Bits Bucket For December 14, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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FPSS, this one’s for you –
China December Producer Price Index to Drop, Liu Says (Update1)
Email | Print | A A A
By Zhang Dingmin
Dec. 13 (Bloomberg) — China’s producer price index is expected to drop “sharply” in December, China Banking Regulatory Commission Chairman Liu Mingkang said.
The world’s fourth-biggest economy is shifting toward deflation, Liu told a financial forum in Beijing today. Capital inflows may shift to outflows, with gross domestic product projected around 8 percent next year, he said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aqjMfDEei8nE
It’s obvious.
They’ve designed their whole economy selling to the US consumer (and lesser extent, the EU consumer.)
When they rolled over, there’s no way to retool the economy to the needs of the locals, or say, the Indians, or something else.
Down the drain go they. Decoupling, eat my shorts!!!
This article doesnt say anything about china slowing down, or a drop in employment. It says producer prices are down, which are mostly commodities. The steep drop in commodity prices is well known.
The US and others stop building houses and cars, world demand for materials and energy drops 10%; prices for inelastic commodities and oil drops 50%.
I read this as a big plus for china. They can run their factories much cheaper to produce goods for domestic consumption. At the same time they are using their immense savings to lock up long term supply deals for oil and resources all over the world, including Iraq.
In China, anger rises as economy falls
The crisis in global capitalism has spelled trouble for the Chinese Communist Party, confronted by public unrest as factories shed workers and investments collapse.
By Barbara Demick
December 12, 2008
Reporting from Beijing — The signs of discontent are small but unnerving in an authoritarian country where public demonstrations are not permitted.
Laid-off toy company workers smash windows and computers and overturn police cars in Guangdong province. Employees of a liquor company in Harbin travel to their company’s Beijing headquarters to demand back wages. Taxi drivers, as many as 20,000 of them, scuffle with police in protests that have spread into seven provinces.
http://www.latimes.com/news/nationworld/world/la-fg-china-politics12-2008dec12,0,2413482.story
Can I get you another cup of Kool-Aid?
mmmmm kool-aid, from today’s WSJ
The Legacy of Jonestown
Thirty years after the murder-suicides in Guyana, the country struggles with memories of the event.
http://online.wsj.com/article/SB122913025549003423.html
Gotta call my broker to buy more oil and commodities.
I think their plan was to use selling to the US and EU to build their manufacturing base and then use their capacity when their economy matures to sell to their own new middle class.
This article is smoke and mirrors.
China’s inflation didn’t just slow, it dropped off the map. The problem is there is little corporate debt and Chinese corporations do not borrow money except for corporate expansion. No expansion, no borrowing, jobs get lost. All China’s leaders care about is 5MM new jobs every year.
China does not have to worry about the dollar, it is getting hurt by the Yuan appreciation against the Euro. Europe is China’s largest trade partner.
In the meantime, China has formed a mini IMF to provide US dollars to other Asian countries - Korea, Vietnam, Malaysia. This devalues the Yuan by purchasing the other countries currencies and gets China out of dollars. The IMF gave Korea $36B in swaps, China gave Korea $50B in swaps. China is stabilizing the Asian markets.
When Japan tried to do this in 1997, the US intervened and told the Japanese not to set up an alternative international lender. The Asian currency crisis. China is doing I expected.
Wang Qishan asked the US to stabilize the financial market, the US did not do so. China acted on its own. I believe China should have acted sooner and stabilized the South American markets at the same time.
So you may call it inflation, but many followers of China finance are looking at a deflationary policy not inflationary. Money supply is going down.
“Money supply is going down.”
Lol. You’re beginning to sound like that Cash is King guy.
Not at all. China is watching Greece and does not wish to be in the same predicament. The countries policies are an attempt to stimulate investment.
see:
Ronald McKinnon
Gunther Schnabl
“China’s Financial Conundrum and Global Imbalances”
http://www.stanford.edu/~mckinnon/papers/China_Fin_Aug-12-08.pdf
China CPI inflation has declined to 2.4%. - a formerly unheard of figure. Food inflation is down to 5.9%.
China’s vast savings make it nearly impossible to calculate a monetary policy, the velocity of money can and in the past has changed overnight.
Bloomberg missed the point, lost in space - starting to read like the WSJ.
They also upped their reserve requirement - that would have dropped the money supply pretty quickly too.
Very astute observations, Hoz
Very interesting.
Lionel, you’re in Seattle, right? How’s things? And ‘Prime is Contained’, where are yoooo? You’re a PNW dweller, right? Seattle renter—um, well. Let me guess.
Anyway, hello HBBers, espcially PNW HBBers! On Friday I met sleepless_near_seattle and it was great fun! We met at ‘The Spar’ in downtown Olympia, after phone tag, and it was raining and I was back from the wilderness but I was only driving, not walking around in it, so I was fairly presentable and moss-less. I told him on the phone what I looked like, for identification purposes, and then I had a good idea: I was going to find a giant Cuban drag-queen with a glass eye and a wooden-leg and pay for them to perch a nasty little scruffy blonde frizzy-wig on top of his drag-queen head and then have him stump up to sleepless and give a baritone lisp of ‘Why, hello! It’s meeee! Olympiaaagaaalllll!!’ And then shake his wig and giggle trillingly.
Hahahahaahaha! That would have been AWESOME!
But I couldn’t find one around. Jeeze, WHY are giant Cuban wooden-legged drag-queens never handy when you finally need one?!
Next time I’ll plan better.
It was fun to meet sleepless. He’s funny and smart, as we knew from his posts, and I note that his eyes are prettily colored about he exact same dark-brown color as a cube of Scharffen-Berger ‘bittersweet chocolate tasting squares’. Now, one thing nearly marred our meeting—he did not want any tater-tots. I’ve always thought only commies and/or pod-people don’t like delicious tater-tots, and I felt justifiably suspicious, but then he DID want a beer, so that restored my faith in him.
Mostly.
It was cognitively shocking and gave my brain a joggle to hear familiar names, names that I read almost daily on here, actually spoken aloud, when we talked about all of you guys. It was fascinating. Then we discussed who was smart, and who was really dumb and/or crazy (you all know which ones you are.) and….oh, come ON. Relax. Of course we didn’t talk about anyone being dumb and crazy. Every single HBBer is at the pinnacle of evolution, obviously, and charming and brilliant.
Mostly.
It only lasted about an hour and a half because he had to go get packing for a move from his digs to new digs, with his doggie—good luck with your move, sleepless, if you read this, and your doggie—and I had to get ready for a trip to Ocean Shores. I wanted to cram in a quick weekend visit there before heading off to Utarr next week for Christmas. But it was a very fun hour and a half, and I hope to have another meeting sometime after the holidays, or we could even get more fancy and a bigger gathering, or whatever.
Oh, hey, sleepless? Sorry I dipped your scarf in ranch dressing and then gnawed on it.
Oh, I have to tell you this too—I brought sleepless a present! I was quite pleased with myself, and I felt like Martha Ste*wart, without the ja*il-time. I ran down to the shore Friday morning and sto*le him some oysters! Huh huh?! Yeah! Fresh and drippy and barnacley right outten the chilly gray ocean waves and into a beige double-bagged plastic ‘Fred Meyer’ bag!
And then I made a little tiny Santa hat from red felt and vitamin-bottle packing- cotton and glued it onto the smoothest biggest oyster, over the barnacles. I had planned to say to sleepless, “I just found them like this, right there on the rocks! And they was all a’singing ‘Jingle Bells’! I don’t understand!’ and then act all befuddled, with a straight face, to see how he reacted, but as it turns out, the little Santa hat never dried out and when I gave him the bag it contained a squashed little gluey hat and some pis*sed off oysters, which ruined the background effect, so I dropped my plan.
So kids—now you know. Don’t glue Santa hats onto oysters. Words to live by.
Hey Oly, indeed I am in Seattle, just east of the university where I’m a grad student. Here in Ravenna I’m seeing a lot of houses just sitting, with 10-15% price reductions but not a lot of movement. I saw the first house under 400 a few months back, but that’s sitting too. And this is a lovely neighborhood. My daughter was out this morning playing in the snow.
I went out with a buddy of mine who teaches at UW, and after a few margs he was pushing the “buy now at these incredibly low rates!” line. I’ve been very open about how I feel about this stuff, and think that Seattle is going to get absolutely slammed, particularly as tech, biotech and Boeing get tossed in the chipper, but my home-owner buddy just can’t seem to grasp just how bad this thing is going to get. It’s amazing to me. Just this week the university tried to fire his wife in cost-cutting measures, yet somehow he can’t see how unemployment will be a huge mover of the downward trend in prices. He fought like a dog and had her position retained, but, had that failed he would have been in serious financial trouble (despite having bought in 1999). My nextdoor neighbor, whom I adore, confessed to me last week that they might have to dump their house if they can’t get refinanced. Her husband is employed, makes good money as far as I can guess, yet their 7-year ARM will adjust in 2011.
Hey Olygal,
Yep, I’m in Seattle—-Ballard to be more specific.
