The financial panic has hammered the economy and we are seeing a very broad-based decline in payrolls.”
Payrolls were forecast to drop by 335,000 after declining by a previously reported 240,000 in October, according to the median estimate in the Bloomberg survey. Estimates of the month’s job losses ranged from 220,000 to 470,000. The jobless rate was projected to rise to 6.8 percent.
Capsizing.
That’s funny, I was trying to explain to Marge last weekend what stage we were at right now, and I likened it to a ship that was listing and was about to capsize.
There is that inflection point, up to which things might seem out of sorts but basically everything is still right side up. Then all of sudden the ship rolls and slides out of sight.
Exactly what point this rolls won’t be known until after the fact. So, it might be a good idea to start wandering up to the high side of the sloping deck.
Capsizing? I wish that was all we were doing.
In naval terms, we’re: holed below the waterline from numerous large caliber hits (credit bubbles in various forms), the superstructure is a burning shambles (lack of leadership), we’re almost dead in the water (the economy), and our rudder is jammed (towards printing money to reward idiots). All that is left is to watch the out of control fires spread towards the magazines, and then its over.
In other words it’s best to be the HMS Hood rather than the Bismarck.
In naval terms, we’re… Mother told me there’d be days like this.
Good, but I’d go with the listing Ford Explorer analogy instead. You have to actively swirl the steering wheel to roll it, hence you are a larger victim…
When they “revise” the numbers next month, they’ll be worse. After years of dealing with fudged numbers, the Press should have caught on by now that whatever numbers are released by the Federal Government, the NAR, and multitudes of other so called authoritative sources will invariably be proved bogus the following month. This includes the numbers of layoffs, the numbers of housing starts, the numbers of house sales (and no, “pending” sales are not sales), reported price increases or decreases, any any other numbers that have to be manipulated to rig the game.
Watch the financial press spin closely today. Yesterday I read that expectations ranged from 225,000 to 550,000. At 533,000 the number didn’t beat the worst expectation so - it’s all good in their world.
I’m confused….
If 533,000 jobs lost represent 0.2% of the unemployment rate that means an unemployment rate of 1% represents 2,665,000 jobs and a rate of 100% means 266,500,000 jobs.
That means unemployment of 100% means 266,500,000 jobs. The adult population of the US (ages 18 and higher) is approximately 230,000,000. What the heck?
Also, if the jobless rate was expected to increase from 6.5% to 6.8%, but only increased from 6.5% to 6.7%, how can it be that the number of job losses are signigicantly higher than expectations?
The 0.2 number is rounded for “soundbite” purposes.
Nothing strange is going on.
The jobs report doesn’t account for the 637,000 people who dropped out of the labor force.
http://finance.yahoo.com/career-work/article/106262/Workers-Give-Up
The number of people in the workforce shrunk.
Either people gave up trying to find work, or they decided to go to school.
Cooked numbers. The rest will be reported in revisions next month.
yes, how could they off by 80k? Kinda makes me wonder how many were over looked this time?
Jobs = wage and salary employment, a shrinking share of the total.
Unemployment is from the household survey, and includes the self-employed.
I guess some of those fired went back to Mexico or became “consulants” rather than becoming unemployed. Or didn’t bother looking for work and dropped out of the labor force.
I heard, but don’t remember the number of people who just gave up and stopped looking for work, it was really a large number. They are NOT figured into the unemployment number calculation even though they are unemployed since they are not looking for work anymore.
I don’t agree with this, and the number is surely juiced, but this is the official explanation of why the % figure didn’t skyrocket as well.
I believe you want to look at the U6 unemployment numbers.
They are showing 12.5%
http://www.bls.gov/news.release/empsit.t12.htm
So, we’re almost halfway to the Great Depression level (since U6 unemployment is much closer to how unemployment was measured back then vs. the current sham.)
Or found a part-time job.
Or found a job that pays 30% less, with no benefits.
There’s plenty of gray area in these surveys.
“533,000 lost jobs but unemployment only goes to 6.7%. I guess 2 + 2 really does equal 621.”
The gov’t stats all 100% BS. Another 1/2 mil in nov have given up and are not counted. U-6 UE rate well north of 10%. CA alone has 8.2 % UE but real U-6 UE rate is closer to 12-15%. Close to 2 million here in CA effectively UE.
Black friday was a one-day spurt, and rest of dec will be dead, dead till a few days prior to Christmas eve , and a small spurt around new years holiday. Come Jan 2009 all spending and consumer activity will come to a complete halt. Only activity will be desperate job hunters - the vast army of the umemployed axed in 2008.
The real estate insert in The New York Post yesterday read, “Bubble Trouble - Market falls back to earth and waits for what’s next”. You could hear the collective shudder rumble through The City. It was followed by a chorus of, “but it won’t happen here”. Keep singing, pigeons.
bubble fallout?
Swiss top banker Alex Widmer from Julius Baer (second largest Swiss bank) suffered an ‘unexpected’ death yesterday. According to rumours he committed suicide, but the bank does not comment on the issue.
It did not turn out so wonderfully for him as it did for George Bailey.
Wall Street Journal
* DECEMBER 5, 2008, 6:19 A.M. ET
Julius Baer CEO Widmer Dies
By ANITA GREIL
ZURICH — Swiss bank Julius Baer Group said Friday that Alex Widmer, who led the bank’s flagship private bank operations, died unexpectedly overnight on Wednesday, aged 52.
A spokesman declined to comment on the circumstances of Mr. Widmer’s death, which a person familiar with the circumstances told Dow Jones Newswires was suicide.
“We decided not to comment, because this is a personal matter for the family,” the spokesman said.
Julius Baer shares were lower after the news on concern that Mr. Widmer’s death was related to the bank’s business, which the spokesman denied.
There’s always a window of opportunity somewhere…
You have to defenestrate your right, to partake.
