Bits Bucket For January 29, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
January 29, 2009
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Jack Welch on CNBC this morning…
If it weren’t so damaging, it would be funny witnissing the cognative dissonace of those with a “free market” dogma begging the government to save them…
Anyway, he’s flappin’ his pie whole trying to justify the hundreds of billions of dollars in bonuses to Wall Street playa’s. “You have to keep your talent, or they’ll just go somewhere else.”
This after he just had a long rant on how we have to use government money to buy up the toxic assets that this “tallent” generated.
How talented are they if they, through thier normal course of business, generate mass quantaties of toxic waste that will have to be dumped on the tax payer?
If we’re going to alter regulations to slow the rate of toxic waste generation, then the profits won’t be there to pay those bonuses… right?
Artificially inflating values generates lots of paper profits that are drained off as bonuses that give the playa’s income 100sx the typical household… Then when the bubble pops, you just dump it on the federal government’s balance sheet so those people with the low incomes can pay taxes to cover the interest on all that debt.
Good work if you can get it…. But I, as one of the little guys that pays 50% marginal rate on my income, am not interest in it continuing.
“You have to keep your talent, or they’ll just go somewhere else.”
Let them go start up some new companies to replace all the wrecks that Wall Street has created.
They are threatening to leave and go wreck someone elses economy and bottom line?
Maybe without so much bailout retention money sloshed their way, failed managers at U.S. firms would have the incentive to leave this country in shame and go help wreck rival countries’ economies.
Hey they could go work for Hamas!
“You have to keep your talent, or they’ll just go somewhere else.”
GO WHERE ?!? Your talent(ed) A$$clowns have NOWHERE ELSE to go to!
We have a surplus of unemployed used car salesmen, RE agents are returning to bar tending and McDonald’s have all the teenagers and seniors that they need
Please don’t insult bartenders!
And the question that I never see answer is, WHERE are they going to go? If you stop paying them crazy money, but all the other banks do as well (because they SUCK at their jobs, a good reason not to pay well) what are they going to do? Go out on strike? Work at MCD because they don’t like the 100K salaries and they want 1M dollars instead? Yeah, that will show us all, the masters of the universe working at MCD to spite us because they just can’t live on 100K a year.
It’s just total garbage. Sports players are in the same boat; if they aren’t paid they will go out on strike.. Good.. Go for it. You’re being paid 1000X what your worth doing ANY other job on God’s earth. If we pay you 500X instead you’re going to walk and take a position at 1/500th the salary? My a**.
They will take thier customers and go start their own firms.
And this is a bad thing? Who cares; if they think that they can do it, let them go for it.
What they do isn’t rocket science, it does not require a 200 IQ. There are 10s (100s) of thousands of people behind them in line who are just as qualified and, frankly, CAN’T do a worse job. Nearly every bank in the country was run into the ground over the last 5 years. And this is talent that must be retained? Do we live in bizzaro world here or what?
Oh, I agree.
It’s not hard to live on $100K per year. My Ex did it perfectly back when I was making $80K!
Disclaimer: Alimony ends in one year. Reverse anniversaries are great!
I always looked at it this way:
It will be easier for me to get used to bring home extra money every month, that it will be for her to fix the hole in her budget, when my money stops coming.
But…..now the kids live with me, so the shoe is on the other foot……..oh well.
Actually the threat is they would take control of their customers money elsewhere. Can’t have that.
They will take thier customers and go start their own firms.
Great then we have fewer too big to fail banks.
“WHERE are they going to go?”
We could use some good entrepreneurial talent to redesign the banking sector in a manner that is less likely to lead us back into the current morass over the next century. Why not give some of the guys not directly responsible for the mess at hand some startup capital and let them innovate a more successful business model than ‘too-big-to-fail’?
The way these firms work is they bring in young kids, give them contact lists, and say “go get some accounts”. If they get accounts, they get to keep their job. If not, they are gone.
Okay, but the accounts are then that person’s accounts. The loyalty is to the person, not the company. So, if the employee jumps ship, the account goes with them.
What the industry needs is an air-tight non-compete that prevents the employee from taking their accounts when they go… Too bad that would be nearly impossible to do.
These companies grow by brining in new traders that can bring their existing accounts with them. They wouldn’t sign the non-compete, because it takes their power to demand huge compensation.
That’s funny, because back in the 90s, my father stock-broker left Merrill-Lynch and got in legal hot-water because he took his client list with him.
Who still uses full service brokers any more??
I bet this whole internet thing will take of in a few years and people will be able to manage their own accounts online.
Nova:
I’ll bet he was paid a high SALARY and a low commission. Then the client lists usually remain with the company.
————————————–
That’s funny, because back in the 90s, my father stock-broker left Merrill-Lynch and got in legal hot-water because he took his client list with him.
Aren’t non-competes, well, anti-competitive?
Shouldn’t individuals and firms have to compete on their own merits?
Okay, but the accounts are then that person’s accounts. The loyalty is to the person, not the company. So, if the employee jumps ship, the account goes with them.
That’s funny, because back in the 90s, my father stock-broker left Merrill-Lynch and got in legal hot-water because he took his client list with him.
The proper way to leave a firm when you have this sort of account structure (the legal world is also like this) is to pleasantly announce to all your clients that you are leaving your current firm, thank them, and wish them the best. Leave it open-ended but make no hints and do not ask any client to come with you.
Your clients understand that you are going somewhere else, otherwise you would have said that you are retiring or going back to school or something like that. If they are happy and wish to move with you, they will ask where you are going and then make the move on their own.
Any suggestions or pushing in any way can and should get you in hot water.
“I bet this whole internet thing will take of in a few years and people will be able to manage their own accounts online.”
You’d think that would be happening already but I’m amazed how intimidated people are. Like the on my 401k committee at work. I thought they were pretty hip and found out they’re using AG Edwards or some other dopes. These are IT people who should be pretty adept at online accts.
P.S. I see no evidence the top economic leaders in this country get it, and every indication that policies designed to reward ‘too-big-to-fail’ firms and punish those which are not ‘too-big-to-fail’ have outlived the Bush administration and are going to be perpetuated by the experienced bailout experts who head up the President’s Working Group on Financial Markets (Summers, Geithner and Bernanke, to name three). Given the path we are on, it appears we can look forward to lots more bailout Kabuki dance shows over course of the next century, as current policy sets a rational expectations paradigm for the course of future financial crises.
I agree that nothing has changed.
More hundreds of billion to ensure the mega-rich remain mega-rich. Nothing to really fix the massive, crushing debt on the little guys.
When the krill die, the whales can’t last for long.
and of course, in Europe we have exactly the same crappy policies. More money for the banksters, so they can make an even bigger mess in the future. Of course, more money for banksters is more overpaid, useless jobs for (ex-)politicians and their friends. And we nee more money, lower rates and easier lending standards for homeowners, so they can go even deeper into debt and blackmail the taxpayers even more in the next round.
And we need easier regulations for the pension funds, because they can’t work with the current ones and want to continue the party for their union members for a few more years (buffers for all major Dutch pension funds are now far below the official treshhold, and most of them have stopped indexing pensions).
Clearly the idiots (economists, banksters, politicians etc.) who are running the system haven’t learned a thing yet. I’m afraid the only way out is a total system crash, in which case everybody looses. The only difference between US and Europe is that in Europe inflation is definitely winning, while in the US there seems to be a bit of deflation (although I don’t think it will last long).
Agree with you on the sports stars. When the baseball players went on strike in 1994-1995, nobody cared, and they only thing that kept baseball alive was a steriod syringe from a doctor’s office somewhere in St. Louis.
Football is still too popular on TV.
Was Barry Bonds in St. Louis in the ’90’s? -
Why is it that people are so offended by sports stars asking for a bigger share of the profits? It’s not like if the salarys decline the ticket prices are coming down. Look at the KC Royals, or until this year the Cardinals. The ticket prices are set to ensure that the stadiums are full enough. If the players take less, the excess goes into the owners pockets. If they want to fight how the revenues to their business are distributed, it’s fine with me. If they damage their business by constantly fighting, they harm no one but themselves.
I do tire of city governments tossing money at stadiums, but unfortunately corruption related to property development seems pretty endemic to city government.
The stadium ticket revenue barely covers the salary of one star. The real money comes from corporate sponsorship which is passed on to everyone who consumes those products. It is almost impossible to avoid all of the products that are involved, so even if you are not a sports fan and do not wish to support those salaries you have little choice. I personally love football but could do without every other major sport. I think I will look up all of the MLB sponsors and see if I can manage to avoid all of their products for a year.
You could probably miss the lion’s share of it by skipping Anheiser-Busch (and Geico). And in baseball (high because of the huge number of games, of course, but also the leage with the highest salaries) ticket revenue covers payroll for every team in the league.
http://blogs.chron.com/unofficialscorer/2009/01/another_way_to_look_at_mlb_pay_1.html
The Texas Rangers generated $23.7 million last year just off of the club level seats.
Alas, they did not spend it on pitching!
http://www.sportsbusinessjournal.com/article/20462
You could probably miss the lion’s share of it by skipping Anheiser-Busch (and Geico). And in baseball (high because of the huge number of games, of course, but also the leage with the highest salaries) ticket revenue almost all of payroll for all but a few teams.
http://spreadsheets.google.com/ccc?key=p8QV0hmBXJ4yVt5uNS2CUZA
I’ll grant that football is an exception because they play so few games, and it’s essentially the sport made for TV, but again, I’m not sure if ad revenues make up most of the cost (the networks overpay for football because it brings huge audiences and those are getting to be rare in broadcast TV). Big audiences are worth loss leading because it can translate into exposure for developmental shows.
The stadium ticket revenue barely covers the salary of one star. The real money comes from corporate sponsorship which is passed on to everyone who consumes those products. It is almost impossible to avoid all of the products that are involved, so even if you are not a sports fan and do not wish to support those salaries you have little choice.
—————————–
BINGO!!!!
I watch very little TV (mostly CNBC), and never watch sports, but I have to pay for all these entertainers (athletes, actors, and the parasites who live off them).
Let the sports teams contract with the cable companies so they can have their own “paid” channel. The people who want to watch sports can pay for it via ticket sales and cable contracts.
