Bits Bucket For January 15, 2009
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Megabank, Inc needs more money, so it can keep biggering and biggering and biggering and biggering. Soon it will finally achieve economies of bail.
SD U-T
Banking troubles outpace bailout
Pressure for larger slice of rescue plan is growing
By David Cho, Binyamin Appelbaum and Lori Montgomery
2:00 a.m. January 15, 2009
WASHINGTON — A new wave of bank losses is overwhelming the federal government’s emergency response, as financial firms struggle with the souring domestic economy, the rapid deterioration of international markets and the unexpectedly high costs of shotgun mergers arranged by federal officials last year.
The problems are intensifying the pressure on the incoming Obama administration to allocate an increasing share of the $700 billion rescue program to financial firms even as Democratic leaders have urged more help for distressed homeowners, small businesses and municipalities. Senior Federal Reserve officials said this week the bulk of the money should go to banks.
Some Fed officials suggested that even more than $700 billion may be required, and financial analysts at Goldman Sachs and elsewhere say banks will have to raise hundreds of billions of dollars from public or private sources.
“economies of bail.” LOL I’ve got to file that with the “funds of August.”
Yeah, I thought that was one of lad’s better lines.
The sad thing is - we’re going to end up probably pumping $3T into these banks, and then they’ll still fail and we’ll end up a complete socialism after the gov takes over the banking system. I’m sure a few people will have shiny new yachts though.
we’ll end up a complete socialism
We are already long since a heavily statist country. Whether we oscillate from fascism to socialism or back doesn’t matter nearly so much. Its just paintings the walls a different color.
You don’t there there was any real difference between, say, Nazi Germany and Sweden?
Well OK if you say so.
Mo’ better blondes? Actually Sweden, although neutral was a defacto ally of Nazi Germany. That being said, I’d rather have been in Sweden circa 1933-45.
You don’t there there was any real difference between, say, Nazi Germany and Sweden?
What’s your point? That fascism is always more violent than socialsm?
How many millions did Stalin knock off?
If you can cherry pick your “socialism”, I can cherry pick mine.
What’s your point? That fascism is always more violent than socialsm?
How many millions did Stalin knock off?
Are you implying that Stalin was not fascist?
Wtf are you talking about?
Are you implying that Stalin was not fascist?
No, I’m saying that he WAS socialist. Conventionally most people see these two things as polar opposites. I think i made it clear from my original post that I don’t see much difference between the two really.
Stalin gained popular appeal from his presentation as a ‘man of the people’ from the poorer classes. The Russian people were tired from the world war and the civil war, and Stalin’s policy of concentrating in building “Socialism in One Country” was seen as an optimistic antidote to war. (wikipedia)
Evidently HE considered himself to be socialist. I’m not saying he was NOT fascist, only that he WAS socialist. If it is possible to be both, perhaps he was.
Yogurt is making the outright (and absurd) claim that fascism is inherently much more violent than socialism and implying socialism is preferred or even “ok”. I merely provided an example of socialism to be considered as well. I make no claims concerning what other attributes may be ascribed to Stalin.
Agree.
To me - fascism is just socialism or communism with the extra ingredient of stong nationalist sentiment, which is normally driven by a charismatic leader (e.g. Hitler, Stalin, Castro, Mussolini, etc.).
I think you can have socialism without fascism - e.g. what you see in many European countries today (like Sweden), but it’s virtually impossible to have fascism without socialism or communism. It’s hard to have communism without fascism since total government control is required and is difficult (or perhaps impossible) without being driven by nationalist sentiment.
Uh, isn’t Nazi short for “National Socialism”? Packman has it dead on.
Here’s a phrase I saw somewhere that summed it up nicely:
Corporate Communist Capitalism.
Get used it… ’cause you’ve got no choice. To big to fail, you know?
I literally lost it this morning… Mark Hanes and Mark Faber on CNBC flapping their pie holes about how, maybe, just maybe, the Fed and Treasury may have really messed up giving hundreds of billions of dollars to doomed banks. Maybe they should have given the money to the few solid banks, and let the bad ones go.
The Fed HAD to give $20 billion to save Bear Sterns or Lehman and Merril would have instantly gone under. Well, Lehman still went under, and Merril has cost over $25 billion to get BAC to take it, and now they need tens of billions more.
Think how much could have been used for other things had Bear, Lehman, Merril and others been alowed to go under, and just the good pieces picked up unencumbered on the other side of the chapter 7.
GEEEEEE YOU THINK?????
Instead, we have a hodge-podge. Bear equity holders were wiped out, but bond holders “saved”… atleast for now. Lehman, both got wiped out, and Merril both got saved… atleast for now.
What a giant cluster F!
I totally lost it… yelling at the tv.
The freakin’ amatures saw the right answer WAY before the “pros”.
Trillions to save billionaires while main street got a check for $300 to $600 per person.
Hello idiots, this is a Main Street problem that spread to Wall Street, not the other way around. 20% increase in median income, 50% increase in CPI, and 180% increase in per household debt….
GAME OVER!
I wish I could just to back to bed. It is going to be a bad day.
Rant off… for now, but I reserve the right to rant on again at any moment.
RE: Instead, we have a hodge-podge.
What do you expect with Barney Frank & Co. running the show.
WSJ ran a blurb yesterday on how he’s now setting up bail-out’ legislation for all the tacky strip mall developers who are getting wiped out.
Plus more billions for BofA; the incoming Treasury Sec is a tax cheat; and some turd in the House of Rep’s is looking to overturn the 22nd Amendment (Prez can only serve
2 consecutive terms), so Emperor O’Bama can serve for life.
likes all those tribal African shithole dictators.
And nobody raises stink.
BTW-Does Britney have her underpants on this AM?
I was having some of the exact same thoughts, HD. Not only is the incoming Treasury Sec a tax cheat, but that’s the least of his crimes. He had a huge hand in blowing this bubble. Geithner is a very sick man.
The Senate Dems should block him, but they won’t. I am starting to think that McCain was the better choice… but then I remember Sarah Palin.
I’d rather lose my money than my rights.
And I agree–I do remember seeing him in one of those Bernanke hearings. He had an active hand in this mess.
I wonder how much the IB’s pay for their own treasury secretaries and such? Does a $300 mill. donation suffice?
A v veritable gallimaufry of economic futility, isn’t it?
Myself, I don’t see how we can avoid nationalizing both the banking industry and healthcare. And by healthcare I mean the whole flipping noodle and not the dipping your toes into the water type of programs that use various ins plans and companies as halfway measures to pacify the starve the beast proponents.
Say goodbye to the last uncharted waters of outright corporate piracy, it’s so ironic that it falls into knee-slapping, gut busting comedy in a very very dark way. I may have to start drinking early today >; )
Maybe they should have given the money to the few solid banks, and let the bad ones go./i>
If I recall correctly, that was the methodology used in Texas in the late 80’s. The Feds would take over the failing institution, and then immediately have it be acquired by a strong institution.
I think things have changed to where now, bank CEOs have the political strength to still maintain leadership of their failed thrift.
This will not end well.
The Japanese must be laughing their asses off.
Right. We were so smug when we were telling them to just let the banks go instead of creating zombie banks….
Guess it is easier to tell someone else to let their billionaires go broke, then it is to let your own billionaires go under.
Got to save the billionaires!
I wish I could find the link to a funny “ad” for a false charity called the “Save the Billionaires” - the entire video was a parody on “Save the Children,” but it instead focused on how the poor billionaire in question had to downsize to a smaller yacht and go on fewer vacations, reduce the number of mistresses he had, etc. But, for only $9,000 a day, you could save this billionaire - since you’re not just saving a life, you’re saving a lifestyle!
Sad, yet true!
Got to save the billionaires!
It has been my suspicion that the general panicked attitude exhibited by the PTB is a direct result of them and their friends being threatened with economic disruption - you know, going from being billionaires to “merely” multi-millionaires.
When your entire social circle is composed of folks who feel threatened, it’s hard not to feel threatened yourself.
+1
I dunno — we are one of their best customers, and when our consumers stop spending, their manufacturers take a hit in the shorts.
“Hello idiots, this is a Main Street problem that spread to Wall Street, not the other way around”
Thank YOU!
Of course now it’s become such a jumbled mess it seems like it’s hardly germane any more. But it matters.
I would argue that the debt-based monetary policy is a wall street created problem, that killed the host (main street), and now wall street has nothing left to feed on and is finally starving.
Dan,
Oh you could definitely argue that and you’d probably be right. The “securitization model” certainly lends itself to THAT! But I was just noticing our little local bank that trades on the pink sheets ( at .67 cents a share, down from $35 a year ago ) is under heavy… heavy FDIC and Oregon Dept. of Finance and Securities scrutiny.
None of which has a DAMN thing to do w/ WS and they are slowly but surely going down the tubes! An entirely LOCAL event! I’m just looking at it purely from a dollar flow perspective.
In this world there is no such thing as “entirely LOCAL” if you involve regulators from Washington and world-wide debt based currencies. Note that it was the regulators that permitted fractional reserve lending without which your local bank would not have failed.
Oh geez, I’m not getting drug into that debate… again!
It’s pretty simple, local bankers made loans to local builders that went belly up. Do you think YOU could walk in there fresh out of your decked-out spanking new F-350 right from Old Virginnie and get millions in construction loans?
Doubt it. Totally local event and ‘you’ weren’t invited! Now multiply same debacle times 50 states and countless STATE CHARTERED banks! Securitization was something Wall Street HAD to come up with to deal with all the v-o-l-u-m-e. Who ‘else’ can handle that kind of volume? Where else you gonna’ go? Main-Street-Problem.
The mania started with the central bank. They opened the spigot of cheap money … and the local builders bellied up like pigs to the trough, with the banks as their willing enablers.
Darrell,
Rant away, rant away whenever you need to. I am with you in this rant.
“…this is a Main Street problem that spread to Wall Street,…”
When plankton dies off, so do whales.
“…this is a Main Street problem that spread to Wall Street,…”
———————————————————————–
I disagree. what about all those CDO’s? The poor f$cks are just getting the blame that’s all. One cannot borrow money to buy a house unless the bank agrees that, after due diligence, that the borrower has a good chance of repaying the loan.
As far as FB’s walking away from their homes/mortgage obligations. Why should anyone be surprised/dismayed. The madoff’s/llc’s and their ilk have been walking away from their financial obligations since the founding of the republic. We have dual standards in this country. It’s ok for the upper elite to steal but damn the poor folks if they try to imitate us.
denquiry,
I’m not going to argue the “double standard” and I’ve been vocal for years about the disparity in the stigma that goes along with filing as an individual and as a corp. No question.
Yet as I posted in response to VirginiaTechDan, simply the sheer scale of the locally created demand mandated WS’s involvement. While the rest of it has been a pack of LIES the one ‘true’ thing King Henry said was that ALL of these loans were ( or should ) have been scrutinzed at the STATE level by… STATE regulators! He went on to say (basically) that now you guys want to dump them all in he and BB’s lap. Now ‘that’ much is true.
Don’t forget that when the state regulators decided to start nosing around the fraud, the OCC shut them down. But yes, they should have been looking into the safety of these loans as well.
The problem was, most people thought “it’s special here–everyone wants to live here–this place is really taking off” and figured the building was rational.
Re: Dying plankton
I occassionally post about the continuing soggy of my housekeeper’s grandson and his family–the one who lost his marginal job, then hanged himself in the garage of his 4/3 McCrapshack when the ARM reset and the Zoloft ran out.
Well, he survived the attempt, and his youngest just celebrated its third birthday. I got to see the pictures. Little Jon Benet clone, complete with kitten heels, was given a scale model electric Escalade to drive about in. (We’re three years old, remember.) Also a life-like rocking pony. A make-up kit. Oh, and a little fake kitchen which was set up on the granite counter top of the actual one.
Ahhhh. Continuity. The whales will survive.
Teach ‘em young. Teach ‘em Right I always say….
Allena, my LL from five landlords ago hanged himself and succeeded. That was 2002.
Arrgh. I’ve been trying to locate one of those used power wheels escalade with chrome rims over the past few days for a hacker project I’m working on. It’s kind of bizarre how the kids toys are mocked up like real vehicles, some with bling. I assume it’s a move to build brand loyalty before age 6. Haven’t found any desperate sellers looking to unload their battery guzzler yet!
So many were bought in 2007 by people who are surely broke now. Perhaps they ended up like so many SUVs–totaled?
The idea of spending that kind of money on consumerist symbols for a three-year-old child– when you can’t even make your house payments– just stuck me as oh, ironic.
As well as borderline abusive.
I know I wanted one when I was little (they weren’t blingy then, they were red, rounded and kinda cute) and my mother put her foot down hard, on the grounds that it was not only ridiculously expensive but, in her opinion, unsafe.
I wonder how many kids have died when they drove one unsupervised into the street and were run over by a truck. And imagine the bad games older children might play with the battery.
I didn’t even get the $300-$600. Kinda ironic, since I have zero debt and actually WOULD have spent it.
Huh? Marc Faber ticked you off? He should have been on that program more often.
Sorry… Rant on again!
When a corp posts a pro-forma gain but an actual loss due to a one-time charge off, everyone focuses on the gain.
Today, JP Morgan posts a $700 million bottom line profit… Caused by a one-time $1.7 billion gain on merging with WaMu and closing a joint venture with Chase.
ANYONE looking at the $.10 loss excluding one-time??? Of course not.
“Of course not.”
You are…
Just what I was going to say.
everyone focuses on the gain.
Not you and not me.
Nonetheless - how can a company that’s still showing profits be getting bailout money? That to me is the absurd thing.
I’m not sure how much they’ve gotten (anyone got a link to some data perhaps?) but they much have gotten some since they’re on the Government Relief Index ^QGRI.
Travesty. Greed and Corruption.
maybe the only show profits before the bonuses are paid out?
Showing profits nothing
How can a company that pays dividends still get bail out money.
Darrell,
I’m not sure you’re angry or not..can you tell
us how you really feel?
