Bits Bucket For December 20, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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I’m trying to post this link again… didn’t go through last time. This goes to a cartoon about the housing bubble and the conflicting dreams/expectations of different generations.
http://www.braindrama.com/?p=1
I dunno…do you think the younger generation really understands that house prices can and should come way down? The ones I talk to seem to take high prices as a given - still - and want to get in before they go up more. When I tell them prices will come down they think I’m full of it.
It’s as if they’d rather find some sleazy way of getting in so they can reap those great profits too.
I have had the opposite experiences. Young guys/gals would find out I had this blog in 2005 and 2006, and approach me quietly. Sometimes they were angry or felt hopeless. Some were trying to ‘get on the ladder’, but it was impossible. The only time they were a little resistant to hear about the housing bubble was when they reflected on their parents housing situation, or the like. Of course, it’s all such a disaster at this point it doesn’t matter much.
Welcome back Mr. Ben, is your back sore from shoveling that snow? Maybe there are some hungry real estate agents that you can hire…for cheap!
Geez, I’m still without an once of mercy…five days before xmas. It’s Made-off & OJ, & Marvin the Martian’s fault…need to watch Lassie or Andy Griffith or listen to Bob Marley or go throw a snowball at Olygal!
For you, ya snowball thrower:
Christmas Questionnaire:
“Making anatomically correct snowpersons is funny.”
( ) True. That is indeed very funny, only watch it with the carrot. There’s such a thing as TOO much fun, you know.
( ) False. That is untraditional and inappropriate. Another thing that is bad and wrong is when the snow builder uses bituminous coal, instead of anthracite, and when the pipe is placed at the wrong angle. Details, people, details!
( ) Absolutely. Where else would we get little snowkids? Think about the future, man.
( ) Don’t forget to use grass and small twigs to indicate body hair and facial stubble.
( ) My neighbors are kinda grouchy people. They should relax, and drink more beer, like me.
I hope you get it right, or you risk Santa’s wrath, because he loves snowpeople.
Cartoon: rabbit with electric hair-dryer approaches snowman. Caption: “OK, OK, you can have my carrot!”
Hi Ben! Bye, Ben!
Bye bye bye bye everyone, I’m off to Utarrr! I won’t be able to post for a few days, until I get done playing in Baker City and get to my mommy’s, and this will be a difficult few days, without my HBB fix. I’ll probably bite my nails or maybe even kill someone, but I’ll make sure they deserve it first, so don’t worry there.
Sleepless, if you read this, when I get to Portland I’m going to honk loudly and hang my head out the window screaming ‘Sleeplessssss! SleepLESSSSS!’ Like that. So run out and wave when you hear me, okay? Okay!
Bye everyone, bye, and I hope you all have wonderful, bright, cozy and Merry Christmases!
For the sake of your traveling companion, please avoid Donner Pass.
Safe travels Oly-G. By the time you get to Portland, they will have shut the city down.
I mean we already have 1.5″ on the ground here. Next, a swarm of locusts is predicted. I’m sure someone is about to dial FEMA. This place is hilarious when it snows.
Merry Christmas, Olygal, and have fun in Utah.
Try to be kind to the Asians, though.
“The only time they were a little resistant to hear about the housing bubble was when they reflected on their parents housing situation, or the like.”
Come to think of it, much of the reaction I get here is colored by local politics: They insist prices must and will stay high because of the constant agitating for Affordable Housing initiatives. If prices actually do fall then it shows those measures as unnecessary. Since it takes so long for people to catch on anyway (because all RE is local!), delaying acknowledgment of the true situation may give politicians just enough time to get a bond passed. So the various agencies and spokespeople play dumb.
When I was a teenager I experienced, first-hand, the consequences of my parents’ basing decisions on wishful thinking rather than clear-eyed, hard-headed reality. Believe me, that was an education that has stayed with me for life. I suspect a lot of young kids who are feeling the effects of their parents’ foolishness, will ultimately benefit by applying the hard-won wisdom that comes from suffering the consequences of willful self-delusion - your own or others - and avoiding the mistakes their elders made.
I dunno…do you think the younger generation really understands that house prices can and should come way down?
This particular lack of understanding seems to bridge generations, geographic locales, and socioeconomic classes.
But all of the higher-priced areas of the US (and some of the less expensive ones) have seen regional busts since 1970. Are people’s memories that bad? Or did people just believe that “this time it’s different”?
Bubbles are always based on the belief that “this time it’s different.”
Damn skippy. This ain’t the first society to think it’s technology and “education” has made it invincible. Heck, even at this stage they still think they have “control”.
Spot on ET. Greed is the human condition that is the genesis of all manias. Check out Friday’s Deskclearing post. There is a USA Today article reporting close-to retirement and newly retired people who bet all on RE and lost. What was astounding is that these retired people seem to think that the return of RE good times is right around the corner.
I do agree that NARscum did a stellar job at distorting housing price history for the younger folk.
“…these retired people seem to think that the return of RE good times is right around the corner.”
I’ve an uncle in that very situation. It’s sad, perhaps sadder than watching seniors pump change into slot machines - and getting a crummy baseball hat from the casino in appreciation.
Another case of: “in the long run” v. “mortality”
A young couple moved in next to me three months or so ago. They’re not married, just “playing house”.
Yesterday I was shoveling the 8″ of snow in my driveway, and just as I’m about to finish the young lady next door comes out and starts shoveling. So, being neighborly (and not seeing her boyfriend’s truck around anywhere) I go over and offer to help her dig out. I take the plowed-in end of the driveway, and we strike up a conversation (I’ve only spoken with her a couple times previously).
So, she starts telling me all the things they’re doing to the inside of their house: new flooring in kitchen and dining room, replacing the brick facade on the fireplace with tile. New tile in the bathroom, etc . And it occurs to me that they’re doing the 2008 version of “Flip that house”.
I don’t think they got the memo yet…
The young lady might soon be knocking at your door with an urgent need to hustle up some instant cash.
I don’t think it matters if they undestand or not. Young folks don’t have the FICO or the down payment to buy anything anway. By that time, they will have internalized Depression Mode thinking so much that they’ll be afraid to buy a pair of shoes.
And Ben, the young people are the only ones feeling helpless. We mid-folks are not happy either. I will probably get on the ladder 7-8 years later than I wanted to. Bummer.
Dang, I mean the young ones aren’t the only ones feeling helpless.
Who needs to be “on the [homeownership] ladder” if we’re not having house inflation? You ARE on a ladder. By being a tenant, you are saving up money for your retirement.
Well said, az lender.
My 21 YO daughter advise her FIL against buying a foreclosure in Surprise AZ. He did anyway, of course. She gets it though, and is hunkered down wtih the downpayment in the bank. It all depends on the information kids get, and how superficially they accept the media hype.
I had the opposite experience. Advised my kids against buying and had set the example by selling and renting. They all bought anyway. Go figure.
That certainly ties a lot of points together. That explains this whole “drive the rates down, but try to support the prices” approach that the pols have latched onto. They think they are clever enough to get the retiree his windfall and also get the young ‘uns into a house at the same time.
The pols want to please everyone, but in the end they will likely please no one.
It’s all about saving the banks. IMO. Keep the FB hopes alive and you’ll keep the banks alive. If the FBs walk then the banks no longer get monthly payments but instead are stuck with an underwater house.
This eventually screws the taxpayers, the bank’s ultimate safety net.
Yes, it’s all about saving the banks, but like any good ponzi scheme you also have to “save” the most recent crop of recruits into the ponzi scheme, lest they get discouraged and decide not to play along anymore.
Because, to a large degree, it’s the most recent crop of recruits who do the best job of recruiting the upcoming crop of recruits. It’s Billy and Jane, who have a big brother/sister or know a guy or gal who made a big killing on a house — those are the ones who are motivated to wade into the pool and keep the whole scheme going. That’s what we’re missing right now…
“That’s what we’re missing right now…”
Ah, and that’s why the NAR is the taxpayer’s friend. It is the NAR who is spending their own money (bless them) for ads promoting the idea that real estate is the road to riches.
Just an update, funny how fast things can change in a few days.
Bottom line I have lost my job, my call center decided that they didn’t need to pay a big salary to the trainer and moved someone else into the position to save money.
Why pay me 50,000 a year when they can pay someone else much less.
My offer on the house is now withdrawn.
Real nice, get fired a week before Xmas.
Last week I said my job was secure and now today I have no job.
Sorry to hear that skb…Hope you find something soon…
Wow, sorry to hear that skb. That really is crappy. I missed your story about making an offer on a house, but I suppose it’s good that you can withdraw it and aren’t saddled with the payments.
Unfortunately our club doesn’t have a secret handshake, otherwise I’d be happy to teach it to you
(well, maybe they do, but no one showed *me*)
I’m with you guys on the handshake. I’ve been off for three months now, and the sucky part is I have NO unemployment because the State of Wisconsin bureaucrats are a bunch of douch-bags.
I hope the people who run Wisconsin’s DWD all get the chance to experience what I’ve been experiencing the last few months…
skb,
How else will the money grubbing CEO’s pay themselves gargantuan bonuses for poor performance?
Why at the expense of your hard work and stellar performance of course. Isn’t corporatism great?
Poor people job requirements: It’s how much you know that’s important.
Rich people job requirements: It’s who you know that’s important.
Who you know is actually twice as important for poor people. It’s one of the main reasons job search professionals emphasize “networking”. Heard of it?
skb:
use a job search professional and network yourself a job. It’s a no brainer according to dude.
Boy, dude, my husband must be really stupid, then, because he’s used job search professionals and networked for years, literally, and except for some temp work, he’s had no luck. It’s not that easy anymore, dude….or should I say, dud.
I never said to use a job search professional. Networking is how many, many, many jobs are found. I stand by my statement.
Don’t network if you like. It won’t make a difference to me.
Oh, and about your husband, you would know better than I.
No kidding,
Our CEO is from India and he has all of his people making sure they are well taken care of.
The sad thing is the gal in my office who was recruiting is going to have to step in and do my job, she HATES training.
When I was hired 8 months ago, I asked her why she didn’t apply for this position, she said she would hate to be stuck in a classroom everyday and she said she would go crazy.
So now her life is also going to be changed because she has no choice, she filled in for training in the past and now the company just expects her to do the job. She will not be getting a raise I am sure, they will tell her that she doesn’t have the years of experience or the certifications that I had.
