December 17, 2008

Bits Bucket For December 17, 2008

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Comment by wmbz
2008-12-17 06:41:32

Banks Show No Signs of Easing Credit in Step With Fed’s Rates …

Dec. 17 (Bloomberg) — For all their efforts to liquefy credit markets, the Federal Reserve and the Treasury show no signs of ending the 18-month freeze, as evidenced by the unprecedented gap between what banks and the U.S. government pay to borrow money.

The difference between the London interbank offered rate, or Libor, that banks charge each other for three-month loans and Treasury bill rates is six times wider than before markets began to seize up in June 2007. Even though the so-called TED spread narrowed to 1.82 percentage points yesterday from 4.64 percentage points in October, prices of contracts to borrow money months from now show investors don’t expect lending to recover until at least the second half of 2009.

Comment by arizonadude
2008-12-17 07:14:53

I has a 25000 limit at amex and been a customer since 1994.I had no balance and the bastards cut my credit limit to 500.I cancelled the card the following day.The banks are taking advantage of people right now I think.

Comment by wmbz
2008-12-17 07:20:53

A friend of mine in the auto repair business has a line of credit with Wachovia for $25,000.00 it was cut last week to $5000.00. The branch manager told him they would be cutting more to avoid ‘risk’.

Gotta love the ‘bailout’!

Comment by Michael Viking
2008-12-17 11:06:33

If you get a chance, I’d love to hear how your friend thinks the auto repair business will do financially with the economy like it is. I’m considering purchasing one. Thanks in advance for any info.

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Comment by BanteringBear
2008-12-17 11:42:58

I have an old friend from high school who owns an auto repair and air conditioning shop. Business has slowed a bit, as people log fewer miles, and use more public transportation.

Comment by wmbz
2008-12-17 13:25:28

Michael, My friend has a four bay import repair shop. He has been at it for 25 years. The most common problem for him is keeping good mechanics/techs and the continued expense of up grading diagnostic equipment to work on newer cars. Techs will bounce around looking for more $ and Ins.

This Nov.-Dec. has been slower than usual for him. It’s always slower during the Holidays, this go round much more so.

One problem he has said has increased is customers leaving their repaired cars longer, due to not having the bucks(or credit) to pay the tab.

All in all people will get their cars fixed, so it’s a business that’s not going away.

Comment by TCM_guy
2008-12-17 13:44:48

I purchased some motor oil at the Napa store recently. Guy told me business has definitely slowed down in the past 6 mos.

This Napa store supplies lots of auto repair businesses in my area.

Comment by Michael Viking
2008-12-17 14:43:53

Thanks for all the responses.

Comment by Happy2bHeard
2008-12-17 15:03:55

I have a friend who does auto repair. He says he is busy, but it is the low profit jobs that are coming in.

Comment by Shizo
2008-12-17 16:02:37

Good points. This, I’d argue is the first wave. What I think Michael was trying to imply was that people are going to hold onto their vehicles ALOT longer than “normal” thus more work will need to be done. I’d tend to agree with that stance. However, logging fewer miles may offset the difference as people decide the back yard vacation will be just fine over the next 2 years.

Comment by Shizo
2008-12-17 16:07:27

On the credit card issue I have had the same result. Member since 1992- $25K+ line. I’ve used it to pay off 23 acres in the past, never missed a payment, EVER. Paid in full 4 years ago. Got a mailer saying due to account inactivity they we CANCELLING my card. No reduction. No “special offer” to entice me to use it. Nada. This is how they treat customers that actually pay the bills. What a joke. See you at the bottom.

Comment by Dr.Strangelove
2008-12-17 20:04:41

“This is how they treat customers that actually pay the bills. ”

That’s because to them, you’re a responsible, bill paying “deadbeat.” Welcome to the crowd.


Comment by jay
2008-12-18 13:20:53

i got that letter from citibank about no use and them closing my account, i used the card right away and they did not close it. so, i’m going card by card and using them all so none will get closed. HSBC closed one card i have for 2k, and never even informed me so i moved my cash out of their online account. i have over 200k in credit, no balances and a score over 800. anyhow, i applied for a new chase card even though i have over 50k with them already and they approved another 15k. i was expecting to be refused. i also asked for credit increases on two other cards online and they gave me a couple thousand more. i borrowed 80k last year on my cards and made money on the deals, i figured that would look good and keep my credit great! so far so good. just borrowed another 30k@2% for a year earning 3.75%. so, i’ll borrow if i can make some money, but i don’t expect it to last. just hoping to keep around 200k in limits!

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Comment by oxide
2008-12-17 07:28:06

Whoh, that’s COLD.

Bankers are beginning to realize that you can’t get blood from a turnip, no matter how “confident” you are of the turnip. (I don’t mean you’re a turnip, adude. Just that they assume everyone is.)

Consumers have already hunkered into Depression mode, nothing will pry them out of it. Even the ones who still have jobs are saving up for when they lose their jobs. Sneakers will last two years instead of one year, cars will last 10 years instead of 4 years. The only new purchases will be food and health insurance.

None of the traditional tools will work.

Comment by skroodle
2008-12-17 07:32:45

I was at the mall this weekend, if there is a Depression coming, most people will be stylishly dressed for it in the latest fashions.

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Comment by crazy frog
2008-12-17 09:14:18

Well, this is exactly why the Depression is coming – most people are too stylishly dressed for their means. They spend borrowed money for too long.

Comment by BanteringBear
2008-12-17 10:30:11

Coach and Juicy don’t look so nice with the stains from living behind a dumpster.

Comment by cassiopeia
2008-12-17 15:46:02

Went into the Benetton store at Century City mall in LA last week. I bought 2 pairs of pants 50% off. I was the last customer of the day and the saleswoman was adding up the money for the day as she took my purchase. She kept saying that she had never seen things this awful. She said they had gone from 20K a week to 5K a week and the owner of the store paid 26K in rent. I told her maybe it was time to approach the landlord to renegotiate the rent, she said they were reluctant to lower rents because they had not upped them in good times and did not see why they had to reduce them now. Wow. I guess that landlord (Westfield) is due for a rude awakening. The fancy places are deserted, Costco is teeming with shoppers. Good for them.

Comment by vannuysrenter
2008-12-17 18:28:44

Isn’t rent tied to the net of the store?

Comment by Bill in Carolina
2008-12-17 07:43:34

Speaking of sneakers…

“The Secret Service is concerned that the recent shoe-throwing incident in Baghdad may become a popular means of expressing disapproval with whatever President is in office. So in addition to having to pass through metal detectors, all spectators along the inaugural parade route in Washington D.C. on January 20th will be required to remove their shoes and place them in lockers that will be set up at each spectator entry point. The shoes will be returned when the spectators leave the parade route area. This will become standard procedure for all future public presidential appearances and possibly even for news conferences.”

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Comment by nhz
2008-12-17 07:46:26

it is soo easy to create new jobs …

Comment by dude
2008-12-17 07:49:36


Please tell me this is from The Onion.

Comment by oxide
2008-12-17 07:52:40

Please tell me this is the Onion…

Comment by octal77
2008-12-17 08:09:48

What the heck, just make everything “clothing optional”

Comment by JackRussell
2008-12-17 08:32:11

That can’t be a real story - the inauguration is in January, and without any shoes you would freeze your feet off.

For a bit of fun try

It is a good thing that the guy didn’t take off his pants and throw them at the President.

Comment by Skip
2008-12-17 08:32:20

Do you realize that Helen Thomas always sits in the front row at press conferences??

Comment by Mr. Drysdale
2008-12-17 09:20:33


Let’s just go with chicken wire like in Blues Brothers

Comment by octal77
2008-12-17 09:34:47

…the inauguration is in January…
…you would freeze your feet off…

Cold January weather, clothing optional…

Looks like the US dollar isn’t the only thing
suffering from the effects of “shrinkage”

Comment by realestateskeptic
2008-12-17 09:56:22

Is Helen still alive and working????

Comment by James
2008-12-17 08:59:25

If you stay away from all the prepackaged crap, you can cut your grocery bill by 50%.

So, the deflationary effects… Going out to eat, to buying groceries to buying less expensive items.

I think the contraction is about 66% in expenditures. Get rid of stuff that is bad for you like soda too.

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Comment by Kim
2008-12-17 09:40:21

“If you stay away from all the prepackaged crap, you can cut your grocery bill by 50%.”

Pre-prepared foods, yes. But I always see BOGO processed & junk food… never BOGO fuits and vegetables (unless you grow them yourself). Plain ole bread always costs less than breads made with whole grain, etc., etc.

Comment by Faster Pussycat, Sell Sell
2008-12-17 09:43:55

What is BOGO?

Comment by Mr. Drysdale
2008-12-17 09:56:48

buy one, get one

Comment by Kim
2008-12-17 09:57:13

BOGO = Buy one get one free

Comment by realestateskeptic
2008-12-17 09:58:44

Buy One Get One free

Comment by Skip
2008-12-17 10:14:21

Potato chips are always on sale at my supermarket, but never raw potatoes.

Comment by BanteringBear
2008-12-17 10:35:15

If you can’t afford raw potatoes which aren’t on sale, you’ve got problems. They’re like 10 lbs for 4 bucks. I’ve never seen 10 pounds of potato chips for 4 bucks. If they were, I think the standard door size in this country would have to be increased. Disclaimer: I’m not a potato chip and soda person.

Comment by Olympiagal
2008-12-17 12:14:19

‘They’re like 10 lbs for 4 bucks.’

When I first got here from Utarr, hmmm, almost 5 years ago, I was quite indignant that a 10 pound bag of potatoes was 1.99 at the Grotlet. I was used to paying $1.99 for a 25 pound bag at my favorite market, Macey’s in Spanish Fark (it’s ‘Fork’, but pronounced ‘Fark’.), Utarr.
That’s when I bought them with dollars. In October I used to go out to Farmer Jorgensen’s fields by Benjamin and gather up alllllll the potatoes I wanted, after their harvest. I LOVED that. I love potatoes, and I love gathering them up from the chilly earth, brushing off the clods, and carefully packing them into bags. You gotter do it carefully, because of course one bruised potato spoils and causes mass ickiness. I would fill the back of the pick-up truck up, and that’s a LOT of potatoes. All the hashbrowns I wanted, baybees!

So, 1.99 for a mere 10 pounds?! Ridiculous!
I even grumbled about it quite a bit. Ah, the good ol’ days.
NOW, of course, a 10 pound bag costs three whole dollars or more at the Grotlet. Ridiculous!

Comment by ecofeco
2008-12-17 14:11:31

Peak potatoes?

Comment by Elanor
2008-12-17 14:15:33

Potatoes: the next bubble?

Comment by shibbo
2008-12-17 14:37:52

I know what you mean about the price of potatoes! Produce in general always seems a little overpriced these days –particulary potatoes and onions, which I always thought of as being the cheapest veggies you could buy.

I live back on a farm now. It’s amazing all the fruit and veggies we have that end up going to waste because we can’t keep up with it all –and we could be getting a dollar a pound if we wanted.

Comment by hd74man
2008-12-17 09:36:12

RE: None of the traditional tools will work.

The guts of the US economy has been exported over the last 25 years and there’s nothing left but a Foo-Foo economy of nail shops and life counselor services for the dispossessed.

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Comment by Al
2008-12-17 10:22:43

Foo-Foo economy. That one’s gotta stick.

Comment by Pondering the Mess
2008-12-17 10:23:53

And Wall Street crooks - don’t forget the “growth engine” of our paper economy!

Comment by milkcrate
2008-12-17 12:17:21

Don’t forget our best growth industry, tattoo parlors. :)

Comment by SanFranciscoBayAreaGal
2008-12-17 12:21:28

Gotta like those shows Miami Ink and LA Ink :)

Comment by BanteringBear
2008-12-17 16:29:58

Methinks there are going to be some very, very regretful middle aged adults sporting ugly ink.

Comment by not a gator
2008-12-17 17:52:22

oddly, everyone I know with tattoos is quite proud of them, no matter how ugly.

personally, I don’t get it.

Comment by Dr.Strangelove
2008-12-17 20:11:51

“oddly, everyone I know with tattoos is quite proud of them, no matter how ugly.”

LOL. Yeah, and I can’t help imagining how weird it’ll be say 20-30 years from now with tatoo covered Grandmothers…”gather round’ yungin’s, Grammy’s gonna tell ya’ the stories behind her jailhouse tats!” :-)


Comment by TCM_guy
2008-12-17 07:54:21

Tens of thousands of small businesses will go under as a result of credit card reductions or terminations. Those who are allowed to continue at 30% interest rates will be the “lucky ones.”

Recently, Chase closed a CC account because I had not used it in the past 12 mos. No BFD there. But ShitiCitibank sent me (via slow mail) a notice of change in terms and right to opt out letter. Some of the changes:

Variable APR for purchases will be US PR + 10.99%, with a minimum of 16.99%.

Variable APR for cash advances will be US PR + 16.99%, with a minimum of 21.99%.

However, a DEFAULT APR of PR + 23.99%, up to 29.99%, will be triggerred by:

minimum payment not made when due

over credit line

or make a payment that is not honored.

Also, 3% finance charge fee for all purchases made out of the USA, be it in dollars or whatever currency.

Late payment fee: $39 if balance > $250.

Over credit line fee: $39. “We add this fee even if periodic finance charges, fees, or other charges you incur are a reason the amount balance goes over your credit line. We add this fee even if the account balance falls below your credit line by the end of the billing period. We add this fee…”

Returned payment fee: $39.

Returned cash convenience check fee: $39.

Stop payment on cash conveninece check fee. $39.

Also, they set the default APR by reviewing the seriousness of the default, and my credit history.

The last time I checked my FICO it was in the 800’s. I do not commit financial fraud, and I have never had a mortgage of any kind; not subprime, not altA, nothing. If after further review, a guy like me gets hit with a DEFAULT APR of 29.99%, then what do they do to their fraudulent clientele?

Evidently, Citibank’s assumption is that all of their CC customers are fraudsters, and everybody gets subprime terms.

I called them and opted out. My old terms will remain in effect until the expiration of my card, at which time they will close my account and the new rules will apply. If they really want to apply these onerous terms at that time, then they can have their account.

It is not like every banking CEO has ruined their business, there are solvent CC banks out there.

Comment by credit junkie
2008-12-17 09:38:04

Wierest thing…

My bank keeps sending me emails telling me that my online accounts have had a security breach & that they need me to re-login using a link.

So, I logged in. Now, some guy from Nigeria keeps calling me asking for money.

Oh well.

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Comment by aNYCdj
2008-12-17 12:30:46

Yeah and they can access your account too..who hoo…you will be broke before you know it…easy come easy go

Comment by reuven
2008-12-17 10:01:50

People like you (and me!) are the only ones they can count on to pay their bills! So it makes sense for them to raise the rates. The debtors will walk away (legally)!

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Comment by diogenes
2008-12-17 11:15:30

El Correcto reuven! I have an acquaintance who makes close to 200K/year under the table and reports 38K. He just defauted on 230K of credit card debt and since he conveyed all his assests to his son some seven years ago has nothing to attach. He laughs about it and what fools people who play by the rules are. The collection people have offered to settle for 40 cents on the dollar but he just laughs at them.

If people think he is the only one doing that they are nuts. That is why banks are pulling back. A lot of americans are deadbeats.

Comment by milkcrate
2008-12-17 12:20:19

Also, real deadbeats=stimulus check recipients who didn’t pay any taxes.

Comment by SanFranciscoBayAreaGal
2008-12-17 12:24:17


What does your friend do to make that much money under the table?

Comment by Vermontergal
2008-12-17 14:27:54

What does your friend do to make that much money under the table?

I’m going to guess that he’s self-employed. Especially with an S-Corp, you can play a lot of games to avoid the taxman. $38K would be enough to prevent an audit flag from the IRS.

Comment by SanFranciscoBayAreaGal
2008-12-17 19:45:03


Pfffffft. I want details, the nitty gritty of what this person is doing. ;)

Comment by Mot
2008-12-17 23:36:21

Perhaps you can get a reward by reporting him to the taxman…

Comment by smiling_in_SD
2008-12-17 10:18:38

800+ Fico, no debt ..none, and WAMU took a card away for no use in the last 12 months. Yea, that’ll help your bottom line

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Comment by Cassandra
2008-12-17 10:39:01

WAMU did the same to me. Of course I’ve had the card 3 years and have never used it.

Comment by BanteringBear
2008-12-17 16:23:12

I’m wondering if some of you people (nobody in particular) are assuming your credit scores are better than they really are. Something is not adding up here. I have an 800 FICO, and my credit limits were recently INCREASED on both of my cards, without my request or knowledge. I only found this out by accident when I was in my online banking account reconciling my checkbook. On top of that, I have been inundated with offers of 0% for 8 months if I would just tap into them.

Comment by exeter
2008-12-17 18:20:14

Similar here BB. JPMC just boosted our limit to $45k. We have to two cards and both hound us with those checks at least twice a month.

Comment by CA renter
2008-12-18 03:33:22

We haven’t had our credit lines cut/reduced (yet), but Citibank sent those notices out to everyone, from what I’ve read on blogs.

We also have 800-ish FICO scores and no debt (pay the CC off every month).

Comment by Pondering the Mess
2008-12-17 10:27:09

” If after further review, a guy like me gets hit with a DEFAULT APR of 29.99%, then what do they do to their fraudulent clientele?”

Nothing - fraudsters get bailouts!

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Comment by BanteringBear
2008-12-17 10:43:33

Through their actions, the banks are actually encouraging people to give them the finger and stop paying. Banks are evil. Period.

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Comment by exeter
2008-12-17 12:56:14

“Banks are evil. Period.”

BINGO. But the conservative/libertarians never fail to create policy that enslaves more people to the banks.

Comment by TCM_guy
2008-12-17 13:40:17

I have posted this before:

Debt is an equal opportunity enslaver.

Comment by bluprint
2008-12-17 14:47:49

But the conservative/libertarians never fail to create policy that enslaves more people to the banks.

Thank god pelosi and company were here to save us from handing over billions to banks. lol

Again Ex, the most libertarian person in Congress, Ron Paul, was one of the few stoicly opposing the handout. Care to reconcile that with your misstatement that libertarians are responsible for the anti freedom policies pushed by dems and repubs?

Comment by exeter
2008-12-17 16:28:15

Don’t you have a house to “build” ravi?? lmao.

Comment by bluprint
2008-12-17 17:26:57

About what I expected. You’re either off your rocker or flat dishonest. I haven’t decided which.

Comment by Bill in Carolina
2008-12-17 17:48:20

I vote for the former. Someone that sanctimonious is probably not dishonest. :-)

Comment by exeter
2008-12-17 17:54:20

But hiding behind an alternate user name is the height of cowardice. No deciding there.

Comment by bluprint
2008-12-17 21:28:47

lol. you really are off your rocker. I wondered if you had mistyped that or posted in the wrong thread or something…

I post as me and me only. Why in the world would I do anything else?

Comment by SaladSD
2008-12-17 10:45:28

That’s weird. I keep getting offers from Chase and CitiBank for 0% credit cards, which I keep declining. I have a balance on my two existing cards, below $500, but perhaps that is the sweet spot.

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Comment by VaBeyatch in Virginia Beach
2008-12-17 11:56:22

Someone just sent me a paypal payment of $500 for some diving equipment I’m selling off. Buyer originally said he would like to pay by paypal balance, so I said that is fine. But when he sent it, paypal wanted 4.9% + $.30 … so I denied it. Just send me a check, paypal doesn’t deserve $25 for moving money around.

I’d actually be happy if credit cards die off. They are so convenient but society is getting so that every purchase involves 2.9%+ going to the banks that run credit cards. Perhaps a credit card that has no fees to the stores or the users would break things up a bit.

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Comment by milkcrate
2008-12-17 12:23:01

Paypal: A ball and chain pulling eBay to the bottom, IMHO. Nearly impossible to cancel an account, though.

Comment by SanFranciscoBayAreaGal
2008-12-17 12:30:31

I’m running across small mom and pop business that only accept cash. One is Louie a restaurant near the Cliff House in San Francisco. They have an ATM right there in the restaurant for those who don’t have the cash. By only accepting cash they have been able to keep their prices down.

Comment by milkcrate
2008-12-17 12:36:19

Gal: That the dive near the beach with a pool table?

Comment by SanFranciscoBayAreaGal
2008-12-17 12:52:19


It’s the small restaurant that’s above the Cliff House.

Comment by Arizona Slim
2008-12-17 13:01:20

A few months back, I had a doctor’s appointment. And I was told that the doctor didn’t take plastic. OTOH, she was quite happy to paid with cash or check.

Comment by TCM_guy
2008-12-17 13:25:32

Yesterday I paid $35 cash for a tire rotation and spin balance. This is a small auto repair shop with a very good reputation, and I am a repeat customer. He gets lots of work while his competitors have few cars to work on.

He does not accept CCs. Told me 3% of revenue is too much of his hard earned money to be giving away. It does not stop people from using his shop.

If, for example, you are a small business operating with a 12% profit margin, and you forfeit 3% of all of your revenues, that is 1/4 of your entire profit!

The whole CC thing is evil!