Hey, leave Darrell alone!
I wish every taxpaying voting citizen would rant like that in a letter to their congresscritters. If they had a huge volume of rants like that, they would have to stand up and take notice.
Of course that would also mean said citizens would have to put their vote where their mouth is.
/voted against ALL incumbents in my state/district on sheer principal.
This is a gross oversimplification, but the reason there’s no liquidity is we have no savings. We spent it all; there’s no real money left. Now we have to live frugally and save. Then the banks will have something to lend.
Banks keep saying there is no real demand for loans. What they mean, is there is no demand from people that are likely to pay it back. I know a lot of people, up to their eye-balls in debt, upside down by hundreds of K on their house, work shaky at best… that would LOVE to keep spending like they had been for the last decade. But, they can’t get loans.
People who can pay it back don’t want a loan, and people that want a loan can’t pay it back.
“that’s all I have to say about that.”
“sometimes… there’s just not enough debt.”
One of the quotes I read from an analyst at Celent made the most sense to me I’ve seen in a long time:
“Banking is important, the banks themselves are not”
How can it be said any better than that? Right now we’ll be lucky to make it to B.O’s inauguration.
“This is a gross oversimplification, but the reason there’s no liquidity is we have no savings.”
Savings isn’t the problem, it’s been the ‘how much’a month it a’gonna cost me plans’ that have locked up disposable income. What was disposable income is now all allocated to servicing debt. Future sales were cannibalized for instant gratification.
salinasron,
Bingo! No question, yet in that same statement lies the seeds of our salvation. If we can construct a tax code that does HALF as much for s-a-v-i-n-g (as it did for leverage) we can restore disposable income. Any suggestions outside of the tax code are welcome too.
This really is the key.
You won’t like this Darrel, but I can think of three ways to do this:
1. Allow cram-downs of loan principle — with lots and lots of conditions to be met: no fraud/lying, primary res only, and must have income to pay the current market value of the house.
2. Make it much easier to pay for health care, either single-payer (yikes) or some Small Business arrangement. This alone may save some small businesses, or at least lower premiums for employees.
3. Create jobs that don’t need a full 4-year degree. In many cases, a 2-year degree or focused trade education is enough. (Most CC’s and some state schools already have programs like this.) You won’t rise on the ladder without the full degree, but at least you can get paying work and return to school later. This will save lots of college costs.
All these things will put a couple hundred $$ in the pocket of consumers — every month. Then they have some $$ to chip away at the rest of their debt.
How about passing a law that forbids banks from paying interest rates below the rate of inflation, however that is calculated?
“What was disposable income is now all allocated to servicing debt. Future sales were cannibalized for instant gratification.”
Exactly. Combined with the rising vector of prices and falling vector of J6Ps wages and here we are!
This is all being driven by the theory that the severity of the Great Depression was driven by a lack of government intervention, the very topic on which Bernanke-san wrote his PhD thesis. Herbert Hoover and his Republican predecessors (Harding and Coolidge) had been aggressive interventionists on behalf of their trusts and , believing that the country would prosper through “economic modernization” during the bubble phase, but behaved completely differently when the bubble collapsed.
During our time, the opposite philosophy of laissez-faire for business duing good times and aggressive intervention during the collapse will be tested. Something tells me that since we have moved from a rural to an urban society, globalization has occurred, and there is no natural disaster like the dust-bowl, it will be like comparing apples and oranges.
IMHO, I think the more relevant lesson from the GD is that structuring the government to the interests of businessmen (or removing oversight) leads to economic overheating and eventual collapse. Perhaps the function of government should be to create a level playing field (by building a competent and publically accessible infrastructure), as well as transparency and accountability to investors.
Oops….”aggressive interventionists on behalf of their cronies, trusts and pro-business constituencies”. Sorry.
NoSingleOne,
With the possible addition that since then, with the introduction of the internet it’s created a sense of urgency when pulling off your larger than life itself scam!
Back in the day embezzelment/fraud took place at a snail’s pace. But since the advent of the Information Age effecting your scam has got to take place in a compressed chronolgy. There’s no time for dilly-dallie if you expect to pull this off. For more info on how much time you have to work with before your little scheme is exposed see: Angelo Mozzila.
Ponzi and Madoff both did quite well without the Internet. I blame the growth of bubbles more on the modern expectation of something for nothing, blind trust, and the tautology of privacy and lack of transparency more than I do on the growth of social networks.
But who knows…
NoSingleOne,
In the end, that kind of -was- my point. With all the transparency the internet supposedly provides, why are we getting more ( and more brazen! ) fraud then ever!?
Truly disappointing. Not to open a can of worms but I think the Blagojevich thing should provide something of a reference? Even though he was ‘already’ under investigation if he got the Senate seat sold quick enough he’d already be on a beach somewhere?
Bubbles aren’t new. Check out “Extraordinary Delusions and the Madness of Crowds” and read that relatively dull chapter on France and the “land bank”.
Long story short: France tried a bunch of crazy fiat schemes and dashed into nutty bubbles as the government and people tried to continue living past their means after the money was gone.
The English could laugh, then, but look at them now.
Harding and Coolidge were very laissez-faire, Hoover very interventionist. See, for example:
http://mises.org/story/2902
I suppose I shouldn’t have included Coolidge, who probably really was a laissez-faire idealogue, and a hero of Ronald Reagan’s. I tend to lump him in with Harding because he was Harding’s veep.
Harding was extremely corrupt, and his entire administration’s cronyism certainly led to a de facto business activism. After reading about him recently, I’m convinced he is one of the few president’s whose intellectual gifts, speaking style, and misguided populism rivals GWB’s. He was undoubtedly one of the worst presidents in US history.
Anyway, thanks for the article.
president’s = presidents
sheesh, time to go back to bed…
After reading about him recently, I’m convinced he is one of the few president’s whose intellectual gifts, speaking style, and misguided populism rivals GWB’s. He was undoubtedly one of the worst presidents in US history.
There are many, many parallels between Harding and our outgoing leader. The main one I’d add is their persistent belief in cronyism — both men appointed ridiculously underqualified or corrupt pals to important positions, and in each case, said cronies proceeded to rob the citizenry blind or generally f@ck up everything in sight.
(Yeah, I know some of you think pretty much everyone in government is incompetent and/or corrupt, but these two presidents really did take the problem to breathtaking new depths.)
A pox on them both.
Harding was by no stretch a great president, but AFAIK no one accused him of benefitting personally from the corruption in his administration. He mostly favored laissez-faire policies over banking interests, and that, IMO, is what really frosts the mainstream historians and results in his bad rep. He also may have been murdered by someone for whom he had refused taxpayer “help”.
IMHO, I think the more relevant lesson from the GD is that structuring the government to the interests of businessmen (or removing oversight) leads to economic overheating and eventual collapse.
Well said — a thoughtful, excellent post.
Thanks…I’ve been reading a lot of history lately on these cold winter eves by the fireplace. It’s absolutely amazing how many parallels there are between the 2000’s and the 1920’s.
When I was in high school… WAY back in the pre-Greenspan era… I was told the role of the government and the central bank in economics was to smooth the cycle. Make sure the good times aren’t too good so that the bad times won’t be too bad. Oh, the good old days of Volker.
Then along comes Greenspan and his philosophy that the role of government and the central banks is to blow bubbles, then clean up the mess after they pop by blowing another.
With out reiterating the details of my position against all taxation/regulation I would like to make the following point…
Deregulation without removal of government insurance is a recipe for disaster. It separates the responsibility for loss from those who make decisions. Those whom claim that we need regulation and “accountability” are “correct” but they often ignore the fact that “government insurance” creates a “government liability” and means that the “government must decide” where the money they are insuring is invested. Ultimately government “regulation” and “insurance” results in LESS regulation and LESS accountability.
True regulation comes in the form of investors writing contracts with another party to manage their money without the backing of a government guarantee. These investors will be far more careful about whom they give their money to and under what conditions if they know that choosing poorly means they lose everything. FDIC, SEC, etc. simply removes responsibility and the investor says “well, if I screw up I can just steal a little bit from everyone and get my money back”. The managers of the money, having no personal liability so long as they “play by the rules” will take as big of risk as they can get away with, pay them selves as much as they can, and let someone else pay for their mistakes. This moral hazard eventually brings down the market.
Also, the claim that there was a laissez-fair policy during the great depression and that we are “trying the opposite” today is a prime example of the elite rewriting history so that they can claim “we are doing the opposite thing” today when in reality they are doing the same thing. The average Joe says, “well as long as they don’t make the same mistakes as the depression then I am good” and then the average Joe rejects all “laissez-fair” opinions because they wrongly believe that “laissez-fair” caused the great depression.
Bingo.
“”"” Deregulation without removal of government insurance is a recipe for disaster. It separates the responsibility for loss from those who make decisions. Those whom claim that we need regulation and “accountability” are “correct” but they often ignore the fact that “government insurance” creates a “government liability “”"”
Regulation is a completely different topic than insurance
The role of gov should be to create a level playing field that all can compete fairly on. To punish those who break the rules. To prevent monopolies/oligopolies from becoming so powerfull that they can manipulate gov and the rules. I would also add that gov should provide some insurance to the individual, that even if they fall they and their family will not starve/freeze to death (ie there will be some oportunity to work for food and shelter, NO wellfare ) Corporations should be allowed to fail with no insurance. If a bank fails, bank is taken over completely by the Gov and closed in an orderly fashion or sold in an open market. Bond and stock holders get nothing but the oportunity to work for the state at a wage that will provide cheese bread a roof and used/state made clothing. I”m OK with limited FDIC insurance.
“Regulation is a completely different topic than insurance”
You don’t seem to realize though that the primary purpose of regulation is to reduce risk . Regulation is in place to make sure people don’t get burned by banks taking your CD money for instance and investing it in junk bonds - that kind of thing. Or that fractional reserves don’t use big numbers like 1:1000.
There were regulations in place that discouraged the massive amount of CDS’s that caused this mess. Once those regulations were removed (2000-ish timeframe, combined with other factors like CRA and lots of others) - whoom they just exploded outwards.
This introduced tremendous new risk onto the scene. The problem is this - everyone still invested in these now-very-risky deregulated schemes because of the implicit government insurance that is bailouts. If this insurance didn’t exist - these firms would have taken a lot closer look at the innards of these devices, knowing that if they didn’t, then they risked bankrupting huge financial corporations. However instead - there was no risk of bankruptcy because of their “too-big-to-fail” status.
Thus you are incorrect - insurance and regulation are inexorably tied. They are both key elements in the risk formula.
Well, some things will just have to wait.
The New York Times is now reporting that up to $850 billion more is now needed to save the Inauguration.
Without it, they claim, we are facing an immediate “catastrophe” of color scheme and party favors.
To their credit, however, the editorial board is calling on Mr. Geitner to step aside. They pointed out that the reason a lot of people have issues with self-employment tax when they are paid by international organizations is that a lot of the people paid by international orgs are the cleaners and drivers, and other low level staff in embassies.
Short version - that dog won’t hunt.
My hunch is that they are trying to pressure congress to release the free money quickly and with no strings attatched.
Yes. Instill fear of “catastrophe!” and steal from the public.
Not like anybody could have seen this, or anything.
Soon it will finally achieve economies of fail.
When is enough bailout, enough for crying out loud? I mean c’mon, this is absolutely ridiculous. Are they just going to continue throwing good money after bad indefinitely? At what point do they stop? What good are these institutions providing to this country. Why can we NOT let them fail? This is beyond ludicrous.
Morning everybody
The other day I got a letter from my old high school buddy who is currently a member of the California Correctional system.
Told me that his cell mate told him that give the economy outside now is a great time to be on the inside.
To which my friend replied
“given the choice I would take the poverty”
HA! What, is his cell mate a convicted realtor ?
Seems no matter what the circumstances, it’s always a great time to be doing something stupid. I like the sound of “convicted realtor.” Get rid of the marijuana users and put the “real” crooks in jail.
I dont know but I cant help but think there are alot of people on the outside who should be on the inside
So I’m trying to reconcile this:
WSJ article from 1/2/09 - “Three Banks Complete Deals”
with this:
Article from yesterday - “Bank of America to Get Billions in U.S. Aid”
(scratches head)
I would say “I smell a rat” but at this point I think we’re pretty much overrun with them. Calling St. Patrick!!! Calling St. Patrick!!!! You’re needed badly!
BoA was promised the money if they would take Merril.
Why do they have to take Merrill? How about if Merrill gets carved up into tiny, economically viable pieces and sold off to private investors, instead of consolidated into a bigger, badder Megabank, Inc?
Counter-party risk. If Merril goes under, then who next? Then who next?
What if they ALL go under. As Bush said in his exit press conference. We were faced with a depression worse than the Great Depression.
Here is a clue to teh worst president ever. WE STILL ARE!!!!! All you did was delay it 3-6 months.
People keep comparing Bush to Hoover. WRONG. Hoover came into office in 1929, AFTER the debt bubble. Coolidge is the jerk that let the bubble blow in the first place, making the depression inevitable. Hoover got poor marks for handeling it poorly, but Coolidge got teh blame for letting it happen in the first place.
Check scholarly best/worst presidential polls. From the 50s to 90s, Hoover was ranked average and Coolidge was ranked right at the bottom, along with the ones that did nothing to prevent the civil war. It was only after the Depression Era generation died off, and Greenspan’s “bubbles are good” philosophy took hold that Hoover began to take more of the blame.
RE: What if they ALL go under.
So what is “real” and what is “extortionist” hype hell-bent
on scarin’ the bejesus out of the politicians who then roll over and write the blank checks on an overdrawn account.
March 13, 2007-”The sub-prime fall-out is largely contained.”
-Henry Paulson, US Treasury Secretary
Who the fook can you believe in any of this?
Who the fook can you believe in any of this?
—————-
We can believe ourselves. We got it right, didn’t we?
It’s even HARDER to hide poo in small pieces than in one big cake.
Jim A,
But it WOULD take the whole liability of the Auction Rate Securities and cast it the four winds?
