Bits Bucket For December 8, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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I understand the stock market is supposed to have a humongous surge today! Yee-Hawww! I guess the economy is OK as long as the traders can jack things around and suck up some of that bailout money. Because you just KNOW that’s where it’s going.
looks like aladinsane is going to provide some extra bonus money for the banksters with his mellow yellow shorts …
More like brown shorts.
Ah … then I misunderstood what he was doing
pulling your leg.
It’s weird to bet against something you’re also betting on, but I guess a souffle begins with single, broken egg from one basket.
I’m not yolked yet.
Makes perfect sense to me, and wise of him to take advantage of such opportunities.
nor whipped.
Hello Experts,
Please advise if I should make an offer on the following house:
15 TICONDEROGA DRIVE
KEARNEYSVILLE, WV 25430
4 Bedrooms, 3 Full | 1 Partial Bathrooms
5,100 Est. Sq. Ft.
Listing # BE6933918 PRICE: $280,000
This house was sold new around $475K. It is owned by Fannie Mae now as foreclosure. Other similar house in that neighborhood is listed at $218,500 which has around 4200 sq.ft.
What should be the offer price or I should wait another 6 months or so? And the realtor was talking about the 4.5% rate coming soon.
excellent segue…
Buy,Bye
If you are paying cash, offer 220K. The house looks good and has nice interiors. But ultimately you should also be able to sell it. At 280K you’ll definitely lose close to 50-60K in a year or so. My 2 cents.
218k in West Virginia????? WTF. Someone has lost their mind.
You should put in an offer of $300k so you can be sure no one else out bids you on the house. You don’t want to miss that one!
RE_MESS,
Unless you’ve got a big family, it could be worth looking for something smaller.
OR if you intend to have a home business and need the extra bedrooms for an office and storage, or for meeting clients and you can write off some of the expenses…or use the garage for a studio….
——————————————
RE_MESS,
Unless you’ve got a big family, it could be worth looking for something smaller.
218k in West Virginia????? WTF. Someone has lost their mind.
If you like that, check out this one in frogballs, AR
Warning: Remove any drinkage from your mouth first.
littlerock DOT craigslist DOT org/reb/949574508.html
I might offer them a nickel for that overgrown monstrosity and build an RV park. Two nickels if they were nice to me. ($50/sqft)(3800sqft)+($1000/ac)(20ac) doesn’t equal 15% of their fantasy price. Even so, who would want to maintain such a ghastly beast. In FrogBalls, Arkansas no less.
Seriously, I figure at the peak that land might have been worth 20k per acres (I haven’t seen the place, so I’m assuming pristine/perfect). Around here, houses got north of $100/sq. ft., maybe $110 or so.
Even at those rates (current market prices have fallen, but I’m ignoring that to demonstrate the absurdity of that price):
$110 x 3800 sq ft = $418,000
20 x 20k =
oops…
Anyway to finish:
20 x 20k = $400,000
Grand total: 818,000
I can’t figure out, giving them the biggest “I’m a retard” benefit of the doubt possible, how they get anywhere near that number. It’s unimaginable.
What kind of premium do you get for a generator? A mill?
20k/acre in Arkansas? Seriously?…. that is outlandish. Are salaries that high there? You can’t get 10% of that in rural areas of the northeast. And why anyone would pay $100/square for used when building is less than $50per is a quandry.
At the top of the bubble, near little rock, yeah. 20k. These are areas around and in commuting distance of Little Rock (less than 1 hour depending on which part of little rock/north little rock), so relatively not exactly “rural” in that sense.
I remember when you could get land in mid-north (about 50-60 miles from the capital as the crow flies, about 1-1.5 hour commute) for 1k, about 15+ years ago. Now even in hillbilly country they want more than that, although I expect that to come down.
I expect we’ll get back to 1k or less in the most rural areas. The areas near little rock will still be at least 5k per acre…maybe a little less.
As for the $50 to build…the per sq. ft. prices are coming down; $100 to buy finished is about gone. I don’t remember what I paid for that spec house in 2006, but I think it was around $70-80, and I only paid the GC $6k total. Of course copper is half now what it was and lumber down like 40%.
I still expect it would cost more than $50 to build, assuming you paid ~15k for a lot (I paid 19k in 2006 for the spec).
Tow other data points: I live on 40 acres owned by my wifes grandparents. I’m in the county, can hunt and do whatever I want (so it’s rural in that sense) but it only takes me 20-25 minutes door-to-door to get to work downtown (close to the working centers) and 2 mins to the interstate, mcdonalds, walmart, lowes, etc.
Her grandparents ran someone off this place without so much as a how-do-you-do after he offered them 400k. Someone near here as of this summer was asking 200k for a sh!!ty 10 acres that looks like its wet most of the year.
jiminy…… Do you guys mine gold in Little Rock? I don’t know anywhere in my vicinity (which is barely commutable to NYC but is on the rail line) that commands $20k/acre although I suppose they can ask for it but I’m unaware of any transactions at that price. It seems unimaginable for Arkansas. Are frog balls the new gold? (laughing)
Does this mean that global markets are pricing in a vast inflation?
Dec. 8 (Bloomberg) — Japan’s biggest bond investors say Barack Obama has room to unleash a flood of Treasuries without driving up borrowing costs as he tackles the worst economy since World War II.
The U.S. is starting to look like Japan in the 1990s, when the Bank of Japan struggled to revive growth as the combination of deflation and recessions stranded the nation in the so-called Lost Decade. Yields on Treasuries are falling as the government sells a record amount of debt to prop up the American economy. Two-year note yields have fallen to 1 percent, compared with 0.57 percent for Japanese government bonds of similar maturity. The gap last week touched the narrowest since 1992.
“History repeats itself,” said Hiroyuki Bando, chief manager for fixed income, equities and currencies in Tokyo at Mitsubishi UFJ Trust & Banking Corp., which manages the equivalent of $200 billion and invests on behalf of Japan’s biggest bank. “Based on our experience in Japan, the same thing will happen in the U.S. The U.S. has more room to borrow.”
No pricing in a vast Deflation
Hey palmetto,
Pricing in an imminent inflation?
-
That’s a SCARY thought.
It’s called “The Plunge Protection Team”. They have been really hard at work..selling gold, buying stock etc etc.
Hedgies are buying like their bonuses depended on it. They are buying like there is no tomorrow.
A record 10% of the nation’s mortgage-burdened homeowners fell behind on their loan payments or were in foreclosure during the third quarter, according to a survey released Friday by the Mortgage Bankers Assn., which said California and Florida were the biggest contributors to the worsening picture.
The percentage of loans at least a month overdue or in foreclosure was up from 9.2% in the second quarter and 7.3% a year earlier, the trade group said. In Florida, 7.3% of home loans were in foreclosure at the end of September. The figure was 3.9% in California and just under 3% for the nation.
Officials at the trade group said the number of loans entering foreclosure — more than 1% of all residential mortgages nationally — would have been higher if not for programs intended to save lenders and loan investors money by modifying the terms of troubled loans.
http://www.chicagotribune.com/business/la-fi-foreclose6-2008dec06,0,4210425.story
Office space set to halve in value…
The value of Britain’s offices and factories will more than halve by the end of next year, making this an even worse commercial property crash than in the 1970s, surveyors have predicted.
In the latest sign of the severity of the economic slump, the Royal Institution of Chartered Surveyors (RICS) warned that the scale of the commercial property slump now dwarfed any other in recent memory.
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/3660747/Office-space-set-to-halve-in-value.html
We don’t see headlines like that from the US press until six months after the fact.
So true. Look at our recession/depression. Denial, denial, denial. Finally, “possible.” Then wham, it started a year ago - so it must almost be over!
Reminds me of the YouTube videos re Peter schiff vs Laffer. Should be a series called, “Schiff Stiffed.”
Hmm I actually wouldn’t mind turning an office building into a house
Just watched this excellent ‘tongue-in-cheek’ video by Fred Thompson on why we shouldn’t worry about the economy. The video speaks for itself :
http://www.youtube.com/watch?v=RKc4XFK0iVY
Now, don’t you feel better ? So get out there and spend, spend, spend
That was, uh…–what prompted him to do it? I guess that was his farewell public service, his Speaker’s Corner in Hyde Park, so to speak.
I’m sorry he didn’t win the Presidency…
A fake district attorney is exactly what this country needs right now, for leadership.
He’s a US Senator.
He was a Senator — his term ended in early 2003.
S.P.Q.A.
The guy is a pathetic know nothing joke appealing only to the low information folks. Talk about crying wolf.
spqr?
anywho, Thompson is a fun guy and pretty damn smart for an actor-type.
Maybe being facetious and/or talking down to one’s fellow elected officials and fellow citizens will embarrass them.. will wake them up.. alert them to the error of their ways.. just like in the movies.
I’m not. He was one of the buffoons who ridiculed Ron Paul during the debates, IIRC, when he brought up the very same arguments. It’s all very well getting clued in now; now that there is incontrovertible evidence that the country is screwed. But *still* none of these jackasses have the balls to admit they were all wrong and Paul was right, and they owe him an unconditional apology for the way he was treated when he was the only one who had the vision to see what would happen *before* the fact.
I think Mr. Sane was joking about his wishes for a Fred Administration.
This business will get out of control. It will get out of control and we’ll be lucky to live through it.
i’m gonna go down and sign up for one of them “refilling holes” jobs before they are all filled. I think that’ll be lots better than the “dig holes” job.
how many standing signholder jobs will be available or coffee-getters?
FL Keys Guy, do you know what the going rent is for a 2Bed in Old Town? We’re thinking we may spend our last days in Florida in the Keys.
Muggy,
I live in the middle Keys (Grassy Key) so I’m not real familiar with Key West rates. However, after retiring from police work, I did manage a large vacation rental office in Marathon for a number of years until hurricane Wilma destroyed the business. One very rough rule of thumb to price an annual rental in the Keys is to take the low season monthly vacation rate (i.e. summer), add it to the high season (winter) monthly vacation rate and calculate the average. Divide this average by 2 to get a ball park annual rental rate. Based on current Old Town 2 BR monthly rental rates, you’re probably looking at $2000/mo or so. Tourism is off lately and will almost certainly worsen - no reason you can’t negotiate a better rate.
Funny, Sad & True!
Wonder if any other banks around the globe would do such a thing…
ROYAL Bank of Scotland has secretly changed customers’ accounts into personal loans with up to 80% interest, generating debts of as much as £100,000, an investigation has revealed.
The bank, which was effectively nationalised 10 days ago, has admitted that its debt collection branch drew up new loan agreements and accounts for customers without their consent. MPs this weekend questioned whether the scheme was legal.
Duncan and Debbie Birch from Torrington, Devon, say their £24,100 overdraft ballooned into a debt of £100,000 when new loan accounts were created without their permission.
http://www.timesonline.co.uk/tol/news/uk/article5299256.ece
“MPs this weekend questioned whether the scheme was legal.”
Interesting times, no?
of course it is legal, they ARE the government now. Interesting times for sure, when the rules of the game can be changed on a daily basis.
Can anyone tell me if “overdraft” means the same thing in the UK as it does in the US? Because that seems weird to me - over 24K pounds of overdraft? Like 24K pounds of checks (or is that cheques?) drawn over their account balance? Please tell me this was a credit card account or some other sort of loan.
i suspect they were moving numbers around to make the books appear more balanced or some such thing .. and got busted when a computer auto-spit out a monthly bill and mailed it when it wasn’t supposed to..
The bank claims the new loan accounts were created “purely” for administration and that it was never intended that the debts should be collected. They were unable to explain exactly what the purpose of the “administrative accounts” was, why they had created them and how many customers were affected.
After a bit of research, I’m personally terrified to state Overdraft there = Overdraft here. Sorta scary… Oddly enough all the comments on every article about this is how evil the banks are… whereas I’m thinking how stupid they are to have ever even considered permitting these in the first place… I presume in order to reap said charges.
Oh my god. You’ve got to be kidding me? I think the most overdrawn my account EVER was, in my life, was about 100 bucks (75 in fees) when I was in college (it’s hard to balance a checkbook with a Natty Ice in both hands).
Wow, that’s truly astounding. I thought I had heard it all, but I think that explains how the UK bubble got so much bigger.
You know, we all know (on this site) that we are in deep trouble, and that our housing prices are going to fall about 50% from the peak. Do the Brits realize how much trouble they are in? I sense that the answer is no..
“Natty Ice in both hands”
If they were warm and you were camping, then we had the same college experience.
I have overdraft protection with my FCU at 19%. I once had an arguement with a relative who said I was “getting ripped off” after suggesting he sign up for it too after paying a bunchof overdraft fees.
I think I pay about 70-80 cents a year for this service.
polly,
In the UK (and here in Australia for that matter) an overdraft is a pre-arranged credit facility, mostly used by businesses.
Conceptually, it’s similar to a credit-card account. That 24,100 number is meaningless in isolation (sloppy reporting, in fact) because the article doesn’t seem to say whether it’s the overdraft limit (~= card limit) or the drawn amount (~= outstanding balance).