I was jealous to hear about your meeting with sleepless; from time to time I’ve contemplated seeing whether anyone in the PNW wanted to have an HBB meet-n-greet, but thus far I’ve been too lazy to organize it.
p.s. I would have ordered tater-tots. In fact, I _did_ yesterday, as part of a to-go order, then was dismayed to find only fries in the bag.
Hey! Anyone in Seattle interested in meeting up, or starting a Bubble meetup?
I’ve been lurking here and on Tim’s seattlebubble.com site, and I wonder if there are others who are interested in the ability to discuss this stuff. I don’t think my married, suburban, homeowner coworkers in Redmond are especially interested.
P.S. Prime_Is_Contained & Lionel, I’m near you both in the U-district (just finished up at UW a few months ago, although technically I did most of my time in the Netherlands.)
Thanks for posting about your meeting, Olygal!
We San Diego HBBers had the good fortune to meet one another when Ben came out earlier this year. We definitely need to do it more often.
BTW, we still think it would be fun to have a Vegas get-together in February, but it looks like the economy is hurting some of the regulars, too. That’s the part that really sucks about this whole thing. Good people are going to get sucked into the votex of the debt implosion.
A total aside….
Just wanted to thank posters here for a very interesting set of threads and posts Saturday. I think that yesterday was the first time that I didn’t skip half the posts due to incessant pissing into political pots.
Did Ben flick a few OFF switches?
A certain gold shill “left”, and I hope he doesn’t come back.
I have nothing against gold but incessant appeals to fear always have an ulterior agenda.
All the arguments to buy gold sound too much like the arguments to buy a house a couple of years back.
Bubble anyone?
I’ll accept these economic figures China reports on their economy the same way as I’ll accept the audited financial reports from Madoff Hedge Fund and the SEC.
Who knows what is really going on in China?
Yep.
Would anyone care to comment on, or explain, the legal and regulatory differences between Berkshire Hathaway and an ordinary hedge fund?
A hedge fund is a _private_ investment vehicle and its operations are regulated by the Investment Company Act of 1940. Investments are usually illiquid and can only be redeemed by the company a few times a year, or less.
Berkshire Hathaway is a publicly traded company and is governed by Securities Act of 1933. Berkshire is also _not_ a mutual fund due to its focus on operating businesses rather than passive holding of stock. Its stock is liquid and can be easily sold or bought.
Liquidity and the type of business are main differences.
As far as its portfolio is concerned, nothing prevents any company from owning various financial instruments, from stocks to craziest of derivatives, as longs as they are properly disclosed in the filings.
Hope this helps.
As someone who used to own BRK.A (fortunately, sold it before the plunge!) some big differences come to mind:
1. It’s publicly traded / Anyone can buy it
2. Because it’s a stock, there’s the same amount of transparency/reporting as any other public companies
3. There are open board meetings that anyone can attend
The big difference is leverage.
Berkshire Hathaways invests in derivatives just as hedge funds do, but Berkshire is not leverage as much.
I keep reading these ‘experts’ assessments, almost all say ‘it’ will be over by the end of ‘09. What on earth do they base this claim on? Other than wishful thinking. Nothing compares to what we are in right now…
“We’re going to have weak demand through most of 2009,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh. “It’s going to be a long and severe recession.”
The housing recession that triggered the credit crisis and the ensuing recession show no signs of abating. New-home starts in November dropped to a 730,000 annual pace, the lowest level since records began in 1959, the Commerce Department is forecast to report the day of the Fed decision.
“More needs to be done” to stop the cascade of foreclosures that is deepening the housing crisis, Fed Chairman Ben S. Bernanke said in a speech in Washington on Dec. 4. “Policy initiatives to reduce the number of preventable foreclosures should be high on the agenda.”
http://www.bloomberg.com/apps/news?pid=20601110&sid=aP0_RXyfs84s
Every recovery scenario is based on the belief that house prices will re-bubble. We all know that will never happen, at least not for another generation or so.
My guess is that any re-bubbling will take 3-4 generations.
In a generation, the social services tab comes due. Medicare. Many dollars will be stolen out of every workers paycheck to pay for those at the top of the Ponzi pyramid.
There won’t be any money left at the household level to enable house prices to increase. Barring some sort of major advance in technology, of course.
Also, Faster is correct to point out the obvious - there’s nowhere for interest rates to go but up.
The world’s population is expected to level off by the end of the century. The entire financial and social welfare ponzi scheme is based on an ever growing workforce.
It had bloody well level off given there are already too many people on the planet. But the problem is one of disparity - the “levelling off” will include a slow rise in parts of the world and a slow fall in other (more “productive” parts), in effect slowly chipping away at the workforce of the world.
RE: Many dollars will be stolen out of every workers paycheck.
From this weeks periodical rags…
Av. monthy cost of Dirigo Health (state run program for self-employed small biz) insurance for a family of 4 in ME-
$1880.00.
Av. cost for monthly day care for solo 3YO-$650.00
$2500.00 per month after tax, and you ain’t even out of the food, shelter, clothing, college loan payback, startin’ gate.
LMAO…Watch for white birth rates to crash.
As a $50 billion thief, Madoff will be considered a piker, compared to government confiscations coming down the road.
There is, and will continue to be demand for houses. However, median prices must be affordable, say 2.5 to 3x median income. Recovery will happen when builders build more affordable (smaller?) houses and house resale prices are adjusted downward as needed to attract buyers.
Houses also will need to be bulldozed as they become decrepit with age. Many abodes will become uninhabitable at the same time. In 50 years, a good many places built from 1900 to 1950 will need tobe torn down. So will many houses built from 1980-2000. Lotsa modern-day crap construction out there.
Actually, a lot of the houses from 1900-1950 will still be around, since the “crap construction” ones have already been torn down.
I’m thinking of my MIL’s placa, a 1920s farmhouse. She’s had a lot of work done on it, the maintenance things that any good house should have done. Siding, window frames, roof. My husband helped re-wire it as a teen. (They didn’t even crack the plaster.)
I would not be surprised if this house outlasts a lot of the houses built within the last five years. It’s been kept well and is pretty enough that future owners will probably keep it well out of love. And its construction is better than a lot of more modern places. (It has its design flaws, though. I’d like a place like it but with a safer staircase, for example.)
builders build more affordable (smaller?) houses ??
Hard to do…There is a good reason they “Build Big”…Land and infrastructure cost the same big or small…Every house has a kitchen and some bathrooms big or small…Around here, a electrician in the field costs $110. per hour…They tried the “smaller” more affordable route with condo’s and townhouses but that game is played out…
An electrician,in the field, used to cost $110. With demand for electricians down in almost every part of the country, what makes you think those hourly rates will stay bubbly?
Unions…….
“Every recovery scenario is based on the belief that house prices will re-bubble.”
Housing price drops lead the way into a recession, and they are the last thing to recover as a consumers regain confidence and resume spending, IIRC.
The Market needs to find another vehicle to “bubble” a way out of it. It was the Internet (went caput), then Real Estate exploded like a nuclear bomb and nuclear waste is wreaking havoc, then the next is…….
Where is the next bubble? Anyone? Anyone? Bueller?
I believe the next bubble will be energy. You’ll see huge runups in energy stocks followed by a big bust.
The run up in energy stocks was between 2003 and july 2008.
“Where is the next bubble? Anyone? Anyone? Bueller?”
US treasuries watch for QE “Quanitative easing” and the end of the US dollar as the world’s reserve currency as it gets devauled to equal the amount of work its supposed to represent. Could take awhile everyone wants dollars now just like they all needed RE a few years ago.
I think it’s going to be alternative energy/energy saving technology. Saw an ad before a movie today for Toyota where they were showing a plug-in hybrid.
It’s gonna take a while to replace all the cars out there…
I think the next bubble will be Government. Seriously.
Believe it or not.
The government is going to be a great vehicle for major corruption. It’s going to be a sad state in the US in the next few years. And the first one to start it off is the Gov. of Ilinois.
As a long-term Illinois native (until just recently - have since moved to Colorado), I find the national news coverage on Blago both hilarious and sad.
Ongoing prattle from the ever-preening media posits that Illinoisians are “shocked” by the news that their are hoards of unethical crooks running the state! A pantload of deep-seated b.s. folks.
For at least two years now, there’s been a move afoot by thousands of Illinoisans to get King Blago thrown out on his candied ass. This latest infraction (how DARE he try to sell the Senate seat) is just the latest in a rather long and unkempt string of unethical and illegal wrongdoings commited by da Gov. No one in the national press gave a damn about him screwing over 12 million little people. Only when it involves Messiah Obama do they bother to pay any attention.
Messiahs….Kings….welcome to Illinois!
Don’t get me started on Daley (who overnight seized a lakefront airport and threw landowners off the land without fair recompense, much less any hearing) and Rezco.
There are surely plenty of skeletons in Obama’s closet, for he was an Illinois official. It’ll be interesting once the SHTF. Got popcorn, Neil?
The only highly visible elected official worth anything in Illinois is state attorney Lisa Madigan (D). That woman means serious business and remains above-board. Kirk Dillard (R) could have run and probably won there as he is highly respected like Madigan, but he opted not to run.