Maybe as we turn Japanese our bankers and Wall Street gurus can take the manly man way out, ritual seppuku.
Heard part of this story about Peter Schiff on NPR. I missed much of it, but NPR was critical of all of the cheer leaders on CNBC. Their response for mocking Schiff “No one likes a gloomy Gus”.
http://www.npr.org/templates/story/story.php?storyId=97801606
Try not to catch yerselves falling knives.
OUTSIDE THE BOX
The liquidity trap
Commentary: Financial engineering seems worse than the alternative
By Jim Anderson
Last update: 12:01 a.m. EST Dec. 5, 2008
SAN FRANCISCO (MarketWatch) — This year one of the best performing asset classes is cash.
People used to boast about hot stocks they owned. Now they crow about how much of their money is in cash. Those holding cash have been richly rewarded with no losses and opportunities to buy assets (condos and equities) at huge discounts.
As prices continue to decline, those that moved too quickly to buy at the bottom are seen as fools. Consider the massive losses of the sovereign wealth funds, Bank of America (BAC 14.34, -0.71, -4.7%) and Countrywide, and even Warren Buffett’s latest foray into General Electric (GE 17.55, -0.58, -3.2%) and Goldman Sachs (GS 67.53, -1.42, -2.1%) . Investors, convinced that prices will continue to decline, sit with their liquid resources on the sidelines. As that investment demand takes a holiday, prices will decline further.
I still think that currency i.e. cash is meant to be spent. By all means hold on to your cash as it should make actual “things” cheaper to acquire. That is until said “things” can no longer be viably produced for profit. I guess thats when da gubmint steps in eh? It’s always a problem when the populace, including bankers, confuse credit and cash.
I’ve been pushing on a string, all the live long day…..
You know how on business news shows they alway ask the guest experts if they or their company owns or controls any shares in the companies they discussed. I’ve noticed that recently the answer is usually no. One guy I saw today even admitted his investing company was mostly in cash.
Step 1 for a long-term fix to the housing market’s problems: Get the REIC’s government agents off the market’s back, and let it revert to a private goods market involving a non-subsidized transaction between a willing seller and a willing and qualified buyer. Given the situation at hand, no long-term fix appears available any time soon. Moral hazard fraught rescue plans will not do the job.
Fixing the housing market
High inventory is killing home builders, and the industry asks for help
By Amy Hoak, MarketWatch
Last update: 12:01 a.m. EST Dec. 5, 2008
CHICAGO (MarketWatch) — Helping Main Street as well as Wall Street has been an objective of President-elect Barack Obama throughout both the campaign and into the transition period. Some argue that home-buying incentives built into a new economic stimulus package — if done right — could help not only the housing industry and the overall economy, but also would-be home buyers who are facing a crisis in confidence as well as credit.
Home builders have much to gain if a stimulus actually encourages consumers to buy houses, even if the builders don’t pick up a hammer for months.
“Fix Housing First,” a proposal supported by the National Association of Home Builders and others, involves giving all home buyers a tax credit that they don’t have to pay back, having the government buy down mortgage interest rates and continuing foreclosure prevention efforts to keep people in their homes.
“Helping Main Street as well as Wall Street has been an objective of President-elect Barack Obama throughout both the campaign and into the transition period. Some argue that home-buying incentives built into a new economic stimulus package — if done right — could help not only the housing industry and the overall economy, but also would-be home buyers who are facing a crisis in confidence as well as credit.”
It’s not change and I don’t believe in it.
The change refers to what’s left in your pocket.
Who knew we’d be getting the entire Clinton Administration all over, with Jimmy Carter thrown in for good measure? So should we invest in mirrored disco balls and shag carpeting, or sink disinfectants and spot stain removers?
What is causing a “crisis in confidence” is this bullsh*t pandering to these industry lobbyists by a government that is supposed to be for the people. And I don’t see that Obama gets it, either, from what he is saying to how he is acting. We are doomed. Doomed. Doomed.
“Fix Housing First,” a proposal supported by the National Association of Home Builders and others, involves giving all home buyers a tax credit that they don’t have to pay back, having the government buy down mortgage interest rates and continuing foreclosure prevention efforts to keep people in their homes.”
All measures that are designed to keep housing at unaffordable levels even longer. And, as such, all will fail.
The government will put every effort into doing the wrong thing before doing the right thing, because every politician elected today sees “success” as maintaining the artificial debt-driven prosperity we’ve had over the past decade. Convincing Americans to live within their means would be “failure”.
In the long run, Keynesians are dead.
Convincing Americans to live within their means would be “failure”.
Ironically, it doesn’t really take convincing. All they have to do is quit doing stuff. “Living within your means” is a natural equilibrium.
“Fix Housing First” = keep that Zombie moving!
About a month ago I was explaining the Baltic Dry Index to a friend, and the double whammy of collapsed non-precious scrap metal prices, combined with very few ships headed eastward to lode up…
Yesterday he told me a friend of his is in the trashout biz, and he had gotten used to the $1000 to $1500 payday on top of what he charged for his services, as there was always a lot of scrap metal coming his way.
It’s more like a $100 to $150 bonus, if he can find somebody to buy it, now.
My electrician was talking about a 40% drop in the price of copper wire over the past year. I wonder what is happening to the prevalence of copper theft these days…going the way of other PMs?
Poor meth-odd actors…
How are they going to pay for their fix now that we’ve taken away their entrepreneurial spirit?
South African property prices have just turned nominally negative.
http://capetownbubble.blogspot.com/2008/12/absa-nominal-property-prices-are.html
That won’t help Suze Orman. She owns houses in S. Africa and San Francisco, among other places. And, in 2007, she was telling everyone to buy stocks. Now, she is on a bandwagon about keeping “struggling homeowners” in THEIR homes. Yet another tool, I guess that is why her popularity, like Sheila Bair’s has been growing.