“The Model” is broken.
Hypothesis: Making poo harder to hide will result in less poo creation.
“Hypothesis: Making poo harder to hide will result in less poo creation.”
+1
Clap clap clap
…a bigger, badder Megabank, Inc., whose failure would be even more disastrous than the failure of its previous individual parts.
Don’t antitrust laws come in to play when companies get as big as the banks and the auto manufacturers became? I mean, geez, it’s not just a matter of competition, it’s a matter of global economic stability. My cheaper phone bills since the breakdown of AT&T suggest that this whole thing is going in the wrong direction, at least as far as the little guy goes.
What anti trust laws?
ALL of the regulations and laws enacted during the GD have been rescinded over the last 20 years. The last was the Glass Stegall Act repealed in 1999. (sponsored by a Repub and signed by a Democrat, btw)
It only took them 9 years to wreck the train. Pretty impressive.
I am getting tired of the spin.
“The increase is partly due to a flood of requests from newly-laid off people who delayed filing claims over the holidays, a Labor Department analyst said”.
I do not know anyone that waits to file 2-4 week after there laid off. I would want to get that unemployment as fast as possible. Bills dont wait.
http://news.yahoo.com/s/ap/20090115/ap_on_bi_go_ec_fi/economy
I personally know people who have waited until the new year to file for unemployment. They didn’t want to start receiving funds under their 2008 tax bracket. Apparently in their states they get unemployment for a set period of time and having two weeks of it taxed at their 2008 rate would be a waste of time and they had enough money to last the few weeks until the new year. I agree if one were living paycheck to paycheck one would have to file right away.
I thought you had to file right away or after one week or it caused problems..
NO its based on benefit year……
by waiting till january the year is from jan1 2008-dec 31 2008
filing in december…you dont count the quarter you are in…so your year is from oct 1 2007- sept 30-2008….
plus if any increase in benefits star jan 1st its better to wait.
It’s also taxed as ordinary income at the end of the day. Which is redundant if not punitive. Employers lower wages to pay unemployment taxes, and the employee “pays” again upon receipt of the benefits.
Also agree with the earlier comment that recipients aren’t going to wait a few weeks to file like they might delay getting their oil changed.
They would beat feet down to the benefits office.
From the same article:
So, as I read it, the “spot of good news,” apparently, is the fact that the reported number of people receiving continuing benefits has not yet been upwardly revised as has been the figure from the previous week.
They’re learning from the realtors.. Or being infected by them.
Or being taken over by them…
“They’re here already! You’re next! You’re next, You’re next…!”
Man… That made me laugh so hard.
The first time that I collected unemployment (during the dot-bomb days), I did the same thing as these folks. I waited, because I thought that my claim would be retroactive; it was not.
The rate goes up on the 1st of the year, based on when you file. So yes, people do wait in order to get a small increase in the amount they receive.
You CAN’T delay filing for unemployment in most states. You will then be disqualified.
In my state you have 3 DAYS to file or you’re screwed.
In most sates, you CANNOT wait. You must file within a week or you are disqualified.
First?
Something is going on here. And Hovanian is advertising on Ben’s site. What’s going on?
I demand to know what have you done with Ben!?!
I constantly get advertisements for IQ tests, while I tend to think this is not really the site to bottomfish for low IQ visitors …
Ben wants to be there when they start advetising free houses.
And it’s a large part of the reason I keep coming back! LOL!
Good one!
Question - why do the market futures generally not accurately reflect the delta from yesterday’s close?
E.g. the this morning at one point the Dow futures were down 59, at 8,100. However the Dow closed yesterday at 8,200 - so how come futures weren’t down 100?
They are futures and reflect traders perceptions on where the market is going. Real time is the first derivative - stocks.
Can BofA survive now that they were talked into taking Merrill? On CNBC they were outlining their bad toxic assets - seemed to total less than 50 billion - but they didn’t mention credit default swaps.
Countrywide!!!!!
Earlier in the morning, another guest host talked about the likelihood of cracking open the Countrywide bonds because the originator and trustee was really the same company so had a huge conflict of interest. The securitization was a fraud. The people holding the Countrywide generated MBS have filed class action, and have an excellent chance of recovering hundreds of billions in losses from BAC*.
* By BAC, I mean U.S. Treasury since BAC has been officially designated as too big to fail.
FRAUD?!
I’m shocked!!
(not)
REhobbyist,
There’s no assurance of that. It’s just that BofA discontinued issuing Liar/Ninja/Subslime loans in 2001 and were simply the most likely candidate to absorb the schlock. I mean shock.
Excellent question.
The wife was asking about how Dow futures are computed and I realized that I didn’t have damn clue. I’m not sure if it’s an aggregate of futures from all the subcomponents of the DOW or a contract based on the actual value of the DOW number itself. Anyone?
The futures reflect the underlying stocks perception of value by the traders.
e.g. Hypothetically the DJIA could give dividends that would lower the value of the Index by 100 pts, if you were to buy the stocks and sell the futures at same value, you would pick up the dividends for free. Aint gonna happen very often - although it does happen.
The futures are settled in cash. The futures are best used by novice traders to give an idea of traders perceptions of direction of the market. Large traders use the futures to move and to hedge blocks quickly.
Future Price = Spot Price * e^rt
e = exponential function
r = risk-less interest rate
t = time until future contract maturity
There are adjustments to be made for e^rt, not just subtracting spot price (yesterday’s close) from future price.
Sorry forget to add that if there are dividends in this picture, then one also throw in dividend into the formula, as Hoz mentioned. Also there is a slight adjustment for futures price daily settlement vs. forward price pay-at-maturity.
F = S * e^(r-d)t
It’s a contract based on the DJIA index level. It’s cash settled, rather than settled with the components.
There is an adjustment called “fair value” that attempts to close the gap at what yesterday’s close shoulda, could and woulda been. Just statistics, no need to look to closely. Please move on.
That Gubment relief index is really holding up well….1000 a few weeks back, now hovering around 750…..LOL!
Thanks again FPSS (or whoever posted that initially).
http://finance.yahoo.com/q?s=^QGRI
Uh oh, a company I depend upon a heckuva lot is on that that index. They go into a bigger fish and I may lose many of my contacts.
Let the Bank Bailout Work
By Martin Neil Baily and Charles L. Schultze
Thursday, January 15, 2009
“…Look at the facts and the numbers: An International Monetary Fund analysis in October found that global banks and other lenders are likely to suffer losses of about $1.4 trillion from defaulting U.S. mortgages and consumer and corporate debt. (About half of that total is mortgage losses.) These losses, once recognized on the books of financial lenders, reduce their capital by an equal amount. That capital is the “backup” behind a lender’s overall portfolio of loans and other investments. In the United States, each dollar of lender capital supports, on average, more than $10 in loans and other assets; the “leverage ratio” varies among different institutions and different kinds of assets.
Bank supervisors, following a complicated set of regulations, are charged with keeping bank capital from falling and remaining below a “safe” level. If a bank’s capital does dip below certain levels, the bank is required to limit its lending. Equally important, as its capital falls relative to its assets, the bank would be considered increasingly risky by private markets, raising its cost of borrowing, lowering its stock price, and reducing its ability to attract new capital and expand its loans and investments. In short, for every $1 million of losses on bad loans, a bank must reduce its portfolio of loans by around $10 million, unless it can obtain new capital to offset the losses. Unchecked, this “deleveraging” process poses a serious threat to the economy.
The IMF has estimated that, without large infusions of government funds, U.S. and European banks over the period 2008-13 would be selling assets and failing to renew existing loans to the tune of $10 trillion, equivalent to a whopping 14.5 percent of their loan portfolios. More than half of this lending contraction would occur among U.S. banks. At this stage, therefore, TARP’s success has to be judged not in terms of how many new loans it produces but what problems it has prevented — fire sales of assets and the cutting off of credit lines.
So far, the TARP capital injection has reduced the size of the problem, but the problem remains large. We are not against providing additional help directly to homeowners, but any substantial diversion of TARP funds away from their central task would be a serious mistake and could worsen this very nasty recession. A restored financial sector must play its part in ending the recession and sustaining an economic recovery. Congress should release the second half of the TARP funds with rules that can actually be enforced and recognize what the program is trying to achieve — a recapitalization of the banks to limit any further contraction of lending.”
WaPo
This is why those big banks should be let to fail, and the TARP money should have been given to solvent banks so they could grow into the role of the larger banks, absorbing the lending business the large banks left behind.
These smaller, solvent banks, could buy those firesale priced assets and make a lot of money off them. In return, the US would see a healthy return on their investment in a few years.
The larger banks collapsing would cause massive job losses, but this would have been mitigated by the growing smaller banks hiring.
Flapping heads on CNBC admitting that would have been the better move. I totally lost it.
Excellent post, Frank. Gee, what a concept, huh? Reward the solvent banks. Reward companies, institutions and people who are doing well and doing right by their fellow man. The US gov, however, would prefer to reward criminals and shysters. The rule of law is an absolute joke in the US anymore.
just the same elsewhere, unfortunately.
in Netherlands the banks (and savers …) that where the most reckless/stupid get bailed out. The banks that had more solid investments get nothing except unfair competition. Savers that choose a solid bank get rewarded with abysmal rates on their savings account.
Companies that can prove that their turnover declined at least 30% as a result of the credit crisis (usually the big financial speculators and those that depend on easy money) can send their workers on leave for a few months - the workers can keep their full salary, paid by the tax payer. Small businesses that often provide their own capital and depend less on easy money get more unfair competition.
A big Dutch carlease company got approved for ‘bank’ status some time ago; as a result they can now leasy cars at fantasy rates, thanks to the full unlimited support from the Dutch central bank. They are now too big to fail. And soon we will probably get the same stupid initiatives that are already used in UK and US for 0% car loans paid by the central bank (= taxpayer). I’m sure some politicians will get nice luxury lease cars in return.
All these bright ideas from government are going to make things worse. If they keep using these policies, only the idiots and gamblers will survive.
Well, if you’re a fireman what are you gonna focus on first? The fireworks factory surrounded by orphanages or the house fire on an acre with its insurance paid in full?
I think the bailouts suck, but I do think these monkeys believe that if the big boys go down the whole system implodes. Who cares if you’ve been winning the game and being prudent if the big bullies have a temper tantrum and knock all the pieces off the board? Game over any which way you slice it.
I’ve made multiple comments that the best case scenario for America is the Japanese zombie bank. We’ll be lucky to even get that outcome IMHO.
How about we let the banks fail and let prices fall?
I’ll never understand this infatuation we have with overpriced assets.
Everything is overpriced right now, and less lending would mean lower prices (and lower wages).
Deflation can be a GOOD thing!
The use of the word “fail” with respect to the banks and other struggling institutions is a poor choice, especially because of the use of that term during the Great Depression, i.e., the banks failed and the sky fell.
Perhaps it’s a small point, but I think that even at the highest level of government, the use of such terms as “reorganization,” “restructuring,” and hte like - terms that express an interest in fixing, as opposed to abandoning - would go a long way in pursuading our esteemed legislators to consider other alternatives than just recklessly throwing cash at perpetuating the same set of circumstances that is the root of the problem. This whole thing is wrongly being spun as a bailout or do-nothing proposition.
“Let the Bank Bailout Work
…
At this stage, therefore, TARP’s success has to be judged not in terms of how many new loans it produces but what problems it has prevented — fire sales of assets and the cutting off of credit lines.”
It’s working, alright, teaching important lessons in future banking business strategy.
Lessons learned:
1) Grow big enough to qualify as too-big-to-fail, and you will reap the reward of bailout funding next time there is a banking crisis.
2) It is always possible to dump bad gambling debt onto someone else’s lap, provided you lose enough money so the global financial system might fall apart if the government does not help relieve you of toxic waste.
3) Financial prudence and fair play is a losing strategy which only fools pursue.
As Trump put it… Owe the bank $50K and they own you. Owe them $50 million and you own them…
Or, in this case… $1 billion in bad debt, and FDIC owns you. $1 trillion in bad debt, and you own the Treasury.
The Treasury is willingly owned in this case.
The $1.4 trillion is an increadibly optomistic guess. I’d put the number north of $3 trillion for consumer, and equal or higher for business… though I guess the banks don’t have as much exposure to the corp bonds and such.
In honor of Ricardo Montalban. Rest in peace.
The WaPo had an interesting characterization of him this morning - Cary Grant times Hugh Hefner divided by Jose Cuervo. LOL.
KHAAAAANNN!!!!!
Hey, could we use the Genesis Device on the TARP to fix it?
Hey - never thought of that! Start Trek XII - “Financial Resurrection”.
“We offered the world *order*!”
- Ricardo Montalban as Khan Noonian Singh. Star Trek, Space Seed (1967)
“We have given no word to keep…….in my view, you have no alternative”
Henry Paulson, (2008)
Khan N. Singh, (somewhere in Futureville)
Good morning bubbleers. Here’s the Atlas Van Lines 2008 move-in/move out numbers by state. If you click on a particular state you can see its numbers for the past 10 years. My apologies if someone already posted this link.
http://www.atlasworldgroup.com/migration/
Cool graphic!! Oddly though it shows CA as still having net influx in 2008, but This article says very much otherwise.
Those are shipments, no? So it may be that people moving out of CA are less likely to hire a moving van than people moving in to a degree significant enough to offset the distribution of people actually moving in or out of the state.
I would think that the majority are relocations paid for by corporations.
The map for 2007 was posted a few weeks back.
My take is that only the more well-to-do use a full-service moving company. Regular stiffs like me had to rent a U-Haul to move from CA to ID.
Packman–
The article you linked was to the SD Union-Tribune. I read that, too, when it was reported. Oddly, though, that same paper reported a few weeks ago that San Diego was the ONLY California metropolitan area that experienced a NET GAIN in population in 2008. Could be more illegals, more kids being born…I don’t remember the explanation.
Ooh this year they have added Canada to their map. Is everyone really moving out of Canada?
Great post Bill….