That said, there certainly seem to be some shenanigans involved here. I suspect the Birch’s overdraft is over it’s maximum, and the internal accounts being talked about have something to do with non-payment penalties.
So, there is a good chance it’s more like a small business loan set up as a line of credit? OK, that makes more sense. We have overdraft protection here too, but I think it mostly meant to cover actual overdrafts - times when you over drew your account because a previously deposited check was not credited on time, or bounced, or you accidently wrote too large a check. Not the sort of thing that often gets as large as is described here.
I have an open line of credit at my bank that I could access by writing checks. It is called an overdraft account.
Recycling bubble?
http://www.nytimes.com/2008/12/08/business/08recycle.html
oops.. lets see.. recycling.. lemme move that.. over here.. to the “Not Recession-proof” column. All fixed.
We have a lot of subsidized “services” that will be going away.
There is a park here that pumps out music 24/7. Soon there will be silence.
Beyond the subsidies factor, i wonder if recycling can be profitable when in competition with progressively less expensive virgin raw materials, energy and labor costs. Re-manufacturing profit margins are slim at best even in the “best” of times.
My trash company has its own recycling plant (purely a for profit operation). I noticed last week that the “magic man” picked out the glass and plastic from my little blue bin and dumped the paper and cardboard into the regular trash.
What’ll it be? Inflation or deflation? Here’s a guy who sees more deflation ahead.
Gulf Oil CEO Joe Petrowski says that the price of oil could sink to $20 per barrel, and there is a chance gasoline prices could drop as low as $1 per gallon by early next year. (Can gasoline possibly become that cheap? In terms of 1935 depression era dollars that’s 6¢ per gallon, only a third of the actual 1935 price of 19¢. Other prices in ‘35; a nice house could be bought for $6,300.00 and a first class stamp for 3¢. Annual salaries averaged $1,500.00. $1.00 gasoline in 2009 would be the lowest inflation-adjusted price in history…by far.
oil is up 5% to $44 today, so at least his timing is a bit bad …
Hopefully they’ll run crude up quite a bit during this little yuletide display of optimism. I’d love to ride that merry-go-round again next month.
WASHINGTON (AFP) – Despite plunging petrol prices, Americans are using public transportation in record numbers, with more than 2.8 billion trips taken on metros, buses and light rail in the third quarter of the year, a report showed Monday.
Ridership numbers marked a record 6.5 percent increase over the same three-month period in 2007, when around 2.67 million people rode public transportation in the United States, the report by the American Public Transportation Association (APTA) showed.
“This is the largest quarterly increase in public transportation ridership in 25 years,” APTA said in a statement.
No shipping, collapsing airlines, more public transportation, and fewer vacations.
Oil company managers are engineers, not economists. Naive extrapolation.
if they are not economists that should at least prevent the most idiotic predictions …
Like predictions that the west will soon run out of food, for instance?
I do not think multinational companies use engineers for management any more than financial firms use hard degreed people; they generally use the same Ivy League trained (or foreign equivalent) so that common sense and skill at deductive and inductive reasoning are not present to cloud the big issues.
Apparently you are correct. He studied economics and history, according to the papers. Also as a note, Gulf doesn’t produce or refine a drop of oil anymore, only wholesales it.
All of management was from the engineering ranks when I worked for the big one in the 80s.
“All of management was from the engineering ranks when I worked for the big one in the 80s.”
Forty years ago every one of the State’s Transportation departments were headed by an engineer who worked their way up through the ranks. Today, not one state DOT is headed by an engineer; select favorites are now politically appointed into these top positions.
Well, like most things, oil should get a bit cheaper over time (assuming no supply constraints) because the techniques for extracting, shipping, and refining it become MUCH more efficient over time. The best example of this is in the IT industry; today’s fastest computer chip (~5000 dollars) will sell for 10 cents in 5 years. The techniques become better, things are easier; practice make’s perfect.
However, oil is not an unlimited resource, so that same equation may not exactly hold. If you think about it; nothing is an unlimited resource, expand enough and something will constrain you!
“expand enough and something will constrain you!”
just as with computers … they seem to get slower all the time for simple everyday tasks thanks to all the Mickeysoft that is running in the background. On an Amiga computer from the early nineties I can type a quick letter before my WinXP system has booted and started the wordprocessor.
The Saudi’s just opened a new oil field with a 46 billion barrel reserve. Horizontal drilling, but it’s ready to go.
What happens when the spare parts to keep things going that the Saudis imported, stop coming?
John Galt is spare parts.
Btw, I’ve been thinking about this GM Volt, that the dem’s are raving about. If you own a fully electric car and you forget to charge it overnight, how do you get to work in the morning? Not happening folks. We leave trillions of dollars in the hands of dimwits. And $40,000 to boot.
There is a documentary (8:00 minutes) on PBS “Running On Empty” (google it) which takes you back to 1993, when Clinton signed a “green deal” to give the big 3 some $. The big 3 did what they wanted, and of course the EV1 gets crushed.
Same promises, different time.
Neat concept but overpriced. You can drive it to work then let it charge the batteries while you are at work (It has a generator on board that runs from petrol).
If you own a fully electric car and you forget to charge it overnight, how do you get to work in the morning?
If you own a gas powered car and forget to put gas in it, how do you get to work in the morning.
PS the VOLT is a hybrid
series hybrid meaning the electric motor turns the wheels, the gas engine/fuel cell charge the battery. You can plug it in to decrease gas use.
Where do you think gas prices will be in 10 years??
More dollars being printed every day and less oil in the ground every day and likely more demand from ASIA over the long run.
Buying a fuel efficient car, is like buying 30-50% of the gas you will use over the next 10 years at todays prices.
From what I’ve heard, the volt is fully electric. Well wise@ss, If you own a gas powered car and forget to put gas it, you usually will have enough to get you to the nearest station, 5 minutes to fill up. I get up for work at 5 am and commute 14 miles to work, a battery car with a dead battery would be a nightmare. If the volt is a hybrid what makes it different than the Prius? or the Ford escape? Hybrids are a great idea, fully electric? not so much.
If the volt is a hybrid what makes it different than the Prius? or the Ford escape? Hybrids are a great idea, fully electric? not so much.
It’s a series hybrid, the gas engine provides no direct power to the wheels, it is only there to charge the battery. It has a larger battery pack than the prius and can be driven for longer distances and at higher speeds in pure electric mode.
While the media focuses on how cheap oil prices have gotten, including the pump price for gasoline, healthcare costs for individual plans are skyrocketing. When they get cheaper, than I’ll acknowledge deflation. Food isn’t exactly cheap either. Housing was in the stratosphere (So Ca). So far, I see nickel and dime deflation in the scheme of things.
Disclosure: We are sitting in cash right now, and we are insured for up to $900,000 (for cash) through the SPIC and a London Insurer. The Stock Market isn’t an issue for our household at this time, directly.
…healthcare costs for individual plans are skyrocketing. When they get cheaper, than I’ll acknowledge deflation.
True enough, but I think the healthcare industry is trying to grab what they can while they can. The changes coming down the pike don’t look too favorable for the healthcare/pharma industries incessant profit pumping.
ET-Chicago,
Interesting thoughts. You might be on to something. All I know is we are paying $838/mo for two adults health insurance, and the illegals are getting it free in So Ca. Makes us want to become one.
The *EBT (electronic benefits transation) cards are good at general retailers, grocery stores, ATM’s for cash out of your bank account, etc.. Add subsidized housing, free education (w/ free meals), and don’t forget free dental. Why are we running a small business, working our tails off?
*I looked up the benefits on the EBT Ca. website.
No supply constraints seen in Christmas trees this year. Picked one up for $21 (including tax), 6 footer, Douglas fir. Seems like a 30 percent decline from a year ago.
FWIW, they are selling DVDs, decent ones for the PG set, at Von’s for $4.99.
Fer y’all that don’t celebrate Christmas, I respect that.
Just don’t set my needles ablaze, please.
Those greedy oil companies, jacking up prices to gouge consumers.
Oops! That was the message 5 months ago. Now I suppose big oil companies are not greedy and are giving away their wealth to consumers.
Nutty how the anti-business people think. The same types claim to have an edge on intelligence and IQ over free market types. I don’t think they have an edge on intelligence one bit.
Bill,
We’re going to need engineers like you to make more mundane stuff than you are currently occupied with.
Are you up to the task of turning the sword into plowed shares for all?
Read my post regarding the $ 40,000 volt car and my question about it’s usefulness as a commuting vehicle. Pelosi keeps raving that this vehicle will save GM. I think intelligence is definitely lacking. The desperate CEO’s just nod their collective heads and say “She’s right, now gimme the money”.
Too expensive. $20K then it’s be okay I guess. There is a video on youtube of a beta model being driven around a neighborhood. It’s got this obnoxious sound, and can’t seem to go fast at all. All I can think is .. POW POW POWERWEELS! the whole time while watching the video.
You’re right.
Now that we’re seeing deflation in oil and gas prices, it’s back to 350 cubic inches of solid guzzling V8 fury — let’s bring back the ‘77 Monte Carlo and the ‘65 GTO!
How about the 454?
Bring ‘em all back, baby!
The bigger the better.
With superchargers.
(I’m being sarcastic, of course — even though I’d love to own a mid-’60s Galaxie 500.)
The Volt is nice looking car, but it’s not the answer to what ails the U.S. auto industry, agreed. We *own a Vette. We know all about looks vs. practicality. What a dumb purchase.
*own as in paid off
With 20 billion in subsidies Tesla Motors should be able to provide 1 million or so of their fully electrical roadsters for $ 40K instead of $ 100K, or the followup sedan for $20K or so. They are working on emergency charging so J6P should never be more than about 1 hour late, worst case
Yep what a waste giving it to the big 3. How about a low interest rate loan to Tesla.
Maybe in the Netherlands they allow you to be one hour late for work, we’re not socialist. You know, where you can’t be fired for any reason, short of murdering your boss or standing up in the cafeteria and proclaiming your love for George Bush. My point is, a fully electric car will never sell as a commuter vehicle and they’re claiming this will make GM profitable. Baloney! Toyota has already admitted the prius has very little profit margin. I’m all for conserving energy, in fact, I haven’t owned a vehicle that gets less 28mpg/hwy, since 1975, but making autos need profits to stay in business. The big three need a lot of profits to pay the UAW $78/hr.
I actually agree with you, the only way to make the VOLT a money maker would be to tax gas up to 5 bucks a gallon. This would reflect the true cost of oil (ie war in Iraq, security to gulf, tax breaks for big oil ect) We could even cut payroll taxes with the profits.
Gas at no less than 5 bucks a gallon would get people to reprioritize what they spend money on. A 30-40,000 car that would eliminate 80-90% of the money you spend on gas starts to look like a better deal.
Instead of cash going to Saudi Arabia, Iran ect and then to terrorist operations that money would go to alternative energy companies, utilities and coal companies here in the US. If we wanted to end funding for terrorism taxing gas to keep it above 5 bucks a gallon would make a big dent.
One of the more astounding items from the Miami Herald fraud article yesterday:
“With so many of Benn’s loans now in foreclosure, Miami-Dade County is littered with still more empty homes. Squatters inhabit some; crack dens occupy others. At least one has been stripped to the ground, leaving only the foundation.”
We’ve seen all types of stories on house stripping, but to the foundation! However, if given the choice of living next to a house with squatters (Lost in Utah excepted), a crack den, or a foundation, I’ll take the foundation.
Soon we’ll be reading reports of houses being disassembled loaded on to flat beds and transported to another parcel of land some where and reconstructed.
“Soon we’ll be reading reports of houses being disassembled loaded on to flat beds and transported to another parcel of land some where and reconstructed.”
Verbatim this already happened in Florida. Flippers were buying urban lots and transporting homes to them from rural Georgia, no joke… I’ll find the article.
Actually I don’t think this is an entirely ‘bad’ idea? Have you ever gotten a quote on what new windows for your house would cost? Seven grand… ten!?
Sinks, fittings and hardware, heating units, AC etc. etc. Reclaiming all of the more valuable components ‘could’ to some degree raise capital for the lenders at some juncture in the future. With all of the unemployed people in construction, labor shouldn’t be all that expensive.
Obviously Home Depot doesn’t want them back but I’m sure these items along with the lumber could be stored somewhere in cases where entire subdivisions have buckled and failed. Hell, I’ll take it! ( Just a thought )
Another example of the crap that was built in the last few years. A 1920’s Craftsman could most likely make the move, chipboard and vinyl? Probably not.
I can’t find the article, too many vague search terms. Anyway, this lady drove around rural Georgia buying up abandoned homes that were solidly built - they were small, but hardy. I don’t remember which area it was, but she brought them in by flatbed to lots in Florida. It was a pretty cool article. Sounds like a lot of risk, and a ton of specialized labor, but doable. I think I read that article here.
This could be done in my native upstate NY, too. There are thousands are amazing homes scattered around the countryside. My wife grew up in a farm house from 1800. It needs work, but it’s still in great shape.
Maybe that’s the arb of the future, buy a nice, solid home from Detroit and ship it to your microfarm in the hills.