I can’t help but notice that the heads of the Big 3 got grilled for flying their corporate jets to ask for their bailout money, but our Wall Streets overlords were subject to no such scrutiny when asking for a far bigger share of taxpayer graft. The groveling and knee-shaking by congress toward Wall Street was something to behold. Now with Detroit automakers they’ve all grown little simulated backbones. The CEO’s have to drive hybrids to DC and take a symbolic one dollar a year salary. Wall Street was subject to no such provisions.
Is it because the Big 3 produce an actual physical product that Americans buy? (how low-class!) Or is it just that congress knows who owns them outright?
The difference in how these two groups have been treated says so much about everything that is wrong with America right now…
I loved the way they spent a lot of time and grilled them about $20,000 private jet flights (or about a few million in Executive compensation, but not nearly as much about 35 BILLION. Most Politicians are such morons…
GM’s market cap is around $2.5 B and they want an $18 B loan. Even for politicians this should be simple math. How many banks would loan 7-8 x the entire worth of the company.
My wife doesn’t understand how the CEO’s might just possibly have been really really busy that week with, you know, not crashing the company or something.
Hey, they could have been hurrying back from playing bridge all weekend like certain bankers.
I agree with every word you wrote, Bub D. Since I live in the area that lives ( and is dying ) by the autos, I want my pig to be fed at the same trough that the Wall St. Yale/Harvard boys and the insurance moguls ( AIG ) ( Ass I Grab ) are enjoying. Trough places for everybody. It’s significant that the New York firms were bailed out, but that Lehman ( Chicago - rustbelt ) was left to die. Their CEO deserved to die. Not the company.
The difference in how these two groups have been treated says so much about everything that is wrong with America right now…
While I’m not exactly gung-ho about bailing the Big Three out, the various ongoing loans, bailouts, and dirty french kisses directed at the financial industry — with little oversight — are migraine-inducing.
As you mentioned, at least the automakers produce something tangible.
It’s nothing more than hypocrisy. Where were the moonbats bemoaning multi hundred billion bailouts for banking?
The war on J6P continues.
You mean moonbats like the libertarian-oriented Ron Paul, who was one of the few to stoicly oppose those bailouts?
Why do you criticize the only people that stood against the things you claim to be against (bailing out the financiers) while you support the people leading the charge to work against your interests (Dems like Pelosi, Dodd, Frank)?
Me thinks the biggest hypocrite here is you. You aren’t really against bailouts, you just pretend to be against them when they are distributed in directions which are unlikely to benefit you directly.
Not necessarily hypocrisy… If exeter were speaking from the viewpoint of a stressed out, low income FB facing foreclosure and/or employment loss (or is such a person), almost all his comments coordinate pretty well.
Where were the moonbats bemoaning multi hundred billion bailouts for banking? Many of them were right here on the HBB. Others were elsewhere. There really weren’t that many in favor of bailouts except in places like the US Congress.
He knows that. He just likes to act indignant. It helps serve his delusion of being “J6P”.
I think he’s referring to the politicians who are now grilling the automakers.
As someone who spent two weeks giving up my life, so I could write letters to congressional representatives, I am disgusted by the antics going on with the automakers.
If we are going to bail out Wall Street, the least we can do is bail-out the last stronghold of our manufacturing industry.
I just feel like throwing my hand up and admitting we all need to get million-dollar checks. Why not? It’s not like dollars mean anything anymore, with the way they’re printing them up, non-stop.
There’s no war on J6P…not with a negative savings rate. It’s a war on Savers.
Wall Street owns them, yes, and as long as there are any real jobs in the country that pay decently and involve actual skills, Wall Street will not have achieved its goals - serfdom for all.
MarketWatch dot com
December 5 2008 10:05 A.M. EST
Bulletin U.S. foreclosures, mortgage delinquencies hit record highs
U.S. payrolls plummet
Economy bleeds jobs
Nonfarm payrolls contract by 533,000 in November, the worst monthly job loss in 34 years. Since recession began 11 months ago, 1.9 million jobs have been lost, pushing jobless rate to highest level since 1993.
• White House ‘very concerned’
• Worse to come (24/7 Wall St.)
Barney sez the impasse over the Big 3 bailout holds the nation hostage, and that the Nov. unemployment #’s support his case.
But who really holds who hostage? The Big 3 and their poodle at the UAW have been issuing ultimatums and making the most dire of predictions for a month now.
Who has been using fear to get what they want? The PTB or the voters?
Not to go all partisan, but this “article” was a pretty good laugh:
I’m Really Gonna Miss Systematically Destroying This Place
By George W. Bush
http://www.theonion.com/content/opinion/im_really_gonna_miss?
Geez, when did the truth become “partisan”?
A year ago everybody thought I was a kook when I told them how cooked the books were, and now they want all my recipes…
that’s not why we all thought you were kooky..
Don’t worry, I still think you’re a kook.
The guy that thought I was the kookiest is a local Realtor (a good guy, really) that i’ve been having lunch with about every 3 weeks, for the past year or so…
He’s no dummy, but it took a long time to sway him to my way of thinking, as I place a high value on candor, and my frankness of the what was happening was disconcerting to him initially.
Hey Lad, is this a decent time to buy Au or is their more downside ahead–I have been quietly accumulating since I know eventually our currency will be worthless, just don’t know if it is today or in 5 years?
I just got off the phone with a Bullion Brahmin and he says there’s still very limited supplies, which is no surprise.
I don’t know that it really matters what price-point you get in, as the powers that be have already telegraphed what’s coming. (Citi sez $2,000)
401k’s for Mervyn’s Employees May Be In Jeopardy
Reporting
Anna Werner SAN FRANCISCO (CBS 5) ― There are a lot of nervous former Mervyn’s employees wondering, what’s in their financial future? CBS 5 Investigates has found out their 401k plans may be in jeopardy. It’s a possibility that could send chills down the spine of anyone depending on a 401k.