“Why is it that people are so offended by sports stars asking for a bigger share of the profits? It’s not like if the salarys decline the ticket prices are coming down. ”
What John said.
When sports could be broadcast television and could be a vehicle for advertising, the worth of the players actually went up, because the number of “tickets” (viewers in the stadium as well as viewed on camera) they could sell far exceeded the stadium size. Now that broadcast no longer reigns, and there are so many options for sports entertainment on cable/internet venues, the value of the players drops back down, because they have more competition for selling “tickets”. The same is true for actors, musicians and other entertainers.
This is another reason why I don’t believe entertainment, in the form of large movie houses and music labels, will be recession proof like in the GD.
Speaking of sports, the turmoil is now effecting ESPN.
ESPN facing job cuts, hiring freeze
http://biz.yahoo.com/ap/090129/espn_economy.html?.v=1
It takes a lot of talent to create complex structures that can create massive amounts of damage. The guys on the Manhattan project come to mind. Luckily the Manhattan project guys didn’t blow us all up in the process. Wall Street smarty boys? Not so lucky.
The most amazing thing about the first decade of the U.S. economy in the current century: Wall Street has done far more damage to itself than any amount of terrorist attacks could ever conceivably do.
time for the foreigners to start an all-out invasion of NYC and Washington, to eliminate the ‘Weapons of financial mass destruction’ for good. Lying is not necessary in this case, because we all have seen the damage done by this weapons, and there should be no doubt about what follows if we let the idiots play with them a little longer.
Can I become an honorary foreigner and help out?
Your passport gives you instructions on how to become a foreigner.
With talent like this and Mr. Welch who needs Osama bin Ladin and Al Quida.
The question is, how do we get replies like this voiced on the main stream media? How do we throw it back in the faces of these clowns?
That kind of “talent” we need like another orifice.
So to speak…
Neutron Jack Welch.
Gah, I despise him. He gutted GE, and when GE bought RCA (where my Dad worked and still works under its latest incarnation), he gutted that place, too. Gut everything - sell the plants, lay off the workers, all the more for Jack Welch… More, More, MORE!!! There is never enough for scum like him. If a starving man has enough to eat for a day, people like Welch would be offended - they would take that man’s food and not eat it, but throw it out just to prove a point.
Last I heard, GE was still paying for his newpaper service, because, you know, he can’t afford it. Sick, sick, sick…
Pie hole. PIE HOLE.
“If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air… We are warranted, then, in affirming that this parody on the principle of ‘a public debt being a public blessing,’ and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper.”
–Thomas Jefferson to John W. Eppes, 1813. ME 13:423
Damn good quote - one of my all-time favorites.
It amazes me how brilliant the founding fathers were in comparison to all of the politicians in my lifetime.
They understood that debt is not wealth.
So do LDS church leaders
Of the founding fathers, Jefferson is the last one I’d look to for economic wisdom. His personal life was a debt-ridden bubble.
He apparently learned from his experience.
“He apparently learned from his experience”
Hardly. You need to read some history. The quote above is more likely a rant motivated by the lousy terms a bank was offering him on his fourth mortgage of Monticello. The man was seriously incompetent when it came to money.
Jefferson “learned from his experience?” LOL! In the casket? He was $100,000 in debt when he died. In 1826 dollars.
‘So do LDS church leaders’
And that is why the Mormons are, every last one of them: thrifty, prudent, financially conservative, debt-free, focused on obeying the Lord and the Living Profit, whilst resolutely spurning the tappings of uber-consumerism and the shallow seeking of status symbols.
Oh…wait…
Yes this is true - but do you know how he lost most of his money?
- Poor handling of inheritance of his father-in-law’s debt by his brothers-in-law
- When he sold land to payoff earlier debts, he was paid in fiat money that later collapsed due to hyper-inflation
- Home was raided by Cornwallis during the war
- Co-signed for a relative who reneged during the panic of 1819 (panic induced by excessive debt from the war of 1812)
So - there you have it. Yeah he may not have been the wisest investor in the world, but it wasn’t primarily due to his own over-spending.
“Yeah he may not have been the wisest investor in the world, but it wasn’t primarily due to his own over-spending”
Poppycock. His spending habits were a legend in his own time — books, furnishings, landscaping, fine French wines, clothing, horses, and his beloved Monticello itself — you name it, he spent it.
Hi. Yes I tend to agree with Boston Bruce. For all of Jefferson’s writing skills and foresight buying LA from France, he was a spendthrift who loved the high life. Co-signing for deadbeat relatives is spending thrifting, too. (I know that one from experience, also knew it would be money down a rat hole.)
Jefferson is the prime example of it beeing easier to give advice than to take it. He talked about the evils of debt and died with massive negative worth. He talked about the evils of slavery, but died owning slaves. (He might have wanted to manumit them upon his death, but of course they were sold off to pay his creditors)
Cool, I learned a new word today: MANUMIT. New one for me.
So the advice is to be ignored? The message is less true?
Would you ignore an alcoholic who says excessive drinking is bad?
BTW, this is essentially the same message MANY of our nation’s early leaders expounded.
Let me join in the naysayers. Ben Franklin sang the praises of fiat money (wish I had the quote here–it was classic). His deliberate money-printing financed the Revolution and made the USA possible.
By the end, his scrip was trading for 10% of face, which is still amazing, given that it was ultimately never redeemable!
Every big US war was paid for by inflation. “Greenbacks” were the derogatory name for Lincoln’s running of the printing presses.
Jefferson is being seriously disingenious here. He of all people should have known the role financing paid in the Revolution. Without it, he should have had his head in a noose hung from the scaffold.
Of course he did. I too, am aware the role a money in the Revolution.
But it’s like fire. A dangerous, but extremely useful tool. But without vigilance, the most destructive force in nature.
Given current events, would you say this is not true?
First smart move the repubs have made in a loooong time. Now when BARF-2 falls on it’s face, B.O. and his clown troupe own it. No need to worry about all this debt pile up, it isn’t going to be re-paid anyway.
Jan. 29 (Bloomberg) — The U.S. House passed President Barack Obama’s $819 billion stimulus package without any Republican votes as lawmakers remained divided over whether the plan would do enough to pull the economy out of recession.
The 244 to 188 vote yesterday sends the measure to the Senate, where Republicans will have more power to demand changes. They are calling for more tax cuts, less spending and a bigger focus on housing in the measure. The chamber is likely to begin work on the plan on Feb. 2. The stimulus measure is separate from the administration’s plan to shore up the banking system, which may cost in excess of $1 trillion.
Obama yesterday urged lawmakers to work out their differences in the next few weeks, saying delay in passing a final bill would cost more people their jobs. “The plan now moves to the Senate and I hope we can continue to strengthen this plan before it gets to my desk,” he said in a statement after the House vote.
In comments to reporters, he said, “The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that their job will be next on the cutting blocks, they need help now. They are looking to Washington for action.”
Someone wake me up when we eclipse the cost of WWII. I think that’s the only thing left (biggest government spending in history) that we haven’t exceeded yet. All brought to you by the REtards of America. Thank you SO much you morons, you have cost us more then just about anything else in US history.
What a disaster the bankers/REtards and MTG shysters have brought upon this economy. I expected the home price collapse. I didn’t expect the fallout that we are seeing today. Just let the prices fall and get back to reasonable values. Nationalize the banks, or just buy up all the MTG paper and let it default as it naturally will. In 5 years, we’ll be out of this mess. The way they are playing it today, it could be a decade before all this stuff finally gets to the bottom.
Well the “war against terror” was/is pretty freakin’ expensive.
Yep. And it’s already been drawn out longer than WWII, with no end in sight.
Michael Fink …Boy do I agree with you that they are just wasting money and prolonging a recovery .You would think that the “Bad Bank” concept in itself is a testimony to their need to fail . Hank Paulson never bought the bad assets and now they are saying they need to buy the bad assets . Bait and switch all the way to more and more money given to the clowns that put us in this spot . I don’t know if anyone remembers Paulson talking to Congress and the Senate with his BS about Good Bank/Bad Bank ,and he ended up just
giving chosen Lenders the money with no requirements made . The
Powers are acting like this money is toilet paper . It will be interesting to see how History will report this Bag-holder transfer.
“First smart move the repubs have made in a loooong time.”
Yes — at least since they defeated round one of BARF-1 (before passing it only days later
:-) 
).
Amazingly all the Republicans and 11 Democrats voted against it.
Last night I was at the gym riding the bike. Right in front of me is a TV with Faux News and O’Riely is on. I try too look away, but it is a bloody car wreck… I can’t look away.
He has a GREAT assertion. If the stimulus fails to revive the economy, then Obama is a failure, Democrats are a failure, and Republicans’ dogma is the only proper belief structure.
WHAT? It is the Republican dogma, followed by many Dems post Regan Revolution, that put us on the collision course with greater depression. Now, if Obama and the Dems can’t fix the disaster that has been building for 30 years, within a couple years, then they are a complete and utter failure!
Blaming people for being unable to fix an unfixable situation… good work if you can get it.
“When you are in a hole - Stop Digging!”
Bush ran this country trillions into debt, with Repbulicans rubber stamping the entire time. How NICE of them to suddenly finally find their sense of fiscal responsibility.
A country has to continue to put money into its infrastructure (health, education, physical, innovation, energy) pipelines in order for it to harvest the rewards on the other end. The pipeline is 25 years long or so. Since Reagan we’ve done little more than harvest the pipeline. The money to replenish the pipe? Oh, it went into the golden parachutes of Lee pig Raymond and his ilk. When the pipeline finally ran dry after 25 years, we filled the gap with debt, which went into John Thain’s ugly office. No wonder we thought we were so great!
Obama has to clean up the carnage, AND replenish the pipeline, making up for 25 years of neglect. In fact, he’s shrewdly using the jobs of one to do the other, thus solving both at once. Do you expect Obama to do this without spending a dime?
Don’t forget the Democrats rubber stamped as well. Good ol’ Pelosi liked to yell at Bush for the budgets that his office put out, but all those budgets sure did pass through her house didn’t they.
You guys are funny. Keep looking at the actors while the real action is going on behind the curtain.
