Bits Bucket For January 6, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the ‘positive spin.’
Lereah admits “he was just doing the job he was paid to do.”
http://tinyurl.com/9yn6av
Wow, hard hitting journalism from CNN, years after it could make a difference. I remember helping out these guys for an article in 2005, I spoke with a big time reporter there for abhout 20 minutes. He couldn’t have been more dismissive of the idea of a housing bubble. And now, with the global economy in a shambles, they are all over it.
Pa-tang!
“OJR: What do you think of the job that journalists working for major newspapers and TV have done covering real estate over the past decade?”
“Jones: Like many of the checks and balances surrounding the housing price boom, the media failed the public to a large degree…In my opinion, the biggest failure of the press regarding the housing bubble in 2004-2006 was a lack of objectivity and ‘professional skepticism,’ as we called it in my auditing classes. Over and over, the print or Web media would turn to a trade group for analysis of some new statistic.”
“This was often the case when this same organization provided the data. These people are paid to provide a slant to the news, yet they were interviewed as an unbiased observer, and their answers were rarely challenged in those years.”
“For example, in the spring of 2005, the Realtors’ trade group reported some very high percentages of speculative and second-home purchases for the year 2004. At first they were a little taken aback. But within a few days they had regrouped and created several new theories to explain this disturbing data. We were told; baby boomers were going to own many homes, and people are speculating because it is a new investment class. Also there was the ongoing ’shortage of land’ mantra the industry made up. And we were told, that September 11th had made the nation feel differently about housing; some sort of comfort aid.”
“All new paradigm stuff and all made up after the fact to explain away some trends that we now know to be the source of many industry ills.”
“If I could see this from my humble desk in Arizona, why didn’t the media pick up on it? They weren’t skeptical enough when it counted. And this is just one example of hundreds.”
No matter what the views of the reporter, the story has to get past the desk of the editor. If the story will enrage the advertisers - ultimately the ones that pays the salaries - then the story will get killed and the reporter will be “encouraged” to go along to get along.
That’s just the way it is, and if one unserstands this then he understands a lot.
unserstands = understands
I’d guesstimate that 90% of the time, 90% of the people allow the press to do 90% of their thinking for them.
+1
Combo:
I disagree the problem is NOT the reporters but in HR which purposely hires clueless people. I’ve seen this over and over. You really can’t blame the reporter for being a moron, he/she was hired for that skill.
————————————————————-
No matter what the views of the reporter, the story has to get past the desk of the editor.
NYCdj,
You’ve started a new chicken or the egg question for me.
Did newspapers contribute to the growth of blogs (their own demise) by putting out cr@p, forcing readers to seek out a better source of news and thought, ie blogs?
-Or-
Did blogs’ growing readership force newspapers to cut expenses and cut corners on reporting and analysis, creating a downward spiral?
For me, it was the first case.
Combo:
After working in a Number of TV stations its almost always the first case
Don’t get me wrong i have met some very smart reporters and i did work daily with Terry Moran, Nancy Grace Johnny Cochran a Rikki Klieman while at Court tv…..but that was the exception. Most tv reporters are just so so, nice but not very bright.
You also notice a weird thing Most reporters do not have their own website or blogs separate from the company they work for…i wonder why?
After watching countless “news” stations and “news” papers parrot the party line, chanting “all is well” while never meeting a scam that they didn’t like (housing, etc.), I searched for sources of actual news and found blogs. Now, years later, the blogs have been astoundingly accurate in their preditions, while the “mainstream media” has been less than useless.
The former, Asparagus. The major publishing companies were consolidating and announcing their goal of 20% profit (in an industry where the benchmark had been 5%) to shareholders in the mid-1990’s, long before the rise of political blogs. (There was usenet, but this was mostly irrelevant in terms of opinion shaping. People came with their pre-formed opinions and shouted at each other.)
Almost makes you want to send a check off to PBS.
I do recall that they were early as far as the press was concerned.
reporters often don’t have their own blog because it’s risky, in the view of the suits. Can’t control what they might write.
it’s not understanding how to use one form of the media to bolster another form.
My favorite part of the newspaper to this day is the Op-Ed section. It’s the part of the paper where things aren’t as whitewashed as they are elsewhere in the paper. Blogs are all just huge Op-Ed sections.
I thought it would be interesting to have a newspaper that presented two opposing views of every story, even obituaries where the “loving father of 3″ was revealed for the wife-beating bastard he really was, or the charity that raised $5K for fighting breast cancer…and the salaries of the organization’s management staff, inflated printing bills, advertising costs, etc…. But then I’m a cynic.
Jon Stewart made good point once: why can’t the 24 hr cable news go into real depth on some issues? They’ll bring in an expert for 5 minutes, and then cut him off because they’re out of time. Out of time? They’re on 24 hours! Not like they’re gonna get preempted by American Idol.
That’s a very good point, oxide. It’s frustrating to watch good sources being cut off like that, often after having their comments muted by the host’s interruptions and/or yelling.
The press is barely better today.
The biggest problem is they’re not neutral on falling house problems. The press universally regards this correction as a bad thing, with the exception of a very occasional article pointing out that a few people are finding it easier to buy a home after sitting through the bubble.
The second problems is they don’t objectively look at the people who have gotten themselves into financial trouble. Again, it’s rare to find someone who isn’t painted as a victim who lost his home, even if that person had purchased a house and a condo, with no money down and 110% financing, and paying interest only.
The biggest problem is they’re not neutral on falling house problems.
And they should be. Every dollar a seller doesn’t get, a buyer doesn’t pay. It’s a zero sum game, there’s no reason to presuppose higher prices or lower prices are a “good thing.”
reuven, I don’t think it’s a matter of being objective or not–I think it’s a matter of never checking the durn facts in the first place. The skeptic reporter of yore has been replaced by the lazy reporter of today. Repeat idiotic fish tale just as it was told to you, call an industry group for a quote for “balance.” Lather, rinse, repeat.
Journalism schools reinforce this: at UF, if you spell someone’s name wrong in the Alligator, you lose an entire letter grade in your assignment, but there is no penalty for accepting at face value a 19 year old white boy’s claim that his name is in fact “Shirow Miyazaki.” (Btw, what is wrong with “chose not to be identified” on a photo caption???)
But it is not a zero sum game for the banks, who seem to have more influence over mainstream media than they do over sites like Ben’s.
I agree the problem comes from the top. There are some excellent investigative journalists around, but you won’t find them doing much with the mainstream press anymore. Modern news is a lot of fluff and regurgitation of press releases.
There are some excellent investigative journalists around, but you won’t find them doing much with the mainstream press anymore. Modern news is a lot of fluff and regurgitation of press releases.
There are lots of amazing investigative journalists around, but they tend to drift toward long-form magazine-style pieces, documentaries, and books when they have the chance. There isn’t much room for them in the modern news cycle anymore.
Don’t discount issues of time and budget, either. Tighter budgets and the 24-hour news cycle have made tight turnarounds, wire services, shared media assets, PR shinola, and a reliable stable of talking heads more and more necessary in order to churn out the product (i.e., “news”) on time.
Even when I was in the broadcast journo biz (mid-to-late ’90s), the amount of re-edited PR hackery dressed up as “news” was appalling. It’s only gotten worse.
++1 to ET
One of my parents was a journalist, so we had a lot of press people around when I was growing up. What they say to eachother (and know) is often different than what they write. For one thing, your editor knows which side of their bread is buttered and don’t want to alienate advertisers and sometimes publishers. Also, I hate to say this, but the majority of people don’t care about good journalism until after a crisis. News is a loss leader. That’s why I believe in publicly funded, non-partisan news sources like the BBC and CBC. News is a public service, if it becomes private, it won’t turn a profit without becoming entertainment.
I have never met anyone more cynical than an old journalist. (My mother said the first thing she learned writing for newspapers is to put your important bits at the beginning of the article. They’ll cut the article in half at the last minute to accommodate a last-minute ad!)
…if it becomes private, it won’t turn a profit without becoming entertainment. I should’ve said entertainment or advertising.
Big laugh! So, you think the BBC is unbiased? LOL! Please get an education!
“Please get an education!”
Well, since you asked so politely ^_^
Seriously, it’s better than CNN, MSBC or Fox, but you may judge differently.
(MSNBC not MSBC)
combo - you are a wise man.
Thank you, Ben, for not using black text on a blue background like that site….whew.
Good observation, CT.
Short story. I once worked for a MSM NYT “property” in Fla. Reporters contributed to a column for the business section that ran down the side. Chatty, semi-gossipy items. A few years ago, I wrote a small blurb, based on my observations in my neighborhood, that real estate agents were negotiating their commission percentages downward in attempts to get listings. Naturally, they are big advertisers, so there was a chance of the item being spiked by editor. It was not spiked.
Next day, the managing editor and the executive editor call me into the glass office. They ain’t happy.
“Was that item true?” they more or less glumly asked.
Yes, yes, yes, I say.
It was the only time in three years there that I was called into the bosses’ office to vouch for the veracity of something that had been picked over multiple times before publication.
I’m figuring their phones rang heavily, with unhappy real estate people.
On the same topic, I know in California that the state DRE says that listing contracts must say, in a certain point size, that commissions are negotiable.
Dunno if Florida has the same requirement.
might that paper have been the *hrm* (what shall we call it?) Alligator Times, perchance?
because they have one of those chatty metro gossip things down one side of the page…
and the paper was utterly reliant on RE ads… price went from $.25 in the boom to $.75 today and I don’t think it’s long for this world…
Close. Almost went to work at that one while the ex went to Law School. This one was to the south close to where big buckets dig the earth and where the air smells like orange juice in the winter. The paper also today is thin and wheezing.
“And now, with the global economy in a shambles, they are all over it.”
This remark applies verbatim to the economics profession.
These are astute remarks (or maybe I just like them because we have already been saying them for many moons around here):
But Richard Curtin, an economist at the University of Michigan, was less hopeful of a fast rebound.
“We don’t see any hint of a turnaround in housing markets in the next nine months to a year,” said Curtin, director of the University’s closely-followed consumer sentiment survey.
A trio of factors continue to dog housing, according to Curtin: Americans’ suspicion that home prices will continue to fall; higher credit standards now being applied to mortgage applications; and uncertainty about future income as layoffs run rampant and the jobless rate continues to rise.
Curtin said research by the University of Michigan supported the link between easy credit and this decade’s housing boom.
At the peak of the housing market in 1977, a majority of home buyers, or 52 percent, said their main motivation was the idea that house prices would rise. By 2005, 75 percent said that easy credit was the key motivation.
“The boom couldn’t have occurred without granting mortgages to anyone,” Curtin said. “The 1970s was a pure price bubble; the 2000s was a pure credit bubble.”
Ah - my Alma Matter making me proud.
Now - if we could only get things together on the football field.
Dumb but honest question:
Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?
So that you can paint the walls any color you want?
To stop throwing money away on rent.
Why should buying a home be weighed in terms of making a good investment?
My boss and I just had a conversation about him buying a bigger house. He’s “in it for the long run” which for him means he doesn’t care if it loses money b/c he expects to stay in this place potentially for the rest of his life (he’s ~32 now).
Well, most of that “long life” will be spent paying for and renovating the house “in the long run”.
Why do fun things like go to Fiji when you can hit HD every weekend, right?
Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?
————————————————————-
It’s different here.
this is god’s country.
we are operating on a new economic paradigm.
Hot damn….I got killer rates from countrywide.
PB,
“Dumb but honest question:
Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?
BUY YOUR OWN MORTGAGE?”
“Economists continue to search for ways to stem the tide of foreclosures that continues to subsume the U.S. economy, or to prevent similar problems in the future.
Federal Reserve Board economists Wayne Passmore and Diana Hancock discussed their plan to create an “option” at the time of a home purchase allowing home buyers to buy back their mortgage at market value if prices dropped.”
Where’s FPSS??????
Oh, he also said he isn’t trying to get rich or anything like that. There will be ups and downs and he’s just trying to maintain. If he loses some here thats ok. My translation: He’s trying to ride the regression line or moving average more or less.
Why do fun things like go to Fiji when you can hit HD every weekend, right?
Hot Dogs?…
But yeah, I get your point. Thing is, it is so obvious (even he acknowledges) to everyone by now that housing is crashing. In AR, we even have the advantage of being behind the CA/FL/etc curve a bit and get to see the warning shot. If you are already planning on selling anyway, why not just sell out and hold your cash for a bit to see what happens? I don’t understand the mentality for NOT doing that…
I’m not down on anyone who wants to own. I’d like to have a nice 10 acres at some point myself; put in an orchard, muscadines, blackberries, etc. But cripes, if you aren’t already there (or whereever you want to be) with it mostly paid off, why not just sit out the next year or so?
because they don’t want to be priced out forever?
because they’re not making any more land?
because Suzie Orman said to do it?
because they know a ‘really good mortgage guy’, who has a secret.
“Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?”
It makes them feel: grown up / successful (they made it) / ”sophisticated” investors.
But yeah, I get your point.
HD = Home Depot
In your 20’s, you should have fun not be saddled with debt and a dinosaurus.
“@ joeyinCalif — Why should buying a home be weighed in terms of making a good investment?”
Good question. I look at buying a house like buying a car — no matter what, I’m going to be eaten alive by interest payments (on a depreciating or inflation-tracking asset), so why not pay as little as possible?? It’s a good investment (as far as losing as little money as possible over the long run) if I buy at the lowest price I can, make a huge downpayment, and pay off the debt as fast as possible (that is if I don’t already have all the cash necessary for an outright purchase, which is the best option).
rob
Because Suzanne researched it?
Because it’s a buyers’ market!
Federal Reserve Board economists Wayne Passmore and Diana Hancock discussed their plan to create an “option” at the time of a home purchase allowing home buyers to buy back their mortgage at market value if prices dropped.”
These academics are really sensationally clueless.
If you did this, you basically have a “callable bond” and since that “option” is not free, investors would rightfully demand higher interest-rate premia to compensate for this risk.
What a buncha navel-gazing self-lubricating mutual-masturbat*ng d*ldos we have here!
Well, puss, they just HAVE to do SOMETHING! What do you not get about that?
On the upside for house buyers, during a mania the probability of the mkt value of the house “dropping” would have been deemed close to zero by the banks, so during a boom cycle one might pay very little for that option.
“Why should buying a home be weighed in terms of making a good investment?”
I have nothing against people who are situated so that it makes sense for them to lose a few $100K on a poorly timed home purchase. In fact, I know of one famous politician (name omitted) who locally made just such a move last year. He is also wealthy enough so that (1) he does not have to worry about selling in a down market; (2) twenty percent or even forty percent of the purchase price of a San Diego home will barely dent his net worth.