CBS 5 Investigates was told the following by former employees, and a source inside the Mervyn’s company who did not want to be named. When Mervyn’s went to cash out those 401k accounts so employees could be paid, one of the fund management companies handling those 401k investments said, not so fast: We can’t immediately turn all those fund investments into cash.
Here’s the brief explanation as to why: Employees’ money was sent to the plan administrator. The administrator put money in what are presumed to be diversified investments. But when cashing out, they couldn’t liquidate everything.
401k’s are only worth about $4.01 now?
From the article:
“they don’t know exactly how much money is there.”
This is crazy. Here come the lawsuits.
This makes little sense.
Here is a link to the article:
http://cbs5.com/investigates/mervyns.401k.plan.2.880417.html
A third party should be holding the cash (like Fidelity, for example), and the employees should be determining how its invested (usually within a narrow menu of choices). I’ve never heard of a 401K where the company holds the money for any length of time, and can access it, and a plan administrator makes all the investment decisions… unless its a pension, not a 401K?
Something funny is going on with this.
Here’s the other great article on CBS5:
Mervyn’s Execs In Line For Potential Bonuses
Reporting
Anna Werner
(CBS 5) You’ve undoubtedly heard about the Mervyn’s chain shutting down. CBS 5 Investigates looks into why former employees are going without back vacation pay, yet executives are in line to receive vacation pay plus bonuses.
401ks are a strange lot. They are kind of like a roach hotel. Money goes easily in, but it is hard to get it out. On several occasions I have had to fill out much paperwork and make many phone calls just to roll one 401k over into another. In one case I was trying to roll out of a 401k from a startup company that had gone out of business. The company holding the 401k would not release the money without paperwork from that startup, which no longer existed. It makes no sense. They know it is my 401k money, so why does the original company I was working for at the time have anything to do with it anymore? The system seems broken that the originating company remains involved after the money is transferred to the brokerage.
The original company owes them fees
Does anyone still expect a Santa Claus rally on WS?
Well Santa made an appearance today.
Santa showed up and gave me the Joshua tree treatment in the last hour of trading. I’ll be sitting in the corner rocking back and forth sucking my thumb all weekend.
A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy.
There were some modest signs of stabilization. The number of loans that entered the foreclosure process totaled 1.07 percent of all loans in the third quarter, flat from the second quarter.
Though that number likely reflects changes in state laws that delay or extend the foreclosure process and efforts to work out or modify loans that could still fall back into foreclosure.
http://biz.yahoo.com/ap/081205/home_foreclosures.html
The reason for the rush to delay foreclosures has been confirmed!
PTB says “We really need to manipulate the process to show that this monster is stabilizing. Maybe the people wont remember the moves we made to get there.”
Yes, we must always remember that foreclosures would be piling up now, if not for the “bans” on foreclosures.
Always manipulating the numbers, those govt folk!
Huge Job Losses Could Be Signal That Worst Is Over
Bethune, for one, isn’t ruling out a big-quarter break out in growth, such as the near 8-percent surge in GDP during the third quarter of 2003, following the last recession.
http://www.cnbc.com/id/28069440/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
I am assuming this was due to the take-off of the housing bubble. So the question still remains, what do these cheerleaders predict will cause this to happen again?
I heard an idiot on Bloomberg yesterday say the Banks are going to lead us out of this in 2009. Lol!!!
I’ve seen the “worst is over” from 3 different people today - Steve Forbes is the latest.
I start with the most basic question, the foundation of the whole mess: Are house prices cheap relative to rents and income? Answer: No.
When bond prices peak and there is some sense of reflation there will be an even greater chorus that the worst is over - could happen very soon.
And as the Obama Inauguration Celebration™ nears, there may be more bouts of this manic-depressive partying. (Only one more employment report until Obamamania begins!)
Then, as bond prices collapse and the Treasury finds it increasingly difficult to fund an exponentially-growing deficit (i.e., all derivatives positive), I picture a big inflation dinosaur running down the halls of the new Congress, terrorizing everyone.
“I picture a big inflation dinosaur running down the halls of the new Congress, terrorizing everyone.”
Lol!!! I nominate this to be the best comment today!
OT but hilarious (tried to post last night but didn’t come through, a very short comment on American pop culture):
www dot youtube dot com/watch?v=baRg-H_LsEc
How is your company treating employees this year end?
We are a manufacturing/ franchising company.
We are doing the following to help the little hard working worker who truly does not understand why life is getting harder for them.
1)Gave every body a raise from 15% to 25%. Thanks to this blog in some ways
2)We are offering upfront money for college courses to enhance their skills.
3)Added more benefits for health/retirement
4)Freedom with a flexible work schedule
5)Upgraded lunch rooms etc with free drinks and snacks
6)Thanks giving turkeys and desserts to take home.
7)Christmas majority will get about 1 week off with hefty bonuses and a good party. They can bring husbands, wife’s as well as children.
8)RESPECT for our employees.
There is a waiting list of people willing to come to work for us.
Well, I want some of item 8! Some RESPECT, dammit!
Oh, wait. I get respect.
Well, then, dammit! I want a TURKEY. Yeah!
I didn’t get a turkey! IIIIII had to go BUY my own. At Safeways!Now I’m pissed, and man, I’m going to steal every single paper clip in this place and then throw them all out the window!
Seriously, though, SUguy, I think it’s super that your company treats your workers so well, with benefits and all the rest. That’s great. It’s hard to find a good employer. No wonder you’ve got a waiting list. Merry Christmas to you.
Well if I may borrow a line from the cnbc chimp Kramer.
