Bits Bucket For December 9, 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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The overwhelming sheer ignorance of these ‘plans’ just never ceases to amaze. So once the defaults re-default etc, etc… What then? The good news is these dimwits will keep on screwing with the system and cause the pendulum to swing wildly in the unintended direction over time. Of course this article repeats the wrong minded idea that it is the gubmints place to ‘create’ jobs, when in fact it is NOT!
Mortgage modifications falling short of goal…
Most who received mortgage aid are again in default. Regulators ponder how far federal help should go.
Reporting from Washington — 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.
The new data raise questions about whether government money may be better spent on creating jobs rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision, at a housing industry forum sponsored by his agency.
http://www.latimes.com/business/la-fi-default9-2008dec09,0,1879765.story?track=rss
On the bright side: Those who had their mortgages modified kept up with the payments longer than they would have if their mortgages weren’t modified. These are precious dollars desperately needed by the banks, needed by the System.
The System is going to get these dollars one way or another. It’s better that it gets them from the FB rather from the taxpayer.
“The System is going to get these dollars one way or another. It’s better that it gets them from the FB rather from the taxpayer.”
Okay, so The System gets a few more months of modified payments, then then FB’s house still goes into foreclosure….but now it’s worth less than it was if The System had just pulled the plug six months ago.
Gov’t can prattle all it wants about loan modifications, but I think The System will roadblock them given 50%+ re-default rates.
i’m not so sure about that because these days bank vaults are deep, stagnant ponds in the money supply distribution ecosystem. But when an FB bails out and rents a place to live the money continues to circulate.
Assuming that rent money makes it to the servicer of the loan Joey.
I do get your point, and you are correct, but as this tradegy unfolds less and less people are doing the “right” thing, and instead they are doing what the neighbor did.
“…whether government money may be better spent on creating jobs…”
Worse still, can the gov’t really “create” jobs just by spending more?
The “rebuild our infrastructure” route is very popular, and I’d be the last to argue that it’s sorely needed. All the same, there better be some massive oversight - otherwise all that dough will disappear into the state and local gov’t abyss.
Even so, once a bridge is rebuilt, then what?
If the core reason for rebuilding a bridge is to provide jobs, after the bridge is rebuilt just tear it down and rebuild it again. This method, if expanded to other bridges and infrastructure, insures a steady income for any number of otherwise unemployed workers while keeping materials and labor in an established work area, thus reducing overall costs.
The sharper minds among you might detect a second possibility that lies hidden in this clever plan.. these workers could actually stay at home but collect the paycheck anyway and this economic plan would just as quickly accomplish it’s ultimate goals. However, in that case these worker’s would be denied that sense of pride and satisfaction one gets by contributing to a job repeatedly well done.. over and over.
I think the goal should be to rebuild bridges that are close to falling down. Not necessarily the old ones, but the shoddily built ones.
I have to agree. The shabby, dangerous bridges got that way and remain so because few people, if any, need to use them. Rebuilding these derelicts will have the least effect on daily commuter traffic.. with the added bonus of being most costly and labor intensive.
If BObama really is searching for fresh, new ideas he need look no further than the HBB.
My 80 y.o. Dad (who still has deep depression scars) says that ‘back in the day’ the community referred to WPA projects as “We’re Probably Asleep.”
But hey, things are different this time.
Whatever the work ethic may have been, in SoCal it seems the only public works architecture of any aesthetic merit were built by the WPA, and are still in use today.
My dad, who also grew up during the Great Depression, said the WPA was the only thing keeping food on the tables for many, many families.
We also got well-built, useful infrastructure out of it…that could be used well into the future.
While I absolutely hate the idea of bailing out banks or FBs, we DO need jobs, and infrastructure projects (among other things) are just what we need, IMHO.
Good question. It takes a year or two to build a bridge. After that, what? I have a feeling the OWP (Obama Work Program) will need to continue until the system is completely tapped out and collapses.
It will take a couple years to decide where to put the money, then a couple more years to do the studies, then a couple more years to actually design the infrastructure. Anyone that thinks that the permitting and design of the new infrastructure (water plants, wastewater plants, bridges, roads) will get done in a year is foolish. It will be years before the money can even be spent.
Further complicating the plan is there aren’t exactly a plethoria of unemployed engineers lying around. Engineering enrollment has been declining in the US for over a decade due to the difficulty of the work, relatively low pay (if you can cut it an civil, structural, mechanical, or envrionmental engineer, you can likely cut it as an MBA, MD, or JD student, so why bother with engineering) and the sheer lack of visibility of the profession. You don’t get rich as an engineer, but then again, you aren’t seen as a money grubbing jerk either so I guess it works out.
Someone with a liberal arts degree or ten years of experience as a real estate agent isn’t going to walk into an engineering firm and be designing buildings tomorrow. Engineering is a profession that almost unviersally requires an undergraduate degree in the field, and a few years of supervised work experience before even becoming licensed. Every other time in our history we needed infrastructure we had the engineers to do the work. Right now? Not a chance.
(Yes, I’m a structural engineer. I have Google Earth bookmarks on buildings I designed. That is completely worth more than all the millions I could have made as a MBA or JD…that and most of the world doesn’t see me as a jerk.)
My undergrad is in engineering as well. It did not take long for me, being treated as a second class citizen, to bail out, get my MBA and cross over to the dark side.
Would I go back into engineering??? Nope!!!
Take care,
Mdsn
RE: Someone with a liberal arts degree or ten years of experience as a real estate agent isn’t going to walk into an engineering firm and be designing buildings tomorrow.
Unfortunately, as one of those with a liberal arts degree and 25 years in association with the real estate industry. I agree with your perspectives.
However…
My son graduated from Renessalear PolyTech a couple years ago with a degree in mechanical engineering.
When I went to visit him on campus he’d show me the CAD software programs he was running for his various
courses.
The complexities totally blew me away.
It’s tough deal when your 23YO kid makes you look like an idiot.
I’m sure the cap on H1-Bs will be increased by Congress to deal with this “shortage” of engineers.
It’s tough deal when your 23YO kid makes you look like an idiot ??
Yeah…Mine also but I just ask them to show me where the alternator is in their car and then who looks like the idiot
I’m sure the cap on H1-Bs will be increased by Congress to deal with this “shortage” of engineers.
Of course otherwise you would have to pay them more and we can’t have that.
“but I just ask them to show me where the alternator is in their car and then who looks like the idiot”
Unless he googles it, of course. Then he could not only show you the alternator, water pump, cams, and cat, he could download a new performance program for your car’s computer!
You can get pirated copies of those engineering applications from the internet and play along at home for fun. I’m sure there are pirated copies of the school books as well, so it’s possible to dip your feet into it just to learn a little.
I worked as a EE for 17 years on defense-related projects and never got any respect. At age 40 I went and got my JD and my salary doubled. There’s just something wrong with that.
I have the utmost respect for engineers. Its a good, honest, honorable profession that takes real brains. It pays well, but not great, and compared to other professions, that in my opinion, are less productive, it pays too little.
There won’t be a need to increase H1B Visas. All of the major engineering firms - Jacobs, URS, CH2M Hill, etc. all have offshore shops in India where they do a lot of their preliminary engineering work. They can also bring over employees from foreign offices for up to 1 year without a visa as part of an office exchange program. I used to work for one of the major engineering firms and this is exactly what we did to get around the shortage of staff in the US.
For the record, our India office manager gave a presentation that gave stats that only 1 in 5 US engineering students was American. Of the 4 colleges in Hyderabad, India (where our office was) they graduated more undergraduate engineers in one semester than all US universities combined in one year. Pretty scary stats if you are in the business of hiring engineers.
My wife is a rocket scientist EE/ME and she worked with a lot of young engineers the past 25 years, and she told me it was a rare bird amongst them, that could think things out…
They just kept getting dumb and dumber.
There is a link between these two posts. Now India and China are much larger than the US and are spending big dollars on technology investment and generally stealing stuff from the US. However, the sheer volume of people they are producing is counter productive. They just don’t have that many qualified people so a lot of the places are degree factories. I’m sure there are a lot of guys cheating their way through. Probably has the net effect of making nearly impossible to sort out the good ones. We have emphasised other fields so much more that being a technical person is less appealing. Its also part of the malinvestment going on. Too many realtors, construction workers, lawyers, financial analyists… not enough doctors, engineers, chemists, biologists.
Also saw the thing about people with a liberal arts degree walking in and working in engineering after 20 yrs. After being in real estate and with an engineering degree its probable that you will not know what you are doing either. 20 yrs is a fricking lifetime.
I’ll also say, hopefully these guys will invent something great that helps us all out. About the best you can hope for.
For the record, our India office manager gave a presentation that gave stats that only 1 in 5 US engineering students was American. Of the 4 colleges in Hyderabad, India (where our office was) they graduated more undergraduate engineers in one semester than all US universities combined in one year. Pretty scary stats if you are in the business of hiring engineers
My wife is a rocket scientist EE/ME and she worked with a lot of young engineers the past 25 years, and she told me it was a rare bird amongst them, that could think things out…
They just kept getting dumb and dumber
‘My wife is a rocket scientist EE/ME and she worked with a lot of young engineers the past 25 years, and she told me it was a rare bird amongst them, that could think things out…’
Great! My uncle Nathan is a rocket scientist. He works for Beoing. Or Boeing, or whatever. Here’s my point: he has the worst singing voice ever created on the planet. It’s like an utter freakin’ miracle of ‘not-pretty’.
So; can your wife sing? I ask this in order to satisfy a scientific curiosity, about those causality whossname thingies.
She can’t sing, but occasionally helps me write some of the songs I post on here.
She’s got good rhyme genes…
James wrote:
We have emphasised other fields so much more that being a technical person is less appealing. Its also part of the malinvestment going on. Too many realtors, construction workers, lawyers, financial analyists… not enough doctors, engineers, chemists, biologists.
————————–
Bingo!!!!!!! This is what you get when you meld the financial industry with the political machine. Everything has been sucked into the “financial” vacuum, to the detriment of the REAL economy.
“(Obama Work Program) will need to continue until the system is completely tapped out and collapses”.
That is correct, because layer upon layer of make work jobs will be ‘created’ topped by over sight after over sight committees.Talk about one guy digging while six guys watch(on steroids).Bound to drag the situation out far longer than need be and burden the system with trillions more un-payable debt.
I don’t think there’s a ready and willing workforce like there was in the 30s!
Who’s going to do the work? “Single Moms” (Our nation’s heroes, according to the left?) Slacker kids with iPods who were raised believing they’re all geniuses? Crack/Meth/Oxycontin addicts? And, of course, out of work Realt-Whores?
Other than our returning Military, there aren’t a lot of others who are capable of doing work!
over sight after over sight committees ??
Thats why it cost $1000 per sq, ft, to build a fricken school around here….
reuven,
Very well said.
No problem paying Blackwater and Haliburten subcontractors 150k for jobs the enlisted military used to perform, but you’re going to slag single moms? bah humbug
Of course I’m not attacking single moms! They’re America’s Heroes. They stand for America, Apple Pie, and Traditional Marriage.
At least the subcontractors actually doing the work for Blackwater and Halliburton are willing/able to do work! (How the company they work for got those contracts is another matter.)
Since when is being a paid mercenary superior to raising children?
Just asking…
It will take 50 years to make up for the lost productivity of the traffic jams created by this rebuilding. I’d have to live to 200 to make up for the delays caused by FOUR YEARS of construction to redo ONE MILE of Linton Blvd. in Delray Beach.
Also, probably 75% of those hired to do this construction will be illegal aliens. In South Florida as far as I can tell all construction consists of a bunch of illegal aliens outside doing something, and a few white guys in air conditioned pickup trucks watching them.
I really dont care if they are Illegals, but why cant we get people to work 24/7 to get that done in 6 months instead of 4 years?
Have on site city inspectors 24/7 It’s Just amazing here in NYC how on many beautiful days and no one is working then its pouring rain and they are sitting in their trucks with lane closures backing up traffic for miles.
Recall the corruption, delays, overruns and shoddy workmanship of the “Big Dig” in Boston. Now multiply that by hundreds or thousands of times.
Also, pay close attention to the companies that become the winning bidders on these projects, and the size/growth of their political contributions.
Kind of like the contributions by those buying 800 homes for 1.8 million dollars. Or those winning no bid contracts in Iraq. Or getting bailed out by FED gov w no strings attatched.
I’ll take infrastructure spending over massive waste/fraud in Iraq, or Wallstreet Wellfare. I imagine the money will be given to states. Some of these states will hire and monitor the construction well, and others won’t.
You might want to take a walk up to Minnesota to see the consequences of ignoring infrastructure.
RE: no bid contracts in Iraq
See LOGCAP and Halliburton under President Clinton. Contrary to popular belief, both LOGCAP and Halliburton existed before January 20th 2001!
Yes, Clinton was to blame for the last 8 years, we got the memo.
Memo:
Clinton/Haliburton/no- bid contract/Kosovo
It’s going to be a long 4 years, as ’ssshrubery’s defenders juxtapose previous and current administrations as the route of all evil.
Why not just admit he’s by FAR, the worst President we’ve ever had, and be done with it?
“Why not just admit he’s by FAR, the worst President we’ve ever had, and be done with it?”
Lad, You’re asking the same people who vote against their own economic interests to think about something more mentally challenging. Now do you really expect an answer?
Not to make a big issue out of it, but I don’t think there’s any real effort being made here to conceal all that’s been revealed?
So! So WHAT if we’re creating make-work jobs! What’s the big deal here?
My problem is that it signals to the world that… we can’t compete, have a saturated and mature economy and that our citizens infinitely prefer a regular check to real progress. Other than ‘that’ ( I’m fine w/ it )
We can’t compete with slave labor, that’s the bottom line.
We can’t compete with slave labor, that’s the bottom line ??
Sure you can…Get a government job…
Until we are in line with Asian rates of pay, there’s no way we can compete.
Minimum wage is a Buck an hour in China, and it’s closer to $9 here.
When it’s $3 an hour in both locales, the world can get going again.
The problem is, It’s probably going to go down to 33 Cents an hour in the far east, and $3 an hour here.
Guys, you need to weigh the quality of the product as well. In time people will realize ( as “I” have recently discovered ) that it’s hardly worth it to save a few dollars on light bulbs that burn out in 3 weeks.
Why aren’t Harley’s made in China? I suppose that when it comes to our recreation ( in boom times ) that’s something Americans chose to take seriously?
Now that people have -finally- taken a break from the non-stop spending orgy of the last decade and taken time to reflect they’ll come to the conclusion that cheaper doesn’t always equate to better.
As was prophetized to the people of Israel in Babylon “the houses that you build will be your houses, the roads that you build will be your roads”. You, your children and your children’s children have a direct stake in the outcome.
The people on this blog need to figure out how you can spend an extra hour a week to make sure the organization, the design and the implementation will produce an efficient and useful infrastructure for the next three generations. You won’t get another chance.
Great point. I was reading about Friedman recently (read Naomi Klein for “ideological balance” after that) and, to paraphrase, he suggested that the road of the future is paved with the ideas that are found hanging around during a crisis.
We need to make sure that the “right” ideas are adopted in this crisis. I know that many of us disagree with individual points w.r.t. the direction we should take on the environment, health care, politics, fiat currency, etc., but one thread that keeps coming up is the fact that we need to have a massive values shift/revolution in the country. At some point, you just have enough stuff. The sustainability of our republic/planet depends on changing our value system.