The problem is, I don’t think we have enough crack dens, grow rooms and meth labs to occupy all the empty real estate.
“if given the choice of living next to a house with squatters (Lost in Utah excepted)”
Thanks, Greg. I actually was a very quiet squatter and even took care of the yard. The neighbors tried to get me to stay.
But you know, I’d be hesitant to live next to squatters, I suspect most aren’t so great (Dude excepted, assuming he’s still squatting, and there was someone else who posted they were squatting also).
BTW, my squat is going into foreclosure auction soon. It actually should just be torn down.
Still squatting and doing well, thank you.
There is a certain festive feeling in the air this holiday season, and it may come from the extra cash in my bank account. I’ve also gotten a definite warm fuzzy from giving a portion of the windfall each month to help the needy.
Merry Christmas HBB!
Merry Christmas, dude!
Happy squatting.
Dec. 8 (Bloomberg) — Pension funds at Pfizer Inc., IBM, UPS and dozens of other companies have joined the parade of businesses seeking relief from Congress amid this year’s economic meltdown. Instead of money, they want legislation to suspend a federal law that would make them pump billions of dollars into retirement plans to offset stock-market losses as many struggle to find enough cash just to stay in business. They’re pressing Congress to consider the issue this week before this year’s session adjourns.
in Netherlands the newspapers report that more than half of the Dutch pension funds (big players in the stock/hedgie market) have fallen below legally required reserve levels. But don’t worry, the funds say that they can still pay pensions for the next 30 years (without inflation indexing), so our boomers with their super-fat pensions will be OK. It’s just more bad news for those coming after them, there will not be much pension money left after the boomers have gotten their share.
“… as many struggle to find enough cash just to stay in business.”
There seems to be a theme occuring everywhere that involves a shortage of cash.
Combo, how much cash purchases are you planning to make? Can you give us the green light when you do?
Tutto
A Credit Suisse report (according to most recent Barron’s) estimates 26% of S & P 500 currently fail to meet the new 94% pension funding requirement whose deadline is (supposedly) 1/1/09.
“Pension funds at Pfizer Inc., IBM, UPS and dozens of other companies have joined the parade of businesses seeking relief from Congress”
When I was renting in the Colorado mtns, my neighbor was an IBM engineer (s/w) who telecommuted. His wife was an artist. They had a very nice custom home they’d had built. Problem was, it was 15 miles to the nearest town, and that was a town that just provides services for the Telluride bunch.
He was happy as a clam in his mtn paradise, but I couldn’t help but wonder what they would do if he ever lost his job, couldn’t sell the house, and was too far from anywhere to find a job. He was nearing retirement age. Maybe another jingle keys. I worked for IBM when I was an engineering student, did an internship there in Boulder. The place had a corporate climate that Big Blue would be around forever and was invincible.
Living high in the mtns is also not where you really want to be when you get old, dealing with the drive on icy roads and 4′ of snow on the ground. But I suppose they just figured they’d sell the place when they got too old to manage.
Congrats, Lostie, on being back in the land of hot water on tap.
I beg to differ with you about being old in the mountains, however. Several octos and nonos up here in East Jeziz, and I can tell you, they’re not the kind of folks you want to cross. Listen to their amazing stories, sure, but mess with, nungh-uh. All the clean living and privation makes for some tough old birds in the far places. (I’m sure you’ve come across a few in your travels.) Getting these characters to a hospital or (yeah, right,) a nursing home would be a singularly unpleasant venture for anyone dumb enough to suggest, let alone try it. Our local legend, L. Snow, is still running Brangus, and he just turned 87. His 12-year-old son helps him out sometimes, though….
Thanks, it’s good to have a home again!
I know some of those hardy types you mention (a 12 year old son - ha, that’s hardy, he was about 75 when he begat that one), and they’re fine in about any situation, but these IBMers are very soft city folks, I mean, he hires all his yard work done, everything. Also has a bad back. He’d have trouble making it in town, for Pete’s sake, on his own, anyway.
Hope you’re doing great, nice to see you posting!!
My sister had a boss who didn’t do yard work, house repair, or car repair. He was a strong believer in “why should I do it, when I can pay someone else to do it.”
Worldwide shipping and commerce has come to a grinding halt, as evidenced by the 1-2 punch of no letters of credit, and the Baltic Dry Index dropping like a rock.
Spare parts will be our achilles heel, i’ll explain why.
We live in utterly complex times (our 1930’s consumerist counterparts high-tech gadgetry was a car, a radio and a refrigerator) and parts are what keep us keeping on.
Thanks to there being no slack in the system (just-in-time manufacturing and inventorying) and the fact that most everything is made elsewhere overseas, we will start seeing shortages within the next 6 months.
The Shah of Iran was one of our military-industrial-complex’s best customers, and the Iranian Air Force had a fleet of F-14’s as a testament. After the Shah Shah a go go, went went away away in the late 1970’s, and the Ayatollahs took over, within a year the Air Force was grounded, for lack of spare parts, because we were the only source and we weren’t in a selling mood anymore.
The Space Shuttle has state of the art 1979 computer gear on-board, and NASA is always on the hunt for spare parts, because somebody didn’t think ahead, and eBay is their best source for old technology.
Those 1950’s American cars still running on the streets of Havana?
The spare parts that have kept them going for 50 years have come from Canada, as they drive the same cars as us.
Parts is parts…
my guess is that food supplies will run out before spare parts in most western countries; most of the supermarkets also have just-in-time inventory/delivery systems.
“…food supplies will run out before spare parts in most western countries…”
Uh — did you ever hear of the Great Plains, or the Great Central Valley? The U.S. has a big comparative advantage in arable land that can be used for food production, and so does Canada. With oil prices dipping towards $40/bl, it does not appear that oil scarcity is going to limit mechanized agricultural production. So far as I am aware, agricultural labor is also not hard to come by at the moment.
I am not sure I get your point.
But I do remember how often you suggested a couple of years back that U.S. home prices were probably going to stay high forever. CA prices are now down by over 40 pct off peak and still dropping. How does that compare to your neighborhood?
I’m very sure I never said that US home prices stay high forever; however, I have always warned that authorities can delay the inevitable and cause even more harm in the future by doing so. This is what is and has been happening in Europe.
homeprices in my neighborhood are still going up, but even for Netherlands that is not representative.
I said ‘most’ western countries, so not necessarily the US. I know the US has huge food supplies (as long as oil etc. keeps flowing) but I’m pretty sure they don’t have everything they need for food nowadays. Russia and Argentina have huge food stocks too, but that doesn’t mean the average city dweller has good access to food stocks.
Cheaper oil can help, but US agriculture is extremely dependent on all kinds of ‘high tech’ help; I think it will struggle severely when international trade is compromised.
Then we re-tool GM and they produce parts for tractors and any other mechanical device we use.
That is the one thing that give me hope for the U.S…we have tremendous natural resources, especially food.
As much as I might bash our leaders for making foolish (or downright evil) decisions, the people of America really are pretty innovative, flexible, and hard-working (when they want to be). That is our strength.
There is something very bad out there called Lean. Lean states that the parts that are needed are in the conveyor belt as the product is manufactured, and there is no warehouse overhead. Lean has been extensively pushed by McKinsey and their minions to everything from stupidmarkets to computer repair shops, but the gist of it is that there is no parts available if the supply line is broken.
This means that supermarkets would be the first to suffer through shortages as they can’t warehouse too much food, and everything is delivered, so food stocks would be the first ones to run out. Now, if lets say machinery breaks, no one has spares on hand, except for mimimal stock in the stealership. Once this is gone, it will not be easy or cheap to replace.
Now people might thing that it will be easy to regear and produce things again… Think again, as we “exported” the tools to make the tools to third world countries. We became in essence an island that depends on the rest of the world for our basic needs.
Lean Manufacturing = a solution looking for a problem…
Pinch hitter hits a Grand Slam!
If you like oral history in the vein of Studs Terkel, I recommend “Six War Years’ by Barry Broadfoot. He went around Canada in the early 1970’s with his faithful tape-recorder and collected some of the best 1 to 4 page tales of the common man and woman, and their experiences in WW2.
A story I remember is the enterprising Canuck that started buying up used spare parts for cars in 1940-41, because he thought ahead and realized that we would get involved in the war eventually, and there would be quite a demand to keep our cars going, not unlike the scenario in Havana…
When the last car rolled off the line in 1942, U.S. automakers completely switched to the war effort, as in no spare parts.
He made a small killing selling spare parts to us, as there wasn’t a plan b to keep cars on the road.
That’s why I’ve been hoarding incandescent light bulbs. The American sheeple don’t realize they’ll basically be outlawed from stores in a few years.
LED
I’m hoarding the printed word.
Call me a biblioluddite…
Not out of any sense of “end times” but I inherited my father’s practice of always “stripping” an appilance, car or component before trashing the balance.
When my washer went belly up this summer I stripped every screw, washer, nut and bolt out of it before sending it to recycling. Basically they’ll get the tin. As a result I usually don’t have to run around just for a spring or a bolt ( even though I live -right- next door to an Ace Hardware.
By the time “I” throw something out, trust me, there’s nothing left in terms of “value”.
Anybody going to Fearapoorloser 09′?
I hear they have an awe sum lineup scheduled…
Rock on with your bad self
With an angle grinder & a pack of metal cutting blades, you can actually “butcher” an appliance or a car & generate large pieces of sheet metal & metal beams for building projects.
By the time “I” throw something out, trust me, there’s nothing left in terms of “value”.
aarrrghh Dinor!
I spend half my life trying to toss out my wife’s junk and stuff.
I suppose it’s not smart to have 2 pack rats in one house!
I’m not that worried about a short supply of parts for newer cars. There are far more automobiles than we need, and they can be scavenged.
I have a basement full of extra hardware, neatly categorized and stored: old cabinet door handles, hinges, nails, screws, I could start my own hardware store! Problem is, when I do need a part, what I have on hand never seems to be quite the right thing. So it’s off to the hardware store to buy a whatchamacallit or thingamajig.
Some day, the urge to purge all that stuff will strike me. In the meantime, I wait and accumulate.
yes, this is what I was suggesting and why I think supermarkets are very vulnerable. There may be food stock somewhere, but if it can’t get to the cities in time in sufficient quantities society will break down.
I don’t know how the supermarkets in the US work, but I know quite a lot about the supermarket logistics in Netherlands (and probably most of Europe) and its downright scary. They have been cutting costs everywhere, most of all by having just-in-time-delivery and minimal storage everywhere. As a result the system is more vulnerable than ever.
The synergy of the car business doing an Auto-Error-Otic Cashphyxiation means spare parts for cars are gonna be scarce again…
History always repeats itself, if you know where to look.
An interruption in gasoline supply in the southeastern US gave a hint of what food could do in times of shortage.
About a week after the hurricane hit Galveston, some southeastern cities began reporting shortages in gas as the pipeline from the Gulf dried up, leaving only tankers and barges to deliver product. That pushed up prices. The prospect of scarce and expensive gas sent folks to fill up. That shut down some stations. That led people to wait in line where stations were still open to fill their car and whatever tanks they brought with them. That dried up supply completely.
When supply caught up about a week later, most people had full tanks of $4 gas that they were in no hurry to burn. The catch-up in supply became a glut and prices fell sharply for the next month or so.
Many people have concluded that had price gouging been allowed, people would only have bought what they needed instead of filling up.
“Heard Mentality”
Pincher,
Very well said!
Mike
“We became in essence an island that depends on the rest of the world for our basic needs.”
I wouldn’t worry about it too much: companies will adapt, and there will be slack in the system. In the same way they will adapt their financing: no more just-in-time overnight loans, instead more cash will be kept on hand (figuratively).
“We became in essence an island that depends on the rest of the world for our basic needs.”
So we’ll have to start walking around again and picking stuff up, then moving it with our arms and legs when we want it someplace else.
Wouldn’t that do wonders for our svelte figures….
So this deflationary global economic contraction will cause higher prices for many items in short supply which will lead many posters here to conclude these higher prices are due to inflaton.
Lol.
“So this deflationary global economic contraction will cause higher prices for many items in short supply which will lead many posters here to conclude these higher prices are due to inflaton.”
Don’t forget we will starve. There is no corn here, it is impossible to grow, the common man is too stupid to grow it, and we must export all of what we grow.
Gardening is all about patience…
It takes 90 days from seed to harvest. Growing enough food to last between harvests is a task beyond all of us (except for Oly!)
Growing enough food to last between harvests is a task beyond all of us (except for Oly!)
On the contrary, growing enough food for ourselves is a task any of us can do, given the time and the proper resources.
It’s not difficult, but one must have the land and the seed and the water and the time to tend.
land cost is a serious problem in many parts of Europe; farmland costs about EUR 45 per sqft in my (rural) area, and farmers say growing crops is hardly profitable at that price (probably influenced by using lots of energy-intensive stuff like large tractors, lots of fertilizer etc.).
