Bits Bucket For December 29, 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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This rising problem is the fault of the great American consumer right?
Holiday Sales Slump to Force U.S. Store Closings, Bankruptcies…
Dec. 29 (Bloomberg) — U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.
Retailers will close 12,000 stores in 2009, according to Howard Davidowitz, chairman of retail consulting and investment- banking firm Davidowitz & Associates Inc. in New York. AnnTaylor Stores Corp., Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.
More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. The holiday results indicate possible consolidation and further bankruptcy filings, according to Gilbert Harrison, chief executive officer of retail advisory firm Financo Inc.
“You’re going to see deals that you never thought you were going to see before because of the necessity of both parties,” Harrison said in a Bloomberg Television interview Dec. 26.
Sales at stores open at least a year probably dropped as much as 2 percent in November and December, the International Council of Shopping Centers said last week, more than the previously projected 1 percent decline. That would be largest drop since at least 1969, when the New York-based trade group started tracking data. Many retailers will report December results on Jan. 8.
Consumers spent at least 20 percent less on women’s clothing, electronics and jewelry during November and December, according to data from SpendingPulse.
Shutting Locations
Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said this month during a panel discussion held at Bloomberg LP’s New York offices. Only retailers with healthy balance sheets will survive the recession, according to Matthew Katz, a managing director at consulting firm AlixPartners LLP.
I notice yesterday whilst trying to reserve a rental car that a number of Budget location had a message up in the reservation system.
“location not open that date-closed perm”
Do you think all the employees of those locations in the SF valley had hair appointments that day?
I reserved a car with budget on one of my recent travels. It was a small airport, but they only had a single employee to handle everything. When my car wasn’t where it was supposed to be, the agent had to leave the desk and drive me around the parking lot looking for it. She left a note saying she’d be back later. I asked her about it and she said they used to have several employees there but were forced to cut back recently.
Additionally, today on my mall walk I noted that Mervyns did not open at 10am. I guess they were really serious about that going out of business sale!
How many anchors does the average mall need to survive?
Depends on region and size of the mall, but ~3 is the answer.
Do they mean 50000 individual stores or 50000 chains? I hope they mean stores. And we’ve already experienced a decrease in selection.
It’s well known that even the most creative toy company will not survive unless Wal-Mart or Target buys the toy. What you see at Big Box is all they make.
When Macy’s bought out Hecht’s and Kaufman’s and other stores, we lost a LOT of selection in women’s clothing. Now my local mall has two Macy’s, just to fill in the old Kaufman’s space. Now I get my clothes from catalogs.
Whole Foods discontinues items that didn’t sell gangbusters. All stores do this, but at Whole Foods it’s noticeable to a casual shopper. You choose either the high-price rice cakes or no rice cakes.
“Now I get my clothes from catalogs”
I went into a JC Penny store looking for sheets with cats on them for one of my Christmas giftees. Couldn’t find the juvenile bedding section at all. The clerk told me they only sell that stuff online anymore.
RE: I went into a JC Penny store
You are a brave denizen attempt a physical visit to a local retail establishment during the holidays.
Interestingly, any roadway or parking lot funnelling to a mall here on the northshore of Mazzland was an abysmal weekend circus following Turkey Day.
However, since the media acknowledges the season to a total bust, one can only discern the ensuring chaos was created by hordes of bored, broke, tire kickers with nothing better to do in their dismal lives than hit the road to go out to finger and oogle inventories of glitzed up foreigned manufactured junk.
What a completely dysfunctional and trashed culture.
actually 74, it was Christmas Eve morning and the parking lot was no more full than on a summer weekend. i don’t go to the mall much, but this was a sniper action for a specific item. Store wasn’t packed either.
Anne Taylor is discontinuing the maternity line….apparently $150 for a pair of pants you’ll only wear for 4 months isn’t a hot item in a sour economy…
I try and stick to fresh produce and bulk goods like oatmeal. If I do this, I can get out of the store without feeling like I have been mugged.
As a former member of ICSC, I read that the projection is 144,000 retail stores (not a chain count, a store location count) closings could take place.
I bet they are releasing the projection of closings in waves, such as large layoffs are sometimes handled.
It’s more likely that the least profitable item (which is a combination of sales and margins) goes.
My consulting business also advises on pricing (for one very specific industry); it’s all about margins. We sometimes cut low-margin products even though they sell well.
“My consulting business also advises on pricing (for one very specific industry); it’s all about margins. We sometimes cut low-margin products even though they sell well.”
This seems foolish, to me. Better to sell more items at lower margins, than no items at higher margins. You can’t trick your customer into spending more money, but you can margin yourself right out of business.
Agree, BB.
So now, the only selection I will have for new dress shirts is (soon to be) the one size fits nobody chinese special at walmart (they fit like a parachute around my torso). I think I will stick to buying most of my clothes used.
I don’t shop at Walmart, but I have the same problem with finding clothing that fits, especially shirts and jackets. If they fit my broad shoulders, then they’re like a tent around the middle. If I they fit my middle properly, it’s so tight at the shoulders I can barely move. And I won’t even start on shoe sizing. There is little quality to be found anymore.
If you purchase a good quality shirt, a tailor can fix the billowing waist at a fairly low cost.
That’s what I do. But I draw the line at socks and underwear, so when I got Penney’s gift cards from family members, I was up bright and early today to see what I could do. Trust me, in many ways, the quality at Penney’s is no better than at Wallyworld. The fit on some of the clothing sucks, same thing around the torso. Socks and underwear, OK. I stocked up. Still had money left over on the card, might go back for some shoes, although a lot of times I can find decent footwear at the thrift and charity outlets around here, even at the estate sales.
I found Penney’s to be something of a harrowing experience. They had discontinued one line of underwear that I liked. They don’t have cosmetic counters anymore, but, WOW, they’ve got Usher aftershave or whatever in a box. As IF!!!!!!!
I have not been to a Penney’s in years, so thanks for the update. Man, has retailing taken a dive or what?!
I get my underwear from K-mart. I get all of my shoes new, since I am hard to fit (as in E-E-E-E-E-E-E wide). The only athletic shoes that barely fit are the new balance wide lasts, so if this brand goes under or gets bought, out I dunno how I will play tennis. I get my shoes at the Shoe Carnival, when they run their 2 for 1.5 specials.
I just about have had it with these dang malls. Last time I was in one I spent hours trying to find athletic shoes. Nada. What the hell r they in business for?
There is a huge Nike store at the local outlet mall. My son needed new soccer boots, so we went there to see what they had. Answer: mostly those weird shoes that teens and gang bangers seem to prefer. I think they did have some running shoes and cross trainers in a corner. No soccer shoes.
“…mostly those weird shoes that teens and gang bangers seem to prefer.”
I shopped 2 malls and at least 12 non-mall stores when I was last looking for casual shoes and all I found was the same thing. Or butt ugly nerdy shoes of poor quality.
Cluephone retailers: adults tend to have more money and taste than wannabe thugs. So we’re not going to buy the neon blue, orange shoes or the grandpa poindexters.
Shirts- Turnbull&Asser, Eton, Fumagalli
Ties-Canali, Zegna, Versace
Shoes- Pliner, Ferragamo, Toschi
Suits- Boss, Armani, Abboud
Brooks shirts are for the masses,Brooks Brothers??? What are you? a realtor? Just joking
Brooks Brothers, Hugo Boss, Canali are for twentysomething or the unsuccessful thirties…Versace (classic or V2) is not the same as Versace Couture… let’s make a true list :
Suit : “Made to mesure” Zegna, Brioni, Armani Collezione (avoid Emporio..)
Tie : the same brand as the suit…
Shirt : please avoid “pinpoint!!!!”, french or italian collars only!!! 100% cotton required!The brand is not important!
Shoes : Berluti’s are the best (worth the travel to Paris : you meet them once, then mail order works), Ferragamo OK! Allen Edmonds’Park Avenue are good. For leisure time, Tod’s!!!!!!
Get Lands End trim fit shirts. Exact sleeve/collar size, selection from $19-99 (depending on what material/collar you want) and decent color choices.
I am an oddball to size-up. Long arms, thick neck, and EEEEEEE feet.
Brooks Brothers athletic cut. Not cheap, but good looking and last forever. And none of that 90’s ‘puffy shirt’ crap around the middle.
The only problem is that I gained some sympathy weight when my wife got pregnant, and the athletic cut shirts are a little tight around the middle. And, no, you don’t need to have abs of steel to fit these shirts: they fit me quite well when I was only 20 lbs over weight (now that it’s 40, things are getting a bit tight).
J.Crew athletic-cut shirts are also some nice casual shirts. Not cheap, but they should last.
That 20-40 lbs has a way of creeping up to 50-60 lbs. When I was young I was so skinny I could jump through a keyhole. Unfortunately I’m afraid those days are gone forever.
A friend has a disproportionately large neck and has this problem. Anything big enough to close the top button on fits like a tent.
I’ve noticed something similar in the local grocery…
They no longer carry the smallest size (16oz = one meal) of my favorite pasta sauce, but two sizes in much larger jars.
They have the 16 oz size in another brand which costs MORE that the next larger size in my fav. brand.
SO, you either buy the small jar of the other at a much higher price, or the large of the fav. which is harder to use up before spoiling (as well as costing more per ounce than it used to…)
More expensive and wasterful either way
(Please note: NYC size freezer = little if any room to freeze leftovers)
This problem should be pretty easy to fix. All we need is a way to spend 110% of our income, forever, without ever having to pay on or for any of the debt, ever…..
No problem…. right?
Hey, that’s what America’s CEOs were banking on when they froze wages and laid millions off this past decade.
When, or better yet how, will we recover from this mother of all recessions when we still have outsourcing, and declining wages due to corporate greed and failed government policy? It seems to me that the country is in a sort of death spiral, with the only hope being a complete about face when it comes to the plight of the average worker.
You’ll know we are on a path to recovery when we are making plastic toys for Vietnamese consumers.
Gee wiz….. didn’t the liars say “outsourcing is good for the economy”, “low wages and low minimum wage is good for the economy”, “privatization is good for the economy” and “borrowing is good for the economy”?
What the deluded knuts fail to ask was whos economy is it good for? I’m thrilled that the deluded knuts are a minority.
Good posts, guys.
Until we see the middle class gaining strength via more stable jobs and better pay (think stronger unions), this economy will not turn around in a healthy, sustainable way.
“Hey, that’s what America’s CEOs were banking on when they froze wages and laid millions off this past decade.”
This has been ongoing since the early 80s.
True, but they really cranked it up since 2000. The easy credit and the bubble made it possible of course.
Reducing the amount of stores is a good thing. Close the store locations that are non-performers and concentrate on the performers. Retail companies became too fat. They where trying to gain as much territory as possible and now it’s time to scale back.
For those who are actually shutting the company, then that is a different story. I heard that last remnants of Woolworths is closing. 200 stores in the UK (US-based stores closed last decade). I remember Woolworths when I was very young. Brings back memories.
“Retail companies became too fat. They where trying to gain as much territory as possible and now it’s time to scale back.”
Got a Borders Books gift card for xmas. Saw a sign that said 40% off DVD’s. Cool, I thought, until I looked at the pre-markdown “retail” prices…$49.00 for a DVD? Give me a break.
Crappy little plastic Chinese-made wind up toys by the counter for stocking stuffers I guess…$5 a pop.
Insane.
DOC
I never understood buying DVD’s. Who likes to watch the same movie over and over? A waste of money, IMO.
“I never understood buying DVD’s. Who likes to watch the same movie over and over? A waste of money, IMO.”
You clearly don’t have a 5-year-old.
“You clearly don’t have a 5-year-old.”
Oh, you’re so right about that. And get this: if I did, I wouldn’t warping his/her little brain by selfishly placing them in front of the tube for hours and hours. If I ever do have a child, they’re not going to be raised on television and video games. Imagine that!
“If I ever do have a child, they’re not going to be raised on television and video games. Imagine that!”
Ha, Ha, Ha, Ha. Man, you don’t have a clue!
Why doesn’t he have a clue? I’m successfully raising two children without tv and video games. The oldest is in middle school, and she takes great pride in her tv-free lifestyle.
“You clearly don’t have a 5-year-old.”