Case in point with engineer salaries. These are the people who actually figure stuff out, yet they feel inferior to lawyers. LAWYERS! I’m not saying that we should turn only to monetary compensation, because I fear that using money accreted as the only arbiter of success is a dead end. However, somebody has to have an idea out there.
Personally, I’ve started to work with the Episcopal church growing food for needy people in SF. If anything, I’m anti-religious but they have a great organizational structure and it seems that our goals on this front are strategically aligned. Food bank and homeless shelters are seeing doubling of traffic.
Sorry for the rambling. Just like the optimistic tone of posters today.
MrBubble
We’ve been making donations to the local food bank for a couple of years now.
In lieu of giving cash, I like to go shopping @ Grocery Outlet and spend a few hundred bux @ a time every few months, and deliver it myself…
‘I was reading about Friedman recently (read Naomi Klein for “ideological balance” after that)’
Nohow! Me, too! Now my brains is all a’scrambled up.
‘Shock Doctrine’ is a great book. I saw Naomi on ‘the Colbert Report’. She’s pretty AND smart. That’s not fair. I’m going to complain to someone about it, or else demand a bailout.
speaking of northern cities, I see the blues brothers are in trouble with the law again. looks like jake & ellwood caused some ruckus trying to auction off the open senate seat.
and gee, what a coincidence the SHTF after statewide threat of a BOA boycott. shows who really has the juice to force the feds to act.
same ‘ol, same ‘ol . . .
“All the same, there better be some massive oversight - otherwise all that dough will disappear into the state and local gov’t abyss.”
Obama admin will create a host of state & local agencies to oversea these massive construction make- work projects and appoint local demo cronies/ political favorites to run them. There will be a lot of graft and over bidding , and a few favored contractors with good pipelines and connections to the Obama adm will make a killing.
Still , creating make -work projects especially in the big metro cities will alleviate the restless proletariat - otherwise there will be bread riots Ala France prior to the the revolution.
The morons being graduated from urban schools have no penchant for construction work, let alone a work ethic to arrive at a jobsite at 7:30 AM five days in a row. Should the overweight, late rising proletariat who await the obamacheck become restless enough to riot, it will be for steaks, not bread.
‘Should the overweight, late rising proletariat who await the obamacheck become restless enough to riot, it will be for steaks, not bread.’
I love steaks! Rib-eye is the BEST, ’swat I think in my pointy late-risin’ noggin!
Then run 24/7 shifts, like NYCdj suggested above, and get them to work.
As someone who has done shift work most of my life, I can say **for a fact** that some people just work better at different times of the day.
“…whether government money may be better spent on creating jobs…”
All this talk about re-building/ repairing /putting up massive infrastructures and thus creating jobs is problematic. What are they talking about? Lots of building trades require skilled trade persons such as welders, metal workers, pipefitters, electrictans, ect. How many of the UE have those skills.
Pouring concrete is one thing but installing electrical outlets, conduits, switch boxes does require training and trades experience.
US has a shortage of skilled trades persons , and not just engineers. Best place to get those skills is in union apprenticeship programs but it take 3-5 years to get training and become a journeyman.
Some jobs require little training such as traffic control, fire and hole watch, confined space certification, ditch digging, concrete pouring, trash- hauling. ect.
I took a 3 -month crash course this past summer in a fast- paced basic construction seminar paid for by the fed gov’t. IF they want their $5000.00 worth of training investment returned i can get out there and at least pour concrete and do basic hammering though i think illegals with experience would be better qualified for the grunt construction work.
Does anyone really think this “works” program is for American citizens? Uh-uh. It’s to keep illegal aliens employed so they don’t riot and gang-bang. Seriously.
[[Does anyone really think this “works” program is for American citizens? Uh-uh. It’s to keep illegal aliens employed so they don’t riot and gang-bang. Seriously.]]
You’re supposed to include a “not that there’s anything wrong with that” with a statement like yours. Illegal alien is the new gay, you know.
Palmy…
Why don’t you depersonalize them even further and call em’ Illegal Humans?
The Statue of Liberty, with her torch held high as a beacon for all, has another hand. In it: a book of law. I think that speaks to Palmy’s point better than a wrestling match in word play.
150 years ago the sign “No Irish need apply” was common in this country, as they were the immigrants we liked to bash back then.
100 years ago Italians were held in the same contempt.
Latin Americans are the whipping boys nowadays…
“Latin Americans are the whipping boys nowadays…”
Who said anything about Latin Americans? Come one, come all!!
But hey, laddie, let’s just do away with the rule of law, heck, everyone else is. It’s very much the “in” thing to do, these days.
Most people that have come to our country, have done so in an effort to improve themselves and prove themselves.
There’s always a few bad apples in every bunch, and many people can only see the wormy ones, for some reason…
It’s not really a question of who, but how many, and over how long a period of time.
As one guy who is occasionally quoted around here by those cheering on TEOTWAWKI said, and who believed in “survival, with honor,” the Western version of civilization ain’t so great, but maybe not so bad compared with the Latin, Asian or African versions of same. Reasonable numbers can fit on the life rafts, but an unlimited swarm will dump us all in the drink.
‘Most people that have come to our country, have done so in an effort to improve themselves and prove themselves. There’s always a few bad apples in every bunch, and many people can only see the wormy ones, for some reason…’
Well, ummm, jeeze, there ARE some big, ugly ‘worms’ here. So to speak.
And are we a ‘nation of law’ or are we not? You don’t get to pick which laws you like to obey. (Well, okay, IIIII do, but that’s not my point.)
My point is: ‘we are a nation of law’. The law is the law.
Also I disapprove of your comma between ‘country’ and ‘have’. It breaks up the easy flow of the sentence.
I have a serious comma, problem.
‘I have a serious comma, problem.’
That’s okay, me too. I forgive ya, ya migrant-hugger.
I agree with Lad.
In addition to the financial implosion/explosion we should go all the way encouraging and speeding up Bosnia.
Multicultural Nirvana extraordinaries!
Oh, you look at things like roads and brideges as potential to generate commerce and keep things economically viable.
There are plenty of things to work on without tearing down a bridge and building it again.
Think of the reduced polution and oil use from improving highways in Los Angeles, Detroit, New York, Atlanta and Houston.
We could use massive improvements in resevoir capacity to catch more run off here in California. Not to mention we could use some of that money on massive scale desalination plants. I’d also like to see the money used for building up a few nuke plants across the country. I’d also like for us to use some deep well cisterns that are covered so we lose less water to evaporation. If we end up with extra water, there are plenty of areas in the inland valley that could use additional water.
There are a lot of areas in Los Angeles where I’d like to reclaim open space by tearing down things like auto dealerships that are going under and put in parks.
Schools are in pitiful shape and like to see better building put up that are not so pitful.
We could use even more investment in electric vehicle technology. Specifically new battery technology and some planning about stress on the power grid if we go in that dirrection.
Hey, if you got bailout money I can find lots of things to do.
James –
I agree with your aquifer proposal and I appreciate your thesis, but disagree with some of the other solutions that you present. This is not a flame! I’d just like to go more revolutionary than evolutionary personally. Instead of improving roads to cut a small amount of (percentage-wise) oil use, how about going with ways that car use can be minimized? Tele-commuting, ride shares, public transportation, feebates, etc, etc. I don’t know what the right answers are, but I feel that some “outside-the-box” thinking is in order to get off the oil teat.
And desalination is hugely energy intensive and nuclear is not sustainable long term (100+). Instead of temporary band-aids to fix symptoms, I’d like to see a more preventative maintenance approach. Like the discussion though!
MrBubble
RE: Even so, once a bridge is rebuilt, then what?
Who says the bridge ever gets built?
When the Seabrook Nuke Plant in NH was bein’ constructed in the late 70’s and early 80’s I got it from a pipefitter on the project, that after the welding was done on a run of piping,
a mysterious hammer would appear in the night, to destroy all the previously completed work, so that the phase would be
failed by the state inspector the following day.
Needless, with deadlines involved everybody was receiving double and triple overtime on top of sky-high union scale base wages to repair all the continuing mysterious “damage”.
Riggers used to tear down scaffolding; burn the timbers; and reconstruct every 2 weeks as part of their contract.
Eventually, with all the cost overruns Seabrook bankrupted the
by the original utility, Public Service of NH and ended up being completed by a by a government decreed consortium of New England electrical companies.
LMAO…this country is so screwed.
When I worked at an insurance company in Boston, we ran into a problem after moving into a new office in Copley Square. Two whiteboards used to track daily call volume were hung a couple feet two low, so some of the college graduate peons answering the phones could not read them.
Getting the whiteboards re-installed, following union rules, required two guys from New Hampshire who were making 45$ per hour to drive 2 1/2 house each way to spend 20 minutes re-installing them. After the travel time, expenses, full day’s pay and benefits for the two workers were added up, it was more than $1,200 to get it done.
gov has never “created” a job
it transfers $ from productive to lame
even the new deal failed in 3 years
Dam, you just pis_ed in punch bowl during Obama’s victory party! Don’t throw facts like this out there. Just enjoy the NEW New Deal as it was such a rip-roaring success the first time. Why everybody I know is so exited to go work on building roads and bridges. Just imagine all those millions of folks out there with their picks and shovels building new roads. Wait a minute don’t we have big machines today to the same work? So what are all those millions of people going to do this time? I guess Congress will outlaw machinery so they can go back to the same way we did it the first time. I love it, 1930’s thinking in 2009, Change we can believe in.
gov has never “created” a job
it transfers $ from productive to lame
————————
Oh, you must mean those “productive” types on Wall Street…or maybe the auto execs. Is that who you mean?
The top two earning categories in the U.S. are “management” (assuming executive) and people in the “financial industry”.
If you think those people are “productive”, then I have an Obamabridge to sell you…
That’s the problem with massive government, that everything requires massive oversight which is inevitably doomed to fail, as it always does. The only solution is to not have massive government.
I was never a big anti-gubmint sorta guy, but it does infuriate me when they pass laws and then refuse to pay for the oversight or enforcement. So I guess you’re right less gubmint, less need for oversight, smaller deficit.
Enjoy those LA Times articles while they last…
“Enjoy those LA Times articles while they last…”
The La Times print edition has become irrelevant and nothing but a society gossip rag on the life and doings of the hollywood elite .
Even the online edition is largely filled with pics and tidbits on the latest glam starlet or arts scene happenings. This in a city which is 50-60% latino immigrant, and most of those functionally illiterate in English and /or get their news from LA Opinion or TV Espanial
That is why Tribune company/LA Times is on the ropes. Also the internet has taken over the print rags.
That is why Tribune company/LA Times is on the ropes.
The Tribune Company is on the ropes because they’re conservative, boring, superficial, not very nice to their employees, and captained by a royal a-hole who’s perpetually one step behind.
Yeah, sure. And Air America is just going gangbusters.
They are at least three steps behind.
Whenever paradigms shift, long entrenched businesses get put into the woodchipper.
ETs right except for the conservative part.
Tribune Co took on massive debt and wiped out employee EOS when it went private in 2007 (at the height of the market of course).
Tribune had buyers but Sam Zell kept angling for a better deal.
No bitterness from the employees - uh uh.
Blano:
Mark green lost to Bloomberg in 2001 mayor race
Air America
On 6 March 2007 Mark Green and his brother, New York real estate magnate Stephen L. Green, purchased majority shares in Air America Radio. Stephen will be chairman, and Mark will be president.[5]
Blano, perhaps you missed the thread yesterday where Mr. Pussycat and I mocked the New York Times for its own similar failings.
I stand by all of my descriptors of the Tribune Co. — especially in their lackluster Zell years.
Hey, if you want to mock something using reason, I’m there†!
† especially if there’s beer/whisky/good wine/good food involved.
‘Hey, if you want to mock something using reason, I’m there†!
† especially if there’s beer/whisky/good wine/good food involved.’
Ditto!
The problem with our infrastructure is 2-fold.
When you initially build it, you can do whatever you want, because it’s new and people aren’t used to using it.
But how do we rip apart aged infrastructure that people depend on to get around?
Therein lies the rub…
“But how do we rip apart aged infrastructure that people depend on to get around?”
When it REALLY needs to get fixed, it does. Last summer a tanker flipped and exploded on a small bridge (but major link) that joins Bradenton to Tampa. The destroyed bridge was rebuilt in about 1.5 weeks.
Bubbles allow people to sit around and do nothing. For the last 8 years way too many people made a great living with the lowest expectations and least amount of effort.
Muggy,
Good point, we can still “snap to attention” when required ( but we’re seldom required )
I also like the way you point out the malaise that bubbles invite. Remember when everyone was going to be a daytrader and just sit at home in their pajamas?
The part that got to me was that during the HB, you couldn’t get anyone’s full attention at work as they were preoccupied w/ their “precious castles” and now you can’t get anyone’s cooperation b/c they’re so despondent that their early retirement and nice lifestyle has evaporated.
So I guess we have a decade of ‘that’ to look forward to?
A similar thing happened on a critical freeway overpass in the bay area near Oakland where a tanker truck caught fire and melted a portion of the overpass.
A private contractor was called in to fix the overpass and got it done in less than 25 days, absolutely incredible. Imagine government in charge of such a project…
A private contractor was called in to fix the overpass and got it done in less than 25 days, absolutely incredible. Imagine government in charge of such a project… And who hired and paid the contractor?
You do the math, and you can ever see where $700,000,000,000 comes from.
4 Million people bought homes they couldn’t afford.
$700 Billion / 4 million = $175,000 which is probably a reasonable estimate of the overvaluation + HELOC’d money, etc, for each home.
There were 4 million people each spending $175,000 that didn’t really exist.
It’s too bad there’s no way to take these 4 Million, plus all the bankers, real estate agents, loan brokers, and make them liquidate ever last penny that they have in order save America.
And of course, if you take any of these get-rich-quickers and give them a second chance, they’ll just do it all over again, as the latest statistics show. The majority of bailed-out people get in trouble all over again.
HIVtv had a staging consultant for a 130k house
change
Perhaps a more immediate change that is needed is your Christian right wing hate. Get your own house in order before you give opinions, or no one will take you seriously. I lost all respect for you.
Whatever he/she might have meant, if anything, it’s pretty tame compared to all the vitriol that comes the other way.
Somebody needs to chill out a little.
On what planet is making fun of others because of the way they were born, and deadly diseases they or their loved ones may have, the same as mocking someone who you feel has unenlightened views?
I’m sorry but people are not born as interior designers.
You are correct. It was a choice between pro quarterback and interior design, and they went with the cash.
As if there has never been a quarterback sneak on an interior lineman?
What are you talking about?
Personal insult there Ben.
How is telling others to stop expressing homophobic hate a personal insult? I know several gay ppl, as well as many ppl that have died or are infected with HIV. I have no problems with others making fun of other’s choices or opinions, but to laugh at those inflicted with deadly disease is unacceptable. The behavior exhibited by taxme was much worse that using profanities or mocking others’ opinions. I agree that taxme should be banned. It borders on support of genocide. And if it appears I have a chip on my shoulder, I am Jewish as well. Wishing death on others is not a joke to me.
Fine. We’ll just call it Ebola-TV instead. Better now?
The Cholera-TV channel takes a lot of intestinal fortitude, to watch.
You can’t watch Tuberculosis-TV without hacking up a lung!
I always just run away from the ‘Limb Show’.
(I was gonna say something much worse, and also better, but I don’t wanna be banned.
lmfao
“lmfao”
I’m offended. I once literally laughed so hard my a$$ fell to the ground. Now what!
Don’t just stand there, man! Apply for a Federal Bailout.
