Bits Bucket For December 15, 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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I’m sorry the shoes missed.
Me too!!
It’s so typical of the frat boy to wreck the place (like he did his two or three companies), leave everything in a shambles, walk away and let other people clean up his vomit. Hey, after all, this has always been his operating basis. Except he brought it to a national and global level.
My contempt is so deep, it hasn’t found bottom yet.
You know how, every once in a while, you come across a pair of shoes hanging by the laces from the telephone wires? I think we should have a national day of contempt, where everyone tosses a pair of shoes over the telephone wires. Maybe the day before the inauguration. As a little kiss from the citizenry.
If you see shoes draped on a phone line, DO NOT STOP AND ASK FOR DIRECTIONS. Shoes hung over a line is the universal sign that drugs can be purchased there.
That was in a great movie called “Wag the Dog”
I think we should have a national day of contempt, where everyone tosses a pair of shoes over the telephone wires.
Someone told me once that is used to indicate corners where one can buy drugs. If everyone does it, how will we know where to buy our drugs?
I didn’t know that. Just goes to show how naive I am. I always thought tennis shoes over a telephone wire was done by bored kids.
LOL, so did I.
Oh, 97% of the time it is just kids throwing shoes on a telephone wire. Nothing more or less. The idea that it shows a drug den is mostly an urban myth. It’s like when you hear people say that if you flash your lights at a car without its headlights on that the non-illuminated car is full of gang members who will turn around and follow you home and kill you. People just make this stuff up for the most part.
I always thought shoes on a telephone wire was a sign to buy now before you are priced out forever?
Oh Adam, the flashing lights at gang members was/is not an urban myth. Very real part of gang initiation. I haven’t heard the gang task force warning recently, but a few years ago it was a legit bulletin.
Yes, sometimes real law enforcement agencies post warning bulletins about urban legends. Show me one news story, from anywhere, ever, where the flashing lights thing has occurred.
http://www.snopes.com/crime/gangs/lightsout.asp
To a lot of people, gangs are the ‘boogeyman.’ Murdering innocent people who flash their lights. Hiding out under cars in the mall parking lot, waiting to slash your ankles, kill you, and steal your car and murder everyone in your family.
Nah.
http://www.snopes.com/crime/gangs/lightsout.asp
What’s your point Adam? I was the Commanding Officer of a gang task force from ‘96-’98. I saw slashing and stabbing victims almost every day. Are you saying these were attributable to the Boogeyman? or that a warning or bulletin should not be issued until absolutely verified? those are general warnings , not APB’s w/armed and dangerous.
“To a lot of people, gangs are the ‘boogeyman.’ Murdering innocent people who flash their lights. Hiding out under cars in the mall parking lot, waiting to slash your ankles, kill you, and steal your car and murder everyone in your family.”
Some people just have to have a favorite hobgoblin. In their deranged world, everybody is a bad guy and we need pseudo-paramilitarized, chain’em to the ground law enforcement types to protect us. As a side note, there is nothing more funny that a dumb overweight cop who never did his patriotic duty parading around in jump boots and BDU’s.
My point is just that we freak out about stuff when it just isn’t necessary.
Do you know you are more likely to die an untimely death in a suburb than in an inner city? Suburban car crashes kill far more people than inner-city crime. And my experience, having safely lived in crime-ridden areas of cities, is that 99% of ‘gang-violence’ has nothing to do with the anyone outside of the gang circles.
The tragedy is that the young people in bad neighborhoods are being forgotten about and/or turned into ‘boogeymen’ when the reality is that these people need supportive environments and better opportunities.
Or maybe the suburbanite buys a handgun to protect his family from the boogeymen, then his son takes it and sells it to some kid at school for $300, which leads to yet another illegal gun in the already desperate part of town.
Just my two cents.
And then we can hire hundreds of workers to take the shoes down off of the telephone wires. It can be part of the new financial stimulus package!!!
Response to the light flashing thing:
http://www.sun-sentinel.com/news/local/broward/sfl-flbdunkin1205sbdec05,0,4280804.story
I see your flashing headlights shooting and raise you a barks like a dog at the judge:
http://www.sun-sentinel.com/news/local/broward/sfl-flbdunkin1205sbdec05,0,4280804.story
The outrage is understandable considering the 650,000 people dead because of him. However, considering their frantic efforts to salvage his legacy, I wouldn’t put it past them to stage something like this to generate phony sympathy.
Why oh Why didn’t we just admit it was in the world’s interest to protect the oil fields. And just send our troops to surround them….
And let Saddam and the iraqis kill each other over their stupid mindless religious differences. We could have saved 4000 Americans from dying.
1. When Saddam was in power there were few if any killings due to religious and ethnic differences. He did manage to hold together his fractious country rather well, much better than the current “regime”.
2. When Saddam was in power, he, his sons and cronies did all the killings.
In light of the above, it’s hard to argue for or against him.
1. When Saddam was our ally, he did not commit bad crimes
2. When Saddam was not our ally, he committed lots of bad crimes.
Hard to argue against him? are you for real? I guess, it’s also hard to argue against Stalin, Hitler, Pol pot, Mussolini, Franco and bin laden.
If it was “all about oil”, Iraq was a poor choice.
“stage something like this to generate phony sympathy.”
Watch the video, he starts laughing before it happens.
Great conspiracy theory, but that’s just his dumb smirk. If this was staged, then Axelrod was right when he said that Obama was involved with Gov Blog on the Senator appointment and he really didn’t misspeak. It cut both ways….
Unbelievable. Is there any time they haven’t made a contrived effort to deceive?
“Great conspiracy theory, but that’s just his dumb smirk.”
I can see it either way. I’m simply admitting that it could be staged.
I have seen some normal people do crazy things, and crazy people do some really crazy things, so I am open to any “conspiracy” discussion. Now, about Geronimo’s skull…
“War” spending: X billion a month,
Co-religionist fratricide to protest against the Man: priceless.
The democratic party zealots and the worldy Europeans and even the childish moslems have choked themselves on bile for years now because the rest of U.S. doesn’t respect them or their wacky ways, when they know in their shoe-throwing hearts that they are worthy of respect and attention.
It’s sad, really. You don’t get respect for your oh-so-peaceful religion by blowing up 100’s of thousands of your co-religionists, or by sabotaging your own country’s efforts, or offering to host yet another meeting every time someone suggests that perhaps action might now be taken.
Well, now many of these formerly powerless and purple-faced-with-rage impotent groups have their opportunity to strut their stuff in power on the world stage. In the U.S., and in the near future the Iraqis too, and the Iranians when they get their bomb or when the Israelis stop hit them, and with whatever time the fast evaporating aged European cultures have left for more meetings.
Zimbabwe, move over: here we/they/you come.
Hey CA renter. On the Forum I rec’d a message from Virginia re your New Year plan. I’m not sure I got my answer through, so please email me, mimigerstell at yahoo dot com, whenever it is convenient.
Sent you an e-mail, az.
What a news week - Blago, Madoff, and a shoe assualt!
Once again, the line between Onion headlines and “real” headlines gets blurrier and blurrier.
Just plumbing the depths is all. Blago may be a crook, but, as I said yesterday, how are many US Senate members any different? Like Schumer, the walking, steaming pile. And Martinez of Florida.
Then I watched Barney Frank on 60 Minutes last night. God help us all. His parting shot? “Yeah, it sucks, but if it weren’t for me, it would have sucked worse.”
Cringe.
The piece after Barney Frank on 60 Minutes is the most chilling story every run on the Housing Bubble. Maybe Joe 6-Pac doesn’t watch 60 Minutes, but a lot of bubble-flipper pseudo intellectuals do.
It wasn’t news to me - I have seen that same chart many times, and none of that was news. Still it was chilling. He was guesstimating that 70% of the Alt-A loans will default.
If you look at the chart, 2009 is kind of a lull before the next storm, at least due to the mortgage resets. The weakening economy may cause some of these homes to foreclose before the reset. Once the loans reset start to hit, it would be 3-6 months afterwards before we start to see the foreclosures.
The interesting bit was the guy claiming that the stock market has priced all of this stuff in by now. No doubt that some of it is, but if GM does the porcelain swirl dance, there will be aftershocks for months, and I am inclined to doubt that this is fully priced into the market right now.
“…the guy claiming that the stock market has priced all of this stuff in by now.”
I am sure he bases this opinion on things that we already now, however, our past proves that it’s what we don’t know that is what gets us.
More shoes are hurtling through space, like the Madoff brand of sneakers for instance.
If the market was so “efficient” it would never have reached the highs it did in 2007! It reflects popular opinion, not reality
The take away from Whitney Tilson is that significant #s of ALT-A and Optional ARM mortgages are ALREADY in default right now, way before the wave of reset in 2009-2011. That’s both good news and bad news: it shows the likely overall default rate will indeed be extremely high, 70% or more. The good news is that you don’t have to wait until then to feel the impact of such defaults, it is happening now and will keep happening in the next 2-3 years. So no sudden lull in foreclosure in 2009 and then be shocked again in 2010, at least one shouldn’t.
What law did Blago actually break?
Bribery of elected officials is legal in Texas(although the govornor cannot sell pardons any more), just wondering if Illinois had any statutes concerning accepting money for appointments.
Such a sentiment shows contempt for one’s country and fellow countrymen.
If an utterly useless, irresponsible frat boy is the symbol of one’s country, maybe. I don’t see it that way.
My point friend, is that it is not the man, but the office that is the symbol.
I think putting him on on the ballot in the first place sullied the office more than America’s contempt for him ever could.
I respect the Office of the President. I just wish the presidents would respect the office, too.
I respect the Office of the President. I just wish the presidents would respect the office, too.
+1, Palmy.
My point friend, is that it is not the man, but the office that is the symbol.
————–
Blind patriotism, whether to a man or an office, is a dictator’s wet dream. It is one of the greatest threats to a democracy, IMHO.
Blind patriotism, whether to a man or an office, is a dictator’s wet dream. It is one of the greatest threats to a democracy, IMHO.
I agree. In a republic, an elected official serves the people. Any “trappings” should be of public service, not of elevation to something above the people.
One of the most democratic acts I can think of is to do the equivalent of throwing shoes at bad public officials. (Insults are better..
)
Palmetto, I`m not a Bush fan either but I`m not a hater. Just so you know he was voted in twice. I did not vote for him.
Lane
“Just so you know he was voted in twice.”
The first time, he was installed by the Supreme Court. The second time, debatable.
I DID vote for him, the first time. And I’ve been castigating myself over it ever since.
I remember the vote for me or die at the hands of terrorists, but only after our Country is destroyed by gays, campaign well. What a great guy. Remember how happy the masses were back then thinking they made a few 100k off their homes, and it would go on indefinitly? Something was going right. Wasn’t it? Wasn’t it?
How soon ppl forget he actually lost the national popular vote. He was clearly not “voted” in by the majority of Americans.
Hate will make you no better than the people you now profess to hate. Let Obama take power with goodwill and a fighting chance. I think it will be a big mistake for the new administration and its supporters to continue to be so angry at Bush/Cheney. It will get you nowhere except to have the “other” side dig their heels in. Obama is being very clear and careful not to do so and to appoint a balanced cabinet, I think most of the zealots would do well to follow.
For instance, do we need a major investigation into Axelrods word about Obama’s involvement with Gov. Blog. Alexrod went a few years without a miststep or gaffe, funny he should do so now? I will accept his at his word that he “mispoke” and hope the conservatives let it die as well. We’ve had to much of this type of distracting cr@@ for 10+ years. We have a lot bigger fish to fry.
Not to get picky, oh well.
It does not matter what the popular vote is, what matters is who wins the electoral college vote. Bush won both times because he won the electoral college vote.
I did not vote for Bush in either election.
The dispute wasn’t whether he was elected by the electorial college. The implication was that he was America’s choice, which just isn’t true.
Comment by Natalie
2008-12-15 08:32:02
How soon ppl forget he actually lost the national popular vote. He was clearly not “voted” in by the majority of Americans.
*****
And neither was Bill Clinton. Either time, IIRC.
Fib fib fa fib fib fib.
1992 Presidential Election popular vote count
Clinton-43.3%
Bush-37.7%
Perot-19%
1992 Presidential Election popular vote count
Clinton-50%
Dole-42%
Perot-8%
Fib my a*s…..Clinton never won a majority. Period.
Nice try though.
“The implication was that he was America’s choice, which just isn’t true.”
Um, you’re kind of ignoring that the electoral college is HOW America has chosen to choose presidents.
So by definition, yes, the electoral college’s choice is America’s choice.
Read it and weep. Clinton led the popular vote by a wide margin in both elections.
Just readin’ and laughing at your silly justifications. Ignoring the fact that more than half the country voted against him. Funny how that’s ok then, but not with W.
Hypocrisy reigns supreme in the northeast (again).