I feel bad for her, yet….at least she still is employed.
Wow, bummer. Sorry to hear that. But thankfully you didn’t buy the house yet. That would have made a layoff a much different kind of monster, indeed.
I’m thinking I’ll never buy a house unless it has enough extra rooms so that I can pay the mortgage from inviting in renters, if necessary. But my other desire is to own a very small, efficient house, so I am not sure how these two priorities fit together.
Hey SKB, as I posted before, I bought a house that closed on Friday before Thanksgiving…on Wednesday, the day before our givings of Thanks…I was “laid-off”. My dad had to pick me up that day., when I told him what had happened…he was quite for a few seconds, then said: (with a reassuring smile of wisdom)…”Well, you had a job before this one.”
Sure enough just before x-mas, an old supervisor working at another company… heard about the lay-offs and said for me to enjoy the next few weeks of the holiday and report to work at his company after “New Years”
Hoping for the best for you skb!
Good old Dad! Still thinking & remembering about him…& Mom
Here’s a revolutionary concept: don’t buy unless the total monthly cost is less than the rent for the same house. That way, if you run into financial difficulties, you can move into something cheaper and just rent out the house.
Excuse me yogurt, perhaps you should learn to not to think you have things all figured out so fast before you are educated on the facts.
The fact is the payment would have been less than our rent. .
We were only going to have a 108,000 mortgage on a 275,000 home.
My husband’s salary was more than enough to afford this home.
My husband had stressed to me on more than one occasion that he really wants a promotion the problem is he will not get it here in West Palm. I have always fought this idea of moving again so soon after we just got here, as we have moved a lot for my husbands career. I thought this would be where we finally put roots down but as it appears he is not going to get promoted at his current job from this location.
We may end up living in Orlando and leave West Palm Beach. If we had bought that home we would really be stuck here.
I never wanted to leave because of my job. Now that it is gone I have no reason to stay here. West Palm Beach is lovely but it is not the big city life that I left behind in Montreal. I like it but
I think Orlando would have more opportunities for my son and for a new career for me.
This is going to sound crazy but I am going to go for my realtors license. I think when the bottom finally does get here homes will start selling again.
My father supported my family growing up as a realtor and I have always wanted to do the same. I have never really had the chance to do that until now.
Thank-you to everyone that offered your support. I had decided that I am better off not working in the collections industry anymore. I have been training the FDCPA and soft skills so long and to say it out loud.
I HATE THE COLLECTION INDUSTRY. Regardless of how I could spin it and try to say we “help people get out of a situation that they don’t want to be in”, that is just pure lip service to make any new trainee feel better about doing that particular job.
I want to move on and do something else with my life.
Thank you again.
The best thing about losing one’s job is gaining the opportunity to do something more satisfying. It is very difficult to reach out to grab something new when your fist is already clenched down holding something else that you no longer want but are afraid to let go of.
Very true, Bungalowball.
=============
skb,
Sorry to hear about your job loss. This is exactly what many of us have said about the outcome of the credit bubble…
Best to be very flexible and ready to move at a moment’s notice.
I responded to your post the other day (we’re the ones with kids who also want to “settle down”), and this need for flexibility/planning for eventual job losses, etc. is why we are still renting…and will continue to rent until we see a good reason to believe our economy has been cleared of all the distortions created by the credit bubble.
Best of luck to you in your relocation and job search!
Trainers will be in big demand now that everybody has to relearn a brand new trade.
Sorry skb.
“”Last week I said my job was secure and now today I have no job.”"
Sorry to hear that. Hope you are able to find another soon.
FWIW I think the above will happen quite a bit particularly after the first of the year. That is, people thinking their job is secure when it really isn’t.
Even my friend who works at the Fed (!!!) is worried about the possibility of their “outsourcing” info tech services.
I would not be surprised if there are a good deal of employers out there who plan to do layoffs but were waiting until the holiday season ended.
That sucks. Sorry to hear about that. Stay positive and I hope you find a new job soon!
I’m very very sorry to hear that, skb. I’ve been there, so I understand at least a bit of what you are feeling. It is a common platitude to say don’t let it get to you, but, honestly, it doesn’t work. It will get to you a bit. Start the process of claiming unemployment first thing Monday. The process takes a while, but you will be very glad for the cash come the middle of January. Find out from your county if there are any rules that let you break a lease (in case you need to move for a new job) without penalties when you are unemployed. The phone calls hurt outrageously. Do it anyway. Then take some time to enjoy a sunset. Good luck. We are thinking about you.
Ditto the others. Sorry to hear about that. I know it doesn’t help in your situation, but you’re probably in good company here regarding that, present company included. Hang in there.
Sorry to hear about it skb. In my 30-plus years of experience, I found that training was always one of the first budget areas to get cut. As you look for something else, I suggest you de-emphasize the training aspect of your career to date. That’s especially true in this environment. Instead, emphasize what can you do that would directly contribute to a company’s bottom line.
Bill - great point, IMO.
Sorry about your job loss, skb. I think there was providence in your not having closed on the house first.
skb,
I hope you can get over your anger at your old employer and take it as a positive, so that you can move on. I am glad for your sake that you are among the conservative and have not lived on the bloody edge financially. How fortunate that you can escape the contract on the house for now.
As I have told myself under similar circumstances: You do have a job, right now it is to find employment. Good luck to you and I hope you can relax over the holidays and gather your strength for the project ahead.
Skye
“My offer on the house is now withdrawn.”
Sorry to hear you lost your job skb, and hope you find another good one soon. However, this may have been a blessing in disguise…just think if you had closed on the house before losing job. Assuming you had a 20% downpayment, thank God you still have that to fall back on. And if you’re somewhat mobile, you can move to wherever job opportunities arise in this country/planet, subject to your personal situation and limitations. Good luck and best wishes.
Other HBBers can learn from this to wait until at least 2012+ before committing your hard earned money in these uncertain times, subject to your own personal situation and need to have a possibly permanent (very important word to keep in mind) roof over your head.
Anyone out there interested in forming a company to buy up distressed mortgage debt? We’ve got a client who I’m going to try to work with to set up a sister company that I want to invest in on the ground floor to buy up toxic debt with recourse (REFIs - not purchase money debt) from walkaways with educations/current and future employment prospects and pursue these GFs into 5 year debt servitude.
OCsandrenter/PortlandHomeDebtorLandlord
High, high risk of the government retroactively modifying the loans to be non-recourse. Be careful where you put your money. Also, having an education is no guarantee of employability. Just an FYI.
Polly - I agree. If I understand the terms correctly, the government yesterday illustrated its willingness to abrogate private contracts, re putting itself in first position with the new lending (GM and Chrysler).
Here is a good tangent article by J.R. Nyquist:
http://www.financialsense.com/stormwatch/geo/pastanalysis/2008/1219.html
“Who is going to loan money to a government determined to inflate?” It just gets worser and worser.
I ran this idea about “who is going to loan” by a friend of mine and got a surprising and interesting point of view in reply:
“…anybody who has already bought a few trillion dollars of our debt. If they don’t continue to buy it and artificially support the demand (and hence the price) for our worthless IOUs, they will go down with us if our currency plummets. In a irony of almost Biblical proportions, the Chinese and the Arabs have to buy our debt at zero percent interest as a high national priority, while their own people grow impoverished as oil prices and exports plummet.”
skb, am so sorry to hear the news. Unfortunately, I too think there will be a lot more stories like this. At least you have some savings so you are better off than at least 50% of the recently unemployed, but that’s not much comfort when you thought that money would be put to a better use. We will be thinking about and sending positive energy your way that you find a job you really love - not in collections!
“Other HBBers can learn from this to wait until at least 2012+ before committing your hard earned money in these uncertain times”
A good point for all of us. This is happening harder and faster than I (and probably others) thought which may mean much different results than anticipated.
RE: Last week I said my job was secure and now today I have no job.
Plenty of others will soon be joining you.
If it took a year for the bureaucratic bean counters to acknowledge a recession, think what it will take to say the “D” word.
People are now really goin’ to understand exactly the type of consumption driven “Foo-Foo” Economy the dolts in Washington have engineered for us over the last 25 years.
Once the anoiting of the coming of second Messiah is over, and the clowns who elected him find out this debacle isn’t gonna be solved with the swipe of a magic wand, the riots will start.
The banking fraudsters and car guys got their bail-out…so what’s the government done for you today?
So…get to the gym and start lifting weights. Muscle up for the coming hard days.
Best thing for your mind and morale given the situation.
I’m sorry about your job loss skb. This happened to me in early 2002, but I knew it was coming. I was working in Phoenix back then and found another job - 2,300 miles away. I packed my pickup truck with a duffel bag, my laptop, and my suitcase and made it to New Jersey in 3 days, but had a 3 week downtime.
I’ve been living this way (as if I will be losing my job anytime) since the Fall of 2000. This scare was the reason I bought savings bonds, precious metals, and municipal bonds mostly outside my retirement plans.
I’m sorry to hear about it skb. You have a lot of people on this board puling for you and giving great advice.
Hey skb, could you shoot me a note off-line… I’ve been thinking about setting up an independent tech-support website/call center and would like to chew over a few ideas. My e-mail is ricercare2001 at yahoo dot com.
HOPE YOU SEE THIS, SKB!!!
Opportunity knocks???
Now that’s networking………………………
I was laid of on Christmas Eve a few years back. I told the VP who came to me with the news it is christmas eve and that he had real class. He was like yeah - classy dude eh?
I have been out of work myself for a while now as a software engineer here in San Diego, although I confess I have not looked all that hard because I had a bit of side work taking the sting out of it. My experience in tough markets is you can find work, but it takes a lot more effort and time to do so.
I think we’ll be seeing a lot more of these individual downsizings. Compared to the sweeping layoffs on the news, this goes under the radar. And it does happen before Christmas because then they can take you off the books, go home for the holidays, and start the next year with a leaner and meaner company.
The really bad part is when they tell you your job is secure when it’s not.
Unless you work for the federal government, your job is NOT secure.
The good news is that my husband does work for the Federal Gov.
CBP
We can make it on his salary, it was so much nicer with the extra 50,000 though, I am not going to say that will not be noticed.
I wonder if some/any of the layoffs in early December are an attempt by management to give the employee the word before the employee spends a lot on holiday gifts. Lesser of the evils might be a pink slip on the 10th and pay through the 30th. Not that it doesn’t suck any way you look at it.