Blech! (but funny)
“The Limb Show”
The new boomer mantra, man:
What do want?
BAILOUT!
When do we want it?
NOW!
So telling someone not to express homophobia and laugh at those with deadly diseases is a personal insult? Or are you referring to taxme who mocked all gay ppl?
UH i think he was implying that House staging person was a flamboyant man as opposed to a truck driver.
Unfortunately the precedent set by the gay/lesbian “In Your Face” agenda has now become “the standard” in the American political process.
Nevermind civility or even s-a-n-i-t-y, just blare your message ( however twisted or inaccurate ) from the rooftops and may the one with the biggest mouth win.
As Joe Walsh said: You bought it, YOU name it!
Yes. Minorities trying to heard is a nuisance. And of course, you are also correct, all minorities, as with all majorities, are the exact same. I do not know anyone who serves an agenda of the the nature you described. Life is simple when you set the facts aside and then rearrange them to fit your needs.
Natalie,
When you say “minorities” certainly you don’t mean the 49% of Californians that are White do you? Or would that be rearranging the facts?
If you want to pretend you’ve never heard of the “In Your Face” agenda, I suppose that’s fine.
I said I dont know of any, not that I never heard of any. I would never take the position of a small subset of a much larger group and apply it to the whole group, but we are different ppl. Assuming you are a white male, I also find it interesting you claim white male minority status. If you are complaining about the prejudice and discrimination you face as a white male, I could only imagine how much you would moan and complain about if you were an actual minority. Do you realize you are the very person you disparage times 10?
‘Do you realize you are the very person you disparage times 10?’
Are you calling DinOR fat? Or overall generally gigantic? DinOR, does this crush your spirit?
This could be girthism at it’s worst. Appalling.
Nat, get used to the phony sanctimonious persecution from the convenient Christians.
Natalie, I do hope you support the causes of ALL individuals.
Individuals are the smallest minority of all. Not whites, gays, blacks, women, Congregationalists, Inuit, hermaprodites, people with implants or people from Pago Pago (the capital of American Samoa). Not people with tattoos, high IQs, compulsive behavior or addictions. Not adulterers, engineers, lawyers, insomniacs, pimps, bald people or pinheads. Not government employees who produce nothing.
Individual rights are paramount.
Don’t let Group Think get in the way of actual freedom for one and all.
Insults against Christians and right wingers are normal here. Not holding my breath on banning that.
The cross you bear is a heavy one. How do you make it through the day?
(blano said) “Insults against Christians and right wingers…”
(Natalie responds) ‘The cross you bear is a heavy one…’
Was this deliberately supposed to be very funny, Natalie? Because it was.
Thanks.
[[The cross you bear is a heavy one. How do you make it through the day?]]
By the Grace of God.
“The cross you bear is a heavy one. How do you make it through the day?”
lmao..
‘The cross you bear is a heavy one. How do you make it through the day?’
Probably the same way a tree-hugging, frog-lovin’, Democrat, animist, evidently non-strictly-specific-gender-oriented, fast-talkin’ gal does.
By praying to Sweet Baby Jeebus a lot and carressing yer guns.
I don’t have a gun, Oly….what would you recommend??
Olygal,
Thanks for the laugh. I love your sense of humor…
This is my weapon, this is my gun
This is for fighting, this is for fun.
Always thought that it was:
This is my rifle, this is my gun
This is for fighting, this is for fun.
If you want a super un-PC jodie, google: “Sniper’s Wonderland”…
‘I don’t have a gun, Oly….what would you recommend??’
Well, look around, my good sir. I’m sure you’ll come up with SOMEthing.
oh yeah, thanks.
Homophobia should only be practiced in the privacy of one’s own bedroom.
Homophilia too!
Man, this thread has drifted. What were we talking about again? Some cr@ptacular tee-vee show or some such?
“If we don’t believe in freedom of expression for
people we despise, we don’t believe in it at all.”
-Noam Chomsky
‘I lost all respect for you.’
Huh? You can actually UNDERSTAND taxmeupthebootay? I never can. I used to try but it hurt my head. Nowadays I choose to perceive his, well, I’ll call them ‘ideas’, more as delicately bobbling water-lilies of nonsense.
I rather enjoy them, even. Refreshing after all the big words laden down with punctuation whossnames.
But, Natalie, since you seem to be easily excitable I’ll tell you this! *assumes an insinuating and sinister whisper *
Another thing taxme often complains about is the wastefulness of his county’s ‘departments of wymin’s affairs and tree planting.’
Huh!? Huh?! Bring the rain, Natalie!
I’m not politically correct and could make NYCboy blush, and cry, if I wanted to. I’m not an activist, nor serve any agenda of the type described by Dinor. I eat rare meat and have owned a big SUV. I have even voted Republican on occasion, and openly against misguided liberal groups such as ACORN and PETA (although I support animal rights). I will not, however, remain silent in the face of discrimination when it wishes, supports or mocks harm, disease or injuries inflicted on the innocent. My grandparents were tortured and killed in the Holocast. It’s the least I could do in their memory.
Your continued comparison of any insinuation toward someone with HIV and the Holocaust makes a mockery of your grandparents’ suffering. Shame on you.
‘…and could make NYCboy blush, and cry, if I wanted to.’
Betcha couldn’t.
Natalie,
Had you read my comment more carefully you’d understand that “I” don’t have anything against the gays either. My -point- was simply that by “coarsening the debate” to such an extreme degree, it set a terrible precedent where the loudest one wins.
It’s really ‘that’ simple.
Irrespective of the argument, Reductio ad Hilterium is a weak one.
As opposed to a comparison, it was in fact offered as a motive.
Actually, gay men are a valid subset of the bubble as they were usually the first to “flip” in bad ‘hoods.”
No joke, my old boss in NYC bought wherever gays were buying (Hoboken, Chelsea, Asbury Park…)
Although liberal I am not politically correct. Gays are typically more interested in design and renovation than staight men, often make less money due to historic discrimination, and tend to conglomerate in urban cores where they can escape the bigots and find others with similar interests and goals. As a result, they are normally at the gentrification forefront.
I’m interested in design and I’ve done restoration. I also buy most of my wife’s clothes and I like to talk on the phone and she does’nt. OK, you said you’re not PC.
‘…I also buy most of my wife’s clothes…’
Does that mean you ‘pay for’, or does that mean you ’select and bring home and dress her up like a quiet and well-behaved Barbie’?
Nuance, man.
Nah, I’m teasing you, kirisdad. Totally and only teasing you. I know from your posts you are a very good sort.
Moving on:
Look, speaking only for me, I know the only, and I mean the ONLY people I ever listen to in matters of decorating style are my darling ga*y boys. They are ‘The Ones.’
I mostly know exactly what I like, and I have confidence in what I choose, but if something is not quiiiiite working, or if you want to make a pretty impact, or if it’s a special party time, or if I need a bold influence. Sometimes I’m too chicken to grab some exciting paint and go to town. Sigh.
Everyone else, no matter how sensitive and artsy, is subject to media influence, or is tainted by Pottery Barn and/or Martha Stewart, or they just…just…I don’t know what it is.
It’s a sterotype, it really is, but ga*y men have exquisite taste. If I ever run across a ga*y man who has sucky taste, I will know he’s just pretending to be ga*y, to irritate his mother.
You must be fun at parties.
I’m not sure it’s worthy of this much debate, but this comment really was in poor taste.
If there is anyone here involved in advertising on the creative end, holler at me. I want to discuss the future of production from the HBB perspective.
Or music biz…
Moi — I suggest using internet advertising (many are already doing this, including music clips of their groups / repertoire etc)
Muggy,
“Tango In Uniform” has done several very nice professional productions on his market up in MT and while I can’t speak for him, he would be as good a place to start as any.
Count me in as well. I’d love to contribute script writing and am probably one of but a few links between Main St. & Wall St. Since “we” have been in the minority and on the defensive since… oh, 2004 what “I” visualize ( rather than a dry factual accounting of the debacle, is more of an update to “Boiler Room” ) to exhibit to the public the specific investment psychology involved that allowed rank and file Americans to participate willingly in the crime wave.
Keep me in the loop. Our story must be told. ( With forward by Peter Schiff! )
I want to discuss the future of production from the HBB perspective.
The HBB perspective?
Are you asking how ad dollars will be deployed in the “challenging economic environment” we now face?
Are you asking how creative agencies will adapt?
Are you asking what advertising strategies may work in our newly credit-crunched culture?
(I think those are all interesting questions, for what it’s worth.)
ET-Chicago,
What “I” envisioned is a quick “short” that anyone ( like say Bill Fleckenstein ) could post on their website as an educational tool to amply exhibit there’s NO credibility to claims that the PTB were “blind-sided”!
We really were the “minute men” ( no not ‘those’ guys ) of the HB. A rag-tag group with limited resources ( in many cases no “formal training” ) and yet “we” managed to accurately access the situation years… prior to the credit crunch.
From there you could have “learn more” links that… ultimately lead you to products like say John Talbot’s book etc.
Yes, all that.
I also proposed a while back to do a documentary on the bubble. That time has passed, but it’s not too late for a mockumentary.
One of my “when I have time gigs” is sitting down and banging out :30 music beds. I suspect as budgets crunch, there will be an increased need for library music (and maybe even stock). The Toyota ads are a great example of the crash (har har) in quality.
I think the days of useless showboating and star-f**king are over. This is good news for the home-office producers.
I’ll take a shot at these, interested in your opinion as well:
“Are you asking how ad dollars will be deployed in the “challenging economic environment” we now face?”
I think production is going to get lean, no more catering and stupid errands like cigs and and fruity drinks; Ads will be less “creative” and more to the point; there will be less usage of actors and other humans that slow the process and add expense;
“Are you asking how creative agencies will adapt?”
They won’t, they’ll go out of business. I think, and hope, the future of ad production will be like guerrilla/tribal warfare. Creatives will pitch directly to a point person at company X. Producers will lead and go ahead and create spots and sell them directly. It’s already happening. Agencies are perhaps the biggest excess EVER. Talk about unnecessary. Anyway, the playing field will be much smaller, less rules, less procedure, less people, less hardware, less space.
“Are you asking what advertising strategies may work in our newly credit-crunched culture?”
TV is still king IMHO. Banners, maybe (only if there is one, like here, not a whole smattering). Print is dead except billboards.
Jump in, anyone…
And I do believe at some point we will see targeted, “on-the-fly” ads as portrayed in Minority Report. Not as intrusive, but a system that learns that you don’t really care about product X.
Lol, I was just sitting here thinking about the dot com ad era. I think businesses today are going to want their name mentioned and see more than a sock puppet…
Good times
Muggy,
We’ve already seen GM ( broke @$$ mf’s ) dropped their endorsement “relationship” w/ Tiger Woods. ‘Personally’ I’d buy a set of golf clubs based on his endorsement ( but a CAR!? ) Never.
I think the other issue “I” would showcase is that unlike the execs on Madison Ave. would have advertisers believe that they ( and they alone ) can “sculpt” the consumer’s behavior, in the end the product must be “sold” to the end user.
The days of buying a product ‘just because’ are over. Save your money to better train your sales force. I think you’re already seeing that in the electronics retailers.
I agree with you re: getting leaner across the board, in ways big and small. The nature of the work itself will determine whether small guerrilla teams can take over — one or two complex projects in any medium can quickly swamp a small team, no matter how good they are. But yeah, the sprawling, bloated big boys may be going the way of the dinosaur.
I’m not sure I agree with the “print is dead” philosophy (not yet, at least), though I do think print is increasingly just one part of a multi-channel approach to advertising. The company I work for does print, in-store and web work, and print has become more of a driver for online commerce — but it certainly isn’t dead yet. Companies are still building effective print catalogs in both B2B and B2C, and end-consumers are still responding to print campaigns.
The targeted ads are already happening in both print and web (1:1 marketing), but in a much less sophisticated way than the lovely/scary examples in Minority Report.
Yesterday I received a targeted internet ad for a dating site that caters to chubby, gay men. I AM a 47-year old single man. Is somebody trying to tell me something?
Whatever happened to “no femmes or fatties?” I thought every 47 year old GAY man was supposed to look like God after hot wax.
“I’m not sure I agree with the “print is dead” philosophy (not yet, at least)”
I can see your point. I tend to view the experience from how I see others using media. I see people throwing catalogs away, reading their laptops and handhelds… people still read paperbacks at the airport, but that’s about it. I see people reading all the time, just not off newspapers and mags.
In my end, the landscape has changed in ways you could call a “new paradigm.”
I just don’t see a future for big production houses. I have seen/heard some amazing stuff done on your everyday mac with box software. If you wanted a multi-track digital studio, 15 years ago, you were talking serious loot. Now you need $2k.
The parts of the majors that handle specific clerical tasks like traffic, media buys and whatnot should probably splinter off into specialized companies. Some of that has already happened as well. One of the slickest operations I’ve seen does payroll for AFM musicians, now only if people still used musicians!
If I were at the desk of a major, reading this, I would be plotting which piece off the pie to break off and streamline. This is why I think it’ll be guerrilla-like.
Hmmm… maybe it got the “housing bear” term from the web page you were viewing and matched you up with something else.
with the US experience to boot, you probably still have many years to make an educational documentary about the EU housing bubble. I guess you could even produce a soap series about it that runs for at least 5-10 years, with the speed that everything is moving here
I guess you could even produce a soap series about it that runs for at least 5-10 years, with the speed that everything is moving here.
—————–
Now that would be fun!
Monday, December 8, 2008
Decoder: What’s the LIBOR?
…
When banks stop trusting each other, they stop lending, and that causes the system to fail. LIBOR acts like a thermometer for a sick economy — the sicker the economy gets, the higher LIBOR goes.
Hilton says LIBOR’s down from its recent record, but it’s still worryingly high.
Hilton: There’s an absence of trust, because the banks themselves are best placed to know what kind of rubbish, what kind of toxic assets they’ve got on their own books, and to make the assumption that other banks are in much the same situation.
And why should the rest of us care about huge banks gouging each other? Brian Bethune’s an economist at IHS Global Insight. He says, banks pass those higher rates on to you and me.
Brian Bethune: There are a large number of business loans and consumer loans that are indexed to this LIBOR rate, because it’s such an important barometer of conditions in the interbank market.
In other words, as LIBOR rises, so does your mortgage and the credit line your boss uses to pay the bills.
Right now, Andrew Hilton says, LIBOR is see-sawing wildly up and down, and not many overnight loans are being made. That’s because of an almost total breakdown of trust between the banks. Hilton says banks are accusing each other of lying to the British Bankers Association about whether they can borrow in the interbank lending market at all, at any price.
So LIBOR, the most reliable benchmark we had to gauge the health of the global banking system has become completely unreliable.
“That’s because of an almost total breakdown of trust between the banks.”
Takes one to know one, eh?
Sounds familiar-
“Speaking of the world-wide economic crisis, he said: “The difficulties are so vast, the forces so unlimited, so novel, and precedents are so lacking, that I approach this whole subject not only in ignorance but in humility. It is too great for me.”
Didn’t he know either?
Nor did Wall Street seem to have any answer. The men of Wall Street were complaining that the trouble lay in a “lack of confidence” (how often had we all heard, how often were we all to hear those hoary words parroted!); and that this lack of confidence arose from fear of inflation and from the unpredictable and dangerous behavior of Congress, which was all-too-lukewarm about balancing the Federal budget and was full of unsound notions. The defenders of the old order seemed as bewildered as any one else; they didn’t know what had hit them.”