—
Oh, you’re so right about that. And get this: if I did, I wouldn’t warping his/her little brain by selfishly placing them in front of the tube for hours and hours. If I ever do have a child, they’re not going to be raised on television and video games. Imagine that!
—
LORD!!
I’ll never forget the first time I heard *Bart* simpleton say a curse word.
See - the child you may have can be tainted by others.
Argh. What does this mean?
Even though they may jump in mudd puddles; climb trees; raise a baby squirrel (?); smiw; (fill in the blank) –
Er…Ya haven’t lived until you stand sleeping upright.
Never mind television.
Just try to keep your child in your heart, for s/he may have other plans; Oh, plans - good to have, realise you WILL adjust!
Try is the opperative word.
HAR! There are others that may thwart your efforts. I made the mistake of thinking a few parents were like minded - yes, that was foolish.
Yes, we misteped on occasion - yet a family we are!
It’s hard to forget the rental we ocuppied for two (?) years in the burbs of Dayton OH.
Family was (many passed) within a four hour distance. We participated in the community, cooked, decorated. Shared. Great times, good neighbors.
Dang, I feel a song coming along…
All yaaa need is luuuuuuuuuuuuv,
And no teeee veeeeee.
Silly me!
Leigh
Well, I certainly did my share of economic stimulation at the post-Christmas sales over the weekend! My extended family is getting together next weekend and I got most of my shopping done at bargain prices. Got to the mall early, stayed a couple of hours (the most I can stand at one time) and made someone in one of the circling cars happy when they snagged my parking spot.
My mother has heard that my all-time favorite clothing store, Talbots, is going out of business. Don’t know where I’ll shop when they’re gone.
“My mother has heard that my all-time favorite clothing store, Talbots, is going out of business.”
There was an email circulating saying not to buy their gift cards as they had declared bankruptcy. Although they’re certainly suffering and will be closing some stores, I was unable to verify their bankruptcy. I think people confuse Talbots with their J.Jill chain, which did go bankrupt (after Talbots sold it IIRC).
Ah, bless you for brightening my day!
I saw both on the *cautionary tale list, along with many other retailers. I am a former *ICSC member.
*Int’l Council Of Shopping Centers
“About 200,000 stores may close in 2009, compared with a record 160,000 in 2008, Flickinger said.”
Only slightly more closings in 2009 than 2008!? That looks like a best case scenario, much like the predictions we were seeing with the housing market a couple of years ago.
so much on relying on the service industry to provide jobs…i thought that made no sense. they kept saying we were becoming a service economy and don’t depend on manufacturing. now, the whole system is shot, no manufacturing jobs and no service industry jobs. hope we bring back manufacturing and make some of our own things we need!
You naughty, naughty consumers. That’s it, Santa’s not buying anything for you next year either.
Stories like this are not new and are sad to read, however that’s life and it can be damn tough at times.There have always been helping hands and will always be. This family has no way to dig itself out of the hole they have dug…
How one family’s mortgage is linked to meltdown…
HAMPTON BAYS, New York (Reuters) - Cynthia Goldrick’s daughter is in and out of the hospital for brain surgery, her mother has Stage 4 lung cancer and her father has moved into a home for the elderly.
So when the Goldrick family’s adjustable rate mortgage reset while husband Patrick was off work for a job-related injury, it eliminated the thin margin between their income and the mortgage payment and put them on the road to foreclosure.
While these circumstances may seem extreme — a perfect storm of bad luck — the basic economics of a hike in mortgage rates and a bank’s inability or unwillingness to modify terms have been shared by many Americans over the past year.
The Goldricks took out a $375,000 mortgage in 2005, when they refinanced a previous mortgage on their 1,800-square-foot house in semi-rural Hampton Bays, some 90 miles east of New York city.
At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family living off Patrick Goldrick’s salary as a cable guy.
Appraised at $605,000 in 2005, the house today is surrounded by others with “For Sale” signs out front and is probably worth less than the outstanding loan.
It is also the only home the Goldrick children have known. “It’s just walls. But this is where my daughter comes home after surgery, so they’re comfortable walls,” Cynthia Goldrick said.
The loan was granted by Rose Mortgage Inc. of New Jersey and is being serviced by Saxon Mortgage Services, a unit of Morgan Stanley.
But the mortgage is in the hands of neither because it was securitized, pooled with $700 million worth of mortgages into an investment vehicle created by Morgan Stanley known as IXIS 2005-HE4, and sold to investors.
Such pools constitute much of the so-called toxic assets at the heart of the worst financial crisis in the United States since the 1930s.
Today’s investors in IXIS 2005-HE4 include Prudential Insurance, Pimco Advisors, Western Asset Management and Legg Mason — institutions that manage money for the wealthy and the population at large.
NOT JUST A HOUSE BUT A HOME
“We didn’t jump on the refinancing bandwagon to take a cruise or buy a Mercedes,” Cynthia Goldrick said. “We refinanced to give my child a life, not a lifestyle, but a life.”
The Goldricks’ 10-year-old daughter, Erin, has had 10 operations for hydrocephalus, a Chiari malformation and spina bifida. Most of the medical bills are paid by insurance and a fund established from the settlement of a malpractice suit over Erin’s treatment as a baby.
Erin is an honor student who would have made high honors but for a score of 83 in dance. She bears little outward sign of her medical history, unless she pulls up her hair to show scars on her neck and an open wound on her scalp. She looks after her little sister, Emily, 6, and their room is decorated by dozens of stuffed animals.
What a shock, Pimpco is in IXIS 2005-HE4
Sept. 4 (Bloomberg) — The U.S. government needs to start using more of its money to support markets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund.
Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities, Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in commentary posted on the firm’s Web site today
I used to have some respect for Bill Gross because he called the housing bubble a few years ago, and saw the downturn coming. Why he was investing in these bonds at the same time he was calling a housing bubble is a mystery to me…unless he was **expecting** a govt bailout.
He’s certainly been in the frontlines asking for lower interest rates and govt purchases of “undervalued” assets.
Something isn’t quite right with him.
PimpCo’s Gross = Paulson’s dupe, who learned the hard way that “sure thing” investments some times don’t pan out. But there is still hope for him, as his “for the common good” policy recommendations, which just happen to work out very well for PimpCo’s bottom line, may get a more receptive audience when the D-rats take charge come January.
So who gets what when the jingle mail from the ex-occupant is received? How can the sale amount foreclosed or short be determined?
While these circumstances may seem extreme — a perfect storm of bad luck
[...]
when they refinanced a previous mortgage
[...]
After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family
[...]
They call this “bad luck” but the root cause of all this was refinancing (and presumably cashing out) and an adjustable mortgage that they couldn’t possibly pay off!
If they kept their monthly expenses predictable, they could have enough saved up to cover basis living expenses (presumably he’s collecting disability on a “work related job injury”) and pay Cobra if needed.
Their awful choice was whether the life of their daughter was worth the death pledge they had to make to give her one. Such is the stuff of great literature and bad TV dramas.
But the mortgage is in the hands of neither because it was securitized, pooled with $700 million worth of mortgages into an investment vehicle created by Morgan Stanley known as IXIS 2005-HE4, and sold to investors.
——————
And I believe the “HE” in “IXIS 2005-HE4″ stands for HELOC. IOW, this wasn’t just refinancing their original loan to a lower rate. Anyone able to confirm if this is the case?
Well there will ALWAYS be those with an unpredictable strain of bad luck. The problem that the economy is having is that with a recession and upsidedown homeowners, those aren’t the only people going into foreclosure these days.
A question Martin Weiss was asked…
Q: I see disturbing similarities between this crisis and The Great Depression. Both were triggered by the bursting of massive debt bubbles, for instance. But this time, the government is doing so much more to pump up the economy. So is it safe to assume that this crisis will be a lot less severe than the 1930s?
A: No, it’s not safe to make that assumption. True, the government’s massive intervention is a major factor. But there are also powerful factors that can offset or even overwhelm the government’s impact:
* Broader speculative bubbles. In the years prior to the Crash of 1929, the bubbles were limited primarily to stock speculation and restricted to a minority of the population. This time, the speculation has engulfed not only stocks but also millions of homes, commercial properties, local governments, corporations, and entire nations.
* More household debt. U.S. households are in far greater debt today with much less savings. In the 1930s, mortgages were rarer and less onerous. For all practical purposes, second mortgages, home equity loans, creative financing, and credit cards didn’t even exist. Today, they are everywhere in our society.
* U.S. is now a debtor nation. In the 1930s, the U.S. had large surpluses of foreign reserves and was a creditor to the rest of the world. Now, it has minimal reserves and huge foreign debts. As a result, there’s ultimately a limit to how much Washington can throw good money after bad to save the U.S. economy before foreign investors rebel, refusing to continue providing abundant credit.
* Derivatives. In the early 1930s, derivatives were virtually unknown — a tiny niche of little consequence. Today there are nearly $600 trillion in notional value derivatives globally, according to the Bank of International Settlements. The forced liquidation of many of these derivatives could frustrate government efforts to revive credit markets, driving the global economy into a deeper decline than would normally be expected.
What people have yet to realize is that our financial system has basically experienced complete systemic failure and that it is only being kept alive by central bank magic. Imagine if the fed had left things alone these past few months?
Of course one might also argue that our entire financial system has always been central bank magic.
July 4, 1776: Independence Day
December 23, 1913: Federal Reserve Act
How does your thesis explain the period from July 4, 1776 through December 23, 1913?
During that time frame it was essentially the same scam on a more regional scale, but you are correct….the real scummery began with the Federal reserve act and really picked up steam with the decoupling from gold.
Because the U.S. NEVER fiat currency before the federal reserve act? googling “not worth a continental” and “greenback” is an execise left to the reader.
Point taken. Does anyone expect Obama to replace the Fed with something new (but not substantially different)?
What are the powers of the President in regard to “replacing the Fed”?
OK, how about the Obama-era Congress?
Instead of killing the Fed, a good place to start would be to physically locate the NY Fed power structure at a different location. Extricating them from the Wall Street muddle and day to day personal interaction with the market thieves would be a great first PR move to show the Fed isn’t there just to bail out the big guy.
Professor,
It concerns me that we kinds-sorta have the same bunch of congress critters that we had long laying the foundation for our present house of horrors. Not sure they have the will to shut down their own craps game.
Please please please read the book The Creature From Jekyll Island. While the book’s central theme is the Federal Reserve, it also explains, in good detail, how the government has nearly always been deeply involved in central banking and/or at least greatly influencing the banking markets, including in the 1700’s and 1800’s. The Federal Reserve did not introduce central banking to the U.S. by any means, it only helped to solidify it. I learned a lot from those chapters on the old history.
Griffin goes a bit out there with some other aspects of conspiracy theory and such (maybe), but if you take that with a grain of salt - you can learn a heck of a lot about the entire banking history of the U.S.
+10000
Yep. You’ll learn more from this book than you will from most others.
* The value of paper money is limited by the real value of goods and services a nation produces. Hence doubling the amount of money in circulation does not automatically double a nation’s wealth.
But does it halve the debt?
“But does it halve the debt?”
If they used it to pay down debt, maybe.
“real value of goods and services a nation produces. ”
leveraged mortgage CDO’s are not real goods ?
We Have out First Pawn Shop in My little neck of the woods Sunnyside Queens. and its named DJ’s pawn shop…43 and queens blvd.
I wish it was mine, i would be a happy camper to own a pawn shop today. Oh heck I’ll apply for a job there today.
I can’t wait for the peep shows and three card hustlers to return to 42nd. It’ll be the 70’s all over again!
If nothing else, Manhattan had a lot more character in the bad old days, before the jet-setters, hedge fund shylocks and other Plastic People Of The Universe took over the island as their own.
“Plastic People Of The Universe took over the island as their own.”
Ditto. I would love the freaks and artists to move back in. I can only take so many chain stores…
We have the internet now.. you can get your gambling and peep shows online.
I was working for that mouse-run company during the “cleanup” of Times Square. Many of the folks in the creative department I was part of sorely missed the porn theaters that got driven out….as someone who grew up in NYC, I miss them too!
Pawn shops are in a tricky spot. Yes, business is up, but ultimately they have to be able to sell the stuff for more than they pay out, so you have to pay close attention to the values, and pay attention to how much other similar stuff you have on hand.