Thanks, Bill.
Ricardo Montalban dies at 88; ‘Fantasy Island’ actor
“Fantasy Island was our last hope for fixing this mess,” Mr. Bernanke said during a speech in front of congress.
Kahn, Mr. Rourke, COR-DO-BA….we’ll miss ya Ricardo!
Rich…. corinthian…. leather.
Soft… Corinthian…Leather…
Revenge is a dish best served cold. It is very cold in space.
I always liked his role as Roderigues in “Battleground” with Van Johnson. A great war flick.
Banks accused of failure to protect assets
By James Mackintosh
Published: January 14 2009 23:34
UBS and HSBC are being targeted by investors who lost money in the alleged $50bn fraud run by Bernard Madoff. They argue the two banks should have guarded assets allocated to Mr Madoff’s business more carefully.
Lawsuits have been filed in New York and Luxembourg against the banks, among Europe’s largest, and more are being prepared, lawyers say. The role of the banks has already prompted a diplomatic spat between France and Luxembourg.
The two banks were the biggest European custodians for the “feeder” funds which funnelled billions of dollars to Mr Madoff, holding assets on behalf of investors.
“The assets that the funds were supposed to have were not really held by the custodians for the funds,” said Erik Bomans, a director of Deminor, a Belgian-based investor consultancy representing up to 50 investors.
“Certainly the liability of the custodian and the asset manager will be questioned, that’s for sure.”…
FT
Let the games begin. Wheeeee
didja see the coverage of the riots in Riga Yet, check the Bronte.
Looks like Latvia is going feral.
yes, shape of things to come in other parts of the anglosaxon empire. We will see the same thing more frequently this year in other EU countries (or potential EU member states) and the Club Med area. The sheeple are angry because fantasyland has come to an end, just when they were really starting to enjoy it.
You mean to say Sarkozy can’t just step in and save the day?
Sarkozy will try to inflate the problems away but that will only work for some time; and not for the EU border states …
todays news says that the Netherlands is now the last EU member that has NOT yet announced massive financial injections (though they already spent billions on banking bailouts); that won’t last long for sure. Even Germany, once known for its ‘tough’ monetary policy, has capitulated. The euro is in really bad shape, if it drops a few % lower on the charts I think the end is near.
I’m surprised that after todays ECB ratecut and statements, Euro Gold is not yet surging; it has been searching for direction for some months now.
whats the ETF thats short the ERU
Latvia is part of the Anglo-Saxon empire?
Latvia is part of NATO.
Expect things to get very bad between the 40% Russian population and the native Latvians.
If Russia steps in, we would be obligated to defend Latvia from Russia.
Things will end badly.
Any feelings one way or the other about what will happen in Estonia?
Polly
The problem with the Baltics is they borrowed over 1.5X GDP in Euros from Swedish banks. They make Iceland and Ireland look good.
Primary lender Swedbank.
All moot if the Euro collapses.
I expect a 90% drop in Talinn residential real estate.
the Baltic states totally depend nowadays on the Anglosaxon banking empire (plus some banks that are related like the Swedes); they will go down together.
If Ireland can have a 80% drop in homeprices (latest prediction) it could be even worse in the Baltics.
Thanks for your insight, hoz.
90%? That is just epic. Epic.
“If Russia steps in, we would be obligated to defend Latvia from Russia.”
Sounds like a perfect place to begin ending our foreign entanglements. Let the Swiss sort it out.
Yes and I wrote my little song about the Baltics the other day.
Bye Bye Baltics
The time to panic was in November.
Loved that song. Forgot to tell you.
Wonder if you were thinking of Ann Margret while writing it. LOL
She is very attractive. Subliminal message, quite likely. Would she like the frozen tundra? She was from Winnetka. It gets kinda cold by Chicago.
I lived in Chicago for 8 years. I know the winter all too well.
everybody is gonna pester you about your “tinfoil” theory regarding he Madoff scandal….knock back some of yer favorite soda pop tonight and spill it…
Im outa here..
I bought UYG at $3.70 - just a little play for the next 2 weeks. Worked once might catch a President Obama rally.
What Mr. Madoff theory is that? I know nothing. I see nothing.
Hmm good idea…since I so totally blew my chance at SKF..
I sure hope you’re right because I bought FAS for a ST trade at $12.30!
A word of caution on the 3X, they work in your favor 3:1 however when wrong they work against you 9:1 In this case you have a winner, but if they pull the plug I could not move fast enough to get out. I’m fast.
Dutch bubble update:
the Dutch housing supertanker is changing course: in fourth quarter 2008 home prices declined 1.8% on a yoy basis. Amsterdam homeprices declined stronger, down 2.7% in the third quarter and down 5.7% in fourth quarter. Part of the decline is probably caused by a change in the type of properties that get sold. Number of homes for sale keeps climbing and number of transactions declined strongly again.
The realtors blame the decline on ’scares’ in the media. They are now projecting a 5% price decline for 2009 (very optimistic …) but: ‘in the long run housing has proved a superb investment’ so no need to refrain from buying! Tomorrow the Dutch government will announce new measures to support the housing market (read: support the housing mob).
The situation is starting to look a lot like 1979, just before the last housing crash (-40% pricecrash within 1.5 years). That crash occurred after a few years of wild speculation (although the price runup was just 100% then, and nearly 1000% now), with huge numbers for sale, declining sales numbers and a quickly deteriorating economy. The only major difference is that rates were high in 1979 (peaked at around 12% in 1980) while they are near 400-year lows, at 3-4%, now. So a quick crash (which proved to do little harm to the economy) is far less likely this time.
nhz.
I’ve always meant to say thank you.
It’s good to know that the entire world is insane, not just the US.
yes, it’s definitely not just a US problem. Although most of the seeds for this worldwide bubble were sowed by the US FED, IMHO.
Germany isn’t:
1. Very tight restrictions on mortgage lending.
2. Extra income tax on flippers.
3. Cultural values that don’t look down on renting.
It works.
yes, Germany is the only exception in the EU. I hope they do not start to import all the stupid ideas from neighbour countries, now that their government is desperately longing for more inflation.
Last year many Dutch RE investment funds were buying properties in Germany, predicting that prices would rise strongly there as a result of new legislation that favours ‘investors’ (read RE speculators). I hope they get burned severely.
P.S.: the declines are tiny compared to the US, but this is the first real yoy decline in nearly 30 years. Stay tuned!
Thanks for the updates.
We heard the whole “It’s the media’s fault!!!111oneone” thing about 12-18 months ago here all the time - sounds like the wooden-shoey’s are just a little behind the curve.
Not alot of room to turn a tanker around on those little canals either.
yes, so it will crash pretty soon.
Congratulations, nhz!
Looks like things are **finally** going to improve for you (low prices are always an improvement).
Thanks for keeping us updated; it is much appreciated.
My steak is better and cheaper anyway.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGiMYbsCjwLE&refer=worldwide
Has anyone observed bubble in the hospitality business (hotels and motels)?
If you travel on any interstates, you would observe quite a few motels together on the exits. I have hardly seen these motels having enough guests to justify a need for so many motels.
I live in Indiana, in town which is on I-65 and has population of less than 20,000. The town has following Motels , Hampton Inn, Holiday Inn Express, Econo Lodge, Days Inn, Knights Inn, Motel 6 , Super 8, Quality Inn and two more Independent motels. I have heard that there is one new motel being built.
The total rooms for the guests are 800-900 that would be approximately 5% of the town’s population.
There are few factories in the area but nothing for the tourists.
I don’t know how are these guys making money.
Oddly, I’m noticing a significant uptick in vacation airfare/hotel rates. I thought I was going to get a good bargain on a family vacation to Hawaii this summer. Airfares are through the roof. Very disappointing, because my professional travel has been reasonably priced lately.
I am in the process of buying a ticket for South America and the fares are much higher than they were in the past. I am surprised and annoyed. I too thought they would be less given all that is happening and the oil price.
Fecaltime!
At xmas, my duaghter comitted to coming to AZ for spring break. I checked airfare and say $350+ for end of March. No way. I alwasy get under $250.
Last week I saw $200. Sent her an email to confirm dates, and it took her a couple days to get back to me.
Yesterday I went hunting and got $175.
Probably should have waited…
Reminds me of one of my neighbors who was going to RAISE the price of his house that wasn’t selling because he thought the higher price would attract a better class of buyer; buyers for whom price was no object.
The same guy is going to re-list in the spring, when he expects everything is going to rebound.
That always works….NOT.
hmmmmmmmmm Truckers and Hookers
Truckers like out of the way podunk towns To park the rig sleep eat and get some action before moving on…
——————————————–
I don’t know how are these guys making money.
The lot lizards do!
Resorts AC- Hotel & Casino, Atlantic City, NJ
Hotel, 879 rooms
Owner, Manager or Sponsor: Colony Capital LLC
CMBS: CSF07T023
Current Thru: 10/9/2008
Current Ending Balance: $175 million
Servicer Comment: The loan was transferred to special servicing in December November 2008 payment being delinquent.
Yeah - I am starting to see a bubble in leisure and hospitality defaults.
Vegas strip is going to be UGLY. Once upon a time rooms were $100+. Now you can get a room for $30. If checking out on a weekday, they’ll offer you extr nights for as low as $15.
Primm on the CA stateline, is LITERLLAY offering rooms for free. Minimum 2 consecutive night stay required. Guess they figure that increases the odds you’ll spend money in the casino.
Once upon a time rooms were $30 in Vegas….
Darrell - exactly what happened in central FL during the bust of the early ’70s. Rooms were darned close to free.
Yes, definitely in Missoula. All those same hotels building here near I-90. I really have no idea why - I can’t believe they can fill those rooms on any given day. Of course we’re such a desirable convention destination, doncha know. /sarc
“I don’t know how are these guys making money.”
When my parents visit me in SF, MrBubbleSr always goes to Priceline and gets these super, huge, lavish (for my caste) rooms in empty hotels near the airport for $40 a night or less. I swear they are only paying for the cost of the cleaning staff. Anybody paying “retail” for anything now is a ripping fool. I remember going to KMart back in the 70s with my Dad and he would (at least try to) cut deals.
“But Dad, the blue light special means that it’s already as low as they can go.” He’d just shake his head at me, give me the “Shh” sign and keep haggling. Getting deals at Benny’s was harder, but he was amazing.
Think that I’m gonna start haggling everywhere I go. I never by sodas and the like because they charge somewhere around a $1 for something that costs $0.03/m^3.
New strategy: “Coke? A dolla’? Tell you what, I’ll give you fiddy cent!” Just to see what they say. And I just realized that I am ripping of a Chris Rock bit, badly. Sorry.
MrBubble
That is what I do, use Priceline to bid for hotel room around an airport.
I have got rooms for less than $30.00.When I check-in and ask for the regular room rates it has alwas been more than $80 some times more than $125
“f@ck the cup, just pour it in my hand for a dime”.
Man, I loved “I’m gonna get you sucka” back in the day.
“Got change for a hundred?”
Two motels are currently under construction along the K-96 Bypass in east Wichita. This is a feeder highway normally used by commuters, not tourists. Work is proceeding very slowly on the one I drive by daily.
This one is especially confusing because the intersection is eastbound exit/westbound entrance only (westbound traffic can’t exit there). There are no markings yet so I don’t know what chain it is.
Dallas city government was being raked over the coals last year by the independent press (err, weekly rag) for pushing hard for buying a parking lot for 33M that the owner had valued at 7.5M for tax purposes, so they could build a new convention hotel on to save the city.
You can’t make this stuff up.
City of Phoenix… yes, THE CITY… just built a giant hotel in downtown Phoenix to provide rooms for the giant convention center. Because EVERYONE wants to have a convention in downtown Phoenix.
http://www.visitphoenix.com/phx2009/index.cfm?action=azrep0505
We got a Standard Suite at The Venetian in Vegas for $ 120.00 per night back in Oct.
This was a walk-up-to-the-Counter and ask them what their best rate is - deal.
On the down side - we had BEDBUGS & they only moved us to another suite
Didn’t “comp” us anything.
So much for the cheap room in Vegas….
We broke 842, not a good start. If we don’t turn around, the next target/support is probably around 815-818. Clearly, we are still under the downtrend line.
A number of bank stocks aren’t just testing their November lows this morning, they’re blowing right through them.
800 is nearest floor. The question is, will the PPT allow it to fall through… It would be nice to shake out some eternal optimists so we can get past this BS but you know how everyone “needs” to get out what they got in it.
Sarasota Herald-Tribune an absolute fountain of good news today. LOL.
One article about the 3-county area having 3,361 NODs in December, whereas all of 2008 had 22,729.
The other one is about the Chinese drywall affecting a local Lennar community and what is and what is not being done about it. One house had its evaporator coil (that’s the copper coil in the air handler, not the outside unit) replaced 3 times in a year. Usually it last the entire lifetime of the A/C system (12-15 years).
How many employees does one Steak House need? Or, what’s wrong with so-called employment in these here lands:
“ARG Enterprises Inc., which operates 69 Black Angus Steakhouse restaurants in seven states in the western U.S., filed for bankruptcy protection….Black Angus, which specializes in black angus steaks, prime rib and seafood, was founded in Seattle in 1964. It employs more than 3,600 people.”
what? that’s a little over 52 employees per location…
But it’s Black Angus, man, it’s Black Angus.
No more HELOC, hello bankruptcy court.
And what about Black Angus bubble?
From Wikipedia:
During the latter part of 2003 and the early part of 2004, the American fast food industry assisted in a public relations campaign to promote the supposedly superior quality of beef produced from Angus cattle (“Angus beef”). Burger King’s Angus Burger was the first such large scale product sold in the US and Canada.
Edward Bernays is laughin’ his @ss off in his grave…
Nice ref! The Century of the Self (and The Trap) is required viewing for all of my good friends.
MrBubble
What part of the cow is the angus?
Ha. Wife and I just went to a BA because of a great dinner-for-two coupon they had. Ordered the 12oz New York cut, medium, and it was pretty good. But our waitress sucked ass and got almost no tip at all.