(from “Since Yesterday”- Frederick Lewis Allen, 1939)
No kidding! “Why would I loan money to a bank whose balance sheet might be just as rotten as ours is?”
Exactly. Banks do not trust each other not because they do not know what the other bank holds on its balance sheets, but because they know very well what kind of @rap they hold on their own balance sheets. And since it is well known that all the banks played the game, it is easy to conclude that the others in the industry are probably as bad as you. The lack of confidence in the banking sector does not come from lack of information - banks know pretty well that they all are insolvent. It comes from the realization of the fact that the music has stopped and the government is rearranging the chairs and is in the process of deciding who will have a seat and who will not.
Ditto. Banks do not trust each other not because they do not know what the other bank holds on its balance sheets, but because they know very well what kind of @rap they hold on their own balance sheets. And since it is well known that all the banks played the game, it is easy to conclude that the others in the industry are probably as bad as you. The lack of confidence in the banking sector does not come from lack of information - banks know pretty well that they all are insolvent. It comes from the realization of the fact that the music has stopped and the government is rearranging the chairs and is in the process of deciding who will have a seat and who will not.
I think many Adjustable mortgages are pegged to LIBOR so they stay higher than the FED would like , what a mess.
“Hilton says LIBOR’s down from its recent record, but it’s still worryingly high.”
WHY THE **** DOES EVERYONE KEEP REPEATING THIS COMPLETE LIE!?
The recent LIBOR values were nowhere near their record highs.
http://www.wsjprimerate.us/libor/libor_rates_history-chart-graph.htm
http://mortgage-x.com/general/indexes/historical_wsj_libor.asp
etc. etc. etc.
(scratches head)
The U.S. Census will be releasing a mid-decade snapshot of our economy that shows wages were declining long before the MEW spigot was shut off.
Look at some of the numbers from the Heartland. Where’s the wage inflation gonna come from? Where? 2009 recovery pffft!
http://biz.yahoo.com/ap/081209/census_economy.html
NOW they tell us.
“WASHINGTON – Things really are bad all over — and they had gone bad even before the housing and finance industries crashed and sent the economy into a tailspin.”
And this:
“The year 2000 was at the end of an incredible boom that lasted a decade,” Hoyt said.”
That’s right. It was all over by 2000. The big economic hole was camouflaged by the housing bubble.
palmetto,
And the HBB has the frazzled pom-poms and blunted drum sticks to prove it! ( Anyone seen my megaphone? )
“The year 2000 was at the end of an incredible boom that lasted a decade,” Hoyt said.”
*****
That statement is baloney.
The economy was not booming anywhere in this country in the early 90’s.
It was nearly dead in New England and not so great in California well into the 1995 timeframe…
That’s right. It was all over by 2000. The big economic hole was camouflaged by the housing bubble.
===================
Exactly, Palmy, just like a few of us have been saying here for years. As you said…now they tell us.
That’s old news for some of us:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20081208/BIZ/812080334/1001
Maudldin has a chart out there showing GDP with and without MEW. Without MEW expect Japanese like economic malaise. There is no chance in hell slapping a Keynesian label over pork barrel spending is going to get us out of this mess.
Exactly, as I read the other day - in 2006 MEW was 8% of income and today it’s less than 1% and dropping.
Add that to the ongoing erosion of income cited in these Census figures - and it’s plain to see that the consumer is finally out of rope.
Let’s see them sell more than 12 MM cars a 2 MM houses a year into this headwind!
If MEW was 8% of income shouldn’t housing have been included in inflation numbers? After all, wages are a huge part of determining inflation rates, probably the most important statistic. All part of the hidden inflation we recently experienced.
geez, how can MEW be “income”?? LOL
Free fantasy money (ie housing bubble), and wellfare were used to cover up the loss in wages and to keep the middle class and poor from rioting a while longer so that the elite could continue to skim off the cream.
Yes, exactly!!!
The MSM is providing plenty of deflation McEdumacation these days.
Tuesday, December 9, 2008
Deflation: Small prices, big problem
Sale sign in Chicago shoe store
With an economy in peril, it seems like everything is on sale. But when consumers holding out for record low prices, the market is suffering from deflation. Stacey Vanek-Smith explains in our latest Marketplace Decoder.
Prof,
I just keep thinking that we are on track to unwind the past 15 (20?) years or so. The US will begin to make stuff again. We will not really need to have all of these silly toys and unneeded outlandish crap that just extends debt. Debt is the real issue anyway. What Wall Street, and by extension the US Gov’t, desires (obsesses?) is a re-ignition of “Consumerism” as it has been practiced lately - since about 1995 or a little earlier.
So, I will make a bold statement: Roidy says, “Consumers are not holding out for lower prices. They are instead not buying all of that stupid crap that they really don’t need. Consumerism is dead! Long live the Consumer!” or something to that effect.
Roidy
P.S. I never drink coffee at Starbucks. I make my own. Anecdotal but illustrates the issue nicely.
ACH,
That would be fairly close to my take as well. Without the consumer in a constant state of “hyper-stimulation” a lot of trade collapses. Then it makes more sense to produce locally.
I can’t tell you how many trips my wife has made returning defective gifts. I bought a coffee maker for the office and it leaked awfully bad. When all of your old-line names now produce in China, what options do you have? Any idea how counter-productive all of this has been?
I can’t tell you how many trips my wife has made returning defective gifts.
As a new parent, I’ve been appalled by all the craptastic crap — both new and used — that people keep giving us.
So many ill-conceived plastic devices that don’t assemble correctly or work right (and are usually ugly as sin). We’ve made many, many returns so far, and we’ve just about had it with gimmicky baby devices — not that we asked for most of it anyway.
Congrats ET Chi, I’m a new parent as well.
And yes, there is a lot of junk out there. My wife and I are part of a little baby boom going on in our circle right now. I mentioned cribs a few months ago on this board. You wouldn’t believe that crap I’ve seen and what some of my homies have had to do to get replacement parts. At the end of the day I think we’ll see stuff like this being hand built in America again.
Muggy, I saw the picture you posted one day. He is a good-lookin’ lad.
We are in the midst of a social-circle boomlet as well.
I want to see another photo of Mini-muggy. The same one you posted before, maybe. That was one very cute kid, Muggy. And I want to see one of Mini-ET, too.
Didn’t you say there was a scare there for awhile, ET? I hope all is going well with your family.
Well, what? I like to see pictures of cute babies. I don’t care if it’s girly. Because I am a girl, so there.
The boomlet is effecting myself as well
Oly, I left a link in response to your repost below …
Congratulations, ET, Muggy and patient renter!
Enjoy your beautiful babies!
I refuse to buy any name brand made in China. I’d sooner buy the much cheaper Chinese knock off at one fouth the price. Works almost as well and I can afford to pitch it and buy a new one if it goes blooey. My days of handing some middleman fifty dollar bills for his off shoring skills are long over.
I have been saying this for well over a year now - occasionally on this board.
Mercantilism - big in the 1800s, will make it’s face known one again. Not as hugely as then, but it will be noticeable. That and old-fashioned bartering of services, especially after the USSA works overtime to rape its own citizens.
Next years Doo-Dah parade:
50 naked people wearings oak barrels holding up banners that read:
“We opened a passbook savings account!”
http://en.wikipedia.org/wiki/Doo_Dah_Parade
Back in the early days of Doo Dah, somebody figured out that corn tortillas are nature’s frisbees, and the parade route on Colorado Blvd like a UFO convention.
$10 will buy you 1,000 frisbees…
Pasadena outlawed them.
Walked into a Starbucks once. Walked right back out when I saw the prices on their menu boards.
Getting high on caffeine makes me more enthusiastic & confident, more likely to buy on impulse. Wonder if there’s a connection between the rise of SBX, gourment coffee etc and the consumerist boom of the last 10 yrs.
I always believed there was a connection between the rise of SBX and the tv show “Friends”.
you may be on to something; the Dutch are known to drink lots of coffee (only the Scandinavians drink more; don’t know the consumption in Iceland though) and have a taste for speculation. Could it be that the tulip bubble started after the first coffee arrived in Dutch harbours?
Oooooh, nhz, you gotta read ‘The Devil’s Cup’. It pretty much attributes the rise of civilization to coffee.
I drank quite a bit of coffee whilst reading it, and look at me now: I’m civilized as all get out.
good suggestion, I have heard about that book before
I bring it up because when I bought my Subaru in 1998, the salesman’s coup de grace move was taking me to his wife’s coffee driveup and buying me a granita. Man I drank that and felt GREAT! and signed on the dotted line when we got back.
At least, I insisted on my own CU’s 6% loan and it did turn out to be a good car (still driving it).
I am not a CONSUMER. I am an American Citizen. Thank you had to get that out. Now I’m going for my second cup of coffee.
‘I never drink coffee at Starbucks. I make my own. Anecdotal but illustrates the issue nicely.’
I generally make my own, too. Trader Joes, often, and even when I get fancy and get some gourmet blend it still costs about nothing, really. AND I make it with a good-quality espresso machine that I got at an estate sale, for an unbelieveable price, I think it was 5 bucks? Maybe only 3. Because it was almost over and they didn’t want to deal with it.
Huh? Huh? Yeah! Deal with THAT Starbucks!
My example of this trend was at work. We did not upgrade to windows vista because of cost, but because what we had worked fine. If it’s not broken, don’t fix it!
I read somewhere that “There is to much of everything for sale”…Does that kind of sum it up ??
Can another drink help an alcoholic? Anyone who does not grasp the wisdom of hair-of-the-dog cures must be some kind of crank.
Tuesday, December 9, 2008
Can Volcker’s style help this economy?
Former Federal Reserve Chairman Paul Volcker
Former Federal Reserve chairman Paul Volcker will play a pivotal role on President-elect Obama’s economic team. But some think his trademark frugality may not help the recession. Nancy Marshall Genzer reports.
Volcker’s world of 25-30 years ago was run by a few powerful mainframe computers that called the shots, and nobody on Wall Street had yet figured out how to make a scintilla, skimming off the top, bottom, sideways or backwards, employing computers as a sort of perpetual profit motion machine…
Things Change
One area Volcker is a refreshing voice is in executive compensation. It baffles him that a CEO needs to be compensated in the millions and should be entitled to a bonus for nothing.
How about a bonus for losing billions of dollars for his company?
Blame mutual funds, ironically especially index funds. Prior to mutual funds stock was held in specific companies, usually concentrated in the hands of large investors who excercised authority on management. After mutual funds it’s very rare to see a board (the stockholder’s oversight committee) challenged by shareholders (because most funds vote with ISI who doesn’t generally rock the boat much with their reccomendations.
Volcker is window dressing.. I think he’d have had more influence actively opposing the BO administration than by joining it.
Sour grapes …?
If I was the typical Chicagoan, I wouldn’t have the nerve to inquire about whether someone else’s grapes tasted sour.
A brown paper bag company ought to sell 6 million or so units - one for each voter who ever pulled the lever for Blago and Daley.
You ought to be extremely embarrassed, both personally and for the State of Illinois.
What makes you think I’ve ever voted for Blago or Daley?
Fact is, I’m neither a Democrat nor a person invested in Chicago machine politics.
I’m not embarrassed in the least — Blago is getting what he deserves.
That comment makes no sense whatsoever.
well.. he’s heading a powerless committee.. he’s surrounded by ideological enemies.. and this octogenarian Carter appointee is expected to generate new ideas. Does any of this make sense?
Wisdom has no age limit.
Even assuming that Volker is blessed with ageless wisdom, BObama has not verbalized any intention of tapping into it..
Makes perfect sense, since Obama and the DEms have made it perfectly clear that they want to inflate the economy. Free gov’t checks for everyone and support those overpaid UAW workers.
“…the Fed has stepped out of its traditional role of backstop liquidity provider, making a direct effort to manipulate long-term mortgage rates. Some presidents are wary of any strategy that appears to subsidize debtors by pushing rates below yields set by the market.”
Well, since the canoe is going over the waterfalls, does it matter much which way or how hard they paddle?
Bernanke Invocation of ‘War Powers’ Undermines Fed Bank Chiefs:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.g.iJbCJq3U&refer=home
We should be slapping WS around and putting some of its leaders in jail. Instead, we’re writing checks and rewarding incompetence.
But some think his trademark frugality may not help the recession.
Those “some” are banks, and people who manufacture/sell things we don’t need.
If we are going to stimulate the economy and keep unemployment from rising to riotous levels I’ll take infrastructure (roads/mass transit/energy/school) spending over trying to convince Susan or what ever her name is to buy a gold purse/big screen/SUV/elmo doll ect ect.
Volcker’s turn will come once the unemployment rate comes back down due to all the juice thats going to get thrown into the system…Unless age gets him…Got Cash ??
CEO of Merrill Lynch asks for a 10 million dollar bonus.
He lists holding Merrill to loses of only 11 billion as one of his big accomplishments for the year.
Merrill Lynch: Bullish on Bonus
Merrill Lynch: Bullish on Bone-US
Good one Palmy!!!
I was in a supermarket yesterday, and they had 30 ounce canisters of Morton Salt on sale for 44 Cents, and it got me thinking about salary and soldiers, on the financial front.
Ancient Roman soldiers (Sal Dare is Latin for: give salt) were originally paid in salt, and the seldom used phrase nowadays “Not worth his salt” applies to many a high-placed soldier of fortune, presently.
It was common practice in the Old West to “salt” a mine, by making it look like it was more prosperous than it really was.
It’s the minds that have been salted, now.
So, salt was a currency that went back thousands of years just as was gold? If I put all my money into salt how’d that be working out now?
Lol.
King,
We figured out just how common it was since the days of the Emperor, thus the current low valuation of less than 2 Cents per ounce.
If the alchemists had figured out transmutation transportation, yellow mellow might be worth as much as lead.
But they didn’t.
you saw salt on sale and.. hmm.. very interesting!
and your thinking gets me thinking further along that same train of thought..
Due to it’s preservative qualities, salt had great value prior to the invention of refrigeration. Why aren’t soldiers (or CEOs for that matter) now paid with ice cubes or refrigerators?
aladinsane
Sounds like you read “The History Of Salt”?
If I put all my money into salt how’d that be working out now?
You’d have that melting feeling.
So, back in the day when they were arguing about salt vs. fiatscos, I guess no one ever rolled out the “you can’t eat it” argument…?
“Ancient Roman soldiers (Sal Dare is Latin for: give salt) were originally paid in salt,”
Couple notes on Roman History for all Roman history buffs:
Rome owed its early importance and rise in part to access to nearby salt beds -maybe near the tiber river mouth.
Rome completely wiped it’s longtime enemy Carthage by salting the Carthage City site with salt so as to make it uninhabitable.
a.w.,
Haven’t read it, but it sounds intriguing…
Much of my worldview is based upon history, and for over 25 years I constantly bought and sold the financial remnants of the past 2,500 years.
It wasn’t unusual for me to buy hoards of Ancient Roman coins one day, and Confederate States Bonds the next day.
“It wasn’t unusual for me to buy hoards of Ancient Roman coins one day, and Confederate States Bonds the next day.”
Wow, you’ve been around for a while.
“Please allow me to introduce myself,
I’m a man of wealth, and taste.”
I lived, breathed and ate up epochs.
It came with the territory.
Actually if you had put your money in road salt last year you’d probably have one of the highest returns of any investor out there.
Salt this year $58 a ton $14 more per ton than last year, for a return of 32%
Salt, by Mark Kurlansky, is a pretty good read.
I think you may enjoy it, Mr. Sane.