I’ve never much in the way of deals, I find Craigslist and eBay the place to find better prices. I’d rather pay someone up front for an item, put more money in his pocket, and eliminate the middle man (Pawn Shop might as be a Realtor, it’s a middleman).
Yeah, there’s a pawnshop near my house, and the few times I’ve visited, they’ve never had good enough deals for me to be interested in buying used cr@p from a pawnshop.
One just opened at Ditmars (Astoria Queens) a few weeks ago too…
Check this out DJ - everyone else too!
Kind of cute, funny and twisted all in one.
http://www.cnn.com/2008/US/12/29/carnegie.tenant/index.html
Duchess of Carnegie, 96, refuses to leave home (The picture is a hoot)!
CNN) — Editta Sherman has celebrated more than half a century’s worth of new years in her palatial studio apartment above New York’s Carnegie Hall. But it’s unlikely the celebrated portrait photographer will be raising her glass there next year.
Known as the Duchess of Carnegie, the 96-year-old came home a few days ago to find an eviction notice on her door.
“I thought, oh, what is this? Are you kidding me that they are really going to send a woman like me down the street just like that? Have me scurry away without a fight,” she said, delivering a whooping cackle, punctuated with a grandmother’s tsk tsk.
“Oh, no, that’s not what I am going to do. They’ll have to take me out of here with their bare hands.”
(Article continues)
Leigh
This is the good and bad of rent control. She has a right to live until she dies in that apartment. (guaranteed renewal leases) because Carnegie hall owners agreed to that deal 50+ years ago…or be paid a lot to leave…nobody expected her to live there that long.
Here is the big check mate, If one of her kids moves in with her for at least 1 years and makes that their permanent address, …change all their info ID to NYC, sell their houses back home and really seriously move in…..they could inherit the rent controlled lease…..ok not fair but AGAIN it’s what Carnegie hall owners agreed to 50+ years ago.
Aricle in the sacbee about the commercial real estate market in horrible condition.I do not see who is going to fill all this space as retailers keep going bankrupt.Maybe they will become homeless shelters?
What about the 5 bedroom 5 bath McMansions becomming half way houses or assisted living quarters for the elderly/ handicapped….but most have lots of stairs.
I don’t think too many people would qualify for a 5 bedroom section 8 voucher
It could become the next Animal house
Any other ideas on what to do with these monstrosities?
————————————
Maybe they will become homeless shelters?
That is going to be an interesting question. Initially the HOAs will fight and resist having “undesirables” living in their communities, but ever plunging values will eventually force them to capitulate.
I am wondering if they could become something like the old rooming houses. You would probably need to re-do the floor plan first though, which might be a deal breaker.
Some of those HOAs will be hard to topple. In many cases you need a unanimous vote and county approval to dissolve it.
Of course, lawmakers can simply invalidate their contractual agreements.
When Jeb was governor of Florida, he passed laws that made it illegal for HOAs to restrict American Flags and solar electric panels. I actually opposed this: If I was smart enough to buy property that had no American Flag or solar panel restriction, I should be able to profit from my wisdom. Non-HOA houses are hard to come by in many Florida counties. Those select homeowners should be allowed to benefit from their situation.
“Those select homeowners should be allowed to benefit from their situation.”
I don’t know about all of FL, but I know south-east FL intimately. With the exception of a few small waterfront communities the only “benefits” non-HOA homeowners get down here are pink/purple/lime-green houses, dirt/weed front lawns covered in dozens of old cars, half naked neighbors enjoying cases of beer in the driveway/porch, and if you are lucky, possibly a severed goats head hanging in one of your neighbor’s carport. I was fortunate enough to have been raised in a working class neighborhood that enjoyed all of these benefits thanks to our non-HOA status. You would be shocked at how quickly these “benefits” manifest themselves.
Your area may not have need for HOA’s but they are so prevalent in south FL for good reasons.
Most places have zoning laws that prohibit more than 3-4 unrelated people from living together in a residential zoned neighborhood, where most of the McMansions are located.
reuven said:
“Non-HOA houses are hard to come by in many Florida counties.”
Same here in Ventura County, So Ca. I refuse to live in another HOA McMansion. All my former residences felt like rentals due to the HOA. Worst idea ever. Totalitarian Money Pits. I hate them.
Family living in £2.6 million ‘council house’
A mother-of-eight living on housing benefit in a £2.6 million home in one of London’s most exclusive streets claims it is “great” - but she would rather have an ordinary house.
By Murray Wardrop
Last Updated: 7:36AM GMT 26 Dec 2008
Francesca Walker, 33, was housed in the five-bedroom three-storey villa by Kensington and Chelsea Borough Council even though it is costing taxpayers £7,600 every month.
But she claims she is the product of a failed society and insists it is not her fault she has ended up living like a millionaire.
She said: “I didn’t ask to be here. I’d rather have a job and live in an ordinary council house than be trapped in a catch-22 situation where going out to work will actually make me worse off because I can never make enough to pay the rent.”
But Ms Walker admitted it was “great” to live in the property, which boasts wooden floors, granite work tops and high ceilings.
She added: “I’m not going to pretend it isn’t great. It’s amazing to have so much space. And not to wake in the morning and have nine of use desperately …
Coffee shops?
Lane
RE: commercial real estate
The next monsterous collapse coming.
FIRREA lives…hubba, hubba!
I was thinking it would be fun to get hold of commercial space for free to do a R&D geek lab.
I was also thinking maybe it would be possible to buy commercial space and turn it into a house. But zoning issues, and it might kill my desire for an inground pool.
commercial real estate market in horrible condition ??
In commercial development the saying goes “Show me rooftops”…What changed dramatically over the past ten years or so is they started saying “Show me entitled residential land”…They did a reversal…They decided to develop prior to seeing “Roof Tops” so they could be first to market and make the price of entry very expensive for any competitor..Roof tops never came and of those who did the current demographic retail profile (lower median income) is much different than the model that was developed to justify moving forward…
You mean empty “flipperbait” developments AREN’T a source of “high end”* customers? Whocouldanoed?
*To much money, not enough sense.
Yep…
BEIJING (AP) — Nine people went on trial Monday in connection with China’s tainted milk scandal, state media reported, following the announcement of steps to compensate the families of hundreds of thousands of children harmed by contaminated infant formula.
The tainted formula gave babies painful kidney stones and news of the problem sent parents around the country rushing their babies to emergency rooms for tests to see if they were affected. Chinese dairy exports such as chocolate and yogurt were also found to be tainted, triggering a slew of product recalls elsewhere in Asia and in Europe, Africa and Latin America.
At least four of the suspects on trial Monday could be given the death penalty
——————————
This would NEVER happen in America the death penalty for harmful products…they are way ahead of us in fitting the punishment to the crime
You can accuse the Chinese of lots of things, but coddling criminals wouldn’t be one of them…
Some of the folks who helped create the financial bubble ought to be facing a similar fate.
hang em high!!!!!!!!!!!
“You can accuse the Chinese of lots of things, but coddling criminals wouldn’t be one of them”…
You got that right, they are the only nation that I know of that has a traveling execution bus.
I think they got that idea from the Germans, who had traveling gassing busses.
Yes, and perversely, much of the gas for those buses was actually transported in ambulances — red crosses on the sides and all. The SS and their doctors (and I’d say “doctors,” except they literally were doctors) would hook up gas lines from the ambulances to these buses and turn on the gas.
I’m currently reading a book called “The Nazi Doctors” which describes many of the “medical” procedures instituted by doctors under the direction of the SS. I’m only halfway through, but it’s been a fascinating and deeply troubling read. I say “deeply troubling” because it exhibits how easily human beings will attempt to rationalize and legitimize even the most objectively sinister actions.
“You can accuse the Chinese of lots of things, but coddling criminals wouldn’t be one of them…”
The shoot them and then sell them to Europeans, who chop them up and charge Americans cash to look at them.
Well, they tend to ignore corruption until something REALLY BAD happens and only then do they exicute somebody. Kind of the way that Wall Street treats companies: you can cook your books eight ways ’till Sunday until you miss a payment or dividend, then it’s bailout time.
And yet the criminals are not deterred. I suppose that its in a criminal’s nature to believe that he will not be caught.
“China’s tainted milk scandal, state media reported, following the announcement of steps to compensate the families of hundreds of thousands of children harmed by contaminated infant formula.”
How long before this sh*t hits us at home, and not just our pets?
This makes me sick, but not surprised. As a kid I remember Chinese-made items being considered an ongoing joke. You KNEW when you bought that tool, toy or trinket with the “Made In China” sticker on it, it would break right quick.
Now we’re getting OUR FOOD (items) processed and packaged there? Is anyone really surprised when corners are cut by Chinese, endangering lives from tainted food products? In the past, we had STICKERS warning us THIS ITEM IS A PIECE OF SH*T!” When you bought that crappy crescent wrench that broke, you only gouged a knuckle or two. What now, kidney stones, liver-failure, tumors?
Double Whammy. Now our jobs are off-shored there, AND to make things worse, performed in a fall-through-the-cracks poorly-regulated FDA environment. So now, you, your family or pet might die a slow, painful death because some scumbag 10,000 miles away rolls the dice to meet US Company’s “profit margin.”
DOC
The amount of a milk solid derivative called casein being imported is increasing. U.S. food manufacturers use it in stuff like pizza cheese and ice cream. It’s not milk per se, and the farther you get away from the creature that produced the milk, the more likely you get shenanigans or the usual integrity questions. Next up: lots of casein from water buffalo herds from India.
Forgot to say that the FDA standards of identity for these new milk products are murky at best.
Not too surprising a lot of autistic children end up being allergic to gluten and casein. Lord only knows where it’s coming from.
We started doing the Feingold diet over the summer to help one of our kids who has ADHD. I have since learned that there is a sub-ingredient list for most prepared food, in other words the stuff that the ingredients are made from. A lot of the ingredients and sub-ingredients are manufactured in Asia.
I believe they recalled some Halloween candies this past Halloween: miniature M&Ms and others from Mars, IIRC.
There is no good reason to be importing our food from a country like China, IMHO. We are so fortunate to live in a country that provides ample food, and we can control the quality here.
The toxic crap from China really ticks me off, especially when our children are the ones at risk.
During the real estate crash that occurred in Texas after the oil bubble of the ’80s collapsed, you read of developments under construction (but not yet occupied) being completely bulldozed down to their concrete slabs. Is anyone aware of that happening yet this time around?
“…you read of developments under construction (but not yet occupied) being completely bulldozed down to their concrete slabs.”
Let C = cost of completing construction on a house, P = market value of a new house, B = bulldozer operating cost and L = salvage value of the bulldozed land. Bulldozing becomes economically rational when
$latex P - C < L - B$.
(Apologies in advance if the latex effort misfires…)
“Gentlemen, Start your engines” and let the Catipiller D10 and D11 Bulldozers…. run wild
The trouble is that land is not selling for much these days, so far as I can tell. I am not sure about the C in my equation, but L = $0 might be a reasonable guesstimate in many markets…
It’s a shame that everyone in the construction business is so shell shocked they aren’t capitalizing on material reclamation?
All of this material was at sky high levels in 2005 but I can’t imagine there’s much of a market for unused roof trusses etc. Then there’s the cost of warehousing all of this ‘cr@p’ until building actually makes sense again. Maybe this is really more about the Time Value of money or ’someone’ would be pursuing it?
Greatest waste of resources in human history.
You actually don’t need to “warehouse” most building materials—-just get them out of the weather, e.g. under roof.
I have a friend whose grandfather ran a lumber-yard during the Great Depression; he just put up roof-like structures with no walls, and piled the glut of lumber under them to keep it out of the rain. I guess the cost of putting up a roof was pretty low, and when things finally turned around, he had accumulated a LOT of lumber at low, low prices. Of course, you also have to be financially conservative enough to have cash to survive operating during such a period.
But if you do, it’s not a bad model… And much cheaper than putting it in actual commercial warehouse space.
Framing lumber 2 x4 2 x6 etc. is perishable just like fruit…Keeping dry does not help…It drys and twists in about 90 days.. Laminated material glu-lams & plywood can be dry stored well..So can kiln dried material, redwood, hardwood and trim….