I very boooooya kind of a merry Christmas to you too Thanks
Mandatory 2 weeks off from 12/19-1/5. Burn vacation or take unpaid.
Which is great because this forces me to take time I ordinarily wouldn’t. My plan:
1. Snowboard a LOT.
2. Snowshoe some.
3. Hike with my dog.
4. Reflect how fortunate I am to have (at least for now) a great job that pays well and that I enjoy.
Oh,
3.5 Learn Polish
Regarding 1 & 2: aren’t you going to need some actual, you know, snow?
Damn. You’re right. I hear it’s coming. Any day now. The whiners (mostly former Angelinos and Diegans) complain when it rains in Portland. I do rain dances daily, but nothing so far.
I could go to the place that’s open year round, but then I’d have to pay. Already got my pass at the other.
Wow, SUGuy!
That’s amazing! So glad to hear about your employer doing the right thing. You are very fortunate to be working there.
Just imagine, if we could stop fussing over housing prices, and focus instead on jobs and businesses like yours, we would get out of this recession far more quickly than if we continue with Wall Street/housing bailouts.
I shorted quite a bit of fool’s gold last week and am in fat city, on paper.
The one thing I can’t figure out, is how far do the majordomos take it down?
Any bright ideas out there?
I’m asking you the same: you mentioned Oil/Gold ratio, which is still really out of whack. But, how long before our currency does indeed become worthless?
Not long now, thus my concern about an exit point.
I need to perform one last later-day alchemy trick…
Turning my very last paper profits into Gold.
There’s one return on investment amount one should always consider: “good enough.”
Very true. I always use stops/limits and set them as soon as I invest. Its too easy to get too greedy or too married to a position. I think, I can lose 10% or get out at 30% upside or whatever you chose GOING INTO a position. I set them and try to stick to them. I did violate my down stops a few weeks ago. C has worked out great when I doubled down, FXP is another story…..
Wasn’t FXP supposed to be great under 50?? Thought I heard someone mention that here.
I have trouble setting upside goals AND sticking to them. The greed thing starts coming into play. For example, I’ve heard a few commentators say Ford could double, triple, quadruple overnight depending on how the bailout talks go. I wanted to ride that baby up. However, 75% was “good enough.” I’m out.
Dude — I am happy for you, especially to hear that your investing strategies have transcended the “gold only goes up” paradigm.
BTW, I will not be entirely shocked if you eventually turn out to be right on your long gold position — just like lots of folks who bought gold in the late 1970s turned out to be right for quite a while while the Fed spiked the punch bowl like crazy. I would probably have accumulated gold when you did too had I been in the position to do so, but it seems late in the game now.
Anyone on this blog that shops at Target needs to watch the register prices at the check-out. My daughter bought her BF 3 video games this week all marked $19.99 on the shelf. When she got home she noticed they charged her $29.99 for one of them. I took it back last night for a refund and when the girl scanned it, she said “oh, your right” and refunded the difference. Why would the register scanner read it differently than the scanner at the return dept.???? Sounds a little fishy to me.
Did your daughter buy the game on the first day of the sale? They might not have had the right price in the database at that time. That would make the difference the fact that your scan was a few days later, not that it was from a different department. It would be very weird for them to have returns and cash register on different databases, but not so unusual for them to have miscoded the item early in the week.
Just a possibility…
It was on a rack of games that were all marked $19.99. In fact there was a sign at the top of it that said “All games $19.99″. I was thinking that maybe it was just a computer error until it was scanned with the correct price at the return counter. But you might be right, they could have caught it after she left that day. But just in case, I’m going to watch my receipts in the future.
Can’t your daughter multiply $20 by 3 to figure out that the bill had to be in the $60 (+ tax) range?
lmao
maybe a “learning” game next time?
The top news story on CNN.com right now? You’d be wrong if you guessed Unemployment or Auto bailout.
“Simpson in court for sentencing”
What a country. The news people think the story that the people want to read is about a football player turned criminal. They might be right. Either way…pathetic.
A friend of mine, whose wife’s brother was Alan Park, (the limo driver) and I remember the day after the slow-speed chase, he told me the skinny on what happened according to Alan.
Alan went to pick up O.J. and knocked on the door, and the juice said “give me 15 minutes”, and Alan went back in the limo and waited.
About 30 minutes transpired and out he came, sweating profusely.
I don’t remember too much else, except what struck Alan as most unusual about O.J.’s ride to the airport…
O.J. rolled down the back windows of the limo, en route, as he was lathered in sweat, which was probably of the nervous variety.
When was the last time anybody saw a stretch limo with the windows down?
Simpson was the lightening rod for both a corrupt legal system and class resentments on all sides. As with the recent election, a simplistic MSM turned it into a racial issue.
If Simpson had been middle-class white, and Nicole Brown brown, he would have been in prison for murder fifteen years ago.
For the record, my personal experience with Mark Fermin was that he was a virulent racist fully capable of planting evidence.
Right, I almost forgot: since Mark Fuhrman used the n-word, and lied about it, it exonerates Simpson from being a knife murderer, in fact, it makes it quite impossible for Simpson to have been one. The focus should most definitely be on Fuhrman.
It wasn’t just Mr. Fuhrman, the prosecutor Ms. Marcia Clark lied under oath. That is the primary reason for the acquittal. And Mr. Simpson should have been acquitted for the egregious lie of Ms. Clark. This does not mean that Mr. Simpson was not guilty of the murder, I believe he was guilty; the acquittal means that the US Justice system worked as designed.
BS. That was NOT the primary reason for acquittal. Clark wasn’t convicted of anything and whatever she did did not taint the trial enough for the judge to order a mistrial. The jury returned not guilty on lack of conclusive evidence, despite the conclusive evidence.
You “believe” he was guilty? Do you also “believe” that the earth revolves around the sun?