If you put all your money in road salt last year you had a 30-40% return. Not bad
“It was common practice in the Old West to “salt” a mine, by making it look like it was more prosperous than it really was.”
*****
In the New West dotcom economy of the late 90’s and early ’00’s, it was not uncommon for an “entrepreneur” to “salt” their company’s employment, revenue figures or market potential - at least enough to attract venture idiot money or to sell their piece of crap to a larger company.
Just another scam here in the Alt-A Bay Area.
I am of the opinion that Mr. Thain deserves some large bonus.
It is very difficult in these times to determine the amount he should receive. If I were brought in to do the job that Mr. Thain had performed, I would want at least $10MM as a bonus.
The company was BK and Mr. Thain was astute enough to manage a sale to Bank of America. In the process Mr. Thain destroyed his personal credibility. What is that worth?
Re: John Thain’s desire for $10M bonus
My young Merrill Lynch broker thinks Thain should get the bonus for selling ML to BofA at the critical moment. It isn’t Thain but rather Stan O’Neal who was responsible for ruining Merrill. I suggested to the young broker that all the young brokers should form a posse to go collect $10M from Stan O’Neal’s golden parachute and deliver it to Thain.
I say we give Thain a tin-foil parachute and send him on his way…
Geronimo!
Agreed, and said parachute should be the open-on-impact model.
I mentioned late last night that Pulitzer now includes web only content. Deadline in Feb 1…
Ben/HBB should be considered. Anyone have experience in this field?
Really, nothing? Sorry Ben, no love for you!
Just cause none of us have any experience in this field does not necessarily imply that we don’t think he deserves to be in the running!
Though my impression is that the Pulitzer is usually granted for a single “piece” written and published in a short period of time. It would be unusual for it to be given to a “body of work” like Ben has been building bit-by-bit over the past several years.
Still, I’d love to see it happen; this blog has undoubtedly had a real impact for those lucky enough to have stumbled on it and seen the freight-train bearing down on them.
I replied, but it didn’t go through. I said pulitzers are reserved for people who create news or literary works, not aggregate them or disseminate them. This is not to say what Ben has done isn’t difficult or worthwhile. Obviously there is a lot of value.
Illinois Threat to Bank of America Is Dangerous, Critics Say
Dec. 9 (Bloomberg) — Illinois Governor Rod Blagojevich’s threat to halt the state’s dealings with Bank of America Corp. over a shut-down factory in Chicago extends a “dangerous” trend of politicians meddling with commerce, a former general counsel of the Federal Deposit Insurance Corp. said.
Blagojevich, a Democrat, yesterday said the biggest U.S. retail bank won’t get any more state business unless it restores credit to Republic Windows & Doors, whose workers are staging a sit-in. John Douglas, an attorney with Paul Hastings Janofsky & Walker in Atlanta, said Blagojevich and Senator Christopher Dodd — who called on General Motors Corp. to fire Chief Executive Rick Wagoner — can’t tell companies how to run their business.
Blago was taken into custody by the FBI this morning. Big news here in Chicago. Corruption charges are likely.
Bank of America works fast.
“Blago” sounds like some sort of rogue blogger, no?
Isn’t there a villain somewhere named Drago??
Ivan Drago was the soviet boxer in Rocky IV.
Yup.
Been wondering when and why it would finally happen — there’s plenty of dirt on Blago.
Peter Fitzgerald (of Plamegate fame) is at the prosecutorial helm, and he doesn’t half-step. So I would imagine the evidence is solid.
Someone commented that 5 out of the last 9 governors of Illinois have been prosecuted for corruption.
Yeah, I mentioned a little of the backstory in a response to sleepless_near_seattle … three gubernatorial convictions since the early ’70s on various white collar schemes.
Ol’ Helmet Hair should be a lock for #4.
Go Illini!
The “sit-in” would make a lot more sense if they weren’t REIC players to begin with. Make doors and windows for WHOM!?
It wasn’t BofA that put them out of work.
Exactly, Din-OR. BofA has nothing to do with it. This is between the company and the workers.
Agreed, but I’m still reminded of a line in a Joe Pesci movie:
BoA to Blago, “F*ck me? No, f*ck YOU!”
Gotta love this story:
http://news.yahoo.com/s/ap/20081209/ap_on_re_us/blagojevich_corruption_probe
Blago is quite the shakedown artist, no? Looking for a fat position with a labor union. No wonder he was up on his hind legs threatening Bank of America if they didn’t lend to the company where the workers are having a nice sit-in for themselves. With Jesse Jackson showing up for a photo-op.
As I posted yesterday, I don’t get this sit-in. 60 days notice of layoff? Anywhere I worked, it was “You’re fired, clean out your desk and security will escort you.” Two weeks severance if you were lucky.
Yessir, Illinois, the Land of Lincoln. I’m wondering when the fatuous Durbin will get nailed. Lord knows he deserves it.
cnn DOT com/2008/POLITICS/12/09/illinois.govenor/index.html
Too funny. This has echoes of E. Spitzer in it, eh? Step outta line with the system, you become front page news…and not in a good way.
Eliot Spitzer was supposed to be a clean guy of good moral fiber, so his downfall was somewhat shocking.
No one in Illinois politics would pretend that Rod Blagojevich was an upstanding guy.
Blago’s hands have been in a score of mud pies — it was merely a question of who would get the goods on him, and whether there would be enough political will to burn him. Apparently there is.
Interesting. I’d never heard of the guy before yesterday. All I know after seeing him on the Nightly News is that he needs a haircut.
His hair is so bad it’s kind of awesome. It always looks like that.
A little historical backstory: our last governor, the grandfatherly George Ryan (R), is currently doin’ time in the pokey for corruption, and taking bribes / ill-gotten gains. Patrick Fitzgerald was the lead prosecutor in that case, too. Ryan was the third Illinois governor in the past 40 years to be convicted of white collar crimes.
I’d say Blago (D) is even more corrupt and far less popular than Ryan, our general Blue Statedness notwithstanding.
It should be an entertaining year in Illinois politics …
LOL. It’s almost as if he said, “If Trump can do it, so can I!”
So the Governor threatens Bank of America and Bank of America has him indicted.
I love Illinois politics. Without Illinois news, Wisconsin’s papers would be boring. I really miss Sen. Carol Moseley Braun; she was great for a laugh.
Next up in Chicago. Mr. Stroger? He is big in the Milwaukee papers and there is nobody else to make fun of.
This week: Our governor’s arrested, workers take over a factory, and the city’s major newspaper is filing for bankruptcy — and it’s only Tuesday!
I don’t think B of A is too worried about the governor’s threats. He was just taken into federal custody for a variety of corruption charges.
http://www.cnn.com/2008/POLITICS/12/09/illinois.govenor/index.html
Blago was essentially trying to sell our open Senate seat. From Mr. Fitzgerald’s press release (this isn’t the actual indictment, but a summary of evidence, I guess):
According to ROD BLAGOJEVICH, “the immediate challenge [is] how do we take some of the financial pressure off of our family.” Later in the phone call, ROD BLAGOJEVICH stated that absent getting something back, ROD BLAGOJEVICH will not pick Senate Candidate.
HARRIS re-stated ROD BLAGOJEVICH’s thoughts that they should ask the President-elect for something for ROD BLAGOJEVICH’s financial security as well as maintain his political viability.
The release is a PDF, but here if you want to take a look. Blago even drops a few F-bombs a la Nixon.
Maybe you’ll know the name, but here is my only experience with Chicago corruption:
I lived and worked in Chicago for a summer. One night I went out with my coworkers. A guy started hitting on one of the ladies in my crew. She wasn’t having it and he got crazy mad as a result. He then decided to make a scene and started yelling his family name, which is the family/company that makes the manhole covers for the city and other steel products.
I’ve seen some dudes overreact, but that was so bizarre, it always stuck with me.
Is that like the secret handshake? Telling people what contracts you have?
If only you knew how narrow the Chicago “upper crust” is, you would be scared.
PB,
You’re gonna love this article: Macroeconomics Is Complete Bunkum.
“…Remind me again which federal funds rate we’re watching this month?”
Perhaps we should have the “TRAP Czar” create a national alert flag system:
Black = “…and then it went dark”
Green = “buy now…or be priced out forever”
Red = “do the exact opposite of Cramas$”
Yellow = “The FED is pissing on your back”
White w/ Red cross = “The Bull has semen”
I just finished reading “The Web of Debt - The Shocking Truth About Our Money System”. Highly recommended. Take a look at the reviews on Amazon. The author’s web site is webofdebt dot com.
Thank you, looks like a good book.
Locals pour more and more of their income into mortgages
By ANDREW ABRAMSON and CHRISTINE STAPLETON
Palm Beach Post Staff Writers
Monday, December 08, 2008
The golden rule of not spending more than 25 percent of your income on housing no longer applied for nearly four of every 10 mortgage holders in Palm Beach County in 2007, Census figures show.
That number probably is higher now and likely to grow even more before getting smaller, housing analysts say.
“With the amount of new foreclosures, high unemployment, in addition to historically high amount of inventory means we’re seeing more households spending a larger portion of income toward housing expenses,” said housing analyst Jack McCabe, of McCabe Research Consulting in Deerfield Beach. “Unfortunately that’s going to hold true, and we’ll probably see those rates increase by the end of next year.”
Survey data released Monday by the U.S. Census Bureau shows that more than 25 percent of Palm Beach County residents spent at least 35 percent of their household income on housing costs in 2007, up from 24 percent in 1999.
The growth in the number of people spending more than 35 percent of their income on their mortgage, property taxes, insurance and utilities was even greater in local cities: from 21.1 percent in 1999 to 30.7 percent in 2007 in Wellington, from 20 percent to 32.9 percent in Royal Palm Beach and from 22.8 percent to 33.8 percent in Port St. Lucie.
That’s largely because home values were skyrocketing between 2000 and 2007.
In Wellington, more than 32 percent of homes were valued over $500,000, up from 3.6 percent in 2000. In Jupiter the percentage was 25.6 percent, up from 6.4 percent in 2000, according to the Census data.
Before the real estate bust, incomes were rising about 3 percent while the cost of living was going up 25 percent to 30 percent, said Bill Davis, mortgage banker for Private Funding Specialists.
“That was one of the things led to the crash,” Davis said.
McCabe says the percentage of mortgage holders paying more than 35 percent of their income for housing has probably grown since 2007 because the unemployment rate in Florida rose from 4.2 percent two years ago to 6.7 percent this year, and he expects it to rise to more than 10 percent in 2009 before improving in 2010.
He also anticipates 3 million foreclosures on a national level in 2009, up from about 2 million this year.
McCabe expects it to start trending back toward the 2000 percentages in the beginning of the next decade.
“In 2010, we’ll see the effects of lower housing prices and hopefully lower taxes because house values have dropped, and correlatively you’ll have lower insurance cost,” McCabe said. “Then you should see the rate in 2011 come down.”
But for now, while home values and mortgage rates drop, even those who can afford to buy homes are cautious about committing themselves.
“What’s happened in the last three months, is that even though people can afford, they’re so fearful of the future that they postpone that decision to purchase for several months, maybe even a year, and see which way the economy is going,” Davis said.
Locals pour more and more of their income into mortgages
ie they have less and less for other stuff.
Anectdote this morning…
My SIL’s (I’ve got two and this one is 18 and still in HS) boyfriend’s folks just built a house. My wife told me last night “the contractor went 200k over budget”. I asked “WTF kinda house did they build?”. She didn’t know. They kinda act like they got a lot of money, but I suspect a lot is an act.
She’s a realtor, he does IT stuff I think he’s kinda high up in the company he works for and proly makes good money. I spent a small amount of time with them this summer. She seemed reasonable for a realtor. Said things were definately slowing down and even made some jokes about realtors who think it’s all easy money all the time because they haven’t worked in any other sort of environment.
Anyway, their youngest son starts college next year, so I dont know why they need a house that could be 200k over budget. I suspect they are planning on selling it in 2 years for a tax free gain. We’ll see how that goes…
RE.
It’s the gravy train to glory, donchaknow, huh, huh, huh?
blu:
My sister went $150k over budget, as her 3rd home was being built a few years ago. She acted as if it was more of a badge of honor, than anything else.
What did she spend all together? That’s what I’d like to know. In both cases, are these 600k houses that went 33% over budget (or 25% in your sisters case)? I can’t imagine these people building a million dollar house (we’re talking actual cost of building the thing…), but if they did then they were still 25% over budget, thats huge. (evidently they are suing the GC by the way)
No doubt they paid handsomly for some hoity toity lot, probably 100k or so, possibly a good bit more. In fact, I’m gonna see if I can find that out.
But in any case, if I were to build a house right now, I know there’s no way I’d spend more than 200k even if I were independently wealthy.
My sister is of the ’see me-dig me’ persuasion, and lives accordingly.
Kinda like buying a $300K house for $1M in 2005 so you could tell your friends, “I live in a million dollar house!”
I have a piece of land in Florida that’s worth, who knows, anywhere between $0 and $100K.
During the bubble, a a similar piece of land adjacent to mine, same size, etc, was listed in MLS for $8,000,000. I spoke to the owner, and he fancied himself a wealthy man! He said to me “5 years ago, I never thought I’d have real estate holding worth $20,000,000″ (he had a couple of other lots for sale, too).
The lot now belongs to the bank again.
“the contractor went 200k over budget”
Get hip…Home Despot is advertising on sale:
A titanium refrigerator!
Frequently “way over budget” is a euphemism for “we decided to change lots of things after the contractor gave us the first quote”.
Making changes costs money, especially when you are deciding to do upgrades to the finish materials.
$200K would require a LOT of changes, though…
Yeah, I’m just repeating how the message came across. My wife’s next comment was to roll her eyes and say something like “sounds like they need to hire the people they manage better”. I agree. It’s possible but I doubt the GC just overspent by 200k without them knowing something along the way.
Reminds me of the “I remodeled my house” group. Oh really? Did you do it yourself or hire it out? That’s what I thought…
I have a friend that works for a mortgage company. He told me that he just did a purchase loan through FHA’s automated underwriting and loan was approved. 97% Loan to value and the debt ratio was 52%. Over half of GROSS income to go to PITI. Isn’t this a little high? He told me borrower had excellent credt, but excellent credit doesn’t pay the mortgage. I don’t get it, this is what got us here and I’m assumong their will be a heavier bailout in the future for the GSE’s - tighter lending?? doesn’t seem like it.
The 97% LTV in a falling market assures a continuation of the cascade of foreclosures.
damned if we do and damned if we don’t
“but excellent credit doesn’t pay the mortgage”
No… you’ll need a j-o-b going forward to do ‘that’!
So true KR, again a great FICO score is a “lagging indicator”. When you have people w/ 750 scores sending in jingle mail just b/c they’re under water…
Do people even know what a job is? Showing houses to other people isn’t really a lot of work. Neither is picking prices out of a hat for them.
How many people were working in the R-E business?
I for one, will never hire anyone for any position that had worked as a Real Estate anything during the bubble (nor will I hire a someone who took on more debt than he could handle).
Sometimes the income ratio as is relates to PITI is misleading…High income earners sometimes have high ratio’s because they still have a lot of disposable income left……
“97% Loan to value and the debt ratio was 52%.”
Wow, that’s amazing. It just goes to show that we still have a LONG way to go before this thing is over.
We need to revert at least to the historical mean in lending, and I can’t see any reason why the amount of pain that is in store would not cause an over-correction to the tighter-than-historical-average side.
Swing, d*mn pendulum, swing!!