Comment by Milkcrate
2008-12-17 13:35:21

That’s interesting. I know some heallth offices that have installed check scanners, next to Visa swiper, that confirm available funds on the spot. But lotta patients now not qualified for Care Credit, health finance co.

Comment by AppleEye
2008-12-17 14:53:30

All that mechanic has to do is charge $36.05 — instead of $35 — to accept credit cards.

People are often too blinded by “principle” to think objectively.

Comment by NOVAwatcher
2008-12-17 15:22:39

That explains why the card machines in grocery stores default to ‘debit’ and ask for your pin even after you pressed the button marked ‘credit’. i.e. they’ll do anything to make you accidently take the charges (’debit’) rather than them (’credit’).

Comment by TCM_guy
2008-12-17 15:44:02

Principle and objectivity is one thing. Competitive pricing is another.

He is a small shop with only two lifts. Almost any other shop in town has more lifts and personnel, and their spin balance and rotation service is $29.00. Most people shop for auto service by price, so it would be difficult for a small shop to simply increase the price by 3%, especially when the price is already at a 20.7% premium over most other shops in town.

Now I personally do not shop for auto service by price, I go by quality of workmanship. Case in point: After he installed the balancing weights on my tires, he spinned them two additional times to make sure they where balanced to perfection, to indicate “zero” weights needed. And once he had my four wheels on the ground, he hand-torqued my wheel nuts to 100 ft-lbs. Try insisting at most shops to do it this way with your car, and they will kick you out of their shop!. This guy is worth the 21% premium to me!

Comment by oxide
2008-12-17 12:37:56

I live on cash and debit card only. But each year I charge at least one thing to each of my credit-cards, like travel gas and motel, and I allow them to charge me the annual fee of $20 each.

Yes it costs me a little bit, but you never know what life may deal you, and someday I may need to come up with $5K cash quick. I’m hoping that by NOT going dormant, not being an obvious deadbeat (pay-off type) and not calling to complain about every little thing, I won’t raise any red flags which might put me on a drop list.

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Comment by Faster Pussycat, Sell Sell
2008-12-17 13:59:12

It doesn’t work like that.

You are better off getting what you get now, and paying for the consequences (as tiny as they seem to be for deadbeat-types) later.

I would not pay that $20.

Comment by AppleEye
2008-12-17 14:56:56

Why throw away so much money?

First there’s the $20 annual fee out the window each year (have never paid one), but worse yet, you’re throwing away reward points. I receive $500 (tax free) in free gas cards each year via reward points.

Pay your balances in full, yes, but run everything through the cards (cable TV bill, groceries, etc) to earn points, which are paid out tax free.

Comment by cashedin05
2008-12-17 17:17:09

I agree with you oxide. I do the same thing because you never know when you may be in a pinch.

Comment by Bill in Carolina
2008-12-17 17:56:21

An annual fee?!! What CC charges an annual fee unless it’s some kind of prepaid card masquerading as a CC for deadbeats.

Got a Chase card that PAYS ME 3% back on purchases in the three most charged categories each month (say groceries, gas, utilities) and 1% on everything else I charge. No annual fee.

BTW, I whacked the RFID chip when the card first arrived.

Comment by Dr.Strangelove
2008-12-17 20:36:51

“BTW, I whacked the RFID chip when the card first arrived.”

Please share how to do this, i.e., locating chip and whackin’ it.


Comment by Mot
2008-12-17 23:42:18

10 seconds in the microwave should do it.

Comment by Athena
2008-12-17 14:11:19

Same thing happened to me with Citi. No problem with my credit score, no balance on the credit card. Since I’ve had the card so long I’ve kept it- but have made note that if it gets used at all- it gets paid before the statement is even due. They won’t make any money from me on this card.

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Comment by diogenes (Tampa)
2008-12-17 14:14:39

Evidently, Citibank’s assumption is that all of their CC customers are fraudsters, and everybody gets subprime terms.

Not exactly.

This is like packaging the sub-prime loan business.
I have a very similar situation to yours. Same credit. Same crappy credit cards.

What occurs to me is that they hope you and I and others similar will make up the loses for loans to illegal aliens and non-paying sub-prime borrowers.
The bank gets cheap money, lends it to anybody, and those who can pay or will pay get the bill.
Similar to hospitals and emergency medical care.

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Comment by ecofeco
2008-12-17 14:23:18

20 years ago those terms and attached fees were considered usury and against the law.

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Comment by TCM_guy
2008-12-17 14:56:08

My understanding is that the banking act passed under Clinton was essentially written by the banking lobbyists.

The bankers got everything they wanted. For example, it made it more difficult for people to walk from debt.

Comment by TCM_guy
2008-12-17 15:49:12

I meant to say it made it more difficult for people to file for bankruptcy.

Comment by Skip
2008-12-17 15:51:17

The bankers got everything they wanted. For example, it made it more difficult for people to walk from debt.

Its actually easier to walk away from your house mortgage than your credit card debt. Who coulda seen that causing problems??

Thanks Vice President Biden!

Comment by Dr.Strangelove
2008-12-17 20:23:25

“Late payment fee: $39 if balance > $250.”

Watch out those Scumbags don’t shorten your payback period. One of my cards shortened from 20 days or so down to 15 days if I remember correctly, anyway, I called them and said the only obvious reason they would do that is to increase the likelyhood of late payments due to snail mail issues (I do not, and will not pay revolving bills online) –and said I was pissed-off because I’ve been a loyal customer 12 plus years. They had no reasoned response.

I only use the card once every three months now (keep it active for credit purposes) and use my other more bank friendly card for more frequent purchases…

I’ve got no trust, confidence and/or warm feeling for finance institutions these days.

Beginning to feel the more savings you have, the more you’re going to have to watch your a**!


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Comment by ann gogh
2008-12-17 08:14:55

Az dude, that’s unreal.
Anybody else getting snipped?

Comment by Ernest
2008-12-17 09:06:14

Almost everyone my business clients has encountered the same thing. Amex for all intents and purposes has cut them off. As mentioned above it is not just Amex either although Amex seems to be particularly aggressive.

I’m seeing credit lines reduced or eliminated across the board.

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Comment by Pullthetrigger?
2008-12-17 18:48:40

I haven’t been cut off, and I’m just Joe blow! :) However, I’ve decided to use my credit cards and pay them some interest to protect my credit score and distinguish my self from the “deadbeats” who pay their bills in full every month and the real deadbeats who don’t pay at all. So far so good. I haven’t had any cuts to the ridiculous amounts they afford me in limits. Not that I need the money, but I don’t want it to affect my credit score, which is paramount.

Comment by Blano
2008-12-17 08:39:56

Wow dude, that’s brutal.

Comment by Bad Andy
2008-12-17 09:22:57

I’m also a victim of American Express. Nearly the same tale of woe. Terrible shame because I really liked them.

Comment by hd74man
2008-12-17 09:41:03

RE: Terrible shame because I really liked them.

Me too.

I always carry a balance (under 30% of credit line) so they make money off of me.

Haven’t got the chop yet.

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Comment by Bad Andy
2008-12-17 10:21:00

From what executive consumer relations told me, everyone with a FICO under 750 will see some type of cut. My FICO is in the low 700’s.

Comment by VaBeyatch in Virginia Beach
2008-12-17 12:00:49

680ish here, and a new cardholder (working on engineering a higher fico by force). I use Amex exclusively one month, then zero out the balance and move to discover the next month as much as possible, hoping that they report a balance then a zero to help drive the payoff factor with the flawed, garbage, FICO system. No notice from them so far, but my limit is low. I tend to come close to maxing it out. I actually paid half way thru the month then paid again at the end just to free up room. I like Discover much better than Amex, waaay better rewards points BS, which I know really comes from the percentage added onto the the things I buy to cover the CC fees.

Comment by oxide
2008-12-17 13:22:43

I don’t know how FICO is scored, but wouldn’t it be better to rack up, say, $1200 all at once, and then pay off $150/month for the next year? Instead of looking like an erratic deadbeat, you’ll look like a guy with a job and a plan. (??)

Comment by bink
2008-12-17 10:11:08

Strange. I’ve been using Amex for business travel for over a decade. No notices of any changes yet for me. You guys are making me worried.

The only change I’ve noticed is that in the last few months they’ve been auto-declining Internet airfare purchases and making me call them to get it approved. A huge PITA. I just figured it was because my card might have been compromised via some online site and that they hadn’t notified me.

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Comment by Bad Andy
2008-12-17 10:18:29

Bink, I’d be cautious using American Express, especially if you’re a charge card customer. They can cut you off at anytime for any reason. I was on a business trip and they declined my hotel because my balance was “higher than usual” and this was years ago. Converted the charge to a regular card with a regular limit and had no problems until they cut the limit.

Comment by bink
2008-12-17 10:42:19

No worries. I keep some extra cards around for emergencies and always have the option of pulling cash from my national bank (so long as it stays in business).

Comment by bink
2008-12-17 10:44:46

That makes me think.. I wonder if Amex travel insurance would pay me if Amex declined my trip home?

Comment by Bad Andy
2008-12-17 12:05:33


Comment by packman
2008-12-17 09:47:15

Sounds very… odd.

Can you give more details? Do you spend much on the card? Is it a cash-back blue card perchance? Those have been really popular lately, and is what I use (and I think a bunch of others here).


I wonder if maybe the CC companies are starting to see spiraling default rates, and are really worried about what might happen this holiday season in particular. Think about it - lots of people being laid off, and still have high credit limits. They know they’re about to be foreclosed anyhow and their credit will be shot. Why not go out in a blaze of glory - buy tons of stuff for Christmas to max out the cards, then just default on everything. Maybe even try to return some “gifts” for cash - or for that matter sell them on eBay or at a pawn shop.


Comment by reuven
2008-12-17 10:05:14

That’s an interesting theory! Why not, if you’re ready to walk away from your mortgage, run the thing up in the name of J*sus this December then sell everything at the flea market and default on the bill.

Our government is practically encouraging the behavior anyway by trying to print and spend our way out of this mess.

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Comment by Matt_in_TX
2008-12-17 19:35:37

Know a CEO who resigned when the company lost financing but didn’t make sure the credit cards were cancelled. The CFO who handled the dissolution charged over 50K to the card… leading to 10 years of credit headaches for the ex-CEO.

Comment by SaladSD
2008-12-17 10:52:03

I’d assume if they see a lot of gas and food purchases on a CC that would trigger a reduced credit limit. They’re probably scrutinizing purchase categories closely, and applying algorithms to detect debt flight risks. Too many CC swipes at the 99cent store, and you’re given the boot.

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Comment by packman
2008-12-17 11:55:23

CC’s are non-secured. As far as I know there’s nothing they can do except slam your credit score. They can attempt a civil suit I believe, but no jail time. Thus I don’t think there’s too much chance of people physically fleeing from CC default.

So were I a CC company - I would be more concerned about big-ticket purchases than I would food and gas.

Coincidentally, I just found this interesting article written yesterday (will post a link, but it’ll take a while…)

Comment by packman
Comment by oxide
2008-12-17 12:42:28

I just want to say that this is an absolutely awesome thread. :-) Much more civil and more informative than the political and gold discussions.

(did we really lose alad? :-( He was so funny when he was non-gold…)

Comment by milkcrate
2008-12-17 12:48:11

Vegas odds of his return: 5:2. :)
Credit card limits: refreshing topic, agreed.

Comment by oxide
2008-12-17 12:52:25

Oops sorry,

To elaborate on Salad SD. Food and gas is a sure sign of a risky customer. Customers who suddely put food on Mastercard likely just ran out of cash and are likely to default. CC’s will cut the credit before the customer runs up any more.

Comment by packman
2008-12-17 12:59:19

Ah - interesting - didn’t think of that.

In my case we put all our food and gas on our CC anyhow, since it gives 5% back (Amex blue). We pay it off every month though - not really a default risk :).

Comment by TCM_guy
2008-12-17 13:10:45

That’s interesting, I never thought about the gas and groceries angle. I would say that with my Citi CC 100% of my purchases are gas, groceries, and drug store. I am a “transactor,” or a guy who pays entirely at every billing cycle.

Even though I do not pay any interest, it is true that I am addicted to credit card use. I sure as heck like the convenience of paying for gas right at the pump, and I get my school textbooks online at reduced prices. So no, I am not so pissed that I will cut up all of my credit cards.

The banks get a certain percentage from every CC transaction. Depending on the size of the business, this percentage can be as much as 3%. But that is not enough; they want 30% on balances, $39 for breathing-air-fee, etc. Greedy b*stards.

Comment by Elanor
2008-12-17 14:24:56

Huh, so that’s what I am: a “transactor”. And here I thought I was just being fiscally responsible by paying off the entire CC balance every month. :)

I’ve read that CC companies hate people like me. But hey, we charge a LOT on our card, and the bank earns plenty on those charges, up to 3% or so of the total. I’ve used that fact as leverage to get finance charges reversed on the exceedingly rare occasion when the payment didn’t reach them by the due date (which of course was ALWAYS either their fault, or the post office’s, back before online bill-paying, LOL).

Comment by fsil2
2008-12-18 10:49:53

I just wanted to add that using a CC to buy food and gas is not a sign of having financial difficulty. In fact, the only time I don’t use a CC is when I pay rent (the house prices here are still ridiculously expensive.) All of our bills are set up to use Auto-Pay via CC. Every year one credit card gets me a free plain ticket, another gives me $300 back (5% cashback on gas and food), a third CC offers a 3% cash back on purchases, and my “last” credit card, Amex, is used to extend the warranty of electronic items.

I have not paid interest on a CC since 2-3 years ago, my credit limit continues being increased without my consent, and I get paid for using CCs. I just don’t see why someone would not want to use a CC or pay an annual fee (unless in the end they come out ahead). (My credit score is over 800)

Comment by ecofeco
2008-12-17 14:28:38

The CC companies were the MAIN force behind the changed bankruptcy laws.

I wonder why that was? Did they know something we didn’t… 4 years ago?

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Comment by FB wants a do over
2008-12-17 08:04:12

From an article written by “Jas Jain”

What Is Peak Debt?
I will limit the discussion to the US. If one looks at the long-term graph of Total Debt as a percent of the GDP (see graph in the above reference) one sees a Longwave Cycle type of behavior whereby the debt grows for a long period, decades, reaches a crescendo and then seems to fall down rapidly, in a crash-like fashion, and remains low for a long period. Since the process is cyclical in nature, it repeats. Thus, Peak Debt, unlike Peak Oil, is not a theory but an observed reality of our economic system.

Comment by CA renter
2008-12-18 04:18:16

Another excellent article by Jas. I tend to agree strongly with his beliefs.

It’s too bad he isn’t more “personable” on the blog, because he is very, very well-informed, IMHO.

He was writing about this credit cycle long before most others.

Comment by GSfixer
2008-12-17 13:02:37

It’s how they plan on letting John Q. Public bail out the banks

-John Q (taxpayer) lends/gives the banks money at 0%.


-Banks start jacking up interest rates on all types of commercial and consumer borrowing, pocketing the difference.

It will lay waste to the broader economy, but since the big banks will remain standing, it’s all good.

Comment by wmbz
2008-12-17 06:48:18

Typical dim-wit move, hammer the middle and lower classes with higher taxes. He also plans to sock it to insurance &health care along with other large businesses. So what will they do? Why pass the rate increases onto consumers of course.

Gov. David Paterson unveils dire New York State budget that includes new taxes, layoffs and cuts…

The proposal, which needs legislative approval, did not include broad-based income tax increases, but relied on smaller ones to raise $4.1 billion from cash-strapped New Yorkers.

Movie tickets, taxi rides, soda, beer, wine, cigars and massages would be taxed under Paterson’s proposal. It also extends sales taxes to cable and satellite TV services and removes the tax exemption for clothes costing less than $110.

“The governor is nickel-and-diming working class families,” said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, an advocacy group.

Comment by Blano
2008-12-17 07:06:40

When oh when will someone actually propose a budget where spending actually goes DOWN????

Comment by DinOR
2008-12-17 08:54:31

Here in OR we’ve tinkered w/ the notion of a “Total Tax” at about 1.25%. So rather than have multiple agencies ( w/ multiple budgets and overheads! ) there would be (1) central agency.

The idea being that we could do away w/ state income tax along with a lot of other things ( that are actually taxes in disguise like hunting “licenses” etc. ) But… in Orygone that equates to a “sales tax” and we’re “too smart” to let ‘that’ happen! Sheesh. Oh and we’re “progressive”.

Comment by Matt_in_TX
2008-12-17 19:39:47

As a former Washingtonian, I think we should all look at how the experiment of having both sales tax and state income tax is working in CA. The legislatures should begin immediately looking into this great financial innovation.

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Comment by SaladSD
2008-12-17 10:58:50

I watched the Cali state legislature emergency meeting on TV a few days ago and every special interest group– from oil producers to boxing promoters–claimed that any change from their tax subsidies or efforts to basically institute a flat tax so all categories were treated equally, would have catastrophic effects on their business and affect jobs. So too, with cutting any medical/education/law enforcement/jail/social programs whatsoever. Absolutely nobody wants to budge, yet our deficit grows exponentially. This is why we’ve become a crisis management government.

Comment by DinOR
2008-12-17 11:29:57


And we can’t be too far behind in Oregon. It won’t be long before the “Only in America” crowd will be singin’ the same blues here.

You introduce a good point though in that there are scores of special interest groups that are more than happy w/ the current mess just as long as it favors them comfortably.

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Comment by milkcrate
2008-12-17 12:31:43

I watched them on tv where they were promulgating rules regarding para-sailing safety guidelines. I could have saved them the time and trouble:
Getcha boat with gas.
Make sure there is no one nearby.
Tell the paras-sailer to check the rig and hold on.

That they are not enforcing existing laws on illegal immigrant costs will haunt us/bankrupt us.

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Comment by Bronco
2008-12-17 11:19:51

“When oh when will someone actually propose a budget where spending actually goes DOWN????”

eventually it will be forced

Comment by Jon
2008-12-17 14:27:00

Florida has cut spending for 2 years in a row and are calling a special session in January to cut another 2 bills.

So far, only the unseen (nursing homes, other poorest of the poor) are getting hit (nobody else cares so I won’t either). In January, they are going to get into the goodies though. Massive cuts in spending on roads, jails, college tuition subsidies. All white middle class cuts. Should be fun to watch.

Comment by edgewaterjohn
2008-12-17 08:57:32

How to Create an Underground Economy 101*

*This is an accredited course, online courses available

Comment by aNYCdj
2008-12-17 10:16:52

Bush is the gretest president in creating underground jobs this country has ever seen…I will always give credit when it due!!!

How to Create an Underground Economy 101*

Comment by milkcrate
2008-12-17 12:33:55

aNYCdj, You would be right.
I’m gonna throw a shoe at the fellow anyway.
Feel better. :)

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Comment by exeter
2008-12-17 09:25:52

Producers can and will lower their price to offset the tax.

Comment by oxide
2008-12-17 13:18:12

A couple years ago I had occasion to attend a breakfast with a conservative Congressman. He sounded quite reasonable and friendly, and I was just thinking Republicans aren’t such bad guys after all. Then my conservative colleagues asked him about taxes. Congressman said we should be going after the middle class, “because that’s where all the money is.”

He lost me right there. btw he was voted out 6 months later.

Comment by pressboardbox
2008-12-17 06:52:22

What kind of bailout/scam/lever-up story can we expect today to try to brighten the picture? You know they have been working on something.

Comment by nhz
2008-12-17 07:16:46

scams are the new Viagra for the stockmarket; it needs a daily dose of the stuff now ;-)

Comment by michael
2008-12-17 07:53:06

i heard a story on NPR this morning about FHA loans.

at the height of the boom FHA loans were 3% of mortgages. now they are 30% because they (FHA) have the lowest mortgage requirements.

the mortgage broker guy they were talking to said something like “we know some of the loans (FHA) we are making now will default…we just don’t know how many”.

so…with that said…we have a looooooooooong way to go folks.

2008-12-17 08:34:23

I am receiving 5-6 FHA mortgage appraisal requests per day. Virtually all of them are low income areas and they are all refi’ing out of IO Option Arms.

Talking with the people is amazing. Many are foreign and they had no idea what they signed.(claim) In some cases the brokers took fees from the proceeds of the closing which was supposed to go to the borrower. They simply mislead the borrower by telling them they owed the fees to the broker.(scum) Some of them are illegals so they couldn’t say a thing.

Based upon the last time they refi’d and now there is a huge gulf that I do not think will help but a few. Most are way way upside down.

In one case I appraised the property and the value was that of 1998 and falling. Here in Florida the market declines are a weekly event. I pulled 3 sales closed in the last 3 months and all of the pendings were lower for a comparable home.

Talk about a falling knife. Basically values are good for about a week and I am predicating my values on pending sales as opposed to closed sales or a combo of the 2. Nutso!

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Comment by Bill in Carolina
2008-12-17 09:03:38


I am seeing breathtaking price reductions on houses listed in the Daytona/Ormond community where close friends bought in 2006 (!). Their ASKING price, if they were to put their house on the market now, would be around 40% below what they paid.

Comment by Bad Andy
2008-12-17 09:25:05


I’m seeing the same thing here in West Palm. Prices are SO low right now and a lot of people still aren’t biting. We’re in for a rough ride.