Sounds like a personal problem with the northeast. Deal with it.
exeter -
The problem with your analysis of the 1996 US Presidential Election is that 49.2% (Clinton’s actual total) does not equal “50%”.
Further, you clearly do not understand the definition of “majority”.
“majority
Pronunciation [muh-jawr-i-tee, -jor-]
–noun, plural -ties.
1. the greater part or number; the number larger than half the total (opposed to minority ): the majority of the population.
2. a number of voters or votes, jurors, or others in agreement, constituting more than half of the total number.
3. the amount by which the greater number, as of votes, surpasses the remainder (distinguished from plurality ).
4. the party or faction with the majority vote: The Democratic party is the majority.
5. the state or time of being of full legal age: to attain one’s majority.
6. the military rank or office of a major.
—Idiom
7. join the majority or the great majority, to die.
Origin:
1545–55; < ML majōritās. See major, -ity
Dictionary.com Unabridged (v 1.1)
Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.”
“Always with the negative vibes!!!”
Donald Sutherland from “Kelly’s Heroes.”
I loved Donald Sutherland in that part.
“Cut with the negative waves Kelly…it’s going to be a beautiful bridge…to no where”
I think the appropriate quote is to imagine Paulson sitting down saying “I only ride ‘em, I don’t know what makes them work.”
They were both really good throws.
Maybe the objective is to show contempt but do no harm, sort of like flipping the bird. If so it was 2 good throws. Plus it’s good for the Iraqi thrower. Imagine the trouble he’d be in if he had hit Bush.
In the Arab world, hitting someone with your shoes or pointing the soles of your shoes at someone is considered a major insult. So yes, similar to flipping the birdie.
The significance of the act was not lost on the Arab world.
(But, yes, some nice shoe-dodgin’.)
I’m sure it meant at lot to those in the Arab culture.
The problem is that the rest of us are all laughing at it like it was a child’s prank, including Bush. The Western world had a good chuckle today but that’s about it. (Those gosh darn Arabs!! Such jokers!!)
You gotta “translate” the gestures to the culture to impart the proper meaning. He would have been much better off flippin the bird if he wanted to actual impart some meaning/immediate impact to Bush.
Unless he was as interested in speaking to his own people as he was to Americans.
Unless he was as interested in speaking to his own people as he was to Americans.
True and I can definitely see that line of thinking in deciding to throw shoes. I still wonder how much impact, in the end, an insult has if the insultee doesn’t get it. The satisfaction ratio on a insult is very low if the insultee thinks the act was funny.
I’m willing to bet you that the Arab reporter in question didn’t get that most Westerners associate shoe throwing with something you do at a bad theater performance, not as a sign of moral outrage.
” a bad theater performance”
I’d say that’s equally appropriate
and really good ducks
He acquired that skill by 8 years of duck hunting with Cheney.
Daffy: “That’s despiccccccccccccipppppplllllllllle!
Monty Python: “Follow the shoe!”…Cast off the shoes! Follow the gourd!
Ah, memories of the little old lady, Keating & a sack of flour!
Any American who is sorry that his President was not hit by a shoe diminishes himself enormously.
Yes, of course: “he’s not my President”, “I never voted for him”, “I love my country; it’s the leadership I despise”, “but what about what HE’s done?”, etc. etc. etc. Zzzzz….These are pretentious rationalizations.
I recall in the late 60s some brilliant playwright in New York City decided to write in a scene in which Lyndon Johnson was f___ing a pig. And he had all the rationalizations why this was completely appropriate. Even as a teenager, I thought that whatever Johnson’s offenses, the people arrayed against him were mean-spirited, self-absorbed and enormously angry. It made me a lot more sympathetic to LBJ.
Even if GWB is not “your” President, think of it this way: if BO nominates someone to the Cabinet, or the Supreme Court, that someone, somewhere, believes is a horse’s ass, would it be appropriate for that person–if he or she really believes in complete good faith that BO is a destructive idiot–is it OK for that person to throw shoes at BO? To give him the finger?
What goes around comes around.
You will have to give us time first. We are all bowing still to the Messiah, BO.
You and people like you represent the worst side of present day America. Have some respect.
“The problems of the economy will not be resolved by anything that the government and the Fed are now doing or contemplating doing. These problems are too deep and structural. The financial system has failed, but the problems are far more profound. They arise from a long-term set of government and monetary policies, and they go to the production structure of American business. They reach overseas into trade issues. They reach into our poor educational system. They reach into ethical failings. They reach into misguided war policies. When a social and economic system has been misled for decades, the results go deep. They can’t be altered by public works spending and money-pumping.”
http://www.lewrockwell.com/rozeff/rozeff245.html
Very well put. History rhymes, it does not repeat. Time will prove that historical templates cannot simply be overlaid onto this contemporary crisis.
I’m a man of wealth and taste
I’ve been around for a long, long year, Stole many a man’s soul and faith
…
But what’s puzzling you is the nature of my game
–Mick Jagger, “Sympathy for the Devil”
Although he died nearly 60 years ago Charles Ponzi’s name lives on. He was a con artist who built a pyramid of investors by paying very high returns from cash inflows from new investors. There was no source of real value creation; early investors profited from the gullibility of later investors. As word spread of the high returns, an investment bubble was created. But no bubbles inflate forever and Ponzi’s scheme collapsed.
The revelation that Wall Street’s Bernie Madoff was running a huge Ponzi scheme has shocked the financial world. Billions of dollars have been lost.
http://www.forbes.com/opinions/2008/12/14/madoff-ponzi-pyramid-oped-cx_rfb_1214bruner.html
Some elite insiders lost money on this scheme. I smell a scandal behind this scandal.
What’s more, how is Madoff any different from some of yesteryear’s bankers and REIC leaders. They made off with billions in bonuses and stock sales just before the housing bubble ponzi scheme collapsed.
“Some elite insiders lost money on this scheme. I smell a scandal behind this scandal.”
Oh, EXACTLY! Some of these so called “victims” knew something was up, but looked the other way as long as they got their returns. Something I was reading on the net (can’t find it now) stated there could be a “claw-back” for some clients who “redeemed” their funds earlier, if there are indications they knew something. This should be a real hoe-down hootenanny.
I wonder when the masses will wake to the fact that the American economic system/engine has been one great big Ponzi scheme?
Eric Sevareid did a report 25 years ago or so, on the largest Ponzi Scheme in America…. Social Security.
Fractional reserve banking is ponzi scheme numero uno.
You got it.
+1
The PTB must avoid that awakening. In fact, the PTBs of all nations must avoid it.
So, are we approaching the point where the nations of the world turn on one another in an attempt for their homegrown PTBs to retain power?
I wonder when the masses will wake to the fact that the American economic system/engine has been one great big Ponzi scheme?
Oh? You mean the internet was fiction? The cell phone revolution was fiction? The entertainment industry was fiction? The health care was fiction? The drug research was just throwing money away?
Bill,
Contrary to popular belief, most healthcare research is funded by PUBLIC money (universities, NIH, public grants, etc.).
Seriously, check it out.
I am shedding a tear for these poor destitutes…
http://online.wsj.com/article/SB122930191111005507.html?mod=googlenews_wsj
Smallest violin is playing…
Why oh why do people *turn all their money over to* someone else to “manage” or “invest”? It seems like rich people, famous athletes, movie folk do this all the time, and are emulated by the wannabes further down the food chain. I have someone who handles all that for me.
Morons.
By all accounts, Madoff was the insiders’ insider. The guy ran a broker dealer in his basement. Insiders believed him b/c they thought he knew which way the market was going before the public. It’s poetic justice.
Why oh why do people *turn all their money over to* someone else
Greed?
“Why oh why do people *turn all their money over to* someone else?”
We had that discussion recently with another couple and they basically said, “For the same reason we don’t drill and fill our own teeth.” In other words it’s too hard for J6P-types to know the ins and outs of investing so let a “pro” do it.
Sorry, but given the significant amount of money that’s at stake, I’m going to take the lead in managing it. And I’ll still let a dentist do the drill and fill.
If my dentist could make a fortune by drilling my teeth wrong - I certainly would drill my own teeth. Or at least find another dentist that I knew was trustworthy.
In other words - bad analogy by that other couple.
It’s not just having someone handle it. It’s that there were no electronic statements and nobody had access to their accounts on line. A sure sign of suspicion.
You can have someone “handle” your investments, but if you can’t monitor them yourself every day, that’s a problem.
If you believed or suspected the guy was trading on inside information, you wouldn’t care about electronic statements highlighting returns. You would assume it was simply his method of accounting, his way of managing every possible kind of ‘risk.’
Why would anyone pay a hedge fund a fee only to have the hedge fund give Madoff all or most of the money? Why go through that kind of effort to put distance between you and Madoff?
If you really suspected Madoff was breaking the law you would want no electronic/paper trail to interfere with you plausible deny ability defense.
Not that it’s a very good reason, but it allows people to ultimately become end-users in funds that may have higher net worth/initial investment limits.
You trust experts EVERY DAY. You let the mechanic fix your car, etc. etc. It must be nice to have more money than you can effectively keep track of yourself.
What does an expert make? Is it complete understanding of your subject matter? Education? Intelligence? Integrity? Would you have trusted Mr Madoff until last week? Seems that a lot of very intelligent people trusted their life savings to him, assuming that he was an expert…. and lost it all.
Experts are way over stated IMHO. They might be good in such a narrow scope, that they have lost track of reality outside that scope. Look at those educated far beyond their intelligence, and those that without formal education in a subject matter, scratch their head, and say, that doesn’t look or sound right…
I think the idea of financial experts is sound in theory but poorly implemented. It seems it would be more prudent to accept financial advice but hold the purse strings yourself.
Giving your money over to a financial expert seems approximately like the cases we have seen where a person has hired a contractor to build a house and has given that contractor the unlimited ability to draw against a loan in the buyers name. It just doesn’t make any kind of sense.
What does an expert make?
I agree on all of it.
Ironically, I just went to the dentist today and disagreed with recommendations for both my kid and my self.
For my problem, I’ll be asking for a second opinion because I felt the dentist in charge was a little too complacent with the hygenist’s recommendations. I had socks older than the dentist, and I’m only 34, which says something. (He was cute, though.)
For my kid’s issue, I have a significant disagreement about even the possibility of interfering with growing bones to only partial cover come what is, in essence, a slight cosmetic issue right now that in no way interferes with my child’s life.
The problem with the couple’s analogy above is understanding the role of any hired “expert” help. My role as the “boss” is to advocate for myself and understand an “expert” who sees me for 1/2 hour can’t possibly fill in all the gaps and make appropriate decisions for me.
So I wouldn’t drill or fill my own cavities, but I will question the need and control the timing of any invasive dental procedures.
The problem is of course, that “experts” rarely like to take the time to explain what they are doing and why, especially in the medical field. There’s a very real time crunch, of course, and also the distinct possibility that you may dead end them with logic (I’ve done that more than once…it wasn’t pretty.)
Well I guess I’m the greedy one then. Like Scrooge McDuck, I’d want to look at it and play with it every day. I remember the comic where McDuck would swan dive into a pool of money. LOL
How much you delegate to “experts” depends on how much time and interest you have.
My trust fundy pal considers it his “job” to manage his money. He doesn’t need a job nor an expert.
If I didn’t work full-time I would surely never call a plumber. With enough time, I have the ability and interest to learn almost anything.
Don’t think I will ever have the ability or interest in filling my own cavities.
My surfboard has a few dings - learn how to repair it myself is on my to-do list.
Though most of you probably know this already, there’s more and more talk about pay cuts for municipal workers in Southern California (and all over the state, I’m sure). In addition to that, there will probably be some layoffs, retired people will not be replaced, and “vacant” positions will not be filled.
Just wanted to make HD & flat’s day.
As I said a few years ago, NOBODY will come out of this unscathed, not even the govt workers.
Apparently, one of the victims of Madoff’s Ponzi scheme is Fairfield County (Connecticut) pension fund. Not to be confused with the Fairfield Greenwich hedge fund operation, which is also a victim. So there’s a bunch of public workers who are SOL.
This “bailout” crap needs to just come to an end. Like the frat boy said, “This sucker’s gonna blow”. Let it. And then assess the damage and do what needs to be done, which is to sweep the board and then re-set it.
No problem, i’m sure they will get access to the tarp funds too.This is chump change compared to the trillion the government has fleeced from the us taxpayer.
By they way tarp= treasury assisted raping of american people.
Anyone know who makes the printing presses that the us government uses?I’m looking for investment ideas for my clients.
They better NOT use the tarp funds.
And if they do, I wonder whether they will refund only the original principal, or also the “earnings” from the fake 1% monthly returns that showed up on their account statements but that never actually existed.
Fairfield Greenwich a victim? I call BS. FGG’s salesmen were arrogant jerks. That’s the only reason my company didn’t sucked into investing.