That was I always assumed. It makes sense to know beforehand, but still people tend to go all Tiny-Tim about it.
That really scks. Losing a job is always terrible, but a week before Xmas is beyond terrible. Good luck to you. Hopefully the recession is nearly over, now that it has been officially acknowledged by the NBER to have started a year ago.
Professor-
When you said “hopefully the recession is nearly over”, did you honestly believe the end could be near? I feel like things are just warming up. Unemployment just hit 10% in my county, and it usually peaks in spring. It jumped more than 1.5% in a month. I wonder if we’ll hit 15% next year. It sounds horrific, but from what I’m seeing, plausible. This time last year it was under 6%, if I’m not mistaken. I’d love to think the worst is behind us, but I just don’t see how that could be.
I agree with PB, the recession must surely be almost over.
The depression is just getting started though…
I was just trying to be upbeat. Losing one’s job during a recession really sucks (been there / done that), but there is eventually a recovery and, if one keeps the faith and keeps trying, another opportunity is likely to knock.
Agreed.
If you consider a career change, consider Audiology or healthcare. I can’t find an audiologist for the life of me. They’re all taken. I have to wait for the graduating class in May. Salary generally is around 50,000 plus all the bonuses from selling hearing aides. 2 year degree after college. Just a random thought. Job security for life.
Ditto. What I find in greatest shortage is audiologists who are not tied to just one or two brands. There is a very wide variety of types and styles, just as there is type and degree of hearing loss. The only person I’ve run into who handles a wide range of brands is booked all the time. More boomers will keep demand high for a long time.
An audiologist yourself?
No, but I use a hearing aid and it crapped out. Been trying to figure out who to see about it.
Ravi - forgot to mention - my mother in law has an audiologist who makes house calls on old people and handles 10-12 different brands. I sat in on one such house call and asked her a lot of questions. After she has tested someone, she makes three recommendations, at three different price points. Unfortunately, a decent hearing aid is very expensive - but I suppose no more so than a lot of dental work.
ravi: why are you hiring an audiologist? Are you an ENT?
I think that is the title for people who fit and recommend hearing aids and know what they’re doing. I got my last one through an Orlando hospital’s audiology department and liked it well enough, but they handled only one or two brands as I recall.
Yes, I am.
That is something to keep in mind. I am going to actually mention this to my young 23 year old son. He wants something in the medical field.
My wife is a family practice doc and she makes less than many nurses and nurse anesthetists. ICU, cardiac nursing and CRNA’s are in high demand and pay very well. Make more than many primary care docs.
yes, that is the big question about buying a house today…how secure is your job? with unemployment going to 10% soon there will be alot of people unemployed and many more houses lost. I just hope it does not become a great depression type event…and i’m not so sure it wont be before it is over. that is why i will only buy if i can do an all cash deal or just rent. i figure if i become unemployed, i can atleast move in with someone for cheaper rent or stay with family awhile…so renting has a good side during a declining economy! it would really suck to buy a house and then get laid off.good luck to you finding work!
I agree with your logic.
My problem is that my wife thinks that since I’ve always provided well for the family that I always will be able to do so.
I’ll only be content with a cash purchase at this point.
Hey SKB, sorry to hear about your job loss. I help people here in Cali at the local workforce center with their resumes. If you’d like a second pair of eyes on your resume let me know. I will check the board later and leave my email if you want.
A very good idea.
I have a nephew who is a recent grad in Chemistry. He has had a lot of trouble finding work.
I told him I’d like to take a look at his resume and when he sent it I found that his work experience section was strictly chronologically listed. He had McDonalds and school custodian listed first and buried futher down his work as a laboratory manager for one of his professors.
Fresh eyes can be a great help, especially if they are eyes of someone who hires in your field.
+1 on the fresh eyes.
Also, recommended is having someone “outside” your profession look at your resume. If they can’t understand it, you need to do a rewrite.
Bad call FPSS, see below. I apparently have no idea what I’m talking about and have been renamed dud.
I doubt it on the bad call.
I have “helped” more resumes than I can care to think about, and independent of whether I had a clue or not, my forcing the resume writer to explain in simple terms made the resume better.
My older son also a Chemistry graduate. Same deal. Had a real tough time finding work. He joined the Marines. He finds it fulfilling, he is challenged, and motivated as well. Not for everybody - getting up at ?4? ?5? or something like that every day for a five mile run before putting in a fairly challenging day will knock the starch out of you, but fast. His chem degree has paid real dividends, since he is a good egg otherwise. It has landed him good assignments in the short term. He’ll be going to Okinawa for his first “real” job after eight months of training. If you’re going to be associated with naval operations, I see Oki as the mother ship. Sort of like being assigned to HQ USA vs. to a one person office in Manteca, in a manner of speaking, on the private sector side.
Of course, what do I know. I’m no military scholar, but this is just my two cents.
Yes. I am grateful that the Federal government has a niche for my open, sunny, hard working son. He has a job in which he can feel accomplished, learn stuff - and most importantly for me, not be thrown off the bus. Because he will be spared that experience, he will get to retain his straight up nature, and will mature into a frankly better human being than his mother.
His mother is a veteran paranoid, with guarded expression, extreme reserve, maniacal attention to detail, a doyenne of the intangibles, a connoisseur of the unspoken quid pro quos, a sniffer of the undercurrents of power, whose stock in trade is prodigious output fueled by the understanding that the wolf is always at the door.
That is very kind of you, I would appreciate the help!
That would be great lostAngels.
Thank you
That stinks, skb. Sorry to hear about your being shown the door. Been there, done that myself.
In addition to joining the gym and throwing some weights around (a very good suggestion, by the way), you might consider the following:
1. Take a week off to form and cement a new schedule for yourself.
2. Get a part time job (also on a fixed schedule) that is simple yet occupies some of your time. Me? I delivered pizzas for 2-3 months. You need things to occupy your time and mind and get out of wherever you are living.
3. Consider full-time jobs outside your expertise. I’ve done this twice (by choice I should add) and it’s turned out quite well both times. Our economy is in constant churn and will be from now on - don’t limit your opportunities by trying to force a square peg into a round hole. Maybe a pizza delivery job will lead to a management job - or another job as a trainer.
4. Regarding #3, ALWAYS remember that most companies will let your create your own post and set of responsibilities, provided that you are a problem solver and profit maker. Pursue the COMPANIES you want to work for, land a job with them - and only then start nosing around for the correct fit. Remember that many head honchos are too buried with ongoing management concerns to spot all the holes that exist within operations.
Good luck. We’ll be rooting for you. Ditto drumminj and hd74.
So sorry, SKB. I am hoping you find something else real soon. I also am glad that you didn’t get that house. And, yes, it sucks to be fired right before Christmas.
A friend of mine works as a fraud investigator for a major credit card company. On Friday he found out that his job is being outsourced to Mumbai, India. He voted for McSame, even though the Republicans, who have become a wholly owned subsidiary of Wall Street, are falling over themselves to export American jobs overseas in the name of “shareholder value.” Of course, the Messiah will follow the same policies, because he answers to the financial oligarchs like George Soros who put him into power, not the naive dupes that voted for “change.” Look at his list of major donors and see who he’s beholden to.
There’s going to be a very bitter electorate next time around, and it’s just possible they’ll be ready to vote for REAL change rather than a sorry rehash of the Clinton Administration.
skb..you’ve got a lot of good advice here. Good luck on finding something new.
Oh DANG, skb.
Hang in there, okay? You’re not alone in this, and who knows?…this may be an opportunity to try something completely different (and far more satisfying,) in your life.
Don’t want to drop platitudes in such a rotten situation, but I’m betting you’re a lot tougher than you thought you were.
Keep us posted?
SKB, if you are in the mood for something completely different, don’t have the two years for the audiology route, and want some freedom to choose your hours, why not consider doing the four month training course to become a basic EMT? It brings in quick cash after a four month time investment. Additional coursework and hours OTJ get you continous upgrades in your certs. The top of the ladder in the EMT world is paramedic (sorry, don’t know if that is capitalized). At that point, we are talking serious dough. Twice what you made as a trainer.
Community colleges have the basic coursework, the certification is portable, there is always a need, you’re actually doing something useful to help your fellow man or woman, you don’t have to waste time sucking up to empty suits, and you have a great deal of control over your work hours.
I have always considered having an EMT cert to be a super back up employment credential. But I don’t need a lot of dough when I’m unemployed - the big ticket and long term stuff goes on the Z list - and I am super motivated by having a portable, useful skill that is not slimy.
Newsvine dot com
‘Angel’ of foreclosure defense bedevils lenders
snip
A University of Miami law school graduate who spent years in private practice in Arkansas and worked in other legal aid offices before coming to Jacksonville four years ago, Charney said she became an expert on lending law when her caseload of foreclosures increased and she began to notice a number of disturbing trends that have yielded her key defense strategies.
First, because of the way mortgages have been securitized, it’s often unclear who actually owns the debt, she said. “What we see is that systematically, the originating lenders only pledged these loans and didn’t actually transfer them” to the trusts that are supposed to hold them and issue the securities, she explained.
But only the true debt owner has the legal standing to be a plaintiff in a foreclosure, she continued. “That’s first-year law school stuff. If you’re Joe and the debt doesn’t belong to you, it belongs to Marjorie, then Marjorie better be in court, not Joe. Don’t come in as Joe and tell me you have the right to be there when you know full well you don’t.”
—
Yet, time and again, loan servicers and others have sought plaintiff status, often by using affidavits stating that the actual notes had been lost, she said. “I’ve seen paperwork filed by lawyers saying, ‘We anticipate assignment’” of the debt, she said with a scoff.
And the loan originators can’t appear in court and claim the right to foreclose because they would be in violation of securities laws for not transferring the loan to the trust when they were supposed to, she said.
—
Nothing new here!
The comments are a good read.
Leigh
can you post the link, Leigh, so we can see the comments?
Sure drum
http://www.msnbc.msn.com/id/28277420/
It’s a two pager. At the bottom of page one (or two if you want to read the entire article), click on discuss story on newsvine.
Leigh
link?