I agree that the Dems have not been models either, but by 2006 it was too late anyway. We’ll see how they behave under Obama. btw, Nancy already wants to expire those Bush tax cuts early.
Yeah but the Obamassiah promised it would be a new and glorious day under his reign but all it looks like to me is the same-o same-o with all the pork projects being crammed into this new bailout bill. And we all know that just throwing 900 bil on this steaming pile of sh*t isn’t going to stop GD2. It’s like pissing on a raging forest fire. Didn’t FPSS estimate that we’re looking at a global lose of 30-55 trillion dollars or the equivalant of 30 years of the worlds GDP?
And let me just add that replenishing the infrastructure is NOT “pork,” just because it has no immediate return.
“I agree that the Dems have not been models either, but by 2006 it was too late anyway.”
That’s a cop out.
“How NICE of them to suddenly finally find their sense of fiscal responsibility.”
It’s a matter of convenience for the Liars Club.
Don’t forget the Democrats rubber stamped as well.
I agree, but what makes me angry about republicans is that fiscal responsibility and smaller government were central to their platform. With democrats they’re pretty much up front about what they represent: increased government spending on social programs.
Now, I certainly don’t claim that democrats aren’t corrupt or that their entire ideology isn’t retarded. What I am saying is that they are less full of crap. Which feels like the best we can hope for anymore.
I think the republicans got over run with religious conservatives. Hence Bush, Palin et al. The religious right was more akin to old democrats in the south. I told my fellow “rebublicans” that I didn’t give a snit about abortion one way or the other; wow did I ever get a lot of hostility back.
So, lots of big spending.
You know in the past we have been able to stop when a really bad plan was out there. Not so sure this time.
Just think a lot of the democrat party leadership, Dodd/Frank/Pelosi are that dumb. Not just dumb but Bush dumb.
I think James nicely sums up what happened to the Republicans: they got overrun by the Dixiecrats and lost their ideals.
And let me just add that replenishing the infrastructure is NOT “pork,” just because it has no immediate return.
It is when it’s unplanned work, specifically for the purpose of stimulating the economy.
Thank Nixon’s southern strategy, better known as the dumbing down of the GOP.
How NICE of them to suddenly finally find their sense of fiscal responsibility.
Oh I get it. One mistake excuses another. At this rate we’ll be sinking in debt for eternity.
Frank isn’t dumb. He’s deluded.
Comment by packman
2009-01-29 14:41:29
And let me just add that replenishing the infrastructure is NOT “pork,” just because it has no immediate return.
It is when it’s unplanned work, specifically for the purpose of stimulating the economy.
====================
I don’t think they are trying to stimulate anything. IMHO, they are trying to buffer the consequences of us going from a debt-fueled hyper-economy to a savings-based economy.
The transition will be brutal, and they are trying to keep people from doing desperate things…which they would do if they have no jobs, no food and no hope.
As much as I hate the bailouts, I think Obama is doing the right thing WRT infrastructure spending. It’s necesessary to keep society together while we move through the storm.
Dems had a razor thin majority after 2006. Not hard to buy off a couple.
Wasn’t it eight years of Bushwhacking (including Hank Paulson’s bailout-to-end-all-bailouts TARP package) which loaded OBwan’s plate with a load of smelly brown stuff?
I guess if TARP-1 had worked as advertised, we would not be looking at TARP-2 today, eh Billy Boy?
If anyone needed any convincing that the two major parties are just polarizing instruments, just review the Bush tactics vs. Obama tactics on the economy as so far revealed.
If you are a Dem and hate Bush for his “handling” of the economy, be prepared to REALLY hate Obama. Obama is going to do EXACTLY what Bush did, only more of it.
If you are a Rep and defended Bush, you will need to defend Obama even more, for the same reason.
If you simply study the situation, you should conclude that the Boyz at the Fed are simply telling Obama whats going to be policy, just like they told Bush what’s was going to be policy. The Fed, a private banking cartel, is calling the shots, just like they did before. Understand how THEY win and you begin to understand the nature of the mess we’re in.
Obama is going to do EXACTLY what Bush did, only more of it.
Cut taxes for the rich? Piss off the rest of the world with tyranny talk? Go into cahoots behind closed doors with the oil companies? Kill FEMA? Bow down to conflicts of interest with companies in everything from Halliburton to Goldman Sachs? Forget how to speak English? Shall I go on?
Yes, Obama will spend. But it’s like sending your kid to college instead of the sending her to the mall.
“Cut taxes for the rich? Piss off the rest of the world with tyranny talk? Go into cahoots behind closed doors with the oil companies? Kill FEMA? Bow down to conflicts of interest with companies in everything from Halliburton to Goldman Sachs? Forget how to speak English? Shall I go on?”
Go ahead and go on - you’re on a roll,
don’t let the facts stop you. Obama is already doing all of these things. Or did you notice, we’re already out of Iraq, and only new faces in his cabinet. No failed retread has-beens from days gone by.
I love your your righteous, indignant outrage -it’s so misplaced.
Cut taxes for the rich?
Who cares about the stupid tax cuts. They’re insignificant to the insane stuff being proposed. A 2 trillion dollar bad bank? Trillions more in various gaurantees and bailouts?
Keep your eye on the ball, son.
well.. everybody, including the Dems knows BO is gonna mess this economy up even further. An unspoken part of the “stimulus” plan is to blame Reagan or Bush or the Man in the Moon… doesn’t matter who.
Obama is not going to wreck it - it is already wrecked, and on a glide path for complete destruction. Obama will try to rebuild it, but it might not work. Even if Obama is successful, he will not save the economy with eight years. He will stabilize it somewhat, and lay the groundwork for new growth to start within 12-15 years.
Already wrecked? Things can’t get any worse? Got popcorn?
Already wrecked? Things can’t get any worse?
That’s not what’s being said here. What is being said is that the decisions that led to this moment happened long ago and the consequences of those decisions are now irreversible. Whatever is going to happen now is going to happen regardless of what the leadership does.
The stimulus plan doesn’t come anywhere near the scale of the problem, and will fail to have any effect aside from making people feel like the government is doing something. No matter which party would be in charge there would be an irrelevant bailout, the only thing that would change is the benefactors.
So what is it that Obama can fail at? What I’ve decided to judge Obama on is whether he can present us with a viable model for an economy. Something that actually makes sense, where people produce things of value instead of “financial instruments.” This isn’t something that will be achievable in a week, of course. I’ll reserve judgment until near the end of his first term.
So what is it that Obama can fail at?
What can he fail at? Plenty. He could choose to agree with you and wave the white flag…
“Whatever is going to happen now is going to happen regardless of what the leadership does.”
Joey — Did you somehow miss the memo that the Wall Street investment banking sector collapsed last fall on Bush’s watch? Where ya bin, pal?
I think the Dems are being very practical about it.
Why throw the money and political capital at a problem they are incapable of solving? That would be such a waste.
Instead, grab that last slice of economic-pizza with a huge pork barrel spending bill and accomplish something for themselves. Who can blame them.. who among us would do differently?
Infrastructure is “pork?”
And the last grab for economic pizza, I believe, was called TARP I.
Wow, just like the blame went to Clinton for 8 years. Welcome to the club joey.
Joey - Back in the pouch!! -
Expectations for this new stimulus plan, building for three months already, are now running way too high. To its credit, the new administration has tried to dampen those expectations, but only half-heartily IMHO. (prez. has - but congress has not)
The high expectations for it extend from Wall St. to Main St. and the recent behavior of both seem to tell that a collective popular turning point may soon be at hand.
Heck, just look at all the recent UHS quotes we’ve all read here - they’re expecting 2005 to return by summer.
The Fed is flooding financial markets with liquidity, which ought to stimulate a heckuva bull run on Wall Street to help legitimize all this optimizm that the economy will bottom out by the end of 2009. Same movie we saw at the tail end of the early-1990s recession, IMO, including a continued decline in housing prices in the background (though housing is crashing much faster and farther this time)…
I susipicion that the developing carnage is unavoidable.
Don’t forget that we haven’t changed the camp whores for new ones, only put the crown on a different one’s head, one of their own. The logical conclusion will not be that the old whore was a virgin.
Hundreds of millions for STD research is part of the so-called Stimulis. How freaking appropriate.
At least the pimps are getting bruised.
Lovely un-mixed metaphor
Yeah, I had a bit of difficulty grasping it myself, but I perservered because of the vivid imagery.
Now all I want to know is, will I be getting a wh0re’s head in the mail, along with a check?
*Wrinkles brow puzzledly *
Because I already got one. (A check, I mean.)
“Republicans’ dogma is the only proper belief structure.”
Not as it stands now, IMHO. The GOP has reverted back to Democrat Lite and currently has nothing to offer except the same, only a little bit less.
The whole bunch of them needs to be swept away.
GOP dogma:
- Preach free market capitalism during the boom times.
- Morph into communists during the bust.
- accuse everyone else of being commies, except themselves, of course.
+1, prof.
The free market thing is a ploy they use to make it appear they are working in the best interest of “us”. Kinda like how in socialist countries they pretend to be working in the best interest of “us”*. They are no more interested in free markets than socialist leaders are interested in “…to each according to his need.” Statism is all about making the well-connected wealthy.
I love when these thieves defend the right of a corporation (a statist construct) to participate in some activity on the basis of “free-market” principles. You want free-market? Operate as a partnership.
*Well, in that case it’s not “us”, but “them”. But it may be “us” soon enough.
“(a statist construct)”
Rather they are power structures no different than what organized labor executive boards were before the financialization and corporatization of our govt. and elected officials. The current power structure of corrupt corporatism needs to be de-fanged just like organized labor was however the vacuum created in the absence of corporatism shouldn’t be filled with more wealthy elite.
‘The free market thing is a ploy they use to make it appear they are working in the best interest of “us”.’
“All animals are created equal, but some animals are more equal than others.”
– George Orwell –
Bingo, BP. I’ve been trying to make these same points over at mises.org. I think they’re slowly sinking in.
What handle do you post as there? I’ve visited the forums but I can only handle so much political only talk until I get tired of it. I like it here, we get a little political and little of a lot of other things.
I wish the mises forums were a little more academic and Austrian focused.