Maybe had we not used the coupon, BA parent wouldn’t be filing BK?
Loved this Black Angus restaurant when I was growing up. They had a perfect leased spot right overlooking the downtown river at the water fall. Priceless view, and a (rotating?) stainless steel dance floor too.
Well, this prime restaurant real estate has spent the last many years vacant… because someone decided they wanted to build an off ramp through it. Maybe, that is. No restaurants, and no off ramps either yet.
Maybe the mayor of Spokane, WA, can get TARP leakage to finally build the off ramp.
Today my LL is sending an appraiser here. I doubt he is selling because he’s got the golden goose, but if his house is appraised lower, then why can’t my rent go down? What questions should I ask this lady so I don’t sound too nosey?
You should ask your LL what break she’ll give you to NOT tell the appraiser that you’re planning on moving out because the rent’s too high.
+1
Roger that! I’d just tell the appraiser anyway.
Your rent should be based on your LL’s actual costs and the rental market. Not the appraised value of the property.
Argueably, the appraised value for a rental SHOULD be based on the rental yield.
Isn’t rental property sold based on how much rent you can get? If LL’s raise rents all over america because the house went up 200K, then they should do the defenseless renters a favor and lower rents, especially los angeles, if values tumble.
But renters aren’t really defenseless. They can move or they can purchase housing. And a 1 yr lease rather than a 30 year mortgage means that the rental market should adjust to changes in supply/demand much more quickly than the purchase market does. All the condo conversions of the last few years led to a temporary removal of housing from the total supply while the conversion was done. (or at least attempted) But with all those and new construction comming into the current supply, rents will probably be DECREASING in most (or at least in bubble) markets for the next year or so.
And to expand on my other comments, NOBODY CARES what your landlords actual costs are. If you’re deciding whether to rent (or continue to rent) someplace you only care about what rents (or the purchase price) is of housing is elsewhere and the cost (both real and PITA) of moving.
Yup.
Ask if the landlord has indicated that this is an investment property.
I once did that - I rented a house that an out-of-state investor had just purchased from a relative and I moved in prior to him taking ownership. Within two weeks I knew it was a mistake, so when he called me to alert me the bank was showing up the next day I looked up his mortgage record. He indicated a primary residence.
Wooohooooo that was a fun ride. The poor apprasier didn’t know what to say when I said I wasn’t the owner of the property, I was just renting it for the next year.
A couple days later the cable company showed up and found a descrambler in the line that wasn’t mine. Woooohoooo that explained why the old owner really didn’t want me getting the cable installed for another week. That was that a fun ride too, the technician was cracking up at me until he realized only an idiot would call the cable company to install cable if they already had cable on the line.
So - what ask? Find out if the property is listed as a primary residence or not…
Thank you for the above input. The appraiser said she doesn’t look at comps and doesn’t know the LL. I should have asked her who hired her. She was a lovely person, really.
Doesn’t look at comps? WOW. Does she just use a rent multiplier less expenses? That seems a bit crazy and indefensible. Did she know this was 2009? Did she say how she valued the property? Most of all, did she say she previously worked at a) Lehman Bros or b) Long Term Capital. Thanks.
Fun times….
How long did the 350 billion in Tarp injections last ,three months at the most . Even the Cheer-leading Talking Heads are saying that maybe they should of just let the Banks fail and shore up the Strong Banks instead . I don’t know how many strong Banks the Powers had to work with at the time ,but from day one the Bail Outs were designed to absorb losses of the chosen Banks and Investments Firms ,IMHO . Shoring up FDIC would of been a better solution while they sold off the assets of these under
water Entities .
Bank of America is claiming they need more money and the sweet deal of buying Merrill Lynch wasn’t so sweet and the losses are mounting . I guess it is the responsibility of the Government to continue to pay for the losses on a merger .
It became a Mad Mad Mad World when bad fraudulent borrowers got
any loan amount they wanted and bad Banks and Investment firms get any loan or outright Bail-out they need to keep afloat ,never mind if Banks or Borrowers have a income or ability to pay .Can’t make bad loans good ,cant make losses into a profit .
I will shed no tears for the Bank of India, er, America.
Obama would spend bailout funds on housing crisis
By JIM KUHNHENN
Associated Press Writer
WASHINGTON (AP) — President-elect Barack Obama would spend the remaining $350 billion of a financial bailout fund on expanded lending and reduced foreclosures and would not use the money to help other industries, lawmakers said Wednesday after discussions with Obama emissaries
Is he willing to stiff Bank of America? (One can always hope
)
Wouldn’t this suggest that a plunge might be staged so as to show him who’s boss?
Wouldn’t this suggest that a plunge might be staged so as to show him who’s boss?
BINGO
Just put out the word that the banks will be selling, Hedge Funds amplify the move.
Oh, man, if he was willing to stiff BofA, I just might like the guy and would knock off my Soetero/Dunham schtick.
Although, I read a report this morning that he’s having a private meeting with John Roberts. Really inappropriate and probably kinda criminal, considering there are two cases on the docket challenging his credentials to be president.
O’bama’s probably checking out how soon various liberal justices are going to retire.
I think you mean conservative.
Doesn`t Bank of America own CountryWide? If he is expanding lending and reducing foreclosures he is not stiffing Bank of America.
No…no… he’s saying they aren’t giving any more to the auto makers, as Bush did with a portion of the first half of TARP. If we are to save the auto makers, it will have to be with other funds, not TARP funds.
This tells me they need every penny of the 2nd half of TARP just to get banks through the 1st quarter of 09.
Great!
I can’t wait to watch the new circus F up the RE industry even worse and drag a correction out far longer than need be. Remember the poor dimwitted girl in Fla. waiting fo B.O. to pay her mortgage and gas bills?
LMAO!
Peggy Joseph Lives!
I am ready for my share of the TARP. $100K ought to be enough for a downpayment on a San Diego starter home. We will provide the rest.
I personally don’t understand the political squabble, as there are unlimited untapped $100bns more where those monies came from.
24/7 Wall Street: Bank of America
January 15, 2009
Bank Of America (BAC) And The Incredible Disappearing TARP
EmpireCongress is fighting with both the administration that is leaving and the one that is coming about what should happen to the $350 billion left in the TARP. Most legislators do not seem to be happy about how Treasury Secretary Henry Paulson spent the first $350 billion. Too much of it got invested in banks and car companies. Not enough went to help mortgage holders.
Whether it is practical to help people with troubled home loans one-by-one may be beside the point. The fight over the TARP will be vicious. Saying that taxpayers will get their money back by saving the housing market probably creates good will politically.
The TARP may simply disappear before the debate about how it should be used is over. Bank of America (BAC) is negotiating with the government for billions and billions of dollars to close its acquisition of Merrill Lynch. That was not how it was supposed to work. BAC was supposed to have had the balance sheet to afford both Merrill and Countrywide.
Sitting on the government’s side of the table in the talks with Bank of America are officials from Treasury, the Fed, and the FDIC. The deposit insurance agency does not have the capital to bail out a lot of big banks. It has to worry about work-outs for smaller ones that are failing. The Fed is willing to lend big banks money for a short term. It is not likely to get into the business of trading cash for equity.
Motorolla laying off 4000. Delta Air laying off 2000. Google laying off recruiters and shutting 3 engineering facilities. Nissan going to 4-day a week operation at U.S. factories.
Heck, even my wife’s work (Banner Health, AZ’s largest hospital chain + smaller facilities in like 10 other states) did a 2% staff reduction yesterday, closing stuff like the poison control hotline, community outreach, and other non-revenue generating “nice to haves”.
No wage deflation there….
PPI off sharply with more to come. Core PPI held up only by auto parts as lower volume pushes up per-unit cost.
Closing the poison control center hotline!? Now who will we call when congress jams another bailout package down our throats??
Now that the vomit inducing trend of realtwhores telling prospective buyers to “bid” on a house is nothing but a memory, shouldn’t we expect sellers to bid on prospective buyers now the collapse is in full swing?
That would be an interesting approach for a craigslist ad:
“Serious Buyer! $100k+ cash on hand for downpayment. Looking for house and acreage. Send best offer to…”
link
100K+ downpayment (The City)
“I’m tired of renting! I have $100k+ cash on hand for a downpayment. Looking for a SFH and a sunny backyard in which to grow vegetables. Fruit/nut tree(s) would be a huge plus. Please respond with your best offer.
Nice Bubbles!
Got a live one:
“Hello:
I may be able to help you if you are willing to work with a realtor and have not signed with one yet. I specialize in working with buyers and have clients in SF. I can scour the market finding homes on the market, homes that are for sale by owner and homes that are not on the market but have owners who are thinking about selling. If you are interested, please contact me to set up an appointment. I will be in the city on Sunday morning to write an offer for a client so I can meet you then. Thanks.”
lol
Maybe we should develop a collaberative HBB response. I’ll start.
…and have not signed with one yet.
Signed for what? You work for the seller and have a fiduciary responsibility to them. Why would I sign anything with you?
Is there something about my ad that was unclear? If you have something to sell that fits the bill let me know and we can talk. If not, take a hike.
Realtard: “homes that are not on the market but have owners who are thinking about selling.”
Mr. Bubbles response: Did you really mean to say, owners who are willing to sell so long as I agree to fund their retirement? Guess again.
lmao. Nice indeed! Is that you who did that fine piece of work?
This is a great approach. I’m not a regular user of Craigslist - how do prospective sellers find an ad like this?
I LIKE that idea. Instead if realtwhores listing houses, they could now list buyers and wait for prospective sellers to invite them to see their houses. Here’s a sample listing:
“Well-Heeled, corporate executive looking for a 4-BR, 2-1/2 Ba Colonial in perfect condition on a quiet lane. Buying price: $10,000.00.
Buyer’s Features:
- 20% downpayment on hand
- 720 credit score
- Does not need to sell existing home
Don’t miss this chance! Sell before prices go down even further!
Retiree looking for waterfront home. Ready to buy and has 800+ credit score, up to $200K for down payment, and no current house to sell. Prospective sellers have until February 15th to submit a proposal, which must include photos of the home, a plat map, property tax information, HOA documents, and their best and final offer. Be sure to list all additional non-cash incentives, such as furnishings, boat, automobile, payment of all closing costs, etc.
The buyer reserves the right to reject all offers.
“Sell before prices go down even further!”
I think we’re a long way from the REIC and their minions lining up with that way of thinking but I do believe it will happen through deep price cutting or a 15 year duration of slow, sinking prices.
I am sure it won’t be long before a retard at central planning will want to do this on our side of the pond!
Taxpayers will fund loans for car buyers
Finance linked to motor industry has dried up…
Customers buying new cars will get loans from the taxpayer under a controversial plan to rescue the beleaguered motor industry.
Finance companies linked to the auto industry could be given access to the Bank of England’s multibillion-pound special liquidity scheme so that they can offer credit to buyers, The Times has learnt.
In a typical year motorists borrow almost £20 billion, helping to fund about half of all new car purchases, more than 1.2 million vehicles. However, credit arrangements offered by car companies and garages have dried up in the credit crunch. Unsold cars are piling up at factories and on garage forecourts and nearly all manufacturers extended Christmas shutdowns to around a month. Honda will shut down again for two months from February.
Car sales in November were down 36.8 per cent on the previous year – 100,333 compared with 158,735 for the month in 2007.
Related Links
Gordon Brown and Lord Mandelson, the Business Secretary, want the Bank of England to make millions of pounds available to consumers to replace their existing cars.
isn’t this the same that the FED is doing through GMAC??
It is breathtaking to see so many (the entire world over) put so much stock/faith in the omnipotence of their governments. Readily selling the remainders of their freedom rather than seriously challenging the hyper-consumer economy.
Imagine what happens when that illusion gets shattered?
Pops always said: “everything the government touches, turns to sh*t”
“”put so much stock/faith in the omnipotence of their governments.”"
Didn’t used to be so. At least for our ancestors. I wonder if we are even the same poeple?
“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master. ”
- G Washington
When the government comes to collect our taxes, we hate government. When we’re in need or about to lose our jobs, we screem, government has to do something!!!
Well, doing something costs money!
Bahh!!! Who needs those factoids Darrell.
Mr. Madoff is not a popular man in New York right now, but one might say that the New York Post front page encouraging him to kill himself is slightly over the top.
isn’t that too easy a solution (think Ken Lay)? And does this proposal come from Madoff investors?? It all sounds very suspicious to me …
Love it!
Jump, Jump!
I feel some Kriss Kross coming over.
Jump, Jump!
Faster:
http://www.youtube.com/watch?v=5J5titd0Kbw
maybe Madoff can hire some of his Hollywood clientele to film (animate) and broadcast the jump in Panavision, so everyone will believe he is really dead after the episode
He should be safe for a while, since only he knows where the remaining assets are hidden away. He will have to fork over that knowledge as part of a plea-bargain agreement, after which he probably is toast.
Flack jackets like that are only proof against pistol cartridges, not against most centerfire rifle cartridges.
If Madoff is dead he can’t spill any beans.
I was wondering if madoff has a little black (no it would have to be a big black) deal book. I betcha a lotta of people ain’t getting no sleep as long as madoff is still breathing air.
I don’t know how Madoff’s still alive, I really don’t. I mean, if I were one of those who lost freakin’ BILLIONS, heck, if I were one of those who lost a few mere piddly millions even, I’d be studyin’ blueprints and polishing my bullets. I mean, come ON.
So this is an indication to me that most people have insufficient initiative and/or planning skills. I feel disappointed, frankly.
I can’t understand why the Wall Street types have their panties in a knot over Madoff…….compared to the amount of money that the main Wall Street players have burned (and continue to burn) through, $50 billion is chicken feed.
Wall Street screws J6P/Main Street = No problem
Wall Street (Madoff) screws Wall Street = Crime against Humanity
Losing some govt pension is one thing, but when it’s MY MONEY…that’s a whole ‘notha ball game.