Any lot you can buy as a private person is not EUR 45/sqft but 50-100 times more expensive, because you have to pay for a building lot (only exception as far as I know are some forest lots, where you can do nothing else then growing native trees which is usually a sure way to loose money every year, because of the upkeep etc.).
I once read you need about 5-10 acres for growing all your own food, that would be very very expensive here (and it would be quite difficult to find unpolluted land with proper water supply etc.).
sorry, wrong price conversion: Dutch farmland is priced at around EUR 4.50 per square meter, = EUR 0.45/sqft.
Land with building permission as available for ordinary citizens usually costs 250 to 1000 EUR/sqm2.
Absolutely nothing will be in “short supply” except the demand (aka orders) for it.. and the cash to pay the bill.
Need spare parts? Starving manufacturers will crawl all over eachother in the effort to be the first to provide them at the lowest cost.
“So this deflationary global economic contraction will cause higher prices for many items in short supply which will lead many posters here to conclude these higher prices are due to inflaton.”
Yes I think you’re right. Shortages as companies go bankrupt.
“Thanks to there being no slack in the system (just-in-time manufacturing and inventorying”
Companies big and small do run lean inventory, and when they require a certain part either for a needed auto repair or a ball bearing part for an assembly line they call upon express delivery companies to have them picked up and delivered . I have worked in this business of ferrying critical needed parts to companies all over SCal. One time an entire company processing operation out in the IE was virtually shut down due to a needed part which i had to get out to them ASAP!!.
I worked in what they called on demand same day delivery . The highest paying rate was a 2- hr window in which companies would pay top dollar ,often in the hundreds. I once did an 8 hr high stress delivery from LA to Oakland and got the item delivered just before 12 midnight on a friday after fighting the afternoon commute insane traffic jam escaping out of LA . Boeing/Northrup payed $1400 to the delivery company i was under contract with just for making that delivery, a critical aero-part.
peter m,
Your eyewitness story of how tight the tolerances of the time-space-consumerum really is, most excellent.
I used to work for a computer products company.
One night (we ran three shifts), we ran out of one part and had to helicopter the pieces in, as we tried to keep hundreds of workers busy with other stuff while waiting…
Yep, been there, done that, with JIT production.
1. There must be a couple of magnitudes more options for spare parts than there were a decade or two ago, given all the internet sources for resale. Who buys new anyway?
2. Companies buy old equipment just for the spare parts as well. Always have. I hear there’s surplus capacity of industrial equipment at present, all over the place, at incredibly cheap prices…
3. Make your own, or work with a local machinist shop. I hear there’s surplus capacity of machine shops at present all over the place, at incredibly cheap rates… I know, doesn’t work for computer chips and similar items. In those cases, see 1 & 2 above.
Anyone who says spare parts are going to bring down the house has never worked in remote field engineering or construction. It can be the absolute best of times, but if you’re stuck somewhere and something breaks, you get creative. You’d be amazed, obviously.
Typical logic when one starts with a conclusion, and works backwards…
Pierce-Arrow made beautiful cars in their factory in downtown Buffalo. The factory is still there, have a look.
http://www.buffalorising.com/upload/2008/02/pierce-arrow-administration.jpg
They were victims of the credit crunch of the Great Depression, and closed the doors forever in 1938.
Chinese fortune cookie companies are dropping like flies…
parts is parts.
1. does not work like that, reality is that most manufacturers make (buy) relatively little spareparts nowadays, and don’t carry them once the product is no longer sold. They prefer the customer not to repair but buy new, or otherwise assume the customer can find parts somewhere on the internet if they really need to. For a lot of hightech products that doesn’t work because the market is too specialised (I know from experience …).
3. could become an interesting market in future, but for sure not at the prices we are now used to. I’m always totally amazed at low prices for new technology stuff from China etc. Even if you have lots of manufacturing equipment and experience, you can’t make/repair it for those prices. If one is really desperate it is another matter of course.
Countries like New Zealand (probably Oz and remote parts of the US etc. as well) have many ‘inventors’ because people had to rely on their own, and fix things themselves when they broke down. Indeed that makes people creative.
Very good point, shoe.
When the nearest hardware store is 85 miles away, and the nearest fabricator 130 miles, one can, in times of duress, do amazing feats of jerry-rig and cannibalism. The corollary is never buy a unit when you can buy a case. This is why god invented cargo containers for storage.
I really do foresee a return to more non-franchise, mom-and-mom local (semi-blackmarket,) enterprises supplemented by UPS/FedEx and abetted by the internet. The corporate oligarchs are toast, but for the socialist/public sector they employ and feed.
I believe alad referenced Dmitry Orlov’s wry comparison of the disintegration of the Soviet Union and America’s Current Mess, “Reinventing Collapse.” In it he argues that the Soviets were in a singularly better position to weather economic chaos when it came, due to their long familiarity with lousy public governance. Moreover, he points out that corporate giants (he uses Google as an example,) already control supply chain, distribution, health care , kintergarten to old age facilities for their workers, pensions, etc…basically a true communistic system.
Excellent read. ISBN978-0-86571-606-3
we are still waiting for Star Trek replicators to materialize, but in a few years maybe 3D printers / rapid prototyping devices can help for maintenance work at remote locations …
Don’t laugh, they are running experiments right now based on Star Trek replicators.
So instead of faxing a copy we’ll get to fax the original?
One can see caravans of old Toyota pickups being towed down Interstate 10 to Mexico. Spare parts is my guess ?
P.S.: I know about NASA policy, I once supplied them with a lot of nearly antique replacement diskdrives for some installation at Cape Canaveral. I also once had to express ship some unusual outdated video hardware to a remote outpost somewhere in Oz, for a mining company. And I know from experience that the military also uses some very old computer parts …
From first hand experience in hurricane alley I can attest to how fast things run out when the alert is up. Even after Katrina , I looked at the empty spam and TP shelves everytime a storm was 2 days away…it happens quick! I think water will be issue #1 in a few more years. A lot of the world depends on our grain,and with the tight markets can dwindle pretty quick with one bad year…especially with the current mono-culture if there was a blight. Abundance,and yet teetering on shortages?? Strange days indeed…
I got a really interesting e-mail last week from one of the stores I frequent in Stratford, Ontario when I am on vacation there. I have spent a lot of money at this place over the past decade or so. Being in a seasonal tourist town (the festival runs from April to November, but the largest numbers are over the summer), Stratford retail has a slightly odd double season - Christmas is a big time, but getting tourists to impulse buy before or after a show can add to your bottom line too. I believe the landlords of the good retail locations in town demand that they share in this “bounty.” The US tourists must have pulled back quite a bit the last two years what with the dollars being at or near parity.
Here it is:
Christmas is approaching. I have just come through the worst year EVER in business, and I am not alone in this in Stratford. There are businesses closing and going down all over town, and it’s only the beginning. After the Christmas season, I think many Stratfordites will be shocked at what transpires. I am definitely in danger of becoming one of those statistics, and I am willing to lay myself on the line, and spell it out, for all of my clients and loyal supporters. Suffice it to say that the last four months, Aug. - Nov. incl. have been down, on average, by 71%. The months before those have all been pretty much the same.
[...]
Currently, my shop landlord has indicated he wants me OUT at the end of this year, understandably, because I have not been able to pay the rent on time for at least a full year. [...] My shop landlord has been, thus far, unwilling to reduce my rent. Therefor, I will either be relocating, if I can find what I need, or I will be forced to cease operation entirely at the end of the year. [...] Normally, it would be a tall order in Stratford to find what I’m looking for, but because shops are closing this year, there will be an unexpected number of locations becoming available. Whether or not I will find it in time to save my business, and whether or not I am able to facilitate the move, remains to be seen. Please do not take this as a solicitation for charity or loans. It is NOT.
[...]
Do I think I am the only person with problems, financial or otherwise? ABSOLUTELY NOT! I do, however, think we live in a beautiful and remarkable gem of a city which has been lulled into thinking that, as long as the Stratford Festival remains, all is well. It simply is not so.
[...P]lease do not take this as something which implicates you in my present circumstances. To the contrary, I am extremely grateful for all of my clientele, whether local or from distant locales. Thank-you, thank-you, thank-you and thanks again! I am merely appealing to you, on my own, as well as on behalf of all downtown Stratford merchants, to please CONTINUE to support us in these fragile and difficult times. Please, also, try to impart to your friends, families, and neighbours, if they value the unique character and charm of Stratford, to come to our aid this Christmas and, as much as possible, throughout the dark winter months. Most of us just want to conduct good business, give good customer service, and provide valuable goods at decent prices to all who are receptive.
Wow. I am glad I got something from him this year. It was a wrought iron candelabra, about 18 inches tall with three branches and is absolutely gorgeous. Lots of hand hammering and obvious careful craftsmanship, made locally (to him) somewhere in Ontario. I wonder if the store will be there next year?
in my country many small specialty shops are closing down because of skyhigh rents; most shopowners have to close as soon as they have to sign a new rental contract with often even more outragious rent (these contracts often run for 5 years here). Only the major chain stores (same stores in every town) are still able to afford the rents, probably because they have good access to ‘easy money’.
This has been going on for at least five years but it is getting out of hand now. Many of these shops remain vacant when the business closes, but the owners don’t care: real estate in Netherlands always goes up, and to them the rent is just pocket change. Also, many owners have huge bank loans where the value of the collateral is only based on the rental price, and not on the question if the shop is rented or vacant. As a result city centers are slowly evolving into ghost towns, and more and more shops get into trouble.
all thanks to the housing bubble
Yeah, there’s some recent news about small “speciality shops” being closed http://news.bbc.co.uk/2/hi/europe/7769199.stm (Amsterdam to cut brothels by half)
Is that a sign of Deflation?
they are not really closed, only concentrated in a certain area and the rest of them is moved elsewhere…
they are closing quite some coffeeshops and mushroom shops lately in Netherlands, but I’m not sure if this policy will stick.
We see that too. I guess it’s the real estate owners that don’t want the low rent, because it in effect will lower the value of the property. So in their world maybe it’s better to take a loss with a higher value on the book with previous rent.
I’m sure I’m not alone in saying that it is surprising how many established businesses (in business over 25 years) have succumbed already.
That’s why we’re seeing so much frantic action this month, as those stores know that even in a decent year they’ll be running in the red until next November. Like the fella in your example states - he’s going into this holiday season already in a big hurt.
This is one desperate December.
Of course not all closures are made under distress. A long time local deli closed this past spring, but I’ve since learned that the owner bailed of his own free will. It seems at least some of the old timers knew exactly what was coming - so this could account for at least some of the closures.
Seems like kind of a long-winded way to beg for enough Christmas business to get enough cash to make it through the winter.
Retailers are like plants; wholesalers are like animals. The former are stuck in one spot and must take whatever current weather conditions are, fluorishing for years and then dying in a sudden freeze. The latter can roam around in search of sustenance.
Hi, my dear HBB’ers. Question to all of you. My lease is up and I have no option but to subject myself to the torture of buying/leasing a car. I’m eyeing a Honda CRV, around 25K new and around 20K used but new (2008, less than 15k miles). I know I’m bad at this, but I don’t want to give the dealer too sweet a deal. They offered me financing for 60 months at 3.9% and I said hell no, the money is sitting in the bank at 1%, it doesn’t make sense. I asked them to give me a good cash offer and they mumbled something about cash offers not being all that attractive to them. So, HOWMUCHAMONTH is fair for a buy or lease (about 3K down)?
Start over again at a new dealership. You never, ever, ever tell them you are going to pay cash. You get them to give you the best deal they will when they think you are going to take their financing (”Wow. I qualify for that? That sounds like a great rate. I don’t think my bank could match that.”), then, when you have both agreed to the price you like, whip out your checkbook.
“You never, ever, ever tell them you are going to pay cash.”
Well, I don’t know about never, ever. I once “scored” a 97 Jetta GT for about $3k off when I told them I wasn’t going to finance and had great credit. Final offer, take it or leave it, I don’t care. I’m sure they still made a small profit off me, but they took the offer and I got the car. Depends on how desperate they are for business I would argue.
Agreed. But this place already told her that they didn’t like to do a cash deal, and that is likely to be the policy at other dealers of the same brand - especially if they are all offering the same sort of financing deal.
When did 60 months become the expected financing term for a car? My one car loan (many moons ago) was 36. I think you could get 48, but that was only for the barely credit worthy and you paid through the nose for it in interest rate.
“I asked them to give me a good cash offer and they mumbled something about cash offers not being all that attractive to them.”
Well, I guess that’s when I walk out mumbling something about how I guess they don’t need my business, etc.
Another strategy might be to take their financing to get the best price (maybe) and then pay it off immediately, or with another loan if you can secure a better rate elsewhere. Just make sure there’s no payoff penalty. (I’ve never financed a car so I’m not sure if early payoff penalties even exist on car loans)
When I bought the Jetta, my thinking was that:
1. I don’t want to take the time to shuffle loans/money around, nor have to sit there and read any fine print.
2. There are SO many good used cars out there, if they don’t want my money I’ll go across the street.
Numbers 1 and 2 haven’t changed since then and number 2 is even better today. Too bad I don’t need a car!