Can’t you gus google it . I have found it
-Maria
Gus, brings a song to mind
The problem is all inside your head, she said to me
The answer is easy if you take it logically
Id like to help you in your struggle to be free
There must be fifty ways to leave your lover
She said its really not my habit to intrude
Furthermore, I hope my meaning wont be lost or misconstrued
But Ill repeat myself at the risk of being crude
There must be fifty ways to leave your lover
Fifty ways to leave your lover
Just slip out the back, jack
Make a new plan, stan
You dont need to be coy, roy
Just get yourself free
Hop on the bus, gus
You dont need to discuss much
Just drop off the key, lee
And get yourself free…
OK, let’s try again.
http://www.newsvine.com/_news/2008/12/19/2229299-angel-of-foreclosure-defense-bedevils-lenders#comments
Dang!
Leigh
Rats butt.
Grrrr.
Try this.
Open Google News tab.
Copy the title of the article ‘Angel’ of foreclosure defense bedevils lenders and paste into tab.
Presto.
Dang thing will probably appear right after I hit Add comment.
Leigh
http://www.msnbc.msn.com/id/28277420/
Third time a charm?
Leigh
Thanks for the post. That kind of stuff has been discussed on and off at times for a while here on HBB. What it means to me is that:
- It’ll take a long time to sort out this foreclosure mess - in fact in many cases (for many properties) it’ll probably never be sorted out - i.e. a lot of properties’ titles will be contended 10’s or even 100’s of years down the road. Many properties will probably just be abandoned (e.g. like Lehigh Acres in Florida) with just ambiguous ownership, and not contended until someone really wants the property again years from now.
- We’ll probably never get back down to a low level of foreclosure activity like existed in the 2003/2004 timeframe. We’ll be on a “permanently high plateau” :). Seriously - it’ll tail off I’m sure but it’ll take probably 20 years or so.
- Seems like a really good business to be in going forward is title insurance. If someone were to go into that now - they could probably be high demand for 20 years or so and then retire well. That being the case - I wonder what would be good companies to invest in? Anyone with thoughts?
(This all assumes that the government doesn’t assume a communistic stance and just start taking properties over, and thus abrogating any ownership claims that might be contentious - which may well happen)
Now that’s what I’m talking about when I say “Palmy want a squat”.
Oh, I could not disagree more than with this knuckleheads POV!
I know it’s Christmas…but without a doubt…not one day less than the rest of his life behind bars!
“…a relatively short prison term — years, not decades — can be enough to deter prospective financial fraudsters.”
“we could be talking about a parade of defendants swapping cuff links for handcuffs and facing not years behind bars but decades. That’s more punishment than even Bernard Madoff deserves.”
Even Bernard Madoff Doesn’t Deserve This:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/19/AR2008121903121.html
I also disagree with this article. These fraudsters absolutely DO deserve to be in jail for A Very Very Very Long Time.
Absolutely agree that these people deserve LONGER sentences than most street thugs. The don’t just devastate one or two families, they devastate entire communities…or entire countries, for that matter.
In addition to jail time, a team of forensic accountants should be employed by the govt to track down all money controlled by the criminals, and ALL of that money should be brought back and used for reparations to those who were victimized.
No mercy for the Wall Street thugs!
I’d like to see him say that directly to the faces of the people who depend on the charities that are about to go under or vastly pull back on their activities because they lost money with Madoff. And then listen - carefully - to what they say about how the fraud has affected their lives.
Polly, it would not matter one whit. These people, their servicers, and their other sycophants - such as defense attorneys - they are psychopaths. They are incapable of empathy, have no conscience, and view others as mere tools for their own aggrandizement.
There is a reason why ol’ Bernie gave it up. Sons turning him in makes for a nice story, eh? Leaves them firmly on the side of the right and good, no?
Half of that $50 Billion is sitting in the Channel Islands, Switzerland and the Caymans. Carefully decoupled.
You worked with these scum. You know they don’t give a flying fook.
I am royally peeved at the preponderence of evil amongst our masters.
Can America live without realtor calendars and fridge magnets? I don’t think I can… we need to bail out the calendars and the magnets, NOW!
———————————————————————————
Bare Fridge Door? Blame the Housing Slump.
In Tough Times, Little Extras Like Agents’ Magnets Can Be First to Go
By Dan Rafter
Special to The Washington Post
Saturday, December 20, 2008; F01
Anthony Sanzo Jr. doesn’t need any statistics to tell him that a slumping housing market has forced thousands of real estate agents to look for a new line of work. He doesn’t need to know that membership in the National Association of Realtors has dropped by more than 100,000 agents in two years.
Sanzo can tell all this just by looking at the number of promotional refrigerator magnets, calculators and calendars that his company, Sanzo Specialties of Endicott, N.Y., has sold in the past year.
“Our business has declined terribly,” Sanzo said. “It’s getting so bad that all the agents want free shipping. Can you believe that? Even if you give things away, the agents won’t take them. They don’t want to have to pay the shipping.”
The recession and the struggling real estate market that triggered it have meant trouble for builders, mortgage lenders, landscapers and home improvement stores, as well as for real estate agents. Like them, Sanzo has seen his company suffer through 2008. And he expects 2009 to be challenging, too, for the family-owned firm, which has been selling products to real estate agents since the elder Anthony Sanzo applied for his first post-office box in 1948.
There was a time when homeowners could look forward every holiday season to receiving a refrigerator magnet with the smiling photo of their real estate agent, along with a phone number. Usually, the magnet would be attached to a calendar or notepad. But as agents watch their incomes plummet, they are cutting back on everything, including the magnets, calendars and football schedules that they have traditionally sent out by the hundreds.
This Sanzo guy must be a little slow. He’s got to kick the agents to the curb and start marketing his magnets and calendars to a new crowd:
- divorce lawyers
- bankruptcy lawyers
- debt consulors
- repo men
- suicide prevention (I know - harsh but sadly true)
- A.A.
- professional arsonists
- newly single cougars
I’m pretty sure the lawyers at least would be able to pay for shipping too.
Here’s a news video of some Ford workers repeatedly taking 2-3 hour lunch breaks at the local bar. It’s not representative of all Ford workers, however, with any luck these folks will get the boot.
http://www.clickondetroit.com/video/10235271/index.html
FORD = F*cked-up Or Ripped Daily.
Some other Ford acronyms:
Found On Roadside, Dead
Fix Or Repair Daily
Any others out there?
Found on Reservation Dump
FUBAR on reliability deficiency
F’ing
Out
Right
Dangerous..
I wonder if they are salaried or hourly. If they are only paid for time they work, then this isn’t an issue, IMHO (not counting the fact they might be drunk on the job, which is a different issue).
As the economy slows, companies will be reducing work hours, and this might be what’s going on here.
Naturally, they should have just admitted that, if it’s true, but I’d like to know more about the details before passing judgement.
BTW, I wonder how many “four-hour lunches” the CEOs and other execs of large corporations might take. You know, the guys who “deserve” their multi-million dollar salaries…
You can rest assured that the UAW that exeter loves so much will come to these guys’ defense, saying they’ve been treated unfairly. Can’t these poor, downtrodden union guys just be left alone to do their job??? I don’t see anything more than a suspension in their future.
And there’s plenty more people like these guys at GM/Chrysler who are going to get their paycheck money now from y’all.
Ain’t life grand??
Blano
Some years ago, I had summer job at GM plant, sanding hot primed Camaros. Nearby, guy has heart attack. Do they stop the line? No. Replacement arrived, cars bob by nonstop at one per minute. And it wasn’t that long ago that Appalachia lost as many coal miners as China does now.
Two hour lunches, of course excessive. Yes, contract givebacks necessary today.
Reasons for collective bargaining: valid.
IMHO
Uh, does the concept of orders of magnitude mean anything to you? Some auto workers taking long lunches is nothing compared to the scale of the crimes committed by the financial elite. I’m much angrier about the Wall Street types who are raking in billions more of my taxpayer dollars than the relative pennies any autoworkers will see.
The degree of anger exhibited here towards those lower on the social or economic chain, much greater than that exhibited towards those in more powerful positions, is typical of a certain mindset. A typical “authoritarian follower” or “RWA” reaction. People with this mindset tend to severely punish “common” criminals in a role-playing situation, and admit they get personal pleasure from punishing such people. But they also tend to go easy on authorities or those higher in socio-economic status who commit larger crimes.
http://en.wikipedia.org/wiki/Right-wing_Authoritarianism
Law and order, chain’em to the ground uneducated types…. Sad…
“Law and order, chain’em to the ground uneducated types…. Sad…”
Yes, very sad.
Perspective takes critical thinking skills coupled with a willingness to acknowledge one’s beliefs may be weak, unsupported and/or unfounded. Never gonna happen with those having even a mild dose of hardwired-in anti-social personality.
DOC
Elitist arrogance rides again on the HBB.
It always seems that truth remains obscured by a continued reliance on ignorance and mantra, even at their own peril.
Nobody here is excusing the other behavior you mention. But your attempts to link one while discussing the other is all too typical.
There’s no anger here either….just contempt. Contempt that these guys have done this for years, and many others before them, and will continue to do so because their union steward will back them up.
And your “lower on the social/economic chain” comment is a laugh too because these guys are all higher up on the economic chain than a lot of us.
And your tax dollars are going to be paying their salaries while they’re at the bar. Liberal lifestyles like that are ok I guess. Sheesh.
Man, that’s hilarious. Let those clowns go down in flames. Another reason not to buy a Ford if I didn’t have enough already.
Thank you for supporting union labor by buying Fords. Support union labor…. it’s the right thing to do.
whatever rainman.
I’m all about decent paying jobs, and opportunity for everyone who wants to work hard. I found this video quite disturbing, and I think these slackers need to be fired, replaced by individuals who actually appreciate the chance given to them. What they’re doing is NOT cool. I wouldn’t want to be working around people under the influence no matter what the job. These clowns don’t even deserve a job as a checker at a gas station.
My Focus was assembled in Mexico, so there.
Dang,
Didn’t come through yet.
I’ll wait a few seconds and repost if necessary.
Leigh
I was wondering if the housing bubble and other such blogs are having a positive impact on the Economic policy makers. Do staff members advising the politicians read these types of blogs and gain knowledge. Have we see seen any concrete examples of positive impacts of our discussions? Ben might be able to expound on it.
No, I doubt it. Politicians don’t care about the little people, they are there for power.