I’m not sure how I would respond to that. Certainly there are those who WOULD respond in such a manner and it’s hard to imagine that none of them had their money with this guy.
I think they are going after the feeders first, (those who they knew and sold them out to Madoff).
http://nymag.com/daily/intel/2009/01/the_strange_story_of_sonja_koh.html
Olygal, your post might explain why the guy is still at home instead of in jail… someone is hoping the court system may yet be saved the trouble!
“I don’t know how Madoff’s still alive, I really don’t. I mean, if I were one of those who lost freakin’ BILLIONS, heck, if I were one of those who lost a few mere piddly millions even, I’d be studyin’ blueprints and polishing my bullets. I mean, come ON.”
Were we separated at birth, Olygal?
Possibly. My origins is kinda cloudy….so, do you live in Tumwater, or not?
There has never been a better time to take a 30-yr mortgage.
BULLETIN
BENCHMARK 30-YEAR MORTGAGE RATE FALLS BELOW 5% FOR FIRST TIME EVER
MORTGAGES
30-year mortgage under 5%
Weak economy keeps pushing interest rates lower
By Steve Kerch, MarketWatch
Last update: 11:00 a.m. EST Jan. 15, 2009
CHICAGO (MarketWatch) — The benchmark 30-year mortgage fell below 5% for the first time ever in Freddie Mac’s weekly rate survey as economic weakness continued to push interest rates lower, the mortgage agency said Thursday.
The national average rate on the 30-year loan fell to 4.96% in the week ending Jan. 15, down from 5.01% a week ago. That is the lowest on record. Freddie Mac began its rate survey in 1971. A year ago the loan averaged 5.69%.
Step right up, suckers! Buy that house with this cheapo mortgage. Then in seven years when you need to move and mortgage rates have doubled, just walk away from that house that’s worth about half what you paid for it.
The real long-term damage of the bubble.
Yesterday in a debate on AZ Republic website, one of the bubble-believers from 3 years ago is being attacked as an idiot by the Realtors… Par for the course there.
He then points out that he pocketed $500K in gains from 2002-2005 when he sold out in early 2006. How stupid is he compared to the idiots arguing with him that rode the crash down?
Once upon a time, we’d tell our kids, “Study hard, go to college, get a good job, work hard, and you can have a good life”. Oh, really?
Not for the last 2 deades. Be a scam artist, work the angles, walk the thin line of legalality, work CLEARLY on the wrong side of the morality line, do not care who you hurt as long as they can’t send you to jail for it, and you will come out WAY ahead. Do the “right thing”, and you get to pick up the tab.
Moral hazard in a nut shell.
Why should I bust my hump, to pay 40% of any raise to the government, just so the money can be used to fund the lifestyle of idiots that have destroyed our country’s economy.
Argg… As I said. Bad day.
(Why should I bust my hump, to pay 40% of any raise to the government, just so the money can be used to fund the lifestyle of idiots that have destroyed our country’s economy?)
Because if you were in NYC your marginal tax rate would be significantly higher, with the added funds transferred to a whole different group of idiots?
(Why should I bust my hump, to pay 40% of any raise to the government, just so the money can be used to fund the lifestyle of idiots that have destroyed our country’s economy?
——————————————————————
that’s simple. obama said he was going to spread the wealth. You gotta take the man serious until he proves otherwise.
‘Why should I bust my hump, to pay 40% of any raise to the government, just so the money can be used to fund the lifestyle of idiots that have destroyed our country’s economy.’
Well, possibly a positive outcome of this whole mess going BOOM is that the coming generations will take a good hard look at the nonsense their elders and stupiders taught them.
I mean that whole ’sitting on the porch whittling bunnies whilst dispensing gems of wisdom’ thingie. Not that that’s the present habit–the present custom is ’sitting in the spa getting Botox and planning the cruise’ thingie, or it was until lately, but you know what I mean. I mean, yes, Darrell, I don’t know too many younger folks who had the money/resources and the time to indulge in the fu*ckery that has brought us to this point. Too busy just trying to get by, basically. Ahhhh….this is too long a subject to really condense. Besides, I have to pretend to be working this morning.
What I hope is, maybe—given no other alternative, because the fun and the pretend has allllll run out—we can learn to dump the wildly consumerist lifestyle and the incessant posturing that goes along with having too much money(debt) on our hands. And just, you know—be folks. Make stuff, enjoy our lives, stop this incessant running running running after ’stuff’.
Is what I hope.
This post needs more Utarr and frogs.
Well, I don’t know about Utarr being so beneficial, but EVERYTHING goes better with frogs.
Wait…wait….I feel a ‘frog catching and caressing’ episode coming on…
Oh, wait, no I don’t. Dangit. They’s all hiding in the mud. Sigh.
I guess I’ll have to bust out the plastic frogs from the DollarTree, see what I can do with them.
‘I guess I’ll have to bust out the plastic frogs from the DollarTree, see what I can do with them.’
Not licking them, for one thing. For one, they’s from the DollarTree and therefore from China, and I don’t want to injest a bunch of poisonous substances painted on them by an 8-year old Asian kid with TB. For another, plastic frogs lack the cool and delicious wiggly slickeriness that your real frog has in such delightful abundance. *disapproving sniff *
Plastic frogs don’t taste as good fried. And I have never heard of an attack by savage plastic frogs!
I think I’d prefer playing with the plastic ones, in spite of the chemical contamination. One of my first childhood traumas involved coming across two large toads in the stream out back of my parents house, mid… coitus. It took a bit of prying before I realized what was going on. Ewwwwww!
One a related note.. prying two humping frogs apart is almost as difficult as re-inflating the housing bubble.
‘One of my first childhood traumas involved coming across two large toads in the stream out back of my parents house, mid… coitus. It took a bit of prying before I realized what was going on. Ewwwwww!’
Why are you so critical of Happy Toad activities? People are wayyyy funnier-looking when they do it in a stream. See, I would understand THAT sort of trauma and youthful alarm on your part.
In fact, one of the first childhood traumas of the many frogs that live in the wetlands around Chez Olympiagal’s is probably them coming across two semi-bald pink evolved monkeys in the stream…
Anyway.
And I just thought of this: Maybe those traumatizing toads were simply giving each other piggy-back rides. And then here you come and you barged in and interrupted their innocent pleasure.
I think you just gave me a new band name. Tadpole Trauma. It has a certain ring to it.
And you know, I didn’t think I’d be reading up on the reproduction habits of frogs today on wikipedia, yet here I am. A few amplexus and nuptial pad clicks later and I bet I’m this blogs foremost expert on doing it.. “froggy style”.
LOL… And maybe those two semi-bald pink evolved monkeys were just giving each other piggy-back rides as well… Naked piggy-back rides, of course.
‘LOL… And maybe those two semi-bald pink evolved monkeys were just giving each other piggy-back rides as well…’
Well, of course. Such was my inference.
Oh, Bink, I forgot to ask; what were the other formative traumas of your early life? You can learn a lot from what people think is traumatic. Also, you can laugh a lot too, which is my interest here, I must admit. Judging from the toad thing, I want to hear more…
Hahahahah! (That’s pre-emptive laughing.)
How about if you give a trauma, and then I give a trauma, and then someone else dishes up a trauma!
‘I think you just gave me a new band name. Tadpole Trauma. It has a certain ring to it.’
A great ring!
Awesome! I often come up with band names, myself! We’s like twins!
Speaking for me, I always charge a beer per name, is my general rule. I learned that back in college, when called upon to come up with a title for some dumb-a*ss smeary piece of artwork that the smearer/artist was helpless to address. I would put on my smart face and stare at it for a bit and say boldly, ‘This is clearly: ‘Abstemious Monk #3′, etc etc, or some such nonsense…ah, those were the days, it really brings me back…
Hey, look. A beer is a beer. And anyway, all my titles always made sense. As do my band names.
But yeah, ‘Tadpole Trauma’ is a good name! Sort of amphibious, full of secret pain, but also a bouncy kind of
vigor.
‘…and I bet I’m this blogs foremost expert on doing it.. “froggy style”.
I bet you’re not.
‘…clic*ks later and I bet I’m this blogs foremost expert on do*ing it.. “frog*gy style”.
Jeeze, my post won’t appear, and all I said was…’I bet you’re not.’
Hahahaha!
But I like your nu* ptial pad reference, bink. It sounds so…so…bridal, somehow.
Your dollar is your vote, spend accordingly.
Y’know Ayn Rand gets a bad rap and deservedly so at times. But this quote is spot on.
“Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.”
If she were alive today I figure she would look at the shenanigans on Wall Street, and our banking system in extension, not as a free market but nothing more than looting.
I just sent that quote to my twit of a Congresswoman.
Plunging endowments causing layoffs:
It’s being reported here that Chicago’s Lincoln Park Zoo saw it’s endowment fell 22%, while the Field Museum’s plunged 30%. In both cases layoffs and paycuts will follow.
Sun Times 1/15/09
“Chicago’s Lincoln Park Zoo saw it’s endowment fell 22%”
Take the train on up to the zoo
Don’t look back on what you’ve been through
Cause everyone’s got a Monday
It looks like $hit and must be America
It burns so quick, and it must be America
Plunging endowments are a major issue right now at most universities, museums and non-profits. A few weeks ago, I noted that the endowment at my alma mater lost 20% of its value just between June and October this year.
Did you see anything about the Chicago History Museum or Art Institute of Chiacgo? Both have hiring freezes, but I haven’t heard anything specific about their endowments or assets.
Hmm, maybe uni’s will be killing less trees next year on recruiting…
(One of the many things they waste far too much money on… do they do that in Europe? From what I saw of those institutions on the outside, it really didn’t seem likely.)
I’d be more interested in this topic if each endowment disclosed the amount of the endowment and the amount of the loss. IIRC, Harvard’s was more than $34,000,000,000 on 1/1/08, an increase of approx. 20% over the prior year:
http://www.boston.com/news/local/articles/2008/01/24/harvards_endowment_surpasses_34_billion/
Enrollment is right at 20,000:
http://www.nndb.com/edu/473/000068269/
So the endowment is, or was, right at $1,700,000 per student.
Is that money feeding the poor? Don’t think so. Does any college need a piggybank of $1.7M 2008 dollars per student? If yes, why? Do I feel sorry for these outrageously large endowments giving back the gains they’ve reaped in recent years? Nope, not me. Smaller funds, sure, but $34B is obscene money. Reminds me of Leona Helmsley, though if pressed I could not explain exactly why.
Get a load of this scam
littlerock dot craigslist dot org/reb/993125350.html
Its an “auction” where you come check out the house for a couple days, then they start a “round robin” over-the-phone auction where they call everyone who is still “in it” and tell them what the current bid is and ask whether you want to increase the bid to stay in the game.
Anyone ever heard of one of these?
Link didn’t work.
HSBC, UBS May Be Liable on Madoff as Fund Custodians (Update4)
Jan. 15 (Bloomberg) — HSBC Holdings Plc and UBS AG may be liable for as much as $3.2 billion of losses linked to Bernard Madoff in a dispute over the duties of financial custodians at funds in Luxembourg and Ireland.
At stake is the image of the European fund industry, French Finance Minister Christine Lagarde wrote in a Jan. 12 letter to the European Commission and Luxembourg Prime Minister Jean-Claude Juncker. European funds’ assets increased 59 percent to 6.8 trillion euros ($9 trillion) over the past six years, partly because rules protecting investors made them attractive.
“If they aren’t required to pay the money, then investor protection doesn’t mean anything and people might as well just invest in offshore funds,” said Isabelle Wekstein-Steg, a lawyer at Wan Avocats in Paris who is representing 10 French retail investors and two institutions that face Madoff-related losses at Luxembourg funds. “UBS didn’t do its job of knowing at all times where the assets were, and the same with HSBC.”
Custodians are charged with oversight of funds, and they manage cash inflows and payments to investors. Those looking to recoup money would have to prove the banks failed to fulfill their duties, according to nine lawyers surveyed by Bloomberg News. HSBC has said it isn’t liable and UBS declined to comment on the issue.
HSBC and UBS’s custodian roles for the Luxembourg funds are limited because they were set up by investors specifically looking to place money with Madoff, said Paul Mousel, co-head of the financial services practice at law firm Arendt & Medernach in Luxembourg. He’s representing both banks.
‘Very Small Role’
“The arrangements that were put in place from the beginning are arrangements that gave to the custodian a very, very, very small role to play, especially regarding the safekeeping of the securities, which allegedly would have been purchased by the investors’ moneys,” Mousel said.
Wekstein-Steg sent a letter on Jan. 9 to Luxembourg’s financial regulator on behalf of her clients requesting that custodians reimburse their investments.
It’s impossible to say whether the custodian has any exposure without seeing the contracts of each fund, according to Julian Randall, a lawyer at Barlow Lyde & Gilbert LLP in London.
“What is clear is that there is unlikely to be any point to suing Madoff himself, and those who have lost money will be looking very hard at anyone, like HSBC, who was close to the action and also has assets,” he said.
I love acronyms.
I refer to the Euro Trash as Club Med, but I like the way the British refer to them as PIGS
Portugal, Italy, Greece and Spain - I guess the F is silent. lol
This is awwsummmmmmmmmmmm…
Congress Debates Adding Elaborate Dance To Obama’s Inauguration Ceremony
“This change must be marked with an appropriate dance….
Spicy Latin Tangos and urban hip hop beats..”
http://www.theonion.com/content/video/congress_debates_adding_elaborate
On that subject, I have been “disinvited” to a party thrown for Inaugural Night because of my “inappropriate” comments about the Messiah™.
Think I should crash it in full hip-hop bling?!? That would totally rock the joint.
Don’t leave us hanging…..what kind of “inappropriate” comments???
Oh, it would be less than nothing on this blog. We are much more advanced in the insult phase.
Just something about “the bee-yatch be retractin’” all the campaign promises, and about the believers: “what fools these mortals be”.
I have been “disinvited”
People do that? Just b/c you don’t like the dude? Jeez…don’t they have manners up your way?