I don’t know enough about the details of this history of labor unions and such to discuss them intelligently. But I’ll take exception to any suggestion that the corporation is not a statist construct. It is, by definition, a creation of the state. We’re really not all that far apart but that detail I think is an important one in the way that it is important to try and identify root causes of problems.
The current power structure of corrupt corporatism needs to be de-fanged just like organized labor was however the vacuum created in the absence of corporatism shouldn’t be filled with more wealthy elite.
I agree. Perhaps where we differ is that I don’t believe the vacuum will ever be filled with anything but wealthy elite. What’s the saying? Power corrupts and absolute power corrupts absolutely?
As long as the power is centralized the ones controlling it will almost always use it for their personal advantage. Whether the current masters of the universe choose to wear the mask of corporatist free-marketer or labor savior or something else is just paint on the walls IMO.
Attempting to defang the corps while leaving the underlying power structure in place just makes room for some other band of thieves to step in at some point in the future. You can’t change human nature (greed, sloth, etc) but you CAN possibly remove the construct that gives those lazy thieves direct access to leech away your productivity, privacy and happiness.
My take is, instead of attempting to defang the corps (which is what I compare to attempting to regulate frankenstein or regulate human nature, a futile activity), remove the underlying power structure (the state) and the castle built on top goes with it AND doesn’t get rebuilt by someone else.
Otherwise, you are counting on the same people who created the corps to “defang” them? Why would they do that? They are more likely to just change the structure to give the appearance of having done so, until we all catch on to that new construct and they repaint the walls again.
Again the difference between Facism and Soviet style communism starts to blur. We have corporate elite running our government they have a government that essentially runs corporations. In the US when a politician doesn’t do what the masters want they loose their money and the race. In Russia when corporate leaders don’t do what the masters want they loose their job, go to jail or worse. All of course done in the name of the working man, the middle class, mom and pop ect ect.
Again the difference between Facism and Soviet style communism starts to blur.
A point I’ve made here before. In my view it’s all statism.
It used to confound me why I couldn’t really fit libertarianism onto the conventional political spectrum. I finally realize it’s because there is no place for it. The conventional “political spectrum” really isn’t. At best It’s only different shades of statism at worst it isn’t even different shades and is only a tool intended to divide the “us” against each other.
Bluprint,
The difference between “statists” and “power structure” is a distinction without a difference. Semantics I suppose but I don’t dispute corporations are anything but those two definitions.
As a side note, why didn’t you discuss this statism or by my definition before? You’re dead on.
The difference between “statists” and “power structure” is a distinction without a difference. Semantics I suppose but I don’t dispute corporations are anything but those two definitions.
Understood. For me the difference has to do with responsibility, which in your post was unclear to me. Some people see corporations as being the evil interlopers who have corrupted the state, and the state as being a generally good entity which has been victimized by the interlopers. I think those people are mistaken in that the state is vechicle for concentration of power and the corporation is simply the current mask the masters choose to wear. In other times/places the masters prefer to be directly in the state. We Americans tend to refer to those places as socialist or communist but really they aren’t all that different.
My point: it was hard to tell by your statement which camp you were in. Is the state a “victim” and we only need to “clean it up” or is it complicit? I see now we may be on the same page in that regard.
As a side note, why didn’t you discuss this statism or by my definition before?
I’m not a very eloquent speaker/writer. I barely have command of the English language enough to order a cheeseburger sometimes. I haven’t changed politically since I’ve been on this blog. I made the libertarian conversion probably about 10 years ago now (I’ll be 33 monday). Mostly I think your perception of my views has more to do with my inability to communicate them well (especially in this particular medium) than anything else. I enjoy the debate of political philosophy but I don’t always do “my team” justice.
One way in which I think I have grown since beeing “here” (HBB) is that I have attempted to make my posts be less driven by passion and more reasoned. I can’t help that part of me, its in my blood. My father is spanish.
I surmise that mises.com has been co-opted–like Cato. These infiltrators wrap themselves in the cloak of libertarianism and parrot Austrian buzzwords but espouse pro-war, interventionist, fiscal voodoo, and expansive gov’t policies–among other libertarian no-nos. They’ve muddied the waters and made “libertarian” a dirty word. It’s become very hard to find a bona fide libertarian in the media these days.
IMHO, any “libertarian” who uses the expression “war on terror”–without prefacing it with an obcenity–is a phony. Plain and simple. Same goes for buying into the bogus left/right–Dem/Rep–paradigm.
I don’t read the mises forums Gadfly, that may be the case. I can attest to one Dr. Walter Block, a senior fellow, who is most certainly a bona fide libertarian (he is a former professor of mine). I think the academics (which I DO read) that write in conjunction with the MI are legit, I have no doubt the quality of the forms may be questionable.
“In my view it’s all statism.”
Bingo. That’s what they have in common
From the Oxford Book of “isms” & answers.com
Fascism:
A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.
It is:
productionist
monist-based upon the notion that there are fundamental and
basic truths about humanity and the environment
simplistic-ascribing complex phenomena to single causes
fundamentalist-the world is divided into “good” and “bad”
conspiritorial-predicated on the existence of a secret worldwide
conspiracy by a hostile group
____
Socialism (which takes up six or seven pages!!), summarized:
A political and economic theory or system of social organization
based on collective or state ownership of the means of production,distribution, and exchange.
____
Communism
A process of class conflict and revolutionary struggle,
resulting in a victory for the proletariat and establishment of a
classless, socialist society in which private ownership has been
abolished and the means of production and subsistence belong
to the community.
Nah….. They’ve just got the two-word, two-step:
“Cut taxes.” “Cut taxes.” ad infinitum.
For whom?
You CAN’T sell Trickle Down Economics without “dumbing down” the little guys who are supposed to catch the BOMBS on ground ZERO
“BOMBS AWAY….Mission Accomplished”
You need religion and zealots to sell Trickle down economics.
Just make sure you sprinkle your sales pitch with lots of words like, “God”, “flag”, “heroes”, “freedom”–and the piece dee resistance–”the c-h-i-l-d-r-e-n”. {sniff-sniff}
The mouthbreathers’ll eat it up like BBQ pork rinds.
BINGO!!!!
The basic failure is that there is any real difference between the two parties.
Both want to take your money and give it to cronies. The cronies vary by party, but both want your money - ALL of it.
When are people going to realize business is supposed to exist to make money, not necessarily to employ people, altho it is a by-product. Looking to the government for help finding a job is not the way to go. Pull up your pants and find one yourself.
Capital can’t survive without labor.
A productive economy requires *both* capital and labor, and a healthy relationship between the providers of same.
Capital can’t survive without labor.
Sure it can - it’s called automation.
Never worked in a factory have you? Automation ain’t so, well, automatic nor reliable.
I have actually.
I realize that there always has to be some labor of course. Some things just can’t be automated - however the list gets shorter all the time. Things will break down and need repairing, and some things are just too complex, etc. - blah blah. These are obvious.
My point is that having labor for the sake of employing people is counterproductive to the welfare of society. We shouldn’t be focusing our efforts on “jobs” and “pay”, but on actual production of goods and services. Which is why “stimulus plans” are such a bad idea BTW - the government is the worst at the efficiencies of producing such goods and services.
What is most productive is to get the least amount of people producing the most amount of stuff as possible. That leaves more free time to devote to our actual welfare - health care, arts and entertainment, education, travel, etc.
Best example is farming in China vs. U.S. - something that’s starkly different, and noticeable just from the air when flying over. The U.S. has a massively efficient farming system where acres and acres can be farmed per person. China has very small farms - mostly family plots, very inefficient. That’ in itself is a large part of the reason why the U.S. is way ahead of China in GDP even though we have 1/4 the population.
Fan of GMO crops, are you?
Comment by packman
2009-01-29 14:53:07
Capital can’t survive without labor.
Sure it can - it’s called automation.
————————-
If you eliminate labor, where will your customers come from? If you don’t sell directly to the (now unemployed) workers, your customers probably do.
You can build as much as you want, and be as productive as possible, but if there is no demand there, there is no market and no economy.
lemme take a stab at that one..
People will understand business for what it is when they place various undue pressure and regulations on business and industry, and those businesses close shop or outsource huge amounts of labor/manufacturing to countries with a more friendly business climate, and people are stuck in virtual ghost towns with no jobs opportunities and little hope of a future.
well, maybe not.
Lamo worn out threats.
Then who will they sell their products too?
You do know that the US is the biggest CONSUMER nation on the planet, right? By damn near a magnitude.
Ok.. lets assume there are not enough consumers. Too many unemployed people are too poor to purchase enough products or services.
Obviously, that business then goes out of business.
Have we learned anything? Is the question finally answered? Do we now “understand business for what it is”?
..or do we need to get spanked a few more times..
You didn’t answer the question, joey.
Where does the **demand** come from?
Go visit a third-world country to see what your world would look like in real life.
Pull up my pants and find a job…where? At all those companies that don’t like to employ people? Or if I start my own business, who will buy my products, since people are not supposed to get any paychecks. be employed or make any money?
Would you like some cheese with that whine? Start a friggin hot dog stand then.
Dear Mathguy, maybe you should get out of a questionable tourism website business that does not have an address, or a name, or any kind of info on who is operating it. “We”, “us” is not a company name. Yours truly.
Party first, country last-just like Rush ordered!
i have a distant relative … long time DC bureaucrat in a security related field who’d worked for several admins, and retired and moved back to California.
At a family gathering, I asked her which party really believed their efforts were for the good of the country.
With zero hesitation she said both… and that, while a few individuals might stray, both parties truely believe they have the better people, solutions and the better plans… that both, on the whole, were equally patriotic and devoted to their calling as civil servants.
Pretty hard to believe, eh?
Especially if your name is Jas Jain!
I thought that was pretty obvious. I tend to think they all start out like Jimmy Stewart in “Mr Smith goes to Washington”.
I am not so sure that civil servants are as a devoted bunch.
–
Rush is a frikin egomaniac with following of “mind numb robots.” Sadly, some of my “educated” friends, including an 82-year old physician, fall in that category.
America is doomed because Americans are thoroughly doped and are led by proven crooks. There is no real mechanism to throw the crooks out as the recent elections have proven.