If you are like this fellow, then I say “Congratulations — go for it!” But for your typical American with no savings and living paycheck-to-paycheck, buying a home when prices are falling at a 20 pct annual rate is tantamount to financial suicide.
‘Thing is, it is so obvious (even he acknowledges) to everyone by now that housing is crashing. In AR, we even have the advantage of being behind the CA/FL/etc curve a bit and get to see the warning shot.’
No disrespect intended, but your boss is a dumbsh!t.
‘If you did this, you basically have a “callable bond” and since that “option” is not free, investors would rightfully demand higher interest-rate premia to compensate for this risk.’
But couldn’t they use either bailout monies or ‘Fed funds*’ to suppress (buy down) the risk premium?
*Early in the campaign, I recall a point when OBwan publicly divulged that he thought Fed funds were cashola (not an interest rate). I assume his capable tutors have straightened him out on that point by now.
Next Shoe To Drop
“@ joeyinCalif — Why should buying a home be weighed in terms of making a good investment?”
Good question. I look at buying a house like buying a car..
In a somewhat backhanded way I was just pointing out that while the RE “investment” mania is soundly and righteously criticized around here, it’s pretty easy to get sucked into the mindset.
Buy the house that suits your conditions, buy as much house as you can afford, and be satisfied.
None taken. He’s a good guy and I like him. In most respects I consider him pretty competent. It may be that he doesn’t really perceive a big crash and is just doing the “smile and nod” thing, or just agree to get along, when I talk about it.
Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?
I’ve been trying to get a co-worker here in Vegas to tell me why he just bought a repo.
He says he won’t mind if he loses 20% this year because he got such a great price on it and an excellent interest rate. Amount owed on the place at foreclosure was $440?k. He’s paying $275?k at 5%.
Stay tuned…
But couldn’t they use either bailout monies or ‘Fed funds*’ to suppress (buy down) the risk premium?
You could but that’s not how it would trade on the secondary market.
Either way, it’s not going to work. These academics are real fools with no concept of how investing actually works.
Because you’re getting it for “less than it’s worth”.
Because these low interest rates won’t be around long.
For the children!
“@ joeyinCalif — Why should buying a home be weighed in terms of making a good investment?”
And this statement gets down to meat and taters of it all.
The idea that a house is a great investment is *still* touted, fomented and leaned on universally. Even against the backdrop of everything going on… the foreclosures, bank failures, political pandering, etc, the general public is still clinging to the absurd notion that the Real Estate God in the sky will bestow bushel baskets full of cash in return for their house. The Crime Syndicate of Banks and NAR is solely responsible for this public conditioning. We must get back to shelter value as the primary fundamental of house-ownership.
Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?
———-
Because my wife said to. The alternative would be losing 20% of the value of my marriage every year. Trade offs.
Because presumably if you do everything right, after 30 years of mortgage you get to stop paying the mortgage, while after 30 years of renting, you are still renting.
Of course, figuring in interest, you pay triple the actual price of the house. But if mortage and rent are about the same $$, buying is a better option. Just IMO.
“Federal Reserve Board economists Wayne Passmore and Diana Hancock discussed their plan to create an “option” at the time of a home purchase allowing home buyers to buy back their mortgage at market value if prices dropped.”
You can basically already buy such a hedge today, using options on housing futures traded on the CME. Assuming you live in a major market that trades, of course.
Even if mortgage and rent are similar, buying is the RISKIER option.
Know any job that’s stable for 30 years? No?
Then what on earth are you babbling about, j*ckass?
“Why would anyone in their right mind buy a house which was losing 20 pct of its value every year?”
It’s worse than this. The real question is: “Why would anyone pay a mortgage of 1.5-2 or more times the equivalent rent for a house that isn’t GAINING 10-20pct of its value every year?” Prices got so high that they COULDN’T just “go sideways” for a few years as the bubble deniers maintained that they would. The high prices were justified solely by higher future prices.
Now we’re seeing the other side of that equation, and prices are going to have to adjust so that they are justified by the equivalant rental rate.
just imagine how even now the discussion in Europe about ‘media involvement’ is complete different: the RE mob is shouting that the media are scaring buyers by raising doubt about indefinitely skyrocketing homeprices, e.g. by reporting that it takes more time and effort to sell a home nowadays.
The RE mob (and politics) suggest that the media should not write about such topics, instead of or in addition to the usual stuff that still fills up our newspapers like ‘a home is the best investment’, ‘buy now or be priced out forever’, ‘renting is throwing away good money’ etc.
Reports from international organisations stating that the Dutch bubble is ripe for a crash have appeared for at least five years. Not ome of them got reported in the TV news or in national newspapers, except maybe for some background articles that suggest things are not as rosy as them seem. One would guess the media hadwised up after what is happening in the US and UK lately, but not a sign of it.
Of course, the RE mob can blame themselves for negative news because they are now pressing the government into all kinds of bailouts and handouts ‘or otherwise all hell will brake loose in the housingmarket’.
Europe is lagging behind the US. Realtors$reg; in America blamed the standstill in selling on media’s negative stories about a year ago. They whined that all those people on the fence were too afraid, even though it was never a better time to buy.$trade; Only now do they realize that we physically ran out of willing buyers.
nhz - here in the US they have a television show called “house hunters” which supposedly follows couples as they look at and purchase houses.
Last nights show was about a couple (American/Dutch) looking for a place in Venlo. I think the place they ended up with ran them US$250k.
funny; we have many of these shows here and they are still extremely upbeat (they keep talking about how much money you can make with that home etc.). But I get the impression that most of them were recorded 1-2 years ago, especially the shows following foreign speculators.
Venlo is about the cheapest place in the country, because of huge unemployment in the area. Our median home price is about $ 360K; in the average city you can find an outdated row house of 30-40 years old for that price, maybe with a small garden. In my area (small town in the outer regions of the country) you cannot buy anything for $250K except POS.
But… but… but you don’t need a JOB to buy a house! Right? Right?
Hahaha!
Paradoxically, it seems like it is still easier for many to buy a Tuscan villa home that it is to get a decent job.
that = than.
Diet cherry Pepsi (pronounced PAP-see in the nearby hills of my youth) hasn’t kicked in…
Oh, it’s not just in Europe where they still blame the media. My own sister, married to a (currently unemployed) realtor, vented to me only this past weekend about how much better off everyone would be if the media would stop reporting all this negative news about housing values.
Sigh.
Just like people would be better off if they kept their eyes closed while walking towards a cliff, so they won’t get scared.
“OJR: What do you think of the job that journalists working for major newspapers and TV have done covering real estate over the past decade?”
Prostituting themselves to the REIC proved to be a fatal business plan.
I have no doubt it was very profitable as long as it lasted. All over the western world newspapers have cheered real estate, and often RE companies were their biggest advertisers. With car companies and jobs going down the drain as well, what advertising is left to fund the papers?
The journalists will probably try to get along with the new new bubble (government handouts or something?).
“I have no doubt it was very profitable as long as it lasted.”
Prostitution has long been regarded as a profession where one could make loads of money through dubious means.
dubious means
I think your doing it wrong Professor!
RE: I spoke with a big time reporter there for abhout 20 minutes. He couldn’t have been more dismissive of the idea of a housing bubble.
Hope you sent the loser a Christmas card, wishing him a prosperous 2009, just to let him know you still remember.
Approximately my thoughts as well. Maybe an email along the lines of “Aren’t you sorry you didn’t report on the housing bubble and beat all your peers to the story?”.
“BEN -JONES! BEN -JONES! BEN -JONES! BEN -JONES! BEN -JONES! BEN -JONES! …”
great interview, Ben! ( big fan here, sure there’s a *few* others
)
What kind of humble desk is it, Ben? Wood? Metal? Carefully arranged miniature sugar cubes? Is there a dancing hula girl on it?
My desk is wood. I’m sitting at it right now, working from home, while the rain patters down outside the window. What a super day!
I got it for free, probably because it looked like a mule had attacked it and kicked it to flinders. I glued it all up, even more excitingly made than it was before, and painted it, so that some of the drawers are red, and I made little handles from driftwood I found. Martha Stewart would scream with pleasure to see it.
Olygal, you really ought to have your own show on HG teevee.
What a good idea! One segment would be when we all made tables and benches from pallets and mule-kicked debris, and then paint them bright and gaudy colors and hammer beer caps and snipped-out tin shapes into their surfaces with those pretty brass carpet tacks, because that would be fun. And on the second half hour we’d go find some developers, or builders, or mortgage brokers, net them, haul them onstage while they kicked and struggled and then paint them bright and gaudy colors and hammer beer caps and snipped-out tin shapes into their surfaces with those pretty brass carpet tacks, because that would be fun.
It’s a surefire hit. You could have assistants demonstrating how-to-do-it, with one showing the basic technique and one showing advanced methods, like they do in exercise videos. I volunteer for “basic”!
LOL - Oly a girl after my own heart
I’m always amazed by what people throw away: I’ve furnished a few places almost entirely by picking and spiffing up furniture that people had left out for the trashman. There’s a myriad of uses for old fabric rolls…
As for hammering decorative carpet tacks into realtors (tee emm) - I’d be happy with some sparkly pasties and body paint.. it’d make the point and wouldn’t incur huge medical bills, or you being wanted by the authorities in 13 states.
‘…or you being wanted by the authorities in 13 states.’
Well, then, what’s the point of it? It ain’t a real party until someone dies and/or the cops come, is what I say.
Besides, no way would I waste a pasty on one of those wretches. I need them for other activites. Now, I WOULD waste paint, but only house paint, and not my prettiest colors.
But that’s me. Also I’m feeling decisive and irritable this afternoon.
(speedy pullet said:)
“I’m always amazed by what people throw away: I’ve furnished a few places almost entirely by picking and spiffing up furniture that people had left out for the trashman. There’s a myriad of uses for old fabric rolls…”
Awesome! Describe some of your efforts, how about! Come on!
If you live in a largish city just check craigslist free list 1-2 times a day.
If you are looking for something particular, use RSS.
I only had to look for 3 weeks to get a free outdoor fireplace. I am now “in the market”, so to speak, for a free hot tub.
The real free market
Is that really any different than all the ugly economic reports that are always worse than the experts expected? We have the world’s worst economists and news media.
Of course, they are bought and paid for by the corporate assholes that run this asylum we call the USA. And while I am on a rant…
WHY THE HELL IS MADOFF NOT IN JAIL?
We are arresting shoplifters over $20 yet this guy steals $50 Billion and is walking around, busy hiding his assets?
This is a banana republic.
Double Standard….Just watch what happens to the Bart Officer who recently “Summarily”
executed a kid…They will come up with some lame defense…
I don’t see how they can come up with an excuse for that. From the video it looks like a third world execution. Look for Oakland to be in a riot soon.
It was horrifying.
Though, not a defense by any means - it looks (judging by both the reactions of the other police officers and the officer himself) that he thought he was reaching for his Tazer, and unholstered the weapon on his other side (ie his firearm) by mistake.
It may account for the ‘casualness’ in his pointing and firing, if he thought he was using his Tazer.
We shall see.
Apparently, you can see him cocking the pistol. No need to cock a Tazer. It’s like my opinion of most hunting accidents: they’re not.
Call your do nothing Congressman/woman. I did. They’ve done nothing.
In my opinion media was an important part of this Ponze skim called “housing boom” organized by U.S. “smart” economic “elite”…
Media is always an important tool to manipulate the horde,to make
them “shipple” to make them proud with our “Democracy”…
Good luck stopping this avalanche…
Metro-Area Foreclosure Sales Tripled in First 10 Months of 2008…
Jan. 6 (Bloomberg) — Foreclosure sales in the 25 largest U.S. metropolitan areas almost tripled in the first 10 months of last year as rising unemployment and falling home values made it tougher for homeowners to sell or refinance their mortgages.
Motivated sales, which include foreclosure auctions and banks selling homes taken over for non-payment, increased 193 percent from January to October 2008 from a year earlier, New York-based real estate data company Radar Logic Inc. said today in a report. Conventional sales rose 6 percent in that period.
“Lenders are motivated to sell foreclosed houses as quickly as possible to get as much of the loan recovered as possible,” Radar Logic Chief Executive Officer Michael Feder said in an interview. “They have a tendency to accept deeper discounts relative to other sales, to the point where motivated sales are driving the market.”
Home prices fell in 24 of 25 U.S. metropolitan areas in October, Radar Logic said, as unemployment hit a 15-year high in November. Almost half the homeowners who bought in 2006 now owe more on their mortgages than their houses are worth, making it difficult for them to refinance without bringing cash to the closing, according to Seattle-based real estate data company Zillow.com.
Forty-one percent of October home sales in Los Angeles and Phoenix were foreclosure auctions or financial firms trying to recoup lost loan value, Radar Logic said.
RPX Report
U.S. foreclosure filings increased 71 percent in the third quarter from a year earlier to the highest on record, according to RealtyTrac Inc., a Irvine, California-based provider of default data.
I am guessing that not all the foreclosure homes going up for sale nowadays had their interiors trashed by former owners who locked up pigs inside?
Almost half the homeowners who bought in 2006 now owe more on their mortgages than their houses are worth…
It’s halftime.
I have discovered the dirty little secret of home sales stats in my area.
They are not including the distressed sales in the inventory or the median home price.
Eventually, they’ll just make up the numbers completely since “real estate only goes up!”
“Lenders are motivated to sell foreclosed houses as quickly as possible to get as much of the loan recovered as possible,” Radar Logic Chief Executive Officer Michael Feder said in an interview. “They have a tendency to accept deeper discounts relative to other sales, to the point where motivated sales are driving the market.”
Callin’ BS on that one today. When it doesn’t take months to get an ok and they counter with “give us your best offer” after you’ve already made an offer, then maybe. ‘Til then, not so much.
Agree, Blano.
“Motivated sales, which include foreclosure auctions and banks selling homes taken over for non-payment…”
Motivated sales!? What happened to the term distressed sales? Too negative for 2009?
Looking for work? The FBI is on a hiring blitz, time to crack down on the bad guys…
WASHINGTON (Reuters) - Wanted by the FBI: agents, language specialists, computer experts, intelligence analysts and finance experts.
The FBI said on Monday it had launched one of the largest hiring blitzes in its 100-year history involving 2,100 professional staff vacancies and 850 special agents aimed at filling its most critical vacancies.
The agency, which seeks to protect the United States from terrorist attack, fight crime and catch spies, among other duties, said it currently has more than 12,800 agents and about 18,400 other employees.