We’re slowly building a larger cabin on our property in Vermont, we’ve gotten some great stuff for free while the boom was still going on and some other stuff for very little after it started. This includes the trailer we bought this fall to haul all of our stuff.
“Framing lumber 2 x4 2 x6 etc. is perishable just like fruit…Keeping dry does not help…It drys and twists in about 90 days”
What the heck happens when it is part of a house that is being built? Does the Building Permit stop framing lumber deterioration? If it is going to dry and twist, nails are not going to stop it. Am I missing something?
San Diego Union Tribune
Foreclosure is best option for some owners, analysts say
By Emmet Pierce
2:00 a.m. December 29, 2008
Deeply in debt and struggling with rising mortgage payments, many homeowners in slumping markets such as San Diego County are choosing foreclosure as a business decision despite the serious damage it can do to their credit scores.
Home values have fallen so far that it no longer makes financial sense for some people to keep paying their mortgage, analysts say. Some contend that those who bought at the height of the market, using risky adjustable-rate loans with no money down, may have little to lose but their pride, especially if they have undermined their credit by missing mortgage payments.
Although loan default should be a last resort, homeowners mired in debt “are better off to just get on with it, take their credit hit today and get on with their lives,” said Mark Goldman, a real estate finance instructor at San Diego State University.
“Pull the rip cord and get out now,” Goldman said. “The next step is restoring your credit, and you can’t begin the restoration process until you take your hit.”
A record one in 10 U.S. homeowners with a mortgage was at least one month behind in payments or in foreclosure at the end of September, according to a report by the Mortgage Bankers Association. Those who end up returning homes to lenders may spend years rebuilding their credit scores to regain their ability to borrow money.
Despite the consequences, the use of foreclosure to sidestep debt when there are other options is a growing trend, said Dustin Hobbs, spokesman for the California Association of Mortgage Bankers.
“There have been no studies to show if it will be a fad or a long-term problem,” Hobbs said. “It’s something everyone is keeping an eye on.”
Not to worry, the new FICO ( soon to come) score system puts less emphasis on missed mortgage payments. Did anyone hear about this? It seems that if you use credit cards, but pay the balance every month, your credit score may take a slight hit. Little things(?) like overdue library books, small unpaid medical expenses or small unpaid student loans will not affect your score. The more cards you have with balances, the higher your score, providing you pay (close to) on time. I hope I heard this wrong.
I hope I heard this wrong.
==============
Me too.
Wall Street Journal
* THE WEEK AHEAD
* DECEMBER 29, 2008, 9:27 A.M. ET
HOME PRICES
Index Likely to Show Further Fallout From Burst Bubble
…
In the most recent report, for September, the Case-Shiller 20-city composite home-price index fell 17.4% from a year earlier and 1.8% from the previous month. The index, which measures prices of single-family homes in 20 metropolitan areas, is based on a three-month moving average.
“We’ve had to repeatedly move our price forecast down and down,” said Abiel Reinhart of J.P. Morgan Chase. “There’s no sign yet of home prices leveling off or even the rate of decline decelerating.” J.P. Morgan estimates that the October year-over-year drop will be 18.2% and the monthly decline from September will be 2.2%.
A 2.2 pct decline over one month occurs at an annualized rate of
((1-2.2/100)^12-1)*100 = -23.4 pct. If Herr Reinhart is correct, then the rate of home price decline in the national U.S. housing market will prove to be accelerating.
I’m going to apologize in advance for continuing a discussion here that was started last night on vegetarianism.
I’m a vegetarian drop out - that is, I found myself tired, sick, and miserable on this supposedly “healthy” diet. It took me a long time to get “home”. But now on a meat/vegetable diet I find myself with energy all day long and better health than I have ever enjoyed.
What interested me last night was that certain posters/blog starters (not to name names
), have not taken the same critical eye to nutrition information as they have to the housing bubble.
Would they have given pats on the head to using the biased and poor observations of philospher and gold dealing frenchmen as “evidence” in relation to the housing bubble? How often has this board lamblasted people for repeating what “everyone” knows (real estate always goes up, rent is throwing your money away, etc.)
If people can get sick on vegetarianism, can it be universally healthy? (It’s not just me, by the way, who is a vegatarian drop out.)
To extend the conversation further - if low fat diets are “heart friendly”, why don’t people stop dieing of heart attacks? (My grandmother and grandfather both died of heart attacks despite a low fat diet for the last 20 years of their lives.)
I encourage everyone here to look at the world of nutrition information with same critical eye they’ve used housing bubble.
If you do, you will discover the same world of conflicted interests, misinformation, and incompetence, especially from the MSM. The main sponsors of the American Heart Association and the Diabetes Associations are agribusiness and the drug companies. Not surpisingly, neither organization can seem to find a “cure”.
If the American Lung Association was sponsored by Philp Morris, I can guarantee you that lung cancer would still be on the top 10 of issues and we’d all be wondering if drinking glasses of water were producing lung cancer. Meanwhile, we’d be happily puffing away on cigarettes for the “health” of our lungs.
I would encourage everyone on this board to read “Good Calories, Bad Calories” by Gary Taubes. It pushes no diet in particular but instead examines how we arrived at our current state of nutrition understanding. The Weston A Price foundation is dedicated to optimizing diets for the human race and another resource I highly recommend.
I’d encourage everyone to very wary of parroting an “known” nutritional information, ie: vegetarianism is healthy, Americans eat too much protien, red meat is bad for you/causes heart attacks, eggs are bad for you, oatmeal prevents heart attacks, saturated fat is bad for you, etc, etc. If you look into the beginnings of each one of these “facts”, you will find poorly done science and people and companies with agendas to push.
Phew! Sorry about the length above. It bothers me a lot to have people suffer needlessly. And they do, because I think we understand less about what constitutes good human nutrition than we did in the 20s/30s.
And for the record, I don’t promote what I eat as a diet for everyone. Find a diet that keeps you healthy and lean. Mine looks like the opposite of the AA but then again, I’ve done the opposite of the NAR thus far and it’s worked.
AA = AHA = American Heart Association
Well, I think an equal # of people feel healthier eating vegetarian. I did. I do feel better when I eat less meat. I’m not crazy/fanatical about it .. I just find that if I cut back on meat I feel better. But that’s me …
The question is: have you ever tried cutting back significantly on the grain/bean products in your diet?
It’s an interesting personal exercise to attempt to eat the modern equivalent of a hunter/gatherer diet for a month to see how you feel. (It takes about a month to find out for sure as your digestive system must fall back into it’s primary methods of digestion, rather than the enzymes it must produce to digest grain based food.)
It’s fascinating to me that the above is simply not done - everyone “happily” cuts out the meat but the thought of cutting out the food we’ve been eating for the last 10 minutes (if you compress our evolution into 1 year) is simply discarded without a second thought.
Again, I do know that there are people who cannot eat the way I do. I believe that there people for whom some whole grains is a must. (There’s actually a medical condition is associated with it. There’s also medical conditions associated with too little fat in your diet, but I digress.)
However, I’d be very cautious about saying that an equal number of people on the planet would do well on a vegetarian diet. Quite often, a switch to a vegetarian diet also involves avoiding junk food and adding exercise. Both of the later 2 acts can have as much of an impact on health as the avoidance of meat.
Vgal,
In the eighties, my Doc told me to lower my
cholesterol, it was 284, to lower the risk of a
heart attach.
I went on a strict vegetarian diet for 6 months, no meat at all, not even fish. During this time I did learn a lot of creative ways to
make veggie sandwich’s and such, plus I did
feel a lot better physically.
Went back to the Doc and took the test and
he was astonished, my cholesterol had dropped
to 282 and this is with a lot of hard physical
work during this time.
Checked the family history and told me not to worry about it. Everyone in my family
tree makes it at least to 90+ and a lot of
them smoked like a chimney and drank like a
drunk….not me, of course.
Skinny and sober Rancher
Rancher…You are around Grants Pass correct ??
I’m confused. Dropped from 284 to 282?? Are you saying that the zero change was what astonished your doc? Or was that a typo? I’m not a big believer in the cholesterol connection anyway.
As a former “soft-core” vegetarian (rare fish) for 5 years I was in superb shape, felt great and saved lots of money. Problem with a lot of vegetarians is that they don’t eat any vegetables–just pass on the meat.
Hunter/gatherers lived to be about 30 years old, and those 30 years weren’t so great.
It’s absurd to think that people who have evolved over the course of hundreds of thousands to millions of years in different climates and conditions would have the same nutritional requirements, but popular culture seems to push the one size fits all mentality. Differences in lactose intolerance, diabetes, etc. in different groups points this error out fairly well. While I think that there are some absolutes ( don’t eat too much, eat a variety of foods) paying attention to your body and knowing yourself should be of primary importance. Knowing yourself should also apply to making a decision on buying a house.
While I think that there are some absolutes ( don’t eat too much, eat a variety of foods) paying attention to your body and knowing yourself should be of primary importance. Knowing yourself should also apply to making a decision on buying a house.
Agreed on all levels.
VG,
I’m busy this morning, but let me tell you a bit about my experiences. When I first started off not eating meat, I made some mistakes. I found myself relying on things like cheese and peanut butter too much and actually gained weight (getting my yo-yo weight gain/loss under control was a big goal for me).
But I read up on the matter and began to learn what to replace the meat with. And it took years. For instance, I came to agree with some writers that some beans should be consumed every day. But the pinto bean is last in nutrition. The asian beans like mung and adzuki are better tasting and contain more of what I needed. But that means cooking them myself. Which brought another advantage; much less spent on food.
I learned more about mediteranian foods and the benefits of olives and those oils.
Years down the road, I read a bit on the adkins diet, and started to wean myself off of so many carbs. This really helped me smooth things out, as I have always had a problem with blood sugar. If I order or make some stir-fry, I don’t have rice with it anymore.
The way I see it, vegetarianism is just one tool in putting together a diet that works for me. And don’t forget exercise. How many people do you know that spend lots of time working off calories, maybe even damaging their knees, etc, in the process? There are a lot of angles to what we eat, and different benefits in the various alternatives.
Anti-carb folks would enjoy the 2007 book “Good calories, Bad calories” by Gary Taube (something like that). The author spent 7 years going through all the research. He found that in all the studies where fat was shown to be the bad guy, the researchers didn’t properly run control experiments for carbs, and so we really don’t know if carbs or fat are the problem. Also, weight is more than calories in - calories out. It’s a complex web of insulin, fiber, exercise, starvation metabolism, hunger, vitamin intake etc. That’s the simplified version, of course, but it appears that carbs really are the enemy.
The only diet that makes any sense is Eat Your Veggies and Not Much Else. Big surprise.
beans and grains they are all the seeds of plants. I guess the same goes for fruits and nuts
we are all seed eaters.
I was a vegetarian for 13 years but not a healthy eating one. I eat better now but although I love the taste of meat I hate the industry and will go back to being a vegetarian for both health and moral reasons. This time however, I know a lot more about what makes me feel better and will be a much healthier eater. (As I have been becoming for the last year.)
I think vegetarians can be very healthy or unhealthy eaters same as flesh eaters. Vegetarians still eat animal products (milk and eggs) and have little nutritional worries as long as they eat a wide variety of foods. Vegans do not eat any animal products and this is a much tougher route where you have to be very careful about getting certain nutrients and amino acids. But they can also be very healthy as long as they are careful.
To state that vegetarians are unhealthy and meat-eaters are healthy is as ridiculous as saying only a raw foods diet is truly healthy. I don’t know what your vegetarian diet consisted of, but I’m guessing it wasn’t a healthy variety of food if it made you feel that bad. Or maybe your cravings for flesh just made you seem more miserable than you really were. (My only problem with being a veggie - smelling the steak or tuna or roasted chicken.)
Americans eat crap and too much of it. Our portions are out of control and processed food is literally killing us. I feel a lot better when I eat whole foods (including lean meats) and lots of fruits and veggies, less simple carbs and no processed sugar. But I also crave the cheap processed food, the carbs and especially the sugar, especially if stressed or depressed. Unfortunately, our bodies don’t crave what is best for us.