NO emphatically NO….Nobody in politics reads these blogs or else i would have been hired a long time ago…
I’ve run into a nice handful of pols the last 2years, and i always give them my card with the HBB address on the back of it……not even a thank you…
So i’m doing my part to try and inform the clueless….
The electronic forums have changed the world forever, IMHO. The days of the media moguls laying out the crumbs of information such that their readers follow a path of blind obedience are over. I find it refreshing to hear from the experienced among us as well as the tin foil hats.
How about the experienced tin foil hats?
Oh yeah, Aladinsane took off for NZ.
Obama has posted his weekly Saturday Morning YouTube. (I guess it’s the 21st century Fireside Chat). He announces a few picks for science/eng posts and reiterates his commitment to science and engineering. This is a good omen for scientists/engineers (real eng, not code monkey eng).
A couple posts this week quoted clueless developers who thought that Obama was going ride in on his white unicorn and “stimulate” their dead-on-arrival PUD developments as if it were 2005. Survey says!?…XXX. Sounds instead like the scientists will be invited in out of the cold.
Hey! Don’t offend the code monkeys!
They’ve been known to throw poop at people.
test
http://www.msnbc.msn.com/id/28277420/
Did anyone see the Keith Hansen Dateline NBC segment last night on evictions? Some were being evicted for foreclosure, some being evicted for non payment of rent, but overall it was sob story city. I’m sorry, I have no sympathy. First there was the manager who worked for the City of Coral Gables near Miami, Florida and his two ton wife and their two bambinos. How does this guy even have a job? Not only was he being foreclosed, he and his two ton tessie ignore the foreclosure notices until the police are at their door. Oh and all the while they “never knew” their mortgage would go from $2000 to $4000. Crocodile tears and baby-waving all over the place.
Then there was the former school principal in Michigan who mortgaged herself to the hilt because her daughter got into Yale and “didn’t know” her mortage was adjustable rate. I don’t buy that for an instant. She says she was just “too busy” and “too trusting” to pay attention and she never thought Americans would do this to other Americans. Seriously. With comments like that, I’d say sending her daughter to Yale is a complete waste of money.
The whole freakin’ segment reeked. The only people I feel any sympathy for when they’re evicted is people who lost jobs, or who were screwed by landlords.
Why does the press always gravitate to civil servants when doing these stories? Are they trying to tell us something?
Hey, the person who traded the house for a college education back when the house was worth something made a pretty good deal. What the heck is the house worth now? I bet the education is the higher valued asset. No one can forclose on her kid’s brain.
Oh yeah? Tell me about it. If you give me a dollar, I’ll show you my lobotomy scar.
Except the kid doesn’t seem to be helping mom, so I guess the kids education wasn’t a good investment for the mom.
“two ton tessie “…..
Thank you for the laughs at work, Palmy.
“Oh and all the while they “never knew” their mortgage would go from $2000 to $4000.”
When the mortgage went to $4,000, they should have quickly found a rental for $2,000 or less and walked (I hear there’s plenty in Florida). Instead they sat there waiting for the sheriff. Their own inaction is to blame.
Man, I saw that. Two ton tessie is about right.
An old friend just divorced his wife. She was a little overweight when they married, but over the course of 15 years, ballooned up to over 300 lbs. He tried for years to help her, paid for lap band (think that’s what it’s called) surgery, counseling, you name it. He called me to tell me, and I asked him what made him finally make up his mind. He said: “I finally got tired of watching someone eat pop tarts and pepsi for breakfast”.
“I finally got tired of watching someone eat pop tarts and pepsi for breakfast”.
Good for him. Truthfully, I’ve become pretty skeptical of all the surgeries and counseling etc.
Food addiction is hard, because I’ve had a taste of it. (Tee hee..) In the end though, the person in question has to at least try to overcome it. They have to decide their worth something more than the junk food they consume. Pop tarts and Pepsi for any meal doesn’t even come close to “trying”.
Just something to keep in mind. As hard as any surgery is on someone that weighs 150 lbs., it is just exponentially harder on someone that weighs 300 lbs. That is pretty much regardless of procedure.
Expelled with great difficulty, and total nausia, from the body of the two-ton tessie, the bambinos actually relish open air, and thrill at the prospect of eviction.
Palmy,
Just out of curosity, what did the husband look like that was married to “two ton tessie”?
He wasn’t bad looking. Average height and weight. Sort of non-descript. But I expected her to moo at any moment. It wasn’t just her appearance, she seemed kinda stupid as well. Although I suppose I’d be stupid if the local constabulary paid me a visit.
You were reading my mind. This lady had no clue and acted like she didn’t know anything. And the guy seemed to know but didn’t want to admit anything to her. Compared to her, he was Fabio. BTW whenever I see Chris Hansen, all I can think about is to catch a predator and all those weirdoes. I wasn’t able to transition to him doing a segment on housing. I half expected to see him confronting some guy in a bathtowel thinking it was his lucky day. That episode seems to stick in my head unfortunately.
Hmm. This is interesting. So, this means, what, more time in free housing for some people who fight the foreclosure? Permanent free housing because the debt-owner can’t find the note? Uncle Sam is buying debt from corporations who don’t own it? House prices will stabilize at their current over-priced values because the foreclosure flood will be halted? All of the above? Something else?
Not sure this “Angel” isn’t really a “Devil” in white.
IAT
She is an angel. Random companies should not be able to sue individuals for fun. The banks deserve the pain of having to follow the rules.
This has the helpful side effect of locking up the mortgage market even tighter.
Agreed that companies should have to follow the rules. But, I’m trying to go beyond the obvious moral assessment. My question is, what are the complex implications of this situation?
Okay, it makes sense to me that this ties up the mortgage market even more. So, this means house prices fall faster. But, the competing concern is that prices would stop falling because the foreclosure flood would be stemmed. And, the other concern is the desire to sell would evaporate for many, because they now have free housing for life.
So, there are multiple implications. How does it balance out? I am not sure. Any thoughts.
IAT
It creates white collar jobs, probably of the paralegal contracting flavor. The documentation is there somewhere. Nobody shredded it. So you can trace the info back somehow. It is just going to take a while and cost some dough (in the form of salaries) to get there. Less money to banks/investors, more to people who can figure out how to do the work. Not the worst thing in the world.
I wonder if a tenant would have standing to gum up a foreclosure using this tactic?
Today’s new picks by the Messiah are in the sciences. They are firm believers in the theory of global warming and could use their weight to place stringent controls on our freedoms. Buy more gold.
On a bright note, the Messiah has reaffirmed a commitment to scientific reason, which should be a big improvement on the faith-based governance to which we have been collectively subjected for the past eight years.
Did they add the right to burn oil and coal to the bill of rights?
http://iceagenow.com
For the hundreds of millions of people worldwide who will die if coal and oil are outlawed as sources for heating because of a possibly non-existent crisis, I would say Amereican-style religious faith-based governance poses far less potential danger.
Having encountered “scientists” of great reputation who were downright lunatics, I am not impressed by his choices. As soon as someone says “This is the way it is,” or “there is a scientific consensus about that,” I become highly sceptical. Facts don’t require a majority vote.
Since nobody has yet explained where all the money is coming from for the bailouts, handouts, work projects, and global warming initiatives, I presume blind faith is also a feature of the new administration, whose messiah (Obama) is ALSO a fundamentalist Christian (and former member of a crackpot fundamentalist church for more than twenty years).
“…Facts don’t require a majority vote”
Neither does a “black hole”
Geez, Increduluous…the way you are talking…you’d think it snowed in Las Vegas, north Phoenix, Houston and New Orleans during the past few weeks.
And in Baghdad, Athens and Rome last year.
And that melting, freshwater ice caps are chilling ocean water significantly…an event that may very well cause the flow of the Atlantic jet stream to shift south, placing Europe in the deep freeze. Remember the snow in Lisbon, anyone?
in any event….GLOBAL ALARMISTS UNITE! The world is going to hell and we must tax people to the nth and ban the notion of the evil corporation. We must ceaselessly strive to reverse global decline through government control, else all rabbits and dung beetles will be flash-incinerated by Sol.
MY GOD, man is detroying the world! Everyone MUST buy carbon credits to save the world! Do it now, lest we’ll all meet our doom! And if that happens, Gloom will cease to exist! Repent, all you uncaring, cold capitalists, for you are truly evil.
Yes, carbon credits: If you have a thousand and don’t use them, I can buy them and use them to “heat” the atmosphere while claiming to improve it. And those selling these imaginary thingies make fortunes in the process.
Whether Gore uses HIS fabricated carbon credits, or someone else’s, he’s still flying around the world in a private jet spewing pollution that WOULDN’T HAVE BEEN SPEWED by the person whose carbon credits he purched. What a blowhard. His worshipers need to remember HE ISN’T A SCIENTIST EITHER; his degree is in DIVINITY (a.k.a., a redneck bible-thumpers’ parody of theology).
In the Middle Ages, selfish True Believers bought indulgences from the Church so they could behave like slobs without consequence. Today, selfish True Believers buy carbon credits for the same thing. Selfish True Believe is the one constant.
You are clearly not a scientist.
You clearly are intellectually biased.
I have my sources. Unfortunately for you, their opinions and findings differ from yours.
There isn’t consensus on global warming/climate change or whatever you want to call it. Deal with it. I have.
There isn’t consensus on global warming/climate change or whatever you want to call it. Deal with it. I have.
Yep.
There also isn’t a “consensus” on low fat diets protecting you from anything like obesity, heart disease, or cancer. Just for fun, try wandering around in a world where everyone consumes sugar as a “healthy” alternative to fat. Meanwhile you eat a diet that as closely as possible resembles a hunter/gather diet, the one we evolved on for millions of years, and derive almost all your energy from fat.
Trust me, it’s a peck o fun to be treated like an insane leper when you contradict something everyone “knows”.
The only thing I do believe in that sounds like tin foil hat time is Peak Oil, in part because my BA is in Geology, and in part because working geologists can’t afford to be wrong about working oil fields (quite literally…)
Science is surprisingly subjective work. I treat all scientists as possible religious quacks who are good at math. (and not just the ones out to prove evolution wrong…)
I also despise the traditional “hypothesis” method of teaching science. It practically guarantees confirmation bias. I teach my kids to wait for the result of an experiment rather than attempt to predict the result.
‘As soon as someone says “This is the way it is,” or “there is a scientific consensus about that,” I become highly sceptical. Facts don’t require a majority vote.’