Since the Sept 11, 2001, attacks, the FBI has been criticized for not having enough employees fluent in foreign languages and for not moving fast enough to upgrade its computer system.
FBI Assistant Director John Raucci of the Human Resources division said the federal law enforcement agency is seeking to bring more people on board with skills in critical areas, especially language fluency and computer science.
“We’re also looking for professionals in a wide variety of fields who have a deep desire to help protect our nation from terrorists, spies, and others who wish us harm,” Raucci said.
He said the FBI, which has been investigating corporate wrongdoing in connection with the current financial crisis, also needs finance and accounting experts, along with those skilled in physical surveillance and various other employees.
The hiring initiative for FBI headquarters in Washington, D.C., and for its field offices would replace departed staff and add some employees, officials said. (Reporting by James Vicini, Editing by Jackie Frank)
What’s sad is that many of us here at the HBB could investigate faster and more thoroughly than a “Special Agent” using nothing but public records and a laptop.
I have no training whatsoever and I can pick fraud out of any given street in about 2 minutes.
If you don’t fit the mold, don’t bother applying to the FBI( eg gay, long hair, over 28, not in great shape, women, non-white, etc ).
“…the FBI( eg gay, long hair, over 28, not in great shape, women, non-white, etc ).”
I happen to like Criminal Minds, it’s one of my fav shows.
Me too. I especially love nerdy, brainy, misfit Reid. And the fact that Hotch is the only one on the team who fits the FBI mold.
RE: The agency, which seeks to protect the United States from terrorist attack, fight crime and catch spies, among other duties, said it currently has more than 12,800 agents and about 18,400 other employees.
LMAO…foreign terror, crime, spies.
Notice that investigations of internal threats via the massive amounts of corruption and dishonesty in the finance sector are given secondary thrift.
The rot and attack is from within, you stupid idiots!
Vut too late the messenger
You know what name I haven’t heard in a while?
Mullah Omar. I liked that name, try rolling the r for fun.
Mullah Omarrrrrrrrr.
Try rolling Barrrrack Obama. It’s great practice.
Yes, the rot is coming from within. All of this money spent to stop terrorists would have been much better spent if we had just put up a huge cage around Wall Street.
The illegal wiretapping activities would have been much more fruitful if we’d listened in on the phone calls of Goldman Sachs, Lehman, JP Morgan, the NY Fed, and the Treasury.
THEN we might have caught the crooks before all the destruction took place…
+1
Surprise, surprise….The government is hiring….They have a great business model…
“Put the federal government in charge of the Sahara Desert and in five years there’d be a shortage of sand.” ~Milton Friedman
Are you sure that the Sahara isn’t the result of the government being put in charge of a playground sandbox?
Sorry, couldn’t resist the quip.
I was at the post office over the weekend to mail a bunch of borrowed cds back after loading them up onto my ipod. Cds qualify for media mail rate (old book rate) and that was about $6 instead of close to $15 for regular first class (I added insurance), so I requested it. Woman behind the counter thought the box was too heavy (aren’t cds heavy?). She said media was subject to inspection. I told her to go ahead as there was just cds and their cases and a little crumpled newspaper for packing material in the box. She pulled out a HUGE pair of scissors (blades could have been 10 inches easy). I was sort of bored. She said she was really going to do it. I said that was fine, then added that she would have to tape it back up as I didn’t bring the tape with me. I didn’t mean this as a threat, mostly it was to move things along. But…you guessed it…she backed down and said she didn’t have any tape. What good does it do to say that certain boxes are subject to inspection if the employees can’t put them back together?
By the way, I could see tape behind the counter, but it said priority mail on it, so I suppose she couldn’t use it on a media mail package.
OK, I am curious. Did you have to go back home and tape the box and come back to the post office?
I avoid using the counter at the post office if I can. The one I go to has mostly older workers (men and women), who stand around talking about their work hours and benefits, or chat endlessly with the more regular customers. I feel there is simply no incentive for them to do their job efficiently.
It was amusing for me to read that there were 1 billion less packages delivered by the post office this past holiday season than the previous season. And that the postal department is already $2-3 billion in the red.
One time, I wanted to send a package and a woman customer service rep. would not ask me to come up to her counter even though she was the only one open and I was next in line; she was trying to figure out how long she would have to continue working full time for her medical benefits. From the conversation with her co-worker, it seemed that she had joined the post office only 3-4 years ago, sort of later in life than the others. And she already hated it. She pretended to not see me for about 4 minutes, and then finally turned around to me and called for me.
Nope. I didn’t have to retape the box because she didn’t open it. She held the scissors over the box and told me she was going to, but never did. Sort of a game of chicken, except I had no reason to swerve since I wasn’t lying. She had no reason to start the game in the first place because, seriously, 17 inches of cds are going to make a fairly heavy box, but I “won the game” as it were.
Polly:
Ebay expert here: you can safely get 40-42 cd’s in a flat rate $9.80 priority box and 58-60 cd’s in the bigger $12.95 box. I offer that as a choice instead of medial mail, since the box is free. and some people like the idea of 2-3 day delivery
Thanks. That is good to know for the future. In this case, I found a box that was the perfect dimension for cds with a little newspaper around them and pretty much exactly 17 inches long, so I knew how many I could borrow from my uncle and be able to easily mail them back. I even took his one Zydeco disc and loaded it up - see, I was thinking of you. Haven’t had a chance to listen to it yet.
Zydeco its going to be big here is a small clip audio is not good, but look what he does to an accordion:
http://www.youtube.com/watch?v=HbuY_8q5gA4
DJ - we found out about those flat-rate boxes during the holidays and they saved us a fair bit of money. But none of the clerks in the post office were about to volunteer the information. We had to learn about them by word of mouth, such as ours here.
Polly,
Really shouldn’t mess around in a SIT-U-ation like a postal worker with an attitude…retribution (after you leave) can result in your items being sent into a sort of “postal hel!” known as “kick/drop/throw-the-box” to the damaged mail dept… your insurance claim may turn out to be as speedy as a Fry’s electronics $50.00 mail-in-rebate coupon.
Having work in the Postal distribution facilities. I have seen moves done with packages that make the NBA look like kids. The word fragile does not exist in the postal language.
That is why I got the insurance. And she didn’t really have an attitude. I could see she was sort of nervous at confronting me. Not a very good attitude for a postal worker. Anyway, she was alone in a small office on a Sunday afternoon. Probably bottom of barrel in terms of seniority.
You have post offices open on Sundays???
Yup. Noon to 4 in the White Flint Mall in North Bethesda, MD just outside the Beltway. And something like 10 or 11 to 5 on Saturdays. The post office seriously increases foot traffic in that mall on weekends.
At the rate were going you’ll be able to expect that level of service anywhere you go - not just the P.O.
Actually, I’m expecting service/product quality to increase. It will be a form of shrinking margins.
Small businesses - yes. Large ones - not so much.
Posted this yesterday, though too late to get any responses -
Question for those in the know about corporate bonds, if I may.
I’m checking into the retirement portfolio of my MIL, and it looks pretty bad - some very risky stuff in there, even though she’s 70. For instance one bad one is a significant amount in corporate bonds for Sanmina-SCI. From looking at the fundamentals it appears that chances are they’ll be going bankrupt soon, probably in 2009.
I know in bankruptcy, there are various “priorities” given to paying back the bondholders - right? Assuming this company does go bankrupt - is there a way to know what her chances are of getting some principle back? If so - is it an all-or-none thing, or might it be a percentage? I’ve also heard of some companies exchanging bonds for equity - stock I presume, and presumably only if the company emerges via Chapter 11.
The specifics of these bonds are:
CUSIP 800907AJ6
Issue date 6/1/05
Maturity date 3/1/2013
Coupon 6.75%
Rating B3/B- (junk, right?)
Aug. 08 price 90.25
Current price 44.00 (!!!)
Side note - this is a good sized company - 38k employees recently. Apparently very poorly managed.
Though apparently this is/was a really bad investment, I’m wondering if it would make any sense to try and sell the bonds now. She has a large quantity, and I’m guessing trying to sell them on the open market she won’t even get 44.00 for them.
Also - what does “44.00″ mean - is that generally in cents? Or just relative to whatever the original purchase price was - e.g. 44%? I don’t know what the original price was, though am trying to find out. Based on her statement, it looks like it’s 44 cents - i.e. if I multiply the quantity times the price, it equals the current value shown.
Thanks.
Packman,
Just some friendly advice. You can always call a financial professional and get some unfriendly advice.
IMO, 44 cents on the dollar is a lot better than no cents on the dollar. As you state, there are “priorities” to obligations, debt and equity of the corporation. In a bankruptcy, the common stock becomes worthless. Then, bondholders may be paid out of the liquidated assets, so there may be value to these bonds even if Sanmina goes BK. That is why they have a value listed at 44. If they were initially issued at 100 cents on the dollar, or close to it, their initial yield was about 6.75% per year.
At 44 a new buyer earns about 15% for as long as the interest is paid. What they recover under BK is the risk they take for the higher yield. It would probably be a “percentage” as you said.
Personally, I think the directors, officers, and other friends of management will tend to squander away the currently remaining value of the company during a period of economic contraction. That’s why I would sell now. I would also look to use the proceeds in an annuity based on her age 70. You may be pleasantly surprised to learn what her taxable income would be using the life-only option in an annuity.
Just IMHO, I don’t trade bonds or sell annuities.
Good luck.
But you have provided an education to everyone else!!
Thanks a million for this in-depth explanation.
Thanks cobalt! See my response to Joey below for more background info.
One follow up - you stated the “initial yield was about 6.75% per year” - this implies that the yield may actually change over time? If so, I didn’t know that. In what way might it change, and how can I find out how it has changed? I assumed that a given bond’s yield was set for its whole time period to maturity.
That is the yield when it is trading at par (100 cents on the dollar). The change in yield happens when it changes hands at a price other than par. When cobalt said that the yield would be 15% for someone that bought it at 44 cents on the dollar, that is the change. If someone was willing to pay $1.15 for a dollar par value of the debt, then the yield would be lower. Without a sale, there won’t be a change in yield unless the rate changes based on an index, formula or some conditional event. The terms will be in the debeture, but I don’t see anything like that in the terms you put in your original post. Looks like a plain vanilla fixed rate junk bond to me.
i read this yesterday and saw at least two problems with it..
1) No matter how things turn out, your getting involved is practically begging for family troubles down the road..
2) The situation is one where advice on the best course of action would only come from professional, fiduciary source.
Funny you should mention that. I didn’t give the background actually. My MIL is quite clueless about her finances, and so is using a family friend who happens to be a professional financial adviser (I won’t say what firm) to do all her investing for her. She had no idea what she was invested in, and even if she did know, she wouldn’t have known how to research to see if they’re good investments.
This is what really bugs the crap out of me - this guy should have known better. I don’t think he has any ill intent - I know him somewhat, and his whole family is long-time close friends with my wife’s family. I just think he hasn’t been wise with her investments and/or hasn’t been paying attention to what’s been happening with them.
Unfortunately it’s not the first time she’s been burned. Just before I met my wife their family had to declare bankruptcy and sell a *really* nice house because their previous financial adviser embezzled lots of money from them. He (the financier) ended up going to jail, but they still lost most of their money. Apparently they then turned to this family friend guy since they trusted him. Side note - her husband was a doctor, and she’s an immigrant, and lives in Florida - they fit the generalization you can imagine with regards to financial sophistication.
Believe me - I’m very hesitant to get involved, because I know indeed it is inviting trouble. Problem is that the alternative of not getting involved may very well result in her losing her life savings (such as they are). So at this point my tack is to just take a thorough look at her stuff, and then make some general recommendations to the financial adviser friend - kind of like “maybe do you think these investments are too risky for her age?” and hope he agrees. I want to be able to respond intelligently if he argues specifics. If the guy just flat-out disagrees then I may have to get more actively involved, though I hope it doesn’t come to that.
Your mom could live to be 100 then what? If she loses the house or assets then its i have to live with Packman and family.
Not a good idea since most older people want independence even if it means being bedridden in their own bed, instead of a nursing home
——————————-
If the guy just flat-out disagrees then I may have to get more actively involved, though I hope it doesn’t come to that.
Yep - exactly. She (in-law actually) indeed does want to remain independent. I’d like to help her remain so :). She’s very healthy and could well live to be 100.
Fortunately her expenses are very low - no mortgage, small house, no significant travel, so she actually lives pretty much just on SS. However as well all know SS will be bankrupt soon, and if not may still be overwhelmed by inflation.
moth ———– flame.
Anyone notice that bubblin’ crude is up 42% from it’s low?
This comes as no surprise to anyone. The question is what can be done to turn this industry around? Pouring tax dollars into this bottomless pit won’t do it, their business plan is broken. What ever it is or was…
U.S. December Auto Sales Dive 36%, Drag Industry to 16-Year Low…
Jan. 6 (Bloomberg) — U.S. auto sales plunged 36 percent in December, dragging the industry’s volume in 2008 to a 16-year low as the recession ravaged demand. General Motors Corp.’s annual total was the smallest in its home market since 1959.
Toyota Motor Corp. and Honda Motor Co. reported their first drop in full-year U.S. sales since the mid-1990s after December declines of at least 35 percent. Chrysler LLC’s 53 percent dive last month led major automakers, while Ford Motor Co. slumped 32 percent and GM and Nissan Motor Co. fell 31 percent.
The federal rescue of GM and Chrysler on Dec. 19 couldn’t overcome buyer pessimism and tight credit in the world’s biggest auto market. GM’s 2008 U.S. sales of 2.95 million light vehicles were its fewest in 49 years, and Ford’s tally sagged to a 47- year low, according to trade publication Automotive News.
“It’s one of the worst years ever, and this year will be worse,” said Stephanie Brinley, an analyst at consulting firm AutoPacific Inc. in Southfield, Michigan. “It’s not a gas problem. It’s not a credit problem. It’s a consumer confidence problem, and it’s worldwide.”
Vehicle sales for the year totaled 13.2 million, the fewest since 1992, according to industry-analysis firm Autodata Corp. in Woodcliff Lake, New Jersey. Annual sales for 2007 were 16.1 million.
GM, which probably lost its global sales crown in 2008 to Toyota, retained the top spot among automakers in the U.S., followed by Toyota, Ford, Chrysler, Honda and Nissan.
The December results for GM beat the average estimate of a 41 percent drop among six analysts surveyed by Bloomberg News. Tempering the decline was a 43 percent surge in deliveries of the Chevrolet Malibu sedan. Sales of GM’s Saab brand, which the Detroit-based automaker says it may sell, fell 57 percent.