I have a friend that works for a mortgage company. He told me that he just did a purchase loan through FHA’s automated underwriting and loan was approved. 97% Loan to value and the debt ratio was 52%. Over half of GROSS income to go to PITI. Isn’t this a little high? He told me borrower had excellent credt, but excellent credit doesn’t pay the mortgage. I don’t get it, this is what got us here and I’m assumong their will be a heavier bailout in the future for the GSE’s - tighter lending?? donesn’t seem like it.
“We are the first nation in the history of the world to go to the poor house in an automobile”
Will Rogers
Well, Nero fiddled while Rome burnt but I doubt he played Foggy Mountain Breakdown.
No, he played “The Devil Came Down to Georgia”
Roidy
I always thought they meant to write, Nero ‘diddled’ while Rome burnt, since the fiddle had not been invented at that point in time.
“…to go to the poor house in an automobile”
Updated:
“…to go to the poor house in an automobile…which still has 72 months left on its 120 month lease ”
Yeah, but we owe ourselves that money so it doesn’t count. LOL.
FPSS, you mentioned an interest in the Tanzania trip Xmas 09. If so please email mimigerstell (at) yahoo (dot) com.
Sorry about not replying earlier. I don’t think I can make it (complicated reasons.)
I really wish I could though. Dammit.
PS :- I do want to meet you next time you’re in New York.
Email me: cba DOT fed AT gmail DOT com
What Dumbocrat came up with the Car Tzar concept? The tzar thing worked out so well for the Russian empire (and the Soviet empire that followed it), I am sure it will work just as well for the U.S. auto industry.
Well, as long as he gets beheaded, it might be fun (and I’m not even saying which head to chop off!)
Policy makers and journalist are obsessed with the TZAR concept nowadays. I could not believe my ears when a strategist from the Democratic Party suggested on NPR, that we need tzar for democracy. His point was that during the years of the Bush administration the democracy in USA suffered so much, that we need someone to reverse all the bad things done so far, so we are in desperate need of democracy tzar. Democracy Tzar – that is some idea!
They just want to have someone “accountable”. Of course, this is pretty much a meaningless figurehead type job, but some people aspire to those.
Tzar = the new tiger team, less the team
It’s the media that loves the czar thingie, gives them an easy target to place blame or flowers at their feet. They’re lazy that way. They love to worship saviors, but detest religion. Actually, ‘democratic czar’ makes perfect sense to them, since it’s an oxymoron.
why would you want a caesar (tsar) to restore a republic?
or kaiser??
Joe Biden in response to Nancy Reagan:
Currently known as the Bankers dilemma:
“Just say No!”
http://en.wikipedia.org/wiki/Director_of_the_Office_of_National_Drug_Control_Policy
“We are the first nation in the history of the world to go to the poor house in a giant got to have it SUV”
Chariots of Ire…
“Chariots of Ire…”
Lovely!
The Fed may have run out of bubbles, but that does not preclude bubble recycling.
PAUL B. FARRELL
10 clues: A new bubble is blowing
Bet on Wall Street hyping a recovery, big earnings, new bull in 2009
By Paul B. Farrell, MarketWatch
Last update: 7:09 p.m. EST Dec. 8, 2008
ARROYO GRANDE, Calif. (MarketWatch) — No bottom yet? No problem! Wall Street needs another bull, is already secretly blowing a newer, bigger bubble. How do we know? Simple. They’re bubble-blowers by nature. It’s locked in their DNA, controls their brain waves. It’s the divine spark that guides their destiny and America’s too.
test
You passed.
Finally!!!
I have a friend that works for a mortgage company. He told me that he just did a purchase loan through FHA’s automated underwriting and loan was approved. 97% Loan to value and the debt ratio was 52%. Over half of GROSS income to go to PITI. Isn’t this a little high? He told me borrower had excellent credt, but excellent credit doesn’t pay the mortgage. I don’t get it, this is what got us here and I’m assumong their will be a heavier bailout in the future for the GSE’s - tighter lending?? donesn’t seem like it.
sorry if a double post
Triple, actually…
Patience, people—-sometimes they take a few minutes to show up. Doesn’t mean the _won’t_.
“James Odell Barnes, an investor in South Carolina, says he and a group of investor partners recently paid about $1.2 million for a bulk purchase of about 800 homes from Fannie Mae. That works out to about $1,500 apiece on average. A large share of the homes were in Detroit and other depressed Michigan cities; others were in cities including Indianapolis, Pittsburgh, Toledo, Ohio, and Memphis. Barnes says he quickly resold for about $50,000 one of the Detroit homes purchased from Fannie for $1,800.”
http://www.tennessean.com/article/20081208/BUSINESS01/812080347/1003/news01
Whee! Free houses in bulk!
I call BS on that Detroit house unless he had some sucker/newbie flipper already in his gunsights. Would love to know where the house is.
Blano, My friend
This is sweetheart sales. This is were the GSEs dump in bulk to their ‘friends’. The 100K houses will be sold in bulk along with the 10K houses and if you aren’t a ‘friend’, fugget abod it.
No argument about what you’re saying at all. We’re probably going to see a lot of said sweetheart sales coming up.
It’s just that even 50K is going to be overpriced in most areas of the city itself these days, even if it doesn’t need much work.
Yep….Money made on the way up and money made on the way down….
Considering the taxpayer eats the loss on the extra losses on the GSE debt, this kind of sweetheart-dealing is now just flat-out theft from the taxpayer.
Thats like buying baseball cards in bulk. Sometimes, you get lucky, and good one shows up.
Whee! Free houses in bulk!
Get ‘em now at Costco or Sam’s Club!!!
So now that Mr. Nassim Taleb has become a faculty member at my financial engineering MS Alma Mater (NYU Polytechnic Institute) teaching, what else, financial risk, I am going to try to sign up for his course next semester. It’s going to be interesting to hear what he teaches in class, vs. what he says in publications and TV interviews. If I hear anything intersting, I will try to share bits of them on HBB. I am
sure many of you have questions for him, but one of the first question I want to ask him is “Why are you teaching a course in financial engineering school when you have basically repudiate the entire discipline from the ground up?” It’s like going to a chiropractor school
to teach a course and calling chiropractors quacks (which may very well be). I am especially interested in what models he would teach the
students to model risk when he have thoroughly rejected all standard methodologies in risk measurements, such as much criticized VaR. And
if there are no math model that works in this regard, should we all just bury our heads in the sand and pray for the best? Surely not
every institution or funds out there can do what he preaches: have 80-90% in cash and buy far out-of-money puts and wait for the black swan.
It’s gonna be an interesting experience for sure.
There is an intrinsic tension in what he preaches.
For him to make money, somebody has to be taking the other side, and since he’s playing in the derivatives market, it’s a zero-sum game.
Word has it that Taleb’s hedge fund (Empirica Capital) while doing spectacularly in 2008 hasn’t had a particularly illustrious track record (as expected from such a strategy.)
Everyone can’t be a contrarian. You need someone to bet against.
Plus at some point, you’re bound to be right as well
No, I actually believe the stuff he is saying. I genuinely think he is intellectually and empirically right.
The question is whether you can translate it into an “operationalizable framework”, and I think the answer there is NO. You can make extraordinarily prescient predictions (e.g. the HBB forum) but I don’t believe you can do so systematically.
It’s all about timing.
I used to laugh @ survivalist nuts, until a few years ago when I became one, because I saw what was coming…
p.s.:
There’s still time to get away from our big cities full of false entitlement, but empty of money and moral suasion.
Yes, yes, we all know your Mad Max scenario. Heck, we’d pay you in gold to shut up about it.
Pussy Galore,
You’ve misunderstood. I’m thinking more along the the lines of Max Mad.
We just want you from hijacking every thread with your agenda.
There are other intellectually interesting things to discuss in the world without an asinine conversation about gold being injected into every one.
Don’t thread on me, pussy.
p.s.
I am coming to the stark realization that the mellow ain’t all that in the scheme of things…
Events have transpired so much in just a few months time.
We now have 2 years of food on hand, and i’m thinking about buying an 88mm Howitzer.
i’m thinking about buying an 88mm Howitzer.
To do what with? Build a giant bong?
ROTFLMAO
What a great idea!!! He already has enough munchies.
“i’m thinking about buying an 88mm Howitzer.”
But how will you get parts for it when the global supply chain stops?
Like DUH!!!
He has already bought all the parts he needs; he bought the company too; then he offshored it to a magical land where the governments are rational, and where there is no central bank, and which is filled with rainbows and roses and dancing white ponies.
Get with the program, man! What’s wrong with you?
What a great idea!!! He already has enough munchies.
No kidding, two years of food.
Using this “long division” I keep hearing about on this board:
Let’s assume 8 stoners, 88m howitzer bong with ladder on the business-end smoke stack, unlimited ganja; adjust for periods when said stoners are unable to climb up the ladder…
I figure that food would be gone in 3 weeks.
Stop, stop, my stomach hurts!
OW.
“Let’s assume 8 stoners, 88m howitzer bong with ladder on the business-end smoke stack, unlimited ganja; adjust for periods when said stoners are unable to climb up the ladder…”
One can only dream…
By the way lad, I wasn’t trying to be snarky about the 88mm, I just can’t imagine what else one might do with it (unless you have avalanche possiblity above your house).
I mean, even in mad max land, one guy with a motorcycle and a shotgun has a pretty decent chance against artillery.
If the nazis hadn’t wasted so much money on rockets and jets, and spent it all on their majestic 88mm flat-trajectory guns instead, the whole world would be speaking German, that’s how good it was.
Think about takin’ out yer neighbors. Those houses don’t move very quickly, you know (except in some parts of California prone to mudslides and earthquakes).
It’s the new paradigm for becoming a real estate mogul. The old one was “Donald Trump”. The new one features Aladinsane and an 88mm howitzer…
An 88 millimeter is a WWII German field gun. Nice choice. Very versatile. A 105 MM recoil less might be more practical. Easier to move around and store. Two years worth of food! Yikes!! Ive “only” got 3 -4 months worth and I already feel like a Mormon. If the SHTF where you need that food due to this financial/housing/industrial/political melt down, I dont think half of the population will be left after 6 months. After 2 years it might be just you.
Our neighbors have a few weeks worth of food on hand (like most of the country), and the extra year’s worth I bought, is really more like 6 months worth of food for both of them, if things get weird.
Both neighbors have great assets to offer me, and I feel obliged to come through for them, when push meets shove.
I have food in the linen closet, the coat closet,
the kitchen and garage. now he says two years of food. Oy vey!
You might want to consider the case that he is full of horse-manure. Words are cheaps, proof is expensive†.
&8224; particularly 80-proof.
Pussy, you caught me this time…
I really have no plans to buy an 88mm gun.
(Carlos Cisco said:) ‘An 88 millimeter is a WWII German field gun. Nice choice. Very versatile. A 105 MM recoil less might be more practical. Easier to move around and store.’
(OIygal said:) Okay. I like you again.
Surely not every institution or funds out there can do what he preaches: have 80-90% in cash and buy far out-of-money puts and wait for the black swan.
That itself would be a Black Swan event.
“…teaching, what else, financial risk”
Methinks he will not have any Amish students, …therefore, he might actually fill up a lecture hall
“There’s no more Wall Street,…That model just doesn’t work because it’s at the mercy of rumors.”
Gee this rumor thingy is really kinda easy ain’t it?
Greenberg Says Death of Bear, Lehman Means Wall Street Finished:
http://www.bloomberg.com/apps/news?pid=20601087&sid=afobAsGbGO8M&refer=home
The model doesn’t work because you can only ride the gravy train from 18% down to 1% once.
It was a spectacular Ponzi scheme while it lasted. It’s over.
Why can’t you hike interest rates back to 18% and restart the ride? (I am guessing it might have something to do with a protracted period of negative savings rates?)
Because you can’t go from being a net debtor to a net creditor without a prolonged period of pain.
Also, because hiking rates up that high destroys all leveraged entities which is just about everybody in the US (individuals, corporations, local governments.)
I think people have forgotten how much pain Volcker caused. Of course, this time you’re gonna get it without the added benefit of actually getting a robust system at the end of it.
“…I think people have forgotten how much pain Volcker caused.”
Living without leverage…how so…unAmish.
people have forgotten how much pain Volcker caused ??
I have not….Many people have never recovered from that period….It was “speed” of the increases that shocked the system…IMO, It could happen again if he gets the opportunity…
You mean I would actually earn something on my savings again for a change? Boy, would I hate that!
“Four former CEOs of Fannie and Freddie are scheduled to testify Tuesday. One pair, Fannie Mae’s Franklin Raines and Freddie Mac’s Leland Brendsel, were both ousted after accounting scandals. The most recent pair of former top executives, Fannie Mae CEO Daniel Mudd and his counterpart at Freddie Mac, Richard Syron, were removed from their jobs this year after the government takeover.”
..but will any of them be prosecuted and fined? (Can the taxpayers view the details of their palatial residences on Zillow? Can we see how large their investment accounts are?) Ha!, we might as well believe fairy dust will make us younger (~:
Franklin Raines home
http://www.washingtonian.com/blogarticles/homegarden/openhouse/7196.html
Exactly
I think every one of these CEO’s should have a financial audit and compare the results to what they were telling their investors and the public at the peak of the bubble. Sounds to me like Raines was trying to cash out in March of last year. The pressure in the lava dome was building. Mozillow was selling stock hand over fist in 2007.
Franklin Raines home
http://www.washingtonian.com/blogarticles/homegarden/openhouse/7196.html
Yeah, it’s who you know (look at the Clinton’s - from Little Rock wheeler dealers in a middle-class home to high rollers with multiple million dollar properties and huge investment accounts..but they earned it all through their invaluable service to America - no?).
queue music: “Nice job if you can get it”
This is one of those places Tony Soprano types lolled about smoking cigars and scheming how to get more for themselves. BTW, what other properties does Franklin Inc. own as an ex-federal employee?
Don’t hold your breath for the gold-plated, no deductible federal politicians health care plan, after all, the “little people” can afford to pay more and get less. Most Americans: “Living one health crisis away from financial ruin.”
Nice place, but worth $8 million+ ? No way.
Eight million dollars for THAT? I would have guessed 250k. Who cares if it has a home theater (how common can one get?) or a sub-zero fridge (also common these days). Instead of presenting it as the estate of the week, the publisher should be presenting it as the laugh of the week.
Well, maybe 500k, but who wants so many bedrooms and bathrooms to deal with?
Maybe he reaaaaaaaaaaaally likes bean burritos.
Who are you to judge?
Harvey Golub, who used to run American Express, sums up the credit mess. “It is not only consumers that must de-lever. Governments must as well. State and local governments across the nation have incurred direct and indirect debt or obligations in the tens of trillions of dollars — obligations that cannot be met under any set of reasonable circumstances without an explosion in growth and tax revenues. In fact, we continue to incur debt for politically palatable ideas, like rebate checks, which have very little stimulus power but increase the depth of the hole we’re in.
“To solve this problem for ourselves and future generations, we must get back to our historic reliance on personal responsibility and market forces, and get government out of economic management. It doesn’t do a good job, as the current economic mess amply proves.”
http://online.wsj.com/article/SB122878188688689783.html
AMEN !!
word on the street is the Illinios Governors mansion is moving to Joliet.
They should get Palin in there, she’d do the job right.
I thought about Palin too.
I’m trying to decide if this will help or hinder IL’s ability to attraction investment capital during these crucial times.
Having two guvs in the pokey might be construed as bad at first, but then again it also tells the Wall St. boyz that here in IL - there’s always someone who will “play ball”.