Hear hear! Scientific truth does not require any consensus. In fact, at points of major scientific advance through the course of history, those lone individuals whose efforts and insights led to a great discovery often times faced peril of death for defending the truths they had discovered, at least back when religion was the overwhelmingly dominant cultural institution, and later outright rejection, when the scientific community coopted religious thinking about accepted scientific dogma. For major cases in point, refer to the life stories of Copernicus, Galileo, Einstein and Alfred Wegner.
“Trust me, it’s a peck o fun to be treated like an insane leper when you contradict something everyone “knows”.”
Like you, Vermont Gal, I know all about this. I am typically very much on the periphery, breaking all sorts of expected societal norms against who I am (i.e., i do not share views that are “typical” of how others define me socially).
____________________________________________________
“In fact, at points of major scientific advance through the course of history, those lone individuals whose efforts and insights led to a great discovery often times faced peril of death for defending the truths they had discovered…”
Yes, again, Prof Bear. All I can add is what the haughtier of scientists hate to admit: That a good portion of the time, scientific advancement or discovery comes wholly by accident.
November Dataquick numbers for California are out:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx
San Diego -31%, San Francisco -20%, San Mateo -25%, Santa Barbara -45% (with the city of Santa Barbara down 19%), Santa Clara -37%, Santa Cruz -43%, Palm Springs -32%, Orange County -33%, Marin -29%.
Sacramento median sales price is under $200K, at $185K.
Egads. This is a slaughter no matter how you look at it, and the upscale areas are not immune.
The slaughter is bound to continue with peak alt-A and prime resets still on tap in 2009-2010, rising unemployment and a foreclosure deluge that won’t quit. Some prices are starting to almost look sane again already. From the SD Union Tribune DataQuick chart:
November 2008 Median Used SFR Sale Prices
Poway $366,000
Vista W $255,750
Oceanside (Central) $200,500
Escondido South $234,000
San Marcos N $302,500
That’s about it. The high end is stuck in the stratosphere, but the prime and alt-A resets should help bring them back to earth.
Someone let me know when the lush area of S. O’side is selling for 200k. It is so damn pretty here but 600k to 400k to 250k is a long way off.
I am guessing by the end of 2010, inflation adjusted. Just make sure you are hedged against the contingency of a wall of liquidity hitting the housing market.
PB it’s nice to responded to my post and I know you are being crafty, but what do you mean by liquidity?
Cheap government money.
Ann — like Ernst said…
Think of freshly printed liquidity as a stealth tax on savers and those who are owed fixed dollar obligations and you will get the idea. Something quite similar happens to shareholders of record when CEOs are compensated with stock options, as the newly created obligation is likely to turn into a dilution of existing stock shares when the options are eventually executed.
Yeah, but the resets are probably cast to LIBOR. Which is pretty low these days. I myself have a 5 year adjustable - it would go down if adjusted today.
Most of the high end places are down 10% or so. The POS places (smog belt areas or high desert meth lab areas) are down 45%.
Manhattan Beach is down 50%. But that is a blip. From $2,100,000 to $1,125,000.
Yes, more bloodletting on the way when Alt-As reset and then in 2011 and 2012.
MB prices would probably average $500,000 in 2013.
I don’t see asking prices falling by much, though. Just took a look at Santa Cruz and a typical price for a old 1200sq/ft home on a small lot is 800k. And it just gets worse the closer you get to the ocean. Not much progress in my opinion if the only way you can get a better but still unreasonable deal is to buy a foreclosure.
“I don’t see asking prices falling by much, though.”
Realtwhores are the masters of keeping up appearances.
Make a mental note: Location Location, Location. Ocean view places with fresh air have the price premium. When you see houses in Fresno or Bakersfield matching the prices of houses a mile from the ocean, that is a big red flag. Same can be said of houses in Riverside, Victorville, Palmdale, Indio, Phoenix, etc. I’m not saying ocean view home prices will not fall. I think their prices will fall more over the next few years.
State unemployment rate jumps to 8.4%
County figure remains unchanged at 6.9 percent
By Dean Calbreath
2:28 p.m. December 19, 2008
The holiday season has not brought much cheer to California workers this year, as layoffs at hotels and restaurants and weak hiring at shopping malls and department stores helped push the state’s unemployment rate to 8.4 percent – its highest rate since the summer of 1994.
Last month, more than 41,700 workers lost their jobs in California, for a year-to-year total loss of 136,000 jobs, according to data released Friday by the state Employment Development Department.
The statewide unemployment rate, which was 5.7 percent a year ago, was 8.2 percent in October. In comparison, the national unemployment rate has jumped from 4.7 percent in November 2007 to 6.7 percent in November 2008.
“These are god-awful numbers,” said Sung Won Sohn, economist at California State University Channel Islands. “The economy is headed downhill and the brakes are not working.”
California declares fiscal emergency
SAN FRANCISCO, Dec 19 - California Governor Arnold Schwarzenegger declared a fiscal emergency on Friday to call lawmakers into another special session to tackle the state’s weakening finances, and separately ordered state officials to prepare to furlough and lay off employees to cut costs.
His two actions mark a dramatic escalation in the budget battle waged in recent weeks in Sacramento, the capital of the most populous US state and world’s eighth-largest economy, as its revenues fall harder and faster than expected.
California’s state government now faces a $40 billion budget shortfall over its current and next fiscal years and is on track to run out of cash in February.
http://www.ft.com/cms/s/0/bb7714e2-ceb4-11dd-8b30-000077b07658.html
This with some of the highest taxes in the nation. Yikes! We have a surplus here in Texas - not sure how long it will last. All I know is it seems like every other person I meet in Fort Worth has moved here from California. Just a slight exaggeration. Of course the most recent person I met was a realtor originally from Corona (grrr) at a new devpt. in Fort Worth that my BIL was looking to buy in. Had the act down to a tee to sell my BIL. He seemed to convince my BIL unfortunately.
It’s pretty obvious in all the handwringing lately about both coasts that Michigan’s ongoing multi-year recession has been forgotten.
8.4 percent unemployment around here would be considered progress, if not a downright moral victory.
Can anyone who gets it please explain how loaning money to hedge funds will serve to prop up consumer credit? Wasn’t it funny money lending from the likes of hedge funds that helped create the morass of debt which is weighing on the U.S. economy at this point? It sounds like more hair of the dog hangover treatment to me, but I am admittedly a skeptic and a pessimist when it comes to the grand plan to save the global economy from its own excesses.
Financial Times
Hedge funds gain access to $200bn Fed aid
By Krishna Guha in Washington
Published: December 20 2008 05:01 | Last updated: December 20 2008 05:01
Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit.
The Fed said on Friday it would offer low-cost three-year funding to any US company investing in securitised consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before, although the Fed may not permit hedge funds to use offshore vehicles to conduct the transactions.
Hedge funds, Derivitaves, Credit Default Swaps etc should all be banned.
“… may not permit…”
Have we entered a Bizzaro world?
Is this like Catch-22?
What the hell is going on in Washington?
Can anyone explain why it is better from the Fed’s standpoint to line the pockets of hedge fund managers on the way to loaning money to consumers, versus just helicopter-dropping the money directly on consumers’ front lawns without first letting hedge funds take a massive cut?
P.S. Some posters were joking a couple of days back about forming a bank in order to qualify for Fed funds. But wouldn’t it be easier to form a lightly-regulated hedge fund in order to qualify? How many people need to be involved in forming a hedge fund — about three or so?
Possibly it stops them defaulting and hitting the bank’s non-existent reserve - this quarter…
Oh Canada, please don’t imitate those wacky Americans:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a423KVNUfxXY&refer=worldwide
“According to recent calculations by the Peter G. Peterson Foundation, the sum of America’s debts and other financial commitments is about to exceed the collective net worth of its citizens. That means that for the first time in our history, we’ll owe more money than all of us have combined.”
Hasn’t Ben saying that for the past few years?
The situation could get worse before it improves. Anyone who saves cash when the Fed is issuing veiled threats to print like crazy is a fool.
For the uninformed, Peter G. Peterson is a Dick Nixon hack and wall street moneychanger. Proceed at your own risk.
“…is a Dick Nixon hack” lol
I’m still not convinced that “helpful” Iraqi citizens will not be climbing to the rooftops of embassies within the “green zone”
In a very short while!
Does Halliburton own any helicopters?… or… just Blackwater/Cheney-NO-BID-CONTRACT/Halliburton-Dubia/Carlyle Group?
What should they be saving?
“their blessings!”
“Anyone who saves cash when the Fed is issuing veiled threats to print like crazy is a fool.”
Lol. Call me a fool then, ’cause cash is the only way to go for me. Everything I wish to eventually own is declining in price.
Cash - the Ultimate Financial Solution - seems to be in great demand everywhere I look. Don’t take my word on this: Take a walk up and down Mainstreet and see for yourself.
Cash is king, until it isn’t.
You don’t think there is a risk of an Asian currency or currencies replacing the greenback as the refuge of choice?
What the heck are we supposed to buy? Canned peas and ammo and cigarettes then?
FXY or similar.
People who are unable to hedge normally liquid accounts like cash, 401K, etc. will be out of luck. That’s part of the plan IMHO.
Anyone here heard of gold bullion?
There are many pathways to Rome. Beware of people preaching in favor of any “one and only”.
FPSS and Combo –
I admit it — I am a fool of my own description, as at least some of my savings is in cash. But in case the Fed’s experimental attempt to prop up the price of almost everything turns into the inflationary analogue of a nuclear meltdown, I have diversified into other assets which will hold up as the real value of the dollar goes down.
“What the heck are we supposed to buy? Canned peas and ammo and cigarettes then?”
I personally recommend canned Alaska sockeye salmon, Norwegian sardines, garbanzo beans and Trader Joe’s french roast coffee (the kind that comes in the great big blue cans). Guns and ammo for good measure, if you are in to that sort of thing…
‘Beware of people preaching in favor of any “one and only”.’
This group often consists of those who have something to sell you (e.g., The Precious).
Combo —
To corroborate your point, today I bought a fancy new grill/waffle maker combination, two pairs of pajamas, a CD, chocolates and three pair of dainty Christmas socks for my lovely wife. One of my sons tallied the outlay for me for fun. He asked me to guess the total damages, and my estimate of $130 proved $35 too high. (A couple of 60 pct off discounts didn’t hurt, I guess…)
“That means for the first time in history, we’ll owe more money that all of us have combined.”