There are a thousand diets out there from Atkins to raw foods and one of them is best for you. Mine is vegetarian (for moral reasons), lots of raw foods, whole grain pastas, non-fat milk, lots of eggs, and cheese as my vice food. No sugar! (I don’t tend to drink much so the alcohol sugars are easy to give up.) With this I lose weight, have better skin, more energy and less illness (although I am rarely sick which has more to do with not having kids than my diet :D.) This would be a terrible combo for others - i.e. anyone who has diet-related cholesterol – but works for me. I also like Weil’s Mediterranean diet which is almost vegetarian but has Omega rich fish a couple times a week. But that’s my body and what works for me.
I’m sorry that being a vegetarian didn’t work for you, but to assume that other posters are lying around in a weak limp heap with no energy, sick and miserable because they don’t eat meat is absurd. To assume they haven’t researched nutrition and tested different diets to see what works for them is demeaning. And to say that you feel better eating meat therefore everyone will and that the vegetarians here are unable to think critically about their diets is more than a little self-absorbed. The book you mentioned sounds interesting and while I agree that simple carbs are bad, but they aren’t the same degree of bad for everyone – i.e. non-carb addicts can eat them just fine occasionally whereas I never should. (I don’t consider fruit a bad carb although I avoid most fruit juice.)
My experience is that after 13 years as a vegetarian I went on the Adkins diet. I have never felt so sick or out of balance or plain gross in my life and managed a couple weeks of feeling like crap before I went back to a more balanced diet. You are not healthy if you are willing to kill someone for an apple!! For others, including a friend of mine who lost an incredible amount of weight, they feel best on Adkins. All of us have different genes, different food tolerances, different addictions, different exercise needs. To assume we all have to eat the same thing and the same diet will make us all feel exactly the same also indicates one has “not taken the same critical eye to nutrition information as they have to the housing bubble.” In both housing and diet there is never a one-size fits all.
You go V-gal. And thanks for the bio lesson yesterday re: humans vs. cows vs. dogs & cats.
This has been a very interesting thread, folks.
All I can say is, ol’ Blano wants his burgers, steaks, etc.
Ug.
Diamonds are a girls best friend??????? Look again:
http://finance.yahoo.com/q/bc?s=HWD&t=1y&l=on&z=m&q=b&c=
What ……..nobody has an opinion on this?
*waves hand* I do ! I do !
My husband’s father sold gold and diamond jewelry. The retail markup on diamonds is outrageous. The diamond cartel has a vested interest in keeping the supply controlled. It’s the classic recipe for a scam: take a commodity that isn’t really as rare as it’s touted to be, give it cachet via advertising and keeping a tight lock on availability, and presto! Diamonds become a girl’s best friend!
IMHO the best use of diamonds is in precision knives for scientific and industrial use.
Having said that, I confess I do possess a near-perfect one-carat diamond pendant made from my deceased mother-in-law’s engagement ring. On the rare occasion when I wear it, I feel quite special.
“take a commodity that isn’t really as rare as it’s touted to be,”
When I was in my 20’s I made and sold silver jewelry. I worked in the wedding ring trade for a little while and studied at FIT. I recall reading somewhere that if allowed to find it’s own true price, diamonds would be closer to the price of rubies.
huge haircut, but looks like a lot of other commodity charts (other than gold) I’ve followed the past year
No-Layoff Policies Crumble
——————————————————————————–
Companies That Have Avoided Job Cuts in the Past Find This Recession Is Different
Until recently, Enterprise Rent-A-Car Co. prided itself on a 51-year history of never laying off a U.S. employee. When competitors slashed fleets and shuttered branches after the Sept. 11 attacks, Enterprise kept hiring.
This fall, though, the nation’s largest car-rental agency said it would dismiss 1,000 of its 75,000 employees, as Americans curtailed driving and flying. “These types of declines are unprecedented,” says Patrick Farrell, Enterprise’s vice president of corporate responsibility.
The deepening recession is prompting layoffs at long-established employers that avoided job cuts in previous downturns. These layoffs demonstrate both the severity of the current recession and the continued erosion of workplace norms that once shielded many U.S. workers from permanent job loss.
Several of these employers are in hard-hit industries. Employment in the car rental and leasing sector, for example, fell 3.3% in October from a year earlier, according to the U.S. Bureau of Labor Statistics. Gentex Corp., a Zeeland, Mich., automotive supplier, conducted its first layoffs in 34 years this month amid plunging car sales. Declining gambling revenue prompted the Little River Casino in Manistee, Mich., to dismiss 100 of its 950 employees in November, the first layoffs in the resort’s nine-year history.
Enterprise hires thousands of young college grads each year to be management trainees. I have a hard time believing that they all stay on board. My guess is that most are terminated within their first year, or leave when they are not promoted from trainee. Neither would count as a layoff I suppose. Maybe they are laying off trainees that aren’t quiting on their own?
Many years ago, Business Week did a profile on Enterprise. Very interesting. They hire the “gentleman’s C” graduates who would have a very hard time going anywhere else. As a patron, I had always wondered where the company placed the employees once they aged past their mid 20s. Everybody does, you know. I have yet to see a middle-aged Enterprise employee.
The Business Week article did not speak to that question. Nor did either of the two young Enterprise employees I subsequently - discreetly - asked.
From yesterday’s NY Times
Housing Inventories on the Rise
http://www.nytimes.com/2008/12/28/realestate/28zone.html?_r=1&ref=realestate
Really really high inventories, over 20 months on Long Island. The article doesn’t tell us, “IT’S THE PRICES, STUPID!”
I like this last bit.
“Mr. Otteau says the shift was partly because of higher energy prices. But the dominant reason is that the number of households with children living at home is on a persistent decline.
“In 1985,” he said, “50 percent of households had children at home. In 2000, that was down to 33 percent. Today it is 29 percent, headed to 25 percent.
“That means that 75 percent of home buyers over the next 15 years will have childless households — and within that group are empty-nester baby-boomers, or couples or singles buying a first house. And that means that three out of four home buyers will have no interest in a house in the suburbs with a good school system, which is pretty much what we’ve created over the last 50 years.”
Mr. Otteau cited a new study from Virginia Tech projecting that a nationwide surplus of 22 million suburban homes on lots larger than a sixth of an acre will be languishing on the market by 2025.”
And how will these empty nesters sell their suburban homes to move if nobody is coming to the suburbs?
It was the same argument about all the people who will move to Florida and Las Vegas.
“That means that 75 percent of home buyers over the next 15 years will have childless households — and within that group are empty-nester baby-boomers, or couples or singles buying a first house.”
Don’t buy a McMansion, unless you want to own a bottomless money pit.
This logic doesn’t seem perfectly sound to me. I know plenty of people who have put off having kids (myself included) waiting till they could afford that house in the suburbs with good school systems. Obviously I have my own bias here as I would be friends with/socialize with people in my own demographic - but I’m not talking about counting on just my hands and feet here…. way too many people I know who are still living with their parents or renting, etc and would, if housing prices were normal, be buying and/or having children.
I know some couples who put off having children for whatever reason and now the biological clock has run its course.
I’m one. But there was no way I was going to have children in a society with insane divorce rates and an “earthquake” economy.”
I grew up poor and it sucked.
“I know plenty of people who have put off having kids (myself included) waiting till they could afford that house in the suburbs with good school systems.”
No act of economic prudence will go unpunished.
Strangely, it will be punished (eventually) by much better schools and more spoiled children, what few there are. (See China)
You guys are the core material for the movie “Idiocracy” with Luke Wilson. It is an idiotic movie with some eerie parallels with today’s societal inclinations.
I’m from Long Island. Of my four siblings and five cousins, only two have stayed on LI. Although we all graduated from college, only one of the two that remained on LI work at a professional job. I’d say LI got a really crappy return for all the public money invested in our primary educations. Of course, kudos to the NIMBYS to managed to scare off any and all industry.
Suffolk county is actually the largest employer in Suffolk county.
I’m also a Long Island native. I’m the youngest of six children and none of us live on Long Island. We’re all college graduates. I was the last to move out and that was back in 1992.
Back then the property taxes in Nassau County were ridiculous and I imagine they’re not any better now (and possibly much worse). The cost of housing was one of the major reasons why I left.
On the rare times I’m back in the metro New York area I’m amazed at how congested the entire area is, even the less densely populated areas like LI and Westchester.
New Yorkers tend to be very parochial and provincial, with a tendency to look down their noses at other areas of the country. I know a lot of them who believe “if it’s not NY then it sucks.”
Once you get out of Long Island and the congested northeast, there are a lot of areas in the country where the quality of life is much better because the cost of living is in line with the underlying economics.
The south shore beaches of Long Island with their fine white sands are beautiful. Relatively easy access to the culture of New York City is another asset for Long Island. But that cost of housing… I’ll pass.
Test
$latex E = MC^2$
OK, FPSS, time for more McEdumacation…
Don’t feel bad. Yesterday I tanked on the &emdash and &mdash thing.
Your browser should encode an em dash when typed correctly (— —), no special character code needed. Not sure what symbols the Prof. is trying to encode, however.
I try to avoid feeling bad about my own ignorance, as it impedes learning. The most important advice I ever received on learning came from a college math professor:
“Learning (mathematics) is a process of eliminating layers of ignorance.”
Prof: As long as we are on the subject of mathematics — did you accept little bears challenge?
“did you accept little bears challenge”
I believe I answered his question beyond his hopes and expectations…
but you will have to hunt back in the bits bucket for my response if you are interested.
Drug Companies & Doctors: A Story of Corruption
By Marcia Angell
Side Effects: A Prosecutor, a Whistleblower, and a Bestselling Antidepressant on Trial
by Alison Bass
Algonquin Books of Chapel Hill, 260 pp., $24.95
Our Daily Meds: How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs
by Melody Petersen
Sarah Crichton/Farrar, Straus and Giroux, 432 pp., $26.00
Shyness: How Normal Behavior Became a Sickness
by Christopher Lane
Yale University Press, 263 pp., $27.50; $18.00 (paper)
“…The problems I’ve discussed are not limited to psychiatry, although they reach their most florid form there. Similar conflicts of interest and biases exist in virtually every field of medicine, particularly those that rely heavily on drugs or devices. It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of TheNew England Journal of Medicine.
One result of the pervasive bias is that physicians learn to practice a very drug-intensive style of medicine. Even when changes in lifestyle would be more effective, doctors and their patients often believe that for every ailment and discontent there is a drug. Physicians are also led to believe that the newest, most expensive brand-name drugs are superior to older drugs or generics, even though there is seldom any evidence to that effect because sponsors do not usually compare their drugs with older drugs at equivalent doses. In addition, physicians, swayed by prestigious medical school faculty, learn to prescribe drugs for off-label uses without good evidence of effectiveness….”
http://www.nybooks.com/articles/22237
“…It is simply no longer possible to believe much of the clinical research that is published…”
The books review is well worth reading.
I had to resist my MIL’s “family diagnosis” that my sons were ADD back when they were normal 5-year-old boys. No Ritalin for my brood.
Do not all 5 year old boys suffer from ADD?
Is that not normal?
My point: Perfectly normal 5 year old boys behave in ways which make it quite easy for quacks (and MILS) to misdiagnose them as having ADD and to prescribe (recommend) Ritalin as a treatment.
Apparently its normal for high schoolers to procure a LD or ADD diagnosis just in time for school and college testing such as SATs. This diagnosis eliminates the time restriction on the test, thus taking away all the pressure (and boosting junior’s chances of getting into college).
We had good fortune raising our son.
His playground was acres of woods and a bay to canoe about. Not to mention the swimming pool filled with all the little dahlings in the neighborhood in the summer months.
And the double good fortune of a seven year assignment during those formative years.
And like you P’Bear, we would never have considered rialin - kids need to jump in mud puddles and climb trees!
Ah, great memories.
Leigh
I had to resist my MIL’s “family diagnosis” that my sons were ADD back when they were normal 5-year-old boys. No Ritalin for my brood.
This sort of pop analysis has become increasingly common in the US and is certainly encouraged by Big Pharma, which now pushes its agenda hard on both the client (patient) side and server (health professional) side.
Not only are drug ads for increasingly obscure kinda-maybe-syndromes now a ubiquitous staple, but we are all encouraged to ask our doctors if Brand X is “right for us” — no matter if the affliction is a non-issue, could be addressed by a change in diet or exercise, etc. Drugs (and to a lesser extent, surgery) are promoted as the first line of defense, while preventative care, alternative methods and plain old common sense are downplayed.