Comment by charliegator in Gainesville, Florida
2008-12-17 09:31:37

I went to a wedding in Clearwater Beach last weekend. Stayed at the Hilton on the Beach. I toured the local residential neighborhoods and found the expected empty homes as I’ve heard about. But the thing that stunned me was all the closed shops along the beach walk and around the hotel. At least half of them were closed up and empty. The commercial rents must be getting drilled.

Comment by skb
2008-12-17 10:05:35

Well I have decided to take my chances on a home that was built last year.
It is LP and in perfect condition. It is the exact home that I wanted to have built.
I have a huge cash down payment of 60% of the selling price and I am in it for the long term. This will be my home to retire in.
My short sale offer is still waiting for approval and I am getting an excellent rate, I am waiting from word from my broker to tell me what the new rates will be as of today.
I know I am taking a huge chance paying .60 cents on the dollar from what the former owner paid.

I am tired of renting and tired of waiting for my life to start as far as I am concerned this is worth something to. So if this home drops down to 200,000 I will be mad but I will get over it.

This home sold for 450,000 and my offer should be approved for 275,000. I am putting down 167,000.

Comment by Bad Andy
2008-12-17 10:12:01

My opinion…and it’s just that…you’re still paying too much. And with that much to put down, I’d keep that money in something besides real estate.

Comment by Mikey(2)
2008-12-17 10:42:36

“tired of waiting for my life to start ”

skb - that’s a shame that part of how you define your life is owning a house. Many people spend their entire lives renting and live not only good lives, but exceptional lives.

I think you might have been sucked-in to the perception that home ownership somehow makes your life more secure and settled, or maybe even a fulfillment of some “dream” that savvy wealthy folk have concocted to sell houses. Or maybe it’s peer pressure because all your friends have houses.

Ah, well, good luck with your place.

Comment by michael
2008-12-17 11:12:41

“tired of waiting for my life to start ”

my life started oct 14, 1969.

Comment by BanteringBear
2008-12-17 11:16:22

SKB- with 20% down, does it cash flow as a rental? If so, and you want to spend the rest of your life there, it’s probably not a bad decision. But, you said that “if it drops below $200k, you will be mad”. It sounds like you’re speculating. Not a good bet, IMHO.

2008-12-17 11:22:10

SKB- I pray you are not in Florida. If you are, give it another year and a bank will probably pay you to take the house.

OK, maybe a bit over the top….but try $135,000. It is coming. I am now appraising houses bought in 2006 for over $400,000 at $210,000 and we are a long way from done.

Comment by SanFranciscoBayAreaGal
2008-12-17 12:56:42

Is skb a regular poster? He/she reads like a troll. If not a troll my apologies.

Comment by Paul in Florida
2008-12-17 12:57:11

Gotta chime in with the group. I can’t imagine paying over 150K for anything in Florida right now, unless you are pulling down six figures with some depression-resistant job. If you buy something a little lower end, the further decline won’t hurt too much, even if it’s 30-40%. Also, no taxes on first 50K, so a 275K house pays more than twice the tax of a 150Ker. You’re overpaying.

(Technically, it’s no taxes on the first $25K and the THIRD $25K, so a 50K and a 75K house both pay taxes on 25K.)

Comment by Olympiagal
2008-12-17 14:28:26

‘Is skb a regular poster? He/she reads like a troll. If not a troll my apologies.’

Yooooooo just are eager to revile a troll, sanfrangal! Admit it!
Sigh. It HAS been so long since we had one to play with.
Where’d they all go?

(sung lugubriously to the tune of ‘Bring in the clowns’)

Ooooohhhhh, bring in the trolllls…
Where are the trollllsssss…
…Well, maybe next YearRRRRRR….’

Comment by skb
2008-12-17 19:23:31

To all of the posters,

I am not a troll, I am a regular reader and on and off poster.

I have been following this blog for three years now and I was a regular poster to FloridaParadiselost until the owner of the blog suddenly stopped posting and some guy named CrazyG continued to post and say horrible things. He was a real nut job, in fact he has even posted in here a few times, there was a lady named Elizabeth that turned me onto this blog.

I don’t want to have to type my entire story, although most of you would find it very interesting to say the least if you did hear it. I know I posted the entire story on that other board but darned if I could find it now.

My statement of my life starting doesn’t even begin to describe how I feel about finally making this purchase.
The sacrifices we have made over the last 8 years have been a lot. My husband went to war in Iraq, we lived overseas in two different countries, I had been ill, but during the entire time we saved, saved and saved our money. This money we have for our purchase was saved over a 4.5 year period.

When I say I want to start my life I mean to be able to put up my barn, pastures, riding ring. My life revolves around my animals. We have four birds, four dogs, a cat and two show pleasure horses.
I show western pleasure horses and currently I am spending a fortune in Florida boarding them in a show barn.
I want to buy my own place so I can have the convenience of having my horses at home with me. I am tired of coming home at 8:00 pm each night when I leave at 7 am for work.
I miss my other animals and want to spend more time with them.
I am 45 years old and and I have owned 4 houses, my husband has owned only one. Home ownership is fine but I am only buying because. WE can afford it, have the money and I want a beautiful home that is NOT ruined by some stupid person that bought over their head and knocked the walls down and ripped out the kitchen.
There is NOTHING nice and brand new in the range of 150,000 in my zip code. If I wanted to move to Port St Lucie there are TONS like that. I have no desire to live in that dump.

My husband works for the Federal Government and unless we put a stop to illigals and terrorisim his job is not going anywhere. I work as a trainer with a great salary in a call center and we are certainly a lot busier than we have ever been. I can not see us going out of business as we are one of the few industries that are doing well and better and better with each new defaulting charged-off debt.

I am talking about getting a mortgage of 108,000. My rent on this old home is 1400.00 per month, do the math.

So are you telling me that this home priced as a short sale at 275,000 will somehow be worth 150,000 some day?
(This is the model home which the builder is still building) I went to see them and they couldn’t come close to offering me this price) The home I am looking at is also on 1.31 acres of land and no pond in a very desirable area in Palm Beach County.

These homes were selling for over 500,000 during the run up. The lots were 250,000 alone during that crazy time.

I am being called a “speculator” but what are the rest of you called that keep predicting where the prices are going to end up?

I understand what you are all saying………what should I do continue to rent this old home pay 1400.00 per month and keep boarding my horses and paying for it?

I have no desire to find another rental, it was hard enough to find someone that would take on the amount of pets we have.

My situation is a bit different than others, most people don’t have this much cash to spend and Noah’s ark living with them.

I appreciate everyone’s comment and thoughts. I wish we would have a Florida get together like they have done in other parts.
It would be great to do a West Palm Beach one. I would certainly attend. It would be helpful.


Comment by jane
2008-12-17 21:36:20

SKF, it is not my nature to rain on a colleague’s parade. However, I have also owned horses. The arcreage you cite (1.3) is NOT enough for barn, ring, house and pasture. Do the math. Sketch it out.

In the Northeast, it is an OK move to put your stable next to the house given the six month winters, heat loss, propensity to put off breaking the ice off the water when it’s a minus 10 wind chill, etc. In Florida, putting the house next to the barn, you are asking for a year round fly and mouse/rat infestation in your house.

If you sketch out a riding ring, you will find that it takes half an acre easily.

Where will you put your used shavings and manure? Mound it in the center of the riding ring? Not going to work. Your neighbors will lynch you before putting up with a mound of composing horse manure in the middle of your ring. Plus, the stress of pretending to ignore year round flies and rats in and around your house will lead you to an early death.

OK. We have dealt with the house, barn and ring.

You plumb don’t have room for pasture. Noway, nohow. One horse needs two acres for pasture. Otherwise it will be eating its own poop. Yes, I KNOW zoning frequently requires only one acre per horse. If you take that as gospel, you are STILL hosed.

If you want to actually live on the place with your animals, the most land-intensive of which are the horses, I’m sorry to say you will need more acreage than 1.3.

That’s a fact, Jack.

Comment by jane
2008-12-17 21:37:41

“acreage”, not whatever I wrote before. Sorry.

Comment by skb
2008-12-17 22:19:45

It is all figured out Jack, We went to the house and measured everything out and my husband made scaled plans.

I have enough room for a decent sized pasture along the side of my house and two smaller ( 50 X 50) day pens in the back, a 116 X 60 foot ring (along the side) , a three stall barn.
The mature bin is located off of the back of the barn and the pick up will be easy as the house is located on the end of a road with a canal running up next to it. The pick up guy wlil drive down the side of the canal road and load up.
The barn is located a good distance from the house and as far as flys are concerned we use predator bugs, fly spray in the barns and we pick up our pastures to.

We have put a lot of thought into this.
In my part of Florida we don’t have acres and acres of pastures like the Northern parts. Our horses don’t have miles of rolling green hills and lush grasses.

My gelding QH is most likely going to be leased out to a friend on her property so it will just be my Paint and a companion mini or goat anyways.

Many people have much more than 1 or 2 horses on their property around these parts. Most people have jumpers, hunters, dressage horses and don’t “turn out”.

My horse being thin skinned and fair and a well bred show horse (worth a lot of money) can’t be turned out in the sun anyways as she would burn or get skin cancer. She is worked daily and knows her job and loves it.

BTW, I have been showing western pleasure horses and cutting horses for over 20 years and do know how to set up a barn etc..I am not some idiot who doesn’t have a clue, or romanticizes the idea of having horses.

We work with what we have in Florida. As far as rats we have those already living in the down spout, we kill them when we get lucky with the traps and we don’t have any horses on this property we rent. Rats come regardless, this is Florida bugs, rats, alligators, heat, snakes, huge spiders = trade off to living in Florida and having warm year round weather.

Comment by Arizzzona
2008-12-17 23:21:35

Hope it all works great, SBD!

Comment by CA renter
2008-12-18 04:39:15


I’ve seen your name before, so don’t think you’re a troll.

We’re in California, so not on top of the FL market. If nothing else, I’d certainly consider what jane and dimedropped (an appraiser) were saying.

That being said, I also understand the strong desire you have to settle in with your animals (we have kids, and the pressures are similar).

If you do decide to buy, I wish you all the best! :)

Comment by skb
2008-12-18 08:01:47

Thank you CA renter.

I am concerned about what dimedropped has said, very concerned.

I appreciate everyone’s comments positive and negative.

Thankyou so much and I will take everything into consideration.

Comment by Elanor
2008-12-18 08:28:36

skb, my 2 cents (and that’s all it’s worth, ’cause I don’t know nuthin’ bout horses or Florida property) is that if you’re planning to stay put wherever you buy, and it will make you happy to have all your furry friends together in one place, and you think the price is reasonable, then go for it. My attitude is that my home is not an investment, it’s the place where I live. Your mortgage will be pretty modest by most anyone’s standard.

Also, life’s too short to wait endlessly to make your dream come true.

Comment by skb
2008-12-18 18:45:34

Thank-you for saying that Elanor

I have been struggling all day with all of this.

The thing is the is the most money I have ever spent on a home. It is also the nicest home I have ever considered purchasing.
How much lower can it get? Who really knows for sure, we can certainly afford the payment.
We are mid forties and not getting any younger. This home is our last home. I have no greater desires for anything beyond this. This home would be left to our children one day.
If I wait a year, will this beautiful home be worth less? Does it matter? I am at the point now that I feel once we purchase I will stop reading this site and just live my life and enjoy my home.
I have been obsessed with this topic for far to long and my husband is sick of me talking about it.
I am sick of me talking about it.

I found out today that my offer is now being considered and I will know tomorrow.

Thank you again for your support.

Comment by hd74man
2008-12-17 09:54:20

RE: at the height of the boom FHA loans were 3% of mortgages. now they are 30% because they (FHA) have the lowest mortgage requirements.

East-West Mortage here in Mazzland is running their traditional “Bad credit-no credit-pay off your high interest rate credit cards” refi advertisements with the caveat that you’ll be accomplishing all this with a government guaranteed FHA/HUD loan.

This agency will become the ultimate subprime bagholder.

With affimative action type underwriting standards, watch for huge number of the Section 8 “ghetto gangsta” crowd to be re-settled in single family detached housing.

Coming to a neighborhood or condo complex near you.

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Comment by Pondering the Mess
2008-12-17 10:41:27

No, no - the bagholder will be taxpayers and savers. Producers will be punished.

“With affimative action type underwriting standards, watch for huge number of the Section 8 “ghetto gangsta” crowd to be re-settled in single family detached housing. ”

Already been happening. Had a pair of ghetto-ites living next door a few years back. The usual violent types with prison-buddies for friends, no legal source of income, etc. They eventually moved out and “bought a house.” Such a system: ghetto-bums with illegal incomes buying houses while producers and savers are priced out. Yeah, let’s see how well that plays out long-term!

Comment by jimbo
2008-12-17 17:45:55

The wife had one of three single family detatched houses on a street with maybe six duplexes owned by slumlords. There was a mixed race couple (he was black; she was right off the boat from Ireland, blonde) in the downstairs unit next door. The couple lived there a dozen years, had two children, and balked when the slumlord raised the rent from $1000 to $1200. They also had trouble with a psycho cab driver who lived upstairs. Wife cried when they moved out. Ayway, the first replacements the slumlord put in the place was a 25ish couple. Made the mistake the first week of giving a smoke to the female half of the couple; the knocks on the door and requests for smokes became more frequent. I finally got nasty and never talked to either of them again. I’m pretty sure they were oxycontin addicts. Wife was still civil with them until one day she came home to find that her older son had loaned her hairdryer to the woman. She had to go retreive it. She never spoke to them again. That’s OK; they were gone within six months. Wife and I got out of there before next tennants moved in.

Comment by milkcrate
2008-12-17 12:42:36

they may be national stats. Bulk of properties sold in Central California are REOs. I don’t know what percentage of them go FHA, but I know a lot of them can not, having looked at a few, cuz they won’t meet living standard requirements. Removing most of the kitchen would kick a home out of the “program.”
There are some in jewel-like condition, but they tend to be in the jumbo loan category. Just thinking out loud…

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Comment by Shuzilla
2008-12-17 07:30:39

Well, here’s a plan I’ve been working on. The following is from a cover letter going to my senators (hat tip to WMBZ for Bloomey quote):

By now we’ve all seen how unpopular the bail-out proposals have become. Americans see corporations being helped but are left wondering when we will get the same consideration. Just as important, we question how bail-outs will help when those bailed-out companies need us to increase our spending at a time household budgets are tightening.

If we (the consumer) have no more money to spend or borrow, production must be cut back and troubled companies must fail. Clearly, Americans won’t see their income increase appreciably over the next few years while the economy is in recession. I’m sure you’ll agree that it’s quite risky to take taxpayer money to prop up banks and auto manufacturers without more money coming into the hands of the “consumer,” enabling patronage of those businesses we’re trying to save.

Then there’s this, from Bloomberg on December 17, ”For all their efforts to liquefy credit markets, the Federal Reserve and the Treasury show no signs of ending the 18-month freeze, as evidenced by the unprecedented gap between what banks and the U.S. government pay to borrow money. The difference between the London interbank offered rate, or ‘Libor,’ that banks charge each other for three-month loans and Treasury bill rates is six times wider than before markets began to seize up in June 2007.”

Accompanying this letter is a four-page outline of a plan that, by utilizing money we’ve already earned and saved, will put more money into the hands of Americans. It does so by simply making housing more affordable, which will turn the housing market around and provide capital to the financial industry. It also provides savings that when spent will provide long-lasting economic stimulus without an expansion in credit. Finally, it virtually bypasses the credit market, making its seizure of little consequence to the housing rebound.

In summary, the plan requires Congress to make available an individual’s Social Security, both the current accounts and future contributions, for borrowing at zero percent (or nearly so) to buy or refinance homes and pay off mortgages.

There is no gimmickry involved. This plan reduces the total cost of housing (down payment + principal + interest) by saving tens of thousands of dollars in interest over the life of the loan. There’s no need to wait for the housing market to adjust downward to encourage buyers, nor is there any further need to depress interest rates, which further penalizes savers, to unfreeze the market.

The average home would be paid off in less than ten years, leaving many more to save for retirement. And the interest saved would put thousands of dollars annually back into the pocket of the homeowner. That savings would most likely be spent, and thus go into some sector other than financial.

This is a plan that would make Congress very popular, because it would put the American people first in the economic stimulus. It’s a win for everyone except the mortgage industry that got us here to begin with, though they do get needed capital without taxpayer assistance. Please take some time to scan the bold points, and if intrigued, read all of it. If there is something not made clear I would be happy to provide additional numbers or research. Thank you for giving this plan some of your valuable time and attention.


I think the plan would work so long as there are reasonable mortgage-to-income ratios for purchasing and for refinancing, though not necessariliy the same for each.

Comment by DinOR
2008-12-17 09:01:40


Most excellent to see you following up on that! Excellent indeed! I like the way you’ve already broken it down it digestable sound bites they can actually handle ( and sell to their constituents )

You know, there were several on-line petitions to “Just Stop the Bail-Out” and I’m sure many here would be only too tickled to get on board w/ that, among many others.


Comment by Shuzilla
2008-12-17 11:03:57

Thanks a bunch, DinOR!

You’re right about this plan not being for the “walk away” crowd. It’s an opportunity to encourage responsible purchases. It should be the way most homes are bought in the future. If you want to pay more than 4x income, you’re on your own. I can see how some feel that ratio props up home prices, but I think they’re failing to understand affordability, which mmust factor price PLUS the interest paid on the loan.

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Comment by DinOR
2008-12-17 11:54:40


Not at all. I’m not ready to totally dismiss the possibility this could “re-ignite the bubble!” or spur unneeded consumption, ( but look around ) I think everyone has learned their lesson.

Industry shills of course are still praying for exactly ‘that’ but we can’t get consumers to spring for Guitar Hero for the kids ( let alone throw borrowed dollars at McMansions ) What exactly are we worried about here?

Comment by Pinch-a-penny
2008-12-17 09:02:37

Wow… Sorry to say, but I have seldom heard of a worst idea. The gist of this e-mail would prop up the price of housing, and after all is said and done, you would still have the run of the mill strawberry picker purchasing 800K homes.
That, I am sorry to say, will make the situation even worse. Now, what would stop said homeower to HELOC the living daylights out of their “paid for by SS” abode and go on a spending spree in Paris with the family?
The way out of this mess, is with a massive reality check, that things are earned by producing products or services that actually are needed, and not by flipping houses from one to the other.
And lastly what makes you think that there IS any money in the Social Security Fund? It is all invested in…. US Treasuries!

Comment by Shuzilla
2008-12-17 09:58:06

“The gist of this e-mail would prop up the price of housing, and after all is said and done, you would still have the run of the mill strawberry picker purchasing 800K homes.”

Read the last sentence, then think on it for awhile. How will the housing market react to a huge and immediate demand for housing that costs 3.5 to 4 times income?

“Now, what would stop said homeower to HELOC the living daylights out of their ‘paid for by SS’ abode and go on a spending spree in Paris with the family?”

The plan would.

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Comment by Pinch-a-penny
2008-12-17 10:04:55

The same way that any economy will react when you have a massive influx of money into an asset. By inflating the cost of the underlying asset. That is why it is such a bad idea, as no matter what you do housing is unbelievably expensive for a majority of people, and 3.5 to 4 times income is still far too much to pay for housing… With how things are going try 2 to 2.5 times income, as now health care, and retirement are not being taken care of by the companies.
The BEST thing that can happen is for the government to stop subsidizing housing at any level, and let the chips fall where they may. You might be surprised at the renewed competitiveness that cheap housing will provide, as more of each months money can go to investing into our future, instead of paying for an overpriced asset… Think about that…

Comment by DinOR
2008-12-17 10:08:06


Sorry, lost a post there but I heartily endorse this plan and think it certainly merits further discussion. I’ve been a fan of mortgage acceleration for years and since there’s no HELOC $’s remotely available to pay down other debts..?

If the check goes -directly- from SS to the lender w/ the caveat that this is being done to reduce debt ( not make bubble bucks available for further spending ) there shouldn’t be any problems. Remember, this is v-o-l-u-n-t-a-r-y so the people that jump through the hoops to participate aren’t going to do anything that’s not in their best interests long term.

Ultimately… it also places less strain on SS as well.

Comment by DinOR
2008-12-17 10:13:23


If you’re thinking this is being proposed w/ the intent of propping up the -Inland Empire- you may not be in the right place?

‘Those’ are the “walk away” crowd that grossly over paid and Shuzilla nor myself have ‘any’ interest in doing damage control where the damage is already done. Likely this will appeal to mid-westerners ( or those of a similar mind-set ) that actually are able to think beyond next payday.

It’s about financial planning, not central economic planning.

Comment by Skip
2008-12-17 10:37:32

I think you guys are forgetting about what happens when the buyer with no skin in the game decides to not pay back the Social Security loan?

Do we take money from their pay check? Give them no Social Security when they want to retire?

Comment by DinOR
2008-12-17 10:57:11


Again if you’re a person that doesn’t have all that much in your acct., you’re probably not homeowner material to begin with? Either you worked under the table or didn’t work at all? If you worked under the table you’re SOL anyway.

If you’re of an age where you have plenty of equity in your home and paid a TON into SS, well then no, obviously you’ve no need of the plan and may… even want to consider a reverse mortgage or selling etc.