Can’t get it up anymore?
Try Cashalis*, the red pill.
Ask your money doctors if Cashalis is right for you…
* Side effects include jibbering, jabbering and loss of mental faculties.
Try Cashalis ??
‘* Side effects include jibbering, jabbering and loss of mental faculties.’
Like me, right now! Except I hope funner, and making one less likely to rush up and punch someone in the stomach.
Governor Randall S. Kroszner
At the Risk Minds Conference, International Center for Business Information, Geneva, Switzerland
December 8, 2008
Assessing the Potential for Instability in Financial Markets
http://www.federalreserve.gov/newsevents/speech/kroszner20081208a.htm
Nice post hoz…
–
T Boone Pickens, Another Born-and-Bred American Dope in Action Today
He is forecasting crude oil at $100 (not after many years but within months) and his argument is that OPEC will cut production by 2.0-2.5 million barrels a day. And the market yawned. Market is looking at lot more fall in the demand than 5 million barrels a day. Did Pickens see below $50 coming?
Being a born-and-bred American is a severe handicap when it comes to understanding economics and political systems. T. Boone Pickens joins the illustrious list of born-and-bred American dopes-for-life headed by Warren Buffet (dopes don’t know when to get off an old and tired horse). These dopes cannot imagine depressions and what causes them when the causes and signs are well understood (abuses in lending, overbuilding led by loose lending) before the beginning of the current longwave in 1950. Only the timing of the beginning of depressions remains suspense, but not when the abusive lending is the primary cause of the recession.
Jas
“Being a born-and-bred American is a severe handicap when it comes to understanding economics and political systems.”
As a born and bred American, I would appreciate it if you’d provide a link proving I’m incapable of understanding economics and politics.
I’m more of an American bred & born doper…
Yeah, me too.
Well, I should clarily that I was replying to LIU and Jas.
+1
I should add that I wasn’t born and bred, but rather bred and then born…
Technically, it was your mom that was bred, and then you were born.
OK, OK, how do you know I wasn’t a test tube baby??
As for me, I magically sprang forth from the forehead of my father, clad in armor, hauling a brace of owls along, and full of good advice.
* majestic sniff*
OK, Athena, that’s enough out of you.
‘OK, Athena, that’s enough out of you.’
Awesome! Well done, Mr. Smarty-pants!
‘Bullfinch’s Mythology’ fell out of a precarious perch this weekend and smote me on the head, is what made me think of it. There’s a teensy little blue bruise on my right temple, which I observe with satisfaction.
I suspect the market is not pricing a global decline of 5MM bbl/d - lol,
” The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices. World real gross domestic product (GDP) growth is projected to slow from about 4 percent in 2006 and 2007 to about 2.7 percent this year and 0.5 percent in 2009. …
As a result, global oil consumption is expected to decline by 50,000 bbl/d in 2008 and by 450,000 bbl/d in 2009, which would mark the first time in 3 decades that world consumption would decline in 2 consecutive years….”
estimates Nov 28, 2008
Energy Information Administration
http://www.eia.doe.gov/emeu/steo/pub/contents.html
Your source?
“…headed by Warren Buffet (dopes don’t know when to get off an old and tired horse).”
Score:
Jas 1
Warren 0
Bottom of the ninth, Jas pitching… full count…wait ladies and gentleman, Warren is laying down his bat…he’s, he’s …unbelievable, he’s walking off the field!…he’s yelling: “I quit! I quit! Jas called me a dope, I just can’t take it anymore, all my life’s work, and he still calls me a dope…life is so cruel.”
Letting dem ferner’s in seems to have been a bad idea hoss.
“Another Born-and-Bred American Dope in Action Today
Being a born-and-bred American is a severe handicap when it comes to understanding economics and political systems.”
Jas — I guess you missed the memo about the abusive language.
–
The current conditions simply could not exist without the propaganda (brainwashing, e.g., American Dream, from birth onwards), led by crooks that systematically produced dopes. Both parties (crooks and dopes) were necessary for the tech bubble, the housing bubble and the commodities bubble. The terms brainwashed, or doped, are not part of an abusive language. Just a statement of certain condition of a group of people. Yes, Americans are thoroughly brainwashed about economics and political systems. I get confirmation of this almost daily.
Jas
But the opposite of confirmation also matters.
This blog is a darned good example of the latter. Not everyone is deluded.
And the rest of the world was not brainwashed also? C’mon Jas, you hate the very country that you reside in and that’s made you wealthy. Cognitive dissonance…
–
“And the rest of the world was not brainwashed also? C’mon Jas, you hate the very country that you reside in and that’s made you wealthy. Cognitive dissonance…”
My FOCUS is America and for very good reasons. World did copy Americans and the same doping was exported (or imported by the local crooks). I NEVER claimed that there is no doping outside of America but Americans ARE uniquely doped due to the success following the WW II.
Jas
Please let us know what country you hail from Jas so we can respond in kind.
Oh, didn’t you know? He comes from ‘Genious-Landia’.
Pop: 1.
–
“Please let us know what country you hail from Jas so we can respond in kind.”
Spoken like a genuine born-and-bred American dope — shoot the messenger is a very common characteristic.
Jas
This is the funniest bits ever!
Everybody is funny today.
‘Another Born-and-Bred American Dope in Action Today’
‘Being a born-and-bred American is a severe handicap when it comes to understanding economics and political systems.’
SighhhhhHHHHHHH…here he is yet AGAIN, Mr. ‘I-R-So-Much-Smarter-Than-Everyone-Else’.
Ben! BEN! BENNNNNNNNNNNNNNNNNN!
Jas is back, and he’s once again implying we’s all iggerant dummies! He’s makin’ me feel sooper-dooper bad with his big smart word thingies! Look, I’m crying out of my ‘merican face!
Booo hoooooo….
Next thing ya know, all the bawn-and-bred American dummies will be cursin’ up a storm and calling Jas mean names agin’
History repeats, even on short-term cycles…
Wha…huh? I didn’t hear you there, losty. Too busy crying and all. Say it again…
hahahaha!
Plenty of dopes over seas these days as well.
“clarify”
[sheesh...]
LOL!!! The keyboard bandit strikes again (flippin keyborad, dang, I mean board).
Well, that’s probably because yer typing from your gigantic new whirlpool tub, and your fingers is all shriveled up ’cause you been in there for 5 hours and also yer all covered in fancy rose-scented bubbles, you lollygagging sybarite.
Lookit you! Civilization has done ruint yer!
Oh.
Losty, I thought you meant YOUR keyboard bandit struck again.
But anyhows, I’m still sure you’re wallowing in sybaritic excess. Probably your dogs even have slaves, now.
“Probably your dogs even have slaves, now.”
that would be me…
But I’m too busy trying to figure out how to buy this house…it’s not even for sale, but fortunes change, we’ve all seen that.
But I’ve found things to be better…now that I’ve given up hope.
(non sequitur, but it’s such a good line I had to throw it in there, it’s from the movie Monty Walsh, the Last Cowboy, which I’ve never seen)
‘But I’m too busy trying to figure out how to buy this house…it’s not even for sale, but fortunes change, we’ve all seen that.’
Fer sure!! You know what, I started out renting my house. Then the owner had an option-ARM coming due on it and also wanted the money for yet another real-estate scheme. She didn’t want to mess with breaking my lease and all the other fuss, so she approached me first, when she decided to sell.
And here I be.
Say, I wonder how SHE’S doing nowadays? *stifles cruel giggle *
Actually, I don’t know how she’s doing. But I bet if I took the trouble to go find out I’d be laffin’ for freakin’ HOURS.
Well, now my hope’s back…
fore twentying, jack?
It’s always that time somewhere …
Is it possible to go off-topic in the Bit Bucket?
Now another “victim” of the housing crash is talking bailout: the lumber industry.
http://www.nytimes.com/2008/12/09/us/09timber.html?hp
LOL
In a bubble, all ships rise. Doesn’t mean that a new paradigm has arrived. You’ll still need lumber. Just not as much.
On a more sombre note, this is the problem with boom and bust cycles. You get absurd malinvestment. All these jobs need to go back to being “boring” steady careers.
Let’s hear a chant I just made up:
(chorus, to rhythmic clapping and jumping up and down)
I love trees!
I love trees!
I love trees!
F–ck lumberjacks!
Except for Paul Bumyan,
Because he has a big blue ox!
Oh, and F–ck Weyerhauser, too!
I hate them a lot!
(Back to the chorus)
Well, what! I’m doing the best I can here, HBBers. If you sing so good, then do it, and quit criticizing my efforts. Man. *stamps off to play with some twigs *
Rhythm 0.
Rhyme -1.
Purpose debatable.
You wanna give it a second shot? Sorta like the kids that want to take the midterm again for half the credit.
Man, you ivory-tower academic types! Did you not see the part where I said:
‘If you sing so good, then do it, and quit criticizing my efforts.’
Hmmm?
Comprehension: -1
Cruelty: +5
Besides, Mr. Man, you didn’t see the elegant and evocative gestures that attended the chanting. That would have given me an ‘A’ right there.
You know, since a good half of my communication comes from gestures, both hand and just wiggling around eloquently, I have recently wondered how I come across here, on the HBB, in a strictly written medium.
Oh, yeah? Well, watch this! *series of gestures, non of which can be adequately transcribed*
Aaaarrrgh! I give up!
Wow the RATS are leaving the ship
Read Ben Steins Bail out the Big 3 article in Yahoo. I think that guy is afraid people are going to show up at his front door with torches soon so he’s trying to change his stripes.
We wish you a Merry Bailout;
We wish you a Merry Bailout;
We wish you a Merry Bailout and a Happy New Year.
Good tithings we bring to you and your kin;
Good tidings for a Bailout and a Happy New Year.
Oh, bring us a piggy pudding;
Oh, bring us a piggy pudding;
Oh, bring us a piggy pudding and a couple good years.
We won’t go until we get some;
We won’t go until we get some;
We won’t go until we get some, so bring some out here.
We wish you a Merry Bailout;
We wish you a Merry Bailout;
We wish you a Merry Bailout and a Happy New Year.
Now im in the mood for xmas.
Bring it on and give me my renter’s bailout for the last 20 years.
In its short-term outlook released Tuesday, the U.S. Energy Information Administration said it expects global oil consumption to decline by 50,000 barrels a day this year and by 450,000 barrels a day in 2009, well below earlier forecasts on both counts.
Just last month, the EIA projected global consumption to increase by 100,000 barrels a day in 2008 and to remain flat in 2009. Total world consumption is between 85 million and 86 million barrels a day, according to the EIA.
Should the projections prove true, it would mark the first time in three decades that world crude consumption declined in consecutive years, the EIA said
maybe it would also mark the first time in three decades that EIA projections prove true ?
This is terrible news. Additional decreases in oil/energy production and consumption only drag us further into the deflationary abyss.
We need a Manhattan-type project aimed at finding new uses for crude oil and innovative ways to waste energy. Who can predict what entirely new and unique methods might be invented?
Due to it’s large manpower and financing requirements, such a program melds perfectly with the stimulus-spending efforts of the new administration.
B.O… are you listening?
Geez, It’s been what 1 1/2 months since the “Great Trap Rescue” …I thought for sure someone would be announcing the grand opening of a .49¢ store…or at least a .89¢ store…I mean even Starmucks is selling $1.00 coffee & free Wi-Fi
Groan - that reminds me that I’m old enough to remember the “Five and Dime” stores like Woolworths, McCrorys, Kress and others. I even remember being able to buy a Coke for a nickel from a vending machine, in the early ’50s.
My wife’s favorite rant is about Starbucks coffee prices at the coffee shops. Instead, she buys 2.5 pounds of Starbucks whole beans for about $21 at the Costco-type stores and it makes 4-5 cups a day for 2-3 months. She grinds it daily with a handy little $15 grinder that lasts a good three years.
Chip,
+1
What economists should have learned from the recent episode, but some apparently did not: Demand-side stimulus makes homes less, not more, affordable. It seems obvious, unless one ignores the data and is blinded by the consensus babble. The longer the gubmint keeps dangling the bailout promises under sellers noses, the longer it will take the market to correct to affordable prices.
Maybe it’s different in NYC, but I would guess that homes would easily sell for 2.9 times median income in California, but sellers are not pricing them at that level. For example, in my zip code, Sandag says the median 2008 household income is $77,628, so Irwin would want the gubmint buyer of last resort to offer to buy up homes for 2.9*$77,628 = $225,121. There is no need for the gubmint to do this, as the market clearing price is above that level already. The problem is that sellers waiting for bailouts must have missed the memo that they aren’t gettin’ none, and hence are listing their homes at prices where they will never find buyers. To show you how wacked out our zip code’s prices are to this date, the current median used SFR list price on ZipRealty.com is $1,195,000 — thanks, but no thanks.
IRWIN KELLNER
The missing link
Commentary: Home lender of last resort must become buyer of last resort
By Irwin Kellner, MarketWatch
Last update: 6:53 p.m. EST Dec. 8, 2008
PORT WASHINGTON, NY. (MarketWatch) — In an effort to jump-start lending, the government has become the lender of last resort. Now to stabilize the economy, Washington must also become the buyer of last resort.
…
It seems obvious, then, that the key to ending this recession and thawing out the frozen markets is to stabilize home prices. To do this, it is necessary to pump up the demand for homes, reduce their supply or both.
Boosting demand will be difficult. People are afraid of losing their jobs, the banks have tightened their lending standards and no one’s willing to buy these days unless they are sure that prices have hit bottom.
Besides, prices are still too high, relative to household incomes. So while 30-year fixed mortgage rates have come down to a bit over 5.5% and the Treasury is planning to bring them down to as low as 4.52%, the lowest since the early 1960s, it won’t be enough to get most buyers off the dime.
Thus supplies must be reduced to meet demand. To do this would mean that median prices would have to come down even further, around another 8% by my calculations.
In effectuating this, the government is not the problem, for a change, but the solution.
As I recommended in March, the government should create an agency (call it the Home Owners Loan Corporation), capitalize it with a few billion dollars, and have it offer to buy all houses for sale either by sellers or through foreclosures for a price not exceeding 2.9 times median household incomes in each market.
“…and have it offer to buy all houses for sale either by sellers or through foreclosures for a price not exceeding 2.9 times median household incomes in each market.”
And do what with them?
rent them out.
Uncle Sam = slumlord of last resort, too?
For anyone who didn’t save some of the best housing bubble and economy quotes by supposed experts, and wishes they had, there is a pretty good collection at the end of this piece:
http://www.financialsense.com/editorials/quinn/2008/1209.html
“Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom? Material abundance without character is the path of destruction.” (Thomas Jefferson)
‘Material abundance without character is the path of destruction.”
Define this ‘character’ thingie. If you would. Then I can see if I got some of it hereabouts.
Just ask my governor - he’s quite a character! He’s got a great hairdo too!
Markets are running into technical difficulties at the moment, heavy resistance. Over the past 15 months anyone buying above the 50 day Moving average has been severely punished. It has been the most obvious intersection to cover or enter short positions.
What’s more, markets have already retraced 50 pct of the previous downdraft and are stuck around 50 - 62 pct range. A pivotal battle is ongoing. Outcomes will be determined. It could be the beginning of something new or the beginning of another sell-off.
“When the people find that they can vote themselves money, that will herald the end of the Republic.”
Ben Franklin
When the WSJ pointed this out 12 years ago, they were roundly criticized. See http://en.wikipedia.org/wiki/Lucky_duckies
(repost)
I want to see another photo of Mini-muggy. The same one you posted before, maybe. That was one horribly cute kid, Muggy. And I want to see one of Mini-ET, too.