Apparently, one of the victims of Madoff’s Ponzi scheme is Fairfield County (Connecticut) pension fund
And this is what they will use to justify TARP saving all of the investors.
no fed layoffs yet
they just got 5.8% raise for showing up
join today
cagw.org ntu.org or go all the way lp.org
Though most of you probably know this already, there’s more and more talk about pay cuts for municipal workers in Southern California (and all over the state, I’m sure). In addition to that, there will probably be some layoffs, retired people will not be replaced, and “vacant” positions will not be filled.
When the state starts to seriously cut, then I’ll take it seriously. That should be sometime between March and August for California.
It won’t just be SoCal. The venture capital dearth is going to kill The bay Area’s economy. The largest donor state going down isn’t going to be pretty…
Got Popcorn?
Neil
Neil, you going to cause the “Marinfidel’s” to stop ordering anymore gourmet popcorn and boutique dog biscuits.
We need more than layoffs we need a start over…Systematically carve of each department of the muni’s and have the private sector bid on it…Take your time so there is not to much disruption…
Hey CA Renter, on the Forum I rec’d a message from Virginia re your New Year plan. Not sure I got my answer through, so please email me, mimigerstell at yahoo dot com. Thanks
Check your e-mail, az.
OK, my first comment didn’t show up. Is “morons” banned?
Arnold and Joan Sinkin are on CNBC right now, hoping someone will help them after Madoff took ALL their money. They would have done better listening to Bob Brinker and putting it all in Vanguard TSM! And that’s saying something.
They should have diversified, as they seem so fond of telling us to do.
They should have kept a few million back as a reserve.
They should have set up the financial equivalent of a “go-bag” in case they had to bail fast. (for example, set up a low cost estate in Europe or cheap US for a half mil or so, where they could live cheap off their savings if necessary.)
Morons.
If only we could ban morons….
Observations RE: Madoff Ponzi scheme:
1) In “ordinary” times, a $50 bn Ponzi scheme seeing light of day would shake the stock market to its core, but in light of the $700 bn TARP and untold $t’s in liquidity injections, it caused nary a ripple.
2) As someone already pointed out here, it is unlikely to be the last major fraud scheme to unravel before we are collectively out of the housing bubble woods, as there is never only one cockroach.
How many hedge funds are “smoke and mirrors”? IMO, I think we will soon be finding out. They need to start throwing lots of these financial criminals in jail for fraud and treason (as in financial terroism/destroying our country. How many Madeoff’s are getting taxpayer bailouts?
Once Wall Street 26 year old guru’s see this… they will be scared of ever doing anything “illlegal” or “immoral” ever, ever again!
“Madoff faces a maximum penalty of 20 years in prison and a $5 million fine if he is convicted.”
.01% of damages for a fine, yeah that’s going to sting…not.
Odd, I’ve seen cases where ponzi schemes of $13 million ended in life sentence (Google Lannie Lown). Yet 50 billion ponzi nets 20 years?
Assuming one charge of fraud: 20 years.
Throw in mail and wire fraud and multiple counts and other variations and soon Mr. Madoff will be playing for multiple life times.
20 is the minimum. Then we talk restitution, which will be obtained by leveraging his family with jail time. He will squeal and bring many other down too.
I have seen this episode a few times…
They’ll be after him and his like the Brown family going after OJ.
OJ’s gonna sit out the financial meltdown. Gonna miss the inflation. He’s not even an FB!
shocking to read in the newspaper that Madoff’s firm was audited three times over the last 10 years and they apparently didn’t find anything suspicious. Did he use part of the 50 billion to bribe SEC members / auditers?
I don’t think we will find out soon about other rippoff companies, apparently the authorities are totally uninterested in catching these guys. Probably they are careful enough not to have too many influential politicians as a customer.
5 million fine is pathetic, but compared to what happens with such people in Europe it is a serious punishment. I don’t know ANY example of a corporate crook that spend serious jailtime or paid more than a couple 100K in fines. Guys that steal a couple of billion get away with proforma sentences here, and sometimes 80-120 hours of community service (which they don’t do of course, or maybe they send someone else to do the job).
The WSJ says Madoff has been hoodwinking the SEC for about 16 years. I didn’t realize the frat boy in the WH had won FOUR elections!
Some day people will wake up to the fact that adminstrations are for show. The real power lurks in the underlying bureaucracy. Laws and mandates come from above, but the details and operations work from below. Laws are easily ignored when not enforced.
Auditors are not magical ninjas who can swoop in and find all fraud in a single bound any more than police detectives can swoop in and solve all crimes committed in a city.
If you are very smart and take the time and effort, you can fool auditors. There are many examples of the extent people will go to in order to accomplish this. Some criminals are extremely intelligent.
It is also note worthy that Madoff did not use one of the “big 4″ audit firms.
should have been a tip off, right there.
Arthur Anderson, though. Just saying.
Makes me think about all the folks rotting away in jail because of 3 strikes law in CA:
some of them getting life and their third strike was having some weed on them….
…and all these bigwigs scamming others out of millions of dollars and never get caught.
White collar crime pays better than any other crime.
From cbsnews.com/stories/2002/10/28/60II/main527248.shtml
“California’s three-strikes law says that if someone commits a third felony after committing two prior similar felonies, then the sentence is a mandatory 25 years to life.
In such a case, Leandro Andrade was given not one but two sentences of 25 years-to-life for stealing nine children’s videotapes, including “Snow White,” “Cinderella” and “Free Willie 2.”
Mandatory sentencing was enacted to promote the growth of for-profit corporate prisons all across the country.
There’s some “privatizing of government” in action for you.
Like it or not, crime rates fell rather dramatically after enacting the “3 strikes” law.
I’d like to see legalization of marijuana (at least), but many times, we need to use whatever tools necessary to get the thugs off the streets. Oftentimes, that’s just a drug bust, even though they are guilty of much, much more.
You need three **felony convictions** last I knew. That’s not just carrying a dime bag around, is it?
Remember Enron. Thay scam was about worth 50 Bil. as well and THAT was front page news for over a year. This is just ONE fund, not a massive company like Enron. This is 100x more newsworthy than Enron IMHO.
Page last updated at 12:51 GMT, Monday, 15 December 2008
Banks hit worldwide by US fraud
Bernard Madoff in 1999 - AP Photo/The New York Times, Ruby Washington
Mr Madoff is the former chairman of the Nasdaq stock exchange
Some of the world’s biggest banks have revealed that they are victims of a fraud which has lost $50bn (£33bn).
Is madoff trying to form a bank holding company about now????This ponzi scheme is no different from the subprime scheme.Might as well get in line.
Rumor has it that on Crissy Cox’s Mercedes SUV he has a bumper sticker that says: “Blame the Democrats!” …but you might not be able to see it with that U-Haul he’s towing. I think we should throw a “Welcome Back” regalia at Fascist Island upon his return to the “Golden State” …make him the “Grand Marshall” of the Doo-Dah parade
Madoff ‘Tragedy’ Said to Have Escaped Scrutiny by SEC:
“…The Securities and Exchange Commission hadn’t examined Madoff’s books since he registered the unit with the agency in September 2006, two people said, declining to be identified because the reviews aren’t public. The SEC tries to inspect advisers at least every five years and to scrutinize newly registered firms in their first year, former agency officials and securities lawyers said.”
“…Madoff, 70, who had advised the SEC how to regulate markets and donated regularly to politicians, was arrested Dec. 11 and charged with operating what he told his sons was a long-running Ponzi scheme in the New York-based firm’s business advising rich people, hedge funds and institutions. His ability to avoid detection may fuel debate about the SEC’s effectiveness and the adequacy of its resources for policing money managers.”
http://www.bloomberg.com/apps/news?pid=20601213&sid=atBIu3Se5SQk&refer=home
we need to bail him out
It is truly horrible that all these large banks failed to perform one act of due diligence aka Homework.
I won’t invest in a stock without going through its corporate report and financials, why would I invest in a fund without seeing audited financial reports?
If I were a shareholder of these bank stocks, I would sue the banks for failure to act in a responsible manner. The entire board of directors of these banks should be fired. The act of buying CDOs based on rating agencies is more understandable than handing Lars (or his equivalent) a few Billion on faith.
Yeah, every penny I get comes from the state of California, but even if we get a cut it will look good compared to people who don’t have jobs. Also, I don’t own an ounce of real estate. Now is when the roller coaster is distributing the barf bags.
I read last night a number of states are running low on unemployment benefit funds. In fact, some are borrowing from the federal government to pay claims. Other states are preparing to borrow. This is getting uglier and uglier.
Palm Beach Smashed By Hurricane Bernie
The Bernie Madoff fraud slams into the Palm Beach economy: Super-luxury condos have hit the market. Pawn shops have snapped into action. Dog walkers, lawn mowers, accountants, and lawyers are expected to be thrown out of work. And more…
WSJ: In this island enclave in south Florida, the damage is especially severe. Scores of local residents who invested with Mr. Madoff are believed to have combined losses in the billions of dollars. Many are retirement-age golf buddies and country-club colleagues of Mr. Madoff, who has owned a home in Palm Beach since the late 1960s.
Shocked investors are saying little publicly, but signs of their sudden financial distress were emerging over the weekend. By Saturday, four multimillion-dollar condominiums at Two Breakers Row, a complex just north of the landmark Breakers hotel, were put up for sale by owners who invested with Mr. Madoff, said Nadine House, a real-estate agent here. The condos sell for as much as $17 million and generally cater to part-time residents who enjoy access to the seaside hotel’s golf course, room service and other luxurious amenities…
“I don’t work on Saturday, and my phone was ringing lots,” said Levi Touger, owner of Royal Pawn & Jewelry, in nearby West Palm Beach, who said he fielded calls offering a Ferrari, a Tiffany ring and a yacht as collateral…
Amy Millman, Bank of New York Mellon Corp.’s managing director for Florida, said the mess is “a financial tsunami on Palm Beach island, and it’s capsizing so many families.” Her Palm Beach office was flooded with frantic calls late Thursday and Friday from local investors hoping to transfer funds out of Mr. Madoff’s firm…
Wow! It blows me away that people on that level live pay check to pay check. Was this a local news article or on the net?
Lane
I bet the conversations until last week at the country club all went “well you know, I’M invested with Bernie Madoff, and I’M making 12% per year”. It’s paying for my new Mercedes! (I’M SPECIAL, AND I’M BETTER THAN OTHER PEOPLE.)
It’s exactly the same as the housing greed-based bubble talk - “I flipped a house and made $100,000K, and MY house has tripled” (I’M SPECIAL, AND I’M BETTER THAN OTHER PEOPLE).
China, Russia and Iran?…now what is in South America that they could use? Hmmm, perhaps wine from Chili or wool from Argentina?
Cheney-Shrub: “I never learned to speak Bolivian @ Yale”
Bush Excluded by Latin Summit Favoring China, Russia, Iran Ties:
Latin American and Caribbean leaders gathering in Brazil tomorrow will mark a historic occasion: a region-wide summit that excludes the United States.
Almost two centuries after President James Monroe declared Latin America a U.S. sphere of influence, it is breaking away. From socialist-leaning Venezuela to market-friendly Brazil, governments are expanding military, economic and diplomatic ties with potential U.S. adversaries such as .
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0a8IQrfwSFU&refer=home
Sorta’ like we have done in Eastern Europe.
I’ll see that bet and raise ya one…
Well, that iciness should improve soon enough.
I really wish Richardson had been tapped for the next Sec. of State position, however — he’s very well-regarded in Latin America. He would’ve given us a big credibility boost in our own hemisphere.
I say round up all there citizens that are here illegally, and deport them to Russia.
The last time I was in S.A., I asked my hosts why everyone was so polite and nice to me. The response was America has not been involved in S.A. politics since the US got involved with the Middle East.
Given a choice between dealing with China which is looking for additional resources or with the US which is looking to expand its corporate hegemony, many countries opt for China. China does not require political correctness to obtain funds.
1936?…well, it’s only taken the little Wall St. guru’s 72 years to figure out how to manipulate that rule… “let them eat my cake”
“When Wall Street decides that commodities are an asset class, it has a direct repercussion on the price you pay as a consumer,”
The futures markets were designed to allow farmers to determine expected demand for their produce and hedge against market swings by locking in prices for a period several months in advance. Speculators, by contrast, have no connection to the actual commodity and instead invest as they would in stocks, aiming to profit as prices change.
‘Posed a Threat’
“Congress recognized that unlimited speculation posed a threat to the commodities futures markets” when it passed the Commodity Exchange Act of 1936, Masters said in his June 23 testimony.
Corn Futures Spark Riots as Speculators Take Trading to Limit:
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=am0liFlDE1U4
“The futures markets were designed to allow farmers to determine expected demand for their produce and hedge against market swings by locking in prices for a period several months in advance.”
Nope.
The futures markets were designed by product buyers to hedge their costs.