I agree the re-bubbling cannot take less than about three generations. Eudemon’s reasons seem OK, to which I would add, memories of the current deflation will have to be erased by the deaths of most FBs and their children.
Only experts that correctly predicted our present situation one year, two years, and three years ago have any credibility whatsoever. Otherwise I believe anonymous strangers on blogs more thant I believe those experts.
As far as quoting Bernake- ditto. Also he needs to show that any measures he has taken in the last 12 months have had any effect whatsoever. Until then, what is really the point of quoting his predictions?
To start the Madoff thread:
I really don’t think any of you get it….how hiring the dumbest, most clueless people you can find makes it easier to commit a fraud.
from yesterday:
BOB:
I’ll bet you a a dozen donuts that complicit staff was 23 year old Paris Hilton type chicky poos with fake boobz….complicit…nope hire them young and dumb…..they can claim stupid and get away with it!!
———————————————
To generate fiction like that takes a very complicit office staff.
I would venture to say that half the staff knows what they are doing is wrong, a 1/4 thinks it is great to rob/lie/steal/fraud, and the other 1/4 are not paying attention, or are afraid of their own shadows.
Either way, ‘paris hilton type idiots’ didn’t bring this on, the powers that be did it knowing full well that they were doing Something wrong.
That is my story and I am sticking to it.
http://www.pbs.org/now/shows/446/index.html
Credit and Credibility (Excellent interviews)
Video: Credit and CredibilityWhat role did the credit rating agencies play in the current economic crisis? This week, a former managing director at Standard & Poor’s speaks out on U.S. television for the first time about how he was pressured to compromise standards in a push for profits.
This week, a former managing director at Standard & Poor’s speaks out on U.S. television for the first time about how he was pressured to compromise standards in a push for profits.
This is not pressure, this is bribery. The pigs set the system up to reward those who could be bribed. The companies who wanted ratings got to choose which rating agency they would go with, and they could give them a ton of money for consulting as well. The gov should have put the rating agencies in a rotation. You want your bonds rated pick a number.
Regulating the rating agencies alone, might have been enough to prevent the HB.
Yes.
I forget where I saw it online, but around 2005, there was a survey done that asked people (10,000 people) whether they admired a good scam.
71% of the respondents answered, “yes”. They did admire a good scam.
If that is survey is accurate, then 2/3 of your fellow Americans cannot be trusted. I’d bet that many of these people would consider it YOUR fault if you “allowed” someone to steal something from you. It’s not the thief’s fault.
That is freaking scary. I would expect 71% to be disgusted.
I expect 71% don’t quite know the definition of “scam.”
LMAO. Maybe 71% think “scam” is something like 401K investing.
I bet 95% of those 71% think that “scam” is synonymous with “rack”.
And no, I don’t mean “racket”.
Is this a great country or what?!
(I’m going with “or what”)
Compare the scenario to the typical foot-soldier in the global housing bubble Pozni scheme. Most Realtors were truly too stupid to realize that it would be mathematically impossible for real-estate to appreciate faster than wages over any reasonable period of time. Or that you can’t borrow your way out of debt.
The whole basic premise that ever-increasing house prices makes them affordable is nonsense, but I think most Realtors and Mortgage brokers not only believed it, but didn’t see how anything could go wrong with this plan.
Its not just realtors, most people just seem to think for themselves when it comes to economic matters. Maybe this is something the State has achieved in the last 100 years of strong central government, I’m not sure.
Much of his staff was family. If story is to believed, they weren’t privy to the inside workings.
Another ironic thing is that some investors, believed he was up to something illegal but assumed it was insider trading. Little did they suspect, he was scamming them. Scamming the scammers. Ha !
There is going to be a film come out of this.
Yes, and the brainless boobs at these failed organizations will be readily re-hired by the mindless HR goom-bahs at other organizations because, well because there’s just no critical thinking skills in the HR ranks these days.
I agree. Most HR individuals haven’t a clue. Nor do their bosses, who tell them to examine applicants based on credentials.
Credentials don’t mean much in this day and age. An ability to think critically does. You want employees from ANY walk of life/background who can effectively/profitably address novel problems.
HR people should be giving applicants tests that measure their ability to think critically. This includes positions in engineering, mathematics and finance. They too need to focus on finding people who are readily teachable and possess the mental acuity to learn rapidly on their own….whether they know anything about your field or not.
There are millions of engineers who could adapt to work in a field traditionally populated by liberal arts majors. The opposite also is true.
Check for the applicant’s ability to THINK.
The please dear gawd hire me i’m desperate fro work…nobody hires smart people today….now way no how….show me a job…
——————————-
You want employees from ANY walk of life/background who can effectively/profitably address novel problems.
Sorry, but most HR staffers have the IQ of a fruitfly and the salary of VP’s
Fruitfly: “Dem’s fighting words!”
So true Eudemon.
I worked for over 10 years at one of the biggest biotech companies here on the SF Peninsula.
At one time they didn’t care if you had a college education. What they wanted was people that could problem solve. Slowly the criteria started changing and the college degree became more important than the ability to think and problem solve.
Unfortunately our HR department was a joke when I started and still was the running joke when I left. Catbert is alive and well at HR departments.
Oly, you’ve got to lay off of those tiny “wild mushrooms”
Why, because I glued a Santa hat onto an oyster? Or because I advised all of you to NOT glue Santa hats onto oysters? *sits up straight and puts on a dignified face *
Well! I defy you to locate better advice than that, my good sir!
And the lavender unicorn standing right here by my desk thinks so, too.
Olympiagal you’re gluing google eyes on innocent sea life… ? You don’t own a deep sea diver outfit ? But no that was in Malibu, couldn’t be you………
‘You don’t own a deep sea diver outfit ? But no that was in Malibu, couldn’t be you………’
Nope. *makes decisive gesture *
I always stay on TOP of the water. Because that’s where is beer is. And there’s fewer sharks hanging out up here.
My experience is that HR contains some very creative types.
They are very creative in coming up reasons to reject applicants.
Any “department” that thinks people are “resources,” to be be used like coal or steam, is always staffed by cretins.
Eudemon, my agreement with your notion that liberal arts types can replace engineers, mathematicians, and financiers is a very limited agreement. When in a supervisory position at a software-engineering firm (compilers) in the 1980’s, I was not sorry to have a philosophy major from a really top-notch undergraduate institution, and there was at least one philosophy PhD (not a symbolic logic geek, either) in another department. However, many of my friends have degrees in various humanities subjects from the very best schools, and their innumeracy is widespread. While I agree that mathematics can be learned in middle life, the frequency with which this actually happens seems very low. Nevertheless, I do like your point about critical thinking, and there are plenty of engin/math/finance persons who lack that skill.
If a physicist were to argue that Shakespeare is useless, he’d be laughed out of town but it is normal for humanities types to be functionally illiterate about basic mathematics.
Extraordinary!
‘…he’d be laughed out of town but it is normal for humanities types to be functionally illiterate about basic mathematics.
Extraordinary!”
And hello! *smiles brightly around the room *
My name is Olympiagal. Every time I add up anything it comes out to be fifty-eleven, no matter what, no matter how many fingers and/or toes or the volume/amount of hopeful cursing I use for the task.
Of course, I did learn math from hairy basketball coaches teaching in the primitive wilds of Utarr. Yes, each and every math teacher I EVER encountered was a coach who had been forced grudgingly into the task.
That could explain some things.
Not so sure about that, az lender. I’ve known several liberal arts majors - including myself - that can pace reasonably well with quite a few engineers/tech geeks…especially computer geeks. Physicists and mathematicians…well, that’s another story. I don’t profess to comprehend quantum mechanics.
Engineers assume that no one outside their sphere could possibly do what they do. Granted, in most cases, they are correct in the assumption. However, there ARE many people out there that can bridge the gap between the deep knowledge/skill that engineers possess (which I do not have) and the typical nob on the street.
I am one of those people. I spent 12 years bridging that gap, working with mechanical/chemical/structural engineers to convert what they knew into something intelligible to John Q Public.
(Curiously, I am equally left- and right-brained according to the half-dozen or so tests I’ve submitted myself to. I do find I must work hard to think linearly…my brain tends to grab numerous facts simultaneously, whirl all the shit around for about a minute, then land upon an answer. Oftentimes, I am right according to others — who more often than not are mystified by my thinking process).
Ooooh….I’ve a question for you guys to ponder. Be prepared - it might give you gas.
Question: Is a musician’s brain - who by definition is a liberal arts/humanities major - wired more like that of a mathematician or that of a English professor?
Do you not think that a musician has an inherent ability to study finance as well? Or engineering? How many musicians have found their way into a math-based field? How many HR reps serving engineering/computer/finance firms have even thought of checking into musicians?
Probably not too many. Never occurred to them because their field of vision is too narrow.
BTW, you might be interested to know that my CHOSEN career trajectory has gone from public relations for Fortune 50 firms (crisis management/annual reports/technical writing/TV) - to finance (energy futures market, circa 1998-2001, then into multi-market brokerage at a mutual fund company until 2004) - to teaching 4th grade starting in 2007.