Which will collectively screw up our credit rating, which will make money difficult and expensive to borrow, which will allow those few with cash and no debts to call the shots and will allow them to set the prices.
Cash is king.
The Chinese creditors are king. 500 neutron bombs in strategic spots will kill enough Americans but leave cars, plasma TVs Iphones, McMansions all available for the real creditors to take back.
“Which will collectively screw up our credit rating, which will make money difficult and expensive to borrow, which will allow those few with cash and no debts to call the shots and will allow them to set the prices.
Cash is king.”
For us bloggers as individuals, workers, professionals, families, and small business owners, (let’s call ourselves “citizens”) for now, true enough. But what about city, county, state, and the Federal government? Can’t the “government” or “the Fed”‘ print all the cash it needs? Or do they need the ability to produce real income, and transfer THAT to the masses? Isn’t that what us individuals need, the ability to produce income? Wouldn’t rising real incomes in the U.S. solve most of the current crisis? Why doesn’t that happen?
I would define “wealth” as the ability to produce income. “Poverty” is the result of the inability to produce sufficient income.
In the current situation, rising unemployment will erode the wealth of the entire country. Individuals who no longer earn as they did before will collectively demand more service from all levels of government, at the very time when the governments will have shrinking tax bases. The citizens are becoming impoverished at the same time as all levels of government.
The governments can “print” or electronically create cash. The citizens can’t.(Counterfeiting aside). Therefore the Government will print or create cash at will, regardless of its ability to create an income stream from it, in order to satify the immediate demands for services from the citizens. It is doing exactly that right now by the trillions. This is why the purchasing power of cash will erode over time. The cash being created does not produce a future income stream. In fact it only creates a future interest expense upon the citizens.
Currently, Cash is King of a very unstable empire running on the fumes of hope and expected change. Expect political upheaval. Expect insurrection. Expect Poverty and Pain to challenge Cash for the throne.
We, collectively, have not figured out a means of addressing an incompatibility between the incentives by which we encourage production and the means by which we distribute it. Human effort is driven by positional as much as material incentives: We measure ourselves against one another. Two centuries ago, a person could be rich with no running water, electricity, or internet person. But wealth was still wealth, and people worked just as hard to be rich then as now. But since wealth is positional, people’s desire for wealth may far exceed their intention or ability to consume. When great wealth is earned by contributing to production, this leads to a surplus, which seems like a good thing, but creates the “problem” of excess capacity. The obvious solution is to redistribute claims on production, so that those with unmet wants make use of the excess. But doing so reduces the differences in station that inspire Herculean efforts to produce, and provokes conflicts over who gets what.
The macroeconomic stories of this decade have all been about squaring this circle: Rather than redistributing claims outright, we adopted the fiction of trading present goods for future claims. The ambitious grew wealthy by accumulating claims on the future of the less ambitious, in exchange for which the less ambitious (and sometimes very distant) consumed present production, and demanded more. Entrepreneurs could measure their position against their fellows by the quantity of their claims. Others could consume in proportion to their ability to manufacture claims that entrepreneurs would accept, that is, they could consume what they could borrow. But high quality claims on future wealth are in reality very scarce. An economic system that depends upon ever expanding claims on the future in order to provide current incentives to produce can not be stable. Once the “wealthy” learn that many of their claims are worthless, the system falls apart. The less-wealthy have no means of consuming, as new claims are shunned. Owners of capital gain nothing but bear costs for maintaining productive infrastructure. “Excess capacity” appears.
There is no iron law of economics, no physics of resource constraints, that prevents us from using all the productive capacity we have ever developed. Our problem is distributional and organizational: How can we match potential consumers with capacity (broadly defined) in a way that maximizes current well-being, and that offers sufficient information and incentives to inspire and direct future production? That’s not an easy problem. In fact, it’s a deep problem, philosophically and ethically, the substance of which is mostly neglected or assumed away by modern economics. Nevertheless, it is the real problem, not “overcapacity”. The world still needs more, and better. We should be careful of what we destroy because, for the moment, it seems “uneconomic”.
-interfluidity
Excellent post, clue.
“… for now, true enough.”
The “now” is where we all live. For now cash is king. Tommorow is promised to nobody and no thing, including cash.
For now cash is the great financial problem-solver. Nothing else compares. Tommorow could be a different story (and it probably will be). Right now prices and wages are dropping which makes available cash increase in value. And the value of cash will increase in value for as long as the banks continue to suck dollars out of circulation by keeping payments flowing into their coffers instead of turning around and loaning them out again. It is what it is.
Cash is king in Vietnam as well. Headed towards an exchange rate of 20,000 dong per dollar, it takes lots of dong to buy much, but 2,000,000 dong or so will buy you a night’s stay in a comfortable hotel, while 200,000 dong or so will buy you a delicious seafood dinner. However, as a store of value, the Vietnamese currency is suspect. One would probably do better as a members of the ownership society (especially high-value human capital ownership) than to rely on savings denominated in an unstable currency.
B*llocks! You have a very narrow definition of cash.
I suggest you read some Hayek.
I just got back from a dinner with some US emigres relocated to Hungary who are getting paid SS in USD. They kept ordering wine for all of us non-stop, and I didn’t exactly complain.
They seem to be liking their USD cash a lot at this point.
http://3.bp.blogspot.com/_H2DePAZe2gA/SU2FK3DcWOI/AAAAAAAAG_w/hVd0tmPbaWY/s1600-h/dx.png
The commitments of traders has not turned negative on the Dollar for the funds, but has decreased sufficiently to indicate the Eurodollar short squeeze has been relieved, at least for now. The TED Spread will indicate any reversal.
We will have to see how this plays out, but we are now bearish on the dollar again for at least the short term, and remain bearish in the long term still despite the strong counter trend rally. Our intermediate term objective of 66 remains unfilled.
While the Obama Administration cannot take a ‘weak dollar’ policy it is the only practical way to correct the imbalances brought about by the last 20 years of systemic manipulation. It is either that, or the selective default on sovereign debt, most likely through conflict, a hot or cold war.
Ironically enough, we think all of this is unnecessary and without good purpose, excepting the pathological greed for power of the elite in all the nations involved.
I hate global warming.
My fingers are frozen and so is my nose.
It’s so cold here I can’t even do light housework let alone jump in the shower.
I really hate the warming of the earth.
its the global-coldening that really scares me now…
LOL. You make me laugh, ann.
Here is Norfolk the Navy is talking about moving a carrier to Florida. One of the fears is that it will cause housing prices to sink(we’re up over 100% since 2003 I think, with wages going backwards (When adjusted for inflation) since 2001. Good riddance!
Meanwhile I’m starting to see job losses in the tech crowd. Gov’t gigs still going strong, but private companies were told by VC’s to cut cut cut.
There’s always a silver lining….
Bakersfield Suicide Factor: Is Economy To Blame?
“Kern County Coroner’s investigators say there’s a 5-10 percent increase in local suicides due to financial burdens that people just aren’t able to emotionally handle.”
http://www.facebakersfield.com/?p=2420
Hey Arlene,
How are you dealing with the snow? …do you need some free firewood?
…just let me know.
Merry Christmas!
Hwy.
Have met up with allena?
i hear she makes wonderful cookies.
It would be great if you could bring her some firewood and xmas cheer.
Hey, Hwy.
Got me four stacked cords of oak, walnut, orange and grape. Not only am I warm, I’m er, smokin’ fragrant. Still, would love to hear from ye before the next dump buries us until April. Contact me off blog?
dvsntt at bnis dot net.
There still is some honor in this world. Precious little, but at least there’s some:
“A Sheffield man who lent a penniless Australian tourist £5 to pay for a ferry trip in 1969 has been repaid his debt nearly 40 years later.”
http://news.bbc.co.uk/2/hi/uk_news/england/south_yorkshire/7791427.stm
Honor is not dead. Great story Chip, thanks for posting it.
Glad you liked it.
L.A. City Council votes to draft law barring evictions of renters of foreclosed properties
http://rds.yahoo.com/_ylt=A0oGki5iWU1JASkBzmBXNyoA;_ylu=X3oDMTEzNTkzN2kxBHNlYwNzcgRwb3MDMQRjb2xvA3NrMQR2dGlkA0gyMjJfMTI2/SIG=1308m7i5l/EXP=1229892322/**http%3a//www.latimes.com/news/local/la-me-foreclose22-2008nov22,0,755430.story
Forgive me if this has already been posted, this could go one of two ways IMHO.
1) The hack politcos aren’t smart enough, or are devious enough, and they don’t deny the transfer of property from a bank to a bank owned holding company as a “sale”.
2) They get it right, and banks rush for the exits with their REOs causing a final crushing blow to market prices since only those with cash to make the purchase will be able to buy.
Sorry about the retarded link, this works better:
http://www.latimes.com/news/local/la-me-foreclose22-2008nov22,0,755430.story
I’d have thought that the primary bad effect would be on investors who want to borrow to buy rental units. For single-family residences, the lenders probably will toughen their clauses about owner-occupancy and pursue fraud charges if the owner borrower cheats + is foreclosed on + renters won’t leave voluntarily.
Hey Ben,
Are you making any money off this ad?
http://www.thewaytoyourfirstmillion.biz/
Like Jim Rogers or not, he is dead on, abolish the FED! Won’t happen but it should…
http://www.brasschecktv.com/page/498.html
+1
I thought the concensus was that government jobs would be safer than private-sector jobs during the downturn. For some workers in California, that might not be the case; they’re facing 10% pay cuts due to mandatory non-paid-leave:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYyR5s0pKdp4
This is one good thing Arnold is doing. Even encourages firings in state agencies, where appropriate. The furloughs are to be in place through mid-2010.
“After all, lots of chobs are being cut in the private sector too, so government cannot be a haven” I could almost quote Ah-noldt as saying.
10% cut is far better than 100% many in the private sector are experiencing right now. Hence the security of a govt. position.
Welcome to deflation.
Unions are unlikely to agree to cuts of the magnitude that would be required for businesses, municipalities and public services to remain viable. Their members have fixed costs which prevent them from working for less than a certain amount, but that amount will almost certainly be more than employers are in a position to pay. This means war in the labour markets.
Failure of static analysis.
Those fixed costs will fall.