Japanese Rice futures markets were around years before the colonies became a country and there are reasons to suspect the Phoenicians had futures exchanges. The Japanese rice exchange is the oldest modern system.
In no case were they set up to help the farmer.
http://www.nytimes.com/2008/12/15/business/15evict.html?_r=1
“In a move that provides relief to thousands of renters who face eviction but draws the federal government even deeper into the housing market, the loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company.”
While it seems fair to allow renters to stay on, I wonder how well equipped Fannie Mae is to be a property manager.
Finally! Someone’s doing something for the actual VICTIMS of this! I’m shocked!
I’ve known several people who were displaced because their landlord was in default and they didn’t know until foreclosure notices were taped to the door.
I’m not sure that qualifies as victimization. Being displaced because of poor decisions by the landlord is one risk inherent in renting. If you want to mitigate that risk, you can buy a place to live in. I think pretty much the only other option is to accept the risk.
I take that back, one other option would be to vet your landlord before renting, i.e. check the mortgage/property tax status on the place you are going to be renting.
That was what I was going to say.
Much like an interviewee should vet their employers as well, perspective renters should also vet their landlords.
“prospective” I mean.
Another option would be to require the tenant be notified earler in the process, so they have reasonable notice, such as is given to an “owner occupier”.
It has become very risky to rent an house in most places, because chances are the “landlord” is either behind in his mortgage or about to be.
Not that I trust the Government to administer this program correctly, but my point is it’s nice to see some level of concerns for people who did nothing wrong and just tried to rent a house. I’m sick and tired of seeing money and sympathy shoveled out to people who “lost their homes” who put no money down, sucked cash out, and were paying a teaser rate comparable to rent.
Of course for every tennant that Fannie Mae takes on; they should also make sure that the former landlord did nothing wrong (for example, did he state he would occupy the property on the mortgage application?) and if he wasn’t 100% clean, throw his a** in jail after trying to recover money from him.
I know many on this blog are renters by choice, but the majority of people renting would prefer to be home owners.
Your statement that “I’m not sure that qualifies as victimization. Being displaced because of poor decisions by the landlord is one risk inherent in renting. If you want to mitigate that risk, you can buy a place to live in”.
As someone who has had to endure an owner-occupied eviction (my home of 5 years the landlord wanted to move in), had a house I was rented sold and then had to move, and had to move again because I wanted a dog and my landlord said no — I would gladly own my own house.
Alas, her in my fair city (San Francisco) only the old folks who bought pre-1995 and the trust fundies, and those who cashed out before the tech bubble burst can own here.
Average house price still at $700K (down from 900K) although as we all know that is changing fast.
Hang in there sfrenter, hang in there. Prices are coming down. When prices do come donw, how sure are you about buying? San Francisco Board of Supervisors is not friendly to landlords, owners and businesses.
donw=down
Oh great, another scam opportunity for Miami. Rent a $1000/month house to your cousin for $50/month before you default, with the understanding that he’ll send you another $450/month under the table as long as Fannie lets him stay there.
Simple answer
It doesn’t take long to ask what the rents are within a mile radius..
Then provide the tenant with a signed lease and where to send the check…. no pay, well start eviction proceedings asap.
Yeah right, we’ll put the same people from the Government charged with stopping Medicaid fraud in Dade County to do it. Or perhaps the people from the SEC that were supposed to supervise Bernie Madoff, they’re very good.
Hedge fund body wants help for Madoff victims
LONDON, Dec 15 (Reuters) - Hedge fund trade association the Alternative Investment Management Association (Aima) called on Monday for restitution for investors caught out by an alleged $50 billion fraud at New York hedge fund firm Madoff Securities.
“Clearly, lessons must be learned, restitution must be secured for investors, and processes/safeguards must be improved to prevent such a situation recurring,” said a spokesman for the association, which is based in London but has 1,280 members worldwide.
How about they pay it out of their 2&20?
Not one tax dollar should go to cover these losses.
Funny how the rampant cargo cultism brings all the peeps down to the seashore.
Restitution paid for by whom?
TARP, of course
This idea could save Las Vegas. Restitution for any gambler who loses more than a certain amount. Not for the hoi-polloi, mind you, just high-net-worth gamblers.
Like the gambler who came to Vegas in a $25,000 Buick and left in a $125,000 Greyhound bus?
LOL
You know even from friends who acknowlege that house prices are comming down, I still get crazy magical thinking. “I’ll wait until next year or the year after to sell, after the market recovers.” If the market is going to improve, it will be because prices have become affordable. Certainly in real terms, and I hope and suspect in nominal terms, we won’t see prices come back up to today’s level for at least 5 years and more likely a decade or more. Certainly I believe that there is a LARGE hidden inventory from people who would LIKE to sell, but don’t HAVE to. IMHO their alligators will put downward pressure on prices for a LONG time.
Thats what made the CA numbers look so great for CA yesterday. Once we get mean home prices down to 200k, ppl can move in again, and turn it back into the rock-n-roll, movie-star, hippie, sex, surfing, free-thinking utopia it was always meant to be. If we can keep this rate of decline up for another two years it will once again be the Sunshine State. I love to see Cali fight back against the politicans that try to choke her. It holds such an important place in my heart.
That would mean tax revenue would decrease quite a bit wouldn’t it? I am guessing those state employees would have to take a big salary decrease.
Nonsense!
We were fine before the dot.com bust (and housing prices were reasonable), and we can do that again.
I can’t understand why everyone is crying about lost tax revenues when they should have been saving all these years during the boom.
If they’ve spent more than they could afford…matching the increasing revenues, dollar for dollar, that sounds like something we can fix by severely cutting back on some of the expenditures.
We can start by enacting Prop 187 (no public services for illegal immigrants). Let those “pro-immigrant” employers pay for their own burdens (that includes infrastructure costs, education/free meals, healthcare, legal and law enforcement costs, etc.).
It’s not personal, it’s business. Taxpayers should not have to subsidize businesses who hire illegal immigrants (who depress wages for those same taxpayers).
Yeah the mindless rationalizations are shifting like dilating sand under a new foundation. The latest tripe is “Housing is like a stock, I don’t have to sell”. To which I say, you want to claim the gains on the upside and divorce yourself from losses on the down? Sorry Charlie.
Maybe they think “not realising a loss” is the same as being clueless about losing money.
They’ve got a big fish like Sam Zell to back them up now as far as a recovery, so it’s all good.
Since I’ve been talking about the housing bubble for what seems like a long time (since reading this blog for a couple of years) all kind so friends and acquaintances have been coming out of the woodwork telling me that “Now is a good time to buy”.
Yeah, a 700K 2bedroom/1 bath. Sheesh.
Walking house
Artists in Denmark have teamed up with US scientists to create a walking house built on six hydraulic legs.
They say it would make the ultimate home for beating floods or neighbours from hell, reports the Daily Telegraph.
The 10ft high home is solar and wind powered and can stroll at walking pace across all terrains. It has a living room, kitchen, toilet, bed, wood stove and mainframe computer which controls the legs.
The pod is set to take its maiden stroll around rural Cambridgeshire at the Wysing Arts Centre in Bourn. It was built by art collective N55 in Copenhagen, Denmark, in conjunction with engineers at MIT in Massachusetts, USA.
“This house is not just for travellers but also for anyone interested in a more general way of nomadic living,” he said.
Designers say it provides a solution to the problem of rising water levels as the house can simply walk away from floods.
http://www.ananova.com/news/story/sm_3057769.html
Ah, that takes ‘walking away’ to another level
by the way, in Netherlands floating homes are legally ‘fixed to the ground’, in order to enable the owner to get a full mortgage. I guess they can arrange the same for walking homes. Who cares where the home ends up, as long as government insures the mortgage …
Hey - that gives me an idea. Patent! A cheaper way would be to just use wheels!
And there could also be a stripped-down cheaper version where instead of the house providing its own power, you could tow it behind your car or truck instead.
Heck, maybe even take it with you to parks and such for sightseeing!
Wait a minute…
In Denmark, people don’t walk away from houses… the houses walk away from the people!
Forget to pay your note? House runs away.
It’s a modern day Baba Yaga hut! Awesome!
Any other no-debt renters seeing dramatic upticks in their FICO lately? After hovering in the mid 750’s for a long long time, mine zoomed to 815 this month. What gives?
Maybe this a secret government program to get you to buy a house.
I wonder if FICOs are on some sort of Bell Curve, so that when some people’s scores go down, it forces others up? Or maybe they’ve consulted with the SAT people - when average scores became embarrassingly low, they just changed the grading method and solved the “problem.”
Bet SFBG is right - it might be a way to get more people qualified to buy stuff on credit.
Or maybe they’ve consulted with the SAT people - when average scores became embarrassingly low, they just changed the grading method and solved the “problem.”
Laugh.
That wouldn’t surprise me in the least. The whole FICO system seems highly capricious anyway.
I am planning to pay off all outstanding debt, just to experiment with the FICO score impact…
How much debt can you possibly have that it would make a difference?
Seriously.
Actually, I don’t think dollar amounts matter that much. I know someone whose credit score went from medium good to perfect in between checks. When she was looking into how it happened, it turned out she had accidentally overpaid two of her credit cards by less than a dollar each and left them that way for a year. Being in credit to the credit cards (rather than debt) is what did it, and for less than a dollar.
Another reason why the whole thing is silly.
That’s kinda’ useful, if not for myself, for the young’uns in my family.
I believe the scoring has always been relative. Just like any percentile scoring system (though they don’t express it that way), when other people score worse, you look better by comparison.
I’ve always assumed that my FICO would go up over the next few years, as there are fewer and fewer people who haven’t dinged their credit.
Thank you, FBs! Not I want a high FICO, mind you—-I don’t really want any debt in the future, if possible. I’d prefer to buy with cash when prices have cratered enough that it is possible to do so.
I’ll check mine the next time I move.
Last count it was ….eight hundred and something.
I better get out my Visa and buy nikon before year’s end.
you might have had 1 late payments from 5 years ago that rolled off; or gotten your limits increased, or paid down your balance relative to your limit. or the accounts are older, or its been a longer since your last move, or you havent attempted to open a new card for 1 year. Lots of things could affect the score.
WAMU used to give me a credit card. On of the perks was free FICO monitoring. Real trademarked FICO scores they said. One month, my FICO was reported as 855. Pretty good since a max FICO was supposed to be 850.
end of the great Dutch Ponzi Scheme?
Home prices in Netherlands are still rising on a yoy basis. However, signs of distress in the market keep growing. Today NRC newspaper writes that local government wants to get out of the National Mortgage Guarantee (NHG) agreement, probably the major cornerstone of the Dutch housing market Ponzi scheme.
More than 75% of homes that were purchased over the last 10 years in Netherlands have a (huge) mortgage covered by this insurance. If the owner of the home has to sell (as a result of job loss, divorce etc.), the insurance will cover any loss so the owner can never loose. For this insurance, home owners pay a premium of 0.4% on closing the mortgage. However, as these mortgages are seen as riskfree by the market (NHG is a semi-gov institution) they get lower rates so the insurance is effectively cheaper than free. It is not the same as the US ‘walking away’ but pretty similar for people who are clever enough - zero downside risk for the buyer.
Currently local government is responsible for paying off the loan and collecting money from the homeowner (if possible) in case of a default. Now the local governments want out of the deal because it is ‘way to risky’; they want the national government to assume all the risk. Of course, they were happy to participate at the start, because most local governments in Netherlands get most of their income from the real estate market (land sales etc.) and this was a sure way to keep prices rising quickly. Some political parties have been lobbying lately to increase the NHG ceiling from 265K euro (about the price of a median Dutch home) to at least 350K euro.
The newspaper writes that the NHG fund has 400 million euro available against mortgages with a total value of about 100 billion euros. Last year the fund had payouts totalling 24M euro, average 31K per home. That was in a rising (and hugely overvalued) market, so the amount per home could skyrocket soon. Also the number of defaults could rise rapidly as the housing stock for sale is at record numbers, and the Dutch economy is deteriorating quickly. The fund would be bankrupt within months if a real downturn in the housing market occurs.
I guess they kleptocrats will simply transfer the whole risk to the taxpayer, somehow
i met a young women from holland while traveling, a 25yo school teacher. she recently bought a house in Belgium and commutes 50km to her job in Holland because Belgium is significantly cheaper. The punch line, “The banks in Belgium are really stingy, they will only offer financing of 100%; i had to pay all the closing costs myself. In the Netherlands the loan would have covered all my closing costs, and even given me some cash back to pay for moving and decorating.”
OMG, that’s unreal. There are a lot of people in for a rude awakening, who have never seen “normal” credit standards in their adult lifetimes.
unfortunately this is very real in Netherlands; 110% mortgages are still normal for anything up to about median price, and even 125% is still available although not as easy to find as a year ago (with GMAC, Bank of Scotland etc. still in the game).