Go to fightingchance dot com for more ideas.
I found this website the most helpful when i was looking to get a new car this year.
http://www.carbuyingtips.com/
I have had very good luck buying the advertised “1 at this price” car. The car is advertised as bait and they will work hard to get ylou switched to another one, but get there early and they have to sell at the advertised price.
Remember when we thought car salesmen were the slimiest people in the business world?
howmuchamonth is zero. $3,000 is enough to buy a car. You asked for opinions and you got one.
jeeze i hate shopping.. ’specially for other people.
Lowball, lowball, lowball. Just like houses. See how hurting these guys are, don’t be afraid to walk away, there will be other Honda CRV’s in the market. It’s a buyers market for cars too.
You own these guys.
Cass, if you are buying from a used car lot, make sure use ask them what extra fees are added to the sale price before negotiating.
All of them in the Tampa Bay area have some sort of “Dealer Fee” around $500 or so.
In 2007, I bought a 2004 Subaru Forester for $12,700. So I’d look for a 2005 Forester for about the same. After being annoyed with a bunch of car dealerships and salespeople, I found a great car lot in Cincinnati that sells 2-5 year old cars off lease.
You can’t beat a Subaru. Routine maintenance is a breeze. Even I can replace a fuel filter and spark plugs, the things are so easy to get to. That’s my advice, get a Subaru.
How about a Joe Breeze Villager instead?
Once you’ve tried it, you don’t go back.
If you use Costco’s or Sams’ auto buying program, you could save. The LX is quoted under 20K + tax, tag, and title, EX under 22K.
Thanks a bunch to y’all. I’ll be taking your advice to heart. I’ll talk to them again this afternoon, and if I don’t hear what I want to hear, I’ll go to another dealer, try a Subaru, check out Costco, tell them off, I’ll try everything…
We bought a brand-new fully-loaded Mazda CX-9 for about $38000 ($300 below invoice) (plus a free upgrade to all-weather floormats). Was asking for $600 below but they would not budge any further. This was in Dec 2007. Got a 0% rate for 3 years ($1100/mo payment but will be fully paid off by Dec 2010).
Our strategy was to get the invoice price from edmunds.com and use that as the starting point. I’d imagine that any new car purchase now should be significantly below invoice. Your credit rating will determine how good a financing deal you get.
Definitely be prepared to walk away and start all over at a new dealer. Do not show any signs of falling in love with the car. Be prepared to stay at the dealership for several hours. Go at the end of the month. Wear them down instead of letting them wear you down.
We also used these techniques to buy custom furniture from Bassett. Got approximately 1/3 off the initial price for a nice living room set. That was last June. Surely the deals must be even better now.
You are literally in the driver’s seat. Enjoy the negotiations.
All we’re waiting for now is the opportunity to do the same thing with a house purchase. With all the tactics gleaned from this board, we’re going to have a blast
Gotcha, thanks….
“I do, however, think we live in a beautiful and remarkable gem of a city”
Translation for the REIC? “It’s different here”.
Bit of an orphan, but I’m going to answer this one anyway. Yeah, I’ve head that the real estate monsters in Stratford have talked about how it is “different there.” They are right to an extent. The place does have an additional source of income for retailers other than just the Christmas season and that is unusual. But, that difference was already baked into the local economy. The festival, after all, has been there for over 50 years and didn’t cause ridicuous spikes in value over the rest of that time even though the Fesival allows people to make extra money out of their houses by renting out rooms to tourists. Why now? What was different? The answer, of course, is nothing. Same deal for California - it has always had good weather. That can justify some difference in price over other locations over the long term, but not a massive change that just started recently. Same thing with the DC area. The government with a base supply of fairly steady jobs has been here for a long while. Why is it all of a sudden a justification for a huge spike in prices?
I just don’t get why people don’t get that. It isn’t hard. It isn’t even opaque to the average consumer, like global demand for oil.
Not that I think you were trying to razz me, or my buddy the merchant, exeter. But this is the ultimate example of my “why would a bank make a small business loan to someone wanting to open the third “Olde Ye Candle Shoppe” in any town. There was a time when such a loan was fine because the business could make money because all the consumers were spending like drunken sailors. Now, it isn’t a good business idea and therefore isn’t a good loan to make. This shop was a great idea. It had interesting, well-displayed merchandise so it was fun to browse and easy to find something that you really wanted to bring home. From where I am sitting I can see at least seven things I bought there (mostly handmade/painted theatrical masks) and they all make me smile. Good for gifts too. And he is likely going to go out of business. Used to be a good idea. Evidently doesn’t make enough money to function in this economy, or at least it doesn’t if the landlord doesn’t wake up. The center of Stratford doesn’t have a Gap, a Banana Republic, or much of anything in the way of chain retail. It is what town planners are trying to immitate when they make those fake “walkable” downtowns/town squares. The real thing is better, and it may not be able to make it - even in a town with two major selling seasons.
No offense Polly. My apologies if it sounded so. The cheesy trinket shops that offer nothing but overpriced useless junk in towns that once were dying business centers were the model over the last two decades. The idea of hawking overpriced “collectible” junk leads to the renaissance of these towns is passe much like the gentrification of slums in urban areas. It’s no more sustainable than overpriced gargantuan shacks.
No offense taken. But you were right. People did justify a real estate bubble in Stratford with an “it’s different here” argument. It is a little different in Stratford. Base economy is light industrial and agricultural (Samsonite factory, Ontario Pork Congress, etc.) On top of that, they have the festival which adds on the theater community and older, fairly wealthy tourists who are buyers of arty and crafty things and other stuff and consumers of hotel rooms and food. It has managed to resist a lot of soul-crushing homogenization of chain retail in the downtown area (plenty out along the highway, where it belongs). It should work. When it doesn’t you are dealing with a serious crash.
From Neal Boortz’s page…
Argentina is battling its own auto crisis. So here is the government’s solution. Are you ready?
Automakers in Argentina will sell basic models of their cars AT COST. Meanwhile, they will receive government subsidized loans in order to keep their companies afloat and keep people in their jobs. Each automaker is required to offer two of its most basic models for this plan. They can choose from one of three financing packages. These packages will be financed .. are you ready for this .. by the social security system.
The Argentinean Industry Secretary says, “We have agreed with the plants that these cars will be offered without a profit margin and the dealerships will also reduce their profit margin.”
Don’t you love this “we have agreed” stuff? That means “We have instructed the automakers ….”
So first Argentina moves to seize private pension plans and blend them into their social security system. They suddenly they’re talking about their social security system financing the automakers. Argentina is headed for disaster. Let’s hope they crash in time for us to lean some lessons.
Wmbz, you can always count on us to crash and add insult to injury with bad policy, that’s a given. What’s not a given is other countries learning from us. Look at Iceland, they should have learned….
cass,
How long did you live in Argentina?
All my life, until I was 27, came to the US in 92. Lived through the military regime, two hyperinflations, you name it. Been there, done that.
Hey, you should be telling Americans what’s coming. Only the Argentines know our future.
Let’s hope the good old US of A will handle things differently. All they have to do is check out what we did and do the opposite…
Argentina crashed 8 years ago. I don’t think lessons can be learned from any of it. The laws of physics are what govern not only science but economics. Yes economics. As the waves recede, governments/banks will gear up for the next printing cycle. Essentially the entire economic system is like a cat chasing its tail..the difference between inflation and growth is minimal.
yes, it is sad to see Argentina heading in the same direction again.
maybe certain countries/societies are more vulnerable for this kind of troubles because they have a taste for speculation (like the Dutch who had their first big bubble in the early 1600’s already, several bubbles after than and an epic housing bubble now - maybe people can learn from experience, but societies as a whole seem to learn or remember very little).
maybe people can learn from experience, but societies as a whole seem to learn or remember very little
We are cursed with bad government, chosen by the people. Maybe it was not so lucky after all to have the commodities boom lift us up from the debacle. It was unreal, and it was way too easy, especially since the gov’t. started immediately taxing exports to finance people completely removed from farming (subsidized industries, welfare, etc.). People knew money was coming in, but, as usual, they did not know where it was coming from, because the government was quick to take all the credit. They spent enough to buy themselves a new election, now it looks like there might be another default in the horizon, who knows.
Is your home worth keeping?
A ‘rescue’ may lock you into high payments that make it hard to pay bills or save for retirement. But deciding to walk away isn’t a strictly financial calculatio
By Liz Pulliam Weston
This is not a column I wanted to write, and certainly not one your lender wants you to read.
But now that troubled borrowers are being given more options to save their homes, the question remains: Should they try?
There’s no doubt that the future of our economy depends on slowing the foreclosure rate. After months of dithering, lenders and regulators are finally rolling out loan modification plans that may help many homeowners.
But what’s good for the economy may not be good for you personally. Falling home prices and the details of the modifications mean fighting to save your home isn’t a slam-dunk.
Unfortunately, in purely financial terms, sometimes the smart decision may be to let the bank foreclose.
I think they are now finding out how well their plans are working.
U.S. borrowers re-defaulting after modifications-Dugan
However, data which is to be issued by the OCC and the Office of the Thrift Supervision next week could throw cold water on a push by some U.S. policymakers for loan modifications as the key remedy for the ailing U.S. financial and economic crisis.
Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.
The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.
http://www.reuters.com/article/marketsNews/idUSN0851001220081208
Is it hypothetically possible to re-re-default?
Yep, I think Speaker Pelosi and Rep. Barney Frank already have a plan for that
These words are find from Liz Weston, but does she include in her
pure financial terms of smart decisions the taxpayers costs of these bail-outs and the future cost of the inflation effect on Citizens ? Does Liz Weston care that some Taxpayers and States will have a unfair burden regarding borrowers gaining by walking when the innocent were prudent and didn’t cheat on loan applications or overpay for a box on a piece of land ? Does her analysis include the possible financial crash of the USA and the untold security issues and that it might threatened
Liz Westons 401k’s and her very Social Security or benefits she no doubt
would claim that she is entitled to. The banks were entitled to their creepy loan money also ,but what the hell ,why doesn’t everyone just stop paying on everything and we can have the Taxpayers own all business. Does this adviser ever consider that the United States will spend money on loss instead of on great things we could really use going into the future .
If Liz Weston doesn’t think people in critical numbers walking won’t create a cost to every Citizen of the United States ,she fails to
be anything but a short-sighted opportunist , not that I don’t think that Wall Street and the Lenders crimes with borrowers didn’t create a false market . There should be major penalty for borrowers or anyone involved that submitted false loan applications and there should be major penalty for people who walk who can really afford the home and have not lost their job ,especially if they have been offered a loan modification.
from their lender .
It appears that the consumer is saying screw this false economy and I want a deal ,so unless the Government or lenders pay down my principal ,I’m walking because I was suppose to make money ,not lose it . While I can have sympathy for a party who doesn’t make out on a investment in the short run ,a disregard for paying obligations by a critical mass will only tip the scales to the innocent paying for the
gamblers and the United States perhaps never being able to heal from this and we will morph into some form of existence that resembles “Each according to his ability ,each according to his need “,sort of Government and existence .
What goes around …
Sovereign Wealth Funds
Published: December 7 2008 18:21 | Last updated: December 8 2008 09:27
Six months ago, a ferocious debate raged in Washington and European capitals over whether sovereign wealth funds should be allowed to buy up swathes of the corporate west. Often this talk boiled down to fears over national security. Oh, to have the luxury of such concerns today. Now the issue is not that these funds might be buying but that they might stop buying – or even sell. …
That is bad enough. But what if SWFs start actively selling? For that, one has to believe that emerging economies with big SWFs, from the Gulf states to Asia, might begin to turn to their SWFs to support domestic markets and local financial systems. In recent years, foreign bank lending in emerging economies has increased, both in absolute terms and also as a proportion of gross domestic product. HSBC makes the point that, if global banks start pulling back on such lending, perhaps under pressure from their own governments keen to see them committed to lending “back home”, that could leave a hole that SWFs might be dragooned into filling. SWFs in the Gulf have already invested in local stock markets. It is not a stretch to imagine more urgent calls on SWF cash.”
FT
LEX
The SWFs bailing on the US would be very scary, although it should not be surprising.
“It’s not a stretch to imagine more urgent calls on SWF cash.”
There’s that cash word again.
Bernanke’s Burden
By Robert J. Samuelson
Monday, December 8, 2008
Amid the hoopla over Barack Obama’s economic team, it’s worth remembering that Federal Reserve Chairman Ben Bernanke is America’s most powerful economic policymaker and will probably remain so after Obama’s inauguration….
So Bernanke faces a rare, if not unprecedented, situation. Despite the Fed’s frantic efforts to relax credit, it seems to be tightening in the midst of a harsh recession: the opposite of what’s wanted. Private behavior is neutralizing public policy. Lenders are terrified by losses and the fear of what they don’t know; the sudden failure of Lehman Brothers in September compounded their anxieties. Having once had too little appreciation of risk (i.e., subprime mortgages), lenders may now have too much. The danger is that tight credit and consumer pessimism combine to lower spending, raise joblessness and cause more defaults.