Toyota, Honda
Toyota’s U.S. deliveries plummeted 37 percent, as it failed to get a boost from no-interest loans offered on most models since Oct. 2. Sales of its Prius hybrid, the best-selling gasoline-electric car in the U.S., fell 45 percent. The Tundra full-size pickup dropped 52 percent, while Toyota’s Lexus luxury brand finished the month down 32 percent.
Honda, No. 2 in Japan behind Toyota, said U.S. sales slid 35 percent. Toyota hadn’t posted an annual U.S. sales decline since 1995, while Honda’s last full-year drop came in 1993.
U.S. automakers accounted for 47.5 percent of domestic sales in 2008, the first year in which their combined market share was less than 50 percent, Autodata estimated. Last year’s figure was 51 percent. Asian automakers had 44.6 percent of the market, while European brands had 7.8 percent, Autodata said.
It’s not gas, it’s not credit, its’s a consumer confidence problem? So their company depends on customers feeling good, not on actually needing a car? They must be taking their business plan from the lady who started the candle shop.
This great recession/depression is going to last a while, especially once consumers find out that they can fix what they have rather than buying new. And we just got done buying lots of brand-new stuff. We won’t need a new anything for a long time.
3M survived the first Great Depression on the sales of its Scotch tape.
“So their company depends on customers feeling good, not on actually needing a ________?”
Heck, fill in the blank - that’s been everyone’s business model: the Pirate store, the Pet Salon, the Scrapbookers - not just the autos. A huge swath of the boomtime economy was built on that statement.
Side note: Recently joined a car sharing program - anything to stay out of the showrooms. The Big 3 can go pound sand.
How’s the car sharing working out for you? I live in the ‘burbs where car sharing may not be as practical, but in the city it seems like a good idea. I’ve seen parking spaces for car-sharing services in Evanston.
Yeah, it depends alot on your location. There’s a dozen cars scattered within 3 blocks of me in various directions - so it’s been a snap.
$8 an hour, and $50 a year membership, $25 one time app fee. They have various plans - igo.org.
My usage is twice a month at three hours a pop. So, $50 a month. I previously owned a paid off beater, but even with minimal insurance and maintenance the costs were still higher. ($500/yr. insurance, $300/yr. gas, $200/yr. mtc.)
The $8 includes all insurance (much better coverage too), gas, mileage, mtc, the whole nine yards.
“This great recession/depression is going to last a while, especially once consumers find out that they can fix what they have rather than buying new”
Do it your self will make a big come back. I’m dropping a new engine in my truck cost $2650. I’m looking at 2 weekend to do it. The dealer want to charge $6000 for the same engine plus $2500 for labor. It also help that my brother is an ASE mechanic and is willing to help.
Addin in a 6 pack or two of your brother’s favorite beer and dinner, I hope? Still a good deal.
WHAT IF….
…everybody decided it’s okay to have the same car for 10+ years,
…people realized that they don’t need to replace their wardrobe every season
…people stopped buying unnecessary junk
Do these things have to result in our “economy” getting all screwed up? How could our economy evolve to function well in a scenario where people value free time and recreation more than shiny new objects?
What kind of forces, if any, are in opposition to such a scenario?
The problem with this scenario is that massive jobs will be lost. The question is: what industry can pick up where the consumer industry left off?
So, duct tape and bailing wire? Who makes those?
I’ve noticed in marginal ‘hoods about Pinellas County there are always one or two extreme makeover homes - those owners renovated, went big! during the boom instead of selling. If you recall, this is when the production of land ceased.
These are usually two story McMansions that fill the lot in neighborhoods of one story CBS homes that sit neatly in the middle of the lot. They are exactly the kind of home I wouldn’t want to be stuck with in the coming unpleasantness.
Anyway, my guess is, these homes will shelter a lot of nasty activity in the coming years. First, it will be obvious that they will be first underwater, second the tax burden will be disproportionate… so then you will be left with a massive, abandoned structure in the middle of a declining ‘hood. I am already seeing these throughout mid-Pinellas.
If I were a man of crack, murder and prostitution, I’d be preparing for a period of prosperity.
CBS= concrete block slab?
McMansions are ugly enough, even if you try to hide them behind landscaping a la Kinkade. Man I’d hate to live next to one.
So that’s why–! In Worcester (”Wustah”), Massachusetts I remember seeing some really grand old homes, decrepit, and surrounded by smaller dwellings. Victorians were the McMansion of their day… guess the neighborhood was not rising as the builder of the white elephant thought.
We have a house like that in Gville, too, on NW 16th Ave. Giant rambling Victorian, looks like it’s about to fall down. Does anyone live there? Surrounded by single story concrete block homes, 1500sqft at best, occupied, on modest wooded lots.
Wow. Thanks for teaching me something new.
FPSS, I saw you tried to post a link to something last night. I am a patient boy, I’ll wait, I’ll wait, I’ll wait. My time, is water down the drain…
I understand that money losing velocity means deflation is a lock, but eventually, as businesses rescale, the cost of goods could go up, meaning inflation even though not a lot of money is moving around. I took micro and macro a while back, so I have a basic understanding of econ. I especially understand that you can’t sell something people don’t want.
The puzzle I am piecing together is this: housing will continue to deflate, health care and some other goods will inflate. I figure as long as housing continues to decline and I keep my job, my family will be o.k. I can always skip the $9.99 cup of coffee if it comes to that.
I also have mad rifle skills if we go Mad Max.
I especially understand that you can’t sell something people don’t want.
There may be a few salesmen out there who think they can..
“I also have mad rifle skills if we go Mad Max”.
Be sure and have a large cache of ammo on hand, load up before the proposed ammo registration bill passes.
“large cache”
Those are for guys that need more than one shot.
the flies eye
‘Those are for guys that need more than one shot.’
Hahahaha! Nice.
link that bill please
There are a lot of rumors flying about laws soon to be enacted to ban certain types of guns, registration of ammo, etc.
I think they are all being put out by the gun lobby to boost sales.
Fear is the fastest way to sales.
Whether it’s “buy now or be priced out forever” about houses or gold or whether it is “buy this or you’ll never get laid”, it’s the quickest way to get someone’s money.
There is never a large economic situation where you need to make decisions that quickly. These things move over years.
It makes sense considering the gun knuts are easily whipped into a lunatic frenzy.
“There is never a large economic situation where you need to make decisions that quickly. These things move over years.”
Well said, and a good reminder, FPSS…
“There is never a large economic situation where you need to make decisions that quickly. These things move over years.”
Fantastic. Considering embroidering a cushion with this. Or a motivational poster (with skydiving kittens)!
Okeedokey
http://www.ammunitionaccountability.org/Legislation.htm
Leigh
I am a patient boy, I’ll wait, I’ll wait, I’ll wait. My time, is water down the drain…
Ah, that’s the first Fugazi reference on the HBB as far as I can recall …
We were lied to about how good it all was. What if we were being lied to about how bad it all is right now, too? Hmm, let’s see, then you could get things like bailouts, threats about world economic collapse, etc. More fear. This can be handled. But idiots are not the ones to handle it.
“This can be handled. But idiots are not the ones to handle it”.
Ah, but grasshopper, just remember we have a new group, that is the same as the old group. They have new plans, that are the same as the old plans, so it’s all good,see?
“Meet the new boss
Same as the old boss”
The Who - We Won’t Get Fooled again
Oh, yeah, you can also have endless wars, spy agencies and extract billions from the citizens. You can have massive illegal immigration and lowered wages, threatening people with food shortages. These are just some of the things that can be done when there are lies about how bad it all is and how it can’t be fixed unless certain things are done.
You can also tell citizens how sh^tty they are and how they deserve all this. Usually what a rapist tells the rapee, btw.
Exactly correct.
The more numbers that come in supports your thesis, the financial crisis seems to be a fraud. WMD in Iraq anyone?
Here is what I know:
Over the last 15 years:
Median Income up 20%
CPI up 50%
Per hosuehold debt up 180%
Business debt up 266%
For the past decade, I’ve made more money but lived a lower standard of living that most of the people I know. How were they doing it, I wondered….
Now I know. They were doing it on debt. Run up the creidt cards, cash-out refi from the house to pay them down, repeat.
I know that can only last so long.
I know they can’t do cash-out refi’s of the house anymore. I know many of them are now walking from their upside down houses. I know many are being forced, against their will, to spend less.
Doesn’t sound like this financial crisis is just a lie… to me anyway.
The insidious rationalizations of RE believers in the New England has condensed into “we’re not FL, CA, NV or AZ and there is/was no bubble here so prices can’t fall much”. But based on state RE organizations sales numbers here, the misery hasn’t begun to really spread. For right now, the local/state REIC knows whats on the menu based on the evaporating sales volume but it hasn’t hit Main Street like a freight train as I think it will this spring. RealTurds and their money grubbing minions will have to make hard decisions here in NY and VT.
There is nothing left in their repertoire of stupidity except variations of “it’s different here”.
Actually, it is different there. The taxes are usually about 2x what they are in the south and west. Good luck with that!
Yes.
Vermont has the highest individual tax burden among all states.
Central planning from Montpelier has ensured fat property tax bills in many areas versus others in “less fortunate” locales.
This being quite similar to that “spreading the wealth around” that was so popular on the national stage this past fall.
We like taxes and spreading the wealth around like every good govt. policy should.
Are VT PROP taxes really higher than FLA? I mean, with income tax, why would they have to be?
Fla prop tax is insane. So are utility taxes (talk about regressive) and sales taxes. Though I’d like to see 10% sales tax and lower prop tax… or lower house prices…
(Sales tax is a lot less annoying if all prices must include sales tax. As in Europe. Easy!)
Really, you have to discount the “value” of any Fla home b/c of the prop tax issue.
-
Comment by exeter
2009-01-06 10:29:34
We like taxes and spreading the wealth around like every good govt. policy should.
******
Of course you do - you’re a government worker!
Yes I am. And I’m hiring more of them today at a very high cost. Life is good.
We’re on it…
Jan. 6 (Bloomberg) — Federal Reserve officials are focused on driving down the spreads between U.S. Treasury yields and consumer and corporate loans, after cutting the main interest rate to almost zero failed to revive lending.
Credit costs for households and businesses haven’t followed yields on government debt lower. Fifteen-year fixed-rate mortgages were at 5.06 percent last week, 2.59 percentage points above 10-year Treasury yields; the spread averaged 0.88 point in 2003, when the Fed slashed rates to 1 percent.
Chairman Ben S. Bernanke sees the thawing of frozen credit markets as critical to a recovery, and is determined to try to prevent a second wave of credit distress as the U.S. weathers bad economic news over the next two quarters. The Fed is now looking at ways to revive lending by using its balance sheet to hold loans and bonds that investors don’t want.
“Investors in general don’t want to take on the risk,” said Richard Schlanger, who helps manage $15 billion in fixed income securities at Pioneer Investments in Boston. “It is going to reach the point where the Fed will intervene again.”
One of the options under consideration: reviving the asset- purchase plan originally envisaged under the $700 billion Troubled Asset Relief Program run by the Treasury. The purchases could be combined with fresh injections of capital into banks, and the use of TARP money to help struggling home owners avoid foreclosure.
Obama Team
President-elect Barack Obama’s transition team and central bank officials have discussed such a strategy. Obama, who has advocated a broad-based approach to tackling the issue, takes office Jan. 20. He has picked New York Fed President Timothy Geithner as his Treasury chief, with former Treasury Secretary Lawrence Summers as White House economics director.
This is a flawed strategy which I fully expect to fail. Can’t any of the economists on the Board calculate a mortgage? You can do it in MS Excel, for Chrissake!
Simple problem: Joe Sixpack the Plumber could have bought maybe twice as much home in 2005 using a stated income loan w/pay-option ARM and 1 pct teaser rate as he can buy in 2008 using a 30-year-fixed at 5 pct with a downpayment requirement.
definitely; reports show that foreign investors are abandoning the US debt market in droves. That leaves the FED / US taxpayer to fund the housing market. Pulling yourself up by the bootstraps is not a bright idea, but Bernanke and Geithner are going to try again anyway. If it fails they will probably demand bigger boots and bootstraps.
P.S.: forgot to add:
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.
http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html
Buiter is such a pessimist! That can’t happen here, because this is America.
And move to?????
I’d be more afraid for the dollar if I had a clue what will replace it.
If you know it’s gonna fail, why get upset about it?
Here, have a potato (hands him a potato.)
And learn to trade the markets with what you know.
unfortunately there is no good way to play the short side of the housing market in Netherlands. They have turbo’s (kind of an option with no expiration date) over here for almost anything except homeprices
as for potential dollar crash: tough to bet which major currency will fail first; they are all putting in their best efforts to get ahead in the race to the bottom.
THIS IS THE KIND OF CRAP i DEAL WITH EVERYDAY:
A lousy $12 hr job that is very close to home doing menial legal support, and i have a car safe drivers insurance 700 ebay rating, and yet No answer to a resume not even a return receipt. Nothing…
OK i don’t look like a messenger boy, I am an adult..and not a stupid kid
I’m scared if I call up or show up in person i will get my A** reamed for not following the directions of no calls!
Its pretty hopeless for smart people in America.
———————————————————-
Messenger/Delivery/Courier - Part-Time-Open Immediately (Sunnyside, NY)
Reply to: trialimaging2@aol.com [?]
Date: 2009-01-04, 2:16PM EST
Legal support services firm is seeking a part-timer for pickups, deliveries & general office duties. Great opportunity for an individual who is seriously looking for a long-term permanent position. Our firm has been in business over 20 years. IF YOU ARE LOOKING FOR A REAL JOB WITH REAL JOB SECURITY, THIS IS THE ONE FOR YOU. Pleasant, clean office environment close to subway. ONLY serious applicants with proper credentials and experience will be considered.
RESPONSIBILITIES:
Pickup & deliver large packages
Able to arrange daily schedules for optimal usage of time
Must be on time, all the time
Obtain and maintain shipping documents (fill out labels, shipping slips,
UPS, FedEx, etc. - computerized)
Must be able to interact professionally, energetically and courteously with
customers and other staff both in person & on telephone
Attire must be professional/presentable
Must be able to work under tight deadlines in a sometimes stressful, busy
environment
Must be dependable, serious and focused on job at hand
Able to perform rudimentary office functions such as sweeping/mopping floors
and garbage collection
Maintenance of machinery including cleaning of automatic processors
(will train)
REQUIREMENTS:
Must have 3 years experience in office and messenger field
Must speak English clearly and be able to read and write English proficiently (clear penmanship)
Knowledge of subway system and Manhattan addresses a must
Have a driver’s license with clean record (no accidents)
Must be able to lift heavy items on occasion
Light computer skills
UPS / FedEx & US Postal shipping and packaging
Approximately 20 to 35 hours per week. Individual must be flexible with hours (come in early or stay later at times). Saturdays as required. References and driving records will be checked.