How’s that?
Next, I’d like to work in the medical field, preferably in a chemist’s lab. Or designing/developing/somehow advancing prosthetics. Maybe by 2015 or so.
I tried for off and on for a while to land a position at companies that examine inventions for their potential in the marketplace (feasibility study type stuff). I had a preliminary bite from a company in Massachusetts, but they didn’t pay enough. I also didn’t like the prospect of living in New England. Still don’t. C’est la vie.
“Question: Is a musician’s brain - who by definition is a liberal arts/humanities major - wired more like that of a mathematician or that of a English professor?”
I think a musician’s brain is closer to that of a mathematician.
I started in music myself, ended up in finance. I really believe that music helped me with math. Can’t explain it, but I’m convinced.
Structure.
I love highly structuralist music myself. I adore Webern, Boulez, Carter.
“HR people should be giving applicants tests that measure their ability to think critically. This includes positions in engineering, mathematics and finance. They too need to focus on finding people who are readily teachable and possess the mental acuity to learn rapidly on their own….whether they know anything about your field or not.”
If critical thinking skills were the main criteria for hiring, we would have 50% unemployment.
YES YES YES and i would have multiple job offers and never be unemployed again…..
=======================
If critical thinking skills were the main criteria for hiring, we would have 50% unemployment.
I think 50% unemployment is optimistic.
LMAO. Ain’t that the truth?
Credentials are an incredibly lazy, shallow and ass-covering way for HR to select applicants (”He has a college degree”) which wastes an incredible amount of talent.
Which is why it is so prevalently used by HR departments in corporate America where the culture is predominantly shallow, ass-covering and wasteful of an incredible amount of talent and effort.
Most HR departments have the imagination of bricks. As an American who grew up mostly overseas, I had a degree from one of the top universities in the English-speaking country in which I lived, and couldn’t get the time of day when I moved to California and dealt with HR people who demanded degrees for positions but thought mine didn’t count because their provincial minds had never heard of it and didn’t fit their cookie-cutter requirements but also didn’t fit into one of their ‘diversity’ categories.
I’ll bet his sons knew all along. Supposedly they turned him in only after he admitted to his misdeeds but I contend he is taking the fall.
China increasing money supply = devaluing the currency.
It’s a race to the bottom, my guess is trade sanctions kick in at some point.
Ooh, yeah, come back Smoot-Hawley, all is forgiven.
(Every single one signs of deflationary times - beggar-thy-neighbor, competitive devaluation, trade sanctions.)
Puddy-Cat: I think the credit vaporization and deflation will take care of international trade.
Just like death takes care of eating disorders.
Russia devaluing-
http://www.guardian.co.uk/business/feedarticle/8143999
Everrrrrrrybody mambo
How low can you go!
Prince Alwaleed Loses 19% of Wealth on Global Slump
By Shaji Mathew
Dec. 14 (Bloomberg) — Prince Alwaleed bin Talal, Citigroup Inc.’s largest individual investor, lost 19 percent of his personal wealth in the past year as the global economic slump reduced the value of banking and property assets, according to Arabian Business.
The Saudi billionaire was ranked the wealthiest Arab with assets worth $17.08 billion as of Dec. 2, the 2008 Rich List, published on the Dubai-based magazine’s Web site today said. That compares with $21 billion a year ago, the magazine reported, citing Alwaleed’s private financial accounts.
———–
Wonder if the hedgfunds got there grubby little hands in any of the Chocolate factory?
http://www.latimes.com/business/la-fi-chinahomes7-2008dec07,0,6321372.story
But…but…China CAN’T devalue their currency. That would impair the ability of Chinese “investors” to be the salvation of California real estate.
Lots of Chinese come to Cali for the affordable education…I wonder if some of these homes will turn into a revolving door for future Chinese students…
No one gambles like the Chinese and I know a few who were willing to buy RE.
Well they will work hard and someday maybe break even ?
China devaluing its currency…
Fed mandating 4.5% mortgage interest rates…
Looks like the depression will be cured by economic homeopathy
Japanese deflation on a worldwide scale. Global lost decade?
Nascar’s Sponsors, Hit by Sticker Shock…
AT the Indianapolis Motor Speedway last July, the parking lot was filled with excited Nascar fans chugging beer, roasting pigs and exchanging drivers’ statistics.
Since then, Chevrolet has said it is cutting back on advertising and sponsorship deals with 12 tracks. Ford is trimming Nascar spending by 20 percent, and Chrysler by 30 percent.
The economic crisis is hitting industries around the globe, and the pain is beginning to filter down into professional sports. Many sports may face smaller crowds and shrinking player salaries, with, of course, exceptions for stars like the Yankees pitcher C. C. Sabathia.
General Motors said in September that it wouldn’t buy any advertising time for the Super Bowl in February; earlier this year, it withdrew Cadillac’s sponsorship of the Masters golf tournament. It has also terminated its $7 million-a-year endorsement deal with Tiger Woods.
http://www.nytimes.com/2008/12/14/business/14nascar.html?_r=1&ref=business
There’s a rumor that NASCAR will be switching to all hybirds next year, “The Prius Series.”
Speeds will be down, but fuel stops will be eliminated.
“Speeds will be down, but fuel stops will be eliminated.”
Sorry to nerd out here, but the Prius actually gets better mileage stopping and starting. It wouldn’t get great mileage driving around in circles without braking; disacceleration (haha) is when the battery gets fed.
I’m trying real hard to feel bad about this.
San Francisco’s real estate industry might be happier to bid farewell to this year if next year offered the hope of anything better. It doesn’t.
“When we get to the end of 2009, I’ll have a smile on my face,” said Bill Drypolcher, owner and founder of San Francisco’s Zephyr Real Estate. “I don’t know if I’ll have any money in my pocket, but I’ll have a smile on my face.”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/13/MN5M14MKSQ.DTL&tsp=1
Boston Globe article about Madoff:
“Friedman said he had spoken with more than 60 alleged victims in the past 24 hours. And many of them are not sophisticated or ultra-wealthy, he said, but rather retirees who had placed their entire life savings, in the $7 million to $10 million range, with Madoff.”
Are these the wealthy retirees who were tabbed to save the Florida real estate market? Whoops!
I need to get up to speed here. Madoff was claiming he had a near-zero risk strategy that consistently returned 4X the rate of inflation, that worked whether interest rates were up or down, the stock market was up or down?
How could that NOT be a ponzi scheme? The only thing that distinguishes it from the traditional ponzi is that it was returning 11%, not 50%, so he was able to stretch the fraud out over decades, not just a few years. I guess the lower rate of return helped fool sophisticated dupes who thought the return was too low to be likely to be a scam.
Yep, since time immemorial, if it sounds too good to be true, it almost certainly is. Reading about “wealthy socialites” bewailing the loss of their “investments” with Madoff, you’d have to have a heart of stone not to laugh at them.
I have a young 20-something friend who got a pile of money from selling a website a couple of years ago. Maybe $500,000 after taxes.
What did he do with it? He found some investment guy who promised him 15%/year! I told him to run the other way from promises like that.
It wasn’t a scam, per-se, it was the naivete of a young guy hiring a young investment manager (who only cared about his commissions!). Needless to say, any “aggressive growth” investment strategy over the past few years based on the belief that things will go up! up! up! was doomed.
Less than $100K is left.
For the record, I told him to put it in a CD ladder and government bonds, just so his retirement savings would have a firm foundation.
Typical.
There’s an old Wall St. saying: making money is easy, keeping it is very hard.
“How could that NOT be a ponzi scheme? The only thing that distinguishes it from the traditional ponzi is that it was returning 11%, not 50%, so he was able to stretch the fraud out over decades, not just a few years. I guess the lower rate of return helped fool sophisticated dupes who thought the return was too low to be likely to be a scam.”
Reminds me of guaranteed pension funds, actually. Should I buy back my retirement or not? How bad is this going to be? I tend to overshoot on the pessimistic side, so I have to price that in. Nonetheless, the speed and depth of this downturn has caught even me by surprise.
And many of them are not sophisticated or ultra-wealthy, he said, but rather retirees who had placed their entire life savings, in the $7 million to $10 million range, with Madoff.”
Sound like stupid trust fund babies to me, ones who got old but stayed stupid. 7-10M !! I’ve worked my ass off for almost 50 years and have not even a fraction of that amount. And even a working class bozo like myself could see the housing bubble miles away and certainly would never invest in a high cost hedge fund. but then as I’ve said I work really hard ( or stupid ) for my money so perhaps I’m more attached to it ?
Bugs: “eh, hey Yos-mite, The WB brothers told me to give you this here work order.”
Yosmite Sam: “…Please report to Washington DC and meet up with the American Iron Works & the UAW delegation…ASAP!…PS, bring all the Dyno-mite you can…urgent!”
Bugs: “eh, so what’s up Doc?”
Yosemite Sam: “Oh, them Dang Varmit Brothers gave me another non-union/part-time/non-residual/non-stipend grimey East Coast job again!”… “Guess I better bring along Foghorn to act as distraction…Hey Rooster, get your war face on we’re goin’ to DC to take on General Paulson!