But if you’re in your mid 30’s to mid 50’s, have paid a fair amount into SS and have ’some’ equity but a mortgage payment that doesn’t allow you to contribute to your 401k or IRA the way that you’d ‘like’ to..!? Then yes, this ‘may’ be a good fit for you.

If you’re in your 20’s and don’t really have anything built up in your acct. and either ‘just’ bought a home or wouldn’t even -consider- buying at THESE prices then you should do focus on what 20-somethings should be focused on ( namely partying and getting laid ) Why is this such a leap for so many of you guys?

Comment by CA renter
2008-12-18 04:51:57

I’m with skip.

You guys are being way to optimistic in thinking people have learned a lesson. Trust me, we are far from that point.

Idiots will see a new source of funds for buying houses and will claim that since they are “borrowing from themselves” they won’t have to pay it off. What happens when it’s time to retire and the SS funds aren’t there.

Let them starve in the streets, or shall we have another bailout?

Why are so many people trying to come up with convoluted ways to artificially prop up housing prices?

The ONLY thing that will work is for debt to be destroyed (either by massive wage inflation/debasing the dollar OR walking away from current debt). There is no other way.

Housing prices need to drop to levels that are MORE affordable than in the past — note the medical and retirement savings that are needed today, compared to previous years, as the OP stated.

The sooner we let prices drop to their intrinsic value (no via funky mortgages or suppressed rates), the sooner we can build up our country and economy again.

Comment by reuven
2008-12-17 10:13:39

This is an awful idea. Want housing to be affordable? If there were no “GSE”s guaranteeing them, the banks wouldn’t have lent money to anyone, and median house price would be about 2x median income.

One’s house should not be considered an FDIC insured bank account. It also, indirectly, punishes people who choose not to buy a home because they don’t get all these deals; and it makes rentals cost more.

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Comment by Shuzilla
2008-12-17 10:24:53

“It also, indirectly, punishes people who choose not to buy a home because they don’t get all these deals; and it makes rentals cost more.”

Yes, it would make less sense to rent.

As far as affordability, you have to consider what saving interest does to the equasion. For a 30-year, 6% mortgage… OK, maybe 2 to 2.5 times income is truly affordable. No argument there.

But if you could save, say, $100,000 in interest on a $200,000 loan, the TOTAL cost of the home (principal plus interest plus down payment) will be even more affordable. 3.5-to-4 times-income loans would become as affordable as 2-to-2.5-times income homes are now.

Bottom line: if you have a mortgage, you are effectively borrowing from the mortgage company at whatever rate to pay into your SS for a near-zero return. That’s insanity.

Comment by DinOR
2008-12-17 10:30:41


Who said “cram downs” couldn’t be part of the proposal? Not ‘me’? We also discussed the potential for ’some’ to opt out of SS benefits altogether! If the applicant’s scenario dictates that they would be better served by having a paid off home well prior to retirement then that is an option for them.

I’ll have to respectfully disagree w/ you guys on this one. Even ‘without’ a bubble, this should be on the table. Let me ask you something? If YOU were given the choice to have access to your SS acct. and pay down ( or in some cases pay OFF ) your house and then be given the option to either re-pay the acct. or opt out altogether… would you take it?

Or would you just continue to lump along and make the regular PITI payments that have very little if any “P” to them? You really have to have a certain grasp on the basic principles of mortgage acceleration to engage this head on.

Comment by reuven
2008-12-17 11:29:20

I paid off my mortgage in 15 years.

I would oppose this program because:

1. It would slow the decline of house prices to their correct market value.

2. It would be unfair to people who chose not to buy houses or (like me) have paid their house off.

3. I have paid the maximum into Social Security since 1984. I don’t anticipate getting my fair share back. Barack Obama wants to remove the cap (at which point, I will stop working) which will increase the unfairness! I will get little or nothing back, and I’d be paying a boatload of money each year, 15% of my gross, to keep house prices propped up. No thank you.

Comment by Al
2008-12-17 11:41:26

This plan is still borrowing from the future to spend in the present. Bad idea.

Comment by DinOR
2008-12-17 11:47:22


I’m not oblivious to HOW you feel. If anything, I’m more in your position than someone that could really, really desperately benefit from this type of plan!

Personally, I’ve -already- written off SS. Be nice if I see some, but I’m not counting on it. I’m on a path to have my home paid off in the next 7 to 10 years ( although that could change for better or worse by the day )

But that doesn’t mean I’m going to demand everyone that -isn’t- in that position suffer to the max just b/c I want to see the world burn? I guess the question for many would be, would you rather a paid off home and at least ’some’ savings or a check for $691 a month and 21 years left on a $1,538 a month mortgage?

Comment by reuven
2008-12-17 11:56:30

I don’t want to see the world burn! I want to see affordable homes again! Homes that sell for 2x median income. Let’s get there!

Comment by Skwee
2008-12-17 21:44:25

I am a renter and am of an age that makes me doubt I will see any of the money I paid into SS. I would be for a plan that allows me to access my SS contributions without any stipulation that I am forced to buy a house with that money. Why do you need these plans to let people buy homes? Let home prices fall to a reasonable level and maybe I’ll buy one.

All of these plans benefit the people that overextended themselves and blew their wad too early. Those of us that planned ahead and sacrificed get nothing or even end up paying additionally. It isn’t fair and in my opinion it isn’t even moral.

Here is the plan we really need. Stop making bail-out plans. Stop supporting housing market in any way, no tax breaks, no nothin. Govts at the state and federal level must not spend any more than they take in in tax money. Govt must stop giving money to any companies. Let that cook for a few years and all of our problems are solved and we won’t need any more bail-out plans.

Comment by Itsabouttime
2008-12-17 22:45:44

To quote Shuzilla, “You [, shuzilla,] are a complete fool. And willfully misinformed. Turn the page.”

Stop trying to prop up prices. Turn the page. Let ‘em crash.


Comment by cactus
2008-12-17 10:26:01

“Accompanying this letter is a four-page outline of a plan that, by utilizing money we’ve already earned and saved,”

and the government has spent there is no money in SS its a Ponzi scam

Comment by Shuzilla
2008-12-17 10:51:57

Good point, but remember there’s been $7 trillion promised to get things going. We can’t do a dad blamed thing about that. However, since large downpayments and accelerated payments put money back into banks, some of that $7 trillion could be used for this plan as part of the Fed’s effort to increase liquidity.

There is a bit more than $2 trillion in treasuries in the “social security lock box.” I think, were that cash, that surplus, plus annual surpluses that will be coming into SS for the next several years (while boomers are making the most money), would just about fully fund the program for about 30 million people.

I have no idea what either selling those treasuries or issuing new treasuries to cover the loans would do to the overall market, but again, Trillion$ in liquidity have already been promised or provided. I’m only suggesting that a portion of that money be re-chanelled through homeowners’ hands so they can de-leverage along with the financial sector.

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Comment by Pinch-a-penny
2008-12-17 11:12:19

When considering something of this magnitude, you must take into account the unexpected repercussions from said plan.
From a purely market driven point of view, it would help those that went into debt the most, and prop up illiquid housing in all areas, not only the inland empire. On the other hand, the US gov would actually have to sell treasuries, and get cash to give to the banks, in fact who is going to buy these treasuries? Right now they are printing the things on toilet paper. I am far from a bond trader, but I do know that if the US gov were to offload a lot of these things on the unsuspecting public, I would tend to think that the prices would plummet.
So on one hand you have a restart of the housing appreciation game, and on the other hand you would most likely bankrupt the treasury (not that it isn’t close right now).

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Comment by DinOR
2008-12-17 11:40:27


I’m not about to debate that, it all rings true. And yes, there likely ‘will’ be unintended consequences. But we have to get back to an economy that *isn’t reliant entirely on credit ( or even GROWTH in credit! )

Having citizens with solid balance sheets nearing or in retirement will be better for eveybody. At some point we have to give up on rubber necking the crash and start to at least offer some solutions. If this were any other country ( especially one that loves to point out ‘our’ flaws ) I’d say “let it burn”. But it isn’t. This America’s tit in the wringer and I happen to think Shuzilla is on to something.

I just want to see where it leads?

Comment by Pinch-a-penny
2008-12-17 12:01:58

I am there with you. I do not want to see the country burn. Once upon a time, the US produced products and services that were the envy of the world over, but something happened in the interim.
We became fat and lazy (and believe me, I need to lose some weight), but the inherent capacity to go back and do the same is here. We still manufacture some pretty amazing things, but we also need to be competitive worldwide. If I could buy a house, and pay $300 a month, I could conceivably live with a much smaller paycheck, and this would help my employer lower his cost, so that my 100% of salary is not allocated to India or China.
The road to recovery does not lie in the raiding of Social security, but in the repricing of assets, labor, and specially intelligence. Right now the first 2 are too expensive compared to the rest of the world, and the 3rd is way under appreciated.
Now we just need to shrug off the “service economy is the new economy” claptrap, and get down to the business of designing, producing, and selling innovative products that have mass appeal…

Comment by DinOR
2008-12-17 13:07:48


Again, hard to argue that, and you’ve re-invigorated me in sending the “service economy” BS right where it belongs!

You pose an interesting scenario though, one where we perhaps traded our viability as a nation ( but involved honest work ) for a ponzi that held the promise of early retirement? I suppose it’s easy for me to advocate pulling the plug on SS ( as I never really saw the value in it to begin with? ) and the other part that makes it uphill is that every time we get in a bind, it’s the 1st place we turn?

As I look at the HM at large though it’s still easy for me to see this as a viable option ( for those that chose ) and not have it interfere w/ a normal and needed correction. Given that much of our remaining mfr. is in the midwest lends a LOT of credibility to your claim.

Comment by desertdweller
2008-12-17 16:49:37

repricing of assets, labor, and specially intelligence. Right now the first 2 are too expensive compared to the rest of the world,

First off, labor isn’t the lead weight. Lets start with CEOs, mgmnt, wallstreet, ‘bottom lines’ etc. And hows about the fact that almost all of our manufacturing jobs are indeed gone.
Spoke with several techs who are in India today. Gosh it would have been nice to speak with someone local, ie USA. Meanwhile it isn’t the cost of labor, it is what the upper execs get paid while paying the offshores a pittance. Because they CAN>

Haves and Have Mores… you are feeding right into that BS.
Why should we as the have to be compared to the “rest of the world” when we are definitely not china,india,vietnam,laos, and the list goes on. Why?
It is just the ability that our elected officials have taken to removing all jobs offshore, except theirs. I certainly don’t see what is so “specially intelligence” about them or the ceos/execs.

Comment by pinch-a-penny
2008-12-17 18:09:17

Could you please identify where you found this intelligence? I Have NEVER seen intelligent life past certain level :-)
You are on the right track though… If you and I get paid less, I naturally will work less, no more late evenings, and if a deadline or two go past me, I will look at the swooshing sound that they make as they blow by.
No, What I meant to say, is that capable people take time to train, and to become productive. Lets take your Machinist. That job is more of an art than a science, and will take decades to perfect. If you see a young machinist, put down the piece, and go away. Same for a lot of very specilized skills that are being ground down. This intelligence is the one not rewarded! This experiece, is the one we have elected to throw away, and that is not quite compensated properly. I can train a Service Delivery Representative, or whatever you want to call them these days, maybe even customer service engineer, in 3 weeks. That job can and will be performed anywhere. That job should be outsourced, until we get fed up with companies that do so, and stop using them, and until that happens, outsourcing to third world countries will continue unabated.

Comment by Pondering the Mess
2008-12-17 10:47:39

What is most humerous is the notion that there IS any Social Security money “lying around” to spend on keeping housing unaffordable!

Other than that, why should we prop up housing prices? To keep people in debt? To reward fraudsters who drive up prices and flip houses? To punish responsible people who wish to live within their means? To keep crooked bankers employed? I don’t see a single decent reason yet!

Comment by DinOR
2008-12-17 11:17:29

No offense guys but I just wish everyone could “get out of character” long enough to view something perhaps a little more objectively?

No, this -isn’t- about propping up home prices ( for like the 3rd time ) Nor is it about “rewarding” fraudsters or d!ckhead bankers for chrissakes. But it IS about getting people out debt.

Let’s play it your way for an instant: Do nothing, more banks fail and… we ALL make our payments to the (1) remaining Gov. run central bank. The fictitious vapor dollars remain in SS until it goes insolvent in ( 2027? ) and now we have hoards of people with no home, no savings and NO social security. Sounds great!

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Comment by ecofeco
2008-12-17 15:08:32

We live in a 74% consumer driven economy. It was only a matter of time before the rising vector of inflation crossed the line of stagnate/falling wages. Result? Obvious.

Without increases in income, this plan fails. And corporations and TPTB are hellbent on seeing that wages remain stagnate or actually decrease for J6P.

Also, while this is a board about the housing crisis with general economy talk thrown in, it must be said that housing is not and should not be the focus nor centerpiece of our economy.

Comment by Shuzilla
2008-12-17 16:26:41

With all due respect, you are completely missing the point.

A person buying a $200,000 home at 6% financing with 10% down will pay $388,500 for the home.

A person buying the same home, borrowing $50k from SS at 0% as a downpayment and putting future SS and 401k contributions (about 20% of a $50k income) would only pay about $240,000 for that house and would own it in 8 years.

There’s your effective increase in income. One doesn’t need to make more, only to spend less on the biggest purchase of one’s life.

A $240,000 home is always more affordable than a $388,500 home. Always. And owning your home in 8 years instead of 30 doesn’t suck either.

There’s now way that paying a $240,000 loan back to the mortgage company then your SS account will ever be more difficult than paying $388,500 to the mortgage company alone. If you can pay $389k back over 30 years you can certainly pay $240K over the same period of time, or less.

A person who can’t afford a $388,500 home may be able to buy the $240,000 home. By refinancing under this plan, it’s the same damn home!

Now, which feeds the “pigmen” more: paying $209,000 of interest over 30 years while forced savings remain out of reach, or $39,000 in interest over 8 years in a senario whereby the majority of financing comes from the free use of one’s own money?

It’s just that simple. The question is, can money going directly to bail out banks go instead to mortgage holders first and then to the banks? Of course it can. can we afford it? Well, the decision to inject liquidity has been made. Politicians, however, do have some say in how it gets spent. And it IS our own savings.

Comment by CA renter
2008-12-18 05:06:40


I greatly admire your desire to come up with innovative ideas to fix the economy. Good for you.

One problem I see with this plan is that the benefit will go to the borrower in your scenario. The problem is, once this plan is enacted, the sellers will see to it that THEY receive the benefit in the form of higher prices.

There is a maximum monthly payment that the average person is able to afford. Prices and interest rates move inversely around this number. If you drop rates, prices will rise (note what happened during the bubble).

We need LOWER PRICES in order to get affordable housing.

You are trying to cure this in a round-about way, but the bottom line is prices are too high. If you reduce prices, buyers have more control over the entire deal. They can pay cash (if able), or make larger down payments (as a % of price, or they can find funding from a variety of sources (friends, family, private lending, etc.). They can more easily accelerate the mortgage payments because if they can save an extra $100/mo to send in with their payment, that $100 pays off more principal than if they had bought at a higher price.

Comment by michael
2008-12-17 11:15:03

“In summary, the plan requires Congress to make available an individual’s Social Security, both the current accounts and future contributions, for borrowing at zero percent (or nearly so) to buy or refinance homes and pay off mortgages.”

just how far out do we want to kick this can?

Comment by DinOR
2008-12-17 12:02:49

You mean vice the path we ‘were’ on of suggesting 40 and even 50… Year mortgages?

You know; as the bubble neared it’s peak on the upside, some buyers ( borrowers if you will ) began to have the audacity to ask realtwhores if prices weren’t getting ahead of themselves? The pat explanation was that there was “good debt and then there’s ‘bad’ debt” and that anything you threw into a house was “good” debt.

Well obvuiosly we’ve seen how THAT worked out! At this point whether you want to call it feeding a ‘good’ debt or whatever, there’s simply too much of it! Maybe we should burn down every house that isn’t 100% paid for and start over?

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Comment by Muggy
2008-12-17 06:53:48

“Comment by Prime_Is_Contained
2008-12-16 19:32:23

We may truly be in uncharted waters, in which it is hard to find a good analogy from history for what we will encounter.”

Naw, there are plenty of good analogies; take, for instance, Mr. Blonde from the film Reservoir Dogs:

“Either he’s alive or he’s dead, or the cops got him… or they don’t.”

Comment by ET-Chicago
2008-12-17 08:15:29

Prime mortgage containment is analogous to Schrödinger’s cat?

Comment by Muggy
2008-12-17 12:48:50

I love Schrodinger’s cat. Star Trek First Contact has elements of this.

Comment by SanFranciscoBayAreaGal
2008-12-17 13:08:04

Geordi LaForge: Look, Doc, we can’t do this without you!
Dr. Zefram Cochrane: I don’t care. I don’t want to be a statue.
William Riker: Doctor…
Dr. Zefram Cochrane: You stay away from me!
[runs off]
William Riker: We don’t have time for this.
[pulls out a phaser and stuns Cochrane who falls in a creekbed]
William Riker: [to Geordi] You told him about the statue?!

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Comment by Olympiagal
2008-12-17 14:22:43

I have spent many sleepless nights wondering: if you stuck your hand into the experimental box the poor Schrodinger kitty was jammed into, and if it behaved like a normal kitty and immediately bit the livin’ cr*ap out of your hand, would it then… hurt? Or would it not hurt?

And how many bad words would you say, or not say?

Speaking for me; at least fifty-eleven really bad words.
But that’s me. I’m high-strung, unscientificky, and also a potty-mouth.

Comment by Vermontergal
2008-12-17 14:51:02

And how long would your hand hurt and also not hurt?

And would the kitty, with the moral outrage of being part of a hideous thought experiment, wake you up at 2am demanding food and a hug?

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Comment by Olympiagal
2008-12-17 15:18:35

‘And would the kitty, with the moral outrage of being part of a hideous thought experiment, wake you up at 2am demanding food and a hug?’

Hahahahaha! Funniness.

Comment by Prime_Is_Contained
2008-12-17 15:16:09

I’ve always loved Schrödinger’s cat references… :-)

Comment by palmetto
2008-12-17 06:54:11

A bit of a long read, but well worth it, especially if you need a schadenfreude fix:

Comment by JackRussell
2008-12-17 07:13:31

One prominent “hedgie” recently flew to China for business—but not on a private plane, as before. “Why should I pay $250,000 for a private plane,” he said to a friend, “when I can pay $20,000 to fly commercial first class?”

I guess times aren’t that hard yet. You could fly that route in coach for 2000$.

Comment by Paul in Florida
2008-12-17 13:11:28

Actually, if you plan in advance, closer to $1000.

Comment by TCM_guy
2008-12-17 08:10:23

Profiles in Panic

“With Wall Street hemorrhaging jobs and asses, even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge-fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. The pain is being felt on St. Barth’s and at Sotheby’s, on benefit-gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question.”

I agree. Great read!

Comment by Pinch-a-penny
2008-12-17 09:47:56

There is not enough panic yet… Call me when they defenestrate themselves from their luxury condozes, or coops..

Comment by scdave
2008-12-17 09:57:52

its values in question ??

That was the best part…

2008-12-17 11:27:00

F’um! Sorry

Comment by oxide
2008-12-17 13:06:30

There’s a great photo of somebody on Wall Street holding up a cardboard sign that says “Jump! You Fu*$#ers!” only with the uncensored language. Just type the phrase into google images; it’s in the first row.

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Comment by TCM_guy
2008-12-17 14:37:30
Comment by CA renter
2008-12-18 05:13:23

That was some from of the protests on Wall Street during the bailout hearings.

Note how many people attended these rallies. Strange how it wasn’t really mentioned in the MSM, no?

Comment by drowning pool
2008-12-17 10:19:46

What schadenfreude, Palm? The money the hedge fund managers and Wall Street bigwigs had was never theirs, because they never worked for it. WE worked for it. They pissed it away on trinkets, and now they get a dose of reality. It just makes the whole thing even sadder.

I will never pay taxes again.

Comment by Left LA
2008-12-17 17:48:25

These guys blew in one year what I could live on for the rest of my life - and live well. Simply amazing.

Comment by aNYCdj
2008-12-17 06:56:35

I think we have just officially passed the OH Crap point in NY….another store just closed i use,a cleaners after 37 years… Now with all the axes proposed by the Gov. ….

I guess its time to give up the idea of ever having a real job that is on the books.

Comment by dude
2008-12-17 07:42:23

Two retail notes from the west SF valley:

I noticed yesterday that a store called “Craptastic Plastic” * has gone from 30% off everything, to 50% off, to 70% off, to 70% off-store closing sale. This place has been open for less than a year.

Kate Spade, right next to anchor Neiman Marcus, has now got a smallish sign advertising 30% off everything. I’m not really much of a shopper, especially for shoes, but I don’t think Kate Spade is supposed to have sales. Isn’t that one of those stores where, “If you have to ask the price you can’t afford it?”

Mall traffic is way down over last year. Red Robin doesn’t have sufficient lunch customers to fill the window booths, which they always fill first to look busy.

* Exaggeration, but it is actually has the word Plastinina in it’s name!