* Location: Sunnyside, NY
* Compensation: Salary: $10 to $12+ per hour depending on abilities and experience.
No offense… I took a job at a call center for three months a few years back to bridge an employment gap. I worked for $11.50/hr. and fielded irate customers all day long. I went home deaf with a headache every day. Sometimes you just gotta suck it up.
Even in three months, that job gave me a lot of experience in mgt., cust. service and a behind the scenes look at call centers. As a result I can handle just about anybody over the phone, resolve just about anything over the phone, know how to get results from perators (politely) and appreciate people who do this for a living.
Think of all the people you’d meet in NYC being a delivery guy. You could probably get a job just by showing up on time.
Muggy, it looks like he’s already applied for the job and gotten no response, not even an acknowledgement that they’ve received his application.
Dang, I suck. I flipped through that too fast. Sorry DJ. You can call me a eunuch if will make you feel better!
Muggy, I believe you’ve already proved you aren’t a eunuch, or did you put more men on the job?
IMO, they are just trolling to see how many apply for the job. Lot’s of applicants applying mean no pay raises for the ones working or they can hire new folks for $12/hr and let the higher paid folks go. And any companies hiring will be waiting for the new president to be installed. New president, new policies, perhaps more tax credits for companies that are hiring.
Maybe True…but damn i live probably with 6-10 blocks from the company…i’m trying to track it down, but they are very well hidden no obvious email or company name or office listed in sunnyside…
“A lousy $12 hr job that is very close to home doing menial legal support, and i have a car safe drivers insurance 700 ebay rating, and yet No answer to a resume not even a return receipt. Nothing…”
To aNYCdj,
THis is my profession, expert messenger courier delivery driver,
That company will want only highly experienced persons with clean driving records -in CA that means only two points on dmv in three years- and they will run a thorough dmv check, and even a background check, especially if u are using a company car.
I found out that using my own small light pickup in capacity of a independent contracter i could qualify for delivery positions far easier as lots of courier companies out here in LA prefer to hire out I/C’s as all the expense and benefits are paid by the driver.
Problem is that i got a bad break from traffic infractions and got shit-canned from my profession for almost a year. This Feb one ticket will be gone from my record and i can then go back to driving actively, in a ‘profession’ i have 10 years expereince in.
Problem is U are competing with hundreds of applicants , many of whom have deep experience, such as former fed-ex/ UPS drivers. Companies will always look for applicants with min 2+-years experience , especially such types of delivery services as legal support delivery work, which is a very demanding position requiring a number of skills besides just being a simple hauler.
$12.00 /hr seems cheap but U will probably be using a company vehicle and they will most likely be paying the gas . Pay Rates in S Cal about same. On the other hand, experinced hustling I/Cs using their own small pickup can pull in $ 600-800 per week but they do have to pay gas and bennies out of their own pocket. So weigh the merits for salaried employees vs I/C’s.
Couier jiobd is highky stresful and fast paced.
And I think FedEx and UPS have let a lot of people go in the last 18 months, if I’m not mistaken…
These will be Class B CDL drivers with very clean records. 2 points? How about zero.
I found a link to a list of “Certified Legal Video Specialists” which had a single entry for Sunnyside, NY. The domain mentioned was “www.trialimaging.com”. Email address was different.
Entry is here:
http://clvs.ncraonline.org/Directory/NewYork.htm
Thanks I finally found it too….their website is non-existent so i thought it was a fake ad…….
I did talk to him, and we will see what happens..
I LOVE Talking to humans!!!!!!!!
I did talk to him, and we will see what happens..
Best of luck to you. I have been unemployed, and it sucketh mightily.
“A lousy $12 hr job that is very close to home doing menial legal support, and i have a car safe drivers insurance 700 ebay rating, and yet No answer to a resume not even a return receipt. Nothing…”
a Ny DJ
In my considerable experience in this field i discovered that in order to get a fair shot at a driving position U must go apply in person at their offices. Call and find out when they are taking applications and go in person to apply.
I have always gotten jobs in courier business by going direct to the company office and filling out appilcation and bringing in my SS, DMV printout, driver license, insurance card, and delivery resume . At the office they will have U fill out an application and have U take a map test and perhaps other tests. Then U wait at office till someone takes u into office for a quick interview.
Like i said these companys always look for experienced drivers, especially in complex downtown city parcel/legal/office deliveries, If the position is a fairly simple hauling job such as auto parts or simple package/parcel only delivery, then experience not that important and they will train. If U have qualities such as a strong work ethic and are good with customer relations/or are good with technical office copying/printing/computers but have little actual delivery experience some legal services companies might be willing to train U, usually by going along with a driver trainer for first 2-3 days.
Just mailing/faxing/emailing a resume will not get u the job. They get hundreds of them and simply dump them in the shitcan.
“Credentials” for an errand boy?
Do I need my janitorial certificate as well? How the transcripts from errand boy school? Will those help?
Idiots.
WTH? CUT TAXES? This is going to really piss off the wacko left! They were hoping to grab big chunks from ‘windfall’ taxes. Check out the last paragraph, Jsixpack is going to rolling in the dough, what with the extra $10 bucks a week. So much for the girl in Fla. thinking B.O. was going to pay her mortgage and gas bills…
Obama stimulus plan boosts business tax refunds
Obama stimulus plan includes billions in retroactive tax refunds for struggling businesses
* Stephen Ohlemacher, Associated Press Writer
* Tuesday January 6, 2009, 7:05 am EST
WASHINGTON (AP) — President-elect Barack Obama’s proposed stimulus package would provide businesses with billions of dollars in refunds on taxes they paid several years ago.
The refunds are popular among business groups and could increase pressure on Republicans to support Obama’s massive stimulus package, even though most of them are wary of government spending increases that could send its total cost to $800 billion or more.
“This gives companies an infusion of cash just when they need it,” Dorothy Coleman of the National Association of Manufacturers said of the proposed refunds.
Obama’s proposal to stimulate the economy includes tax cuts of up to $300 billion, including more than $100 billion for businesses.
The refund provision would enable some companies posting losses last year to get refunds for taxes paid as far back as five years earlier. The businesses could refile their old tax returns, using the losses suffered last year to offset profits made when times were good.
Under current law, businesses can use losses to offset profits the two previous years.
Obama’s team has yet to provide estimates on what the refunds could total. When Congress considered the same idea last year, carrying back losses to offset profits in the previous five years would have provided businesses an estimated $25.5 billion in refunds.
With business losses mounting in 2008 because of the recession, the price tag on Obama’s plan would probably be much higher, said Bruce Wein, who heads the U.S. tax practice for the law firm DLA Piper.
“I think it’s creative, I think it’s bold,” Wein said. “It’s going to get a lot of backing from Republicans for the obvious reasons.”
Obama’s tax package also targets individuals, providing a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 larger each week.
It’s sad that our mental state has become such that we call the government not taking taxes from us as “an infusion of cash”.
It’s all a plot so that the real* fiscal conservatives won’t what to complain about: tax cuts or increased spending. Latest alternative energy proposal: hook a dynamo to the Concord coalition and harness the kWhrs as they spin angrily looking on as the debt/GDP ratio soars.
*not the deficits-don’t-matter/tax-cuts-for-all-my-friends neocons.
And they’re dumb enough to get hoodwinked…. again. lmao.
Oh cripes I almost fell out of my chair on that one! Too funny.
Not familiar with the “Concord coalition” term though - care to expound? It sounds like I’m definitely a member.
http://www.concordcoalition.org/
OK so after checking them out (I thought they rang a bell - now I remember reading about them) - no friggin’ thanks. Talk about lip service. Given that one of the heads of the CC Bob Kerrey is also the head of the Socialist/Communist New School - who believes they really seriously believe in fiscal responsibility, at least from a reduced-government standpoint?
No thanks.
The problem with a plain old ordinary tax cut is the exact same one that there is with bailing out the banks. They can’t force people to spend the tax cut. They couldn’t force the banks to lend with the new money instead of holding it in reserve to offset the eventual writedowns of the bad loans/investments already on their books (or, maybe they could have, but they didn’t). I’ll take the extra money if I get it, but it isn’t going to change my spending habits.
“The refund provision would enable some companies posting losses last year to get refunds for taxes paid as far back as five years earlier. ”
Great, those of us in business who managed to not lose money because we watched our costs, held back on fancy office furniture, etc…, get penalized for being smart and successful. I can’t eff-in’ win.
Bloomberg
Manhattan Apartment Sales Drop for Fourth Quarter in Recession
By Peter S. Green
Snips -
Jan. 6 (Bloomberg) — Manhattan apartment sales fell for the fourth straight quarter and prices for the most expensive apartments dropped for the first time since the recession began as the national housing slump hit the metropolitan area.
Fourth-quarter transactions dropped 9.4 percent to 2,282 units from a year earlier, New York property appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. While the overall median sales price rose 5.9 percent, luxury prices dropped 3.9 percent and the median for all resale apartments slid 3.6 percent.
The fourth-quarter Manhattan property results are the first to reflect the deepest yearly drop for U.S. stocks since the great depression. In 2008, the Standard & Poor’s 500 Index lost 38.5 percent, led by slumping shares of Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc.
“The whole process is taking a lot longer,” Herman said in an interview. “Six months ago in New York City people would lose their down payment if couldn’t get a mortgage.” Now buyers are refusing to sign such restrictive contracts, she said.
Sales of luxury condominiums in two buildings, 15 Central Park West, where Goldman Sachs Chairman Lloyd Blankfein and former Citigroup chief Sandy Weill bought homes last year, and the Plaza skewed condo sales prices for the quarter, according to all three reports.
Leigh
On the plus side, many of the forces that have hurt other housing markets have had little impact on Manhattan, according to Heym.
Few New Yorkers used exotic mortgage products to buy apartments, for example. These were the kind of loans that led to the huge foreclosure problems in California, Nevada, Florida and other boom markets. Co-op boards and even many condo owner associations simply don’t allow them, and they often reject potential buyers with weak financial profiles.
That means that most apartment owners in New York have substantial home equity, and will still retain equity even if home values decline 10% or so. That helps stabilize the housing market.
http://money.cnn.com/2009/01/06/real_estate/Manhattan_market_softens/index.htm?postversion=2009010608
Then, why did Park Ave. apartments fall by 50% during 1991-1994, huh?
That means that most apartment owners in New York have substantial home equity, and will still retain equity even if home values decline 10% or so.
What happens when the declines hit 30%, 40%, 50%?
Yeah, we know: it’s New York City. Everyone wants to live there.
The desire to live in Manhattan may be infinite but the means to do so are decidedly not.
Because everyone wants to live there and because it’s different, 10% can’t get exceeded. And the real estate agents promised this!
Yesterday, I was looking today at rental units through the MLS in the 78701 zip code (downtown Austin). It pretty much includes condos for rent in the newly developed condo units such as 360, Brazos Place, The Shore, and Milago. There are 105 condos for rent right now with the cheapest unit going for $1000 per month and 456 sq ft.
That is huge a number of rental units. It does not include condos that are supposed to open this year such as The Austonian, Spring, The W or the Four Seasons.
It also does not include any apartment units such as AMLI Downtown, AMLI on 2nd, The Monarch, Legacy, 300 N Lamar, Red River Flats or the uber expensive Ashton located on 2nd and Colorado, which will open sometime this year.
GOOD LUCK RENTING ALL THESE UNITS AT THOSE RATES!!!!!
This weekend I looked at a 626-apartment on AMLI on 2nd in the 17th floor overlooking the lake and the construction of The W. The rate was a little over $1800 dollars for 626 sq ft…. it was tinny and ubber expensive.
Has stuff happened in your towns? how have things turned out?
Dallas-Fort Worth apartment demand plummets
07:53 AM CST on Tuesday, January 6, 2009
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
The Dallas-Fort Worth apartment market suffered a huge hit in the final months of 2008.
Apartment occupancy in the area fell by almost 6,000 units – more than erasing the gains earlier in the year, analyst M/PF YieldStar reported Monday.
The dramatic decline in net apartment leasing also indicates that the local job market is not as robust as many had thought, analysts say.
“This was one of the worst quarterly demand performances ever recorded in Dallas-Fort Worth,” said Greg Willett, M/PF’s vice president of research. “For move-outs to reach this magnitude, job loss has to be pretty substantial.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/010609dnbusapartment.3fcf5790.html
“The dramatic decline in net apartment leasing”
For the medium term sitters among us: this is why you need to be careful with multiyear leases if you are mobile. After my 2 year is up I go month-to-month. I predict by that time (next August) I will be able to negotiate 10% off…
We are entering the stage where “one month free” will no longer be enough and rents will start dropping.
I hope you’re right… the insanity here is just precious.
You said “precious”
- 1,000
In multifamily housing, vacancies will also rise for Central Texas in 2009, according to the report. But, leasing velocity has remained strong among downtown Class A rental properties. Given current conditions, well-capitalized investors have the opportunity to make a big splash in the Austin market, the report concludes.
http://austin.bizjournals.com/austin/stories/2009/01/05/daily7.html?surround=lfn
“GOOD LUCK RENTING ALL THESE UNITS AT THOSE RATES!!!!!”
No kidding. I’m paying 80 cents a foot for a very nice large place, and newer listings are down to 64 cents for the same nice quality.
where do you live?
Orlando.
Dutch bubble update:
* RE research agency expects 30-40% homeprice decline over the next four years. Another reports expects 42.5% decline. I would not be surprised to see 50-75% decline in 5-10 years.
* Dutch free market rents expected to decline this year as number of homes for rent is surging (most of these homes are from stubborn sellers who don’t want to lower wishing price for their second home)
* unofficial reports say Dutch 4th quarter homes sales are down 40-50% from previous year. Biggest realtor organisation does not want to comment.
* homeprices officially still rising +1% on yoy basis, but next weeks number is expected to be negative yoy for the first time in twenty years.
it’s taking time, but we are getting somewhere
“* RE research agency expects 30-40% homeprice decline over the next four years. Another reports expects 42.5% decline. I would not be surprised to see 50-75% decline in 5-10 years.”
NHZ — Happy New Year, pal!
What do you know — perhaps it is not so different in The Netherlands as we all thought.
it is not different of course, except that we could use some of the US dynamics over here. I’m afraid it could take one generation before we see the bottom
Hang in there, nhz!
The strong hands fall last, but harder.