Kudos to you for not buying the hype.
“This sort of pop analysis has become increasingly common in the US and is certainly encouraged by Big Pharma, which now pushes its agenda hard on both the client (patient) side and server (health professional) side.”
Don’t even get me started on vaccines.
Walmart may actually be onto something good. Their $4.00/month pharmaceuticals may change the way America gets medicated. If I needed drugs, I would tell the doctor to prescribe something that Walmart sells for $4.00. Not only would it be cheaper, more effective, and safer, but the doctor would earn a good recommendation from me.
A friend of mine had outpatient facial surgery to remove a small cancerous lesion. The (topical ointment) prescription was an incredibly small bottle of liquid for $120. What wrong with using iodine tincture? Ridiculous.
The era of never ending dividend increases from the pharmaceuticals stocks is over. As long as the sheeple were getting medicated via an insurance plan, the fleecing was stuck on automatic. But now as more and more of the sheeple have to pay, they ain’t goona play. Patients will insist on more accountability from these freakin’ doctors. Goodbye and good riddance.
Actually I do both of these. I have gone to walmart, see what they carry on the $4 list, and taken the list back to my doctor. They will also do maintenance drugs, like blood pressure and such, in 90 day amounts for even less than $4×3, but again, got to get the doc to prescribe as such.
I also try to get my doc only to prescribe something that has been on the market for 50 years.
These two in combination, make prescription meds a financial non-issue. Even if you don’t have insurance.
I have also noticed that local grocery store pharmacies are catching on. Not exactly $4, but $6 or $7. Not enough to get too excited about.
“A friend of mine had outpatient facial surgery to remove a small cancerous lesion. The (topical ointment) prescription was an incredibly small bottle of liquid for $120. What wrong with using iodine tincture? Ridiculous.”
A year ago I was treated for a Basil cell carcinoma (cancer) on my upper lip. The surface ointment prescribed was Aldara which was similarly priced. It worked amazing well and the results were exactly what my dermatologist predicted. He also said if the Aldara did not work I would face some disfuguring surgery. I am very, very happy this drug (ointment) was available and would have paid a lot more to avoid the surgery.
Wait until you are faced with the choices before you pontificate!
I think the OP thought the ointment was an antibacterial ointment. I’m assuming yours was some form of treatment for the cancer itself? Very different, yes.
According to the maker’s web site, Aldara is a white cream. You could have insisted on the lower priced generic (imiquimod), and the results would have been just as good. My friend’s Rx was a small bottle of clear liquid. Not the same thing, and whatever it was, I’m sure that a lower priced alternative is available, that is just as effective.
My point is that for almost every very expensive medication, there exists some alternative that is just as effective for much less. Maybe it can be purchased as a Walmart $4 drug, or as a lower priced generic elsewhere, or as a lower priced substitute.
But I am glad to hear you did not have any complications and avoided any additional surgery.
Out of control up means out of control down. Millions of people bought homes they could never afford and won’t be able to no matter what’s done. When you live on the knife edge of bankruptcy the slightest event becomes a disaster. All the crying and screaming isn’t going to change a thing.
Frankly, those of us who have lived well within our means and have a bit set aside for normal life calamities don’t have much sympathy but we’re the ones who will have to rescue the irresponsible which wouldn’t happen if it were left to me.
The one I blame the most is the government. The entire system from top to bottom watched this happen, participated and laughed all the way.
“The entire system from top to bottom
watched thisencouraged this to happen,…”Dang it P Bear, it was dem po’ folks what caused it!
“The entire system from top to bottom watched this encouraged this to happen,…”
Or was it from bottom to top? Congress is a reflection of the majority of the American public. The majority of Americans have overspent. Congress overspends. The majority of Americans are fat, the majority of Congress is fat.
I can name more similarities. We met the enemy and the enemy is us.
We Harry Browne running for Pres. in 2000. But no, people voted for tweedledee. We had Ron Paul running for Pres. in 2008. But no, people voted for tweedledum.
Last I checked, it was the corporations and special interest groups that donated money to said politicians. The very same special interests who fleeced Joe Sixpack.
The money masters are expected to understand what they are doing, while J6 tends to be rather ignorant about these things.
Yes, J6 could try to educate himself more, but **somebody** has to go about the business of being productive around here. Not everyone has hours each day to devote to finding out what’s going on behind the scenes of the financial world. The rules changed (shifting risks from the lenders to the borrowers), and nobody notified J6.
In years past when Israel did something irrational, there was flight to the dollar. Now there is limited flight to the dollar but there is flight to the Euro, CHF and Yen among others. This bodes ill when tensions settle down.
Is it more of a decoupling of the dollar from oil?
supposed to have been posted in your currency comment below.
hoz wrote:
Now there is limited flight to the dollar but there is flight to the Euro, CHF and Yen among others.
Oh my!
Your comment just made me check my Swiss treasuries. You’re not kidding!
No worries, those that didn’t spend themselves into poverty will not be able to salvage those that did. Numbers are too big, many more have drunk the Kool Aide and those are the ones that are the “victims”? What a joke, nope this financial train wreck isn’t even going good yet, wait for another three to six months, then the real impact of this mess will be felt but good. Summer will be a season of hitchhikers and wanderers moving about the country with their backpacks. Of course, I could be wrong.
The entire system from top to bottom watched this happen, participated and laughed all the way…..to the bank!
The FOREX market is looking ugly today for Uncle Buck.
With other things equal, days when oil goes up in price will tend to work against the dollar’s value, while days when oil goes down will tend to work for it’s value.
“With other things equal, days when oil goes up in price will tend to work against the dollar’s value, while days when oil goes down will tend to work for it’s value.”
or maybe the dollar is going up and down and oil is staying the same.
I think the dollar is in for a crash just like RE. Its the when that is unknown.
“…or maybe the dollar is going up and down and oil is staying the same.”
Maybe in general, but the eruption of a major Middle East conflict is most clearly an oil supply shock.
IMHO Mr. Dick Fuld will look really good in prison stripes.
Was his behavior somehow substantially different than that of his peers?
The Sunday Times
December 14, 2008
Exposed: Dick Fuld, the man who brought the world to its knees
Dick Fuld ran Lehman Brothers as if he were at war. He drove the bank hard and ignored the signs of collapse. Andrew Gowers, former editor of the Financial Times, who was working at the heart of the bank as it brought the global economy to the brink of disaster, reveals the inside story
RE: Fuld
Even when in a relatively upbeat mood he seemed to take pleasure in violent imagery. Lehman was “at war” in the market, he would say. Every day was a battle, employees were troops. At an investment banking conference in London last spring, I saw him astonish several hundred of his managing directors with a blood-curdling threat aimed at investors who were selling Lehman shares short – depressing the price.
If this worthless POS had any sort of ballz relative to his pleasures of “violent imagery” and body part cutting; he’d put a 9mm in his mouth and pull the trigger, just like SS fanatics in their final days at Stalingrad.
I love these management idiots who fancy themselves as “warriors”. Any 60+ year old retired Marine could clean his clock.
Was this the same guy who went to Congress and complained about the day that Congress “put him in the GRAVE” and shot lazer daggers at the Congresspeople with his eyes. He was made that everyone got bailed except him.
thanks for the link, nice read
Still, the BRIEFCASE DRILL TEAM MARCHING BY! in the Macy’s Thanksgiving day parade was funny. With 30 some years of tradition, I admit I expected a bit flashier display though.
Answers some of the questions one is left with after reading this a.m.’s WSJ article about the weekend Lehman went down.
or for those who can’t stand the dangling participle
Answers some of the questions with which one is left ….
I gather you’re refering to the preposition (not participle), and there is no official rule prohibiting its placement at the end of a word group. This antiquated affectation–never ending a sentence or statement with a preposition–from British university students, has long since been abandoned by most publishers (including British publishers).
My fifth grade teacher would have disagreed with you and any British publishers. I call this another sign of gravitating towards the lowest intellectual mean. You may think it is correct to say or write it, but I don’t think it is correct for me to hear or read it.
From where I sit (which is far from Wall Street), Fuld’s biggest mistake appears to have been miscalculating that it was too big to fail. After CFC, BSC, FNM and FRE (to name a few) were rescued, wasn’t it somewhat reasonable for Fuld to expect like treatment?
From the link:
Think of the hundreds of billions of dollars in oil riches gushing into the Middle East, he said. Add the further hundreds of billions in sovereign wealth funds in emerging nations. Multiply all that by the plentiful liquidity and leverage available on financial markets and you had an almost limitless pool for investment banks like Lehman to swim and prosper in.
Just wanted to point out how “productive” the wealthy are…and so deserving of out tax money!
And in the immortal words of George F. Handel,
“And with his stripes we are healed”.
From CA renter who can’t post this morning:
December 29, 2008
Article from: Agence France-Presse
PRESIDENT-ELECT Barack Obama’s economic stimulus plan is an urgent matter that will favor long-term infrastructure and job creation projects over tactics aimed at boosting consumer spending, two of his top aides said.
“Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires.”
“Some argue that instead of attempting to both create jobs and invest in our long-run growth, we should focus exclusively on short-term policies that generate consumer spending,” he said.
“But that approach led to some of the challenges we face today - and it is that approach that we must reject if we are going to strengthen our middle class and our economy over the long run.”
http://tinyurl.com/9ws4nx
We had better “strengthen our middle class and economy” over the short run or there may not be a “long run,” just a slow trudge of despair.
A great interview with some folks who lived it. A lot of great quotes.
http://www.washingtontimes.com/news/2008/dec/29/witnesses-to-the-great-depression-remember/
People like to say that this won’t be a depression because it won’t be as bad as The Great Depression. Well, it can still be a depression without being that bad.
I already picture The Onion title:
Nation Disappointed at The Not-so-great Depression
+1
“People like to say that this won’t be a depression because it won’t be as bad as The Great Depression.”
Or it could be worse. Time will tell.
It’s worth bearing in mind, though, that the term “Great Depression” was previously used to refer to the depression that followed the Panic of 1873, until 1929-39 came along and was more impressive.
It’s possible that we could stop referring to 1929 as the start of the Great Depression, and start referring to 2008.
Possible… My MIL got our family a Wii for Solstice. I had a Great Game in Wii bowling… 225. Then my son got a 230, which became The Great Game. Less than 24 hours later I rolled a 245… which remains The Great Game, but will likely be bested in the near future.
One of the thngs they forget to mention along with the 50% drop in GDP of the great depression is the 25% decline in prices. So really, it was a 25% drop INFLATION adjusted.
I’m fully expecting a 20% drop in INFLATION ADJUSTED GDP this time. So, will it really be that much less?
As for unemployment, sure, the government is reporting 6.7%, but the underemployment rate (people working fewer hours or for substantially less pay, against thier desires) is well into the double digits at something like 12% and quickly rising.
Don’t forget people on disability, SS, pensions etc. Income they didn’t have at that time.
It would seem the main-stream media is beginning to understand what we’ve been discussing on this board for years.
The Upside of Downward Mobility
At a macro level, if incomes are under pressure, what does that say about home price levels in the future? And not just prices, but also the size of houses will have to change as well. We’ve all derided the McMansion here, but the truth is if one were to buy one, even at bargain prices, who would you sell it to once it becomes apparent that future generations will have less income for support and upkeep?
The next step…. You are NOT going to have the retirement you were promised. Those kids that will be making less than you, can not pay the Social Security taxes that would be needed to give the Baby Boomers and Gen-X-ers what they have been promised.
You can not work for 45 years, then take a 20-30 year vacation.
Can’t happen.
The sooner we deal with that, the better.
You can not work for 45 years, then take a 20-30 year vacation.
When most people kicked the bucket in their late 60’s to early 70’s, retiring in your early to mid 60’s made sense. But you are quite right, there is no way for the average Joe to save enough for a “20-30 year vacation”, and having others pay for it via pyramid schemes is kaput as well.