Comment by awaiting wipeout
2008-12-17 09:26:36

This sounds like W…fi*ld Shoppingtown Topanga. Since they leased it to high end retailers, which they think will draw shoppers in from Malibu, and so forth, I predict the place becomes a ghost town. I was in the biz a long time (shopping centers) and some how, the developers forgot about the average middle class. That mall is just ops (over priced status).

Comment by SaladSD
2008-12-17 11:07:05

They opened a Shoe Pavillion about 6 months ago next door to an established TJ Maxx store and when I went by this weekend to check out the shoes, the space was empty, as if it had never existed. Even discount stores are going bust?

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Comment by SanFranciscoBayAreaGal
2008-12-17 11:24:23

Shoe Pavillion is bankrupt. They have closed all their stores.

Comment by Charlie_in_LA
2008-12-17 14:22:24

I work in the west valley. Before the remodel i use to go to lunch there frequently, could get a Tommy’s hamburger combo for 5 dollars. The revised upscale version of the mall, a modest lunch now will run 10-12 dollars. I seldom go to that mall anymore. You are correct they forgot the average middle class.

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Comment by Arizona Slim
2008-12-17 15:05:40

And they talk about deflation like it’s a bad thing. I, for one, would enjoy a five-dollar lunch.

Comment by schweg
2008-12-17 09:49:19

I saw the same thing in Soho and Nolita in Manhattan, Chip and Pepper store 50% off everything, many of the trendy boutiques were advertising 70% off the entire store.

There were double the amount of shoppers last year in that area. And in September it was covered with foriegn speaking customers (probably 60%), but didn’t seem to be the case last week.

Comment by edgewaterjohn
2008-12-17 09:03:19

This isn’t the first established business failure you’ve told us about. My street level observations square with yours, this event having a profound effect at the neighborhood level.

It’s a good thing so many people drive to work, otherwise they might be able to look to their sides and see all the papered-over/soaped-over windows.

Comment by mrktMaven
2008-12-17 06:56:39

Did the Fed just throw a tantrum? What’s the game plan now?

Comment by Muggy
2008-12-17 07:06:22

“Did the Fed just throw a tantrum? What’s the game plan now?”

Maven, my plan is to rampage through the streets for rice. I am actually starting a non-profit called “Rampage for Rice (R4R).” Our first action will be to gank Salvation Army pots and use them as battering rams at local groceries. We will then commandeer idled frontloaders to rip ATMs from their foundations, South Florida-style. In honor of Kunstler, I will use a salad shooter from China as a deadly weapon.

The problem is I need a clear “Rampage Signal.” The other problem is I like waffles more than rice, and rampaging for waffles just seems silly.

Comment by mrktMaven
2008-12-17 07:26:51

There are growing numbers of unemployed soon to be foreclosed under-represented Americans without access to free money. What are these frustrated folks going to do when all these grand schemes fail?

Comment by skroodle
2008-12-17 07:36:24

Demand higher taxes to combat the increase in crime and build more prisons. I think that was how it was done before.

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Comment by dude
2008-12-17 07:48:11

A sure sign it’s time to rampage is when you see a cop running from a store with a television/DVD player/weapons.

Don’t sweat the dislike of rice, waffles are most definitely better food and more nutritious. Plus, if you aren’t a total lazy sack of crap. you can rampage for waffle mix and make waffles!

Comment by ET-Chicago
2008-12-17 08:24:41

The problem is I need a clear “Rampage Signal.”

Is this the rice version of Ol’ Charlie’s Helter Skelter vision?

Comment by pressboardbox
2008-12-17 09:31:58

Rice Raiders could parachute in using chutes freshly repaired with Mighty-Mend-It and would even be covered against anke-breakages by an exiting new healthcare plan that eveyone can afford!

Comment by bink
2008-12-17 10:27:32

I see some Olympiagal influence here. It needs more Utarr though.

Comment by Olympiagal
2008-12-17 14:04:15

Yar! It sure does! :)

Plus, there must be gaudy helmets with a rice motif. And cummerbunds. And secret signals.
Without gaudy helmets, cummerbunds, and secret signals, why, it jist ain’t worth doing.

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Comment by Asparagus
2008-12-17 07:10:20

They’re going to lower the rates to the point that you have to pay them to save money. Now go buy a wii.

Comment by edgewaterjohn
2008-12-17 09:11:31

It’s even more complicated than that. The Matrix requires several hoses up one’s posterior to function properly:

Hose #1: base consumerism - buying that Wii
Hose #2: regular financing of big ticket items
Hose #3: slavish “saving” for retirement - read: 401k
Hose #4: obedient payment of taxes
Hose #5: fearful payment of insurance

All these demands and poor ol’ Joe’s paycheck keeps getting smaller and smaller.

Comment by desertdweller
2008-12-17 18:09:10

Speaking of Wii or whatever it is called. a pick up truck next to me at the grocery store had sign on it saying, something like, physical therapy for Wii injuries… or something like that. I guess they specialize.

Comment by polly
2008-12-17 06:58:07

I spent some time this weekend with a group of people who participate in the high end private school culture here in DC. It is quite fascinating to hear people who pay $30K per year for private high school, talk about sending their kids to start the next stage of their education in the community colleges of Northern Virginia. The decline of their 401(k)s was the reason given.

Comment by Jim A.
2008-12-17 07:19:00

Michelle Rhee or no, for anybody with reasonable expectations for their children the DCPS system is considered a non-starter.

Comment by oxide
2008-12-17 07:34:44

$30K a year?? For high school? It would truly be cheaper to home school the kids (including evolution) than to send them to school. And that’s if you have only one princess.

Comment by SanFranciscoBayAreaGal
2008-12-17 08:09:37

Don’t forget to include the princes.

Comment by JackRussell
2008-12-17 08:27:53

That is the going rate though. I hear anecdotally that parents are starting to pull their kids from private schools and rejoin the unwashed masses in public schools. And that was before things really went to hell in Oct - I am thinking that a lot of parents will try and tough it out for the rest of this school year, and that enrollments will really take a plunge next year.

Comment by Xenos
2008-12-17 09:34:16

I found a great private school for my first two kids, at just $12,000 each per year. It was a new startup. Within two years they realized that they could charge $21,000 per child and still be undercutting the competition. That is when I withdrew my kids and decided to rent in fancy towns with fancy educational systems, and let the landlords pay the taxes.

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Comment by ET-Chicago
2008-12-17 09:50:29

That is when I withdrew my kids and decided to rent in fancy towns with fancy educational systems, and let the landlords pay the taxes.

A good strategy.

Comment by Jim A.
2008-12-17 10:24:37

Somehow, I’m reminded of the movie “The slums of Beverly Hills.”

Comment by Vermontergal
2008-12-17 14:55:54

That is when I withdrew my kids and decided to rent in fancy towns with fancy educational systems, and let the landlords pay the taxes.

We homeschool right now, but we rent in good school districts in case we want or need the kiddos to join the unwashed public school masses. I’m thinking you and I and possibly 2 or 3 others in middle America are the only people to notice that you only need to reside in a fancy school district, not buy into one.

Comment by not a gator
2008-12-17 18:29:23

When my wife was just a wee one, her mother did this after the divorce, but she overshot on the school system and my wife ended up going to high school with undermotivated, mean rich kids. OTOH, because she was motivated (and close to starvation at home–all the child support went to rent) she got really good grades and a free ride through college.

Still… I think she should have gone one step down on the school system… the kids would have been brighter, maybe college would have been a little less challenging (my wife made it because she got by on 5 hours of sleep), and they wouldn’t have had to crash Grandma’s house on the weekend because they had run out of food.

Since we were talking about renting in fancy school systems…;D

Comment by SV guy
2008-12-17 09:17:26

There is a school in Hillsborough, CA that charges $35K for grades K-8. Lot’s of big money, at least when I was there (not as a student).


Comment by scdave
2008-12-17 10:19:14


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Comment by ET-Chicago
2008-12-17 08:32:09

Interesting. The two years at NOVA Community College, two years at UVa / W&M / Georgetown / wherever is old hat for DC-area families who’re a little further down the ladder, but I didn’t know that it’d trickled up to the Sidwell Friends jet set.

Comment by Shelby
2008-12-17 08:58:56

Whew - glad I didn’t spend the big bucks for private High School for my “Prince” in NoVa.

He managed to get into an Ivy without having the Private High School to shoe him in :)

Now we can afford to pay the 60K a year tuition at the private Ivy!!!

Comment by oxide
2008-12-17 16:32:43

Yesterday there was a news blip about high school girls saving money by sewing their own prom dresses, which led into a discussion of the princess culture among the young ladies. That’s where the Princess talk comes from.

But it didn’t originate with us. On the floor plans for upscale mcMansions, a [bedroom+private bath] combo was labeled a “princess suite.” An appeal to trader-up fathers who think they’re “rich,” maybe. The sheer arrogance has me rooting for their downfall — mcmansions and princesses both.

Comment by Kim
2008-12-17 10:16:01

When we moved back to IL last spring, my daughters preschool only had one spot on one day a week open (what good is that?). Twice I was told that the wait list for full time was several months long. A month later they had two days a week open (so I enrolled her). As of right now, most days I only see about 12 in a class that could enroll 20. Hanging streetside - probably for the first time since construction - is a “Now Enrolling” banner.

Comment by sfrenter
2008-12-17 12:42:55

I work at a public school in San Francisco - the past month we have gotten 3 transfer students, all from private schools.

I think we’ll be seeing more. Private school or mortgage. Hmmmm, easy choice.

Regardless of what many believe, there are many very good urban public schools.

Comment by Bill in Carolina
2008-12-17 18:11:34

(In Bill Cosby voice) Riiiiight!

Comment by wmbz
2008-12-17 07:09:00

Dollar No Longer Haven After Fed Rate Cut, State Street, CMC Say
By Kim-Mai Cutler and Bo Nielsen

Dec. 17 (Bloomberg) — A majority of the world’s biggest currency-trading firms say the dollar’s appeal as a haven amid the financial crisis all but evaporated.

The U.S. currency slid to a 13-year low against the yen today and the weakest versus the euro in 11 weeks after the Federal Reserve reduced its target interest rate yesterday to a range of zero to 0.25 percent, the lowest among the world’s biggest economies. CMC Markets said today the currency’s prospects appear “ominous.” State Street Global markets said the dollar’s outlook has been “undermined.”

Comment by KR
2008-12-17 07:13:40

the us dollar is officially the new carry trade

Comment by nhz
2008-12-17 07:19:15

I think carry trades work better if there is a steady depreciation of the currency, not a sudden plunge like Heliben is engineering.

Comment by Faster Pussycat, Sell Sell
2008-12-17 07:24:32


You’re short the funding currency. It’s great if there’s a vertical drop.

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Comment by Muggy
2008-12-17 07:29:20

“You’re short the funding currency. It’s great if there’s a vertical drop.”

Dammit, man! Speaky English! Talk to me like I am a 5 year old with some money to invest.

Comment by nhz
2008-12-17 07:48:27

that is great as long as it lasts; but speculators might be afraid to get whipsawed (like last summer), I think they prefer steady depreciation …

Comment by michael
2008-12-17 08:02:45

reminds me of an episode of the office where michael ask one of his employees to explain something to him like he was a 10 year old.

they guy does…michael gets a confused look and says…”ok, now explain it to me again like i was 5″.

i love that show.

Comment by Faster Pussycat, Sell Sell
2008-12-17 08:20:26

carry trade = borrow in funding currency, go long in a “higher-yielding thing”

The latter could be a lot of things - bonds, foreign bonds, etc. In theory with currencies, it shouldn’t work but there’s theory and practice.

Well, if you’re short the funding currency, and it goes down, that’s great, you’re paying back with cheaper objects.

Comment by Prime_Is_Contained
2008-12-17 11:50:31

I thought it was the increasing carry-trade that _caused_ the nice, steady depreciation…

Comment by KenWPA
2008-12-17 16:26:36

Ok, Faster…..could you try to explain it to a 3 year old with a learning disability? Thanks.

Comment by pressboardbox
2008-12-17 07:41:40

Finally reaching out to the consumer the Fed has decided that it is now buying: Old Lotto tickets, checks from closed accounts, unpaid utility bills, cereal box lids, and even monopoly money in exchange for cash at face value minus a ’small haircut’. The fourteen trillion dollar plan will be the last in a series of equally ridiculous plans to get the country’s bogus economy back on track.

Comment by bluprint
2008-12-17 07:56:07

I wish they would expand the program to Marlboro Miles and Copenhagen can lids. People need relief!

Comment by Muggy
2008-12-17 08:40:33

“Marlboro Miles and Copenhagen can lids.”

If they’d take pamper points, I would RULE THE WORLD.

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Comment by ET-Chicago
2008-12-17 09:13:46

Doubtless there are some rednecks who could pull off the trifecta — Marlboro Miles, Copenhagen Lids, and Pamper Points.

Comment by Muggy
2008-12-17 10:09:49


Comment by bluprint
2008-12-17 12:22:48

I dont have any kids.

Comment by Skip
2008-12-17 11:36:36

How about airline miles? People need to fly!

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Comment by Ernest
2008-12-17 08:16:50

I’ve got some old green stamps and top value stamps that must be worth something?

Comment by oxide
2008-12-17 08:33:30

Probably worth more than your average AAA rated MBS tranche.

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Comment by Ernest
2008-12-17 08:41:56

So what’s the play here?

Short the cereal box tops and go long the green stamps?

Comment by Muggy
2008-12-17 11:05:44

“So what’s the play here?”

Well, if red and white are your favorite colors, and you like leather, go long Marlboro points. Those are pretty sweet jackets.

“Hey, nice jacket. I didn’t know you smoke?!”

“Nah, I don’t, I read the housing bubble blog, man.”

Comment by scdave
2008-12-17 10:27:12

Play the trump card….Buy our dollar OR ELSE;

We will pull Military out of all NATO countries, Saudi Arabia, Kuwait, South Korea and anywhere else that they may be….See how they do without the military protection of the USA…

Comment by Arizona Slim
2008-12-17 15:09:56

Yeah, that’ll learn ‘em!

Comment by wmbz
2008-12-17 07:11:44

California Lawmakers Kill Plan to Raise Taxes, Fight Deficit
By Michael B. Marois
Dec. 17 (Bloomberg) — California lawmakers for a second time rejected tax increases intended to narrow a record budget shortfall, even as the state’s swelling financial problems may force it to abandon $3.8 billion in public works projects.

The legislation sought to cut $7 billion of spending while raising $11.3 billion in higher taxes on retail sales, oil production and alcohol. The bills, proposed by Democrats, needed approval by a two-thirds majority in the Assembly and received no Republican votes. Democrats abstained from voting last night after it became clear the measures would fail.

“We are in a crisis” said Assemblywoman Noreen Evans, a Democrat, during a debate on the defeated proposal. “This is not something we can run away from. This is not something we can just stick our heads in the sand and hope it goes away.”

Comment by dude
2008-12-17 07:55:14

These legislative hacks just don’t get it. They still have projection for growth in years 2,3,4, and 5 of this budget.

They need to make real cuts, not just cuts in increases, and to hell with fed earmarks. The only alternative is to pull a Bolivia.

Comment by yensoy
2008-12-17 09:24:35

Please don’t give them ideas.

Comment by Skip
2008-12-17 08:41:01

Why did the Republicans not support a cut of $7 Billion?

Comment by Blano
2008-12-17 08:58:05

Probably ’cause of the 11 billion in spending that went with it.

Again I say, when oh when will someone propose a budget where spending actually goes DOWN????

Comment by Blano
2008-12-17 10:07:30

Ooops…replace “spending” with “higher taxes.”

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Comment by scdave
2008-12-17 10:33:58

Not until it breaks….This deficit is nothing compared to whats coming…If I can get of a few pieces of real estate I am going to be buying something in Nevada and Oregon…The purpose being to shelter taxable assets from the state of Cali…

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Comment by Bronco
2008-12-17 11:05:37

scdave, you are right about that. almost time to re-state.

Comment by Wizard of Oz
2008-12-17 21:49:47

Your right there.
Retirement soon. Primary res will be in Nev.
No taxes on retirement/401K.
Think you’ll see an exodus of firms as well.
Great weather can only account for so much.

Comment by TCM_guy
2008-12-17 07:25:31

Coldwell Banker & Century 21 headed towards failure?

By Sophia Pearson and Pierre Paulden

Dec. 2 (Bloomberg) — Billionaire investor Carl Icahn sued Leon Black‘s Realogy Corp. over claims the company’s planned $1.1 billion debt exchange is a fraudulent transfer of money that will only delay its inevitable failure.

Icahn’s High River Limited Partnership, owner of Realogy’s so-called pay-in-kind toggle bonds, said it will be unfairly pushed behind other noteholders in the exchange. Realogy, the Parsippany, New Jersey-based owner of Coldwell Banker and Century 21 brands, is asking bondholders to swap the securities for new debt at a discount as it battles the worst housing crisis since the Great Depression.

Realogy “is not entitled to re-shuffle its capital structure by violating its contractual obligations to the toggle noteholders and engaging in transfers that are fraudulent as to its credits generally,” High River said in the complaint filed Nov. 26 in Delaware Chancery Court.

Comment by scdave
2008-12-17 10:37:48

Good…We need to eliminate about 70% of the real estate agents in this country…

Comment by aNYCdj
2008-12-17 12:41:14

NO problem….no income no renewal licenses. The market will take care of it like travel agents

I really don’t see the need for massive regulation of agents. Maybe impose a $1000 fee to get a license and a criminal background check…

Comment by sfrenter
2008-12-17 12:46:08

May all RE agents go the way of the dodo and the travel agent.

Can someone please explain why they are necessary?

Comment by waiting_in_la
2008-12-17 15:02:14

To keep hair dressers / manicurists / plastic surgeons / headshot photogs in business.

Not to mention to provide us with material for one-liners on this blog.


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Comment by Hwy50ina49Dodge
2008-12-17 07:31:31

Shelby’s Corker McConnell: “Lets stick it to them Ford GM Northerner’s, we got Japanese and Saudi’s surrogate’s to help us rise above it all. Heck maybe we can get the Gov’t FEMA trailer contract as well.” ;-)

“Plans to produce the Prius hybrid in the United States have been put on hold indefinitely, Toyota Motor Corp. said Monday.”

“Reports surfaced in Japan last month that the automaker was delaying the start of Prius production at its plant near Tupelo, Miss., until 2011 at the earliest”

Toyota suspends plan to build the Prius in the U.S.: :-),0,3967924.story

Comment by Hwy50ina49Dodge
2008-12-17 10:03:21

I reckon the Southern boyz didn’t get that memo regarding Paulson’s authority from Alexander Haig: “I’m in charge here!” :-)

“Congress never voted for a federal bailout of the automobile industry, and the only way for TARP funds to be diverted to domestic automakers is with explicit congressional approval,” wrote 26 GOP lawmakers, led by Rep. Jeb Hensarling of Texas.

White House pressured by lawmakers on auto bailout:

Comment by ravi
2008-12-17 11:07:03

at least the public seems to be against this bailout. Let the dinosaurs die.

Comment by Skip
2008-12-17 11:39:40

I think Jeb just realized that all that money will be under the control of President Obama in a couple of weeks to do with as he pleases.

Comment by Jim A.
2008-12-17 07:39:16

The propper response to accusations of Schadenfreude: “No parent is HAPPY have their prediction that ‘You’ll poke somebody’s eye out,” proven correct.”

Comment by Hwy50ina49Dodge
2008-12-17 07:47:45


You could’nt have a bb gun when you were 10 either, right? ;-)

Comment by Jim A.
2008-12-17 09:15:59

Heck, now I want dad’s lamp.

Comment by ET-Chicago
2008-12-17 09:28:17
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Comment by Hwy50ina49Dodge
2008-12-17 09:53:03

Don’t ya have to win it @ work? Maybe… Madoff puts his ankle bracelet around it at night? ;-)

Comment by CA renter
2008-12-18 05:30:29

I’m gettin’ one of those! :)

Comment by Hwy50ina49Dodge
2008-12-17 07:39:38

From “subprime”…to…”subordination” ;-)

Gov’t to bankers: “O.K., we’ll be 2nd…if need be, to get this piece of crap sold, we can just wait a few years and them get the new buyer… just remember you fancy pants owes us a few favors” ;-)

IRS to help homeowners refinance or sell homes:

Comment by Hwy50ina49Dodge
2008-12-17 07:45:57

“You’re doing a heck’va job Crissy!” ;-)

Relax Crissy, “Lost Wages” is 290 miles from Newport Beach & Fascist Island…you can be back in the ‘hood in a matter of hours, hangin’ out with the “Real wives of The O.C.! :-)

“On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys.”

“In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff…”

SEC chairman says agency failed to probe Madoff:

Comment by Blano
2008-12-17 09:01:46

“hangin’ out with the “Real wives of The O.C.! ”

Not a bad plan…..that Gretchen is smokin’ hot. :)

Comment by bananarepublic
2008-12-17 15:47:02

He was hand picked to gut the agency so the criminals could get away with the crime of the century. Now he blames the agency?


Comment by bananarepublic
2008-12-17 16:02:55

Just about everything bad that has happened to this nation can be linked directly back to Bush and his cronies.