The Fed is struggling to mitigate this sort of spiral. There are offsetting forces. Lower oil prices bolster consumer purchasing power. The Fed’s latest announcement on buying mortgages pushed rates down, stimulating more demand to refinance old loans, thereby reducing consumer debt burdens. It’s widely expected that Bernanke will ultimately cut the Fed funds rate to zero and then, by buying long-term Treasury bonds, try to push down longer-term interest rates.
All this is a vast and daring monetary experiment, global in scope and fraught with hazards. The new money and credit issued by the Fed are created out of thin air. If the Fed is too timid, it may deepen today’s slump; the financial magazine Barron’s — hardly a socialist bastion — suggested the Fed should balloon its credit to an astounding $6 trillion. But too much money and credit might someday boomerang as higher inflation. Considering the consequences of being wrong, Bernanke faces an enormous intellectual challenge and no less an agonizing personal burden. ”
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/07/AR2008120701926.html
“It’s widely expected that Bernanke will ultimately cut the Fed funds rate to zero and then, by buying long-term Treasury bonds, try to push down longer-term interest rates.”
It must be nice to merely suggest you might do something to move prices, only to have a thundering herd of traders respond in a direction which immediately moves prices in the direction you planned to move them. Buffett’s publicly announced stock picks some times have this effect, although his recent general suggestion to buy stock did not.
“All this is a vast and daring monetary experiment, global in scope and fraught with hazards.”
It sure is great fun to be a lab rat in Professor Bernanke’s social experiments.
http://www.time.com/time/photogallery/0,29307,1864272,00.html
A series of photos of what is left of Detroit. How many other American cities have this future in store?
Here’s a Bloomberg story about Detroit too. Had to laugh at the guy who said having a garden nearby could add as much as 5K to selling prices.
Also, Pussycat, you said over the weekend you didn’t know much about Detroit. The last sentence of the article pretty much sums it up.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aMV8_J49diKs&refer=home
These pictures only prove that you can’t just have houses and buildings ,you have to have jobs to support a community . I wonder how a Foreign Country would feel if America started producing and manufacturing here and they lost their jobs as a result ?
The fact that so much of the World produces for this island called America ,while their own people stay down-trodden because of
wages and rules and laws being different ,must be something that is hard to resolve for people of other Countries .
Years of incompetent governance at the city and state level haven’t helped Detroit. I think the city and state might be well served by waiving property taxes for new homeowners for a certain amount of time or eliminating corporate taxes. The value of the land their has in many cases dropped below zero, they are at a point where they almost have to pay people to live there.
Yeah, I don’t know much.
There was a website called Forgotten Detroit or some such with tons of pictures, and I saw all of them. The picture of the train station was simply tragic, and there was one with the storage of the school supplies, and that was truly surreal.
Detroit is really broken. I think Baltimore is equally broken as are Buffalo, Cleveland, etc.
Re: school supplies, at one time kids had to bring their own toilet paper to school.
My favorite is the Theatre turned parking garage. If my perspective is right, the far end is the top of the stage - ie - this is the top level of a multi-level garage.
Also interesting is slide 8, the abandoned lot. It’s like country in the middle of the city limits. There was a video essay that I recently saw that a few guys took from a car that showed the same thing. I was surprised to see how much land there was in what was supposedly Detroit.
I’d love to reclaim the bldg in slide 2. That’s what lofts were before trendy developers co-opted the phrase and charged $500K for 800 sf of them.
Here you go. These are the videos I mentioned:
Part1:
http://www.youtube.com/watch?v=T6WKMNmFsxM
Part 2:
http://www.youtube.com/watch?v=BfhsS-KMFL4&feature=related
I think Part 2 was the one I originally saw where I was amazed at how much open space there is, probably made possible by houses already bulldozed. I also like the fish-eye lens affect used in Part 2.
Helpful hint: You might want to mute your speakers.
Can anyone here tell me what’s so great about Jacksonville, FL?
A co-worker of mine in South Florida bought a house there (in the last few months). Moved his family up there to live in a house I knew he clearly couldn’t afford when he was talking about buying it. A few days ago his bank leaves a message for him to call. When I gave him the message he says that he’s late making his payment again. AGAIN. It has been less than FOUR months since he moved them there.
Honestly, I don’t know how he was able to get a VA loan for this place. He is always talking about his financial problems. Overdrawn accounts. Past due notices. No savings. In his mind, his problems are normal. The bank actually loaned him $250,000, no money down. What happened to having to be a boy scout to get a loan these days?
“Can anyone here tell me what’s so great about Jacksonville, FL? ”
I’ve heard Jax Beach is the only “true” surf spot in FL. People from my area drive there (4 hours) for the weekends just to surf. It is also supposedly “old-south-like.” I don’t know exactly what this means, but people say they like it for that reason as well.
Lastly, Salvation Army/J-Ville = Genovese/NYC.
Much of the Jacksonville area is very nice. The beach there is outstanding, and there are rivers and bays everywhere. There is a good cycling and triathlon scene. I rented for two years. We only had one frost in two years at the beach, but lots of nights in the 30s and cold days in the winter. I prefer more tropical conditions, so bought a little bungalow 250 miles south, despite still having to commute north to sell stuff every 6-8 weeks.
FXP, 36.
You didn’t have to say that, it hurts!
I’m not sure it’s time to wade in yet.
This rally has legs.
I agree, that’s why it hurts. It’s so much fun
just watching hundred dollar bills flying out the
window. Win some, lose some.
Fibonacci resistance at the moment.
Burglar bars trap family in burning home:
http://blogs.tampabay.com/breakingnews/2008/12/tampa-three-res.html
Which is why Yours Truly isn’t about to put jailbars on the Arizona Slim Ranch windows.
I thought laws required there to be a release inside to unlock them. Oops!
I rented a place that had these, with a push button release on the inside, it seemed to work well.
I think I’d keep a Sawzall under the bed just in case!
And this is why we have building codes. Any modern building code requires each bedroom to have a functioning point of egress. That is, a windows that you can fit through if you need to evacuate.
The NYTitanic needs somebody to show them the money, $225 Million…
Gray Lady hit an i$eberg
They’ve been headed downhill for a while.
Putting their journalists behind a “pay wall” was one of the worst moves ever.
Even today, they are totally technologically clueless (compared to a lot of other media which have the same economic headwinds.) I can explain in more detail if anyone gives a cr@p.
Putting their journalists behind a “pay wall” was one of the worst moves ever.
Indeed.
They’ve perpetually been behind the ball online — in terms of generating revenue, in terms of expanding readership and services, and in terms of not pissing off their core readership by making them jump through stupid hoops.
Even today, they have a dumb registration scheme when any good tech person will tell you that they can glean the same data via the HTTP requests — IP + OS + some aux info will give you pretty much unique person.
You can gather the same stats for less cost, give your customers higher speeds, and not p*ss them off.
Same thing for the “multi-page”. Is there anyone whose first response to a page is not to click the “single page” option? I mean seriously, folks, what is wrong with you? Do you want people to read your content or not?
The other problem is that they are seriously middlebrow. They are not a specialist publication like the FT or the Economist. They are not really great in any single domain just muddling along, and they are getting raked over the coals by craigslist, etc.
Not to mention that they are carrying an absurd debt load, and still think that this is 1985.
Not to mention the obnoxious auto-links, which in no way resemble real blog links.
I have 2 writer friends in NYC, one for WSJ and one for a professional journal. I hope they can stay employed, they’re cool cats.
Coolness has nothing to do with the way the professions are moving.
Either they evolve or they die.
In either case, unless they are super-brilliant they can hardly compete with a buncha specialist blogs like this one where people are doing it for far less than those people’s “professional” salaries.
A couple observations from my neck of the woods:
We went to lunch at Applebees yesterday (Sunday). When we arrived, there were only eight (eight!) tables occupied (including ours). When we left there were only ten tables occupied. This was over the noon “lunch hour”. Just 3-4 months ago there would have been a wait for a table at that time. We must have had a 2:1 staff-to-table ratio, which DH and I found unnerving.
Retiree friends of my parents are spreading the word that they are not sending Christmas cards this year. They were (and probably still are) heavily invested in the stock market.
Two snowfalls within the past week here in Chicagoland are making it VERY obvious which houses are unoccupied (used house salesperson sign in yard, driveways not plowed, no car tracks).
In light of these things, can anyone give me a good reason why the market should be up 300+ points?
And here’s another fun observation.
This past weekend, I picked up my business mail at my P.O. box. Among other unsolicited missives, I found a hand-addressed letter from a bank that I don’t have an account with.
So, I opened it.
Turned out that the missive was from some fellow who bills himself as a home loan and financial expert, and he’s looking for another job. The purpose of his mailing was to ask my firm to consider him for any openings that might call for his skills.
Talk about an un-targeted mailing.
Mr. I-Think-He’s-Soon-To-Be-Bank-Jobless sent his missive to my graphic design and photography studio, and trust me, I need a home loan expert here like I need a hole in the head.
I’ve started getting unsolicited inquiries for jobs, etc, at my tiny consulting firm! Never before in my 8 years of running this business has anyone ever contacted me to see if I had any work for them.
(BTW: My plans, if Barack Obama uncaps Social Security, are to take the next 4 years off…)
I occasionally get inquiries from newly minted designers looking for print work. Since most of what I do is Web-related, I can’t really use them.
OTOH, there are some crackerjack young Web people out there, and I’ve subcontracted work to a number of them.
I find I’m better off getting a person with a real design/BFA degree then some self-minted web monkey.
Or you could keep it text, and only fill it full of useful information versus flash animations and chopped up full screen jpg images. See Craigslist for an example.
Text? What’s wrong with you?
It could be worse. You could be like me who thinks that everything past the VT-100 was all downhill.
I used to know those VT-100 escape sequences _way_ too well..
LOL. I still use a DOS orbit mechanics tool one of my associates converted from his original VT terminal display codes. Executable is dated 2/27/1990
DOS? I spit upon you.
Talk to me about PDP land.
Here is my local market observation…Layoffs…Lots of um…
Short squeeze Part 3 (or is it 4?)
We saw this in Sep before the bottom fell out.
what level do you get short? I think anywhere over 9k is gonna be decent.
Sorry, I think in terms of S&P. Dow is too narrow.
Past the 1000-level.
I’m doing this incrementally—-some today, some last week, probably some more late this week or next week. Less chance of missing completely that way, even if you may not get in as fully as you intended.
From the “Voice of the People” in Sunday’s Chicago Tribune:
Jim Poole from Chicago writes:
“I am going to spend some cash. I am going to take the kids shopping for cloths and my wife and I are headed out to dinner. Bailout or not, the only way that the economy is going to get going again is with all of us spending money. What good are savings that pay you 2% interest? We need to refill the machine and spend some cash. ”
Nice patriotic boy, there. Go for broke, Jim.
He can spend my share while he’s at it.
I have a simple way to make them understand, before they hand out any more bailout money what a billion dollars actually is, make them sing a billion bottles of beer.
A billion bottles of beer on the wall, a billion bottles of beer, you take one down pass it around, NINE-HUNDRED and NINETY-NINE MILLION NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-NINE bottles of beer on the wall, NINE HUNDRED and NINETY-NINE MILLION NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-NINE bottles of beer, you take one down pass it around, NINE-HUNDRED and NINETY-NINE MILLION NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-EIGHT bottles of beer on the wall…..
They wouldn`t be ready to bail anything out for about 45 years
Big Ben Fires Up The Choppers
http://www.forbes.com/2008/12/06/bernanke-fed-recession-biz-beltway-cx_jz_1208interest.html?partner=yahootix
Steve Forbes Plea to Paulson, Suspend Mark to Market now!!!!
Steve: Paulson’s Last Chance
http://www.forbes.com/2008/12/05/intelligent-investing-industry-insights-PaulsonDec8.html?partner=yahootix
From the link:
Mortgage rates are too high. Why not give Fannie and Freddie explicit guarantees so we can get fixed-rate, 30-year mortgages under 5%? That would rapidly revive the housing market.
And while mark-to-market is fine for publicly traded stocks, it makes no sense when you don’t have a market, as with packages of subprime loans, and it also makes no sense for long-term insurance reserves. Paulson and the Securities and Exchange Commission can suspend this inane rule in a heartbeat, yet they refuse.
———————
What an idiot.
Firstly, mortgage rates are at or near historic lows.
Secondly, we NEED mark-to-market, because one of the things that is freezing markets is lack of transparency. If we do away with MTM, I believe we will see dire consequences, because investors will believe NOBODY with respect to their asset prices.
Perhaps I should just “claim” that I have twelve million dollars in my account…poof!!! just like that.
That is no different from mark-to-fantasy values for mortgage-related assets.
There IS a market for all this paper, but (just like housing), the price is not what they expect.
I don’t think it’s going to bust 9k, and if it does, not
by much. There’s just to much negativity out there
to support these kind of prices. I’m going short right
now on the builders and the banks.
SKF, goes under the 100 bucko mendoza line this week.
SRS, could go all the way to 60.
FXP, looks to be driving down the China turnpike to 20.