Jas
Rush Limbaugh is a brilliant and hilarious entertainer. The only problem is, some people don’t realize he’s lying.
Some people don’t realize he is ‘doped.’
Oxyconvenient? - “)
“Americans are thoroughly doped”
You know something that all 303,824,640 Americans don’t know? Wow. Are you The One?
Ha on me! I was referring to Neo in the Matrix, and forgot that people call Obama “The One”. But, still, “Americans” is about as helpful a generalization as “women” or any other mass group. Rush doesn’t have 303,824,640 listeners.
According to Jas, yes all 303,824,640 oops 303,824,639 (Jas would not consider himself as one of those dopes. I on the other hand don’t get why he is still here in the US if there are nothing but dopes that live in this country).
If America is doomed so is the rest of the world. So pucker up butter cup!
The new president has been in office for a whole week! And you folks can already graph the trend!
I’m impressed!
You guys should work for Wall St.
Oh wait… we did that already.
What, did I miss Prof. Bear’s estimate of 2009 deficit based on this weeks spending?
2 Trillion!… Taint enough!
(Reuters) - U.S. government officials seeking to revamp the financial bailout have discussed spending another $1 trillion to $2 trillion to help restore banks to health, the Wall Street Journal said, citing people familiar with the matter.
The paper said the Barack Obama administration could announce its plans within days but has not yet determined the final shape of its new proposal, and the exact details could change.
The administration is also seeking more effective ways to pump money into banks, and is considering buying common shares in the banks, according to the paper.
A Treasury spokeswoman told the paper that “while lots of options are on the table, there are no final decisions” on what she described as a “comprehensive plan.”
“The president has made it clear that he’ll do whatever it takes to stabilize our financial system so that we can get credit flowing again to families and businesses,” she told the paper.
I have a feeling congress will balk at that sum of money. At least, I hope they will.
What they need to come up with is a clear argument as to why hyper-stagflation is better for Main Street than depression… Why is it good for Main Street to suffer 25% unemployment and 25% inflation so the billionaires can stay billionaires, and how is that better than 25% unemployment and 20% deflation with the billionaires becoming only millionaires.
I have a feeling that there is no sum of money this congress will balk at. I was certain they wouldn’t possibly throw 750 billion down the rat hole, but they did.
The first time you mortally stab a currency there is a twinge of guilt, after that it gets easier.
Congress will balk, then the markets will collapse and congress will cave in and give the banks everything.
What are our collective predictions for forthcoming unapologetic requests using the “T” Word??
So much for the wait and see approach.
Is it just me, or does mounting desperation seem to ooze from between the lines of that press release?
Of course, with matters economic, 2012 might as well be tomorrow.
” get credit flowing again ”
Because increasing consumer and business debt from $7 trillion to $25 trillion in 15 years, a growth rate about 7x the rate of inflation over that period, just isn’t enough.
We need MORE debt!
This is just as much a joke as the Onion’s story about investors demanding a new bubble to invest in.
Bankers have been confusing paper debt with real wealth at least back to the time of Thomas Jefferson — please see my Jefferson quote above…
If they implemented the Seidman plan, they could use Tarp moneys to modify and insure liquidated loans. That would create a base in the housing market and provide the opportunity for a sound lending process to emerge.
What they are doing now is putting money down a black hole without measurable results. Buying toxic assets holds no one accountable and it is very unpopular. It’s a non-starter. Heck, it just pisses people off.
We’re reminded of -
Patient: “Doctor, it hurts when I do this…”
Doctor: “Don’t do that.”
or of the adage:
“Insanity is doing the same thing over and over when it’s proven not to work.”
Will we ever learn?
Is it more or less insane to keep doing the same thing over and over in ever larger installments?
Good question. Unfortunately “the surge” in Iraq appeared to set a precedent that doing the same thing bigger can produce different results.
However in speaking of “doing the same thing” I was referring to repeated bailouts, I was referring to the generality of all debt. That being the case - these new larger installments are still way small compared with the original debt that got us into this trouble in the first place. We’d have to have about a $20 Trillion stimulus or bailout package to really get bigger than the original debt.
Homeopathy economics! A little bit will treat you, but you need more and more until the dosage is high enough to kill you.
“I was referring to repeated bailouts” was supposed to be “I wasn’t referring to repeated bailouts”
“Will we ever learn?”
Yes! But then we’ll have to learn again later, does that count?
Trying to recapitalize the banking system by buying toxic assets is the wrong approach. It is fraught with all kinds of risks and rewards incompetent management teams.
I was listening to Seidman’s plan last night. He ran RTC during the S & L crisis.
He argues the government needs to wipe out shareholders and incompetent managers. Liquidate bank assets. Sell cleaned up bank to competent managers. Give bondholders the proceeds.
Agreed. Further, why not create a pool of seed money to help smaller, innovative, customer-friendly banks get started at a community level, rather than subsidizing failed members of the Megabank, Inc cartel? I am sure the managers of startup banks can figure out how to pay campaign contributions as well as the leaders of Megabank, Inc do.
….and not be controlled by the SooperBank behemoths, I mean, Masters of the Universe? Oh silly you
Quote from the underwriters of the Royal bank of Dadland:
“NO..you CAN’T have an ADVANCE on your allowance unless you are prepared to do EXTRA work and PAY it All Back !”
That line used to work for me and my once 6 yr old kid…in front of the TOY STORES
Now he’s looking at little help on a used work truck..and another “Promisory Note” to Dad.
The kid has become a wizard at writing them up …and paying them back IN FULL
If you think about it, the solution to the banking crisis is really simple — liquidate, sell, pay bondholders. When they start getting too creative, you know someone is trying to pull a fast one.
Free market capitalism is based on the principle you win some and you lose some. Equity investors understand this. Banks are priced accordingly. Shareholders will not be surprised.
P.S. Liquidate does not mean the bank shuts down and all the employees sent home. It means the assets are properly priced to market then sold to someone with the ability to manage them. The bank stays open. It functions. The employees’ future secured under competent management.
After less than a week in office, Barack Obama’s approval rating plunges 15 points.
http://www.dailymail.co.uk/news/worldnews/article-1127427/After-week-office-Barack-Obamas-approval-rating-plunges-shocking-15-points.html
I thought that was hilarious. “But … how can it be? He’s been in office for an entire week and I still have all the exact same problems I had before! It was all supposed to be different! I’ve been lied to!”
oh, it’s just not as hopey and changey as people expected. Too much ugly reality interfering.
Well, he still hasn’t paid peoples’ mortgages, gas bills, etc. so there you go!
I had the same thought, Pondering:
youtube Obama Is Going To Pay For My Gas And Mortgage!!!
Reuters) - U.S. government officials seeking to revamp the financial bailout have discussed spending another $1 trillion to $2 trillion to help restore banks to health, the Wall Street Journal said, citing people familiar with the matter.
so thats why TBT is moving up
The Associated Press - Jan 27, 2009
CLEVELAND (AP) — An Ohio firefighter has been given a six-month suspension from his role in a pipe and drum band because he nodded to President Barack Obama…
ok.. now listen up!
Never look directly at the King. Keep your head bowed whenever you face him. Never turn to look at him. Never let him catch you looking at him should he turn around.
For your own sakes, be a little more careful out there.
“Never let him catch you looking at him should he turn around.”
Give me a break. He wasn’t suspended for nodding at the President because the President reported him. If I read the article correctly he was suspended because he had been told not to do what he did.
That’s my understanding as well.
hah! He’s lucky it was a celebration of our great leader’s inauguration, who in his happiness and by his mercy saw fit to decree a mild punishment.
Had it happened at any other time the insolent peon would be lucky to escape with his life.
Very well.. do as you please… but you have been warned.
Why anyone would care if he did that is beyond me. Screw that “etiquette” crap…….the guy had his moment to remember and nobody got hurt. So who cares???
It’s their orginazation, their rules. Apparantly they take their rules seriously.
Too bad many other organizations in our society don’t feel the same about rules.
I’m ok generally with “my organization, my rules,” and taking rules seriously is fine in certain occupuations (cops, firemen, etc.). But band leaders?? These folks need to lighten up a little.
But band leaders?? These folks need to lighten up a little.
Clearly you’ve never been in a marching band. I had a drum major hit the bottom of my trumpet when I was in the 9th grade. The horn of course was on my mouth and nearly split my lip. Dead serious, I told him if he ever touched me again I would beat the $h1t outta him (my language wasnt nearly so nice). A few of the band stopped playing and was laughing, that really made him blow his top. The rest were still just playing like nothing happened.
This guy was over the top. Even the instructor just sat there and said nothing. I figure he probably thought it would be good to make him more considerate of his actions. That was my first and last year in “high school” band.
Correct blu, I haven’t. Your situation was much worse than what went on last week. Again I say, come on, it was a wink and a nod, who cares???
In a marching band everyone has to stay in step and play the same tune. Its really not that hard to understand if you have ever been in a band with a tyrannical band teacher.
Ok, but can someone explain how a wink and a nod as you’re passing by the new Prez is going to screw everyone up?? That’s just too anal for me (not aimed at you, FYI).
One person screwing up is funny, 40 people all screwing up at the same time looks stupid.
A band is a team, you don’t really have any place for mavericks.
Mavericks can go solo.
The only thing I can add is . . .
One time . . .
in band camp . . . .
There once was a band in Nantucket………
Limerick to follow…. -:)
Joey — Doesn’t Rush Limbaugh have a blog where you can post?
Rush and co. are too narrow minded and predictable for my tastes.
i’d bet that today he will talk about BO trying to walk through a window yesterday, and compare it to GW trying to walk through a locked door.. any takers?
In any of OB’s 57 states, even Alaska, walking through a window is a sign of being an bonehead.
Rush can write???
“Rush can write???”
Yeah. Prescriptions for narcotics.
Who wrote The One’s cocane prescription?
Yeah, I think references to anyone’s drug problems are going to always turn back on the Prez, so how bout we just shoot a li’l bit higher from here on out?
I thought GW bought his on the black market… Can you actually get a script for cocaine?
humm….joeyinCalif has a point !