Jul. 10, 2002

Fielding questions at his Monday press conference about the growing epidemic of Wall Street fraud, President George W. Bush several times pointed to the crucial role played by the U.S. Securities and Exchange Commission in rooting out corporate corruption. Touting the agency’s watchdog and investigative capabilities, Bush insisted that to uncover fraud, “we need a strong, vibrant SEC.”

But even earlier this year, Bush was pursuing a markedly different strategy, catering to a pro-business lobby and rejecting pleas from within the SEC to strengthen the commission.

In the first two budgets his administration submitted to Congress, funding for the SEC was essentially frozen at a time when the commission was reeling from an exodus of employees.

Salaries for SEC employees are notoriously low, even by government standards. On average, commission lawyers and accountants earn 30 percent less than examiners at other federal financial regulatory agencies. Not surprisingly, turnover among SEC professionals is more than twice the rate for comparable positions elsewhere in the government, according to a recent report by the U.S. General Accounting Office. In the last three years, the SEC has lost 30 percent of its employees to the private sector, half of them lawyers. And nearly 300 positions — roughly 10 percent of the commission’s workforce — went unfilled last year.


In Bush’s first budget, for fiscal year 2002, the SEC’s budget was increased a meager 3.5 percent, to $437 million, barely more than the rate of inflation. In fact, the Bush budget forced the commission to eliminate 57 staff jobs, 13 of which were related to preventing fraud.

Even after the Enron scandal had broken, and at a time when Bush’s own SEC chairman, Harvey Pitt, was beseeching White House budget director Mitch Daniels for more money to pay for fraud investigations, the White House unveiled its $2.1 trillion 2003 budget and stiffed the SEC with just a 6.6 percent increase in funding, to $467 million. Since most of that new money is targeted for computer improvement and security, and to offset inflation, keeping up with inflation, the commission’s budget would remain effectively frozen for the second straight year with no additional funds to hire more employees. If approved by Congress, the budget goes into effect Oct. 1.

By comparison, as part of President Clinton’s final budget for the 2001 fiscal year, the SEC’s budget was increased 12 percent, from $377 million to $428 million. (Over the course of the 1990s the commission’s budget increased 73 percent; the number of initial public offerings, which the SEC reviews, grew by 242 percent.) And that was before the high-profile accounting scandals of Enron, WorldCom and others burst onto the front page and stretched the SEC to its breaking point.

Every bad thing that has happened to this nation can be directly linked back to the Bush gang.


Comment by Matt_in_TX
2008-12-17 19:59:13

SEC Chair blames the troops

(The stealing will continue until morale improves)

Comment by Hwy50ina49Dodge
2008-12-17 07:56:49

I love that scene in Melvin & Howard…where Mr. Hughs walks back to the pickup after Melvin dropped him off at the back entry to Hugh’s Casino… smiling, holds out his hands and moves his finger…asking for the rest of Melvin’s change…Classic economic lesson in American Culture! ;-)

“There are a lot more requests for loans than we are granting, particularly from real estate developers who are desperately trying to raise money,”


Banks Show No Signs of Easing in Step With Fed’s Cuts:

Comment by taxmeupthebooty
2008-12-17 08:02:56

any ideas to survive the WAR ON SAVERS -other than gold

lad was right about miners- they should be zooming and they sck

Comment by scdave
2008-12-17 10:48:58

Patience ??

Comment by clue
2008-12-17 08:07:51

10yr at 2.11%

it’ll be 2% by Christmas.

HO HO HO, and a Happy New Year.

Comment by clue
2008-12-17 08:10:40

TLT at 120.
TBT at 37.

targets are approaching….very quickly.

Comment by clue
2008-12-17 08:14:33

the trick was to be long the TLT and short the TBT, but its gonna reverse…..cant say when..but its lurking. massive volume spike on the TBT.

Comment by clue
2008-12-17 08:16:12

YEN blasting higher, Hoz may be correct in a YEN bubble forming.

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Comment by hoz
2008-12-17 08:23:29

85 is purchasing power parity. A bubble is when the price goes above realistic values. The Euro has been in a bubble for quite awhile. Eventually the Euro bubble will crack, but it might hit 1.75 before it does.

Comment by Faster Pussycat, Sell Sell
2008-12-17 08:17:47

You asked yesterday why I don’t post trade ideas. But I thought I did. Oh well!

Anyway, shorted at the close yesterday, covered at the open.

I love the swing reversals of sentiment particularly when volume is light (plus, you pick up the market-impact.)

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Comment by hoz
2008-12-17 08:16:05


10 yr Tips are under 2%

Comment by darthrealtor
2008-12-17 08:23:14

Damn. More air for the Treasury bubble.

Comment by darthrealtor
2008-12-17 08:28:51

On that note, I still don’t understand the fundamentals of the treasuries market these days. Why not park your money in cold cash and wait for better days? Why buy these poor yielding treasuries when the threat of overstimulation is on the horizon and better deals could be had? Will there be a market for these crap treasuries when everybody starts selling them?

I just don’t get it.

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Comment by Faster Pussycat, Sell Sell
2008-12-17 08:38:09

Ever tried parking $10M for a week, or a month somewhere?

No? Well, try it, and get back to show us how that works.

Comment by Jim A.
2008-12-17 09:18:48

And nobody want’s to leave more than the FDIC limit in any one bank.

Comment by packman
2008-12-17 09:30:37

Exactly FPSS. Everyone assumes that cash is the ultimate save investment, but neglects to consider - where to put that cash? Cash is only safe and conservative from a gains vs. losses perspective, not from a safety perspective.

That’s why Tbills went down to 0. Seems to me that hypothetically they could go negative - significantly so even. Theoretically they’d still be positive relative to price deflation, and definitely positive relative to equity deflation.

Comment by darthrealtor
2008-12-17 09:38:33

In a deflationary environment (like this one) cash would be a very safe liquid bet. But like FPSS mentioned, it’s an issue of volume.

My other post will show up soon….it has a link to more info I dug up.

Comment by packman
2008-12-17 09:51:12

“And nobody want’s to leave more than the FDIC limit in any one bank.”

Lots of people - including myself - are not exactly comfortable with FDIC backing either, long term. FDIC just double their rates I think, or are proposing too. They have very little reserves. What happens when their reserve gets killed by the rapid increase in bank failures - both on the output and on the input side? Obviously there’s implicit government backing, but…

Comment by Mr. Drysdale
2008-12-17 10:09:00

FDIC’s new rates for banks have come out and are effective Jan 1.

Beginning then, banks premiums go from 5 bips to 12 bips on interest bearing deposits and to 10 bips on non-interest bearing deposits. So the FDIC should be getting a huge infusion next year.

Prime now down to 3.25%, deposit rates holding steady and costs of FDIC insurance going up . . . ouch, not a good time to make money in the commercial banking biz.

Expect all other fees to climb, lending rates will detach from Prime, but still strong competition for good deposits. Even without loan losses, bank earnings are gonna s*ck for a year or so.

Comment by Olympiagal
2008-12-17 15:54:02

‘Comment by Faster Pussycat, Sell Sell
2008-12-17 08:38:09
Ever tried parking $10M for a week, or a month somewhere?’

Oh, yeah, all the time I try that. It’s quite tedious.

Hahahahahaha! * snort *
Yeah, whatEVer. I would love to be afflicted with that problem. This morning I got all excited when I hauled out and put on my giant puffy coat and stuck my mittened hand in my pocket and found…five (5) whole dollars in there! Awesome! I’m going to buy nourishing groceries and ointment for my chillblains* with it!

*Say, what are chillblains? I don’t actually know. I just like the sound of it. Also I’m not going to buy groceries with it. I’m going to buy candy, since I already have plenty of beer on hand. What else do I need? Nothing, that’s what.
Look at me! I’m really getting into this whole ‘learn how to lie’ thingie we discussed yesterday.

Comment by ozajh
2008-12-17 20:01:53

Nothing funny about chilblains if you have them.

Comment by mrktMaven
2008-12-17 08:13:32

The Fed’s recent move is quixotic. LMAO after hearing the official and already implemented announcement. The fed is out of bullets and promises to pull out all of the stops. Other than destroying free market capitalism as we know it, there is nothing else it can do. What’s worse, people actually believe the fed can do more to help.

Now, where did I place my tinfoil helmet? It’s time for battle.

Comment by bottomfisherman
2008-12-17 09:09:01

Heck, BB could go negative on the FFR– Having the Fed pay to take money off of its hands could be a the new paradigm.

Comment by SanFranciscoBayAreaGal
2008-12-17 08:16:14

Since the World fund mangers say the economic deterioration slowing, it must be true:{9892D8E6-FB50-4CFB-93EC-6099A09E2400}&siteid=yahoomy

Comment by Garrett
2008-12-17 08:38:40

Thank you Aladinsane for sticking to your guns….

“the Dude abides….”

Comment by Muggy
2008-12-17 08:43:29

Garrett, one week ago Alad said it was too early for Jas to claim victory, the same then applies to Alad.

When I am stabbing people for rice, we will declare Alad the winner, and then stab him for his rice.

Comment by edgewaterjohn
2008-12-17 09:17:52


Comment by Garrett
2008-12-17 09:55:22

damn that was funny. good one.

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Comment by Jas Jain
2008-12-17 09:33:26

I am not here to claim victory but to share my observations and conclusions. There are disgusting intolerant people on this blog whose sole aim is to harass me and to stop my views from being aired here. We know who they are.

10-Year Treasury at 2.11%!!!!!!!!!!!!!!!!! Who could have imagined that?

Fed is impotent at fighting deflation, as I had been claiming for three years since Bernanke was appointed to become Chairman of the Fed. It is the debt, Stupid!


Comment by hoz
2008-12-17 10:46:47

10 yr tips at 1.87%


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Comment by Muggy
2008-12-17 10:58:36

“I am not here to claim victory”

I understand, I hope that was clear in my post. Please continue to share your conclusions.

Comment by Hwy50ina49Dodge
2008-12-17 10:48:42

“…It is the debt, Stupid!”

What debt? I still see debt people…but they are only half-debt now! ;-)

Relax Jas, they’re throwing the debt out the window with the baby.

I guess the FED would have really caused a lot more economic damage…. if they raised mortgage rates to 14+%? :-)

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Comment by SanFranciscoBayAreaGal
2008-12-17 11:09:54

“I am not here to claim victory but to share my observations and conclusions”

Everything before the word “but” is a lie :)

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Comment by Olympiagal
2008-12-17 12:21:39

Hahahaha! :)

Comment by Skip
2008-12-17 11:42:08

I’m still laughing about Jain’s lazy American comment from last week. I hope he continues on with other nationalities.

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Comment by Jas Jain
2008-12-17 13:23:08

Just to clarify I meant intellectual laziness (result of decades of brainwashing). Otherwise, Americans are the best trained economic slaves in history. No masters have asked or gotten more than America’s corporate and economic elite!

Americans ARE hardworking economic slaves.


Comment by Muggy
2008-12-17 14:41:47

“Americans ARE hardworking economic slaves.”

This is it! This is my rampage signal! Thanks, Jas!


Comment by Vermontergal
2008-12-17 15:10:13

I’m still laughing about Jain’s lazy American comment from last week

And I missed it. Dang, dang, dang!!!

No masters have asked or gotten more than America’s corporate and economic elite!

The Japanese work much longer hours than Americans do, to the point where there’s actually a coroporate/government initiatives to have workers spend time with their families so they might consider having more babies. (Really!)

This is, of course, the same culture that gave rise to Kamikaze pilots and soliders could survive on a handful of rice a day.

But corporate America is wringing every last dollar out of those drones watching YouTube at work. LOL - Americans are *evvvvvil* and will take your rice when you least expect it.

Comment by Shizo
2008-12-17 16:16:25

” I EAT YOUR RICE!!!!! “

Comment by wmbz
2008-12-17 08:55:24

Rats deep fried on a stick, after they catch them could catch on…

Berlin’s Poor Should Catch Rats, Says Politician

A Berlin politician has come under fire for suggesting that poor people should be encouraged to catch rats by offering them €1 per dead rodent. The intriguing idea entails some gnawing practical problems and has been called “inhuman and cynical”.

The idea poses some practical problems too. Killing rats by hitting them with shovels or kicking them to death would break animal protection laws. Besides, rats are fast and much tougher to catch than returnable bottles, much sought after by poor people who retrieve deposits on them at supermarkets.,1518,596705,00.html

Comment by exeter
2008-12-17 09:13:10

The poor reduced to catching and eating rats? Sounds like a libertarian/conservative utopia.

Comment by Bronco
2008-12-17 09:35:16

another idiot comment

Comment by exeter
2008-12-17 09:43:59

The truth is painful eh?

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Comment by wmbz
2008-12-17 11:24:42

Probably called it an ‘idiot’ comment, because the story came out of Germany. Long known as a Bastian of conservatism & Libertarianism …Riiiiiight.

It was one of your brother socialists that came up with the plan, imagine that.

Comment by exeter
2008-12-17 11:37:39

Which is different from your fascist heros in what way?

Comment by bluprint
2008-12-17 12:31:46

Ex, can you help me reconcile the idea that libertarians are to blame on par with the conservatives with the fact that your liberal leaders Pelosi, Dodd and Frank were tripping over each other to see who could hand out 700 bill to the richy-rich bankers you so adore?

The only people I’m aware of that were seriously opposing the handout to the financial industry were the libertarian-oriented, e.g. Ron Paul. Libertarianism is virtually unrepresented in our government yet earns your scorn for acts committed by the liberals you simultaneously worship.

Comment by wmbz
2008-12-17 13:32:45

Fascist- Libertarian? WTF? Get a dictionary, you can’t know what a libertarian is.

Comment by exeter
2008-12-17 15:29:22

Beat the drum beat the drum. You go boy.

Comment by bluprint
2008-12-17 17:28:52

Just trying to have a rational discussion of your views. Why are you so shy to support them with something other than poorly thought out one-liners?

And don’t steal my “bang the drum” line. ;)

Comment by wmbz
2008-12-17 09:56:17

You can’t talk to the close minded and humorless. Life members of the perma-pissed crowd.

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Comment by ravi
2008-12-17 11:10:04

He’s always got his panties in a wad (exeter, that is).

Comment by Bronco
2008-12-17 11:34:30

i realize…

Comment by exeter
2008-12-17 12:45:39

It got you squealing pretty quickly. ;)

Comment by Bronco
2008-12-17 13:13:59

it’s not difficult; just continue with your nonsense

Comment by yensoy
2008-12-17 09:39:42

This is how it will play out. Some enterprising poor folks will realize they can farm rats which they can sell to the government. Career protestors will ensure rats sold to government aren’t killed. A Rat Consolidator will arise, who will buy rats from the government for “humane disposal” which means he will sell it back to the “poor” for 0.5 Eur, which will then be sold back to the government, etc. The program will gain in popularity, so the government will have to hire Rat Program Officers and Directors.

Looks more like a liberal utopia to me :-)

Meanwhile I am happy Ich not bin ein Berliner.

Comment by Faster Pussycat, Sell Sell
2008-12-17 09:48:13


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Comment by wmbz
2008-12-17 09:48:28


Surely a gubmint run program would be much more efficient, it’s for the children.

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Comment by Hwy50ina49Dodge
2008-12-17 09:56:41

“…so the government will have to hire Rat Program Officers and Directors.” :-)

Cheney emerges from the “Shadows”…newly knighted as… The Rat Czar! ;-)

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Comment by scdave
2008-12-17 11:06:23


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Comment by SaladSD
2008-12-17 11:16:32

If you killed rats and ground them up for cattle feed would we incure some variant of Mad Cow disease?

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Comment by SanFranciscoBayAreaGal
2008-12-17 11:27:38

Denny Crane would say Yes

Comment by Ernest
2008-12-17 11:21:04

I always knew the Rat Patrol would make a comeback!

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Comment by AZgolfer
2008-12-17 09:37:23

a co worker is refinancing her house. says she is getting a 187k loan for 1200 a month which includes taxes and insurance. Can this be a convential loan?

Comment by Xenos
2008-12-17 09:57:45

Maybe, but I really doubt it. If taxes and insurance are very low, and her interest rate is around 5%, she could get pretty close, though.

Comment by AZgolfer
2008-12-17 10:20:49

I am guessing that taxes and insurance are $200 to $250 a month. She says she is getting a 4.8% loan. That means the payment for just the house would be around $900 or less. Says she is not even going to read the papers because she “trusts” the morgage broker who she has done business with in the past. This seems too low to me. I told her I was concerned and for her to read the papers and she got angry with me and said “I know what I am doing” Nuf said - I she is tricked into a bad loan I have done all I can.

Comment by hoz
2008-12-17 10:58:03

Wells is offering 30 yr fixed at 4.875%.

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Comment by Prime_Is_Contained
2008-12-17 17:19:09

Not reading the papers makes her a fool regardless of whether she gets fooled or not.

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Comment by Watching the Carnage
2008-12-17 20:52:30

Yes-just locked in 4.625 for a 30 year fixed last Friday with CountryWide. Refi at app 187k - $349 application fee, no appraisal, no income verification, no cash out, closing costs and points rolled in, 780 FICO, 1 5/8 points plus insurance and taxes on a MD house tax appraised at $650,000 equals $1197.00 PITI/month

Comment by takingbets
2008-12-17 09:38:06

Congressional panel hears of economic woes in Las Vegas, lack of help from bailout

Gail Burks, the president of Nevada Fair Housing Center, said her nonprofit receives 600 calls a day from homeowners seeking help avoiding foreclosure. She said a typical loan modification takes about 200 hours of staff time.

I wonder how these 200 hours effect the cost of all those bail-out programs?

Comment by wmbz
2008-12-17 09:44:22

Warren should have listened to Daddy Buffet….

Comment by Curt
2008-12-17 09:57:34

Home-builder Hovnanian Enterprises (HOV), announced late Tuesday that the company had a fourth-quarter loss of $450.5 million, or $5.79 a share, for the quarter that ended Oct. 31. This compares with a loss of $469.3 million, or $7.42 a share, in the same period last year. The company has now put together a string of nine quarterly losses in a row.

Can somebody explain why the rating bureaus still rate this stock as a “hold?” If 3M missies by a penny the “don’t accumulate, sell now, run for the hills” warnings abound.

I guess they feel the 10th quarter could be a winner.

Comment by pressboardbox
2008-12-17 09:59:06

How can the Madoff story be the “biggest ponzi scheme ever”? Has nobody heard of Hank Paulson?

Comment by Hwy50ina49Dodge
2008-12-17 10:14:42

“She said Madoff was so well-regarded many did not want to hear her findings….It was such a cult thing,” Murphy said. “People would literally yell at me at the dinner table.” :-)

Good thing she didn’t bring up real estate values at dinner. ;-)

Does this qualify in the 10 ten of missunderstatements of the year? ;-)

“Their due diligence must have been lacking,”… said Brad Alford, who runs Alpha Capital Management in Atlanta

Connecticut investment firm stung by Madoff ties:

Comment by ella
2008-12-18 18:16:51

“Good thing she didn’t bring up real estate values at dinner.”


Comment by Hwy50ina49Dodge
2008-12-17 10:42:05

Has the “Homeland Security Czar” ever checked Paulson & Madoff’s passport to see if they ever visited Nigeria?… I mean they don’t teach this stuff at Yale do they? ;-)

Comment by Hwy50ina49Dodge
2008-12-17 11:13:44

Maybe… he could solicit Dennis Rodman & Mike Tyson?:

“A hearing had been scheduled for Wednesday in which Madoff was required to find two additional co-signers to vouch for him.

But with the scandal swirling around Madoff, he was unable to find co-signers.” :-)

“My Kingdom for…a horse!” ;-)

AG recuses himself from Madoff fraud probe:

Comment by hoz
2008-12-17 10:09:57

New Poll Shows 63% Are Already Hurt by Downturn

By Michael A. Fletcher and Jon Cohen
Washington Post Staff Writers
Wednesday, December 17, 2008

“…A new Washington Post-ABC News poll also found that a rapidly increasing share of Americans — 66 percent, up from just over half a year ago — are worried about maintaining their standard of living. Nearly two in 10 said they or someone living in their household had lost a job in the past few months, and more than a quarter said they had their pay or hours reduced. And 15 percent said that at some point in the past year they fell behind on their rent or mortgage.

The poll captures the widening fallout from the faltering economy that policymakers are struggling to contain. The Federal Reserve yesterday cut its target for the federal funds rate to a range of zero to 0.25 percent, the lowest on record.

“They’re getting to be about as low as they can go,” President-elect Barack Obama …”

Comment by Jim A.
2008-12-17 10:31:38

“They’re getting to be about as low as they can go,” President-elect Barack Obama …”

Now I have the Limbo tune running through my head.

Comment by scdave
2008-12-17 11:30:29

Nice post hoz…Quite disturbing though…

Comment by TCM_guy
2008-12-17 16:22:50

66% are worried over their standard of living? They should be, because were will their next loan come from?

Comment by hoz
2008-12-17 10:16:19

The Great Unraveling

Published: December 16, 2008

Hong Kong

The stranger, a Western businessman, slipped into the chair next to me at an Asia Society lunch here in Hong Kong and asked me a question that I can honestly say I’ve never been asked before: “So, just how corrupt is America?”