One thing I have found to be true in life, is that eventually, the bears find EVERY basket at the picnic.
I can’t believe an entire day has gone by without ANYONE commenting on this awesome statement of general wisdom.
Finally, nhz!
January 6, 2009 8:39 AM ET
Toyota Motor Corp is to halt production at its Japanese plants for 11 days in February and March as a sharp slide in U.S. sales has left dealers’ lots full of unsold cars.
A 37 percent slump in December sales in Toyota’s biggest market was its sharpest fall in more than a quarter of a century and worse than declines at struggling U.S. rivals General Motors and Ford Motor .
“I never expected the crisis to spread this fast and leave this deep a scar,” Toyota President Katsuaki Watanabe told reporters at a Tokyo event hosted by Japan’s top business lobbies.”
Maybe if they went 0% for 60 months for unqualified buyers it wouldn`t be so bad.
“I never expected the crisis to spread this fast and leave this deep a scar,”
BAD analogy! It’s not yet a scar; in fact, the bloody thing hasn’t even scabbed over yet!
Wow - the PPT took the DJIA straight up to 9K first thing this morning and is propping it up there. Will Geithner continue to pull the levers from behind the curtain after he moves up to T-Sec?
January 6 2009 9:45 A.M. EST
Bulletin
U.S. stocks rise early Tuesday; Dow industrials up as much as 80 points; crude tops $50
Crude reclaims $50-a-barrel mark
Stocks start higher Tuesday
Investors quickly put Monday’s losses behind them, bidding stocks higher as they await the latest updates on the U.S. economy.
NYC real estate defies gravity - so far
Manhattan home prices increase despite the financial market’s turmoil, but it doesn’t look like they can buck the national trend much longer.
Last Updated: January 6, 2009: 8:09 AM ET
A severe slump could be around the corner, since New York’s economy and the health of its housing market rely heavily on the financial sector.
In September, Lehman Brothers declared bankruptcy and, since then, several other investment banks have been sold, announced huge layoffs and slashed bonuses.
“A little over 20,000 securities industry people have disappeared from the payrolls so far, about a third of the projected layoffs,” said Heym.
Despite these events, New York’s economy is still reasonably strong, according to Pam Liebman, CEO of the Corcoran Group. For example, although the city’s unemployment rate has increased to 6.3%, it’s still lower than the national rate of 6.5%.
“We’re a year and a half into the credit crisis and the Manhattan housing market and the New York economy have held up pretty well,” said Heym.
http://money.cnn.com/2009/01/06/real_estate/Manhattan_market_softens/index.htm?postversion=2009010608
January 6 2009
LONDON (AP) - House prices in Britain fell by their biggest annual amount in at least 56 years during 2008, as credit seized up and possible buyers stayed out of the market, a leading mortgage lender said Tuesday.
The Nationwide building society said house prices fell 15.9 percent in December from a year earlier, the biggest annual fall since it started compiling statistics in 1952.
“2008 has been a year of turmoil in the British housing market,” said Fionnuala Earley, Nationwide’s chief economist.
Prices fell 2.5 percent in December from the previous month, much more than the 0.4 percent decline recorded in November, and the biggest one-month drop since May’s 2.6 percent drop.
Despite the historic declines, Nationwide did note that the three-month rate, which evens out more volatile monthly numbers, showed only a 4.2 percent decline, the lowest since May.
Nevertheless, Earley said the length and depth of the recession in the wider British economy is so uncertain that Nationwide decided not to issue a full-year forecast for 2009 house prices.
“Conditions remain highly volatile going into 2009, making it more difficult than usual to arrive at a specific forecast for house prices,” said Earley.
The last time Nationwide did not issue a full-year forecast was in 1993, when the British housing market last crashed.
Halifax, which is part of the HBOS PLC banking group, has also refused to issue a house price forecast for 2009, though it claimed its stance was due to its impending takeover by Lloyds TSB PLC.
Most economists doubt that 2009 will be any better. With the British economy set to contract by up to 3 percent, according to some forecasts, and unemployment heading toward 3 million, the downward pressure on house prices will likely remain.
“We expect house prices to fall by 20 percent in 2009,” said Seema Shah, property economist at Capital Economics.
everything is rising today, except the euro (gold is doing little in $ but keeps rising in euro currency). Looks like inflation to me; exactly what Heliben, Obama and Geithner want.
People who are loosing tens or hundreds of thousands on their houses don’t see it that way, even if gasoline goes up 10c.
yes, for the moment (until the dollar resumes its crash) the situation in the US is a bit different.
Not a chance he was…pushed? Naw…people control their emotions over lost moneys.
Billionaire Merckle Killed by Train, Die Welt Reports
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF5SBKSGYhwE&refer=home
Hedge funds braced for more pain
By James Mackintosh in London
Published: January 6 2009 02:00 | Last updated: January 6 2009 02:00
Hedge funds are suffering a New Year hangover of record proportions after an end of year rush to suspend or restrict withdrawals of money and the first of what is expected to be a wave of closures.
Funds from London managers GLG Partners, RWC Partners and Oceanwood Capital all introduced last-minute restrictions as the year ended, while Finnish fund Ilmatar yesterday said it would close.
Hedge funds are facing a meagre year after their worst 12 months on record left most needing to make up for hefty losses before they began earning performance fees. One hedge fund investor said: “Some people who had said they were going to give everything back changed their minds at the last minute.
“You have to wonder if they are just doing it because everyone else is doing it.” …
http://www.ft.com/cms/s/0/d51a2540-db90-11dd-be53-000077b07658.html
Exit Queen “Another one bites the dust”
Hooray! The rich are liquid again and will pick up the consumption slack! We’re saved!
“Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including the merchants, the industries, and the mills of the country?”
Senator Carter Glass (D-VA)
Senate debate on the Banking Act of 1933 (Glass-Steagall Act)
Rixey Smith and Norman Beasley, Carter Glass: A Biography (1939)
Where Is Our Ferdinand Pecora?
By RON CHERNOW
Published: January 5, 2009
“…For inspiration, Congress should turn to the electrifying hearings of the Senate Banking and Currency Committee, held in the waning months of the Hoover presidency and the early days of the New Deal. In historical shorthand, these hearings have taken their name from the committee counsel, Ferdinand Pecora, a former assistant district attorney from New York who, starting in January 1933, was chief counsel for the investigation. Under Pecora’s expert and often withering questioning, the Senate committee unearthed a secret financial history of the 1920s, demystifying the assorted frauds, scams and abuses that culminated in the 1929 crash….”
http://www.nytimes.com/2009/01/06/opinion/06chernow.html
“Where Is Our Ferdinand Pecora?”
We Spitzered him.
When I read that story, I also thought of Spitzer; I think he would have done a fine job of it, if he could have kept things zipped up…
Excellent article! Thank you, Hoz.
Ivy Zelman is a rock star. I am sure many of you saw her on CNBC this morning. She didn’t let up on her bearish view of the housing market. I guess I’ll hold off another 5 years or so.
Yes.
See data I posted yesterday - IMO there’s still a lot of crashing to go, about 2-3 more years of full-on crash, probably followed by about 5-10 years of bouncing on the bottom.
To make it count, you have to end your prediction with the phrase: “…but it’s never been a better time to buy.”
Bumper Sticker idea:
Don’t mess with me, I am a consumer!
tm OV
I am a MAN….not a consumer!
Don’t mess with me, I am a woman.
Don’t mess with me, I am a smart, mostly bald, pink, semi-evolved monkey.
(Well, okay–not that smart. But you should see me climb a tree. Impressive!)
You have a tail???? Weird.
Oh baby! Bet you she has a tail that just won’t quit.
Ooooo! Ooooo! OOOOO!
(clamps hand over mouth and manages not to say it)
German billionaire Adolf Merckle commits suicide
The family of Adolf Merckle says the German billionaire committed suicide after his business empire got into trouble because of the global financial crisis.
http://biz.yahoo.com/ap/090106/eu_germany_obit_merckle.html?.v=2
I guess this guy couldent handle the thought of becomming just a millionaire again?
Stuff like this makes me think that there’s a lot of bad stuff still coming down the pike, that people like Marckle see, but haven’t yet been exposed to the public.
Never go “investing” until all the jumpers are done.
I love it. More, more, more!!!
I am having trouble finding the stories again, but in the last 24 hrs. one prominent local real estate magnate and one re agent offed themselves here in Chicago.
January blues?
Steven Good, a major figure in Chicago real estate, was found shot to death Monday at a Kane County wildlife preserve, police said.
Mr. Good, 52, was the victim of a self-inflicted gunshot wound, police said. They said his body was found in a car parked at the Max McGraw Wildlife Refuge near East Dundee.
Kane County Coroner Charles West said the victim died of a gunshot wound, but he said circumstances remain under investigation. “At this point, there’s no concern about foul play,” West said.
Friends described Mr. Good as unfailingly upbeat and always on the hunt for business.
She said she saw no signs anything was amiss. “He had unbelievable showmanship,” Darling said. “He was just always on top of his game.”
And now, he’s at the bottom of a hole.
BWAHAHAHHAHAHAHAHHAHAHAHHAHHHHHHHHHHHH!!!
‘They said his body was found in a car parked at the Max McGraw Wildlife Refuge near East Dundee.’
Oh, no! I do hope no creature took a nibble on him–think of the horrible cooties that these people carry. That was really inconsiderate of him, is what I think.
I wonder if anyone did a “jumper index” from GD1, to look for the correlation.
“Looks like the jumper index is back down below 56 - time to get back into equities.”
Euphemism in journalism used to be higher back then so might be difficult to separate the suicides from normal deaths (especially for famous people.)
Just guessin’ here.
IIRC, Galbraith’s book on GD-I suggested that the anecdotal reporting of jumpers on Wall Street was highly exaggerated.
There are policies at some news outlets not to acknowledge suicides. I think the idea is not to encourage suicidal people who seek attention.
So, if you dramatically jump off a building don’t expect anyone to read about it, even in a smaller city.
Happens about once a year from casino parking garages in Atlantic City, NJ. Truth be told, local paper does cover them, usually on page three or four of regional section. Saddest case I recall didn’t even involve a gambler. 16- or 17- year old boy threw himself off garage on a very bleak, nasty day in November. Kid’s picture was in his obit; I was watching some small college football playoff game and blubbered away over his picture. I don’t do it often; my beagle, Vern, apparently never heard my blubbering before. He started howling along with me.
Why did you blubber?
Because the “yoof of our nation have so much potential” and “one such yoof was lost”.
Sorry, they don’t. They have about as much potential as the “yoof” everywhere else. Anyway, the world is far too overpopulated as it is.
Bad stuff happens. It’s the way it is.
Why did I blubber? You would have had to see the kid’s picture: Ill-fitting, poorly repaired glasses; uncombed hair. Looked like he had had it rough. Broke my heart.
“my beagle, Vern”
(:_;) <3 <3 <3
It’s hard to say for sure, not having met your beagle, Vern, but I think love him quite a lot.
Vern’s very lovable. The wife has a greyhound who has serious mental problems. Used to spend most of the day in a fetal position. Well, since we got together, the greyhound now thinks he’s a beagle; wags his tail; pretends to sniff out things like Vern. Vern’s made him semi-sane!
Oh, Vern. *sniff*.
FSPP,
You are naughty - I like it!
Leigh
Actually though, it is quite morbid. Stepping in front of an oncoming train?
Yeszush.
Wow. It is important not to over-identify with one’s job or money. Life is so much more vast than that.
‘Life is so much more vast than that.’
That could be an overly generous interpretation, bungy. Maybe some people’s lives AREN’T so ‘much more vast than that’. Maybe some people are no more than posturing skin-bags, and on some level they secretly know it. In which case, I just hope they have the decency to not die where they will pollute a wetland or contaminate a hungry wildlife specimen.
the newspaper reported a few days ago that the wealth of the very wealthy families in Germany has declined an average 30-40% last year. The last numbers I saw from Netherlands suggest that the rich got even richer in 2008, but maybe the numbers are not quite up to date …
regarding the billionaire: Europe sure seems on track to make everyone a billionaire, maybe that was the problem? Wages are rising at their highest pace in 15-20 years, even the cooked inflation numbers are still above 2% in most EU countries (actual inflation probably in the 8-10% range) and homeprices on the mainland are still close to all time highs. No sign of deflation here (yet).
Ah, yes, nothing more frustrating than going broke by going short (in Merkle’s case, VW) in a down market. Never underestimate the power of a well-capitalized short squeeze.
Pending home sales for November - another record low. Sigh - this is getting boring.
Link
http://www.thestreet.com/story/10456233/1/pending-home-sales-plunge-to-record-low.html
Again, numbers came out worse than expected, but through the power of spin, they were already priced into the market…Despite being unexpected.
At this point the only thing that is unexpected is good news.
Seems like the one thing missing is the large-scale failures like we had in Sep/Oct. It’s been…. quiet… lately.
Almost as if the Sep/Oct failures were an intentional concerted thing, like something related to politics. Nah - couldn’t be.
Oil calms the water.
To the tune of hundreds of billions.
Can’t stop the tide though.
I am enjoying all the downward revisions of earlier data. It shows the momentum is building nicely.
Financial Times
Pending home sales fall to record low
By Alan Rappeport in New York
Published: January 6 2009 16:24 | Last updated: January 6 2009 16:24
The US housing market showed further signs of weakness on Tuesday as the closely -watched index of pending home sales dropped by 4 per cent in November to a record low as rising job cuts and eroding confidence deterred buyers from signing new contracts.
The data, released by the National Association of Realtors, which reflects deals that have been signed but not completed, was worse than economists expected and fell to its lowest point since 2001 when the index was created. Pending home sales in November declined by 5.3 per cent on the year.
“There is no evidence that, as weak as it is, housing activity is close to bottom,” said economists RDQ Economics in a research note.
Fayette schools to teachers: Please donate your raises
By JOHN HOLLIS
The Atlanta Journal-Constitution
Monday, January 05, 2009
The cash-strapped Fayette County school system is asking its teachers to voluntarily return the pay raises they received last spring.
In these economic times, would you be willing to return a raise to keep your employer afloat?
Yes, sacrifices are called for.
No, I’m struggling too.
School board members say if the county’s teachers would return their 2.5 percent raises, it could keep the 24,000-student system afloat. Should they all return the raises, it would add roughly $4 million to the system’s coffers.
In Monday night’s meeting, board members decided they had nothing to lose by writing a letter to Fayette’s roughly 1,800 contracted teachers asking them to voluntarily “make a donation” to the system’s financial well-being.
“Nothing ventured, nothing gained,” said board member Dr. Bob Todd said of the unorthodox request.