I hate to make jest of a person in peril but this was simply to funny to pass up.
My local Sunday paper had an aucion notice. The address “Labor in Vain Rd”
Classic!
You just can’t make this stuff up!
Active Short Sale MLS #80086799
2075 Flat Broke Way, Placerville, CA 95667
http://www.metrolistmls.com/
2075 Flat Broke Way, Placerville, CA 95667
yea thats Gold Rush country the road name doesn’t suprise me.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVzCdm.m0txc&refer=home
Telling excerpts from today’s Bloomberg article on the collapse of the Madoff Ponzi scheme:
Bernard Madoff’s investment advisory business, alleged to be a Ponzi scheme that cost investors $50 billion, was never inspected by U.S. regulators after he subjected it to oversight two years ago, people familiar with the case said.
“This is a tragedy,” said Sorkin, a former U.S. prosecutor and SEC enforcement lawyer. “We are going to fight through these events and try to minimize the losses as much as possible.”
Since 2000, he has given at least $100,000 to the Democratic Senatorial Campaign Committee and more than $23,000 to the party’s candidates, including Senator Charles Schumer of New York and Senator Frank Lautenberg of New Jersey, who leads a charitable foundation that invested with Madoff.
Imagine that. You give generously to the Republicrat entities of your choice, and not so coincidentally, government regulatory and “oversight” bodies give you a free hand to do whatever you please. Then, when the extent of your fraud and malfeasance become clear, they declare a “tragedy” has occurred, and “mistakes were made,” while dodging their own responsibility and accountability for turning a blind eye to what should have been an easily-uncovered, massive case of fraud.
And yet year after year, the sheeple continue to vote for the same Establishment bozos, never seeing the connection between their vote for the status quo and the corrupt, venal Republicrat duopoly running this country into the ground.
If there’s one person who is a complete walking pile, it’s Schumer. On one of the Sunday morning punditry shows (I think Meet the Press, but not sure) it was brought up that “pay to play” politics takes many different forms. We decry Blagoevich, but on the other hand, people do expect a quid pro quo. How is Schumer really any different from Blago? He’s just legally blatant. BTW, watch for many of these Madoff investors to be made whole, courtesy of you and me.
The most dangerous place on the planet to be, is between Chuckie Schumer and a television camera.
I once came across Chuck the Schmuck while walking through a neighborhood street fair.
He was kissing babies and preening for the camera. I was trying to hold my lunch down.
Being from Florida, it seems that the most dangerous place to be is between Mel Martinez and any kind of camera, or microphone, for that matter. I’ve seen footage of announcements being made by Florida Republican political figures and Martinez lumbering into the shot has to be seen to be believed. He tries to seem real casual about it, but he’d crush the foot of any person in his way.
Palmy, did you catch this re the Everglades/U.S. Sugar deal? Tuesday is D-Day.
http://www.palmbeachpost.com/localnews/content/local_news/epaper/2008/12/13/a1a_sugar_1214.html
Have you read the NYTimes this morning?
That profile of Chucky the Schmucky?
Its’ the usual NYTimes h*rseshit. Nothing much to read. Move on.
You got me curious enough to actually go read it for once. Are you referring to the Dreier thingy?? Pretty ballsy if you ask me.
I wasn’t aware that Dreier is gay. Isn’t he one of those family values phonies?
Different Dreier.
How on earth did you derive a gay implication from that??
Oh I forgot, you’ll use any excuse to rip someone you disagree with.
“And yet year after year, the sheeple continue to vote for the same Establishment bozos, never seeing the connection between their vote for the status quo and the corrupt, venal Republicrat duopoly running this country into the ground.”
A big part of the problem is that there are no other choices. Until there is campaign finance reform, nothing will ever change.
Madoff’s company was probably covered by SIPC. If so, SIPC may be on the hook for $500K per investor account. If that doesn’t cause SIPC to go belly up, the formerly rich may get up to $500K back and not be totally broke. But they probably won’t be able to afford to live in Palm Beach any more…
SIPC only has 1.5 billion according to reports.
Come, Mr. Tally Man, tally me banana
Daylight come and I want to go home..
They’ll get TARP money, IMO, and be “made whole”. That TARP thing is just one hugely irresistible Pile O’Cash, and I’m sure there will be many calls made (that we will never hear about) to use it to help out these poor investors who were so unceremoniously taken advantage of.
I mean, just think about it. If you’re Neel Kashkari, how many phone calls do you think this guy has already gotten on this very subject? He’s ONE OF THEM, and part of the reason he was appointed to the position he has is because he has to protect them. And does he have the Stones to say “no” to all these rich people (and their lawyers)? My guess is no way.
And, since there’s very little visibility on how this TARP money is actually being spent, he can just push it through one bank or a’nother to reach its final destination. No problem…
They’ll get TARP money, IMO, and be “made whole”.
No way the TARP money is going to the Captains of Industry who we can’t live without apparently.
When the rich go broke, they don’t need much:
http://www.videosift.com/video/The-Jerk-All-I-Need
All I know is that when the relatively “rich” loose money it carries like 10x-100x the punch than when the little guy does. Just listen to them howl!
Where did a lot of those investors live - Long Island and south FLA? Oh yeah, there’s gonna be some big fallout from this one.
Out here, we just push wheel-chaired ladies down a flight of stairs like in Kiss of Death.
Wrong thread. This was in response to the snowballs below.
Some people are like slinkies. They serve no useful purpose, other than to put a smile on your face when you push them down the stairs.
Oh no!…imported china spring steel. ;-(
Made in China = Toxic warning label
Made in India = Toxic label warning
Slinky commerical
http://www.youtube.com/watch?v=CM_sMM_tvX8
Love the green shag carpet!
Will Winter in Saint Tropez for Food
Well, the weather here in Wisconsin is balmy this morning: about 33 degrees. And the snow is starting to melt a little. So I did the only thing I could think of that was appropriate: made a bunch of snowballs and threw them at the squirrels that have been raiding my birdfeeder.
The birdfeeder is only about 14 feet from my sliding door, and it hangs from a tree that tops out at about 25 feet. So when I step outside the squirrels jump off the feeder, onto the tree and run up it. It’s a trap, obviously, for them. Because there’s no other trees nearby they can jumpt to and they’re now at the mercy of my snowball-throwing. Of course, they run around to the other side of the tree so I never really get close to hitting them. But it strikes me as great juvenile fun to be throwing snowballs at another living being at this time of the year.
Heck, while I was peering outside to see where the squirrels were this morning, I saw my neighbor-lady come home from walking her dog in the church-yard across the street. And she turned the dog loose in her back-yard and proceeded to — you guessed it — throw snowballs at her own dog.
It took all of my willpower NOT to step onto the deck myself and launch one of the frozen projectiles at HER. Not because I have any great disdain for her or any great affection for her dog. But just because I thought it would be fun to see her reaction if a snowball landed, splat, right next to her while she was having her own merry little fun.
Anyway, for those of you who wonder how we occupy ourselves in the upper Midwest when the nights get long and the snow starts to melt, well, now you know. It’s moments like these that I wish I had Olympiagal as a neighbor because I think she’d expecially enjoy it if I launched a snowball at her….
‘It’s moments like these that I wish I had Olympiagal as a neighbor because I think she’d expecially enjoy it if I launched a snowball at her….’
As a matter of fact I would. I love snowball fights. I hope I have a hundred snowball fights at Christmas time in Utarr! Snow! Snow! My favorite perch is on top of the goat-shed, but you have to prepare early and make a load of snowballs and sneak up there and line them along the middle ridge in the roof. Then when someone comes up on a snowmobile, or to go on a walk in order to enjoy the beauteous and magical winter wonderland–then! Then I STRIKE! Like a snake! A noisy snake in a pom-pom hat! Blat! Blatblatblat! Like that!
Then when I’m out I just jump off and run away hooting with joy. Or, alternatively, I can just start laughing and fall off. There’s usually a nice pile of frozen horse-poo to cushion my fall.
Speaking of your nefarious plan again: if it was an unexpected snowball that popped me as I was standing there looking innocently at a tree or something, why, I’d probably yelp and spring high into the air and then squeal and run away into the woods jabbering, because I’m kinda high-strung, but that would just make it even funner for you.
Methinks you’re embellishing Oly… Utah snow is too powdery for snoballs, ‘cept in October and March. You moved from the land of Utah Powder to Cascade Concrete. Caught ‘cha!
What a bunch of white, fluffy hooey!
I formally accept this debate, with spirit!
(May I say, I approve of your use of ‘methinks’, and I wonder where you live in Utarr, as you speak with unmistakable snow confidence?)