His question was occasioned by the arrest of the Wall Street money manager Bernard Madoff on charges of running a Ponzi scheme that bilked investors out of billions of dollars, but it wasn’t only that. It’s the whole bloody mess coming out of Wall Street — the financial center that Hong Kong moneymen had always looked up to. How could it be, they wonder, that such brand names as Bear Stearns, Lehman Brothers and A.I.G. could turn out to have such feet of clay? Where, they wonder, was our Securities and Exchange Commission and the high standards that we had preached to them all these years?

One of Hong Kong’s most-respected bankers, who asked not to be identified, told me that the U.S.-owned investment company where he works made a mint in the last decade cleaning up sick Asian banks. They did so by importing the best U.S. practices, particularly the principles of “know thy customers” and strict risk controls. But now, he asked, who is there to look to for exemplary leadership?…”

Buy now or be priced out forever. Dollar Cost Average, the market will always go up. Oh well.

Comment by wmbz
2008-12-17 11:03:16

“So, just how corrupt is America?”

Ha,Ha,Ha, how corrupt? We are still learning from a number of other countries. We have a long way to go to be #1 in that dept.

Comment by Faster Pussycat, Sell Sell
2008-12-17 11:51:48

Buy now or be priced out forever. Dollar Cost Average, the market will always go up. Oh well.

Your heart’s not in it, ol’ chap!

You forget Sharpe ratio, standard deviation is risk, efficient markets, diversification.

Loaning money to Argentina at 10bps over Treasuries is not risky but shorting it is risky because “shorting has infinite downside”, etc.


Comment by ecofeco
2008-12-17 16:06:29

dang board.

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Comment by ecofeco
2008-12-17 15:52:25

There are other countries spending $1,000,000,000,000 to bailout their financial “industry?”

And have we forgotten Enron/World Com/Tycho etc. so soon? The S&L disaster of the late 80s to early 90s? The dot com bomb? The Keating Five?

My my, such short memories.

Comment by ecofeco
2008-12-17 16:02:52

You must not be very old.

S&L? Dot com bomb? Keating Five? Enron/World Com? The list is LONG.

And what other countries are spending $1 TRILLION to bailout their financial “industry?”

And who created the CDOs and vetted them?

(sorry if this double posts. you all know how crazy this board is)

Comment by ecofeco
2008-12-17 16:08:37

Wrong. We ARE the masters. (and if my other posts would come through you would know why)

Comment by Vermontergal
2008-12-17 16:36:13

We ARE the masters.

What’s this “We”, kimosabe?

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Comment by ecofeco
2008-12-17 17:13:04

Well, not you. Or anybody else on this board. But as a country, ho boy!

Dang, I wish my other posts would come through.

Comment by cougar91
2008-12-17 10:59:05

Did anyone watch… uhm, I mean accidentally came across Cramer on CNBC on MadMoney? Less than 2 months after he said take out all money you need for the next 5 years from the stock market, he said to go out and buy a house tomorrow as Fed will prop up everything and with low mortgage rates, housing will bottom in June 2009 so buy now. He neglected to mention how many people already own a first home vs. historical average and where those home buyers will come from since we are above the historical average. Guess he is asking people to go out and buy second homes or for investment flips.

I thought I couldn’t get sicker of his antics, but apparently I was wrong. This is guy is buffoon-in-chief of CNBC, with Kudlow and Neal his deputies.

Comment by packman
2008-12-17 12:02:30

Please tell me you don’t watch that guy.

Idiots are best left ignored. Eventually they go away.

Comment by Olympiagal
2008-12-17 12:16:52

‘Idiots are best left ignored. Eventually they go away.’

Are you sure about that? Because it seems to me that they might even be reproducing or something, as I seem to meet a whole lot of them.

Comment by Faster Pussycat, Sell Sell
2008-12-17 12:22:52

Relax, here have a potato. (hands her a potato.)

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Comment by Olympiagal
2008-12-17 14:09:44


Comment by SanFranciscoBayAreaGal
2008-12-17 12:44:10

You beat me to the punch Olygal.

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Comment by packman
2008-12-17 13:02:33

The problem is - they’re not being ignored. Many in fact end up being paid big bucks on TV where they’re watched en masse by our also-dumbed-down society. Especially true if you’re a pretty-face idiot (though Cramer certainly doesn’t fit into that category).

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Comment by Blano
2008-12-17 17:16:51

I’ll admit to watching him on occasion (and Kudlow) because I want to see what kind of crap they’re feeding people.

Comment by sfrenter
2008-12-17 11:01:03

They may not make as much as Madoff, but the scammers are out in full force. From my neighborhood parenting email group:

“A man just showed up at our house as my husband was leaving for work
claiming to be from our new mortgage company, Wells Fargo, and said
that he was here collecting payment. (That immediately made me
suspicious.) I called our mortgage company who said that Wells Fargo
has always owned them and they would never send people to collect
payment but would periodically inspect properties. He left a slip of
paper with our names on it and an 800# to call. When I looked up the
800#, several people posted on the internet that when they called the
number it asks you to key in your loan # and/or SS# and that it’s a
scam. So I just reported this to the police.”

Is anyone really dumb enough to fall for this schme? I guess so, otherwise they wouldn’t do it, huh?

Comment by packman
2008-12-17 13:07:51

Given that there’s a sucker born every minute, that means there are 525,600 born every year. Given an average life span of 75 years, that means there are 39,420,000 suckers out there.

Sounds about right.

(Yes, I am uber-nerd. I have a calculator and I know how to use it.)

Comment by Paul in Florida
2008-12-17 13:48:36

Nerd-adjustment: (1) multiply by 1.00068 to account for leap years. Better yet: (2) It is not precisely the average life span you need, but the weighted-average percentage of those remaining alive in each age group. So, given a survival rate x(n) for a yearly age group (n) take the sum of the survival rates over all age groups, multiplied by 525,600 for some age groups and 527,040 for the ones that include leap years.

Either way, I believe the result underestimates the number of true suckers, and is perhaps the result of the phrase being uttered around 100 years ago by P.T. Barnum, when the U.S. population was around 100 million.

Henceforth, I am adapting, “There is a sucker born every 20 seconds” (in the U.S.) and even “There is a sucker born every second” (in the world).

Comment by packman
2008-12-17 15:08:01

I stand out-nerded :)

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Comment by Hwy50ina49Dodge
2008-12-17 11:02:02

O.K., Since Jeb Shrub wants to run for Florida Senator…I would like to nominate… Crissy Cox as the next… ML Baseball Commissioner! :-)

Can I get a 2nd?

Postcard to God: ps, please let Rash Limbaughs buy the St Pathetic Lambs

Comment by wmbz
2008-12-17 11:26:07

In Madoff We Trust

Peter Schiff
Dec 17, 2008

As the multi-billion dollar Ponzi scheme orchestrated by Wall Street insider Bernard Madoff unravels in the media spotlight, the nation is being presented with a rare opportunity to understand the true nature of many of our most cherished financial structures. Hopefully we have the wisdom to connect the dots.

Although the $50 billion loss engineered by Madoff is truly a staggering accomplishment (and was done using old-fashioned fraud rather than the mathematical wizardry that has characterized Wall Street’s recent larcenies) the size of the scheme pales in comparison to the multi-trillion dollar Ponzi structures run by the United States government. In fact, rather than looking to jail Madoff, President-elect Obama should consider making him our new Treasury Secretary. If not that, at least make him the czar of something!

Comment by ahansen
2008-12-17 11:37:28

Somali Pirates in Discussions to Acquire Citigroup (C)

The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker.

“You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything,” said Ali.

Comment by Hwy50ina49Dodge
2008-12-17 12:45:44

LOL :-) …Remind them to pay in Euro’s

Comment by wmbz
2008-12-17 14:00:02

I’d rather see the Somalis running Citi at least you know what you’re dealing with.

Comment by reuven
2008-12-17 11:55:07

I got an unsolicited email today offering to sell me a piece of worthless swampland at the bargain price of $350K!

I got your email address from your no trespassing sign on your land on R**** Road. I have a property close to yours that I want to sell and there’s 2 ways that there may be some money in it for you.

One: I have an April 2007 appraisal of 1.9 million. I’m into it for over $500k and I’d like to liquidate it very soon. If you could be interested in taking advantage of a bargain cash price in the $350k range on this 20 acres, call me. I may also carry 75% financing at around 8 1/2 to 9% with a 20 year am and a 5 year balloon for slightly more.

Two: You could refer a buyer to me for a small consulting fee of a couple grand.

This was followed up by a second email to hurry! because it’s going to sell in 45 days “no matter what”. HA HA HA. And, to top it off, this guy’s name wasn’t listed as a property owner on the Orange County appraiser site, so it may be a complete scam.

If it’s not a complete scam, it’s still a hoot because of the wacky wheeler-dealer deals he’s trying to pull and the fact that this land, at the peak of the bubble, was never worth more than $100K. It’s in an area with a lot of wetland issues, and unless you did a lot of bribery/mitagation, you can’t put more than 1 house per 5 acres.

We bought our swampland (for cash, and nowhere near the price this guy’s asking for his) just to have a place to have one private home. We wanted to put our retirement home smack dab in the middle of a big lot, free of HOAs and CC&Rs, with a big concrete wall around it. Those plans are now on hold because of the general implosion of Orange County. Crime is going up, and there are so many empty houses around, I wouldn’t want to build a home there now. I work on the assumption that my lot is worth $0.

Comment by Muggy
2008-12-17 13:02:46

Reuven, what can you tell me about the complexes in MetroWest (other than the Wal*Mart shooting a few weeks back)?

Comment by reuven
2008-12-17 13:08:47

One footnote! During the boom this property was in MLS for $6.5 million:

There wasn’t really a house on it. It was “to be built” The land has since foreclosed, and the owners were licensed R-E agents. (BTW: I always believed that licensed R-E agents should not be eligible for any bailout. They had every reason to know better.)

Comment by Faster Pussycat, Sell Sell
2008-12-17 12:19:53

Moments ago, U.S. Attorney General Michael Mukasey confirmed that he will be recusing himself from the ongoing investigation into Bernie Madoff. The Justice Department didn’t specify a specific reason for his decision to step aside—early reports have suggested that Mukasey’s son, Marc, may be planning to represent a defendant in the case. But we can report a much more likely—and personal—reason why the Madoff case poses a serious conflict for the AG. Mukasey’s own synagogue was ripped off by Bernie Madoff’s Ponzi scheme.

I’m beginning to like this guy. If the US AG recuses himself because you ripped him off, you’ve done really good.

It’s like the “preemptive strike” doctrine taken to the next level. ;-)

Comment by Hwy50ina49Dodge
2008-12-17 12:54:22

How tough is it?…just give a Cheney”No Bid” contract to Halliburton and have the US Coast Guard reserves paint & expand the 2 1/2 mile radius “green zone”…it ain’t rocket science. ;-)

“…It is not clear how the State Department would replace Blackwater if the recommendation is accepted. The department relies heavily on private contractors, including Blackwater, to protect diplomats in Iraq as its own security service does not have the manpower or equipment to do so.”

Panel calls for dropping Blackwater guards in Iraq:

Comment by Chip
2008-12-17 12:59:41

Center front page of Orlando Sentinel today is big photo spread on panicky price cuts by retailers this week. Looked like just one big page of bad news, though I liked the bit about box wine sales booming at the expense of bottled stuff.

Relative sent me interesting information from Viera, a huge PUD in Brevard County, to the east of Orlando. In three sizable (for the area) 55+ communities, there appear to be about 150 resales either active or under contract. That’s a pretty high number, especially since more than 30 are in one gated neighborhood that didn’t even get started until about 2002. Have to assume there were a number of speculators over 55 who could buy, or that there us an uncomfortable number of seniors who took out fairly big mortgages at a point in life when one would think they’d be shedding debt as fast as possible.

Comment by Ernest
Comment by Jas Jain
2008-12-17 13:25:30

And idiocy of Bernanke’s solutions. I could have told you three years ago.


Comment by Chip
2008-12-17 15:16:56

I’m fearful that Bernanke has too much ego wrapped up in this and that he will not be able to see, hear or absorb in any way arguments that contradict his thinking about solutions to this crisis.

Has anything he’s done so far made life better for, say, HBBers? Doesn’t feel like it to me. He needs a horizon meter in the cockpit, because he’s flying upside down in clouds and thinks he’s right side up. Scares the heck out of me.

Comment by packman
2008-12-17 15:23:59

Wow that’s quite a downer article - very harsh. Unfortunately it’s probably mostly true.

Interesting point about money market rates. Perhaps that the next big money infusion - maybe planned that way even. When people start getting their bank statements that show no gains on their MM accounts - they are indeed likely to start pulling money out en masse. One thing he didn’t mention is the Treasury’s new guarantee on MM accounts. If people start pulling money out - then that’s a new place (excuse) to pump bailout money into.


Comment by pressboardbox
2008-12-17 13:15:08

A guy on CNBC just said that the Fed could buy a quadrillion dollars worth of bad paper if it needed to. Numbers have completely lost any kind of meaning. Reminds me of little kids making up numbers on a playground -” my dad has a zillion-billion-million dollars”.

Comment by darthrealtor
2008-12-17 13:34:46

Goldbug troll! ;-)

Comment by wmbz
2008-12-17 13:40:51

I can’t wait until they ‘print’ up a sextillion just because it has the word sex in it. Ask um if he can print up a Duodecillion. & no cents.


Comment by bluprint
2008-12-17 13:50:26

commas please. i can’t make any sense at all of that string of zeros…

Comment by Olympiagal
2008-12-17 15:56:42

Yeah, what are you, channeling ‘taxmebootay’ or something? Except I note with disapproval that you are using those apostrophe things, which mars your presentation completely.

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Comment by wmbz
2008-12-17 16:37:37

Not that anyone should or would waste their time, here you go. Poor things get their thongs in a twist over the craziest things…


Comment by bluprint
2008-12-17 17:02:34

wow, that looks like a much more impressive number now.

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Comment by WhatOnceWas
2008-12-17 20:42:58

This is our current national debt, but who’s counting.No worries, we’ll pay it off with future GDP, and productivity…or not. Max out the card…we’ll pay it off later…..


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Comment by clue
2008-12-17 13:37:41

whale blubbers at 40.05, you gonna short it or what?

Comment by clue
2008-12-17 15:19:35

USD/JPY 87.30

Comment by Hwy50ina49Dodge
2008-12-17 13:40:22

What ?…she didn’t “invest” in N.Y.C. real estate…there has to be more to this story…or just bad reporting. ;-)

“Police said after Jackson’s arrest in March that she spent the money on cars, casinos and rock concerts, and threw herself a $15,000 birthday party.”

NYC manager of foreign currency firm admits embezzling almost $2 million:

Comment by Hwy50ina49Dodge
2008-12-17 13:50:10

Thank goodness Cheney-Shrub stopped putting $146.00 per barrel crude into the salt cave…it was their idea to stop doing that right? :-)

Crude Oil Falls Below $40 on OPEC Skepticism, U.S. Supply Gain:

“Inventories have gained because the oil market is in contango, where crude for future delivery is more expensive than near-month prices, encouraging stockpile increases.”

Comment by Hwy50ina49Dodge
2008-12-17 14:00:05

It’s beer & bits time! ;-)

This guy is sharp… using his big head to protect his little head with conjugal visits in the near future.

Peterson Plans to Wed Mystery Bride, 23
Peterson Remains a Suspect in the Disappearance of His Fourth Wife, Stacy:

“…But because Drew Peterson is still legally married to Stacy Peterson, a divorce will be necessary before he can set a date to walk down the aisle with his mystery bride.”

“He’s legally married still,” said Selig, “so I guess in order to get remarried he’ll need to get a divorce first.”

“According to the Chicago Tribune, Drew Peterson met with a high-profile divorce attorney to look into how to get granted a divorce on the basis of abandonment.”

Comment by Olympiagal
2008-12-17 14:37:19

Another woman is actually going to MARRY this guy?! THIS guy!?

What the fook is WRONG with her? Good lordy!

Comment by Olympiagal
2008-12-17 14:46:37

Hmmm. Now, I know gals who look at prospective boyfriends or mates as ‘projects’. They go out and deliberately select a ‘project man’, aka ‘a real as*h*le’.
(You all know such women, I bet. As if knitting isn’t WAY more rewarding than turning a jerk into Prince Charming. At the end of the first sort of project you have a useful doily or pretty oven-mitt, whereas at the end of the latter sort of project, why, you have a resentful, sullen jerk who has adamantly refused to become Prince Charming, but who has instead given you AND your sister an STD and also stole your account information.
That’s why IIIII, Olygal, stick with guys who have already been fixed and/or trained by their wives. It saves me lots of time.
Or, alternatively, with knitting or making a bench from pallets when I want a ‘project’.

And now you ask: Why do I be friends or associate with such silly women?
Because I like to laugh loudly and robustly and cruelly.
Does this make me a bad person?
Probably. But I don’t care.

Comment by Vermontergal
2008-12-17 15:25:00

And now you ask: Why do I be friends or associate with such silly women?
Because I like to laugh loudly and robustly and cruelly.
Does this make me a bad person?
Probably. But I don’t care.

This makes me a bad person, too, cause I think you should. :)

Every woman who sleeps with jerks and then does their laundry for them because they “don’t know how to do it right” lowers the bar of for male behavior.

Guys like that deserve to be sleeping in their mother’s basements (cause you know that’s where it started..), not “getting some”, including pats on the head when they “accidentally” sleep with the girlfriend’s best friend.

Not that I am bitter at rogue male behavior, of course. :)

And knitting is a waaay more productive project than men. My socks are almost done.

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Comment by Olympiagal
2008-12-17 15:44:30

‘And knitting is a waaay more productive project than men. My socks are almost done.’

Ooooh! What color are they?

I’m not very good at socks. If only my feet were different sizes, then the socks would fit, but alas.
My favorite socks are a couple of pairs my great-gran knitted, using up all the oddments and loose yarn from her yarn bag. They are mighty colorful, and quite bulky. I use them as bed socks, and they keep my feeties warm AND entertained all night long. Which is good, especially now, because it’s COLD here. It’s like 30 degrees! I think I’ll eat a few neighbors, with butter, so I can bulk up and stop shivering, and my bones will stop rattling.
The sad thing is, growing up in Utarr 30 degrees was regarded as one of your balmier- type winter days, and a signal to break out the shorts so you could go get a suntan.
I suspect I’m becoming wus*sified.

Comment by Vermontergal
2008-12-17 16:18:06

Ooooh! What color are they?

They are a mixed color of light blue, dark blue, and tan called River Wash. They make these cool stripes as I knit.

I suspect I’m becoming wus*sified.

It’s the PNW effect - 30 degrees is cold, slugs the size of fruit are “normal”, and everyone drinks coffee beverages with names from much sunnier places. It rose to about 34 degrees here today and we were pretty close to gettin’ the shorts out. It certainly put a damper on the skiing. :(

I’m not very good at socks. If only my feet were different sizes, then the socks would fit, but alas.

I found this method on the internet where by using 1 giant circular needle, you can make two socks at the exact time that will come out exactly the same. (In my case, oddly) Here’s the website:

Comment by cougar91
2008-12-17 16:58:04

>then does their laundry for them

But my mom told me that’s how you find out if she really is the one for you or not.

What’s that mom? Yeah, I want steaks for dinner and no veggie on the side, like I told you the last 100 times, OK? Bring it down when it is ready, I am too busy paying Wii.

Comment by ACH
2008-12-17 17:11:26

Ok, Ok, I get the point you two are making. Still, while I’m positive that the idiot who is marrying Peterson has an inherent death wish, it is a fact that most if not all men are to a degree “projects”. I am a case in point. I was just beginning to work on my PhD when I met my future wife. We married and have been so for 21 years.
I have made progress in that time. I no longer drink milk from the carton, leave the seat up nor dirty socks in the living room, disappear for weeks at at time on “hunting trips” with my brothers, hang out at the girlie bars, and so on and so forth.

I guess my point is just this: Some “projects” are oriented toward success (I like to think most men are!), and some aren’t (Peterson and his ilk). How to tell the difference? Well, if I have to explain how to do that …


Comment by Paul in Florida
2008-12-17 19:34:32

I never could figure out why women want guys to put the seat down. Seat up “proves” the woman gets a hygenic use after the man has been in there.

Comment by cougar91
2008-12-17 16:55:21

So that’s what I been doing wrong… no woman want to lay their hands on me (and not just figuratively speaking) because I am TOO PERFECT. It’s no challenge for them.

Guess just have to burn all my liquid cash on liquor then.

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Comment by Blano
2008-12-17 17:05:30

A big “AMEN” to that, cougar.

That’s why I’m always dateless….I try to be a gentleman at all times. Bad boys don’t concern themselves with such trivialities.

Comment by Vermontergal
2008-12-17 17:11:12

Guess just have to burn all my liquid cash on liquor then.

LOL - sadly, you *can* attract women with this strategy. (I remember a roommate who was attracted more than 1 bar fly calling my husband of 11+ years “too boring and quiet”.)

However, the women in question will probably be clingy and nagging and unable to make any predictions whatsoever from previous patterns.

In order to get the perfection in female form that are the “gals” on the HBB, you will need to keep drinking and sleeping around to a bare minimum. Also, a large bank account is good. (But no house is required!) :)

Comment by sleepless_near_seattle
2008-12-17 17:29:58

“Guess just have to burn all my liquid cash on liquor then.”