Yikes. Big condos under construction in NYC shutting their sales offices for the winter to save money.
http://www.nytimes.com/2008/12/07/realestate/07deal2.html?ref=realestate
“They are hoping that spring, traditionally the peak selling season in Manhattan, will bring renewed confidence in the economy and abundant low-cost mortgages.”
December 8, 2008 12:42PM
The Problem of Re-Defaulting on Mortgages
By Ray Hennessey
Second chances aren’t producing first-class results.
According to the Office of the Comptroller of the Currency, 36% of mortgage holders who had received a re-worked mortgage from their bank were late on payments three months after they got the new loan terms.
Worse, 58% of mortgage holders were more than 30 days late six months after their loan modifications.
What does this mean? A number of things. First, some of these mortgages were so badly underwritten that borrowers, even with a rework, can’t hope but stay current (a situation that will only get worse as unemployment rises).
Second, some reworks just aren’t good enough and will probably have to be modified further.
And, lastly, the numbers of delinquencies will rise even further, despite the best efforts of Congress and the banks.
One thing we’ve noted here repeatedly over the years is if you do the math on many of these sob stories, many folks wouldn’t have been able to afford a 0% fixed-rate 30-year mortgage.
It’s a waste of time to even bother trying to refinance!
The serfs only had to give about 50% of the fruits of their labor to the lord for protection.
I give about 8% to the bank in P&I and 40% to various governments and I can tell you that the bank is not doing its share in protecting me.
WKYC-TV in Cleveland, noon news today: Old-time mortgage standards are back, you should not spend more than 28% of your income on mortgage payments, taxes & insurance.
“…should not spend more than 28% of your income on mortgage payments, taxes & insurance.”
Planning to wait until prices reach a level where it is feasible to buy at 28 pct of income. We’re not there yet…
Not even close…yet.
Of course, good luck trying to predict property tax (you’ll have to pay more because your deadbeat neighbors aren’t), insurance prices (with crime skyrocketing, so will insurance), and HOA dues (same problem with deadbeat neighbors).
20% would be safer.
Writing a check is safest.
Of course, I got screwed by writing a check!
If I didn’t pay off my house in 15 years, and still had a mortgage, I’d be eligible for all sorts of handouts and cramdowns just by missing a payment or two.
Well in the Norfolk, VA and surrounding areas that means hardly anyone can actually afford the properties for sale. But then again 28% of a normal income + $5,000/mo in under the table income makes the loan work I suppose.
Interesting pattern on SKF, has not closed gap.
And somebody turned off the valve on SPY at 13:42.
@dude
Actually there are two gaps it should fill -
the upper gap around 237-242
today’s gap
I don’t know a thing about charting, but I bought some SKF today on the belief that this relief rally will not last long…
Anyone know how to find out how many bank owned properties Aurora Lending Services is holding on their books?
Any specific advice for dealing with them?
Up, up, and away!
Maybe the Precedent-elect will have more than one banking/social unrest issue to contend with come January:
“CHICAGO – Gov. Rod Blagojevich ordered all state agencies Monday to stop doing business with Bank of America to try to pressure the bank into helping laid-off workers staging a sit-in at their shuttered factory.
The governor wants the North Carolina-based bank to use some of its federal bailout money to resolve the protest by about 200 workers at Republic Windows and Doors.”
Perhaps every Governor in every state should propose boycotting banks that dare to conduct business as usual.
That ought to stimulate lending.
(sarcasm off)
Blago is, generally speaking, a massive tool. I have a low opinion of him.
But I fully support strong-arm tactics where financial institutions are involved.
B of A doesn’t want to extend credit to Republic Window? Fine. Stick it to them. The banks received this money (our money) so they could make loans of this type. If aren’t doing what they’re supposed to, kick them in the shins a little.
Agree.
If we’re going along with the bailouts, then the banksre obligated to do their part.
Don’t see my post yet, but fixing “banks ARE obligated…”
I’ve been waiting to hear statistics on this and they are even worse than I imagined.
http://finance.yahoo.com/news/Homeowners-who-modified-loans-apf-13773244.html
“WASHINGTON (AP) — More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday.”
Although, I’m sure this isn’t a surprise to any of us, I hope this is a wake up call for those crafting the bailouts. Of course Comrade Bair doesn’t see the error of her ways. According to her, “The quality of the (modifications) are not what they should be.”
I was waiting for this number to arise. Over 50% of those treated to another chance did not come through and make their payments and have fallen behind once again.
For many years I was a fee appraiser working for HUD and covered a rather large area. Loved the work. We handled about 120 cases a month for years and years. Then HUD Sec. Martinez wanted to run for election to the Senate and he put Florida into a test mode to try a program of forebearance. It worked about as well as he did as a Senator in Washington. (not running for re-election)
At any rate we were pulled off the assignments and told they would counsel the people and delay mortgage payments as well as ammend the docs. Guess how beautifully that worked? The houses were so beat up after we finally got them(14 months later, no pmts) that the values had dropped another 20% for damage and lack of maintenance. Some counseling. How to screw the government 101.
During this period I swear to you that HUD was paying people up to $600 plus bonus money for fixup to take the property off their hands. They had nothing in it and got a check at closing for showing up and moving in. I was sick on two fronts as one might imagine but I have watched the same idiotic programs on a macro basis over the past 5 years.
I am beginning to think that we will ultimately see values in the 1975 range and at that time noone will have any reason to hold onto a house. Don’t laugh as I believe we are headed right there which was when I got into the business. $45 per square foot is coming to a town near you.
Wow, that’s pretty bearish, though you could be right. Depends on how they handle the economic problems.
In its quarterly report, the BIS warned the US Federal Reserve, the Bank of England and other central banks that near-zero interest rates and emergency monetary stimulus may come at a cost.
By opening the cash spigot, the authorities risk displacing the money markets and may “discourage banks from lending to other banks”.
The money markets are a crucial lubricant for the financial system, but they cannot function if rates fall too low. The sector can wither away, as Japan discovered during its “Lost Decade”.
Telegraph — Ambrose Evans-Pritchard
The stock market has developed an apparent immunity to bad news, surging higher and higher over the course of the past week or so. Given the grim outlook for this economy over the course of the next year at least, methinks a sharp downturn is in the cards. DOW 5000?
“The common knowledge among investors that things are bad and will only get worse is precisely what forms the basis of every durable market bottom.”
Mr. John Hussman
Man I though I was the only one on HBB who reads Hussman but guess not. I suggest everyone read Hussman as he is one of the best out there.
such market bottoms may be durable, but they can still fall out; probably in a few weeks or months …
They tend to start bottoming out again when things turn out “worse than expected,” which seems to happen quite often these days. Of course, with all the talk of deflation and Great Depression II in the MSM, one has to wonder if expectations are not close to bottoming out?
You calling a bottom?
Only in most Asian markets.
ping pong, ding dong.
sorry hoz, just making notes.
*thought*, not though.
From Rueters
Speaking in Stockholm where he will collect his 10 million Swedish crowns ($1.3 million) prize, U.S. economist Krugman again called on policy makers to spend liberally to cushion a withering global downturn.
“A scenario I fear is that we’ll see, for the whole world, an equivalent of Japan’s lost decade, the 1990s — that we’ll see a world of zero interest rates, deflation, no sign of recovery, and it will just go on for a very extended period,” he told a news conference.
“And that’s unfortunately very easy to see happen.”
Krugman added that in his worst case scenario there would also be a series of extremely serious crises “in particular countries that are in big trouble.”
He said there were already premonitions of economic and political crises in line with those in Argentina and Indonesia in the 1990s-early 2000s, particularly “in the European periphery.”
Iceland and Latvia are among European countries that have been hit hard by the global financial crisis.
“We can easily be talking about a world economy that is depressed until 2011 and maybe beyond,” Krugman said.
“If there’s a safe place I can’t see it.”
Just $15B left in first $350B of gov’t bailout
The government has just $15 billion left to spend from the first $350 billion pot of financial bailout money, the Treasury Department announced Monday.
The department said $335 billion has been allocated from the first half of the $700 billion program, which was enacted on Oct. 3. The information was contained in a report to Congress.
http://biz.yahoo.com/ap/081208/meltdown_bailout_funds.html?.v=4
Hey Laddie,
I got confused in my oil-vs-gold spread response yesterday in the bits bucket, and got it backwards. Ooops. Sorry about that!
You were right that 400gal/ounce current and 125-200 gal/ounce historical argues for cheaper gold (e.g. it is buying too many gallons, so it is too strong at present relative to oil) and more expensive oil.
But FPSS is right that to really play that spread collapsing to historical averages, you should short gold and go long oil.
Personally, i wouldn’t have the stones to go long oil right now; I suspect that the collapse of the spec bubble combined with real demand destruction that is occurring could drive it much lower over the next couple of years.
Anyway, just wanted to mea culpa.
I agree about oil. The question is in what form
Contango Pays Most in Decade as Shell Stores Crude
“…Traders who bought oil at the $40.81 a barrel on Dec. 5 could sell futures contracts for delivery next December at $54.65, a 34 percent gain. After taking into account storage and financing costs investors would earn about 11 percent, according to Andy Lipow, president of Houston consultant Lipow Oil Associates LLC. The premium, known as contango, is the biggest for a 12-month span of futures since 1998, when a glut drove crude down to $10. …
The tankers, if full, hold about 26 million barrels worth about $1 billion, more than the 22.9 million barrels sitting in Cushing, Oklahoma, where oil is stored for delivery against Nymex contracts. U.S. crude inventories rose 11 percent this year to 320.4 million barrels, according to the Energy Department. …”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aL2dc1mwHOdo&refer=home
An 11% return after all costs is the minimum profit. But that is not taking into account the cost of protecting from New Jersey pirates or San Francisco politicians. lol
If you’re collapsing spread bet, there’s a real chance that the denominator will rise while the numerator stays constant.
Most traders love the “short spread” bet, Buffett included.
As I said, I don’t care if you’re making one way bets, relative bets, or more complicated stuff. The justification must match the bet though.
“The justification must match the bet though.”
Totally agree, FPSS…
“Personally, i wouldn’t have the stones to go long oil right now..”
well, I am long oil, and the natgas is crushing me.
Im coming out of the closet.
funny thing is, I’m long gold as a hedge. And I dont like gold, ever.
What can you traders say about the backwardization of gold on the 2nd-3rd? I just read a few articles saying that was the first time that had happened for any length except for witching’ glitches since 72′. He seemed to think this was a Flashing red for the gold market. I know there are so many new records being shattered ,but I keep watching lease rates,and they seem to be ever inching higher…..
Smothers Brothers: The Missing Story
David Henderson
For decades, I believed, as I think almost everyone who followed the issue did, that the Smothers Brothers Comedy Hour was yanked by CBS because of CBS’s objection to the Smothers Brothers’ edgy commentary about social issues. Various “public” television stations, in their December fund-raising, are showing a documentary special that pushes that view. WGBH in Boston, for example, will show it on December 11. The documentary is entitled Smothered: The Censorship Struggles of the Smothers Brothers Comedy Hour.
It is true that CBS had a lot of difficulty with the Smothers Brothers’ edgy looks at politics and religion. But that’s only part of what got the show yanked. The other part was a humorous bit done by guest Dan Rowan. Rowan gave the “fickle-finger-of-fate” award (i.e., the finger) to John O. Pastore, a U.S. Senator from Rhode Island. Why did Rowan single out Pastore? Pastore was the chairman of United States Senate Subcommittee on Communications. In that role, he had a great deal of power over the Federal Communications Commission, the federal agency that censors radio and television. In other words, Rowan “fingered” a man who had a great deal of power over television content.
That man was not even mentioned in the documentary. Why not? Here’s my “public choice” speculation. Pastore is also known for pushing hard for subsidies to public broadcasting. Indeed he did so only about a month after CBS yanked the Smothers Brothers show. He became a hero to those who believe in tax-financed subsidies to public television. So the stations have probably never wanted to look at the truth because it would mean admitting that their hero was a nasty censor who, like most politicians, couldn’t stand being made fun of. Ironically, while the various public broadcasting stations try to come across as open-minded people who want the truth to come out, by trumpeting this movie and not mentioning one important thing left out, they are not trying to broadcast the whole truth at all.”
http://econlog.econlib.org/archives/2008/12/smothers_spin.html
If you believe they censor TV in other countries….
I see the Obama rally is going well in the stock market. I’m going guess it settles out at about 11,000 when all is said and done. Then it should crash again in May to October. Should be a short honeymoon.
Also just watching the blood bath accelerate in the resale market. Lots of properties moved off the books aready sucking more future buyers from the market. Lots of investors that are going to get some knife cuts, though fingers may still be attached.
Just waiting to see how long till the Inland Empire bargins begin to eat away from the rest of the price base in east OC and middle LA.
Its creeping along. Just think what its like to sit there at tax time and look at how high your interest payments are, looking at the loan balance going down only slightly if at all, while your equity gets worse.
Then think about looking at a property tax bill or MelloRoos.
Then thinking about the HOA bill comming up and the increases because other people have defaulted.