Prices in Belgium near the border have gone up strongly over the last ten years; they used to be 2-3 times lower than in Netherlands, I think they are now maybe 20-30% lower. In some southern parts of Netherlands people are complaining that speculators from Belgium are driving up local home prices …
Germany is still very cheap compared to Netherlands (at least 50% price drop right across the border), but there is relatively little work in Netherlands close to the German border. The number of Dutchies who work in Netherlands and have their home in Germany is pretty small because of that (if they work in Netherlands they have all the advantages of the Dutch mortgage system, and can afford 2-3 times more expensive homes than the Germans).
@uking stingy banks! How dare to limit loans to 100% LTV. She is already a grown up (25years old). She should be given at least 125%LTV, so she can buy some Prada shoes. Burn the banks like they do in Greece.
nhz,
That still sounds like good news to me. Think it’s finally hitting for real?
if the NHG rules are really changed I think the Dutch market is toast. But our politicians are slow and will do anything they can to keep the RE show going. Fortunately, the national budget is going to be in bad shape for the next years, so sticking it all to the taxpayers it not a good option.
DENVER – After going months without a full-time job, Daniel Ramirez has decided it’s time to return to family in Mexico.
Vicenta Rodriguez Lopez says she can’t afford to live in Colorado any more because her husband was deported.
Roberto Espinoza is going back, too. After 18 years as a mechanic for a General Motors dealership in Denver, his work permit wasn’t renewed and he didn’t want to remain in the country illegally.
http://news.yahoo.com/s/ap/20081215/ap_on_re_us/return_to_mexico
they should offer that guy citizenship as the only person ever to leave the usa because they don’t want to break our immigration laws!
Agree!
Hey, check out Zip Realty’s site. They have a new feature where you can play a game (and actually win prizes) predicting the price at which current listings will sell. I think today is the first day of the new feature, so there isn’t much in the way of comparison prices for your own estimate — but should be interesting in the weeks ahead. Bet it will give some sellers pause to see where the buying community figures their fair market value rests.
Can a player enter a negative number?
The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.
“I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job,” Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff’s scheme, told the British Broadcasting Corp.
“All through the credit crunch this has been apparent,” Horlick added. “This is the biggest financial scandal, probably, in the history of the markets.”
well maybe you should just buy US treasuries instead
Enron was truly a pioneering company! We just didn’t know it!
Enron was the thing that made me suspicious in the first place. Before that, I had no interest in markets and assumed that people in suits were quite sensible.
If you want to feel horrible and get the creeps (for some reason
) go visit youtube and watch old enron videos. *shudder*
In the 1970s I was in the retail energy business. From Day One the Enron stuff, re “supply shortages in California” didn’t ring true, not one bit. Generation and distribution of energy is a very-long-term proposition and big-time interruptions are freak occurrences. But everyone seemed to buy into the idea that we “suddenly” had this huge shortfall in overall supply. BS, just as with the peak-oil baloney. (Peak “easy-oil” is over, but technology has overcome that problem.) It is all manipulation. The manipulators may change from time to time, but it is all manipulation and U B Scru’d as a result.
It would have been interesting to watch that unfold through your eyes!
We are too hardwired to “believe”. It’s kind of dangerous.
This dude had a huge 9 (nine!) percent of his fund “invested” with unregulated Bernie Madoff, and he blames American regulators instead of himself???
Nicola - and other fund of funds - collected fees for supposedly doing due diligence on unregulated investments with Madoff - and now they want a bailout? Un-f-ing-believable…
Obama to travel by train to D.C. for inauguration:
http://www.reuters.com/article/newsOne/idUSTRE4BE49A20081215
December 15, 2008
$2 Trillion In Home Value Gone In A Year
One year. $2 trillion gone. According to Reuters, “Homes in the United States have lost trillions of dollars in value during 2008, with nearly 11.7 million American households now owing more on their mortgage than their homes are worth, real estate website Zillow.com said.”
A homeowner with a mortgage which is underwater is more likely than someone who still has equity to default or go through a foreclosure.
The question is how much more likely? During 2009, the number of homes with “negative equity” is likely to grow, by at least several more million. There will be another wave of mortgage rate resets beginning in mid-2009 and running through 2010 as “pay option” loans increase homeowner principal and and interest rates.
Anyone who thinks that most of the real estate credit crisis is behind the economy and that home prices will bottom in mid-2009 has to have his head examined.
BwaHaHaHaHAHAHAHHAHAAAAAAA!!!!
The problem is responsible people who didn’t buy houses they couldn’t afford will be rightfully very angry when their deadbeat neighbors get all sorts of handouts, from 4.5% mortgages to forgiven loans. This will motivate a lot of people to do the math and walk away from their homes if it would be a net gain. Just buy a house across the street and reset to a mortgage for 1/2 the principal.
In economics Keynesianism (pronounced /ˈkeɪnziən/, also Keynesian economics and Keynesian Theory), is based on the ideas of twentieth-century British economist John Maynard Keynes. According to Keynesian economics the state should stimulate economic growth and improve stability in the private sector - through, for example, interest rates, taxation and public projects.
I expect the FED to try and print up all the RE losses, to come out even. This will run a deficit but keynesian econmics states this is better than depression.
I would say to stay even is too much money thats how we got the RE bubble. Maybe keynesian theory is faulty ?
I have heard oh so much talk about how the FED will do this, that or the other to prop up home prices but so far, there is very little evidence anything they have tried has had any success.
They are caught in a rational expectations trap of their own making, as the cumulative effects of a never-ending real estate boom’s collapse are overwhelming them.
PB,
Are you still using that large bottle of hand lotion?
That’s just it, they can’t ‘fix’ it, but they will continue to gum up the works with their jackassed schemes. The markets bounce around like ping-pong balls, and the ‘law’ makers lay plans for more and more control.
You need evidence? Common now, you don’t need evidence. You need HOPE. Positive thinking man, positive thinking. The FED has everything under control. Go help the rest rearrange the chairs on the upper deck.
The other shoe is now dropping on the foreclosure crisis. I believe it is different this time, as in previous housing busts, job loss was the primary driver of foreclosures and falling prices, while in the current crisis, home prices have already been severely hammered by the fallout from high risk lending.
Business News
Unemployment causing rise in foreclosures
Published: Dec. 15, 2008 at 11:04 AM
WASHINGTON, Dec. 15 (UPI) — The primary cause of U.S. foreclosures is shifting from financial to economic issues as unemployment rises, national records show.
Unemployment triggered 46 percent of all 90-day delinquencies in the first half of 2008, the Federal Home Loan Mortgage Corp.
By contrast, in 2006, 36 percent of three-month delinquencies were caused by income loss, USA Today reported Monday.
The primary reason for 90-day delinquencies in 2007 was risky loans, including many subprime loans with adjustable rates, newspaper said.
“The primary reason for 90-day delinquencies in 2007 was risky loans, including many subprime loans with adjustable rates, newspaper said.”
Never heard of a loan itself actually causing a delinquency. I always thought it was the fact that someone didn’t actually make payments (due to unemployment, financial decision, whatever) on the loan.
Learn something new every day!
Agree with Packman. Either you can pay or you can’t. Reason doesn’t matter.
My name’s Snidely and I’m the bank. I don’t care why you can’t pay — gimme the money or gimme the deed. Don’t forget, the train comes at 2:00. You want a pillow for your head? Looks damned uncomfortable down there on those rocks and ties, snarf, snarf.
Folks, from the ground level in Florida, I gotta tell ya, the exodus is ON. Unbelievable what’s happening before my eyes.
Let me guess — all the folks who moved to Florida because there is no state income tax are heading for New York now that THEY have needs to go on welfare?
In the early 80’s Texas was the destination of a lot of people from Michigan looking for jobs. I had a friend who moved down with his family. They commuted back and forth for several years, I think to keep their residence in Michigan to qualify for welfare & food stamps.
If they can’t wait until springtime for a little state government largesse up north, they’re in dire straits indeed.
(Sidenote: Maybe Buffalo can be re-invigorated with ne’er-do-wells from the Sunshine State? A little exposure to a Great Lakes winter ought to toughen them up nicely.)
Good….fewer people to annoy me when I finally show up there.
Details, man, details!
“Details, man, details!”
Oh man, I don’t even know where to start. *EVERY ONE* I know is moving or thinking about moving or discussing moving… was walking with my son, chatted with a lady from IN, been here 22 years, time to move on, house next door went FSBO this morning, saw some midnight UHaul activity iver the weekend, seen the Sheriff outside of condos with people sobbing and armfuls of belongings, and yes…
my barber is thinking about moving back to Erie.
Combo will love this: garage/yard sales everywhere, nice neighborhoods, cars for sale everywhere, make offer signs everywhere, dudes in sandwhich boards and goofy hats announcing going out of business sales…
Got cash?
If only there was stuff I actually wanted to buy… I hate to see all these impending bargains when I need so little. Almost tragic, really…
+1
‘If only there was stuff I actually wanted to buy… I hate to see all these impending bargains when I need so little. Almost tragic, really…’
It’s true. Lessee…I already got myself another kayak. I am sort of casually looking for a motorcyle, but in no rush.
Hmmmm.
I LOVE the garage/estate sales hereabouts, lots of rich old people stuff at great prices, but at this point where would I put more terrific stuff? The walls are already entirely insulated with books, for instance.
I know! I’ll buy a spare house as soon as foreclosures really start making a mark out here, and use it as a library! And then buy another house, for my shoes!
Man, I’m a genious!
Hey, just think! That other library/house can become the Olympiagal Memorial Library.
Has a nice ring to it, don’t ya think?
PisC, +1 for sure…
Muggy, I’m looking for a nice Toyota Avalon, leather, 2000 or newer, no more than 10k mi/yr. I saw a lot of them in FL when I was there. Good road trip car. Trade-in value + $100.
Implosion - try autotrader dot com. Only serious sellers pay money to post ads there. Easy to search, easy to contact. Sold a car through them and it worked perfectly. My son and son-in-law prefer Craigslist, but no one goes to autrader who isn’t serious about a car. FWIW.
My inlaws in Sarasota, who have been a little snooty whenever I previously asked about housing down there, said that there are several foreclosures in their neighborhood. They seemed surprised, even though every time I see them the subject of RE comes up and I have always suggested that FLA will get hit badly.
They live in a pretty upscale hood, too.
More than likely they are heading back to New York, where their genius Gov. has come up with a never before tied plan… Raise taxes!
New taxes, cuts in budget plan
Paterson sees $404M tax on non-diet soda; higher levies on health care
The plan will come with a host of revenue raisers — increased taxes on hospitals and insurance policies, for instance — and at least one new assessment, a so-called obesity tax on non-diet soda to raise $404 million. The governor also is contemplating requiring new license plates to raise cash, reviving sales tax on clothing purchases, removing the tax cap on gasoline and threatening to require Indian retailers to collect taxes on sales to non-Indians by signing into law a bill passed earlier this year by the Legislature.
http://www.timesunion.com/ASPStories/storyprint.asp?StoryID=750267
If you don’t like it, move to @$%$%.
Remember that old convenient one?
“and at least one new assessment, a so-called obesity tax on non-diet soda to raise $404 million”
Hmmm… I kinda like that idea. The hospital tax, doesn’t make much sense though.
Tell um not to stop in South Carolina, new report out today, unemployment is forecast to hit 15% next year.
I think the FL to Carolinas exodus is over. That appears to be the locusts that cashed out at peak and headed to the new “promised land.”
I think the next round of FL refugees will be headed to their home states or Alaska / Montana (frontier type places).
Probably right, they will head back ‘home’. Or in search of the next elusive bubble.
They’ll probably head back to Ohio and Michigan where you can buy a house for less than a car.
The money you save though needs to be spent on a weapon of some sort so you can protect yourself on the way to your new home sweet home.
“They’ll probably head back to Ohio and Michigan where you can buy a house for less than a car.”
Naw, you can’t “start a new life” there.
It’s 4 below in MT today. Stay away you friggin’ softies - you’d hate it!
Hit -10 in Colorado’s high country. Not much snow yet this year, though.
It was -17 this morning in Loveland/Ft. Collins. Its ) degrees right now.
Yesterday, I played tennis outdoors.
South Central KY
“Stay away you friggin’ softies - you’d hate it!”
No joke. I’d hate it and I ain’t comin’! Glad you enjoy it. Gives balance to the world.
Foreclosure Storm Will Hit U.S. in ‘09 Amid Job Loss
By Dan Levy
Dec. 11 (Bloomberg) — U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.
A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.
“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.
From: “Joe the plumber”…to:…”Kevin the Crusader”
Go Kevin, Go Kevin!
Mich. man sues, says AIG bailout is illegal because of insurer’s ties to Islamic finances:
http://biz.yahoo.com/ap/081215/aig_bailout_lawsuit.html
THAT is an interesting argument. He might make it to the Supreme Court with that. The bizarre spinoffs of the bubble are simply amazing.