The board’s move highlights financial difficulties facing the Fayette County school system in the wake of unexpected state budget cuts and diminished property tax revenues in a struggling economy.
No decision on the budget was made Monday, but the raise refund will be discussed again when the board reconvenes on Jan. 27.
Todd and board member Marion Key sounded confident their teachers would respond positively.
Board members pointed to teachers in one Maryland school district who returned a 5 percent raise in 2008 to help their struggling school system.
The Maryland teachers, however, were represented by a union and needed only a majority of their group to pass the measure. Fayette teachers are not represented by a union.
The decision to ask teachers for the donation followed a lengthy meeting in which the board had discussed a number of other cost-saving measures, both for the current 2008-09 school year and the following one.
Those options included the furloughing of some contracted employees, such as principals, starting next month and the slashing the salaries for pre-kindergarten para-professional teachers, all in the hopes of avoiding layoffs.
Other measures on the table include a reduction in county contributions to employee life and long-term disability insurance plans and a possible reduction of the 180-day school year.
Whatever budget cutback the board chooses, it will be painful.
“I think it’d be silly if we didn’t ask the question,” board member Janet Smola said.
Why stop there?
Why not give back the raises from the last 3 years. Heck, why not ask for cash donations.
If you want to keep your job, please contribute $3,000 to the keep your own job fund.
So low-paid teachers, who got a paltry 2.5% raise, are asked to give it back so the school system can save $4 million. How much was Paulson’s bonus his last year at GS?
We are truly blessed to live in such a great country!
Many districts spend millions on pointless programs or good programs that aren’t administered correctly. Teacher’s salaries should be the last thing cut. Teachers teach kids, not new buses with tinted windows, new PCs with unnecessary software…
As Palmetto said before, if that means a kid that can’t speak English doesn’t sit in front of a new computer, so be it.
It’s the same thing with cops, too. We need the COPS THEMSELVES, not the damn tanks and airboats and all of the other goofy toys that get used once a year.
Agreed. Our Sheriff’s Department went out and purchased a couple of $500K “Command Vehicles” (basically glorified RV’s painted green with some comm equipment). Found out that neither has ever been used in a non-training situation except by one lieutenant who was found living in one after his wife kicked him out.
State workers in Florida haven’t had a pay raise in 3 years and Florida has the lowest state labor costs per capita in the nation. Facing a $2.3 billion deficit, actually cutting their pay is now on the table. Anecdotal input tells me that anyone who was in any way competent to get a decent job has left, leaving only those who can’t work anywhere else or are so close to retirement they have to hang on no matter what. In the meantime the Speaker of the House tucked $25 million into a spending bill for his alma mater who coincidentally gave him a 6 figure salary to collect while being Speaker. His best pal, a developer, will be using the building built by the $25 mill to house his aircraft business.
Corruption and ignorance in Florida is on a scale that would make Mexicans blush.
oh yes, that sweet little deal… it was reported on but apparently legal? or something.
I saw his picture. He had the fake smile of a Realtard.
Ooh, add well trained spies and anti-terrorism peeps - sometimes a human is best, but they require so much upkeep
Just another way to make our grandchildren pay for this mess.
“School board members say if the county’s teachers would return their 2.5 percent raises, it could keep the 24,000-student system afloat. Should they all return the raises, it would add roughly $4 million to the system’s coffers.”
Naturally the school board would return whatever compensation was paid to them, and ask school administrators to take a cut at least equal to that of the teachers. Right?
:::crickets chirping:::
German billionaire Adolf Merckle has committed suicide after his business empire, which included interests ranging from pharmaceuticals to cement, ran into trouble in the global financial crisis, his family said Tuesday.
The 74-year-old’s body was found Monday night near railway tracks at Blaubeuren in southwestern Germany, prosecutors in nearby Ulm said in a statement. They described the death as a ”railway accident” and said there was no evidence that anyone else was to blame.
His family, which had reported Merckle missing after he failed to return home Monday, issued a brief statement saying he took his own life.
BWAHAHHAHAHAHHAHAHHAHAHAHAHHAHAHHHHHHHHHHHH!!!
Do these people not put any money away?
I can’t understand suicide under any conditions, but for arguments sake lets say I can see it if you lost EVERYTHING. Well, if a guy is that rich (and I suppose I could be making a mistake in assuming how rich he is) does he not have a few mill socked away?
Just in case something terrible (financially) happens, enough that he could just say “f* it all” and go retire on a beach with a couple 20-something chicks for each arm.
You’re missing the psychology.
After a little socked away, and I’ll even go out on a limb and say that little is truly little indeed, all your needs are satisfied, and it becomes a game of wants, or of keeping score (however you want to phrase it.)
The people who are driven by more, more, more are not the same people who have the thought about “f*** it all, and I’ll go to a beach with a buncha hotties”.
To them, this loss of status, money, access to power is real. It’s “keeping score”.
It’s a strange game of vanity, and I’ll never “really” understand it.
‘..it becomes a game of wants, or of keeping score (however you want to phrase it.)’
+1, Fasty.
That ‘more more more’ hunger makes no sense at all. Unless you’re talking about books, or else woodworking tools, or maybe pretty dishes. Then it makes sense, but that’s the ONLY time.
Oh, or music. That’s acceptable, too. But that’s it.
Oh, and stamps. I forgot those, the first time. You can be carried away by greed for stamps, too, and that is acceptable.
But that’s it.
What about pallets that serve as load-bearing walls? One can’t have enough of those…well, I suppose that depends on the size of the house, but still…
It’s all about perspective. I used to feel this way about lego blocks and barbie shoes. My niece feels this way about pine cones.
‘What about pallets that serve as load-bearing walls? One can’t have enough of those…well, I suppose that depends on the size of the house, but still…’
Hi, sleepless! Where you been?!
Oh, I been but for a few days on either side of each of the holidays, I poked in very sporadically. Other than that, mostly lurking.
This move has been brutal. The weather during the first week of the holidays killed me. I wanted to be in place by Christmas. I’m STILL moving the small individual items that can’t be boxed. Ugh. Should be done by week’s end. New place has limited storage, which sucks the big ‘un. On the other hand, it’s a good excuse to unload things I haven’t used in years…
Plus, it’s taking forever getting DSL at my new place, which baffles the bejeezus outta me. Shoulda just done the package deal w/Qwest. So, I’ve been preoccupied and had bad access. I s’pose that’s good for redirecting one away from an addiction.
How was Utarr?
“I’ll never “really” understand it”
Maybe rather than you “don’t get it”; it won’t get you.
Failed vain endeavors have been the best milestones in my life!
that dude was probably looking over his back and tripped on the RR tracks.
It’s all about perspective. I used to feel this way about lego blocks and barbie shoes. My niece feels this way about pine cones.
HAhahahaha! That’s funny! Darling, but funny.
Suicide? Sure. Sure it was.
But you got the “keeping score part” right.
Look for more scores being settled… er, suicides in the future.
Jan. 5 (Bloomberg) — Kenneth Heebner’sCGM Focus Fund, the industry’s top performer in 2007, dropped 48 percent last year….
Heebner’s fund gained 80 percent in 2007 to beat all peers, largely by buying energy stocks. He was hurt in 2008 after oil prices fell almost three-fourths from a record in July. Known for his rapid movements in and out of stocks, Heebner reversed course in the third quarter by selling energy shares and snapping up bank stocks such as Citigroup Inc. and Bank of America Corp.
…
The new bets didn’t pay off, as Citigroup fell 67 percent in the last three months of 2008 and Bank of America dropped 60 percent.
That’s an interesting note, as Heebner was the “first” to be out of housing stocks, back in June of 2005, IIRC.
Buying Citi and BoA in Q3 - what was he thinking?
Perhaps he thought the bailouts and similar measures would be bigger and better?
An off-shoot comment from the above discussion on the faults of the press. TVGuide Channel runs reruns of a show called “Making News, Savanaha Style” about local news TV program in Savanaha Georgia. WOW, what insight that show offers into how the local news works.
The “writers” collect the press releases and the AP stores, along with police logs and such. Then the write the “tease” for each story. You know, those little blurbs that run on the way in and out of commercial breaks…
After they’ve written the “teases”, all the writers gather for a meeting. First, they pick the lead story. It has to be something that they can send the live crew out on. The news ALWAYS has to start with a live feed from somewhere… so the “reporter”
ends up standing outside a pitch-dark court house, city hall, etc., where somethign happened 12 hours ago… but they are live from the scene….
Okay, back the the writers. After they have selected the lead story that can involve a remote from somewhere, they take turns reading their “teases”. Whatever stories “tease” the best, are the ones that get run.
It is ALL about getting people to sit through one more commercial break to here the story. If it isn’t going to make someone sit through commercials, it isn’t getting air time…. PERIOD!!!
And, the behind the scenes stuff makes it clear the reporters and writers all know it is bunk. They lament having to do all puff pieces and not being allowed to do any real reporting or journalism. Heck, even all the “hard hitting” investigative stuff is really just sitting around waiting for a disgrunteled former employee to call the station and blow the whistle on something.
It is ALL about getting people to sit through one more commercial break…
I am SO glad you wrote that.
I had long suspected that was what goes on in TV news. My ex and I used to have fun making up ridiculous “story teasers”, like:
“The air in your tires. What you need to know”
“Grass. How does it grow, really?”
“Why you won’t be wearing pointy hats next season”
Standard format:
“________(normal household item): could it kill you/your children/your pets? Laudermilk MacMurrin tells us more after these messages”
(commercial break, featuring people who are exceptionally excited about a sandwich/goji berry product/credit card)
“So, your (household item). We ask: could it kill you? (Ominous music montage). Maybe, but probably not. Next we’ll take a look at a horrible violent crime. The killer, is he still loose and standing behind you? We’ll tell you more after these messages.
(commercial break, featuring families whose bonds are preserved by a phone service/dishwashing powder/long-lasting batteries)
“Now our top story. An act of random violence occurred today, here are all the gory details, inappropriate police photos and the 911 call. Scared? Next, we’ll ask the grieving relatives “how do you feel?” - hopefully they’ll cry! Then Skip Chesterton introduces us to a pretty special gerbil/goat/canary who can sing/waterski/save lives.”
(I wouldn’t be so bitter, but I just came from the dentist and the TV above the chair was tuned to a show about an assault/murder victim and they showed her body with blood all over the street, interviewed her mother…then inexplicably showed chefs with big poofy toques pushing each other around in a kitchen. There was no sound, so I could only guess what the angry chefs had to do with anything. Then they showed the killer man about a million times. And all the type was set in Copperplate. *shudder*)
Just how are school children going to get to our newest “National Marine Monument” ?
Teacher: “So Johnny how does one get to the new “Papahanaumokuakea Marine National Monument”?
Johnny: “Well you take a jet plane or cruise boat to Hawaii,($$$) then you charter another small plane to Wake Island ($$), then you inquire about for a boat & captain that is willing to take you to yet another even smaller island ($$)… well, then you go ashore in small inflatable to a tiny village and give a St Joesph statue to the local tribal chief named: King ShrubHalliburtonhehehehehe… If, he thinks your worthy, he sells you a map ($) to yet another island 700 nautical miles away, once you finally get there… you’re kinda of on your own for housing, food, supplies, transportation…I also believe there is not any WiFi or cell phone service, at the moment.
Bush to Protect Three Areas in Pacific:
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/01/06/GR2009010600208.html?sid=ST2009010600211&s_pos=list
Maybe it’s to be a refueling stop on the way to a tax haven.
Its a “three hour tour”.
EU derivatives industry deal on clearing collapses
McCreevy has said central clearing would cut risk in a $47 trillion market at the heart of the credit crunch.
The Commission’s objective was to set up a clear roadmap on how to ensure credit default swaps are cleared through a central counterparty, but some industry groups have been reluctant.
The deal collapsed over McCreevy’s insistence that clearing of EU-based trades must be done inside the 27-nation bloc.
http://www.reuters.com/article/marketsNews/idINL638283320090106?rpc=44&sp=true
Chicago real estate broker/auctioneer commits suicide:
http://www.chicagotribune.com/news/local/chi-real-estate-suicide-06jan06,0,6015803.story
Every time I read about one of these suicides, I think what a damn p-boy way of dealing with things. If I had killed myself every time I failed I’d be dead over a dozen times by now!
Unless you failed in the attempt.
ROTFLMAO
Nah, I’ll leave it to the cowards of the world.
Is this the news that sparked the Wall Street rally? Or was it the record low in pending home sales? Or dismal retail sales this past holiday season? It is hard to pinpoint what is charging up the bulls anymore, there is so much good news to cheer them on.
Factory orders fall for 4th month
Census Bureau reports worse-than-expected decline in factory orders.
Last Updated: January 6, 2009: 11:08 AM ET
They are just looking for a tradable bottom.
They know Obama can’t really do anything to fix this, but each is willing to pretend that they believe it to get a rally going. Of course, each plans to be back out before the rally ends and bust returns. Not all of them can be correct.
Although price is increasing, volume isn’t what it used to be and money flowing into the market is decreasing.
On the retail sales front, I saw an empty Starbucks at my local mall today at 1pm. That is something I’ve never once seen at that location. The baristas were just standing around chatting.
CNN dot com
How Geithner can avoid Paulson’s mistakes
The new Treasury secretary must show the public and investors he has an actual plan to deal with the banking crisis.
Colin Barr, senior writer
Last Updated: January 6, 2009: 12:23 PM ET
…
Geithner will find no shortage of eager TARP recipients. The demand for low-cost taxpayer money is so great that the current Treasury Secretary, Henry Paulson, took just 77 days to pledge the first half of the $700 billion of TARP funds - prompting him to joke at one point that the Treasury had set “a land-speed record from announcing a program to getting funds out the door.”
But getting funds out the door may prove trickier for Geithner. Unlike his predecessor, Geithner won’t have a crisis-imposed mandate to spend as he sees fit.
Zees can be arranged…
Oh, I’m sure there will be plenty of crisis that will mandate spending as he sees fit.
As for a plan… Okay. Let’s lay out a plan…
Problems:
1) People have been spending 110% of their incomes, largly financed through mortgage equity withdrawl against quickly rising property values. Poof, gone… Forced to live within thier means will cause what can only be called a mild depression.
2) Consumer and business debt up from $7.5 trillion combined to $25 trillion over the last 25 years on 20% increase in median household income. Some $15 trillion of debt on the verge of default with a good $7-10 trillion in real losses coming… Just the losses from housing will likely be on the scale of all federal budget deficits of the last 28 years, COMBINED.