The nation once looked to boy wonder Bush and now it’s as about immobile and productive as a big BLOCK of SALT.
Hey, was that a raindrop
“The credit contraction of 2007 is in the process of destroying the banks that created the crisis and has already virtually destroyed the Republican Party who abetted them,” writes Darryl Robert Schoon. While correctly knocking Republicans for pushing us to the edge of the cliff, he doesn’t let Democrats off the hook, either.
“It was Democrat Woodrow Wilson, who signed into law the Federal Reserve Act in 1913 that gave private bankers control over US currency, control that was to indebt our nation, businesses and people into perpetual indebtedness.
“It was Democrat Franklin Delano Roosevelt who outlawed the possession of gold in 1933 by US citizens thereby trapping Americans into the paper assets of bankers just as the bankers wished, putting beyond Americans’ reach the gold that would have otherwise protected them from the banker’s debasement of the US dollar.
“And it was Democrat Bill Clinton who signed the repeal of the Glass-Steagall Act in 1999, thereby repealing the safeguards set up in 1933 to prevent another Great Depression and allowed investment banks, insurance companies and commercial banks to co-mingle America’s savings in what was to be soon the greatest destruction of wealth on a scale never before seen.” Rather serious charges against Democrats AND Republicans. Now, these same political parties aim to lead us out of the most dangerous economic downturn in almost 80 years. Can they do it? Or, must we throw them overboard and try something new?
I keep voting to throw them overboard, along with very few others!
I’m one of the few. ‘Shopped bumper sticker I saw on fark said “Ron Paul 2008: We told you so.”
~SR
I’m not letting Clinton off the hook on the Glass-Steagall Act but lets not forget that in the Senate only one democrat voted for it. Clinton was in fact quite conservative on some economic matters and that is what drove him to sign this bill.
And let’s not forget who SPONSERED that repeal:
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The bills were passed by a 54-44 vote along party lines with Republican support in the Senate[9] and by a 343-86 vote in the House of Representatives[10]. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bipartisan bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. Without forcing a veto vote, this bipartisan, VETO PROOF legislation was signed into law by President Bill Clinton on November 12, 1999. [11]
Did you all catch that? “Republicans” and “Veto proof.”
There will be test at the end of week. Class dismissed.
Thank you. I can’t tell you how many times I’ve felt forced to point that out.
3 words. “Republicans” and “Veto proof.”
(my long post will show up later. hopefully)
Good job on that eco!
So, the bad bank proposal is said to carry a price tag of $1 -$2 trillion.
INSANE!!!
This is in addition to the TARP.
Are all the other national economies in trouble around the globe going to follow the PPT’s bailout lead?
I think in some EU countries the ‘Bad Bank’ is a done deal already; they are just trying to figure out how best to defend the staggering cost to the public.
Let’s see:
$168B Stimulus 1
$700B TARP 1
$900B Stimulus 2
$1-2T TARP 2
$?? Bad Bank
Pretty soon we’ll be looking at real money.
Close to home, Corning to layoff 3,500. We are essentially back to 2001 when they layed off 4,000. Corning-Elmira never bounnced back from that one. Victorians for $40K anyone?
“Just give me the COFFEE and no one gets hurt”..saaay WHAT ?
Starbucks to lay off 6,700, close 300 stores
Starbucks Corp. continues to take the ax to its business. New plans include closing 300 stores and cutting up to 6,700 jobs in fiscal year 2009.
Starbucks, hit hard as consumers forego pricey coffees, increased its cost-savings target to $500 million from $400 million for the fiscal year. Starbucks saw its same-store sales fell 9 percent for the quarter.
http://www.chicagotribune.com/business/chi-biz-starbucks-laoyffs-jan28,0,3694564.story
Once when I was in Barnes and Noble, the barista at the Starbucks inside went on the PA and announced that “the Starbux cafe is here for your convenience; we offer” yada yada yada. Must be desperate.
1/5 of diluted vodka at Wal-mart supercenter: ~$4.95.
Vente mocha mint cappachino with foamy soy skim and sprinkles for improved sugar shock at Sbux: ~$4.95.
That’s all I need to know about what Americans are addicted to.
Unemployed people aren’t drinking as much coffee, yo.
Actions still speak louder than words, I guess…
SPECIAL REPORT Issue #1: America’s Money Crisis
Bonds extend declines after Fed
Treasurys moved lower after the central bank left rates near zero and said it was prepared to buy long-term bonds if necessary.
By Catherine Clifford and Ben Rooney, CNNMoney.com staff writers
Last Updated: January 28, 2009: 3:42 PM ET
NEW YORK (CNNMoney.com) — Government debt prices extended declines Wednesday after the Federal Reserve said it is prepared to buy long term Treasurys but did not offer the specific details that many investors were looking for.
The U.S. central bank kept its benchmark target rate in a range between 0% and 0.25%, citing credit conditions that are expected to “remain extremely tight.” The Fed also said it is “prepared to purchase longer-term Treasury securities” if necessary.
Why is the government in the knifecatcher encouragement business?
SPECIAL REPORT Issue #1: America’s Money Crisis
Homebuyers get a bonus in the stimulus bill
First time buyers could receive a $7,500 tax credit if they purchase soon.
By Les Christie, CNNMoney.com staff writer
Last Updated: January 29, 2009: 7:38 AM ET
Worst housing sales since ‘82
NEW YORK (CNNMoney.com) — If you’re thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that’s now before Congress.
Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.
This credit was passed last summer.
“If you purchased a primary residence after April 8, 2008, and before July 1, 2009, and are a “first-time” home buyer, you can qualify for a new tax credit for 10% of up to $75,000 of the purchase price. To be eligible, you must not have owned a residence in the U.S. in the previous three years.”
It was not a credit. It was a zero-percent loan which has to eventually be repaid. But politicians will lie…
Am I the only one who looks at this and thinks that ever house in the US drops in value by $7500 on July 1st of this year? Or on whenever date they end up extending the sunset of this credit to?
If people won’t buy with the credit, they’ll be that much less inclined to buy the day after the credit expires.
I am trying to understand where the money comes from to cover the cost of this mortgage modification program. It sure does not come from the balance sheet of failed banks.
Fed Adopts Policy to Modify Mortgages, Stem Home Foreclosures
By Alison Vekshin
Jan. 27 (Bloomberg) — The Federal Reserve will ease terms on residential mortgages acquired in the rescues of Bear Stearns Cos. and American International Group Inc., seeking to stem foreclosures.
The Fed policy is targeting borrowers who are 60 days or more overdue on loan payments and covers modifications of interest rates and payment plans. The program uses the Fed’s authority in the $700 billion Troubled Asset Relief Program and was released today by the House Financial Services Committee.
“It reflects the understandable desire of the Federal Reserve to have some cooperation” with the Obama administration, House Financial Services Committee Chairman Barney Frank told reporters today in Washington. “This is a very big deal.”
Hello bubble bloggers
I am in Japan, and sadly in March, my visa ends. Unless I find work. So far a no go. (They are really hurting here people are cutting back) So while talking to my family I hear talk of the wonderful careers in the medical field.
Do you guess think thats the next bubble? Personally i want to short higher education.
My wife works for AZ’s largest hospital chain. They are already doing layoffs. People aren’t paying thier medical bills.
Damn shame to hear Japan is doing badly also. My plan, if laid off, was to max out the credit cards, fly back to Hiroshima, shack up at the in-laws place, and get a job teaching english.
rob
Sorry to hear about your visa and job loss(?).
Although nothing is truly recession/depression proof, healthcare is probably one of the safer bets. I wouldn’t go into debt to get training, though, and would only do something that requires face-to-face contact (they are outsourcing many of the lab jobs, etc.).
Good luck!
Jan. 29 (Bloomberg) — The number of Americans receiving unemployment benefits soared to a record….
Continuing claims for benefits rose to 4.776 million in the week ended Jan. 17, the highest since record-keeping started in 1967…. First-time filings increased 3,000 to 588,000 in the week ended Jan. 24.
And of course, the ACTUAL number of people unemployed, and the ACTUAL unemployment rate, are MUCH MUCH higher than these sanitized, pasteurized, whipped with air and polysorbates foo-foo numbers.
Any sane person can quickly surmise that the ACTUAL unemployment rate, meaning the percent of capable citizens who cannot get a job, is now about 17% - roughly one out of six working age Americans. Successive Administrative propaganda managers have tweaked the analysis and numbers into meaninglessness, in order to pacify and delude the masses.
While I don’t dispute stats are manipulated where you get the 17% number. I personally know at least several hundred people and I do not know one that is currently unemployed. I know many that are fearful of job losses but nobody that is sitting at home looking for a job. I think the more likely scenario is that people who own business like myself and are making less but they still have a income. There are many more folks who employ themselves today than 20-30 years ago and they just tighten their belt and slog through. This is a different time, unemployment is not always binary today.
In AZ, unemployment has jumped from 4.2% a year ago to 6.9%..
But, here is the joke. They claim the entire increase comes from more people looking for work. They claim the actual number of people with jobs has increased, just not as quickly as the population has grown.
Labor force
Dec 2008: 3.166 million
Dec 2007: 3.060
People with jobs:
Dec 2008: 2.946
Dec 2007: 2.932
Well, if there are more people with jobs…. WHY are personal income tax collections down 20% YoY???? Why are sales tax collections down 15%-20%? Why is the vacancy rate skyrocketing? Why is enrollment at schools falling? Why are there so many businesses laying off, closing, going under???
The data to not coorilate.
Darrell, those data _could_ be consistent, if, say, more people are working, but being paid 20% less.
E.g. more part-timers, and fewer hours for those part-timers. You get the idea.
Regardless, a broadly-spread 20% decline in income is definitely going to leave a mark.
Jan. 29 (Bloomberg) — Orders for U.S. durable goods fell in December for a fifth consecutive month, signaling a slump in business spending will deepen and prolong the recession.
The 2.6 percent drop was worse than economists had forecast and followed a 3.7 percent decrease the prior month that was deeper than previously estimated…. Excluding transportation equipment, orders decreased 3.6 percent, also more than anticipated.