Now. Maybe in the mountains, on the benches, or in skiing commercials the Utarr snow is ALWAYS powdery light, and I won’t dispute that it often comes in that form, but in MY environs– this’s at me mom’s house in the rural land–the snow is almost always eminiently compactible, no matter how it falls out of the sky. If needed, you just clamp it firmly in your bulky knitted mittens and patiently breathe on it moistly until it gets nice and crystallized and icy-hard. Then pry the ball off your mittens and set it gently down in the row, all ready to go. It’s not like you need a gigantic snowball, sized like a child’s head. A cup a snow’ll do ya, plus they can’t be dodged in that compact form, ’cause the victims can’t see them coming as good. Or maybe the heat of my little yet mighty girl fists always just melts the snow into snowball form? That could be it.
No, wait. That couldn’t be it. My hands have the tensile strength of asparagus.
Look, whatever, all I know is that if you live in Utarr and if you’re dumb enough to give me your address, I’m a gonna drive up sometime over this Christmas Holiday and lurk patiently outside your domicile and…then! Then pop up outta somewhere and show you how verrry wrong you are about the compactibility of Utarr snow into snowballs! S’right!
And for you, dear ‘iftheshoefits’, I will do what I have hitherto done now and then as a special treat, mostly only for my dear and beloved little brothers, Big Al and Little Dave: I shall embed a single, separate, frozen goat-poopie-nugget in the center of each incoming snowball, assuming I can pry them apart, all froze-like as they are to each other and the ground, to extract a single precious element.
Like a cordial cherry!
Except kind of not.
Hahahahahaaha!
Sorry dear, I guess I’m just an east coast snoball snob. I think that everything about Utarr snow is superior (easier to drive in, shovel, looks prettier, etc), except for it’s snoball making ability.
I’ll only take you on if I can answer with the snow of my choice. By the time you’ve frozen your hands waiting for that first bit of Utah powder to compact, I’ll have pelleted you with about three-score Baltimore iceball specials. I know of which I speak.
But of course I jest, I’d never really consider such a thing. Wouldn’t be a fair fight. Not to mention down in Wayne Co. there’s not enough snow to depend on in the first place…
Well allright then. I’m going out on the deck right this minute to pitch a snowball at that maple tree. I’m going to pretend it Olygal. We’ll see how good my aim is…
Crap, I missed the tree but I hit (and broke) one of the wooden stakes in my garden….
So consider yourself warned Olygal. If you ever come around these parts there’s a guy here with a sore elbow who’s willing to pitch a snowball or two in your direction whether you expect it or more likely not.
‘Crap, I missed the tree but I hit (and broke) one of the wooden stakes in my garden….’
Hahahahaa! You missed! Hahahaha!
Now, if I was the maple tree, or if I was me, at this very point I would turn around slowly, with an exaggerated expression of surprise and vague interest upon my countenance, and then I would bob my head up and down annoyingly, like a chickadee, making the pompon on my cap bounce back and forth, and I’d shout so the neighbors could all hear: ‘Shoots! That’s some crappy aim you got there, ButI’mNotDeadYet’, (or Luke, or whatever your real name is), huh huh huh?’ and then I’d whisk back around to where I was before and waggle my bum, and kick my feet in the air like a can-can dancer, and maybe, if I judged your aim was going to continue to be poor, I would pretend to be gathering an invisible bouquet of flowers, while humming a Christmas song loudly and teasingly and waving my bum.
Boy, would you be aggravated! That would make your aim even poorer for the next snowball, see.
I know these things. It’s from long practice in aggravation. Plus, it’s almost like a magical talent with me.
Watched ELF last night. One of my favorite scenes is the snowball fight.
Haw! I love that movie. Say, speaking of Will Ferrell, have you seen this?
http://www.funnyordie.com/videos/74/the-landlord-from-will-ferrell-and-adam-ghost-panther-mckay
That was funny Olygal.
Did you watch “The Landlord Out Takes and The Landlord 20 Years Later: Finding Pearl
Hi HBBers. Thinking that the period between holidays would be good timing, I’ve been busily submitting lowball offers here in bubble central Sacramento, CA. All rejected so far. Sellers, including banks, still have inflated opinions of their houses’ worth. Oh well, I guess I’ll have to wait another year. My goal is to match PITI to rent.
I’ve been royally pissing off some of the local FSBOs, most of whom have put their wish price so high that even the local realtors, who are still True Believers that the Spring Miracle Housing Price Revival is just around the corner, refuse to waste their time listing them.
Most of these greedheads bought in 2004-2007, and are under the delusion that the selling price has to be at least “what we’ve got into it.” At which point I give them my patented look of pity mixed with contempt, and say, “Sorry, but for what you’re asking, I’m a lot better off waiting till next Spring, when I can get much more house for the money.” At which point they usually tail me to my car, piteously bleating that “we’re open to reasonable offers.” To which I always say, “When you price it to sell, it’ll sell. Until then, I’ll bid my time.”
I have no intention of buying now, of course. I just consider it a civic duty to soften up the greedheads for the Great 2009 Fire Sale.
Keep on rubbing it Sammy! You are my hero!
“Most of these greedheads bought in 2004-2007, and are under the delusion that the selling price has to be at least “what we’ve got into it.””
For many sellers, the price does have to be what they have into it. They have no equity, and they don’t have money to bring to the table. They literally cannot lower the price. They’ll sit at those fantasy prices until it goes back to the bank. This has a lot to do with stubborn asking prices. Quite obviously, those aren’t the properties you should be looking at. Around here, I see new listings which are priced way below those fantasy sellers. These are people who have owned for decades, and will sell for what the market bears.
Italics off
There’s a house near me with a big sign out front that says “house for sale; SHORT SALE - MAKE ANY OFFER.” Been thinking about checking it out, as the sign’s been there over a month now.
To paraphase Yoda, “DON’T THINK ABOUT IT, DO IT”
We also are looking in the Sacratomato area and have actually seen some places we like where the PITI is under our rent. For a larger space, with little extras like garages. But not the place we want just yet– we found a house we liked but the lot was simply not. We don’t need a lot of lot but we need some lot for small fry to run about.
Quoth my sister: “I didn’t know they could build on a .07 acre lot!”
(Disclaimer: We have modest needs, like 2-story houses (traditionally less expensive), have sterling credit and a love of projects… so the houses we’ve seen were not turnkey. Yes, they still have plenty of room to fall. And well, we haven’t bought yet.)
let us once again visit the Bernanke speech from the Austin luncheon on December fiz-erst.
Going forward
1. Interest Rate Policy:”We will continue to explore ways to keep the effective federal funds rate closer to the target.”
2. Liquidity Policy: “Expanding the provision of liquidity leads also to further expansion of the balance sheet of the Federal Reserve.”
3. Policies to stabalize the financial system: “The capital injections into the banking system under the EESA, the FDIC’s guarantee program, and the provision of liquidity by the Federal Reserve have already served to greatly reduce the risk that a systemically important financial institution will fail.”
—-
How I read it.
1. We will cut rates, till we are done cutting rates.
2. More liquididty is always available, but dont ever forget that we will give you a high and tight haircut on your debt if we want to.
3. Only entities that we deem systemically critical will not fail.
I’ll add that downside risks to growth remain elevated, and a vigorous rebound of the economy is highly unlikely in the near term. However, the Fed will remain vigilant in its efforts to coordinate global rate cutting along with Foreign Central Banks. The Fed is also closely monitoring the Hedge fund crisis, and will not backstop uber rich people who have not engaged in proper due-diligence.
“…and will not backstop uber rich people who have not engaged in proper due-diligence.”
Will not? Or cannot?
Could the perceived omnipotence of the Fed soon come under some serious stress testing?
The credibility of the Fed is dead. Hey, that rhymes!
Fed cred dead. Bed red Zed!
Why is the Fed stuck in groove about cutting rates? So far it hasn’t worked.
Before I go watch my beloved Packers beat the lowly Jacksonville Jaguars, j’espere.
The easiest way to create inflation is for the Federal Reserve to buy US Treasuries. It is conceivable for the US treasury to buy all the US debt (see James Hamilton UCSD economist’s article). Shock and awe. The Federal Reserve is attempting to convince the populace that there is deflation and that this is the problem to be faced. This requires a pretense of cutting rates. Fed Fund rates are already at 0% without any further cuts. A cut is purely symbolic.
James Hamilton UCSD economist’s article). Shock and awe ??
Tried to google it hoz…Could not find it…Do you have a link ??
FORMER FED VICE CHAIRMAN ALAN BLINDER
“When the Fed buys commercial paper, guarantees GSE debt, or backs asset-backed securities, it is trying to reduce the spreads on each of these instruments over Fed funds or Treasuries. It should keep doing that.”
FORMER IMF CHIEF ECONOMIST SIMON JOHNSON
1) Interest rates on loans should be lowered through direct Fed action on mortgages and in other markets. Purchases of assets by the Fed should not be sterilized by selling Treasury debt. Inflation is much preferable to deflation.
2) Establish a clear policy on how the U.S. banking system will be recapitalized if needed. The Citigroup bailout is not scalable; there are better ways to protect taxpayer value.
3) As most emerging market debts are in dollars, investors around the world are potentially short of dollars. The Fed can expand its swap lines to more countries both directly and though the IMF. When the IMF is involved, the cost of any default is shared with other countries.