Read the transcript. Then comment - ignorance is bliss, NOT
Hoz - Somebody comes in and murders your family. Over the course of a 3-year trial somebody in the evidence or prosecution team makes a small misstep, completely unrelated to the evidence of the guilt of the culprit.
Now you’ll sit back and say, fine, no problem, the system worked. You think that’s the way the U.S. Judicial system was designed? You think that’s justice?
A prosecuting attorney cannot legally make false statements to get a conviction. In Ms. Clark’s case not only was she threatened with contempt of court by Judge Ito, but a juror asked for only one piece of evidence, the Chauffeur’s testimony, which completely refuted Ms. Clark’s timeline position - she lied about the chauffeur’s testimony. There is nothing else to do than demand acquittal.
If something happened to any member of my family or extended family and the prosecution was stupid enough to botch the trial, I would deal with it.
Now from the skeptical side, since many individuals are convicted in just as shoddy a way, there is no moneys to be made for a juror from writing a book if Mr. Simpson had been found guilty.
Why do nosy nobodies whine for justice? Self righteousness? Can’t mind their own business like bickering old ladies?
Somebody in your family is arrested. A member of the prosecution deliberately lies to get them convicted…
No system is perfect. But do you really want anybody capable of getting a job as a government prosecutor running around able to convict at will?
There are so many other reasons for not liking people than the colour of their skin…
Welcome to Wal-Mart Nation. Try not to get trampled going in the door.
Financial Times
US retailers suffer worst month this decade
By Jonathan Birchall in New York
Published: December 4 2008 15:34 | Last updated: December 4 2008 20:24
US retailers experienced their worst month this decade in November, as stores such as Macy’s, Gap and Abercrombie & Fitch reported double-digit falls in comparable store sales amid the economic gloom.
But Wal-Mart, the largest US retailer, led a small band of retailers that managed to deliver comparable sales growth during the month, beating its own forecast with a 3.4 per cent increase.
Ho Ho Ho!!! Merry Christmas!!!! SUV-priced gasoline for all Americans coming to a service station near you soon.
Crude Oil Lt Sweet Electronic (Nymex). CL08XE (NYMEX)
$40.91
Change:-2.76 -6.32%
Volume:165,977
12:56pm 12/05/2008
Gold ends lower on weak oil, deflation fears
* Reuters, Thursday December 4 2008
NEW YORK/LONDON, Dec 4 (Reuters) - Gold prices ended lower Thursday on a steep crude oil decline despite a weaker dollar against the euro, and worries about deflation could put a damper on gold’s rise.
Gold’s appeal as a hedge against inflation decreased as broad-based commodity index Reuters/Jefferies CRB dropped to a six-year low, led by a 6 percent drop in crude oil futures.
“I think that the whiff of deflation that’s in the air is enough to keep the near-term pressure on gold,” said James Steel, chief commodity analyst as HSBC.
Spot gold was at $767.50 at 2 p.m. EST (1900 GMT), down 0.7 percent from Wednesday’s close of $772.60.
are prices for the biggest SUV’s already starting to go up again in the US?
Hugo C. has gotten awfully quiet all of a sudden.
MarketWatch dot com
BULLETIN
CRUDE-OIL FUTURES CLOSE AT $40.81; WEEK’S DECLINE OF 25% IS STEEPEST SINCE 1991
Crude falls 25% in week, biggest loss since 1991
By Moming Zhou
To add to the nation’s economic woes…
December 5 2008 1:37 P.M. EST
Bulletin
O.J. Simpson sentenced to at least 15 years in prison
Joblessness at 15-year high
(MarketWatch) Nonfarm payrolls contract by 533,000 — worst monthly job loss in 34 years. Since recession began in late 2007, 1.9 million jobs have been lost. Jobless rate is at highest level since 1993.
And the markets Rally!!!!!!
“O.J. Simpson sentenced to at least 15 years in prison”
He’s lucky, he should have fried years ago for murder.
strange situation regarding rates in Netherlands (is the same happening in US maybe?):
until recently it was tough to get more than about 3.5% on a savings account or term deposit of a few months, even for relatively large amounts. After this weeks 75bp ECB ratecut I can suddenly get a savings account from the two banks that I use that offers 4.5%, no real strings attached except that the minimum capital must be 20K euro. One of these banks is government-owned, the other one is generally considered one of the safest banks in the world. Rates on savings deposits as of today are in the 2.5-3% range (strange, as you can’t touch your money in that case …).
Now the strange thing is that mortgage rates were 4-4.6% for a 5-10 year fixed loan before the ECB ratecut, and a bit lower now, so already below the rate on savings accounts. Our government is now pressuring the banks to fully pass the 0.75 ratecut to the mortgage customers. In that case mortgage rates would go far below savings rates. Real mortgage rates are even lower because of the Dutch HMD (tax office pays about 50%, so effectively the Dutch rate is around 2% now).
People who are adventurous can take out a maximum mortgage on a home (effective cost 2%) and park the money in a savings account (rate 4.5% minus 1.2% taxes, effectivey 3.3%). So you get paid about 1.3% every year for taking out a mortgage even if you don’t need it.
There is the risk that the principal (home) looses value, but if you already own the home it seems like an easy choice …
strange world?
Haven’t seen this here. Wish we had higher rates here. Everything is low, low, low (though I did buy some long-dated CDs at 4-6%).
Should plunging l-t T-bond yields make me want to try and catch falling knives in asset markets (stocks, housing, etc)?
Plunge protection needed
Vis a vis absolutely nothing, but perhaps appropriate after reading some of yesterday’s (is there a nice way to say bigoted?) commentary, in tears, I took a break from rereading B.H. Obama’s extraordinary memoir “Dreams From My Father,” only to hear of O.J. Simpson’s sentencing.
I would love to hear our President-elect’s considered thoughts on this one, as my own are far too murky to be clarified.