And the hits just keep on a coming across the Lost Empire State:
ROCHESTER, N.Y. – Eastman Kodak says it is eliminating 3,500 to 4,500 jobs, or 14 percent to 18 percent of its payroll, as it posted a $137 million loss for the fourth quarter.
Kodak says sales and profits from both digital and film-based photography products plummeted.
The Rochester, N.Y.-based company said Thursday that its loss amounted to 51 cents a share in the last three months of the year. That compares with a year-ago profit of $215 million, or 75 cents a share. Excluding one-time items, the loss came to $21 million, or 8 cents a share.
It says sales fell 24 percent to $2.43 billion, as digital revenue fell 23 percent and traditional film-based revenue slumped 27 percent.
Analysts surveyed by Thomson Reuters expected, on average, a profit of 21 cents a share on higher sales of $2.81 billion.
U.S. Dec. durable-goods orders ex-defense down 4.9%
ECONOMIC REPORT
Record number standing in the unemployment lines
Initial jobless claims rise 3,000 to 588,000; continuing claims hit 4.78 million
By Rex Nutting, MarketWatch
Last update: 9:00 a.m. EST Jan. 29, 2009
WASHINGTON (MarketWatch) — Unemployment lines stretched to the longest on record, the Labor Department reported Thursday, a sign that the U.S. labor market continues to worsen.
Continuing jobless claims rose by 159,000 in the week ended Jan. 17 to a seasonally adjusted 4.78 million, the most since the government’s records begin in 1967. That is the same week that the government surveyed hundreds of thousands of workplaces and households to gather information for the January employment report.
TheStreet.com whines about many of our favorite topics, all in one article:
http://www.thestreet.com/story/10460518/1/opinion-credit-woes-for-fellow-boomers.html
According to Bloomberg, Taleb and Roubini are calling for bank nationalizations. That too is very unpopular and transfers the burden to the US Government.
Failure is an option. Liquidate assets. Sell cleaned-up bank. Give bondholders the proceeds. It’s not easy but it is the right thing to do and it will restore confidence to the system.
WSJ:
Jumbo Threat
Some pretty interesting stats and graphs on Jumbo loans - they’re delinquent way more than conforming at this point, by a factor of over 3:1.
The thing to remember is, you don’t need a jumbo loan to buy an expensive house. If you buy a cheaper house, pay off the mortgage and sell it, than you can use that equity to buy a more expensive house.
The jumbo loans going delinquent were cheaper houses purchased at expensive house prices in the bubble, or HELOCKed up to expensive house levels.
“pay off the mortgage”
Wait a minute. You can do that? Wierd.
I mean, it can’t be a good idea - what about your liquidity?
You know, paying off $100,000 is a loss of over 500K in credit card buying power. The government should make that illegal so unliterate people don’t make a fatal mistake.
Jumbo loans are more apt to be underwater and underwater by a larger amount than conventional loans.
Red (numbers) alert!
Yesterday’s rally.
Emasculated.
Updated version of Paul Revere’s warning:
“The shorts are coming, the shorts are coming!!!”
Paul Revere is the pizza delivery guy coming out of the closet….
bomb=chicka-wao-wao….
too much pron for the bears…
Jan. 29 (Bloomberg) — Policy makers must stop declines in asset prices to revive the U.S. economy in 2010 and curb rising unemployment, according to Bill Gross, co-chief investment officer of Pacific Investment Management Co., the world’s biggest bond fund.
Wrong! Policy makers should simply reject ideas like propping up asset prices to save fat cats hoping to suckle on the teat of taxpayers. Grow up, Mr. Gross. You disgust me. Like everyone else, if you place a bet and lose, you lose.
So far since the stock market bottomed out last year, asset prices have been steadily falling up, so I guess Gross’s asset price support program is not necessary?
What? We can’t let them lose on their bad bets.
IMHO, Mr. Gross is correct about stopping asset price declines. (Mr. Gross is also on the right side of this market. If you read his monthly reports over the last decade, he has been far more critical of American Banking finance than any on this board).
We all see the same data, but some of us interpret it differently. In this economy, under the current economic structure in the US, if deflation were to occur; 80% of the jobs in the US are at risk. Mr. Gross happens to be a believer in the ‘at risk’ model. Disinflation is a good thing (as we are currently enjoying); deflation causes dramatic job losses.
Perhaps the real problem is that 80% of the jobs in this country need to go away, or some large portion of those….
We need to lose 75+% of the Wall Street jobs, 50% of the retail jobs, 25-30% of the government jobs, advertising, marketing, 75% of construction, 50+% of banking jobs…
Unfortunately
We then lose 70% of all research jobs, 90% of the rest of the manufacturing jobs, 90% of all hospital jobs (incl doctors), 70% of all engineering jobs and 95+% of all computer programming jobs.
There is no safe job.
It would get really ugly really fast. The social upheaval would make this country a very unpleasant place to live.
And then we start over back at $0.
Better than 20% of the population having 80% of the wealth, and the other 80% burried under a crushing debt load having to pay for it.
OR….
Perhaps we start focusing the bailouts on “the little people” and let the mega-rich take their losses!
The mega-rich loaned their money to people that can’t pay it back… Sucks for you!!!!!
I feel no obligation to keep the mega-rich, mega-rich.
That’s all bullsh!t, hoz. We’re not going to lose 80 pct of all jobs if asset prices fall. If home prices fall to affordable levels, jobs will be created. It’s because hope (that’s not a spelling error) prices remain at unaffordable levels we are losing jobs and the economy is falling off a cliff.
After purchasing a home, purchasers need to fill it with things like durables. At current prices, there is no paycheck left to buy durables. Until asset prices fall to natural sustainable levels, we’ll remain in this morass. It won’t affect Gross, however. He benefits from the morass.
Is this some kind of threat? Where did you get those numbers from, Gross himself?
“I feel no obligation to keep the mega-rich, mega-rich.”
Darrell, it’s not just the mega-rich that get hurt if we “start over back at $0.”
It would screw all savers and strongly reward the irresponsible debtors.
Are you really in favor of that?
I’ve been a saver my entire life, and such a reset would be very bad for me; it would send me a strong message that I had wasted all the money I did not consume immediately along the way.
All you guys that posted in this discussion are smarter than me but I’ll just tell you this first hand observation and let you guys sort it out.
I know people in Miami who are refusing to pay their mortgages, they have the money but tell the bank that unless the principle is drastically reduced they will not pay.
Now, here is where it gets interesting, guess what they are doing with their money?
They are buying FNM because it’s so cheap now.
-
Well, you guys have the smarts (I’m not being facetious, you guys are smart) so, how does price support work in my neck of the woods?
“That’s all bullsh!t, hoz. We’re not going to lose 80 pct of all jobs if asset prices fall.”
Come on MM. I never said we would lose 80% of all jobs. I wrote “…80% of the jobs in the US are at risk.” Which is absolutely true. Would you look to buy anything if your job is at risk? This creates the downward cycle.
The other figures are where the job losses would occur in a worse case scenario. The government has a responsibility to society to prevent this societal devastation.
So when you learn to read without interpreting to your personal belief then criticize me. (Just don’t make fun of my lack of sex life or my weight or my stature - I get ripped on those enough - lol.)
Myopic focus on asset prices like houses and shares is what has kept us in this morass. All the rate cuts and TARP were directed at asset prices. They failed.
Enabling malinvestors is not the antidote for economic growth. They simply suck economic potential out of everyone and everything around them. We need to cut these suckers lose.
No, I’m not talking about recently unemployed mothers and fathers. I’m talking about fat cats like Gross.
Myopic focus on asset prices like houses and shares is what has kept us in this morass. All the rate cuts and TARP were directed at asset prices. They failed.
I liked PB’s quote that builders are producing 200,000+ homes a year that have no buyer given the current rate of new home purchases. Supporting asset prices will only make this worse. It misallocates resources from where they are needed to where they are not.
Agree with you on this, Maven.
I’m not sure how falling asset prices cause job losses over the long term.
IMHO, lower fixed costs (including lower housing prices) are the solution to the problem. We have too much debt, and that debt needs to be destroyed before we can work our way out of this “crisis.”
I have read a few years of Gross commentary and yes, he was pretty critical of the banking system at first. But over the last 1-2 years it seems to me that he is deperately looking for ways to continue the party, and he argues far too often in favor of the PIMP’s positions (positions that are often ad odds with sanity in banking and economics).
U.S. Draft Law Would Ban Most Trading in Credit Swaps (Update2)
By Matthew Leising
Jan. 29 (Bloomberg) — Draft legislation that would change how over-the-counter derivatives are regulated might prohibit most trading in the $29 trillion credit-default swap market.
House of Representatives Agriculture Committee Chairman Collin Peterson of Minnesota circulated an updated draft bill yesterday that would ban credit-default swap trading unless investors owned the underlying bonds. The document, distributed by e-mail by the committee staff in Washington, would also force U.S. trading in the $684 trillion over-the-counter derivatives market to be processed by a clearinghouse.
“This would basically kill the single-name CDS market,” said Tim Backshall, chief strategist at Credit Derivatives Research LLC in Walnut Creek, California. “Given the small size of many issuers’ bonds outstanding, this would make it practically impossible for the CDS market to exist.” …
Trying to force traders to own Treasuries? No just trying to stop selling stocks short against the bonds. It would improve matters if if the CDS were exchange traded.
I don’t know hoz. I don’t have a draft of the bill, but something like this can have some serious unintended consequences. Just like trying to put a chain on a wild dog makes it thrash even harder. Probably better just to shoot the darn thing.
Hard to believe that these things have only been around for 12 years.
They have been around longer than 12 years through insurance companies. The pricing was not good.
However:
ISDA Announces Agreement to Make J.P. Morgan’s CDS Analytical Engine Available as Open Source; Increases Transparency in CDS Pricing
NEW YORK, Thursday, January 29, 2009 - The International Swaps and Derivatives Association, Inc. (ISDA) today announced that J.P. Morgan has transferred to ISDA its CDS Analytical Engine. The CDS analytical engine, originally developed by the Quantitative Research group at J.P. Morgan, is widely used in the industry to price CDS contracts. ISDA will make the analytical engine available as open source code, thereby increasing transparency around CDS pricing.