PIMCO CO-CEO MOHAMED EL-ERIAN
So (buying) the triple-A asset-backed, Alt-A, credit card, etcetera .. is going to be the next step. Again, you don’t want to get there too early. You want to make sure that implementation occurs well. But that is the next step.
———
cut rates and announce a clear and overt quantitative easing policy strategy?
Packers up by six in the third quarter.
I don’t think the Fed can convince anyone to even tie their shoes at this point.
Nobody doubts the theoretical ability of the Fed to print money. We’re doubting that they can print enough money in enough time to contain the derivatives mess.
My bet is no. And that destruction of money is deflation.
I think, hozzie, ol’ chap, you need a refresher on “fractional-reserve” and derivatives.
J-ville just put up another six.
+1
two weeks in a row.
Hoz, my condolences.
“The easiest way to create inflation is for the Federal Reserve to buy US Treasuries.”
Yep and thats what they will do. And then what ? Gasoline back at 5 dollars a gallon but nobody has a job.
And then when the dollar has crashed in value it will make sense to make things in America again but we will mostly be so broke that it will take 50 years to get things going again.
What do you mean? Is this not deflation? Do you think the Fed can create enough dollars to supercede the number of dollars that are being destroyed? I think not at this point, although I’m certainly open to new information.
Oh, somewhere in this favored land the sun is shining bright;
The band is playing somewhere, and somewhere hearts are light,
And somewhere men are laughing, and somewhere children run;
But there is no joy in Hozville - for the Packer’s season’s done.
http://www.timesonline.co.uk/tol/driving/jeremy_clarkson/article5292547.ece
An apocalyptic view from across the pond.
This is a bit sensationalist for my taste.
Nobody in their right mind doubts the pain that is in store but does anyone think that the disappearance of a lot of Gucci and Gap stores means the end of the world as we know it?
Here’s my prediction: lots of pain, lots of store closings, massive deflation in “fancy” goods, the central banks won’t let “base money supply” fall but since borrowing will/be impossible, it will be deflationary (= failure of fractional-reserve); most people will feel a lot less wealthy because they are less wealthy but you’re not gonna get mass starvation, and the world will go on …
How to invest? That’s a different post, and a different rant.
FPSS, while you are in a mood for predictions, I would like to ask you something.
A couple of days ago you mentioned that you expect the stock market to begin to bottom somewhere in mid 2009. What will be the signs that you will be looking for as a proof that there are some real deals out there? I was a bit surprised that you think it will be so soon. You have always been saying the major issue is the lack of incomes, and I still cannot see from where those incomes will come with all the overcapacity in every sector of the economy both in the USA and globally.
I would appreciate very much your insights. I don’t know much about stock markets, but I have been a long time lurker here and appreciate greatly the education that I got from regular posters like you, GS/PB, Hoz and others.
———————————————————————–
Comment by Faster Pussycat, Sell Sell
2008-12-12 13:59:02
I will not be “investing” until this is all over. Most likely, mid to late-2009 is the first time we will see some true long-term opportunities.
Take these things with a mountain of salt. Nobody knows these things, and anyone who claims otherwise is lying.
Here are my best guesses:
Stock markets at 10x earnings. Current earnings, not h*rseshit like EBITDA or “forward earnings”. Guessing 650 or lower on SP500.
Credit spreads need to blow out on corporate bonds. In a regular recession, junk trades at 10-12% spread to the good stuff. This not being a normal recession, I’d expect it to be >15-18%.
At that point, I would look into it. I said “look” not “jump” for the comprehension-challenged.
Maybe the other regulars want to chime in? If not, we have plenty of time.
Thanks Pussy.
I guess the real question (for me at least) will be to determine what is “junk” and what is “good staff”. Almost everything looks junk to me nowadays.
Another point is how I can have any trust in the numbers for earnings that are given from the companies. They could be totally made up. Is there a way to really check them? This is not a rhetorical question by the way. I really would like to know.
Lot of money from the FED to the banks I expect the stock market to seem to bottom out right about now.
2 years from now it will start down again. Look at Japan and their stock market not too great after 18 years.
Thats my favorite senario right now. But I was also buying up anything that came out of the ground this time last year !! haha that cost me some money and would have cost alot more but I CHANGED MY MIND and sold early this year parked in Money market treasuries.
so far this is like my Grandfathers Depression ( 1930’s )and not my fathers Recession (1970’s). Maybe it skips a generation ?
crazy frog,
We have all year to argue. Sounds like a good time to me.
Just chill. The long-term opportunities will come, and you’ll have all the effin’ time in the world to capitalize (in fact, I bet you p*ss your pants when the chance actually comes.)
FPSS, I would not even dream to argue with you. I am fully aware how little I know about stock market to dare to argue with someone like you. I am just thinking aloud and probably sound a little bit frustrated, which makes people to think that I do not agree.
Frustration = knife catcher.
Don’t be one. Chill.
I’m the most impatient person in the world. However, oddly enough I have infinite patience in exactly two domains - food and finance.
When it comes to housing I am as patient as it comes. Actually, my plan is to buy only after the knife-catchers got foreclosed on and there are no more “make easy money on foreclosures” adds on the radio anymore.
When it comes to stock market, I am even less eager to jump in. (I trade a little from time to time). In fact I am sure that it is much more probably for me to miss the opportunity, than to ketch a falling knife. Thanks for your insights though. I agree that we have quite some time ahead.
Born and bred Canadian dopes…
http://www.nationalpost.com/news/story.html?id=162200
Dodge Sounds Alarm
Banks must co-operate to save debt market
David Dodge, Governor of the Bank of Canada spoke to the National Post’s Editorial Board Tuesday December 11 at the Post’s head office in Toronto.
All Canadians could pay a price if banks fail to come up with an agreement to save the troubled sector of the country’s debt market and $300-billion worth of leverage is allowed to unwind in a worst-case scenario, David Dodge, governor of the Bank of Canada, said yesterday.
“If the whole market goes into a shambles everybody gets affected, including Mr. and Mrs. Jones on Main Street,” said Mr. Dodge. “We have a collective interest in the whole thing not going into a shambles.”
Ah, yes…the “Wall Street equals Main Street” argument.
Indeed, the world will come to an end if the banks aren’t saved!!!
/sarcasm
The worst part of my sister’s housing debacle is not cashing out. Had she cashed out of her primary in 2005/2006 and rented instead of levering and buying 2 additional homes, she’d be up 325,000 (tax free) instead of roughly 400,000 in the hole. She argued at the time selling and buying a new home would increase her property taxes. Sadly, she rejected a real life changing opportunity.
$725K is a serious amount of dough.
Of course, she can recover $400K by entering bankruptcy.
Experience keeps a dear school, but fools will learn in no other.
- Ben Franklin
http://www.usatoday.com/money/economy/housing/2008-12-12-homeprices_N.htm
“National Association of Realtors chief economist Lawrence Yun predicts home prices will keep falling in 2009 but could return to their 2006 peak in three years, not counting inflation.
He says the bubble largely was confined to four states — California, Nevada, Florida and Arizona. “People who bought at the peak in those states will need time for prices to recover, even up to five years,” he says. Yun says people who buy now “have much less risk of price declines and a great possibility of price gains.”"
Can’t we just make this guy go away? I can’t believe they even interview him anymore. And in this article, they explain why prices got out of control, why we’ll never see bubble prices again, compare it to the Depression - then they quote this turd brain.
I keep hopefully awaiting the return of trolls to the HBB. Given the general state of IDIOCRACY that prevails in our fair land, you know that at least some people still take Yun and the NAR at face value, and will try to get us to do the same. Troll-bashing just hasn’t been as fun since the 2005-2006 heyday, when true believers would still show up in here.
I love the NAR and Yun. You should too. They’re the ones offering hope to FBs, assuring them that everything will be alright, that they should hold on their houses and keep up with the payments because the bottom is just around the corner.
With continuing payments the banks get fed a steady stream of much needed money. Without these payments the taxpayers end up getting stuck with the bill.
Relax, and learn to love the NAR.
“Dr. Strangelove” or “How I learned to stop worrying and love the NAR”
LOL
Gentlemen, you can’t fight in here! This is the War Room.
He could be right. 3 years of hyperinflation could do the trick.
If you mean hyperinflation as in Germany (prices of most goods and services quadrupling each year), I don’t think it would take three years, more like half a year. Hard to assess just what level of (non-housing) inflation could bring back housing as an “investment.” Less than a year ago, all of us here were complaining that the real inflation rate outside of housing was being vastly understated, that it was really 10% or more. Yet that didn’t tempt any of us to get into house-buying. I guess if they found a way to get WAGE inflation going, it wouldn’t take long to get people buying houses. But to do that, they’d have to find a way to get people employed. ???
Your right, wage inflation isn’t going to be happening in the next 3 years.
Right now, Congress is attempting to create wage deflation in the auto industry, which if they are correct could end up resetting down the wages for 1 million people directly connected to the auto industry.
Heck, they even cut the salary for the Secretary of State.
Wage deflation is necessary for the auto industry to survive. Figure out what the monthly costs are for a $25,000 auto w/o leases, 0% financing and no MEW to draw from. Now stick that into the median monthly take home pay. Cars prices were almost as bubbly as home prices.