Muggy - drop me a line if you can. I wanted to talk to you about something you posted the other day. You can get me at dan at fdcarson dot net .
Thanks, awesome conversation. We need to start a nationwide insiders club.
Muggy,
I want to hear more about this insiders club.
Well, I suspect many of us share a lot here, but not all. It’s reasonable since there is no way to verify / establish trust.
In this case, Facedown has information that is very helpful to me. It’s a weird coincidence, but also not: we cover a lot of disciplines here, but it usually somehow relates to housing and real estate, which is the stage where our daily lives play out.
In a password protected forum, we could share more information without the issues of a public blog.
I think these are the same a-holes that are trying to set up pharmacies that don’t sell birth control devices/pills/etc.
I wonder what the human effect is of all this. The stress, the worry, hypertension. Between job layoff stress, to retirement savings stress, and perhaps home equity stress. I wonder if the doctors are seeing an increase in patients?
Assuming they can afford doctors.
There have been 171 company layoffs in Healthcare since 12/14/2007 - most layoffs have been in cost prohibitive endeavors. e.g. There is only one critical burn center on the East coast vs 5 in New York City on September 11, 2001. Not a good time to get ill.
Advanced Medical Optics Inc February 16, 2008
Adventist Health System January 8, 2008
Adventist Health System February 16, 2008
Aiken Regional Medical Centers, Inc March 7, 2008
Alameda Hospital January 25, 2008
Allina Health System October 4, 2008
Alton Memorial Hospital August 28, 2008
American Cancer Society Inc September 26, 2008
Anna Jaques Hospital May 2, 2008
Ascension Health February 20, 2008
Atrium Medical Center November 10, 2008
Bamberg County Hospital and Nursing Center July 25, 2008
Battle Creek Health System August 2, 2008
Baystate Health November 5, 2008
Beaumont Hospitals November 17, 2008
Boca Raton Community Hospital Inc July 2, 2008
Boca Raton Community Hospital Inc December 11, 2008
Body Focus Fitness Center August 9, 2008
Bon Secours Charity Health System July 16, 2008
Bon Secours Hampton Roads Health System September 24, 2008
Boone Hospital Center October 29, 2008
Bradford County Manor December 3, 2008
Bridgepoint Community Rehab December 18, 2007
Cambridge Memorial Hospital November 28, 2008
Cape Cod Healthcare Inc August 5, 2008
Cape Fear Valley Health System May 14, 2008
Caring Family Network February 6, 2008
Caritas Carney Hospital March 28, 2008
Carle Clinic Association November 24, 2008
Carle Foundation October 3, 2008
Carol November 10, 2008
Cedar Lake Lodge Inc December 10, 2008
Centinela Hospital Medical Center January 13, 2008
Chestnut Hill Health System September 4, 2008
Children’s Hospital & Research Center Oakland July 2, 2008
Children’s Hospitals & Clinics of Minnesota June 27, 2008
Clarian Health December 7, 2008
Columbia St Mary’s November 4, 2008
Condell Medical Center February 20, 2008
Corcoran District Hospital September 26, 2008
Covidien Inc July 22, 2008
Edward Hospital & Health System May 23, 2008
Empire Health Services February 14, 2008
Erlanger Health System August 30, 2008
Fairview Health Services October 4, 2008
Florida Radiology Associates PA April 1, 2008
Gaylord Hospital May 21, 2008
GE Healthcare June 21, 2008
GE Healthcare July 19, 2008
Glens Falls Hospital May 21, 2008
Good Samaritan Hospital December 9, 2008
Group Health Cooperative February 25, 2008
Hawaii Medical Center April 29, 2008
Hawaii Medical Center August 8, 2008
Hawaii Medical Center September 27, 2008
Haywood Regional Medical Center May 13, 2008
HealthAlliance Hospital Leominster August 20, 2008
HealthPartners Inc October 4, 2008
HealthSouth Dallas Rehabilitation Hospital September 8, 2008
Hernando Healthcare December 6, 2008
Hill-Rom Inc August 15, 2008
Holyoke Medical Center October 10, 2008
Howard Regional Health System September 9, 2008
InnerPulse Inc August 16, 2008
Intermountain Healthcare Inc April 18, 2008
IVX Animal Health January 12, 2008
Johnnie B Byrd Sr Alzheimer’s Center September 25, 2008
Johnson Health Network June 13, 2008
Johnson Memorial Corporation October 31, 2008
Joseph Brant Memorial Hospital December 3, 2008
Kaweah Delta Medical Center June 13, 2008
King’s Daughters Medical Center December 11, 2008
Kona Community Hospital July 13, 2008
Laurel Crest Nursing Home February 15, 2008
Lee Memorial Health System September 4, 2008
Life Time Fitness Inc November 19, 2008
Lifetime Health Medical Group January 29, 2008
Lima Memorial Health System July 23, 2008
Long Island College Hospital October 22, 2008
Loyola University Health System December 9, 2008
Lumetra September 8, 2008
Martha T Berry Medical Facility September 24, 2008
Massachusetts General Hospital September 17, 2008
McKesson Corporation January 25, 2008
Memorial Health Medical Center January 26, 2008
Mercy Health Partners June 11, 2008
Mercy Health System of Northwest Arkansas June 20, 2008
Mercy Health System of Northwest Arkansas October 4, 2008
Mercy Medical Center-North Iowa April 10, 2008
Mercy Regional Health Center March 29, 2008
Merit Lancaster, L.P. February 12, 2008
MeritCare Health System June 24, 2008
Methodist Le Bonheur Healthcare November 21, 2008
Missouri Baptist Medical Center June 20, 2008
Mountain View Regional Hospital September 13, 2008
Muhlenberg Regional Medical Center April 12, 2008
Nash Health Care Systems Inc June 7, 2008
Natchez Regional Medical Center May 17, 2008
Natus Medical Inc. December 18, 2007
Natus Medical Inc. February 11, 2008
Nemours Children’s Clinic-Orlando September 16, 2008
Newark Beth Israel Medical Center October 31, 2008
Newton Memorial Hospital January 9, 2008
Niagara Falls Memorial Medical Center Inc. January 18, 2008
Niagara Falls Memorial Medical Center, Inc. February 1, 2008
North Hawaii Community Hospital July 15, 2008
North Memorial Health Care December 8, 2008
North Ridge Medical Center April 7, 2008
Park Nicollet Health Services December 8, 2008
Parkridge Medical Center Inc November 19, 2008
Physicians Medical Center January 11, 2008
Ponderosa Lodge July 26, 2008
Portland Medical Center November 19, 2008
Portsmouth Regional Hospital December 2, 2008
ProMedica Health System November 22, 2008
Queen of the Valley Hospital August 8, 2008
Raleigh General Hospital June 28, 2008
Rehabilitation Hospital of the Cape & Islands May 13, 2008
Rice Memorial Hospital August 22, 2008
Richmond University Medical Center April 4, 2008
River Edge Behavioral Health Center September 30, 2008
Rosewood Center November 15, 2008
Rouge Valley Health System February 28, 2008
Rouge Valley Health System May 17, 2008
Sacred Heart Hospital September 5, 2008
Safeguard Health Plans Inc March 25, 2008
Saint Alphonsus Regional Medical Center April 1, 2008
Sarasota Memorial Health System August 14, 2008
Seven Counties Services Inc July 1, 2008
Shasta Regional Medical Center June 4, 2008
Shasta Regional Medical Center November 1, 2008
Shriners Hospital for Children January 4, 2008
Simi Valley Hospital June 11, 2008
Sisters of Charity Providence Hospitals October 21, 2008
Slidell Memorial Hospital June 19, 2008
Soporex Inc September 8, 2008
South Central Regional Medical Center July 25, 2008
Southern Ocean County Hospital June 10, 2008
Southwestern Regional Centre October 22, 2008
Southwestern Vermont Medical Center February 4, 2008
SSM Health Care June 16, 2008
St David’s Health Care System Inc November 11, 2008
St Francis Health Center May 6, 2008
St Francis Health Center November 21, 2008
St John Health April 7, 2008
St Joseph’s Hospital October 29, 2008
St Luke’s Health System November 19, 2008
St Luke’s Hospital August 12, 2008
St Mary’s Hospital October 18, 2008
St Rita’s Medical Center July 11, 2008
St Vincent’s Healthcare October 15, 2008
St. Joseph’s Health Care December 18, 2007
Stanford Hospital and Clinics July 26, 2008
Strathroy Middlesex General Hospital October 31, 2008
Tenet Health System Medical Inc October 7, 2008
Texas Health Resources October 28, 2008
The Medical Center of Central Georgia September 11, 2008
The Medical Center of Central Georgia October 22, 2008
The MetroHealth System May 16, 2008
The MetroHealth System November 18, 2008
The University of Texas Medical Branch October 9, 2008
The University of Texas Medical Branch November 28, 2008
The University of Texas Medical Branch November 13, 2008
The University of Toledo Medical Center November 26, 2008
TLC Vision Corp June 9, 2008
Toronto East General Hospital July 22, 2008
University of Michigan Health System November 25, 2008
University of Pittsburgh Medical Center October 24, 2008
Valley View Regional Hospital October 31, 2008
Wesley Medical Center October 18, 2008
Western State Hospital March 14, 2008
I’ve heard rumors from my Mom’s chemo therapy nurses that Kaiser Permanente Hospitals may be laying off people.
Sorry to hear about your mom, SF. Chemo’s not fun. Hope she feels better soon!
I thought people just showed up at the ER and got treatment? That’s what the R.N. next door said. “I bet I didn’t have a single patient all week that had insurance… it’s mostly 3rd gen welfare recipients in that area.”
Ironically maybe this will solve the SS problem.
The life expectancy in USSR and Eastern Europe fall of a cliff after 1989. IMO the USA will soon be in a similar situation, not so severe of course but still significant. Old people have the hardest time to adjust to new realities and the mental stress from realizing that their retirement will not be much fun can be devastating for old folks health.
This of course will make the problem with Medicare worse than expected, but this is another topic.
I’ve thought about that. Deflating home equity could be detrimental to U.S. life expectancy.
I would say that this goes way beyond housing. First of all private assets are deflating, but even more importantly will be the realization that the USA just cannot fulfill the promises to all the baby boomers, especially when it comes to the quality of health care. High quality healthcare is very expensive. It will come gradually, but people will realize eventually that the arrangement between the US government and the baby boomers is similar to the agreement between the big 3 automakers and their retirees – it is false promise, that simply cannot be fulfilled.
A lot depends on the definition of “high quality health care,” and on the monitoring of parasites.
My daddy, who died in 1983, might be alive today if he had all the hoo-rah medical stuff that is available now. All he would have needed was a bypass or stents. It’s all relative and, I suppose, generational. Whatever I die of, you younger folks probably will survive because of new technology. But I can tell you this, from observing those who live longer: reaching 100 sucks, no matter how you do it.
Yup.
It’ll also wreak havoc on health care and pharmaceutical stocks. I have never invested in pharmaceuticals because I always figured “who in the h*ll can afford to purchase those expensive new medicines?” The answer is: the taxpayer, who is bilked for their purchases by the (way underfunded) Medicare ponzi scheme.
At some point, that pyramid is bound to fail also, leaving millions of elderly Americans without the drugs that their doctors tell them they “Have to have”…
Suicides are up.
That’s the cost.
Meanwhile over @ Angel Stadium: Countrywide has been replaced by:
Der Wienerschnitzel!
Professional sports needs more taxpayer money…or least a few leaves from TRAP tree.
Goodbye to the Ballpark:
For most of the last 15 years, my office has been in right center field of the Ballpark in Arlington, home of the Texas Rangers, the local professional baseball team. The entire center field in the Ballpark was made into an office complex, which has worked out very well for all. I can walk out on my balcony and watch the games and have as many as 25 friends into my office to watch with me. It has been the ultimate little boy’s office, and I have enjoyed it. There have been many good times here.
But tonight we are packing up, and tomorrow we’ll move the office to Dallas, where I will work in my home along with my small staff. More and more of what we do is now done elsewhere, so we don’t need as much room. Not only do we save a very significant amount of money, Tiffani and I also save over an hour a day in commuting. As we began to think about it, that is about 225 hours a year, or almost five weeks of time. And the one thing we both need is more time. At the end of the day, it was the time savings.
The office has been worth the money, I think. (I still have a few months on my lease and control the next five years, so if you are interested I would be glad to show it to you.)
Your turning the page of life one more time analyst,
John Mauldin
John@FrontLineThoughts.com
John Mauldin hedge fund guy probably smart to downsize after the 50B hedge fund blow up of Bernie Madoff.
Does anyone have a handle on how much liquidity the PPT is pumping in to the stock market to avoid derailment in the aftermath of the Madoff ‘train wreck’? I am guessing they are pumping in lots and lots of liquidity.