I’m honestly a little shocked that you would be literally disinvited. I could understand if someone just chose not to invite you but once the invitation is sent I think it takes an awful lot to legitimately disinvite, in polite society anyway.
Well, not literally but you know how hints are dropped?
I suppose I disinvited myself. I might be a downer for them.
Ah…I’m a very literal person, sorry. I hardly ever get sarcasm unless it’s pretty obvious.
In that case I vote for crashing the party to help represent the “big tent” inclusiveness of the Osavior.
Get into some Carharts overalls and play Farmer Faster with a can of Miller Lite. They wouldn’t know what to make of you!
I think going black-face would be appropriate.
And in chains.
Lionel? Lionel Joseph? Is that you?
Just when I was about to think Obama was going to be a uniter and not a divider. I mean his supporters say that he will listen to all sides right? *snort*
So funny that Democrats are hornswaggled just as easily as Republicans.
“Tell me what I want to hear”, chant the mindless drones.
VTDan - Thanks for responding to my post yesterday and giving some background. I didn’t see the response until this morning, but it’s always good to be able to put people’s posts into perspective.
Just one more plus to lower oil prices, little turd dictators like this get the tables turned!
CARACAS: President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.
Until recently, Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.
But faced with the plunge in prices and a decline in domestic production, senior officials here have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.
Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.
But the shift also shows how the global financial crisis is hampering Chávez’s ideological agenda and demanding his pragmatic side. At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.
Maybe the two moonbats can throw him a lifeline too?
this could be good news, just like the fact that Europe is now forced to work together with Russia for its energy needs, instead of just attack (like through the Georgian dictator) and insult the country on a daily basis. Make trade, not war.
Story today about how morgan stanly.. or some other broker… is trying to hire a taker to use to store its oil. They bought futures way back inthe summer for $140, and don’t want to sell into the market now. They want to store it for 3-6 months and sell futures against it for delivery then.
Refineries are running at 85% capacity, and still gasoline inventory is building up.
There is a SERIOUS oil glut right now.
Never before have so many people made as much by being long oil as was made in the last month.
I would like to get a tanker or 2 also - there are none available. Annual profit being long oil in today’s market 400%.
Because today’s price is so low, but out month future contracts are still high? Buy today, then sell a future? Hold the physical oil until the future matures?
If everyone is buying liquid today and selling futures, then was has the yield not flattened? Just the producers selling fewer futures on plans to cut production?
Correction: then why is the yield not flattening…
Because the longer term investors and hedgers are willing to buy securities like USO as a hedge against inflation. USO buys far out futures.
There are more futures traded than oil in existence below ground.
I know we disagree about inflation vs disinflation. Money doesn’t talk, money screams.
I think the contract rolls over very soon and the spread, month to month is like $7-8 so the really low price on this month’s futures goes away very soon and back up the $7-8. Still very low, just not quite as low
I wish I knew enough about this conversation to profit from it. But I don’t - not even close. My simpleton logic would assume just two things - first, that eventually the sort of storing oil on ships become significantly uneconomical and second, that in any cartel, members will cheat to benefit themselves, meaning cutbacks aren’t sustainable for very long no matter what the heavy hitters do. I’m sure there is more to it than that, and that introspection is what keeps me away from the gamble.
Wouldn’t this fall under the category:
“Fool me once shame on you fool me twice shame on me”
or
“Nationalize me once shame on you, nationalize me twice shame on me”
Fool me once…
“Fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”
One of my favorite quotes of all time!
A note to RealTards(We know you’re reading)
If there are so many “bargains” out there as you all seem to parrot, why does the pool of buyers continue to shrink? Seek an answer to that question before you blabber on about bargains.
GWB only has a few days left in which to declare martial law. Some of the posters here must be getting nervous. What will be the likely effect of martial law on CD rates?
WB only has a few days left in which to…….
Ask Osamba to do a quick terrorist attack in Wash DC…so we can forget about the Ohbahma quip “we have one president at a time!”
‘GWB only has a few days left in which to declare martial law.’
Naw. He done shot his wad. It’s a tired old wad. How’s he going to gussy up some excitement in such a short time, and to what effect?
Good-bye, crazy jug-head man, good-bye…
Welcome jug-eared boy?
Big bounce. She could be turning.
Resistance right under the 842 line.
Breaking resistance. Could even break downtrend line. STIMULATING.
Very interesting technical day. Good day for those saying we are banging along the bottom and have some good support in this range and are taking Armagedon off the table for Wall St. Let’s see if the bounce holds into the close….
We got right up on the downtrend line and pulled back. WOW!
What was the mover? $800 billion+ stimulus bill?
Is the PPT passe? (don’t know how to to the ending e-character thingy)
Jan. 15 (Bloomberg) — Freddie Mac continues to foreclose on homeowners and make plans to evict them, drawing fire from legal aid groups who say the moves violate the spirit of a moratorium the company agreed to in November.
While Freddie has suspended sales of foreclosed properties and isn’t locking people out of their homes, the mortgage- finance company continues to initiate court cases against homeowners and pursue existing cases, company spokesman Brad German said.
Freddie and Fannie Mae, the government-sponsored enterprises seized by regulators Sept. 6, agreed to suspend “foreclosure sales” and evictions through this month after regulators urged them to help struggling homeowners modify mortgages to reduce payments. Advocates for borrowers and tenants said Freddie, unlike Fannie, is sowing confusion because it hasn’t halted all legal action.
“The new filings send the message that Freddie Mac doesn’t want to work with them and causes immense fear, stress and instability,” said Amy Marx, a staff attorney with the New Haven Legal Assistance Association in Connecticut, who works to keep owners and renters in their homes. “People think they’re being evicted.”
McLean, Virginia-based Freddie and Washington-based Fannie announced the foreclosure and eviction moratorium on Nov. 20 for six weeks and later extended it through this month.
Freddie “has ordered its national network of mortgage servicers and foreclosure attorneys to suspend all foreclosure sales and evictions,” the company said in its November statement.
“The actual sale, the actual eviction has stopped, but the process continues,” German, the Freddie spokesman, said yesterday. “The moratorium does not affect the normal process of legal filings. But no one is being evicted, the homes are not being sold,” he said.
At Risk of Failing
Fannie and Freddie, which own or guarantee almost half of the $12 trillion U.S. home-loan market, were taken over when regulators found the two were at risk of failing after posting record losses in the worst housing decline since the Great Depression. The Treasury pumped $13.8 billion into Freddie in November to keep it solvent after the company posted a $25.3 billion loss for the third quarter. Fannie, which had a record $29 billion loss, said it may need Treasury aid after it reports fourth-quarter results next month.
Fannie had an inventory of almost 70,000 foreclosed properties at the end of the third quarter, while Freddie held about 30,000.
Fannie and Freddie are offering residents facing eviction “cash for keys” to vacate foreclosed properties, and Freddie has said it is working on a new tenant policy that it expects to have ready before the end of this month.
‘People Feel Powerless’
“The tenants, meanwhile, still have to defend these cases,” said Stephanie D’Ambrose, an attorney for Greater Hartford Legal Aid in Connecticut, a non-profit group that provides free legal advice for the poor. “People feel very powerless. A lot of people will move out or take cash for keys without knowing that come February 1 they will have an opportunity to get a lease.”
By contrast, Fannie has worked to halt court proceedings and notify borrowers and tenants that they may be eligible to stay in their homes if they agree to sign a new monthly lease at market rates, according to Marx and D’Ambrose.
When cases have fallen through the cracks and court action continued, Fannie is “literally sending people out to knock on doors to make them aware of the policy and, when they’re not home, we leave flyers with information about their options,” said Fannie spokesman Brian Faith.
– Editors: Larry Liebert, Joe Winski
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.
Last Updated: January 15, 2009 00:01 EST
From “home-owner” to “tenant.”
Tradgedy in the Hamptons: Shaky start to rental market for 2009
http://www.27east.com/story_detail.cfm?id=189503
“This year there is not the immediacy.” [sic]
This blogger, rather breathless, asks, “Immediacy of what?” This Southampton Press article is worth reading if only to remind yourself of what the term “foppish” was meant to convey.
Pls. forgive the unintended pretense - “blogger” should have been “poster.”
Does anyone know the legality of Wells Fargo suddenly enacting a “rate floor” on my heloc? It’s always been tied to prime so it was getting lower with each cut until before the last one, they sent me some “addendums” stating that it would NEVER go below 4.24%. So they get the FED discount and keep the extra instead of passing it onto customers. How is this legal? I really loathe banks, especially WF.
Then pay off the HELOC so they (and you) get 0%.
Shouldn’t the “addendum” (e.g. change of terms) have had an opt-out clause, similar to the ones for credit-cards? In other words, you should be able to reject the change, in which case they would close your heloc line and you would get to pay it of under the old terms…
Jan. 15 (Bloomberg) — An $825 billion economic-stimulus measure drafted in the U.S. House of Representatives would provide $550 billion in new government spending along with $275 billion in tax cuts for families and businesses.
A summary of the proposal released today said it would provide about $90 billion in infrastructure spending, $87 billion in aid to states struggling with surging Medicaid costs and $43 billion in unemployment and job training programs, including a $25 per week increase in jobless benefits.
Other provisions would provide $20 billion for federal nutrition assistance, $15.6 billion to Pell Grants, which help low-income families send their children to college, and $6 billion to expand broadband access in underserved areas.
“$6 billion to expand broadband access in underserved areas.”
We have nothing better to do with our time and money???
People in the sticks need porn too!
Man, you are just so wise all over the place today, Darrell. Serious. You are clearly having a genious day. I get those too, sometimes, and it’s always fun. For me, anyhow. For everyone else, I guess that kinda depends. (That means: ‘No’.)
Anyway, yeah! Give us more thoughts!
They need to spend $20 B to tell people that Mountain Dew and “hot stuff” potato chips aren’t nutritious?
Ahansen, very nice article in People magazine about your experience. You look very good considering your injuries. I’m happy that you are doing well. Yes, the dogs are big.
Why hasn’t this been posted yet? It was in today’s paper:
I don’t like this Reuters article because it doesn’t mention that $4500 is for the newest cars, which are probably worth more than this in street value, but it would be $3000 and then $2000 for the oldest cars, some of which are surely worth less than that.
I called Bill Nelson. The young man at his office was very rude to me–never got that from a congressional staffer before. I tried to explain that this program would raise the price of cars should I want to purchase a used car, and it’s just a backdoor bailout of GM, when if they really want this stuff off the road they should just cancel that tax break so doctors who own their own practices can buy hummers for free.
I then called Rep. Corrine Brown and told that staffer that if they have $1B to burn, which they don’t, they should spend it on rail projects and let the car market take care of itself. The big three need to respond to the market, not get price supports to keep doing the wrong thing.
Gee, what’s more ecologically responsible?
a. obtaining maximum use from existing automobiles
b. creating artificial demand for autos that might not even exist yet
They want us to picture a belching rusted ‘74 Regal - but most of the “clunkers” around here are early 90s vintage Japanese sedans.
Politicians haven’t got a clue, I hope all those looking to Washington for all the answers keeps that in mind when going on your “libertarian” name calling witch hunts. BTW, this “libertarian” supports rail infrastructure expansion and improvement.
I tried to explain that this program would raise the price of cars should I want to purchase a used car, and it’s just a backdoor bailout of GM,
————————————————————————–
the pols get $$$$ kickback from GM. The pols, they could care less about you and me.
I’m plenty old. Old enough to remember (as a driver) when a lot of cars on the road belched smoke (pollutants) because their engines’ rings were shot - their owners had to add a quart of oil every 50-100 miles. But that was when basic tires were guaranteed for 10,000 miles, you needed an oil change every 1,500 miles and it was more common than not to see reprocessed oil in glass bottles with chrome screw-on pourers on the curb at the gas station, as a cheap alternative to fresh oil.
Today, I drive much more than then yet I don’t see one car in five hundred belching smoke. While I base this reply solely on the post above, if it is correct and comprehensive I don’t see anything close to fair value for the robbed (us) relative to the benefit from this expunging of relatively few really-bad still-running cars from our roads.
Per CNBC BofA’s gov’t. guarantee in the $100 billion to $200 billion range.
My stimulous is bigger than your bailout…
Economic Stimulus
$825 billion price tag
Democrats unveil a massive stimulus plan loaded with federal spending and tax cuts — likely to face Republican opposition.
By Robert Schroeder, MarketWatch
Last update: 12:11 p.m. EST Jan. 15, 2009
WASHINGTON (MarketWatch) — House Democrats, with the blessing of President-elect Barack Obama, are preparing a massive $825 billion economic stimulus bill loaded with federal spending and tax cuts, a more expensive package than initially estimated that is likely to face Republican criticism.
How many politicians were raised in households where problems were solved by throwing money at them?
The maid’s kid looks a little too much like daddy? $$$$$$
Lil’ Tiger was too frisky with his prom date? $$$$$$$
Lil’ Princess blew over .08? $$$$$$
Mommie needs some spa time at Betty Ford? $$$$$$
Money for schools (teachers unions), rapid transit and alternative energy (environmantalists), first time home buyers (NAR), tax credits vs. cuts (low income), healthcare for poor (low income), $30 billion for highway construction (unions)…
Glad to see this is a non-partisan bill that doesn’t pander to the Democratic base.
anything said about money for fraud, kickbacks, embezzlement, theft, or graft… you know, whats in it for the grifters, the carney men, the snake-oil salesmen?
825B is just another down payment.
I think they’re keeping that in a separte pot of money called TARP.
FYI U.S. Airways flight down in the Hudson river - flight bound for Charlotte out of NYC. 146 passengers on board plus 5 crew. No report on their condition. Plane appeared to “land” OK but in the river, and apparently is sinking.
Thoughts and prayers with them.
Seems like they’ve been rescuing passengers, so hopefully everyone’s already. Apparently the plane has sunk.
My worst nightmare.
I always feel so vunerable on an aircraft. Nowhere is the reality of my own mortality so apparent.
The most dangerous part of your trip is the drive to and from the airport. Don’t let the illusion of autonomy fool you.