Thanks for the reminder. I need some more Maker’s Mark!

Comment by hoz
2008-12-17 17:36:52

I asked a girl out on a date this decade, she turned me down and said “lets stay friends.”

If I wanted more friends I’d go the friendship society or the Loyal Order of Moose. Don’t you just wanna slap a girl that says, “Lets stay friends”? lol

Comment by cougar91
2008-12-17 17:58:05

>Don’t you just wanna slap a girl that says, “Lets stay friends”

Actually I just bury them “let’s be friend” type in my backyard like all of my previous EX-es.

I am gonna need a bigger backyard.

Comment by Blano
2008-12-17 18:05:12


On occasion I can keep ‘em interested for a week or so before I get those 3 magic words. That’s about it.

If I had a nickel every time I heard “let’s just be friends” I could repay half the TARP bailout.

Liquor is far less cruel.

Comment by jane
2008-12-18 03:41:58

Wait a sec - is there a Dog-given right for you ‘nice’ guys to get a schtupping from any female who catches your fancy? Didn’t think so. What’s ‘nice’, anyway?

‘Let’s be friends’ covers a lot of ground. I use it frequently to cover instances of indirect lechery hoisted by overweight middle aged married guys who intimate they stay with their wives for the sake of the dog. And ‘how nice it would be to get away for a few days’.

I claim a Constitutional right to refrain from engagement - even the casual line at the copier kind - with manipulative lechers. Actually, icy contempt is more my style, I have yet to carry this off with subtlety. At work, frankly, bland is good. Anything else is a catalyst for others’ drama.

Comment by CA renter
2008-12-18 06:20:05

You tell ‘em, jane! :)


No offense guys, but “let’s be friends” means that a woman actually likes you, just not in “that way.” Believe it or not, it’s a compliment because she is not outright dumping your a$$. ;)

Comment by Blano
2008-12-18 06:53:43

I’ll respectfully disagree, CA. :)

As hoz points out, if I just wanted another friend, I could just go to some bar and play darts with someone or get a puppy. It’s not really a compliment because what you’re actually saying is there’s something you DON’T like about us to even consider “that way.” Face it, “let’s be friends” is a brushoff.

And then more often than not you gals go chasing after someone who’s less attractive, less intelligent, less gentlemenly etc. etc. than us because they have that “certain something,” which is usually code for “Bad Boy.”

Comment by Blano
2008-12-17 17:09:45


Your wit and wisdom is an endless source of amusement for this ol’ boy. Always enjoyable.

I’m fixed too, BTW. :)

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Comment by Olympiagal
2008-12-17 18:41:48

‘I’m fixed too, BTW.’

Reallyyyyy?! * Spits out frog, looks contemplative. *
So, you’re not actively evil. Awesome!

Comment by ButImNotDeadYet
2008-12-17 17:04:23

Eddie Murphy’s character in “48 Hours” had a line that went something like:

“The generosity of women never ceases to amaze me”

Comment by Houston_Bug
2008-12-17 17:23:31

Lorraine Bobbitt’s sister….

Comment by Houston_Bug
2008-12-17 17:26:08

The bad news for him is that it is Lorraine Bobbitt’s sister….

Comment by DennisN
2008-12-17 19:38:56

Oy veh.

I was treated so badly by women that I stopped dating around 1985. The last time I was “with” a woman Jimmy Carter was in the White House.

The women I dated were abusive to me and promptly dumped me when they checked out the size of my bank account. Many dated me on the condition that I would keep it a secret so their friends wouldn’t find out and that they could keep looking for a rich sugar daddy.

Comment by salinasron
2008-12-17 14:03:39

Since I’m to lazy right now to research it, maybe someone can give me an answer. I just got a Xmas Card from a friend who stated that they moved all their money out of the stock market and are doing ok as they only lost the last 10yrs of profits. What % would they be down? I know that includes the era of the bust but I assume that things went well through that period (didn’t hear any complaints) or maybe it’s because now they are retired. Another stated that they just this past year (before summer) bought a condo in Palm Springs on the greens.

Comment by Muggy
2008-12-17 14:32:09

“I just got a Xmas Card from a friend who stated that they moved all their money out of the stock market”

Wait, you have friends that send holiday cards with their stock losses/gains on them?

Comment by Olympiagal
2008-12-17 15:28:35

‘Wait, you have friends that send holiday cards with their stock losses/gains on them?’

That interested me, as well. My friends send cards with hideous, illegible chicken-scratch type inscriptions scrawled all over them. Or else maybe chickens have my address; hard to tell, and irrelevant in any case, since I can’t read ‘em.
But if I COULD, I bet it would be about how they love bunnies, and how their boy/girlfriend and/or spouse is being a real jerk nowadays, and meditations upon if toast is better than muffins for breakfast.
You know, regular blather.

On the other hand, when IIIII write Christmas cards I only write about wise-type thingies.

Comment by Paul in Florida
2008-12-17 14:58:49

Hmm. Let’s see. We’ll write salinasron a Christmas Card. In it we’ll mention that (1) we’ve moved all our money out of the stock market, (2) we’ve lost 10 years of profits, (3) we’re doing OK.

Translation: your friends are not doing OK, and they wish you to know that they are no longer financially well-off and probably won’t be again anytime soon, and are trying to make do as best they can, so please don’t invite them to any expensive Las Vegas get-togethers or expect them to be around on your next charter fishing cruise.

Comment by Kim
2008-12-17 16:55:46

“I just got a Xmas Card from a friend who stated that they moved all their money out of the stock market”

Too bad the recipients would be more impressed had the senders wrote that on LAST year’s x-mas card.

Comment by wmbz
2008-12-17 14:09:59

Another sharp ‘money’ manager, Shemika appears to have spent her embezzled dough in smart fashion!

NYC currency firm manager admits embezzlement
NYC manager of foreign currency firm admits embezzling almost $2 million

* Wednesday December 17, 2008, 2:30 pm EST

NEW YORK (AP) — The manager of a foreign currency exchange’s New York City branch has pleaded guilty to stealing nearly $2 million from her employer.

Shemika Jackson pleaded guilty to first-degree grand larceny. She admitted Wednesday that she stole the money from Travelex Inc. between December 2006 and March 2008 by entering false computer data.

Manhattan Justice Gregory Carro promised Jackson, who’s 33, a 4-to-12-year prison sentence on Jan. 7. She is jailed without bail.

Travelex says it is the largest provider of currency exchange and cross-border payment services, with branches throughout the world.

Police said after Jackson’s arrest in March that she spent the money on cars, casinos and rock concerts, and threw herself a $15,000 birthday party.

Defense lawyer Melvin Greenwald refused to comment.

Comment by Blano
2008-12-17 17:00:59

Holy sh^t………these scammers are coming out of the woodwork!!!

Comment by rfw
2008-12-17 15:33:05

Any chance that Shemika is Drew Peterson’s next mystery bride?

Comment by Olympiagal
2008-12-17 15:46:18


Comment by IUnknown
2008-12-17 15:43:59

I think California is up $h*t creek. Now Calpers, the state pension plan, is bankrupt.

“Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. That’s because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed.”

Comment by Olympiagal
2008-12-17 15:59:38

And here’s an example of the wise-type thingies I write in my Christmas cards:

Christmas questionnaire #1:

“Should an Angel of the Lord appears to you on or around Christmas Day, announcing glad tiding of great joy, for verily a Son is born, you should quickly:

( ) Offer them your slippers, because it’s a cold jaunt betwixt here and Heaven, and look, they have bare feet. Angels always have bare feet, it’s like a rule for some stupid reason.
( ) Complain about over-population and the necessity for birth control, and also how you aren’t a shepherd, you’re a IT programmer.
( ) Scream shrilly. I mean, Jeeze!* This is a freakin’ serious business!
( ) Don’t worry about it. Verily, an angel ain’t going to appear to YOU, ya sinner. Probably Satan will make an appearance later, though. At this point He’s practically your best friend.

*Ooops, sorry. That was in poor taste, maybe?

Comment by Vermontergal
2008-12-17 16:32:54

Don’t forget this option:

( )Mention that you’ve lost 10 years worth of profits and have moved out of the stock market. Say that you are doing “okay” but would not mind receiving any “duplicate” presents that the Son might get.

Comment by Blue Skye
2008-12-17 17:30:00

I believe in putting out a fleece or some other test. My suggestion is to ask a trick question:

() Should I rent or buy?

() Did my Ex send you?

Comment by what-me-worry?
2008-12-17 19:42:11

Over-population wouldn’t be a problem if we all lived on a bigger planet.

Comment by SanFranciscoBayAreaGal
2008-12-17 20:09:44

You forgot to add

( ) All of the above

Comment by hoz
2008-12-17 16:01:20

Perhaps there are people from India that worry about deflation. I worry about currency collapse.

Comment by clue
2008-12-17 16:18:58

uh… if the dollar index continues on the current path…..Im not sure whats gonna happen. 87 on Yen….GO JAPANESE COWBOYS !!!

Comment by hoz
2008-12-17 17:45:27

“Comments from leading Japanese policymakers overnight confirmed that leading figures in the government and at the central bank are considering currency market intervention to suppress the surging Yen: Cabinet Secretary Kawamura noted that the BOJ should factor in recent moves in the domestic currency when setting monetary policy; meanwhile, Vice Finance Minister Naoyuki Shinohara reiterated again that action against further appreciation can be taken if forex price action is deemed “undesirable”. We have suggested as recently as this week that with limited fiscal and monetary options going forward, slowing the Yen’s ascent to boost the export sector is becoming an increasingly viable alternative. The Bank of Japan is set to announce monetary policy between today and tomorrow.”

By the time Japan decides to intervene the Yen will be 80. In the meantime the PRDCs are killing the Australian dollar, but the US dollar is so weak that it appears to be rallying.

Comment by clue
2008-12-17 18:45:52

kinda like the Ruble-y rally on dollar?, devalue and you cant keep up with the bucky plunge….

in my best Japanese Cowboy:
We must have a new poricy for the protection of exports. No more bad roans. Road the zeros with currency and send ‘em to America, damn the hericopters….and terr those idjits at Deustche Bank that fairing to forrow through with rong-time traditions of redeeming bonds at the eariest convienence is not going to be torerated by the Emporer, dont matter if he’s nekid.


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Comment by sleepless_near_seattle
2008-12-17 17:22:00

Me too. Well, actually I worry about moving what I do have before that happens. Seems prices on housing related prices aren’t falling fast enough to go that route beforehand.

Been racking my brain 24/7 about how to get that paid-off, cash-flowing, bought-it-in-the-70s investment property that I commented on a week ago.

If you know of anyone who wants to give me one, let me know. Heck, I’ll even pay the 1983 price (as per Fastie the PuddyTat), if they need some consideration for it!

Far’s I can tell, that’s the best place fer yer moolah these days.

Comment by Vermontergal
2008-12-17 17:36:02

Been racking my brain 24/7 about how to get that paid-off, cash-flowing, bought-it-in-the-70s investment property that I commented on a week ago.

I’ve wanted one of these for a while. They are hard to come by.

Comment by Olympiagal
2008-12-17 20:17:27

A brain? Or a property?

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Comment by Prime_Is_Contained
2008-12-17 17:43:56

Hoz, what are you doing about it, now that you can’t short treasuries anymore?

Comment by hoz
2008-12-17 18:19:48

Same position that I have had for a while

Long Yen
Long Tips
Long JGBs

Short Dollar
Short Euro
Short US Treasuries
Short the European stock markets.

Just scalping in and out on a daily basis.

In the US I am not short any stocks any longer, closed all a couple of weeks ago. I am long PCY - and UYG - and a couple of commodity funds incl USO.

I have 25% fully invested in the Japanese stock market, 5% in China, 5% in Brazil, 5% in the Middle East, 5% in Korea, 5% in Taiwan, 5% in South Africa, 3% in India, 2% in Vietnam. The rest is sitting on the sideline waiting for a place to invest.

I wish I was not invested in Vietnam, but since I can’t pull it out easily, I am in for the ride - not a whee.

Simple and not perfect. Easy to hedge, easy to get out of. Liquidity is the most important thing in this market environment.

Comment by clue
2008-12-17 21:08:37


Im on the hoz plan….

Hozzie Baby…your the biggest nut!

been reading here for almost 3 years…..

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Comment by cactus
2008-12-17 19:16:22

Why can’t one short treasuries anymore ? TBT UltraShort Lehman 20+ Trsy ProShares (TBT)

And peter shilling thinks the dollar is going up

“At the end of last year, we forecast that the dollar would end its seven-year slump and rally later in the year against most currencies, but not the yen. And it did, starting in July. It was obvious a year ago that far too many were negative on the greenback. As with commodities, many institutional and individual investors considered foreign currencies as an asset class, worthy of a certain percentage of their portfolio.

Much more importantly, we were forecasting a major global recession and reasoned that, as usual in times of trouble, the dollar would be the global safe haven. We didn’t expect the U.S. economy to improve but that the rest of the world would join America in the tank. The greenback would be the best of a universally bad lot. We expect the dollar to keep rising for the next 5 to 7 years, continuing the long- run pattern.”

I personally think stocks will go up for at least a few months as the interest rate cuts and 700B plus go through the financal markets, then it will go down again lower than S&P 800

I own boring CD’s and money market, GNMA and bond funds and a few Gold stocks KGC.

Comment by clue
2008-12-17 19:54:40

The artists in the colony made sure all points of view were heard….

This is town, where Oblio was born was banished to the Pointless Forrest…

Me and my arrow
Taking the high road
Wherever we go, everyone knows
It’s me and my arrow

And in the morning when I wake up
She may be gone, I don’t know
And if we make up just to break up
I’ll carry on, oh yes I will….


I rarely have a point, but whatdya wanna bet I am not a blue meeny? Here’s how its gonna go, anythings fair….get the idea?

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Comment by Prime_Is_Contained
2008-12-17 20:24:15

My understanding is that many of the “short” ETFs don’t actually short the underlying asset; instead, they enter into swaps with one of the major IBs. In other words, you may not be short treasuries, but instead long counterparty-risk. :-)

I suspect that equities will not hold up for as long as a few months based on the cuts; it seems like each infusion of “confidence” has had a shorter and shorter effective duration. I could well be wrong in that, though.

Boring is good right now! I’m essentially all in cash/Treasury MM, and short a small percentage in indices and financials again.

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Comment by what-me-worry?
2008-12-17 19:24:49

American automobile plants in Mexico manufactured 5% more vehicles in November 2008 than in November 2007.

“[General Motors] and competitors such as Ford Motor Co. shifted more manufacturing to Mexico this year to capitalize on wages less than an eighth of those in the U.S. and factories that make fuel-efficient models. Through November, Mexican plants turned out 5 percent more vehicles than a year earlier, versus an estimated decline of 30 percent in the U.S.”

Comment by cactus
2008-12-17 19:28:20

James Grant

Forced selling may be distorting prices for secured bank loans. Senior bank loans that are higher up in the capital structure of a bank, meaning owners of the bonds would be paid before other debtors in the event of a default, are trading at lower levels than junior portions of the structure, he said. That means safer loans are cheaper than their riskier counterparts.

“All these anomalies are part and parcel of the liquidation in the credit market,” Grant said. “That’s why we’re bullish on credit, because so many things simply don’t add up.”

Comment by Nathan
2008-12-17 20:13:30

New Report Details How American Families Rely on Credit Card Debt To Make Ends Meet
Americans’ credit card debt grew by 315 percent–TO $876 Billion–Since 1989; Depleting Home Equity To Cope

NEW YORK, NEW YORK - November 7 - American families are using credit cards to bridge the gaps created by stagnant wages and higher costs of living and balances have grown dramatically since 1989, according to a new report published today by Demos. Borrowing to Make Ends Meet: the Rapid Growth of Credit Card Debt in America documents the disturbing trends in sky-rocketing credit card debt, and also provides detailed data based on age, race and income demographics. The report discusses how these trends relate to the housing market crisis and the increase in predatory and sub-prime lending in the financial services sector.

Since “income volatility”, or the rate of fluctuation in family incomes, has almost doubled in the last two decades while wages have remained flat, families have turned to credit cards as a safety net in tough financial times. As of 2004, when the most recent Survey of Consumer Finances was conducted by the Federal Reserve, three out of every four American households had a credit card. The average debt among households with balances is $5,219. In total, American cardholders owe a staggering $876 billion on their credit cards.

“There’s a common misperception that families with credit card debt live beyond their means,” said report author and Demos senior policy analyst Jose Garcia, “but the findings presented here show that credit card debt is a serious and quickly growing problem for millions of families who don’t have enough income to cover the basic costs of living.”

Borrowing to Make Ends Meet shows how credit cards aggravate the financial distress many households now feel–as healthcare, education and fuel costs rise and mortgage payments reset upward–by trapping cardholders in a cycle of debt with unnecessarily punitive fees and interest rates. Exorbitant charges were not always the industry standard; deregulation in the 80’s and 90’s enabled companies to raise rates far in excess of the risk factor of unsecured debt. Between 2004 and 2005, credit card issuers took in $8 billion in fees alone.

To cope with the rising pressure of credit card debt, and after exhausting other income and assets to meet unexpected costs, America’s families have turned to the equity of their homes. Over the last six years homeowners have cashed out a $1.2 trillion (2006 dollars) in equity, further endangering their financial well-being.

Faced with limited or non-existent assets, rising costs, sluggish wages, and increasing credit card debt, many Americans live on the brink of financial ruin. Borrowing to Make Ends Meet documents this reality by providing data on credit card indebtedness by household income, race/ethnicity, and age.

KEY FINDINGS (all figures in 2004 dollars, unless otherwise noted):
* Between 1989 and 2006, Americans’ overall credit card debt grew by 315 percent from $211 billion to $876 billion (2006 dollars).
* From 2001 to 2006, homeowners cashed out $1.2 trillion (2006 dollars) in home equity, often in an effort to cope with mounting credit card debt and to cover basic living expenses.
* Nearly six out of 10 households with credit cards revolved their balances in 2004. The average amount of credit card debt among those households reached an all-time high of $5,219, an increase of 89 percent from $2,768 in 1989.
* From 1989 to 2004, the percentage of cardholders incurring fees due to late payments of 60 days or more increased from 4.8 percent to 8.0 percent.
* In 2004, the average credit card-indebted family allocated 21 percent of its income to servicing monthly debt compared to the 13 percent dedicated to debt payments among all households.
* In 2004, 46 percent of very low-income (under $9,999) credit card-indebted households spent more than 40 percent of their income to pay off debt.
* From 1989 to 2004, credit card debt among very low-income households quadrupled from an average of $622 in 1989 to $2,750 in 2004.
* While white households carry more credit card debt, African Americans and Latinos have a higher percentage of credit card-indebted households. In 2004, of those with credit cards, 84 percent of African-American households and 79 percent of Latino households carried credit card debt compared with 54 percent of white households.
* Over 90 percent of African-American families earning between $10,000 and $24,999 had credit card debt.
* Since 1989, Americans over 65 have experienced the greatest increase in the amount of credit card debt carried. The average balance for this age group increased 194 percent from $1,669 in 1989 to $4,906 in 2004.

Comment by Happy2bHeard
2008-12-18 11:07:55

I wonder how much of that credit card debt is due to interest and fees.

Comment by WhatOnceWas
2008-12-17 20:27:32

Calpers To Report Losses of 103% on its Residential Investments
CalPERS, the California Public Employees’ Retirement System announced a new milestone in pension plan incompetence today by admitting losses.
Biggest loss since 1932. Lost 25% since july 08′. Will have to make up shortfalls by raising taxes,and dues… ~excellent.

Comment by clue
2008-12-17 20:40:30

Comment by wmbz
2008-12-17 06:41:32
Banks Show No Signs of Easing Credit in Step With Fed’s Rates …

Comment by cactus
2008-12-17 19:28:20
James Grant

Forced selling may be distorting prices for secured bank loans.

Comment by Hwy50ina49Dodge
Can I get a 2nd?

Comment by TCM_guy
2008-12-17 13:40:17
Debt is an equal opportunity enslaver.

Comment by wmbz
2008-12-17 07:20:53
Gotta love the ‘bailout’!

Here’s how it reads:
Banks Show No Signs of Easing Credit in Step With Fed’s Rates, and Forced selling may be distorting prices for secured bank loans. Can I get a 2nd (mortgage).

(I know) Debt is an equal opportunity enslaver. (but I) Gotta love the ‘bailout’!

Comment by Hwy50ina49Dodge
2008-12-18 06:03:40


Comment by clue
2008-12-17 20:41:34

you guys are lucky Im on heavy moderation…

dont hate me ben….

Comment by clue
2008-12-17 21:04:09

thanks ben….

its like therapy for me and my arrow….taking the high road…

Wherever we go….everyone knows its me and my arrow.

Comment by FP
2008-12-17 21:44:16

Congress passes this bailout TARP Bill and it is misused.

Why is it that the Governemt sits there and talk and talk and talk about how wrong it is. Why not turn off the spigot. Fire the CEO’s misusing the funds.

We sit here and hear this stuff and we can’t do anything about it. I’m one person and if I’m going to do something about it, I’m going to learn every freakin loophole to reduce my taxes to ZERO.

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