Madoff crash was a ‘train wreck’
By FT Reporters
Published: December 15 2008 19:47 | Last updated: December 15 2008 19:47
The fallout from Bernard Madoff’s alleged fraud spread through the global financial system on Monday as more banks revealed exposure to his brokerage firm, and hedge funds, charities and other investors were left nursing possible big losses.
The potential losses reported by large financial institutions that invested or lent to investors in Mr Madoff’s failed venture reached $10bn after HSBC confirmed the news, first reported in the Financial Times, that it could lose up to $1bn.
What does that make Cheney-Shrub…Teflon Commanders-in-Chief?
“…A college student at a third-rate business school would jump on that sort of paranoia as reason to sniff around and see if something was amiss. But Bernard Madoff was by then a…
Teflon financial king.”
“If nothing else, the securities industry remains a predictable animal. In the end, when Madoff was owning up to his alleged fraud during a conversation with employees, he said he would be surrendering in a week or so. He first wanted to dole out bonuses to “employees and preferred customers, i.e. friends and family,” according to the SEC, using the last $200 million or so that was left.”
Madoff’s Country Clubbers Smiled $50 Billion Ago:
http://www.bloomberg.com/apps/news?pid=20601039&sid=ajTlcTh7XnYA&refer=home
A guess is about all it would be as the Fed isn’t letting anyone know where the TARP money is going.
Has there ever before in history been so large and secretive a transfer of tax dollars into private hands as with the TARP? I still cannot believe it is legal.
Who said anything about tax dollars?
The U.S. Treasury isn’t funded by tax dollars so much anymore.
Who said anything about legal?
Pitchforks and torches.
CNN Quick Vote
Do you owe more on your home than it’s worth?
Yes 19% 34260
No 81% 148359
Total Votes: 182619
This just reflects the delusion that they will get bubble prices when they sell.
I assume you are specifically referring to the 81 pct no vote?
Yeah.
Long time reader, never poster.
Wanted to link an article about g*old to confusticate the insane laddie and perhaps draw some bacteria-laden scratches from FPSS.
Hope the link is correctly done. It’s from Antal Fekete, related to the recent backwardization of g*ld.
Backwardization of Gold
Me? No mortgage. Paid off early in `99 after 4 years. Wife and I have lived in the same house for 15 years… we love it too much to think about selling.
Plenty savings, large portfolio — moved entire portfolio in early `00 to Canadian primary listing commodity producers. That helped. It’s still well up since shifting to Loonie-denominated companies… for now.
For about 10 years we’ve itched to buy a winter home in warmer climes — I get SADD in winter. HBB saved us from tripping over the edge and buying more than once. Now we just vacation instead.
Maybe someday we’ll buy, when prices drop another 60%.
Apologies if the article ruffles any feathers… or fur.
Home builder sentiment remains at record low
Mon Dec 15, 2008 3:17pm EST
By Julie Haviv
NEW YORK (Reuters) - U.S. home builder sentiment held steady in December but remained at a record low as deepening economic turmoil, a deteriorating job market, and a flow of foreclosed homes on to the market continued to hurt sales conditions, an industry group said on Monday.
The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index was 9 in December, unchanged from November when it reached its lowest level on record since its launch in January 1985.
Readings below 50 indicate more builders view market conditions as poor than favorable. The December index was in line with expectations based on a Reuters survey of economists.
“This is suggestive of the continued decline that we have been seeing in new home sales, stubbornly high inventory levels and mounting foreclosures,” said Michelle Meyer, an economist at Barclays Capital in New York.
“What is most surprising, however, is that home builders are not more optimistic about their outlook despite growing speculation of greater federal assistance for the housing market,” she said.
The NAHB’s Housing Market Index (HMI) is at a level of 9 this month for the second month running. By contrast, it bottomed out at a level of 20 during the last real estate bust in January 1991. I note that home price declines continued for the subsequent five year period. I am sure it is different this time, though…
The worst aspect of the current episode in the U.S. housing market: There is no apparent honest attempt underway by the top economic policy makers in the country to figure out what factors led to the housing market collapse, how to steer clear of similar situations in the future, or even to acknowledge the size of the problem. All I see are expedient and short-sighted attempts to respike the housing market punch bowl through hair-of-the-dog stimulus programs. This is not a viable plan, and is doomed to fail.
I think this is because politics is rooted in sketchy land deals… a trade probably as old or older than prostitution.
For the very first time tonight, I saw a guest commentator on PBS’s Nightly Business Report actually say that the government was trying to reinflate the mortgage bubble with super-low rates.
Everyone who talks about the “problem in real estate” says the root of the problem is dropping home prices.
The reality is that the root of the problem was a lending bubble that led to house price inflation, by allowing people to raise vast sums with little or no regard to their ability to pay the loans back, and when the loans came due, a financial black hole was created when they debtors defaulted.
Until the politicians start being honest (hah! this in the country with the best government money can buy?), I see the country’s wealth being continually looted REIC insiders (how do we get ours? With the vast sums being looted from the treasury - sorry, distributed - rounding errors can set one up for life
First the corporations were looted, now it’s the state Treasury.
There will be blowback from these policies. “Spare the rod, spoil the child” for the modern day should read, “Spare the irresponsible, devastate the economy.”
O.K., I can’t resist since aLADINSANE stopped posting:
Looks like Steven can do another biographical movie:
1993: Schindler’s List
2008: Swindlers List
Spielberg’s Wunderkinder Foundation joins list of Madoff victims:
“…The Wunderkinder Foundation (translated as child prodigies) is a relative modest one compared to Spielberg’s much better-known Shoah Foundation and Righteous Persons Foundation.”
http://www.jewishjournal.com/united_states/article/spielbergs_wunderkinder_foundation_joins_list_of_madoff_victims_20081215/
Dec. 15 (Bloomberg) — American International Group Inc., the insurer bailed out by the U.S. government, sold residential mortgage-backed securities with a face value of $39.3 billion to a facility funded by the Federal Reserve.
AIG will receive about $19.8 billion for the assets, which were held by the insurer’s securities-lending program, the New York-based company said today in a statement.
The Fed has committed a total of $152.5 billion to rescue AIG from insolvency and reduce losses at firms that did business with the insurer. AIG stumbled when it lent securities to investors and used the collateral to buy mortgage-backed securities that plunged in value.
“The creation and launch of this financing entity will eliminate the liquidity issues associated with AIG’s U.S. securities-lending program,” Chief Executive Officer Edward Liddy said in the statement.
How and when will the Fed offload all the MBS toilet paper on to the backs of the U.S. taxpayer?
Doesn’t the Fed do an annual “sweep” of its profits (or losses) over to the Treasury? The question is: at what point will they recognize the losses (which at this time only exist on paper)?
Or, will they hold these instruments to maturity and only recognize the losses when it becomes apparent that the debtholder has defaulted???
the question remains, does a 50% haircut reflect “market conditions”?
perhaps the market signaled a 70% haircut, or 80%.
Liquidity is not an issue, unless it is.
Seems to me like lots of those Markit MBS indexes were trading at a nickel to the dollar last time I checked, but perhaps the Fed can reflate them back up again?
they are trying to drive down spreads….
money is so cheap.
HOW CHEAP IS IT? the crowd.
Money is so cheap nobody can afford it. (combotechie, I dont consider bucky money anymore.)
“Everybody and their brother knows this has to come down some time,” said Kim Rupert, fixed income analyst with Action Economics. “It’s tough to continue to buy Treasurys at these unsustainable levels.”
That would mean huge amounts of government debt with little demand left to buy it, resulting in a devaluing of the dollar.
“The end result of all of this could be the next major problem: the crisis of confidence in the dollar,” said Baumohl. “At some point, foreign investors are not going to come to the table to buy U.S. debt, leading to a dollar decline.”
“How and when will the Fed offload all the MBS toilet paper on to the backs of the U.S. taxpayer?”
The answer is they already did. They did it through inflation. Not tomorrow’s inflation - but yesterday’s inflation. They grossly inflated the money supply with loose lending all throughout the tech and the housing bubbles. This caused a giant bubble in prices - inflation - in the financial and the housing markets. Our 401(k)’s, IRA’s, etc. - and houses - all had vastly inflated values.
You know that market collapse that started in September, and will continue till who knows when? That was the sound of trillions of dollars of virtual taxes being paid by Americans to the banks.
All along, in the late 90’s through now - under correct market conditions - we should have been in a deflationary market, price-wise, because economically we were in an extended recession - fundamentally if you discount home equity extraction. Instead we had inflation. Not massive inflation, if you measure it by “core CPI”, but massive nonetheless compared to the deflation that should have been otherwise due to the economic fundamentals that were weak, but hidden by the bubbles.
Right now we should have incredible, spiraling deflation - like -10% per year IMO. But we have only slight deflation because they’re pumping as madly as they can to try and stop the bubble from collapsing. It’s working only to the extent of changing a fast-motion crash into a slow-motion crash.
uhh…its almost 3 years into this so-called, “slow motion crash” of which you speak.
And its accelerating to boot! Home prices are currently dropping at the fastest rate ever, despite all the Fed’s jawboning about what they will do to fix the housing market. I wonder how fast home prices would fall if the Fed weren’t doing all it can to slow the rate of home price deflation.
Packman - I really liked your post. I have no idea what percentage per-year deflation we should be seeing, but I agree with your premise in general and you stated it clearly and well. Good ‘un.
I agree with you, packman.
Considering what wages have done over the past few decades (esp in the past decade), we’ve had major inflation in housing, stocks, bonds, commodities, etc. Money has been chasing assets around like mad.
**Although I’m against the bailouts,** if they do it right (and it’s a very delicate balance they have to maintain), they just might be doing the right thing. They are trying to pump liquidity into the vacuum created by all of this artificial wealth. It just might keep us from spiraling into a deflationary depression that we could literally not survive.
Maybe we should ride out the recession by only spending what we can afford
Dec 10 2008 By Owen Trotter
…
The UK economy has a huge hangover. After years of living the high life on borrowed money, the bill has arrived and the ‘morning after the night before’ isn’t proving to be pleasant. A ‘hair of the dog’ is an attractive option but will it make the final reckoning even more painful?
Man, it’s cold here! 30 degrees F! For here, that’s very cold.
I just went on a walk to get the mail and I was dressed up like Bigfoot, in a big fur coat and a large and impressive fur cap. I felt like a Tolstoy character and thought, ‘Where is my vodka, and my samovar?’ and I also thought about killing someone and then feeling guilty and writing a long novel on the subject, like how the Russians do it.
Meanwhile I scared the crap out of the neighbors dog, who I met at the mailboxes up the road with the neighbor; he barked like mad and was howling and leaping in the air, the dog, not the neighbor. Soothing words were ignored. I hastened away before he decided to be a hero and kill the ‘Bigfoot’.
Got cold enough for a dusting of snow on the hills around the San Francisco Bay Area. Mt. Diablo and Mt Hamilton.
lol
woosies
Tonight: Windy conditions and snow showers. Wind chills approaching -15F. Low 1F. Winds W at 20 to 30 mph. Chance of snow 60%.
And I’ll be on my quad to watch the ball game at the Dew Drop.
I knew that would get a rise out of you Mid-Westerners and North-Easterners
Don’t get me wrong. I love how cold it gets here. Just right for me. I do not envy you hoz.
drowning your sorrows after the Packers loss and punishing Lars at snooker…
Its good to be the king…
Lars is a cadgy snooker player aka he wins more than I would like, but this is the last night before some family members come home and then it is Christmas and Chanukah thingies going on. My sons and their SOs and I are going to Illinois (motto: show me the money) to the beautiful city of Chicago (motto: Where’s mine?) to spend moneys and bring the country out of recession. Then we shall watch the wimpy Bears lose to the Green Bay Packers.
Hoz - Merry Christmas and Happy Hanukkah. Or Merry Xmas and Happy Xkah, if you prefer. Down here in FB (flat-broke) Florida, I’m wearing short-sleeved shirts, but I don’t mind a bit if you all like the white stuff that is more traditional for this time of year. I love to see it on TV. I think it’s great for everyone here that we can focus on the fun things in life instead of our upside-down mortgages.
And my never-ending gratitude to Ben Jones.
Lol, took the word right out of my mouth, hoz……
Woosie woosie woosie!!!!
Had to open my truck door to use the ATM tonight ’cause the window was frozen shut.
I proudly will accept being called a woosie.
So…was this the cute neighbor??
(This blog is dedicated to the vitally important questions…)
LMFAO, this is the best story of the year, by far:
“Blagojevich… erupting in fury for failings as mundane as neglecting to have at hand at all times his preferred black Paul Mitchell hairbrush. He calls the brush “the football,” an allusion to the “nuclear football,” or the bomb codes never to be out of reach of a president.”
http://www.iht.com/articles/2008/12/15/america/15blagojevich.php
I would love to live in a world where my hairbrush is called the football. Blago’s brain should be an amusement park ride.
And people trusted this guy with their money?