Social security is a tax. Just ask any democrat. A tax, that doesn’t have to be paid back. Its a given, that any senator or congressman that would eliminate social security, would be impeached in a heartbeat……they’ll never touch it and will always fund it, even with more funny money. To the up and coming generations i say this.” Pay up Suckers “
There is going to be a lot of disappointment from that crowd. The truth of the matter is that those who work will have to support those who don’t, and there aren’t enough of us. Our standard of living is not an accumulation of stuff, it’s the result of effort put forth every day by individuals. Expectations will have to be lowered.
“The truth of the matter is that those who work will have to support those who don’t, and there aren’t enough of us.”
maybe Boomers will vote to dramatically increase immigration to keep the population pyramid wide at the base and paying into the ponzi Social Security
Japan rejected this idea but the US ?
Well if you save enough of your income you can. Certainly putting away 30% or more of your income and having a paid off house SHOULD enable you to retire. The problem is that EVERYBODY can’t do this. I don’t mean that everybody can’t save this much. Most people could dramaticly lower their standard of living and save more. But everybody saving (consuming less current production) does little to enable greater per capita consumption when they retire. Buying fewer iphones mcmansions, and SUVs today does little to increase production of depends, nursing homes, and golf courses memberships in the future.
Exactly right. I, as a GenX-er, need the Gen-Y people to run up lots of debt that they will pay back 40 years from now. Then I can buy bonds backed by the debt. Then as they pay back that debt 40 years from now, working in the depends factory, they are actually paying me back for the money I loaned them……
Of course not. We can’t have that socialist/commienism HERE!
A smaller generation coming:
http://seattletimes.nwsource.com/html/nationworld/2008568649_kids29.html
http://www.nysar.com/media.asp
“NYSAR has spent much of 2008 emphasizing to the media that the New York State housing market should not be lumped in with the so-called ‘national’ housing market,” said Duncan R. MacKenzie, NYSAR chief executive officer. “There is almost certainly an unfortunate and unnecessary negative effect on consumer confidence resulting from the reporting of national statistics without also reporting state-specific data. The truth is that the New York housing market in terms of home values is healthier than what is being reported nationally.”
So much mantra, so few words.
1) NY is different
2) The media is the cause of all this
3) Housing prices always go up
The collapsed sales volume tells an entirely different story that elicits visions of Realtards eating gruel. Eat up Realtards… there’s alot more gruel on the way.
http://www.nysar.com/pdfs/monthsales.pdf
Computer glitch, but fair?
http://www.mineweb.co.za/mineweb/view/mineweb/en/page34?oid=75913&sn=Detail
It’s the Chinese. They’ll do whatever they want. Most likely, deny the transactions.
The enemy of the conventional wisdom is not ideas but the march of events.
–John Kenneth Galbraith–
Washington Post
The Crash in Conventional Wisdom
Humbled By Our Ignorance
By Robert J. Samuelson
Monday, December 29, 2008; Page A15
It’s the end of an era. We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best. The great lesson of the past year is how little we understand and can control the economy. This ignorance has bred today’s insecurity, which in turn is now a governing reality of the crisis.
The great lesson of the past year is how little we understand and can control the economy.
BS- I suggest that most of the financial CEO’s of this country knew exactly what was going to happen. Some may not have known exactly when but the majority knew what was coming.
Again I’d like to see the financial records of the top CEO’s, FED officials, ect. Then we could see if they didn’t understand?? As I recall many were selling hand over fist for a couple years prior to the crash, and of those that didn’t sell all their shares how many used derivatives and Hedge Funds to hide bets against their own company.
+1
Here’s something for the California thread. It seems skateboarders from all over the world are converging on Fresno to test their skills in the drained pools of foreclosed homes:
http://www.nytimes.com/2008/12/29/us/29pools.html
Ah, I love a story like that. These kids are livin’ the dream …
Mr. Peacock travels around town in his pickup searching for the addresses of homes he has learned have been foreclosed on, either via the Internet or from a friend who works in real estate. He has also learned to spot a foreclosed house, he said, by looking for “dead grass on the lawn and lockboxes on the front door.”
Once he has found a pool he likes — he prefers older, kidney-shaped ones — he drains the water into the gutter with his pool pump, sometimes setting up orange cones on the sidewalk to appear more official. Later, he returns to shovel out the muck, and then lets the pool dry. In order to maintain a sense of public service, the skateboarders adhere to basic rules: no graffiti, pack out trash and never mess with or enter the houses.
As the owner of a newly (as of today) plastered pool where once a huge hole did sit, this bas***** needs a shotgunning. Be fun to watch him do the “Dance, Skateboarder!” dance.
Where I live, draining a pool the way he likely does it is a recipe for a floating concrete boat. Unless he likes to skate around weep holes.
Just like in the 90’s.
The California-style skateboarding took its roots during the RE bust of the early 90’s, when skateboarders used abandoned properties in SoCal to skate inside drained pools.
I forgot the name of the movie about that time, it was pretty good. Homeless people were living in those abandoned properties.
A bit of history repeating.
“The Bones Brigade Video Show” 1982
The name of the movies were “Lords of Dogtown”. Once a documentary, the other fictionalized based on the documentary.
It was the mid 70’s, not the 90’s..
The California-style skateboarding took its roots during the RE bust of the early 90’s …
SoCal kids (e.g., the infamous Z-Boys) were skating the inside of drained pools as early as the mid-70s. The inspiration had more to do with a regional drought than a housing bust.
I concur, but the 90’s housing bust also saw a number of pools drained and skated from my first hand experience. Santa Clarita/Antelope Valley in particular was a hotbed. I predicted this latest wave of pool skating on this very blog over a year ago, fueled by google earth and real estate websites. One of my best finds was an empty pool at a burnt mansion in the malibu hills via a RE website. All these fires in Socal contribute to the cause.
As one of the guys said in the article - god bless greenspan. This is another bright spot in the housing collapse.
As someone who spent a large portion of his youth upside down with a board on my feet, I have to admire their passion. But I also spent part of my college years cleaning and maintaining pools.. and they will no doubt cause significant damage just by draining them.
Once he finds a problem pool, his workers treat it with a combination of insecticide and mosquitofish, pinky-size carp that find mosquito larvae delectable. But they do not empty any pools, he said, because in a good rain, an empty pool can be partially lifted out of the hole by groundwater, he said. “I’ve seen them float up a foot or two,” Mr. Rusmisel said.
Almost one in 10 Floridians are on food stamps
By JOSE PAGLIERY
The Miami Herald
Monday, December 29, 2008
MIAMI — Unemployed and strapped for cash, Floridians are asking for state assistance to feed their families in record numbers.
In the last two years, the number of Floridians on food stamps has increased more than 40 percent to 1.7 million. That increase is the highest in the nation, according to the U.S. Department of Agriculture. And it’s the second-largest jump in the state’s history, surpassed only during the aftermath of Hurricane Andrew, said an analyst at the Center of Budget and Policy Priorities, a Washington-based think tank.
Almost one in 10 Floridians is now on food stamps, and state managers say many more qualify
http://gawker.com/5119862/the-37-million-park-ave-apartment-your-bailout-bought
Where is the government’s bank-bailout money going? In part to pay for Wall Street banker Peter Kraus’s $37 million Park Avenue spread.
Kraus had excellent timing. He signed on as a top executive at Merrill Lynch in May, negotiating a $50 million pay package, with much of that guaranteed if the company was sold. He didn’t officially start until September. A couple of days later, Merrill CEO John Thain sold the company to Bank of America for $50 billion, triggering a $25 million payout under Kraus’s contract.
Bank of America got a $25 billion capital injection from the government. Kraus resigned and collected his cash, taking a job as CEO of AllianceBernstein, a money-management firm. And then he bought, for an estimated $37 million, an apartment at 720 Park Avenue from Democratic fundraisers Carl Spielvogel and Barbaralee Diamonstein-Spielvogel.
Let’s be clear: Kraus got this apartment fair and square: He suckered Merrill Lynch into a pay guarantee, and had the gall to hold Merrill and Bank of America to his contract, even though he only worked a couple of days.
Bankers deserve bonuses — but only when they really earn them. Thain, who arguably saved Merrill Lynch from the disastrous fate of Lehman Brothers and Bear Stearns, declined to seek a bonus this year, but he would have been justified in getting one. Kraus got a bonus, but he didn’t earn it. He did nothing illegal. He just did something unseemly.
The 5-bedroom spread technically belongs to Kraus’s wife, who was listed as the purchaser. But given the circumstanced of its sale, I like to think it belongs to all of us. Behold the splendor of the People’s Palace.
That’s why I laugh at these naive Keynesian fools calling for more stimulus. Like Squealer from the farm, the Keynesians argue we’re all in this together; however, the pig-man gets to keep his yacht and bonus. The pig-man is a thinker, you see, and we proles must simply accept his tinkering.
They’re are going to have us build windmills, you know? For f@cksakes, windmills! Bloody windmills! LMAO! Lifted it right out of the text.
“Bloody windmills!”
We are going to need something to tilt at, won’t we?
The pig-man is a thinker, you see, and we proles must simply accept his tinkering.
Rather than a thinker I would insert manipulator.
The proles have to accept the tinkering, until they don’t. Just ask Marie Antoniette.
I must have missed lecture the day my macro professor covered the theory that indiscriminately spending one’s way into debt is inherently better for the common good than saving.
Financial Times
IMF argues for large stimulus packages
By Alan Beattie in London
Published: December 29 2008 19:13 | Last updated: December 29 2008 19:13
Across-the-board tax cuts or bail-outs of troubled industries such as the automotive sector are likely to waste government money while doing little to stimulate the global economy, the International Monetary Fund warned on Monday.
As governments around the world bring in tax cuts and boost spending to combat the global recession, a study by the IMF said such programmes must be large but carefully designed.
“There is a strong case for doing too much rather than too little,” said Olivier Blanchard, the fund’s chief economist. But, he added, tax cuts should be aimed at people likely to spend money rather than save it.
Obama aides stress long-term goals
Senior economic adviser warns of 10% unemployment by end of 2009
By Michael Kitchen, MarketWatch
Last update: 12:10 p.m. EST Dec. 28, 2008
NEW YORK (MarketWatch) — Top advisers to President-elect Barack Obama stressed the incoming administration’s long-term economic goals, saying Sunday that the situation is likely to deteriorate more than previously forecast in the short term, with double-digit unemployment likely.
“Today, many experts believe that unemployment could reach 10% by the end of next year, and our economy could fall $1 trillion short of its full capacity — which translates into more than $12,000 in lost income for a family of four,” Lawrence Summers, who has been named to head Obama’s National Economic Council, said in an editorial published Sunday in the Washington Post.
Summers repeated Obama’s plans for government works spending, including funds for infrastructure upgrades and environmental technology, but he played down the importance of direct stimulus to consumers.
“Some argue that instead of attempting to both create jobs and invest in our long-run growth, we should focus exclusively on short-term policies that generate consumer spending,” he said. “But that approach led to some of the challenges we face today — and it is that approach that we must reject if we are going to strengthen our middle class and our economy over the long run.”
Double digit unemployment? Officially?
Uh oh.
“and our economy could fall $1 trillion short of its full capacity ”
and which equals almost exactly the size of our proposed stimulus….
“The recession officially began in December 2007. But Magna’s Bob Coen calculates that U.S. ad spending actually fell in full-year 2007, with bigger drops seen in 2008 and expected in 2009. That would be the first three-year decline since the Great Depression.”
http://adage.com/article?article_id=133462
“The upside? Business runs in cycles. The recession means reduced consumption, but that creates pent-up demand that can help drive recovery.”
Unless this is not just a regular cycle. Perhaps…. just maybe.. this is actually a debt collapse that will leave people unable to spend. Where is the demand for the latest fashions or the new autos when you are strugling to keep a roof over your head and food on the table?
We just had a 25-year “Roarin’ 20s”… Why are people so quick to believe that it will be fixed in a year or two?
Financial Times
Keynes, Libor & leverage
Published: December 29 2008 18:58 | Last updated: December 29 2008 18:58
…
George Soros likened the predilection for high gearing to “driving along a straight, clear freeway with a sharp spike pointing from the centre of the steering wheel” to your chest. “All would be fine if the road and the traffic continued as they were, but any sudden application of the brakes would stab you through the heart.”
But, but, but, … Suzanne said we have Disk Brakes!
Ben and everyone,
Thanks for sharing so much knowledge with everyone in 2008. I enjoy reading what so many intelligent people have to share.