Bzzzzzttttttt…… try again.
I usually check in here earlier in the day on weekends. Today, though, I was consumed with drafting a response to a letter I received from New Jersey’s Real Estate Commission. It’s too long a story to relate, but for roughly one year, I’ve been blowing the whistle on an NJ licensed realtor who has a conviction out of Virginia for offering to pay a 14-year old boy to pose naked for him. Now, mind you, in order to secure a realtor’s license in NJ, you must possess a “good character.” The Commission informed me– in a tone I would describe as half indignant, half patronizing– that it had no choice but to grant the realtor’s application notwithstanding his pedophile convivction. I gave it back to these clowns with both barrels, told them that I knew a thing or two about the enforcement of “good character” provisions; copied three legislators I’ve dragged into the dispute. Also informed the Commission that I recognize “bureaucratic hokum” when I read it. I signed, sealed the letter and its copies; put them in the mail before I had second thoughts or someone talked me out of it. Hopefully, all the heat being turned on the SEC in the wake of Madoff’s schemes will make apathetic and/or corrupt FIRE regulators think twice before they just blow off complaints from John Q. Publics. Then again, I’m talking Joisy here– Joisy. Have a nice weekend!
Good for you, jimbo!
The media is writing a lot of woe-is-me reports on charities losing their stolen “Madoff dividends”, that they were living high off of over the years. (In other words, Madoffs scheme likely raised the giving the donors could give.)
Very reminiscent of the housing bubble: musical chairs, stopped music, stunned players.
Here’s to hoping BC’s Nigerian business ties take out Hitlary’s current Secretary of State and future Presidential prospects in one fell swoop.
WSJ.com
* DECEMBER 20, 2008
Bill Clinton’s Complicated World
Donor to Former President’s Foundation Had Business Ties to Nigerian Dictator
By JOHN R. EMSHWILLER
Bill Clinton’s ties to Nigerian businessman Gilbert Chagoury illustrate the kind of complicated relationships with foreign figures the former president is now disclosing to pave the way for Hillary Clinton to become secretary of state.
Nigerian businessman Gilbert Chagoury, shown with his wife, Rose-Marie, has long been a financial supporter of Mr. Clinton.
Mr. Chagoury is one of the biggest donors to the Clinton Foundation, having given between $1 million and $5 million, according to the list of over 200,000 contributors released Thursday by the former president’s charitable organization. The release of the names came as part of an effort by Mr. Clinton to satisfy the incoming Obama administration that his extensive array of foreign donors wouldn’t present problems for Mrs. Clinton as the nation’s top diplomat.
Mr. Chagoury has long been a financial supporter of Mr. Clinton. He donated funds to support then-President Clinton’s 1996 re-election effort, and later helped the former president land a lucrative speaking fee. Members of the Chagoury family donated thousands of dollars to Mrs. Clinton’s recent unsuccessful run for the Democratic presidential nomination.
Mr. Chagoury is also a figure with a controversial past. In the mid-1990s, he was known for a close association with Nigeria’s military dictator, Sani Abacha, which helped him land lucrative business contracts in construction and other areas.
After Gen. Abacha died in 1998, Swiss and other European authorities froze a number of bank accounts, including some related to Mr. Chagoury, as part of an investigation by the Nigerian government and others about whether billions of dollars had been improperly taken out of the country during the Abacha regime, according to news reports and a 2001 British court decision in Abacha-related litigation. Mr. Chagoury later agreed to return funds, estimated to be as much as $300 million, to the Nigerian government in exchange for indemnity from possible charges and to unfreeze his accounts, according to the British court decision.
Mr. Chagoury and his family still have large business interests in Nigeria. That country’s big oil supplies and large population make it one of the most important nations in Africa to the U.S. “He has lots of contacts in Nigeria and knows lots of people who are still in power,” said Patrick Smith, editor of Africa Confidential, a leading newsletter covering African affairs. Given Mr. Chagoury’s record in Nigeria in connection with the Abacha dictatorship, his relationship with Mr. Clinton “must be a problem” for Mrs. Clinton as secretary of state, said Mr. Smith.
The Nigerian embassy in Washington didn’t respond to inquiries about Mr. Chagoury.
Despite my disagreement with the TARP concept, I hope HP gets his wishes and blocks Frank and company from diverting TARP funds into the mortgage market. The TARP was intended to shore up financial stability, not to help Joe Sixpack cope with his unaffordable mortgage.
It is worth noting the political-economic sleight of hand involved in this tussle. These pols speak as though the $700 bn in TARP funds represent a pile of cash sitting in a vault somewhere. If they can’t manage to save all the homeowners and sick banks with $700 bn, what is to stop some other politician from proposing and getting through Congress another $700 bn bailout package, then another after that, then another, etc?
Let’s get real, folks. This money does not exist, except as an electronic bookkeeping entry against all the rest of Uncle Sam’s unfunded obligations. Only macroeconomists believe in a world without budget constraints, where money grows on trees to unlimited increase.
WSJ.com
* DECEMBER 20, 2008
Paulson Wants Rest of TARP Funds From Congress
Request After Auto Bailout Leads to Uncertainty Over How and When the Second $350 Billion Tranche Will Be Accessed
By DEBORAH SOLOMON and DAMIAN PALETTA
WASHINGTON — The U.S. government’s rescue of the auto industry drained what remained in the first half of Treasury’s $700 billion bailout fund, prompting Treasury Secretary Henry Paulson to call on Congress to release the rest of the money.
The move sets off a period of uncertainty for financial markets as the Bush administration and the Obama team scramble to determine how to proceed.
On Friday, Mr. Paulson said lawmakers should release the second $350 billion “to support financial market stability.” He said he would discuss tapping the money “in the near future” with congressional leaders and members of President-elect Barack Obama’s transition team.
Draining the current bailout fund raises the question of how the administration would handle an unexpected fiscal emergency. Mr. Paulson said in a statement Friday that Treasury, along with the Federal Reserve and the Federal Deposit Insurance Corp., has “the necessary resources to address a significant financial market event.” While the first $350 billion has been allocated, not all of the money has been spent and Treasury could dip into the unused funds.
We are becoming more Japanese by the day.
WSJ.com
* OPINION
* DECEMBER 20, 2008
Let’s Encourage Banks to Dump Bad Assets
The government’s commitment to Citi is too open-ended.
By JUDAH S. KRAUSHAAR
On Nov. 23, federal banking regulators provided $20 billion to Citigroup for preferred stock and guaranteed $306 billion in real estate and other assets against large losses for a period of five to 10 years. The capital injection was not new, but the asset guarantee broke new ground. Unfortunately, it included little incentive for Citigroup to shed problematic assets. Instead, it encouraged the bank to hold onto some of its worst assets in the hope that they might recover some of their value.
The problem in this transaction — along with most of the palliatives attempted thus far to “stabilize the financial system” — is that public money has been aggressively deployed without much thought as to how it might aggressively bring buyers and sellers of distressed assets together. Policy makers have embraced the notion of getting banks to lend again. But their actions have fallen short of actively moving problem assets off bank balance sheets.
IMHO, the policy has nothing to do with “aggressively bring(ing) buyers and sellers of distressed assets together” and everything to do with helping the likes of Citigroup indefinitely postpone coming clean on the balance sheet implications of a plethora of toxic mortgage assets which are half-on, half-off their books.
This is outstanding commentary — well worth the time to read it.
* DECEMBER 20, 2008
Essay
Is the Medicine Worse Than the Illness?
The world ran out of trust in 2008 — but there is no shortage of money because the Fed is printing like mad. It’s the wrong approach, with potentially dire consequences, says James Grant.
By JAMES GRANT
It is a sorry place at which we Americans find ourselves this none-too-festive holiday season. The biggest names on Wall Street have gone to their rewards or into partnership with the U.S. Treasury. Foreigners stare wide-eyed from across the waters. A $50 billion Ponzi scheme (baited with, of all things in this age of excess, the promise of low, spuriously predictable returns)? Interest rates over which tiny Japanese rates fairly tower? Regulatory policy seemingly set by a weather vane? A Federal Reserve that can’t make up its mind: Is it in the business of central banking or of central planning? And to think — our disappointed foreign friends mutter — all of these enormities taking place under a Republican administration.
…
Barely nudging Mr. Madoff out of the top of the news was the Federal Reserve’s announcement last Tuesday that it intends to debase its own paper money. The year just ending has been a time of confusion as much as it has been of loss. But here, at least, was the bright beam of clarity. Specifically, the Fed pledged to print dollars in unlimited volume and to trim its funds rate, if necessary, all the way to zero. Nor would it rest on its laurels even at an interest rate low enough to drive the creditor class back to work. It would, on the contrary, “continue to consider ways of using its balance sheet to further support credit markets and economic activity.”
Wall Street that day did handsprings. Even government securities prices raced higher, as if, somehow, Treasury bonds were not denominated in the currency with which the Fed had announced its intention to paper the face of the earth. Economic commentators praised the central bank’s determination to fight deflation — that is, to reinstate inflation. All hands, including President-elect Obama, seemed to agree that wholesale money-printing was the answer to the nation’s prayers.
One market, only, registered a protest. The Fed’s declaration of inflationary intent knocked the dollar for a loop against gold and foreign currencies. In many different languages and from many time zones came the question, “Tell me, again, now that the dollar yields so little, why do we own it?”
A very good read. Thanks for posting it…
TAIPEI, Taiwan — You can buy Tsingtao or Qingdao beer in Taiwan. But people in China can’t drink Taiwan beer, which, well, is just about the same as the poor man’s drink with the brand name of Qingdao.
Both are German-type beer. Prussia had Shandong as its sphere of influence and breweries were founded at Tsingtao to produce beer.
—
get bullish.
asain brews….China is opening the still for Taiwan.
BTW, the Tsingtao you get today is a pale memory of the good sh*t you got ten years ago.
The bast*rds dumbed it all down, and it’s like dog-pooptacular special now. It actually used to be excellently good.
will the chinese labor class take to the imports?
dont matter what your refined tastes may be.
not same same.
Well, obviously not. What’s your point?
I’m a capitalist.
Even if I drink the finest Burgundy and eat the best parmigiano-reggiano for me, I’d still invest in MCD.
Mass market is mass market. It’s sh*t that sells. Who cares if it is good?
WMI
Its the sh*t that sails….
MORE WHINE !!!