I think we have the answer to the current economic disaster: too many stupid people with too much money.
“And people trusted this guy”
Has anyone noticed the correlation between awful hair, and corruption?
Blagojevich has Televangilist hair — the kind you expect to get up on all fours and walk away from his scalp.
Now the guy has a severe case of Spitzer face to compliment the hair.
Has anyone noticed the correlation between awful hair, and corruption?
hee! what about makeup?
Clearly only the Messiah could pull this off…
Obama clears himself and staff in Blagojevich case
The president-elect says an internal review shows there were no inappropriate conversations with the Illinois governor about who would fill the vacant Senate seat.
By Christi Parsons and John McCormick
December 16, 2008
Reporting from Washington and Chicago — Barack Obama said Monday that an internal investigation had found his staff had no inappropriate conversations with Illinois Gov. Rod R. Blagojevich over who would succeed the president-elect in the Senate.
But Obama said the review of his staff’s contacts would not be made public until next week at the request of federal prosecutors, who are investigating whether Blagojevich put Obama’s Senate seat up for sale.
Dec. 15 (Bloomberg) — Bank of America Corp. will need to raise more capital to offset rising loan losses, and the stock may sink to $9, according to Friedman, Billings, Ramsey Group Inc. analyst Paul Miller.
The bank should cut its quarterly dividend to a penny from 32 cents and conserve as much capital as possible, Miller wrote in a report issued today as the stock closed at $14.11. He rated shares of Charlotte, North Carolina-based Bank of America “underperform.” Miller finished first among bearish analysts in a June ranking of the world’s best stock pickers compiled by Bloomberg.
Maybe the Bank of India, er, America, can bring jobs back here so people can, I dunno, pay their loans?
Remember the time when all the smart financial analysis where praising BAC for “snapping” Countrywide for a barging? At that time I was just thinking: What pathetic knife catchers are these guys. And Mozillo laughed all the way to the bank.
Why isn’t the CEO of BAC fired already?
One of the City’s best-known fund managers has criticised US regulators for not detecting the alleged fraud.
Nicola Horlick, boss of Bramdean investments, told the BBC: “I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they have fallen down on the job.”
“This is the biggest financial scandal, probably in the history of the markets - $50bn is a huge amount of money,” she said.
She sounds pissed huh ?
I think it’s hilarious, in a weird way.
All these MBA types, running around crackberrys with Important Things to Do, and Important Thoughts To Think 24/7, throw billions of dollars at an old guy with no staff promising ridiculous returns for no risk. Because he had a good “reputation”. (Where can I get one of those??)
It’s like that bank in CT that was still entering entries on ledger paper. Gee, what a surprise! They were committing fraud too.
What amazes me is not one of them thought this might be to good to be true. Common sense is becoming a rare commodity.
I know!
10% Horlick had in there. 10% !!!!!
!
This is just going to add to the idea that all financial dealings are magical luck. The idea of fundamentals, or practical underpinnings to a financial system rarely occurs to many people. I spent yesterday yelling at my computer which was playing an NPR On Point broadcast about proposals to help underwater types, in which various mortgaged people called up to support the idea of the government helping them to pay their mortgage and not lose their homes. And they were so VAGUE in their suggestion that the “GOVERNMENT” could just BORROW the money. Things I yelled included:
-”borrow from WHERE?”
-”Oh, of COURSE you did, you, -bleep- ughhhhh” (in response to a caller admitting he borrowed against his equity to buy 2 vacation properties and wants the government to force his bank to lend to him at less than the rate he signed on for not that he has lost his job. Being a builder.).
-”The government is NOT MAGIC”
etc. Possibly I sounded completely mental, but luckily I was working on a Sunday by myself
I am quite soft spoken, so I could have really startled someone.
10%?
10% is for whiners.
-”The government is NOT MAGIC”
Oh, ho, ho it’s magic, you know
Never believe it’s not so
It’s magic, you know
Never believe it’s not so.
Ever been awake
Ever seen a stock break
Leaning on my shorts in the morning
Lazy day in bed
shorting bonds instead
Crazy morons buying in the morning light.
Oh, ho, ho it’s magic, you know
Never believe it’s not so
It’s magic, you know
Never believe it’s not so.
I love my sunny day
Dream of far away
Dreaming on my pillow in the morning
Ever been awake
Ever seen a bond break
Leaning on my shorts in the morning light.
Oh, ho, ho it’s magic, you know
Never believe it’s not so
It’s magic, you know
Never believe it’s not so.
that’s fantastic!
She is not getting half the bashing she deserves. Her fund is toast
“01Clients
Our firm specialises in investing in alternative asset classes. We offer segregated accounts for institutional and family office clients, as well as pooled investment both for these clients and also for high net worth or affluent investors….
Robust and thorough due diligence is at the heart of our firm’s investment process. Our detailed manager monitoring programme ensures that our clients’ investments are subject to on-going and effective governance.”
Bramdean
and her response to the paper
Ms Horlick said: “Between us we have made a lot of good decisions. Any suggestion that Bramdean is mortally wounded is way off. The fact that this man ran off with the money is hardly my fault.”
from This is London
Where is the due diligence that you promise in your solicitation?
“..Hedge fund investment adviser Aksia LLC warned clients (Nov, 2006) not to put their money with Bernard Madoff after learning of “red flags” at his company, including that its books were audited by a three-person accounting firm….” Bloomberg
Economic Freedom or Socialist Intervention?
by Ron Paul
The freedom to fail is an essential part of freedom. Government provided financial security necessitates relinquishing the very essence of freedom. Last week, the big 3 American automakers came back to Capitol Hill with their hands out to the government. Congress spent this past week debating how much money to give them and what strings should be attached. Though the bailout plan for the auto industry has suffered what I would call a temporary setback in the Senate, other avenues for public funding are being explored through the Federal Reserve and the Treasury Department. I am afraid the American auto industry will soon learn that having billions rain down from Washington will not be the blessing one might expect.
The government, after it subsidizes an industry, tends to become a very demanding benefactor. Politicians may not have any real idea about how to build a car, run a bank, educate a child, heal the sick or build a road, but they are quite adept at using carrots and sticks to manipulate and threaten those who do. Most of the federal control over education, roads, healthcare, and now banking and soon auto manufacturing, is done through money, mandates and conditions. The bailout proposal we were considering would force automobile manufacturers to submit their business plans for the approval of a new federal “car czar.” This bureaucrat would have the authority to approve the automakers’ restructuring plan, monitor implementation of the plan, and even stop certain transactions he determines are inconsistent with the companies’ long-term viability.
One could argue that if billions of taxpayer dollars are going to flow into a failing industry, then representatives of those taxpayers have “bought” a say in how that industry is run - which is precisely why bailouts are such a bad idea for both the industry and the taxpayers. The federal government has neither the competence nor the Constitutional authority to tell private companies, such as automakers, how to run their businesses. I would have thought that failed experiments with central planning and government control of business that caused so much harm in the last century would have taught my colleagues the folly of making businesses obey politicians and bureaucrats instead of heeding the wishes of consumers, employees, and stockholders. But the auto industry is in danger of learning for themselves one of the oldest lessons in politics: he who pays the fiddler calls the tune.
It is not the job of government to sustain business. The government should get out of the way, and instead examine excessive regulations, tax policy and red tape that have been hostile to manufacturing in this country. We should get back on a sustainable economic course in this country, or we are doomed to collapse, as the Soviets did, under the crushing burden of big government and a strangled economy that can no longer pay for it.
I hope he enjoys the privilege of saying “I told you so” when his predictions come to pass.
I’m surprised Dr. Paul doesn’t ever address the greed and lack of transparency of corporate CEOs and their accountants. He seems only fixated on one aspect of the evil permeating the financial sector: government. Ronald Reagan said many of the same things, and yet much of this mess started when they started deregulating or out right “depolicing” the market.
Ask Michael Lewis.
I get the impression that the only government that he thinks works would be Somalia’s…
I voted (and campaigned) for Ron Paul. Does any other congressman or senator provably refuse contributions from any PAC? I’m an old fart now and Ron Paul probably is the last true libertarian and, by my definition, true statesman to run for such high office in my lifetime. I wish all of you younger folks well and I hope that you like or can accept what is in store for your future. Or that you’re long pitchforks.
By Kevin Hamlin and Li Yanping
Dec. 15 (Bloomberg) — China’s industrial production grew at the weakest pace in almost a decade as export growth collapsed, increasing pressure on the government to do more to revive the slumping economy.
**the nuts of the piece***
“Electricity Output Falls
Industrial production is plunging around the world as demand dries up. China’s electricity output fell by 9.6 percent in November from a year earlier, today’s figures showed. Pig- iron production fell 16.2 percent. Raw steel declined 12.4 percent. Steel products tumbled 11 percent.”
—
Where is “real” demand being demonstrated?
BBC News is going on and on and on and on about how many folks in such high places were screwed for so long by Madoff. I see nothing here that can’t be fixed up with a few more Fed rate cuts, can you?d
“Richard DeKaser, chief economist of National City, predicts the Fed will cut the target by 0.75 points, to 0.25%, and may announce that it will hold rates low as long as needed in order to influence expectations.”
That’s how AG blew the first housing bubble sky high. I wonder if the Fed is hoping they can get housing bubble pricing back up again, as it was such a boon to the U.S. economy last time? Personally, I think they are missing something important, as prices were not dropping from record heights at a record pace during the early 2000s. It is hard to stop a tsunami in progress, but I guess that won’t stop them from trying all the tricks in their monetary magic bag.
And this will encourage foreign buying of our Treasuries how?
Seen on another blog (sorry if I missed this witicism here):
Someone calling this the start of the… “Great Recession”
Does anyone have the vaguest idea how much this guy actually Madoff with?
Madoff’s madness
Published: December 15 2008 19:39 | Last updated: December 15 2008 19:39
Every investor is looking for a good return. But it seems now that Bernard Madoff’s performance as an investment manager was too good to be true. A fraud of up to $50bn is alleged. That reflects badly on regulators, but badly, too, on the funds of funds that entrusted Madoff with their clients’ cash.
A regulatory backlash is certain: something went horribly wrong for a fraud on such a scale, so there will and must be blame, hand-wringing and rewritten rules, especially on the separation of front and back offices. Audit regulators, the Securities and Exchange Commission and the funds of funds that were supposed to conduct due diligence on Madoff are only the most obvious people with questions to answer.
Don’t worry, the SEC is busy suing The National Lampoon for stock manipulation on a purchase of $250,000.00 of National Lampoon stock.
Madoff or National Lampoon? Lets go for the National Lampoon it will get more press.
Yes go after the small fry, so you look like you are doing something.
You can buy stock in the National Lampoon?
I’m gettin’ some!
…….and for those thinking this is the bottom.
http://www.gold-eagle.com/editorials_01/seymour062001.html
The crisis gives the US new financial power
By Ricardo Hausmann
Published: December 15 2008 19:19 | Last updated: December 15 2008 19:19
T he economic crisis in the US signals the end of American global hegemony. Or does it? Pundits from different camps, some with fear and others with glee, contemplate a future where the US will have a much diminished weight in global affairs. But if the US plays its hand well, things will turn out to be just the opposite.
It is useful to remember that power is a relative, not an absolute concept. True, the US has been hurt by the current turmoil but so have many others. The Dow Jones is down by almost 40 per cent so far this year but this makes it pretty much the best performing stock market in the world.
More importantly, as far as power is concerned, unfriendly states such as Russia, Iran and Venezuela are suffering from a dual collapse in the price of their oil exports and the value of their sovereign bonds.
Remember the dangerous scenario this past summer with Russia intervening in Georgia and threatening Europe with the energy card?
Now, Russian policymakers perform daily prayers just to be able to open the stock market for regular business.
hoz, clue, FPSS, PB,
Is this good or bad news?
Fed Readies for Balance Sheet as Main Tool as Rate Nears Zero
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCrmnf9nR.6A&refer=home
latest news
Euro-zone Dec. composite PMI slips to 38.3 vs. 38.9 Nov.
SPECIAL REPORT
The 2008 market will go down in history
This bear market ended up smashing record after record
By Nick Godt, MarketWatch
Last update: 12:01 a.m. EST Dec. 16, 2008
NEW YORK (MarketWatch) — Investors lost trillions of dollars and U.S. stocks prices plunged to 11-year lows. Overseas markets suffered even worse declines.
Yet, to say that the 2008 market will go down in the history books might almost sound like whistling past the graveyard. As the U.S. and the global economies continue to worsen, investors are still licking their wounds and worrying about 2009.
Looking back to expectations at the start of the year, “the surprise was not that we had a bear market and a recession,” said Hugh Johnson, chairman of Johnson Illington Advisors.
“The surprise was that events were as severe as they turned out,” said the veteran adviser, who has over 40 years experience in the investment world. “I have been at this for a while and I’ve never experienced anything like this. It defies words to describe it.”