Anyone else?
Simpson is a double-murderer who was set free due to an incompetent prosecutor and a pack of racist jurors in California, and people have been royally pissed ever since, and getting pisseder, and The People have finally had their revenge.
Why don’t you man up and say what you think?
I thought the police were more incompetent than the prosecutors, although not as bad as the Boulder police a couple of years later.
Simpson sure picked the wrong state to f-up in. OJ meet the Aryan Brotherhood.
Paul,
My question had nothing to do with the odious Mr. Simpson, it had to do with America’s bifurcated reaction to the original verdict. IE: Has it somehow been mitigated, as manifested in the election of Mr. Obama? As he addressed this so eloquently in his response to the Jeremiah Wright controversy, I was curious as to what our new Pres’s reaction might be to the verdict.
Is that man up enough for you?
“Why don’t you man up and say what you think?”
Why do nosy know nothings squeal for justice that has little to do with them and their small narrow world?
Sorry, this was supposed to post above.
My only thought was that Arrogance is often short lived.
OJ is living proof that the death penalty is justified and appropriate.
I think if Oba Wan Kenyobi had to create racial healing AND undo the damage from the last 4 years AND appease his voting bloc AND be leader of the Fee World, then he we better plan on cloning him.
RE: the unemployment data — the fine print.
Employers are cutting hours rather than heads, and involuntary part time employment has soared to record levels.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJikdmHyr2vk&refer=home
“Helping keep the jobless rate in check was a decline of 422,000 in the size of the labor force, defined as all those either employed or looking for work. The number of discouraged workers who stopped looking for work and left the labor force rose to 608,000, the most since records began in 1994, from 484,000 in October.”
“The 28 percent increase in the number of people not working a full day because of slack business conditions over the last three months is the biggest since 1975.”
“Counting part- timers who would prefer full-time work, as well as discouraged workers who are no longer looking for jobs, the jobless rate would have jumped to 12.5 percent from 11.8 percent in October.”
On-topic relevance? All those categories, not just the unemployed, are out of the game for home purchase purposes.
That’s one of the untold stories right now…hours being cut back, since it doesn’t technically show up in unemployment. It’s happening all around same as layoffs.
Any reason why the stock market is rocketing up on such grim news?
LOL. I was just about to post asking you how you liked that 500 point turnaround today, since you seem to be the most consistently irked at this time of weekday!
LOL. I think I’ve become fascinated by the volatility sometimes seen at the end of trading. Some wild swings, that’s for certain.
A simplistic analysis suggests that stocks become more attractive when l-t bond yields get the crap pounded out of them.
Another viewpoint is that l-t bonds may have peaked, or at least may be approaching a nominal peak, in that their yields (whose movements are inverse to price) have hit something like 58 year lows. Why not take a few chips off the l-t govt bond table now to play the stock market?
A third perspective is that deflation and ever-worse economic news will not last forever, and when the news can get no worse, the stock market will eventually find a bottom and correct back up.
A fourth perspective is that with all the stimulus and talk of more stimulus, perhaps some of it will eventually help to lift the stock market out of its doldrums.
Good Professor - why no mention of the PPT?
You’ve been talking about the PPT around here since the summer of 2005.
I think they are mighty low on ammunition, now that they are running Bailouts Unlimited.
Now that is funny! Running out of ammo…. the Federal Reserve. Nah, they can just print and spend with Ms. Imelda Marcos. 200 pairs of shoes, market order on close.
The Federal Reserve and US Treasury are not out of ammo until and unless no mopes buy US Government debt. There may be aversion in the halls of Congress on any greater infusion of moneys, but there is little fear at 33 Liberty St.
Perhaps I should have said the Fed may be unusually constrained, given their stated intention to bail out anything and everything that moves downwards in the U.S. economy and probably a few things that don’t move as well. I still have some deep-seated suspicions that there might be a macroeconomic budget constraint, even though macroeconomic policy makers avoid ever discussing it.
“The Federal Reserve and US Treasury are not out of ammo until and unless no mopes buy US Government debt.”
Can the left hand print the money and the right hand sell US government debt to the left hand? I guess as long as the right hand is still willing to sell and the left hand is still willing to buy, there will be no shortage of ammo.
Yes
The enormous amount of money funneled into the banks and brokerage firms screams “Don’t be short”.
Buy when it snows, sell when it goes.
Treasury Yields Climb From Record Lows as U.S. Stocks Rebound
By Dakin Campbell and Cordell Eddings
Dec. 5 (Bloomberg) — Treasuries fell for the first time in eight days as stocks surged and traders said that the rally that pushed yields to record lows is unsustainable.
Yields on two-, 10- and 30-year securities had declined to the lowest levels since the Treasury began regular sales of the debt after a report showed U.S. employers eliminated jobs in November at the fastest pace in 34 years. Price gains were erased as the job losses prompted speculation Congress will accelerate an economic stimulus package. Bonds have gained for five consecutive weeks as the U.S. recession deepened.
“It’s a one-way market that needs to be unwound,” said David Robin, an interest-rate strategist in New York at Newedge USA LLC, an institutional brokerage firm. “The numbers are so bad and so horrific that the stimulus package being talked about going forward is going to be more than a trillion, off the charts.”
“Common sense and fairness dictates that those who earn more should contribute more but they don’t and haven’t for a long time.”
What does fairness have to do with anything? Only in America do we throw the word ‘fairness’ in to try to take something away from someone else when we don’t wish to expend the effort to achieve it for ourselves. More PC crap! If you want to raise the standard of living of the lower class then teach them to get a grip on their emotions, learn about government, learn English, learn about money and how to handle it, and teach them that they aren’t ‘entitled’ to something just because they wish it!
A note about fairness and equality. By definition something that is fair, in inequitable.
The lenders aren’t lending and the borrowers aren’t/can’t borrow, it’s the collapsing debt bubble that stole Christmas.