Didn’t you say there was a scare there for awhile, ET? I hope all is going well with your family.
Well, what? I like to see pictures of cute babies. I don’t care if it’s girly. Because I am a girl, so there.
Hey! I know—just put them in the gallery, so we can see them anytime.
I’ll getcha tomorrow in bits. I’m beat! My new job + SAHD = going to bed at 8pm!
Far be it from me to not share baby pictures.
Here’s a recent one I like.
Didn’t you say there was a scare there for awhile, ET? I hope all is going well with your family.
He was born six weeks early and spent a little time in the hospital, but he’s happy and healthy now …
Cute little nugget.
‘Eeeeek, ahooo– hooOOOO!!’ *girly high-pitched squeal indicating approbation *
Oh, what a cutie! Oh, gosh, ET! How darling. Good job.
Say, you better give his mom a kiss. And a raise. Or a kiss and a raise, plus a sincere ‘thank you’ note, huh huh huh?
Asia set to recover quicker than other regions
By Daniel Inman | 9 December 2008
“…“Use this quarter’s volatility to add equity exposure in Asia,” says J.P. Morgan in its look ahead to 2009. With all sectors hit hard this year, the US bank recommends investors to focus on defensive domestic sectors, such as financials. Although it expects cyclical industries and commodities to have “substantially” lower profits in the last quarter of this year, J.P. Morgan points out that it is these sectors that are usually the first to recover from a downturn. To take advantage of this theme, it recommends export-related cyclicals, such as automobiles and technology stocks, over commodities. The valuations on Taiwanese tech stocks are eye-catching, the report notes.
This begs the question of how long the downturn could last. The good news is that J.P. Morgan holds that the worst of the financial crisis is behind us. The bad news is that its base case scenario assumes the worst US consumer recession since the end of the Second World War, with a synchronised global recession in the developed world. Growth in emerging markets such as Asia will not be unaffected, but the risk premium over developed economies will decrease, especially for domestic businesses.
One country will be at the forefront of the recovery, according to J.P. Morgan: “China is a must buy today. A year ago investors underestimated the negative impact of policy on growth – do not make the same mistake today.” Other countries that are running stimulatory programmes – such as Taiwan, Hong Kong and Singapore – can also expect to be on the mend quicker than their neighbours that do not have similar programmes in place.
Within the region, the countries to focus on are those with a current account surplus and large financial reserves as they should have lower borrowing costs, says J.P. Morgan. Countries such as Australia, India, Indonesia, and Korea will require external capital, which will link them to the global credit crisis. These are the underperfomers in the region….”
http://www.financeasia.com/article.aspx?CIaNID=90696
The Catastrophe Capitalist
“The salmon-colored pages of the Financial Times are not the place you turn to these days to find good news. But on the morning of November 4, Jim Chanos, president of Kynikos Associates on West 55th Street, the world’s biggest short-selling hedge fund, read an article in the paper with irrepressible glee. A colleague had e-mailed him a link. The headline: GOLDMAN FUND LOSES $990M AFTER 10 MONTHS.
Chanos had reason to be happy, and not because he had any stake in the outcome. His East Hampton neighbor, Marc Spilker, managing director of the Goldman Sachs division responsible for the billion-dollar loss, was finally receiving his comeuppance. In June 2007, Spilker decided to widen the rather narrow footpath from his house on Further Lane to the beach. One afternoon, Spilker dispatched a crew to widen the path by bulldozing the hedges between his mansion and Chanos’s. Chanos was outraged. “I hope this is not a harbinger of how other Goldman senior executives may act when the markets become ‘just not lucrative enough for us!’ ” he wrote to friends at the time in an e-mail that just happened to find its way to the New York Post. Several months after the Post leak, Chanos pulled nearly $3 billion out of his Goldman trading account, costing the bank some $50 million in annual fees, according to a source, and brought a suit against Spilker. …”
http://nymag.com/news/business/52754/
Mssrs. Roubini, Taleb et al may talk a good story, but Mr. Chanos is in a different league - the profitable league. “Since the summer, he has been cashing in his short positions in cratered banking and real-estate stocks, as the crisis has spread from the subprime-mortgage sector to become a full-scale economic meltdown.”
My wife and I are pretty much convinced world-wide trade is going to stop dead in it’s tracks, so we’ve been brainstorming about what items made overseas, that we should stock up on.
What items made elsewhere (but not here) would you miss most?
An example: We backpack a lot, and butane fuel canisters are something we use all the time. Most are produced in Korea. They have a long shelf-life, so I bought 30 of them yesterday.
Quite a few batteries are made overseas; if you’re thinking generator power, most small engines are foreign born. Many guns have an overseas address…HK, Taurus, Beretta, many others. Almost all small fishing or hunting items have foreign examples esp in the discount stores. Clothing, esp heavy coats and outerwear in general, made in yunowhere; shoes, boots made for walking…doubt if any made here anymore.
Dam lad i have 6 mini propanes for my mini burner.
Do i need more? I do enjoy shopping ,,,,
ann,
Don’t sweat it, unless you backpack about 300 miles a summer…
The 3-year T-Bill now sports a negative return on one’s money.
That’s perceived safety? ha
It’s institutional money (= pension funds.)
They get paid independent of whether they make money or not. They don’t give a rat’s patootie.
One of these days you will meet a pension fund manager. That’s when you will really cry.
3 month T bill, LOL
If the 3 yr T bill were negative, then there would be deflation. The 3 month is parking and yr end window dressing.
I get months and years mixed up a lot, my bad.
Oops and the most important reason for the 0% is nobody wants to get into ‘repo failure’, it is cheaper to cover losses than lose the ability to short Treasuries. A lot of bond traders promised these to their customers and had to cover.
You’re preaching reason to a gold-digger†?
† to be taken literally.
FPSS
Come on old buddy, Aladin’s OK. There is reason in his fixation on golden things, not all have your years of learned instinct in self preservation that is crucial to survival in any market can diminish the preservation of wealth through gold. It is just not as good a return as other options available worldwide. It is protection and insurance.
I understand the overwhelming desire to protect what one has painfully accumulated. I get it, I get it in spades. I sympathize.
What I can’t get over is that no amount of reason can budge him. It’s like talking to a complete babbling m*ron. I have little patience with this kind of human.
Plus, he ruins most threads which are intellectually stimulating by injecting his one song (which we f*ckin’ get, okay?)
I replied to this but it hasn’t appeared, and I don’t resent the lad and his gold.
What I do resent is the injection of a gold discussion into every single intellectual discussion on this blog. Both you and I understand there are plenty of opportunities. I really really resent the injection of a boring ol’ fact into every single discussion.
I’ll also add that he is dangerous for n00bies.
We don’t allow NAR realtors to preach here, do we? We satirize them ruthlessly.
Why should the rules be different for gold dealers?
Pussy,
I just went back and looked, and I only mentioned that thing you hate so much, just once today.
It gives me a most excellent ideal of the hyperbole you are capable of…
Give it a rest, you’re full of hot air.
Today is an exception.
You were full of it for the longest time until your precious Comex expiration exposed you as a charlatan.
Pussy,
Give it up, I can’t stand watching you make a fool of yourself for all to see…
BWAHAHAHHAHAHAHHAHAHAHHAHAHHHHHHHHHHH!!!
A.
you left off the last letter.
now all better.
FPSS, I agree, just drop the bickering ,and instead give us something to chew on. You spent 4 posts replying, and neither Lad or you gave us one new idea.
Now to You,and Lad. WTF is going on with the neg bond action…I know, I know hedgies, pension funds bailing to safety etc etc.but why not just let it sit in some type of cash account? This seems all too like a bubble rush to me,and the implications of the inevitable snap back…what happens if/when a stampede back out? I make no bones about understanding the subtlties of the bond market, but ” first time neg. rates since 1929″ gets my hackles up…Ok discuss amongst yourselves…
Hey, sleepless_ near_seattle, sleepless! Sleepless?! SLEEPLESS! Pay attention, man!
Say, when you going to and fro past Olympia this weekend? Do you know? What’s your schedule?
Wh-? Huh? C’mon, Mom, just 5 more minutes! I don’t want to get up, yet.
Oh, wait. What? Oh, it’s Olygal. Sorry. I dozed off there for a few.
My entourage (the people I talk to but who no one else can see) and I will be heading up there on Thursday around midday (maybe earlier) and, deity willing, leaving Seattle before 1PM on Friday.
I’ll probably be near Olympeeuh around noon Thursday, around 3 on Friday.
Now, where’d my pillow go?
I dreamt I was in seattle lastnight.
somehow i was at dinner with oly and others
and then i had to run for my life.
almost fell into a windowless room with no escape and clawed my way back up.
Oly looked like mary of nazareth.
she glowed.
Just got back. This rental search thing is actual work. Okay I was done with that hours ago. That was followed by gnashing of much teeth over which place to live in ever since.
So many options, so many “1 month free”s, so many delusional landlords. They’re actually daring me to negotiate. Well, okay. I’m gonna sleep long and save that for tomorrow.
Is there an impromptu Olympia HBB meeting this week?
The dollar you don’t spend today is missed by others.
“The economic news is so grim these days that even people whose incomes haven’t dropped are cutting back — to prepare for a possible job loss or to rebuild their retirement savings after watching their 401(k) investments evaporate.
In the scramble to save money, however, people don’t always see how each cutback ripples across the community, causing other cutbacks for the families affected by the skipped latte, the canceled home-improvement project, the postponed vacation.”
They don’t go so far as to say that “you fools need to get out there and spend,” but being the HBB-head that I am, I certainly perceived it that way! Also, the comments mirror what we say here sometimes, chastising govy workers and athletes.
And the alternative would be?
Only a total m*ron would keep spending while the economy comes crashing down.
That article seems to say that what we thought was the heart of our economy is more like it’s appendix..
Yeah, whatever. The shills want us to spend our dollars so that they can use theirs to pick up the pieces.
Right now, everyone’s dollar is in big demand. Don’t be a patsy, fortunes are being made and lost right now. But, one things for certain - buying a something like an automobile right now is hardly the path to riches.
A little off topic, but I saw the subject mentioned here previously, so here goes. My 82 year old mom sold a rental property (partially at my urging) right at the bubble’s peak. Cashed out bigtime. Unfortunately, she stashed the proceeds in Bank of Scotland stock. (totally NOT my idea — sold to her by a family ‘friend’ who is no longer accepting phone calls at his brokerage.) Since this issue has been partially nationalized — what exactly does that mean for her? Is the stock worthless? She is pretty hysterical for what that’s worth. Thanks to anyone who can answer.
Royal Bank of Scotland?
http://www.investors.rbs.com/investor_relations/index.cfm
It depends on where she bought it. She may and probably does have a lawsuit against the broker. Since the broker is a member of SIPC, your mother will likely collect in arbitration. A good securities lawyer is a necessity.
I am sorry to hear about that scottish bank.
..worth less than before perhaps, depending on when, how much, etc..
Google “Bank of Scotland stock” and browse. Looks like it’s currently trading at 70.10 GBp per share. It was about 400/share a year ago.
From what i see the govt/citizens own a controlling interest to the tune of 58% of the stock. While private stock holders and potential investors might react to that in their own fashion, moving the stock price wherever it will be, the takeover doesn’t necessarily devalue the stock or the company per se.
Her current financial advisor might suggest she diversify a little bit.. financials aren’t what they used to be.. going through some really tough times actually…
Just wondering if a/the bailout of GM/Ford/Chrysler violates international trade regulations. I suspect that it does.
Is the US attempt to deliberately devalue the dollar violating trade regulations?
FPSS and I have disagreed on which country would bail on the dollar first: I believed France and Faster thought Italy, now it appears that Greece is going to pull the plug first. Greece, WTF? lol
You mean Euro.
Greece? No way! LOL @ you too.
Euro, dollar whats the difference? If it bails on the Euro, it bails on the dollar. lol But Greece? I wanna go down to a real country!
The flight to safety appears to be over in Asia.
And you ask, why Asia?
Maybe later, I’ll do a “lemme ’splain, Lucy”
I used to think that most of the daily newspapers would kick the bucket, and the majors would survive, but now i’m not sure any of them will make it…
The internet wins by default, but just how easy would it be for the powers that be to pull the plug on it?, if too much truth was spewing out of it and people rose up against the machine. (i.e. Greece)
Who “owns” the internet?
NEW YORK (AP) — The NFL pays its players billions of dollars a year and fans pack its stadiums every week. But even the deep-pocketed league is shedding jobs.
Commissioner Roger Goodell said Tuesday that the league is cutting more than 10 percent of its staff in response to the downturn in the nation’s economy that could put a dent in ticket sales for next season.
Goodell announced the cuts in a memo to league employees. The NFL is eliminating about 150 of its staff of 1,100 in New York, NFL Films in New Jersey and television and Internet production facilities in Los Angeles.
“These are difficult and painful steps,” he wrote in the memo. “But they are necessary in the current economic environment. I would like to be able to report that we are immune to the troubles around us, but we are not. Properly managed, I am confident the NFL will emerge stronger, more efficient and poised to pursue long-term growth opportunities.”
The NFL long has been regarded as one of the most wealthiest pro sports leagues on the planet. In September, Forbes called the NFL “the richest game” and the “the strongest sport in the world.” The league has revenues of approximately $6.5 billion of which an estimated $4.5 billion goes to players.
But now it joins the NBA, NASCAR teams and the company that runs Major League Baseball’s Internet division in announcing layoff
I can’t wait to see attendance at the Bowl games. My guess is their will be a lot of empty seats.
A new first:
US Treasury bonds cost more to insure than McDonalds Bonds. The CDS have crossed. British bonds (UK Government debt) cost twice as much to insure as MickeyD’s.
I’ll have a large order of fries with that please.
Maybe we should just let trustworthy competent HUD keep financing ACORN, and between the two of those organizations, they can help pull us out of this mess.
Former Alphonso Jackson HUD Sec, Orlando Cabrera, then-assistant secretary resigned this year in disgrace as they were involved in corruption themselves (Philadelphia Mayor and FHA). Kim Kendrick
was involved and amazingly is still at HUD. Look what she is doing with our money now. But first alittle about Kim from an article:
“HUD Officials Caught Bullying State Employees Members of the Bush Administration have once again been caught strong-arming government officials into abiding by their policies. In an email exchange, two top political appointees at the U.S. Department of Housing and Urban Development (HUD) discussed ways to make the life of Philadelphia’s housing director Carl R. Greene miserable after he refused a request to transfer a $2 million piece of city property to a business friend of the HUD Secretary.
“Would you like me to make his life less happy? If so, how?” Orlando J. Cabrera, then-assistant secretary at HUD wrote about Philadelphia housing director Carl R. Greene.
“Take away all of his Federal dollars? : D” responded Kim Kendrick, an assistant secretary who oversaw accessible housing.
Thanks for using our taxpayer money to finace ACORN KIM! At the core of the ACORN is HUD.
Assistant Secretary for Fair Housing and Equal Opportunity
http://edocket.access.gpo.gov/2005/E5-7268.htm
$200,000 from HUD to ACORN - Kim Kendrick
and
http://www.hud.gov/news/release.cfm?content=pr08-164.cfm
New Mexico ACORN Associates $100K in October
HUD AWARDS MORE THAN $21 MILLION IN GRANTS TO FIGHT HOUSING DISCRIMINATION
92 agencies nationwide receive Fair Housing Initiative Program funding