Finally think about all the sudden mantinance needs when the substandard work done in the bubble starts to melt down.
This is going to be a crushing season for a lot of small timers out there. And some big timers too.
Sound familiar?? This doesn’t quite pass the smell test, IMHO:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20081208/METRO02/812080425
Have you seen this Charlie Rose interview with the author of “Black Swan”?
Taleb suggests that Roubini is an optimist!
I am glad that some someone else out there besides me thinks that the things will turn worse than what Roubini predicts. It makes me think that I am not totally crazy, contrary to what people probably assume from my name.
My favorite excerpt from the interview:
”The economic establishment, as a class, has been extremely incompetent. It is like medieval medicine.”
http://www.charlierose.com/view/interview/9713
“It is like medieval medicine.”
Right down to the financial equivalent of bloodletting.
Count me in on one of those considering Roubini as a hopeless Keynesian-Samuelson-meth-addicted optimist!
+1
This 20+ minutes should be required viewing before letting people add money to their 401K.
At minute 20 or so, Nassim shows us with his hands which direction he thinks the market is heading.
LMAO. Can you imagine how the shills that manage the 401k accounts start their annual presentation with Taleb’s interview.
The economists have been acting like undertakers doubling as surgeons.
13-week Treasury bills were auctioned today, $27 billion were sold at 0.005% interest. For investing $9,999.87 this week, you’ll get $10,000 in 13 weeks. That’s a penny of interest A WEEK!
The first attempt of longer term auctions is on Thursday. $15B Hopefully it goes well.
And on the bond front, FDIC yields crashed and came close to parity with the Fed notes- the Federal Reserve was the buyer. Why not, FDIC is government guaranteed and was yielding 2% more than US Treasuries, just sell some more treasuries and pick up the interest differential. A nice arb for the government. lol
Darn right, that’s why I locked in my FDIC guaranteed 5% yield with my HELOC. I wished I could offer to sell securities backed by FDIC to someone who buys these Treasuries at this low yield and arbitrage off the rate between the US Treasury and the CD rate.
December 8, 2008
Hoax phone call ‘almost took Pakistan to war’
“A hoax telephone call almost sparked another war between nuclear-armed India and Pakistan at the height of last month’s terror attacks on Mumbai, officials and Western diplomats on both sides of the border said on Sunday.
Asif Ali Zardari, the Pakistani President, took a telephone call from a man pretending to be Pranab Mukherjee, India’s Foreign Minister, on Friday, November 28, apparently without following the usual verification procedures, they said.
The hoax caller threatened to take military action against Pakistan in response to the then ongoing Mumbai attacks, which India has since blamed on the Pakistan-based militant group Lashkar-e-Taiba (LeT), they said.
Mr Zardari responded by placing Pakistan’s air force on high alert and telephoning Condoleezza Rice, the US Secretary of State, to ask her to intervene. …”
Times online
comments withheld pending resuscitation.
That was soooooooooo yesterday.
Remind me again, how that “Shining Knight” dealt with a tiny inconsequential island in the Atlantic?
At least, the knight got to b*ng Monroe though which is more than Zardari has going for him.
Headline tomorrow in the Times (if they are still publishing):
“Crank Yankers Start WWIII !!!”
Er, before the ‘experts’ who write for the Financial Times fall all over themselves arguing that $500 bn in fiscal stimulus is no big deal, could they please remind us how much bail has already been rolled out thus far? I have truly lost track…
Obama digs deep to escape the hole
Monday Dec 8 2008 14:10
Though not yet willing to go into detail about its planned fiscal stimulus, Barack Obama’s transition team is underlining two key points. First, the proposed stimulus is going to be very large. Second, it will provide for massive new investment in infrastructure - the biggest since the construction of the federal highways in the 1950s, the president-elect has indicated. Both commitments are welcome.
The US economy is contracting at an alarming rate, with half a million jobs lost in November alone. There is every sign that this recession will be persistent as well as deep. As private spending shrinks, the budget deficit must take up the running, and on a scale appropriate to the shortfall. The US government is a creditworthy borrower, and is in a better position than most to act decisively. A fiscal expansion of $500bn, or a little more than 3 per cent of GDP, is hardly too large.
GM’s Bust Turns Detroit Into Urban Prairie of Vacant-Lot Farms
Dec. 8 (Bloomberg)
“…With enough abandoned lots to fill the city of San Francisco, Motown is 138 square miles divided between expanses of decay and emptiness and tracts of still-functioning communities and commercial areas. Close to six barren acres of an estimated 17,000 have already been turned into 500 “mini- farms,” demonstrating the lengths to which planners will go to make land productive.
The city, like the automakers, has to shrink to match what’s left, said June Thomas, a professor of urban and regional planning at the University of Michigan in Ann Arbor.
“The issue is how,” she said. “There’s no vision.”
The 11th-largest U.S. city is running out of options and money as its three biggest corporate citizens seek a federal bailout and the economy contracts. While Detroit isn’t even sure how short of revenue it is, the latest estimate from the mayor’s office puts the deficit at $200 million and climbing on an annual budget of $3.1 billion. …
“How do you downsize to the right level when there doesn’t seem to be a bottom?” asked developer Fred Beal of J.C. Beal Construction Inc., which wants to do a $50 million conversion of the vacant 34-story David Broderick Tower near the city center into offices, shops, restaurants and lofts. …
“We’re looking at pretty innovative ideas,” said George Jackson, Detroit Economic Growth’s chief executive.
One is urban farming. In many parts of Detroit, land that once held houses now grows cucumbers, tomatoes, peppers and collard greens.
The city has more than 500 gardens and “we plan to triple that every year,” said Michael Travis, deputy director of Urban Farming, a Detroit-based nonprofit corporation that helps clear land and provides topsoil and fertilizer. ..
The farms may also raise home values. In many neighborhoods, nearby gardens could add as much as $5,000 to selling prices, said real estate broker Russ Ravary, who works in the city and surrounding suburbs. The average price of a home dropped 55 percent to $18,578 in the first nine months of the year, according to the Detroit Board of Realtors…
“I hate to say it,” he said, “but I wouldn’t put my money in Detroit.” ”
Such a Coward. Detroit is wonderful, the farming capital of the Midwest!
Pave Paradise Put a Parking Lot.
MARSHALL LOEB
Time to retire
Wall Street vet of 64 years has seen it all, but says 2008 unprecedented
By Marshall Loeb, MarketWatch
Last update: 7:24 p.m. EST Dec. 8, 2008
NEW YORK (MarketWatch) — Arthur Gray, a smooth and dapper man, has worked on Wall Street for 64 years, which makes him one of the most experienced traders in America’s investment community. Through profitable booms and painful busts, he thought he had seen it all. But that was before he saw the pillage and madness of 2008.
“We’re living in unprecedented times,” he says. “There’s never been anything like this.”
And, he adds, these are not the kind of times to risk investing large parts of your portfolio. So he is following the advice of the late, legendary trader, Bernard Baruch, who is credited with saying, “nobody ever went broke selling out too soon.”
On Friday, Arthur Gray, at age 86, will pack his bags and submit his resignation as a senior managing director at Carret Asset Management.
“The main reason I’m doing this,” says Gray, “is that as I look ahead, there doesn’t seem to be real opportunity in the investment environment for years.”
Everybody seems to agree there’s never been anything like this. And yet most of these same people say stuff like, “Well, the market fell 50% from its highs, that’s never happened since WWII and therefore it represents a good buying opportunity.”
And yet during the Depression the market fell by 2/3 AFTER falling 50% from its highs. In many economies in which there has been a political revolution, equities have lost all value.
Today you had TI and Fed Ex lowering guidance nominally after the bell, and their stocks falling on the order of 10%. The market as a whole still seems to be expecting $70 in S & P earnings in 2009! As negative as I’ve been over the last two years, my overall outlook on the economy continues to do nothing but deteriorate. I agree with the posters above that Roubini is too optimistic. There’s no way this market (as a whole) presents a good long- or medium-term buying opportunity.
In many ways, the economy is in worse shape today than it was in 1930. The only thing holding the market up is government intervention and the prospect of inflation. I am not at all in favor of government intervention (which is essentially just welfare), but without it, I believe the market would already be much lower than it is today, more on the order of the fall in commodities prices. And it will eventually find a level at least as low (in real terms) as it would have without the government interference.
“And it will eventually find a level at least as low (in real terms) as it would have without the government interference.”
That’s an interesting hypothesis. I’m guessing Dr Ravi Batra (”The Great Depression of 1990″) would have concurred with it back in 1990. My question is not whether it will eventually find a level at least as low as w/o govt interference (like you, I am sure it will), but rather will this ever occur over the next half century.
Tribune’s Cubs Bids Said to Be Less Than $1 Billion.
The bids Tribune Co. received for the Chicago Cubs baseball team ranged from $850 million to $950 million and should decline now that the parent company is in bankruptcy, a person with knowledge of the process said.
The Cubs never get a break!
Zell Mail !
Bears Attack Cubs !
insert your own Headlines….
The papers must really be in terrible shape if he kept the Cubs but let the papers go under…
Calvin & Hobbes explain bailout & financial crisis:
http://www.marcellosendos.ch/comics/ch/1992/02/19920216.gif
Pulitzer now available for web-only content. We need to get Ben on that rader. Deadline is Feb 1
http://www.youtube.com/watch?v=5vmeLfhX66M
Al-Jazeera piece on the Spanish property market, focus on fraud by developers.
From Orange County Register today. The article also includes a graph showing redefault rate.
More than half of homeowners who got a change to their mortgage to make it more affordable, started missing payments again within six months of the loan modification, according to John Dugan, the nation’s Comptroller of the Currency.
Those were for loans modified in the first quarter. Loans modified in the second quarter are going delinquent again at a faster pace, beginning about two months after getting a modification. For example, within five months more than half the loans modified in Q2 went delinquent again vs. it taking six months for more than half of loans modified in Q1 to redefault.
http://mortgage.freedomblogging.com/2008/12/08/more-on-homeowners-defaulting-a-second-time/4060/
We can all dance around and play “Im an idiot” , “Im a smart guy”, and “look how funny I am”…
but arent we all just waiting for higher interest rates, lower stock prices, and the dollar falling?
Are the structural imbalalnces so great that those things cannot occur in order?
bond market meltdown. (higher rates)…foot tapping.
stock market crash (we gettin there)…1000S&P 500, seems to be concensus on this rally.
dollar falling (it did today, but WTFK…who the @#% knows)
Housing prices are not in question, they are moving lower; however, will house prices bottom at the interest rate bottom? HELL NO….only higher rates will put the real floor under housing….
Tough medicine for the things we love.
The dollar index has been pretty flat for six weeks or so.
The S & P is at 910, lower than it was a month ago, and down over 30% in the last 3 months.
Bond yields have been moving higher the last couple of days.
What are you really wishing for?
Wishing for?
At this point, Im so diversified and so beaten down dog tired….
A month off, thats what Im wishing for.
unfortunately, thats not tough medicine.
So what do you think about this?
From Market Ticker:
“I would normally consider this “tinfoil” in the extreme, but Steve Liesman has reported it TWICE in the last hour on CNBS, so here you have it:
“Administration officials are allegedly considering using eminent domain to buy up MBS, with the justification for doing so being invocation of “national security”.”
IF Congress (or the Administration) is actually stupid enough to try something like this two things will happen instantly:
1. You will need to go long Georgia Pacific and International Paper as the number of lawsuits that will be filed will instantly deplete the available inventory of paper across the United States. This will be highly stimulative to that part of the economy.
2. All lending by private parties with capital, both inside and outside the United States to US markets, will cease instantly.
The market has proved that “mortgage modifications” do not work as they do not prevent defaults; the majority of modified loans redefault within six months.”
“Administration officials are allegedly considering using eminent domain to buy up MBS, with the justification for doing so being invocation of “national security”.”
They have already proved over the course of 7 years and 11 months that they can and will do whatever they want. Why not stay the course through month 96?
Who’s on FED watchers anonymous?
Does it really matter if they cut, or if they say:
“Downside risk remains; however due to significant deterioration in the [insert market BS], as well as, [insert disinlation /deflationary diatribe], coupled with unemployment and uncertainty in the future…”
rate cut. priced in.
no rate cut…..commodity complex pricing deterioration.
its a two day affair.
Headline: FED MEETS, NOBODY GIVES A @#$%.
Where have all the savings gone?
Long time passing
Where have all the savings gone?
Long time ago
Where have all the savings gone?
Bankers stole them every one
When will they ever learn?
When will they ever learn?
Leaders
Savings
Where have all your savings gone?
Dec 4th 2008
From The Economist print edition
Investors may draw the wrong lesson from history
Michael Morgenstern
FOR American and European savers it has been a lost decade. After two booms and two busts, stockmarkets have earned them nothing, or less, in the past ten years. Low interest rates have made bonds and bank deposits unrewarding too. Were it not for the tax relief they receive, contributors to personal pension plans would have been better off keeping their money under their mattresses. It will be little consolation to Westerners that savers in Japan have known this empty feeling for far longer.