Consumers unexpectedly trimmed borrowing in October as caution grew amid recession
WASHINGTON (AP) — U.S. consumers unexpectedly cut back on their borrowing in October as the economy sunk deeper into recession.
The Federal Reserve says consumer credit fell at an annual rate of 1.6 percent in October. That compares with a 3.1 percent growth rate logged in September, and marks the deepest cutback since August.
Economists expected consumers to boost their borrowing by around $2 billion in October from the previous month. Instead, consumer debt dropped by $3.5 billion to $2.58 trillion.
The Fed’s measure of consumer borrowing does not include any debt secured by real estate, such as mortgage or home equity loans.
“U.S. consumers unexpectedly cut back on their borrowing in October as the economy sunk deeper into recession.”
Oh yeah — how could anyone have possibly seen that coming?
Frack. There goes my UYG idea. Or maybe modern banks make more money by NOT loaning money?
I’m sorry, this is funny……..people just need to lighten up a little:
http://voices.washingtonpost.com/the-trail/2008/12/04/one_more_question.html
You have to wonder how many beers were consumed before that photo was taken.
“That’s when some interesting photos of a recent party he attended — including one where he’s dancing with a life-sized cardboard cut-out of secretary of state-designate Sen. Hillary Rodham Clinton, and another where he’s placed his hand on the cardboard former first lady’s chest while a friend is offering her lips a beer..”
I was wondering about that. I can’t figure out if he’s trying to grab her breast, grab her arm, or cover her armpit. The other guy looks like he’s trying to get Hillary to _snort_ the Heineken. Makes me wonder how successful they are with the ladies…
Hellish earnings for owners as Baltic Dry closes on 666
London: The evil tailspin that has seen dry bulk plunge to near all time lows closed yesterday on the Mark of the Beast — 666, the alleged number of the Devil, a suitably dark and appropriate number amid the rate bloodbath.
The association of the number 666 with the Devil is taken from the Book of Revelations. However, earlier versions of the book suggest the actual number was 616. For owners the latter number is where the index is heading as the index continues to slide each day from its highs of nearly 12,000 mid-year.
Just back from foggy Fresno…
The highlight had to be the sign spinner on a street with the words “FREE DIAMONDS”, in front of a Bed, Bath and Beyond.
I didn’t stop and pick up a D Flawless 3 carat, my bad.
Saw a pink gorilla in West Palm Beach yesterday spinning a sign that said “3 months free rent.”
No way. Can’t be true. Rents always go up.
I saw that pink gorilla on Congress.
Fleck has closed the short only hedge fund, and Roubini admits to being long only in stocks….let the depression begin.
BOOYAA…..
“Roubini admits to being long only in stocks…”
Cool! I am in good company. Time to change my name to Professor Bull?
Love him or hate him, Rush is funny. He played a parody today of “Dancing Queen,” with a Barney Frank soundalike singing the lyrics as “Banking Queen.”
Friday night and the cash is low…
How long until $25/bl oil? About two weeks more?
Gulf Daily News
The Voice of Bahrain
Oil hits $39
LONDON: Crude oil prices plunged below $40 a barrel yesterday to their lowest levels in nearly four years, as worse-than-expected jobs data in the US raised prospects of a severe fall in energy demand.
In London, Brent North Sea crude slid to $39.50 a barrel, the lowest level since January 2005, before closing at $39.74. Light sweet crude for January slid to $40.81 in New York, also a near four-year low.
I filled my gas tank for $20 tonight. I am buying cheap gas and lovin’ it!
OPEC Oil Profits Plummet to Barely 4,400 Percent…
WAAA! How Will They Ever Survive?
SINGAPORE - December 5, 2008: An AP report early Friday morning shows the price for light, sweet crude oil for January delivery fell below $44 dollars a barrel, for the first time in about four years.
If it costs under a dollar per barrel to bring the oil out of the ground, as it does for the Arab oil kings, then their profits are at a starvation level 4,400%.
Gosh, we’re just all broken up over this calamity. Let us know when it hits $2 a barrel, I’m sure we have an extra jar of chicken soup we can send over.
WSJ Real Time Economics
December 5, 2008, 3:59 pm
Defining Depression
… with the economy in the midst of what may be its worst downturn in the postwar period, it is worth thinking about what it would take to dust off the “depression” moniker.
Richard Sylla, an economic historian at New York University, says that his rule of thumb for a depression would be double-digit unemployment rates lasting for more than a few months. The only times that occurred in the U.S. were during the Great Depression and the 1890s. The deep recession that ended in 1982 briefly saw unemployment rise above 10%.
Berkeley economic historian Brad DeLong’s definition of a depression is in a similar vein: Unemployment hits 12%, or it stays above 10% for three years.
Rutgers economic historian Michael Bordo says he would define a depression “as a sustained decline in output of 2 or more years of at least 10% per year. If you look at U.S. history we only really had one such event.” –Justin Lahart
It’s really all about frequencies, consistent measurements and threshold definitions. The midwest has “100 year floods” every twenty years or so. How often are the depressions? Every 60 years or so?
Some folks are smart enough to figure out that eventually, Bailouts Unlimited will be a very fat cash cow for fraudentials.
Wall Street Journal
* BUSINESS
* DECEMBER 6, 2008
Heebner the Contrarian
Fund Manager Bet Against Financials; Now, He’s Buying
After making a fortune betting against financial stocks until this summer, mutual-fund manager Kenneth Heebner is turning bullish on the sector.
Mr. Heebner, who runs one of last year’s best-performing mutual funds, is sure banks and insurers will recover next year, thanks to Treasury Department and Federal Reserve efforts to bolster lending.
“A year from now, credit will be available because of the government’s actions,” said Mr. Heebner, who works at CGM Funds in Boston.