Calling all smart traders on this board :
What are your thoughts on shorting Long term US Treasuries
http://finance.yahoo.com/q?s=TLT
by buying TBT :
http://finance.yahoo.com/q?s=TBT
Thinking about initiating a position
Sounds like a sure thing, which always makes me nervous, as one who has previously lost money on similar sure-thing gambles (generally more due to being early than outright wrong).
What is going to end the “flight to safety”?
Have we reached the end of corporate bankruptcies that will suddenly make stocks and corporate bonds the safe place to be? Do we really have the full magnitude of the foreclosure disaster priced into ALL MBS to make them safe?
I’ll believe treasuries are in for a drop right after I figure out where else you can safely park money.
I think that the bursting of the treasury bubble will make everyone realize that there is NO safe haven. Therefore, money will squirt out into other markets.
But, then again, I have no idea what I am talking about.
Just seems like another bubble.
The problem is, a big change in yield is actually a small change in price. Even if treasuries turn around, the risk of loss there is less than the risk just about anywhere else. What, 15-20% max reasonible loss??? Compare to the 45% pounding in the S&P. 90%+ loss on some MBS… 40% drop in Real Estate in my neighborhood.
Yes, there is a risk in treasuries… but not NEARLY as much risk as there is elsewhere…. especially in the deflationary cycle we are currently in.
For me, it is not R-on-I, it is R-of-I.
Must take issue. Long bond has rallied approx. 25% in price in the last 3 months (now stalled), greater than any comparable change in real estate in a similar period.
As yield drops, changes in price actually increase relative to (absolute) changes in yields, although the percentage change in price remains about the same. 50 basis points in the 30-year at the 1% level is worth around 20 points vs. around 10 points at the 4% level.
Also, I have some historical perspective from the front lines, having traded short-dated money market securities on WS between 1980 and 1982. Gaining or losing $50K on a $50 million position overnight, or after a money supply annoncement - even in paper with average maturities of under 90 days - was commonplace.
Interest rate and bond price volatility, mostly dormant for 25 years, could return with a vengeance and can be every bit as volatile as other assets.
It is a bubble, but the bubble can last a lot longer than anyone can remain solvent. Thus you must hedge. The government is the largest potential buyer of government securities. Can you compete with the government?
I’m not yet convinced it is a bubble. What is traditional return on 1 yr? 2% over inflation? Well, for the last few moneths we’ve been looking at -2% inflation. So, is a 0% yeild that out of expectation?
Of course, if the Fed is able to stop deflation and turn it back into inflation, then treasuries will again need to adjust. But, I’m not convinced.
They give money to banks to loan, but banks can’t find people to loan to that are likely to pay it back. They tried a cash handout, but people saved it, or used it to pay down debt.
So, how do they get people to spend?
“How do they get people to spend?”
You have to keep the analysis going, keep connecting the dots. The logical outcome is the nationalization of aggregage demand, aka communism.
Darrell
Oil cannot fall another $100. If oil stays above $30, inflation runs 1.7%. “…The energy index fell 17.0 percent in November…” BLS. The CRB is up since its November lows. Thus the spike in the New Tips to under 2%. We are experiencing disinflation, not deflation. You are confusing the rate of fall in the inflation rate with deflation. A common mistake made by quite a few posters here. “…For the 12 month period ending in November the CPI was up 1.1 percent…” BLS
If the Federal government wishes to buy treasuries, they may! 0% or 100% it does not matter. If China and Japan do not buy Treasuries, we are toast.
Bonds are in a bubble.
Bubbles can last much longer than anyone can remain solvent, but they can end more quickly than everyone can get out.
yes, i have been thinking the same thing…the only problem is the fed is determined to drive down the interest rates to very low levels. it is a bubble for sure so i don’t see how you could lose long term. i’m waiting for more bubble creation by the fed in long bonds!
“What are your thoughts on shorting Long term US Treasuries”
Yes I’m watching TBT
If you think you have a winning strategy, one option would be to buy say 100 shares. Then if it dips, buy another 100 shares thus lowering your per share cost.
You might want to put in a stop loss for safety.
Usually, I’ll sell the position on a wild swing up.
This has worked very well this year. Lotta good swings up and down. Sadly, volitility will ease as time goes on.
It was fun while it lasted. Proshares Ultra… RIP.
Thinking about looking at some homes and, if I like them, offering ~80% of asking. There are a few out there right now that I’d buy for 80%. Think it’s too soon?
It is too soon in my opinion, but as with anything, if you find what seems to be a good deal in your eyes, and your buying it for the long term, then ‘why not?’
I am starting to look, too. Still don’t plan to buy for a few years, but want to keep my finger on the market, and start strategizing about where I will eventually plant myself.
I just spoke to a mortgage guy to get pre-approved. Told him to pre-approve me conservatively. He did and it ended up about where I’m comfortable. But then went on to say I could go as high as $XXX,XXXX. That the old rule of thumb was 25% of gross income for PITI, but it’s much higher now. I stopped him and said, “And isn’t that part of the problem?” He said, no, that going as high as 45% - 50% now is perfectly reasonable. I said, “But isn’t that why so many are defaulting?” He said, no, that the ones defaulting are the ones spending 60% or so.
*bite my tongue*…
He also proceeded to tell me that the Philly area - which hasn’t really dropped much to begin with - should bottom out in the first half of 2009. Riiiiiiight.
Find out your PITI with the loan amount and subtract your rent. Bank that money for the next six months. See if THAT feels like a reasonable lifestyle. I really don’t know why anybody believes some banker when he tells them that they’ll be happier living on peanut butter sandwiches and rice for dinner with a mortgage than they were without. Alternately,
We sold out and moved into a less expensive house this year. Unfortunately, it has more storage. I just bought a new $8 caulking gun because I can’t find my old one. We had all the home stuff and still spent several thousand this first year on home stuff (pretty much none of which was new furniture, either.) That is, all stuff that is beyond anyone’s expected budget.
“Think it’s too soon?” Yes
“offering ~80% of asking.” Too much
With all due respect, you sound like a future knife catcher in the making.
Way too soon. Another year at least.
Too further expound: after the S&L’s collpased, the real deals were to be had at about 4 years out. So far, current events are close to same.
Also, look up the RTC (Resolution Trust Corp) There was so much inventory out there, even they couldn’t handle it all. Many companies were stuck with white elephants.. to them that is.
eastcoaster,
It is probably too late to post a response and expect you to see it, but…
Of course it is too soon! You are so impatient. Maybe it is a seasonal thing, didn’t you ask to be talked down this time last year?
You may feel that your income is secure enough to tie the knot for the next three decades, but most of your neighbors are not so secure. One of my best and oldest and most favorite customer’s business is in Hatboro PA. He lost his biggest contract this month and will shutter his plant within a few months. Good chance he will loose his house within the year and move on. Multiply by the thousands.
Sure you want to ride this collapse down with debt? It’s just getting started.
Ok, this new idea about giving new home buyers the money for a down payment is just too much.
It’s official, renters truly are the Forgotten People.
I am going to have two more cookies!
You are not the forgoten people… you are the last, best hope to save housing. But it will fail.
Lesson learned from the housing bubble:
NOTHING WAS LEARNED.
Wouldn’t you love to have the data on what percent of recent buyers with no downpayment ended up underwater, foreclosed, etc?
California home loan program suspended
By Eve Mitchell, STAFF WRITER
Posted: 12/23/2008 04:06:31 PM PST
It has got even harder for low- and moderate-income first-time home buyers to find an affordable loan, thanks to the state’s budget problems. The California Housing Finance Agency has temporarily suspended popular programs that help people get into homes through 30-year, fixed-rate loans and down payment help.
You’re not forgotten, just unAmerican. You hate mom, apple pie and mortgage brokers. How DARE you refuse to get an exploding neg-am loan of 750k for a 600 sq ft sh@tbox in Compton? (tounge no removed from cheek)
That is what I told my sons when they asked me for down payments… “It is just to much, get it from the government”, I solvently replied.
Just kiddin.
I call the current process “The Great Winnowing”.
I have noticed a gradual process over the last decade or so whereby white-collar workers now spend the majority of their shift doing personal stuff online, yacking on their cell-phones, texting etc. Many employees at companies which allow “flexible hours” come in and out of the office during the day and inevitably work less than 40 hours a week. Information Technology has created huge efficiencies that make the kind of clerical work that millions of people did twenty years ago obsolete. Most white-collar workers in fact have very little specialized skills and are easily replaceable. When times were good, companies could maintain the deadwood. Those times are over. We are going to see huge numbers of white-collar layoffs in the current economic downturn.
Yes… but it’s not exactly a new phenomena. Companies have been shedding white collar workers since the 90’s - the redundancy packages have been one of the factors fuelling all the franchises.
My wife was last in the office work force about 12 years ago. She looks at me like I’m a loony (and continues with her blazing speed typing practice, completely undeterred) while I try to explain to her that I’ve never seen a secretary/assistant in my entire 15,000 person government installation. I’m sure there are some, over in “Building One”, maybe, but not in the labs, offices and working buildings I see day to day.
It’s not like the musical from 40 years ago we watched this weekend anymore. (How to get ahead in business without really trying.) Where 50 women in rows in a big bay changed shoes in unison at 9 O’clock sharp, put paper in their typewriters, and then did their hair.
If she does go back to work, somehow finding a position in the Great Recession, I expect it will be a bit of a shock.
Financial Times
The year the god of finance failed
Published: December 26 2008 19:33 | Last updated: December 26 2008 19:33
Promises about the world run foul of experience. Promises about an afterlife do not. So secular gods visibly fail: in 1989, communism collapsed; in 2008, came the turn of financial capitalism. As panic spread, governments ended up nationalising the financial systems of the west. This is no longer capitalism as we knew it. But it is not the end of market economies either.
The financial system is special.
Frankly, it was only a matter of time. We were/are operating under an obsolete system.
And no, I’m not saying through the baby with the bathwater. But “eating your seed corn” and “slash and burn” economics is not a sustainable system.
The mope forgot to write about trust.
Trust = a hand shake over the phone that causes millions of dollars to change hands in exchange for a promise. Vanished as a result of lies and opaqueness. Trust may come back to the US in a few years. In the meantime the market has moved to Asia.
The Fed hasn’t broached that subject yet. They seem to believe that financial engineering solutions (e.g., helicopter drops of freshly-created monies) are the ticket.
FWIW, HSBC’s roster of ramshackle dumps has grown significantly.
Bloomberg: Treasury said it will purchase a $5 billion stake in GMAC, and lend $1 billion to GM so the automaker can participate in a rights offering at GMAC to support the lender’s reorganization as a bank holding company. The loan is in addition to $13.4 billion the Treasury agreed earlier this month to lend to GM and Chrysler LLC.
…
A Treasury official said there is no cap or deadline for aid to automakers under the TARP. Congress “will need to release” the second half of the $700 billion TARP under Treasury’s rescue plan, the official said on condition of anonymity during a conference call with reporters.
GM gets another billion above and beyond the 13.4 billion promised to it and Chrysler…..an official says there’s no deadline OR cap to aid for automakers under TARP. So why did anybody even bother trying to put it to a vote??
http://www.bloomberg.com/apps/news?pid=20601087&sid=asJGlr5r3Uf0&refer=home
There is really no budget limit whatever on how many billions GM or anyone else can get. The U.S. money supply is unlimited as an official, explicit policy.
So what was the point of all the Congressional BS???
I have made my way nearly to the end of this most troubling account of Wall Street’s demise. Perhaps my conclusion is overly simplified, but I take the impression that the Megabank, Inc business model, aided, overseen and regulated by a SuperFed/PPT, is broken, as it concentrates too much risk into the hands of a tightly-knit, group-think-prone circle of “smartest guys in the room” whose collective vision is prone to lethal bouts of blindness. The demise has only served to concentrate control in the hands of a smaller group of the same individuals who perpetrated the disaster.
In case anyone in the Obama camp is paying attention, please consider busting up this banking cartel before it destroys the country.
Wall Street Journal
* BUSINESS
* DECEMBER 29, 2008
The Weekend That Wall Street Died
Ties That Long United Strongest Firms Unraveled as Lehman Sank Toward Failure