Not sure this is so with U.S. Airways flights…
What is it? 2 years since anyone has died in a domestic flight? Comapre to 30K+ deaths in cars.
PB - tacky, but funny.
“What is it? 2 years since anyone has died in a domestic flight? Comapre to 30K+ deaths in cars.”
Calculate the death rate per trip (flight or car trip) to see what people are worried about. Trust me — there are many, many more car trips than domestic flights.
U.S. domestic car trips (2003): 1.14 bn
U.S. automotive accident deaths 42K (approximately)
“Emplanements” (January 1982 to March 2001) 8.109 bn
Fatalities = 2,301
Automotive death rate per 100K trips =
4.2/1.14 = 3.68 / 100K
Air travel rate per 100K trips =
0.2301 / 8.109 = 0.0284 / 100K
Thus you are about 130 times as likely to die each time you get into your car than when you set foot in a plane. FEEL BETTER NOW?
Really? Sorry to hear it.
I love the part when the wheels lift from the ground and you can feel the plane really take to the air. It’s climbing in the air! There’s nothing underneath it! Can you believe that?! I LOVE that part!
I usually turn my face away so that I won’t have to explain the emotion on my face to incidental watchers. Inside my head I am thinking, ‘Behold! Man! Verily, this is a f*ck*in’ MIRACLE! We can get in a big metal thingie and it flies in the air! This is Magic with a capital ‘M’! Lookit what us smart little monkeys can do!’
Is what I’m thinking.
Oly-
I am fortunate enough to still have a job fixing these things (the smaller, faster corporate ones like GS fixer-sorry for the news by the way-I’ll keep a eye open for ya, GS) and I get to fly test flights. Alot. The same thoughts go through my head every time and my body gets all tingly, heartbeat gets fast- I LOVE it. I get to do things like stalls where you get up to 51,000 feet and throttle back the engines until the thing literally falls out of the sky about a thousand feet or so and then the pilot eases the thing back into flight and you do it all over again! My job has saved me hundreds of dollars on amusement parks- what do they have to compare? They are truly one of the great miracles of mankind. To bad they try to turn them into airborne busses- its hard to appreciate flying when your knees are in your chin……..
SoCal - interesting post. Thanks.
Oh my Gawd, I love take off on an airplane. The closest I will get to feeling like I’m taking of for space.
I also love flying above the earth and watching the scenery pass underneath me.
Thank you, socaljettech.
One thing I love to hear in my head as my body orbits the rest of me, is enthusiasm. That’s what makes the spine stiff, and the head glad to be alive, don’t you think?
I’m going to go ahead and pray to the frogs that you live for forever, and that you always conquer G-forces, and that you never fall further than you want to. Well, okay, only a wee bit further. But you can yank yourself out.
*assumes devout righteous face as I begin to pray*
SoCalTech –
In your opinion, are there adequate safeguards to prevent airlines in financial difficulty from scrimping on preventive maintenance, or avoiding replacement of planes which are too decrepit to fly safely?
Kudos to the pilot and co-pilot… nerves of steel on them.
I hear everyone made it out. Minor injuries from the landing and some hypothermia, but everyone should survive.
Don’t’ look now, but black gold is about to drop through its recent debt cat bounce floor…Got deflation (cue up the Twilight Zone theme music: Do-DO-Do-do Do-DO-Do-do…)?
shorting the whale blubber was good at 135, shorting it at 36 aint my bag baby.
I’ll take my chances with the drillers….
“There are more futures traded than oil in existence below ground.”
And there was a lot more in notional value derivitives than underlying assets. A drop of oil can be used only once, but the drop can be sold and resold as a future an infinate number of times.
“I know we disagree about inflation vs disinflation. Money doesn’t talk, money screams.”
And how many times has Wall Street been wrong. I don’t think they get it. It is about wages.
Billionairs use money to swap futures contracts and derivitives, but they can’t possibly actually use all the oil they can trade. Main Street is where the oil actually gets used. And, that requires wages.
Inflation can’t take hold in a time wages are already more than 10% below recent demand, and are falling by the minute.
Most of the money thrown at the economy has been thrown at Wall Street to plug holes in the balance sheets. Great for stimulating futures tradea, but sorry, that doesn’t stimulate real demand…. and eventually that oil will have to be pulled out of the tankers and actually used.
The $800 billion stimulus over 2 years? Not even HALF what we were getting from debt based on rising home values.
ANY inflation that hits Main Street will immediatly result in plunging demand. Heck, taken another step. Without deflation hitting Main Street, we’re going to continue to see demand falling as wages fall and debt continues to be cut off.
In the end, Wall Street has to sell these commodities to someone on Main Street. Using trillions of dollars to ensure the billionaires stay billionaires will do ZIP, ZILCH, NADA to allow Main Street the ability to buy all the stuff Wall Street is going to want to sell us.
Darrell — really liked your ground-level perspective in this post. Every day that I can be online I get my financial bearings from Ben’s blog and proceed accordingly. My friends are amazed, but it’s all of you who provide the information, analysis and anecdotes that facilitate my decisions, ones that so far have panned out 100%.
“The $800 billion stimulus over 2 years? Not even HALF what we were getting from debt based on rising home values.”
Do you really think that is all there is? The Federal Reserve is buying everything. Agency debt to lower interest rates, FDIC notes from Goldman Sachs and Morgan Stanley to buy up toxic debt. As of today the Federal Reserve is guaranteeing 5.8T in new debt.
The federal reserve will not care if the debt guarantees go to $13T or 50T.
Piss and moan all you want but live with the crap that is handed to you. Anticipate the Federal Reserve to continue to add stimulus as needed. Mr. Martin Wolfe’s estimates on the total stimulus package are on the nature of 2.5T over the next 3 years. (FT) That is a reasonable beginning.
This will not be a one and done. Just like the $160B $300 check/mope was a one and done. Betting against the Fed has long proved to be a futile exercise. They tell you what they are going to do, they do it and everybody acts shocked.
Unemployment will go down in the US, I am sorry for that; but the dollars are in Asia and they will be spent.
Fault lines emerge at Fed
Bernanke, Philadelphia Fed’s Plosser differ publicly on new policy
In a speech on Tuesday, Philadelphia Fed Bank president Charles Plosser publicly took issue with positions advocated by Fed chief Ben Bernanke.
In a breathtaking innovation in monetary policy, the Bernanke Fed since the fall has not only expanded its balance sheet from $900 billion to well over $2 trillion in its efforts to restore the credit markets to health but has stopped offsetting the expanding bank reserves.
…
Plosser urged the Fed to “proceed with caution” with the new policy. Others outside the Fed are much more strident and want plans in place immediately to reverse it. They believe an inflation storm is already in train.
“It is a huge disagreement,” said Robert Brusca, chief economist at FAO Economics.
While the Fed chairman has made it a practice to run a more democratic central bank, the disagreements come at a crucial time when the Fed is striving to appear on top of the current financial market crisis and steep recession.
…
Underneath the surface is a real concern about how and when the Fed tries to exit from its new monetary policy.
Fed officials who pay attention to the money supply believe that the Fed’s current policy of printing money never ends well and the danger of inflation is very high. They believe the Fed must withdraw the stimulus before there is any sign of inflation or it is too late….”
http://www.marketwatch dot com/news/story/Fault-lines-emerge-Fed/story.aspx?guid={F11875CE-A72F-4DFE-86ED-07A420EBB1CF}
“…Others outside the Fed are much more strident and want plans in place immediately to reverse it. They believe an inflation storm is already in train….” Having had my say about this mess, I am a firm believer in the Inflation Train. The train is pulling away from the station slowly but surely.
http://www.azcentral.com/members/Blog/AZResidential/43585
You HAVE to read this!!!!
“I went over to the Convention Center this morning to listen in on the Urban Land Institute’s Real Estate Trends Conference, where most of the Valley’s big developers were scheduled to give their take on the market and where it isn’t going.
I was the only person on the massive escalator as I ascended to the third floor, where a handful of well-dressed, sullen-looking professionals with plastic badges pinned to their chests were milling around in the hallway.
For a moment I thought maybe I had gotten the wrong floor and was witnessing the aftermath of a poorly attended speed-dating conference.
But then I entered the half-empty conference room, where a panel of middle-aged white guys was blaming all its problems on the media, and I knew I was in the right place.”
That’s just scary clueless.
If a realator/developer/mortgage broker spontaneously combusts in an empty conference center. Does it make a sound??
From Yahoo News:
“The source said Bank of America has threatened to walk away from the Merrill deal if it did not receive more government aid. Bank of America has already received $25 billion of TARP money.”
I guess we better hand it over then.
when the taxpayers owe the banks a trillion dollars, the banks own the taxpayers. When the banks owe the taxpayers a trillion, the banks own the taxpayers.
anyway you wanna slice it, the banks own the taxpayers.
Now get out there and borrow before its too late.
Isn’t it like $3 trillion, if we consider the Fed an odd offshoot of the government?
“…has threatened to walk away…”
bankstortion
Extortion
From Wikipedia, the free encyclopedia
Extortion, outwresting, or exaction is a criminal offense, which occurs, when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense. … Exaction refers not only to extortion or the unlawful demanding and obtaining of something through force,[1] additionally, exact in its formal definition means the infliction of something such as pain and suffering or to make somebody endure something unpleasant.
BS on Yahoo news
The Fed has already said they are all in.
No reasonable follower of the Federal Reserve would expect to have a bank of any size fail. Citigroup is being dismantled and the Fed will assume ~400B in debt. Bank of America may be allowed to survive with $200B in government guarantees.
The free money is buying any large banks corporate debt. The government will bail them out. The equities are for chumps.
Why did the market rebound so strongly today? Did it bounce off some support level?
It went up today because a plane crashed in New York Harbor and everyone survived .Must be the reason ,or maybe because Congress approved another 350 billion Tarp money .
Yes, but, my guess is that it was the larger than expected stimulus with less going to tax cuts and more going to pet causes, like houses, energy, etc.
Then it is a false bounce. Like who didn’t know Congress wasn’t going to approve the additional TARP money or support a massive stimulus?
Why do all the experts assume that if we can just “fix” housing we can “fix” the economy? It seems housing is just the sympton of the disease. The disease being too much debt compared to incomes.
Someone tell me if I’m wrong but until, as a country, we realize we need to consume within our means to pay for everything, this thing is far from over and in fact, continuing to deny realty will only prolong the pain. We’ve borrowed from tomorrow to consume today, now we must pay the price. Ain’t no free lunch.
Well you’re only a little bit wrong.
See, if we go back to consuming within our means, that means we have to learn to consume on diminishing, not rising wages.
In a 74% consumer driven economy… well, you get the picture.
And here we are!
“…we have to learn to consume on diminishing, not rising [relative] wages.”
Great point, Eco — one that I’ve not seen addressed at all on any talking-head program to date. Unless there is a mind-boggling discovery that either ends all illness for cheap (good for now, maybe not for later) or reduces the cost of energy to squat, I agree that we are in for a sustained - beyond my lifetime - period of significantly reduced frivolous consumption at the least.
Getting back to the purpose of Ben’s blog, I wonder how long it will take for the masses to understand how much, and for how long, this will affect the pricing of shelter in the U.S.
I would not want to be short into tomorrows news…smells like panic in.
You don’t think the PTB will repeat the performance on the first half of TARP with an initial rejection by the house?
Big money was made by those in the know on both ends of that one…
intel said earnings should get better as inventories get used up
Bank bail out 2 approved
My guess market up big tomorrow ?
Good lord — how many more ways can the elite of the economics profession (Bernanke, Summers, etc) menace the populace with a series of economic hobgoblins?
I’m very tempted to call today as a double bottom on USO.
The trade is $13K into Jan ‘10 $60 calls, returns $250K when oil is back at $80. Inflation hedging at it’s finest?
http://news.yahoo.com/s/nm/20090116/bs_nm/us_usa_fed
“Janet Yellen, President of the San Francisco Fed, said the central bank would not let inflation fall below one percent, and that setting inflation targets would be “one way” to convey the Fed’s commitment to a turnaround.
“‘We need to make it clear that would be undesirable, unwelcome and we would fight it,’ Yellen told reporters after a speech to the Financial Women’s Association in San Francisco.”
OK - I’m game - why isn’t zero inflation a VERY tolerable outcome for a democratic republic? Please skip the assumption of negative inflation after yada-yada events, since that was not addressed in Yellen’s remarks. I’d like to get to the heart of why regular inflation of “any” percent is “good.”
Cuz you can’t cut your employees salaries - e.g. slower than inflation pay increases.
The government cannot pay its debt
It is not possible to stimulate demand.
And if you believe in the Philips curve, 0 inflation would be continuously falling employment.
Someone from on high agrees with many of the posters here (including me)
Financial Times
JPMorgan chief attacks mortgage plan
By Francesco Guerrera in New York
Published: January 15 2009 12:18 | Last updated: January 15 2009 23:44
Jamie Dimon, JPMorgan Chase’s chief executive, on Thursday attacked a proposed law to allow US judges to modify mortgages, saying it would have a “chilling effect” on consumer lending and lead to an increase in personal bankruptcies.
Mr Dimon’s criticism of the planned legislation, which has received the surprise backing of Citigroup, came as JPMorgan reported a slump in fourth-quarter earnings to $702m – 76 per cent below last year’s levels.
it’ll raise rates, and thats all it will do.
funny thing about higher rates. They are gonna put the floor in on housing prices….no other way to do it. case closed. Its counter-intuitive to koll-aid drinkers.
I thunk the Fedury was planning to keep rates low forever?
They are gonna put the floor in on housing prices….no other way to do it. case closed. Its counter-intuitive to koll-aid drinkers.
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Preach it!
The only way to solve the “crisis” is to raise interest rates and get housing prices down to where people can actually afford them…and have money left over to spend on more important things.
Housing is NOT the economy, but it certainly can pull money out of every other part of our economy (via high prices).
Low housing prices are a positive for the rest of the economy.