3) Jobs have been outsourced, we have massive foreign debt, we can’t plug our trade deficit.
4) We can’t get people to spend. If we give them money, they save it or use it to pay down debt. We can’t get banks to loan because everyone that wants to borrow is highly unlikely to pay it back.
5) The problem is global, and whatever we do to try to save our economy, will be countered by other countries looking to save their economy.
Tools available…
Well, Fed Funds Rate is already at 0%. We’ve already had the Treasury hand out $350 billion like it was Monopoly money, and the Federal Reserve has handed out $8 trillion like it is toilet paper. Pretty much all we have left is about $750 billion to spend over the next two years, meaning the stimulus amounts to less than 1/3rd of the purchasing power lost by inability to forever borrow against rapidly rising house prices.
Solutions:
Hmmm…. We just need some way to let people spend 110% of their income, forever, without ever having to pay for or on any of the debt, ever.
Oh, is that all. Piece of cake.
Truly awesome (and frightening) post, Darrell. I try not to think that hard about these things, as the stark realities are quite depressing.
maybe the US has one advantage: they are first in the debt rally, maybe they can take advantage of that before other parts of the world realize they are in a similar situation (e.g. Europe after their own housing bubble, which is even bigger, pops).
the economic websites over here have been writing for some days now that dollar and stock market are rising because the Messiah is going to save the US economy within a few months; everything is going to be fine, so invest in the US Economy before you are priced out forever!
Yeah, we do have that going for us… maybe we can sell all our toxic debt to foreigners and let them eat the loss for us. That would be SWEET!!!!
Who’s up for another game “World War?!”
(Pray to the god of your choice I’m wrong. I know I will.)
Good post, Darrell. Thanks for summarizing it so nicely!
The Realtors think that the housing market has upside potential, although that is often the state of mind of real estate agents. But they have a potential stimulus package from President-elect Barack Obama to look forward to, and that could make a difference, according to Lawrence Yun, the association’s chief economist.
“With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10.0%, to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country,” Yun said.
http://www.forbes.com/markets/economy/2009/01/06/housing-factory-update-markets-econ-cx_cg_0106markets24.html
From Professor Bear above…
“Early in the campaign, I recall a point when OBwan publicly divulged that he thought Fed funds were cashola (not an interest rate). ”
Fed Funds IS cash. The Fed Funds target rate, is the rate at which they’d like to see banks lending their federally mandated reserves kept on deposit at the federal reserve bank(Fed Funds) to each other.
Point taken, and I misstated mine, which is that OBwan thought that Fed Funds could be somehow redirected (say for bailout purposes). How ridicorous!
Again, the reserve rate is adjustable. We could lower teh reserve requirement, freeing up more money for banks to have available… but continue to not lend, since they can’t find anyone that wants a loan that is highly likely to pay it back.
But, even if you are saying, he thought the money “belonged” to the Fed and could be handed out like the TARP…. well, again not toally insane. The Fed is effectivly handing out cash when it hands out trillions of dollars in swaps and such… Not to mention it handing out cash as it buys us toxic assets like GSE backed bonds.
The simple truth is, dollars are Federal Reserve Notes, and they can print them and hand them out to banks (and now primary brokerages) at will.
I will include sarcasm tags next time I write ridicorous.
Where’s NYCityboy?
Trying to talk his liver down from the ledge…
I thunk BB studied this and had it all contained way back in early 2007.
latest news
FOMC saw sharp contraction easing only in 2nd half of 2009
THE FED
FOMC saw specter of depression, deflation
Minutes show members grappling with fresh approach to monetary policy
By Rex Nutting, MarketWatch
Last update: 2:23 p.m. EST Jan. 6, 2009
WASHINGTON (MarketWatch) - Members of the Federal Open Market Committee at their mid-December meeting saw increasing risks of depression and deflation as they grappled with employing new tools to stabilize an economy that was rapidly weakening, according to truncated minutes of the meeting released on Tuesday.
Some participants at the meeting saw “the distinct possibility of a prolonged contraction, although that was not judged to be the most likely outcome,” the minutes said. Inflationary pressures were likely to dissipate, and “some members saw significant risks that inflation could decline and persist for a time at uncomfortably low levels.” Read the Fed release.
“The overwhelming message gleaned from the minutes of the meeting is one of fear — fear of a deep recession, and fear of a debilitating deflationary spiral that would capsize a debt-laden economy,” wrote Joshua Shapiro, chief economist for MFR Inc.
“the distinct possibility of a prolonged contraction, although that was not judged to be the most likely outcome,”
Look, a typo… let me just fix that…
“the distinct possibility of a prolonged contraction, although that was not judged wise to admit is the most likely outcome,”
Where were these guys back in December 2007, when we were assured there would be no recession in 2008? (Later the NBER dated the onset of the recession to December 2007.)
cnn dot com
SPECIAL REPORT Issue #1: America’s Money Crisis
Fed predicts economy will get worse
In the minutes from its last meeting, the central bank said it expects GDP to decline in 2009 and unemployment to rise into 2010.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: January 6, 2009: 3:16 PM ET
NEW YORK (CNNMoney.com) — The U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010, according to the latest forecasts from the staff of the Federal Reserve.
This bleak forecast was presented to Fed policymakers when they met last month and lowered interest rates to near zero. Low interest rates are one key tool the central bank uses to try to spur economic activity.
According to the minutes from that meeting, the central bank is now predicting that gross domestic product, the broadest measure of economic activity will fall in 2009.
“I think that the Fed is really very scared right now — like everybody else — and they want to pull out all the stops,” said David Wyss, chief economist for Standard & Poor’s.
“pull out all the stops”…. What does that mean, exactly? They are going to do MUCH more than they $8 trillion in actions they’ve aleady thrown at this monster? Seriously?
It means there are no rules, other than desperate times breeds desperate measures. Please refer to my post under today’s topic on Machiavelli’s principles of governance.
It doesn’t matter - market will be up tomorrow.
Didn’t see it already posted but could be wrong or lagged:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZZvAeQPTd_Q&refer=worldwide
Jan. 6 (Bloomberg) — Manhattan office rents fell the most in at least two decades last quarter as securities firms cut jobs and tenants leased less space.
Fourth-quarter rents dropped 4.8 percent to $69.44 a square foot from the third quarter, broker Cushman & Wakefield Inc. said in a report today.
Fo some reason this is really a standout story for people I know (who don’t follow this sort of thing). This and the “milk glut” story. People keep saying “hey, did you hear” for these two.
Cravath negotiated a nearly $900M, 15 year lease for a building that is now bank-owned that (my inside source believes) will sell for $600m. At the time, rate was $100/ft., now $60.
FPSS, you gotta like that! I’ll repost this tomorrow for sure. It’s a good thing the LSAT keeps stupid people out of law school
Here’s the old story:
bloomberg dot com /apps/news?pid=newsarchive&sid=aar21pxL.2ow
Cravath is filled with the same preppy j@ckasses that used to line the IB’s before they all got taken out and shot.
This is quite entertaining. Love it.
BWAHAHHAHAHAHAHHAHAHHAHAHAHAHHHHHHHHHHHH!!!
WSJ: Alcoa to Eliminate 15,000 Positions
Aluminum maker Alcoa unveiled deeper work-force cuts, more plant closures and a 50% reduction in capital spending, citing the impact of the economic downturn.
Doesn’t matter - market will be up tomorrow.
Alcoa shares were down 4% after hours. Why didn’t they just fill out the form to become a bank holding company and apply for TARP cash.
These companies that actually seek to produce something and turn a profit by balancing cost and market demand are suckers.
Even though Alcoa is a Dow component - Dow futures are still up. I’m telling you - the market just doesn’t care anymore. It’ll keep going up until every company is bankrupt. When the last company goes bankrupt, the Dow will go from 30,000 to 0 in one day. That’s apparently the plan.
Particularly shocking is the homebuilders, who are up significantly lately, despite ever-worsening conditions.
Jan. 6 (Bloomberg) — Basell Finance USA, an affiliate of LyondellBasell Industries AF SCA, one of the world’s largest closely held chemical producers, filed for bankruptcy protection in New York.
The company listed assets and debt of more than $1 billion each and said that it had more than 25,000 creditors, according to a petition filed today in U.S. Bankruptcy Court in Manhattan. The company’s 79 affiliates will also file for court protection, including Lyondell Chemical Co., according to the filing.
Santa Obama rally can only last until reality slaps the markets in the face. Nothing like bankruptcy, $ billions in real losses, and tens of thousands of newly announced layoffs for a harsh dose of reality.
It does not matter - market will be up tomorrow.
ROTFLMAO!!!!! and your right, it dosent matter, it will still go up tomarrow.
All the better to short it with, my dear!
This is notable, too, because now companies that are at least 2 degrees away from houses and banking are starting to go under.
I’d consider companies that make construction materials to be 1-degree away, as well as car companies, which depended on home equity money for sales. But a chemical producer? They could, perhaps, provide raw material for construction material producers.
This isn’t a good sign.
Predictable. There’s a lot less demand for foam and plastics in cars when you’re not selling any cars.
People buying less plastic cr*p from Target? Chemical co’s that hedged big when oil was at $100, now it’s at $50, their output is commodities so the competition is killing them?
I suspect the latter is the case, as Dow and friends seemed bulletproof during the entire oil runup…
Ooo, and don’t forget the other story: agriculture. Fertilizer, baby. A lot of fallow fields this year.
Basell Finance USA BOUGHT Lyondell in 2007 and apparently over-leveraged.
Oops.
(In best Nelson voice) HA ha!
Let’s look at some of the factors that make it an opportune time to buy now.
Mortgage interest rates remain at historical low levels, effectively lowering the cost of buying a home. It is not clear when interest rates will begin to rise.
However, economists and other experts generally agree that rates are unlikely to fall significantly in the near future.
Southern Nevada’s economy remains stronger than most metropolitan areas, with steady job and population growth. According to Las Vegas Perspective, Clark County added more than 96,000 new residents in 2006. This bodes well for the long-term strength of the local housing market.
Las Vegas Review Journal, 8/11/07
I love the smell of oligopoly in the morning
Remember when you used to pay a dime for a text message… or maybe even a nickel? And now you likely pay 20 cents a pop, coming and going. Everyone complains about text prices (unless you’re on volume, per-month plan), but in the end we always assume it’s part of the cost of doing business… that carriers have had to raise prices because their costs have been increasing. How else after all to explain 100 percent price inflation in the last three years?
Perplexed, Wisconsin Senator Herb Kohl looked into the matter, polling the four major U.S. wireless carriers about their text message pricing policies. The result? Quite the runaround, stonewalling, and misdirection. And there’s no surprise why carriers don’t want to talk much about the issue: Text messages don’t cost much to transmit.
How little do text messages really cost? The truth is that they’re so tiny — 160 characters is the usual max — they functionally cost nothing at all.
Price fixing ????
Not price fixing, this is what the market will bear.
One must remember that the overwhelming majority of regular and prolific texters are teenagers who never see the bill.
This is probably about to change.
I know the $0.20 bugs me. It bugs the livin’ daylights out of me. And no, it rarely amounts to more than $5 in a month so the plan would be irrational. And no, it’s not a lot of money. It just bugs me.
I hate myself when I allow myself to be carried away by the small stuff but we are all crazy like that sometimes.
it’s price fixing… in Europe and Asia texts are used over calls, since texts are much cheaper. There the companies rolled out digital to begin with (except Scandinavia, an early adopter like the US) and the pricing plan is actually rational.
Cell users also buy their own phone, so none of this amortizing through the contract (another scam because the payments continue after the contract is through). They use SIMM cards to move their personal data from phone to phone or to get service in other countries on holiday.
Thus, the consumer has all the power, buying services a la carte.
In the US, the carriers decided to make text users pay for the digital conversion (which was expensive–this is a big, spread out country). Carriers have a lot of power, especially the ones also dabbling in local phone service, and they’ve received giant payments from the government and special treatment from the FCC. As they’ve merged, the situation has gotten worse. The fee structure is extremely opaque. Now that the number of carriers is down to a handful, we’ve seen them change prices in tandem.
As far as I’m concerned, f*** them. I hope Congress makes them change their rate structure, but until then, I’m going to use my “anytime” minutes and never text. Hope they like paying for all that unnecessary bandwith, the fools. Mm, and email. Who needs SMS?
biz.yahoo.com/cnbc/090106/28526743.html
Bank of America Execs forego bonuses for ‘08
We went to Tahoe Donner last week, on a last minute mini-vacation. I was expecting/hoping that there would be a lot of availability, and maybe even some lowering of rental prices.
But no, it was all full price, almost everything booked.
I was also surprised to see very few For Sale signs. All of the homes in Tahoe Donner are second homes and investment properties.
No capitulation there.
And lift tickets are SO expensive. Where’s the deflation, dude?
I went to Disneyland for the New Years weekend. PACKED!!!!! But I did see a lot more “outside food” in the parks than I’d seen before. I know I didn’t eat many meals in the parks… too expensive for what you get.
Disney started this “get in free on your birthday” promotion, but you can’t get the tickets in advance… Only at the ticket booth when you show photo ID with birthdate. The lines for the ticket booths were INSANE… 10x as long as I’ve ever seen before.
Seems people will go to Disneyland, if you let them in for free!
I must say $75 for gas round trip is hecka-better than the $200+ we paid last summer.
Have you looked at housing prices lately, darling?
1. It was the holidays.
2. More people are “stay-cationing”.
More people are “stay-cationing”.
What daddy? We’re not going to the Bahamas for Christmas this year? BAAAAAAAA!
Goody’s Family Clothing Inc. is liquidating operations, becoming the first high-profile retailer in the U.S. to go under in a new year that is expected to see more going-out-of-business announcements.
WSJ
January 2009
The art market bubble
http://www.newcriterion.com/articles.cfm/The-art-market-bubble-3978
Excerpts, the first quote is the juiciest:
What’s the silliest thing you have heard in the past year or two? Take your time. Our candidate comes from Tobias Meyer, Sotheby’s head of contemporary art, who declared in 2007 that “the best art is the most expensive because the market is so smart.”
…
Ivanishvili and others like him “didn’t simply shove their wealth into contemporary art, they imported the strategies of financial investment into art collecting.”
…
Just last June, the excellent Tobias Meyer informed the public that the art market goes in only one direction: up. “For the first time since 1914,” he said, “we are in a non-cyclical market.” Tulips, anyone?
Love the title of this MSM story :
http://money.cnn.com/2009/01/05/real_estate/home_toxins.moneymag/index.htm?postversion=2009010613
I guess the ‘feel good’ era of home reporting is officially over, indeed.