That’s the problem with fiat, in a sense.
You can print the money but the money has to be funneled towards a particular asset class. There is absolutely no reason that it must make its way into any specific one (read: gold†.)
In the last cycle, it went into absolutely every single asset class I can think of — houses worldwide, Chinese modern art, rare books, emerging markets bonds, stocks, you name it, the money made its way there.
All that money has gone to money heaven and is not coming back.
† that pretty much sums up my critique of gold.
A guy I work with just refianced his home. The new price was really a shock to him he just can’t quite beleive it. This was not his first home and like many he rolled the winnings into this one and the equity is almost all gone. Must be worse when one loses real money and not just the banks.
Its in Queen Creek AZ bought at the peak 2006. As a bonus we will probably all lose our jobs sometime next year.
Realtors chief economist Lawrence Yun is in for a fun filled couple of years.
If you want to see some pretty pictures go to this page. A few web cams show different views of Yosemite.
http://www.yosemite.org/vryos/index.htm
Just came over Tioga pass a few weeks ago… Beautiful…
scdave,
I love Tioga Pass and the Tuolumne Meadows. I never get tired going to Yosemite.
I’m having a total freakout day. I just want to get the frick outta Florida.
I’m close to hopping in the car and splitting. We’ve made a decision to relocate, and we see the light at the end of the tunnel, but it just feels like we’re never going to get outta here. I think the holidays are putting me on edge. I have no family down here so it gets me riled up.
My wife and I have laid out all of the various pieces, and the earliest we can split is next August. Ugh.
Well I never liked FL very much when I was there on extended business trips. Makes me understand this woman’s problem to some degree.
http://www.tcpalm.com/news/2008/dec/12/drunk-pedestrian-roof-wont-come-down-seeks-more-be/
“Police were dispatched about 9:15 p.m. to a “drunk pedestrian on the roof” and arriving officers heard the man twice tell Smith to leave. Smith reportedly said she’d leave if the 37-year-old man gave her more beer…”
Where you headed Muggy ??
‘I have no family down here so it gets me riled up.’
Well, you have my sympathy, Muggy. Family all around is a good thing to have at Christmas time. I’m going to Utarr pretty soon and I can’t wait. Somehow all my siblings and my mom seem so much less annoying when I’m wearing a Santa hat and full of egg-nog.
Say, how’s Mini-muggy liking the holiday season? Is he eating ornaments when you’re not looking? I bet he is–he looks like quite a clever and thinky lad. And thanks for posting a photo the other day. I got back late and had to catch up and didn’t get to remark in a timely fashion about his darlingness. That is one charming kid!
Good luck to you. I know how frustrating it can be to stay in a place when you’ve already moved on mentally.
Vermonter, thank you.
OlyGal, are you kidding? He eats ornaments when I’m looking! He’s charming, but dang, he’s a hog. He’ll eat an ENTIRE banana in about five minutes then cry for a bottle. It’s crazy. I’m going to have to have a small-scale farm just to feed him.
Dennis, in Florida it seems like there is always someone demanding beer. Coincidence that you posted that, because just today I was walking in a nature preserve, disappointed with all of the discarded beer cans littering the marsh.
Dave, we are going to move to our native upstate NY. For no other reason than family. We’re still trying to figure out where. It will most likely be somewhere on Rochester’s East side.
‘He’ll eat an ENTIRE banana in about five minutes then cry for a bottle. It’s crazy. I’m going to have to have a small-scale farm just to feed him.’
Super! Imagine how big and fat and healthy he will be, all full of glittery ornaments and everything…
Do you know, interestingly enough, I have recently been made to begin studies of ’small-scale sustainable agricultural endeavors’. It’s like one of those ‘coincidence’ thingies.
I will be super happy to send you handy pamphlets, although I admit that research regarding the ‘Productive Growing of Sparkly Christmas Ornaments’ is sorely lacking. Maybe you can initiate a pilot project. Take notes, when you change his diapers. It could be scientificky.
Family is a good reason IMO…
MADRID (MarketWatch) — Banco Santander SA (STD:banco santander sa adr
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Last: 8.89+0.07+0.79%
4:04pm 12/12/2008
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STD 8.89, +0.07, +0.8%) has an exposure of more than EUR3 billion to the alleged fraud committed at Bernard L. Madoff Investment Securities LLC, Spanish financial daily Expansion reported Saturday, without citing sources.
Santander, Spain’s largest bank by market capitalization and assets, has the exposure through its Optimal hedge fund unit and its Banif asset management unit, the newspaper said.
A Santander spokesman declined to comment.
——-
Santander is the big monkey that is buying SOV.
SOV has not been TARP’d…. something is gonna give.
anybody short Santander?
I client of mine just told me he bought a 4500 SF pool home in the Community of Olympia in Wellington, Fl for $375k. Spiral staircases, all marble, spa, -all the bells and whistles. At the height of the market, I remember bidding wars for this model home ending at around $900k. Now there are over 100 shortsale listings in this decadent community-(one I aspire to live in in, say another couple years after prices take another 20% cut).
Oh how times are achangin’
I don’t care if the mud guys used crushed bone china for joint compound, there isn’t a house on this planet that is worth $375k.
Bingo.
What?! They have an ‘Olympia’ in FLORIDA?! Nohow! Unacceptable! I refuse! IIIIII have the only Olympia. It’s mine!
Well, I guess I must put yet another item on my outstanding list of ‘Things To Burn Down When I Get A Chance’.
It’s getting to be quite a long list. Soon it may very well be longer than my list of ‘Things To Just Leave Alone’.
I’m having a strange mixture of emotions recently, because suddenly this downturn that I’ve been rooting for the past several years is hitting very close to home.
Three teammates in a small league (~60 guys) have been laid off in the past several weeks. That’s +5% unemployment in a very short period in my admittedly very small sample set.
It’s really getting interesting now.
I also heard a rumor that my company is planning layoffs of 10% right after the holidays. I expect to avoid the first round, but give myself 30% odds of being nipped in the second round. I’m not worried, because my cash reserves have strengthened significantly over the past 2yrs; I expect to be able to ride out the downturn without any problem on that.
So while I continue to be fascinated by the downturn, I’m now seeing friends of mine get hurt by it, and there’s no schadenfreude joy in it.
‘I’m having a strange mixture of emotions recently, because suddenly this downturn that I’ve been rooting for the past several years is hitting very close to home.’
S’true! I know EXACTLY what you mean. I heard from the Beachmaster (isn’t that a great name? And a really great guy) of Totten Inlet, here where I live, that Taylor Shellfish is having a hard time lately. Laid off a ton of guys very recently. I was pretty sorry to hear it. It’s entirely understandable, though–when you can’t pay the heating bill, you probably won’t go out and buy a dozen oysters on the half-shell.
But, I mean, I KNOW some of these guys, stumping around all jovial in their waders! They have heating bills, and little kiddies, too…
Test.
10 hours & no posts went through yet.
Well, did you mention your pant*ies? P*anty posts never make it through, as I have learned. Ben has an excellent pan*ty filter up.
Or maybe Ben just doesn’t like Pontiacs. Change your name to Chevrolet, perhaps.
Dec. 15 (Bloomberg) — Sentiment among Japan’s largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession.
Must be why their market is up almost 5%!
Lalalalalalala…that’s me, singing Christmas carols loudly and unprettily at this time.
I been snowed in! Well, not really. Only it IS snowing, beautifully, has been all afternoon, at least one whole half an inch out there, and it’s cold, and I have no reason to go anywhere, and my car would slide if I did. Why would I go anywhere? I have all I need. Yes, thank you Baby Jeebus for the HBB and a well-stocked pantry and plenty o’ beer, is all I can say. That’s why you’ve all heard so much from me today. Snow, and generalized fondness.
Presently I’m wearing a Santa hat and making Christmas cards from scraps. I’m using silvery beer cans from cheap Reservation-style beer and pictures of jewels from Shopko ads stapled to recycled card stock to represent glittery icicles. They look super!
Now, if only all of you were here, instead of stupidly located somewhere else, we could have a bonfire and sing loudly and uglily together. Huh huh huh? Except all of your ugly singing would annoy me. I’m fussy about singing, unless it happens to be my own.
Olygal,
Sounds like you need to make yourself some bourbon slurpees . . .
Lawd, I need a bourbon slurpee….. what’s the recipe?
Huh, I was watching the toob a few minutes ago. It seems that someone threw a shoe or two at the Shrubbery. They missed him though. I’ll bet it’ll get like the airport except they take the shoes away now.
Roidy
Alas, alack
The Packers fall into the 2nd losing season in 16 yrs.
What happened, who took our defense away?
Thank god we get to play
the wimps from Chicago
Next Monday
they will make the Pack look so
grand.
“Executing a vote may be less grizzly than executing investment bankers – but it might be just as effective (but somewhat less theatrical).”
Mr. John Hempton
Pierre! Sharpen the guillotine. Off with their heads.
How could we lose to Jacksonville? weep, weep tears Execute the defense.