“J.P. Morgan has invested a lot of intellectual capital in this analytical engine. Its willingness to assign this to ISDA for us to make it available as open source to the entire industry demonstrates our collective commitment to the integrity of the CDS product,” said Robert Pickel, Executive Director and Chief Executive Officer, ISDA. “ISDA and its members are vigilant to public concerns around transparency. This is yet another measure of increased standardization in CDS.” …
You wonder how a law like this would affect the short ETF’s
Hi HBBers. I’m in escrow for a foreclosure house. Interesting experience so far. The bank verbally accepted my offer the day after I made it, but didn’t open escrow until 2 1/2 weeks later. I’m getting a loan for the property of $79,000. Even though we are getting the loan from our bank and have enough deposited to cover the loan, not to mention moneys in other places, we are jumping through more hoops to get this loan than we did for our original house loan back in 1993. I’ve had to write letters to explain the source of every deposit we made in 2008. We were supposed to close in 25 days, but it looks like we won’t close in time. No urgency at all on the part of the lender, the bank-owner, and the escrow company.
Rehobbyist,
It seems you could write a check for the place which begets the question; why are your borrowing the money instead?
I’ve considered this myself. If you were going to buy a place and had either enough to pay cash or a very large downpayment (much larger than required), would you put all your cash into it?
I think I’m getting 2.65% interest right now in HSBC. If I can get a loan for say 5% that means I’m only paying ~2.5% on that money.
It’s not inconceivable that rates could go up significantly in a year or four at which time you would have a 5% loan and the cash earning possibly a good deal more than that. And that’s not counting the possibility of finding something more productive than an online savings account to do with the cash.
But I’m anxious to hear the answer to your question in this particular case as well.
You can get 5 year CD’s that come close to covering the borrowing cost. If I were buying (which I’m not) I’d borrow as much as possible and put your cash in an FDIC insured CD 3-5 years. I thought about getting my Father in law to refinance his home and put it in a CD of this duration.
Sounds like the kind of hoops I jumped through in 1994.
The issue may not be you, it may be having the money to lend, and if there is a more profitable place to lend it given its scarcity.
Yeah, what exeter said, and why even deal with banks and their hoops?? Detail EVERY deposit?? I’d tell ‘em to go pound sand.
Take my cash, my 40% of ask price and my quick close or kiss off. There must be enough motivated sellers around to wave cash in front of. I never had the patience to deal with those REO clowns.
Any bankruptcy experts out there?
Couple years ago, my wife’s ex violated the terms of the divorce agreement and parenting plan, and we had to push a contempt of court case. He lost ugly and was ordered to pay out legal fees. 6 months later he’d not paid, and we had to push a second contempt of court. At that time, he paid half, with agreement to pay the second half a year later.
Well, it is a year later and we want the second half. So we write him an email asking for the money.
The response is that he has filed bankruptcy and included our claim in the bankruptcy.
Can he get a court award for legal fees for a lost contempt of court case, discharged in bankruptcy?
We really don’t want to spend $ thousands more in a failed attempt to collect the thousands he owes us.
This is not the place to ask for legal advice.
Having said that, you can’t get blood from a turnip, so I would just let it go.
Here’s a project that will never happen if the developer is lucky!
“ASHEVILLE – A local development company hopes to attract a few people who want to go green — and have a lot of green — to a 13-story building it plans to build on a postage stamp-sized lot downtown. The 10 condominiums at 73 N. Market St. would sell for $2.1 million to $2.6 million and come with a photovoltaic array on the roof, an underground garage designed to fit only the fuel-sipping Smart Fortwo subcompact car and other features designed to lessen the building’s environmental impact.
The building would be among downtown’s taller structures and would sit on a lot a little larger than 40-by-70 feet.
But that’s only if North Market Street Investments, which unveiled its plans Tuesday, can convince enough buyers to sign on.”
http://www.citizen-times.com/apps/pbcs.dll/article?AID=2009901280316
Decent idea, horrible timing.
Asheville is full of NYC megabux. Did they not get the memo about the Hamptons?
Too much for too little.
It has “Fail” written all over it.
“I’ve had to write letters to explain the source of every deposit we made in 2008″
Dec 31st 2008…Tiffany / Rolex…Former boss: Mr. Made-Off
New home sales down to 331,000 for a revised 407,000 (revised from 388,000.)
What’s with all these revisions? My bank knows within 3 seconds whether I wrote a check and immediately deducts it from my account, but the folks who count home sales goofed-up by 19,000?
No doubt the 331,000 will be revised down next month.
Don’t forget, “it’s a good time to buy.”
We discovered a long time ago on this blog that new home sales include contracts to buy that also fall through in the financing phase. It takes a month or two to discover the financing fell through and they revise the number down.
I think they also “seasonally” adjust them like the employment figures.
“Bank of America is planning to defer bonus payments to some investment banking staff this year – a move certain to inflame tensions between its employees and officials of newly acquired Merrill Lynch, executives familiar with the matter say.”
http://www.ft.com/cms/s/0/51df9ac6-ecb5-11dd-a534-0000779fd2ac.html
And why are the executives so tense?
“BofA insiders said the deferrals would be a particular problem for executives who had constructed a lifestyle around the near-certainty they would receive a bonus each February.”
Constructed a lifestyle. Brilliant move by our financial minds.
We constructed a lifestyle around one middle class salary. The rest has been saved or given away, or used to allow part time work for both of us when our kids were toddlers.
They’re teens now. I tell them to consider a career in finance, because by the time they leave college the industry will be hollowed out, and many of its former workers will either be discredited or unwilling to do a good job at the new level of pay.
“Bank of America is planning to defer bonus payments to some investment banking staff this year – a move certain to inflame tensions between its employees and officials of newly acquired Merrill Lynch”
Infame tensions? There are thousands in line for their jobs. Good luck with that hissy fit, fat cats.
We recently saw the news from the Census Bureau that privately-owned housing starts in December were at a seasonally adjusted annual rate of 550,000. A crude comparison to the most current new-home sales rate of 331,000 suggests that the home builders are adding to the extant glut of vacant, unneeded, unwanted, unaffordable new homes at a rate of 219,000 per annum, +/- statistical error. It must be time for more housing stimulus!
BULLETIN
U.S. NEW-HOME SALES FALL NEARLY 15% TO LOWEST MONTHLY LEVEL ON RECORD
U.S. Dec. new home sales down 14.7% to lowest level ever
By Greg Robb
Last update: 10:00 a.m. EST Jan. 29, 2009
WASHINGTON (MarketWatch) - U.S. new home sales fell 14.7% in December to the lowest level on record,, the Commerce Department estimated Thursday. The decline in new-home sales to a seasonally adjusted annual rate of 331,000 was far below the 390,000 pace expected by economists surveyed by MarketWatch. New-home sales in November were revised to a 388,000 level compared with the previous estimate of 407,000.
Everyone remember when people were talking about how housing starts had fallen to a rate of 1.5 million per year, and I said that historically that was an average year and 1 million was a bad year?
I think at this point we can say housing starts are really, really low, even if sales are lower.
I think you are talking about total annualized housing sales, aren’t you? It is easy to mix the two numbers (new housing sales/existing housing sales, etc.)
No no… housing starts, permits, sales, at the peak, were all well above 2 million a year.
The resales were like 7 million.
Ooops… I see what I whad wrong. The number over 2 million is total housing starts, single family and multi-unit.
Single family starts look like this: (data only available through 2Q 2008)
2001: 1st quarter 274
2nd quarter 374
3rd quarter 341
4th quarter 285
2002: 1st quarter 293
2nd quarter 386
3rd quarter 361
4th quarter 319
2003: 1st quarter 304
2nd quarter 406
3rd quarter 412
4th quarter 377
2004: 1st quarter 345
2nd quarter 456
3rd quarter 440
4th quarter 370
2005: 1st quarter 369
2nd quarter 485
3rd quarter 471
4th quarter 392
2006: 1st quarter 382
2nd quarter 433
3rd quarter 372
4th quarter 278
2007: 1st quarter 260
2nd quarter 333
3rd quarter 265
4th quarter 188
2008: 1st quarterr 162
2nd quarterp 193
If we go with 2001-2002, 329,000 per quarter as “average” and from 2003 to mid-2007 when we built 383,000 per quarter as the bubble, then we built 961 million too many single family homes. (according to U.S. Census stats)
(383-329)*18 quarters.
Again, using 329 per quarter, on average as normal, then since mid-2007 we’ve given back 509,000.
HOWEVER!!!!!!
100 million households growing at 1% a year = 1 million TOTAL housing units needed. How can we need 1.3 million new single family homes when total housing need is only 1 million?
If we re-baseline, to say 250K single-family homes needed per quareter, on average…
Then from 2001 - mid-2007 we overbuilt by 3 million SFR (I think it is close to 5 million total housing units including condos and apartments). And, since mid-2007 we’ve only given back 192,000 of those.
At 330,000… assuming we really need 1 million new single family homes a year, then it would take about 4 years to work off the excess.
Note: 330,000 a year is an 81% decline from 2005’s 1,7171,000 single family home starts.
Those numbers don’t even include the number of big houses being subdivided and people moving in with family or other roomates.
Hey Bear, just for sh*ts and grins, could you do a comparison of Dec 08 to peak? (annual rates) Just to provide some added context.
Behold the bubble’s gargantuan footprint:
Series: HSN1F, New One Family Houses Sold: United States
Series: HOUST, Housing Starts: Total: New Privately Owned Housing Units Started
“New One Family Houses Sold: United States”
They don’t include today’s data point in the graph yet. I believe today’s data point is lower than the full extent of the graph (back to 1/1/63) and perhaps considerably before that to some time when the nation’s population was far smaller than 300m.
Thanks! Looks like it’s right on the cusp of getting oh so very interesting.
Whoa.
MSM dummies still have not digested the NAR’s propaganda, which trumpeted the one-month increase in used home sales off a dismal November and conveniently ignored the year-on-year decline.
ECONOMIC REPORT
New-home sales fall to record low in Dec.
By Greg Robb, MarketWatch
Last update: 10:55 a.m. EST Jan. 29, 2009
…
Earlier this week, the National Association of Realtors reported a pickup in existing home sales in December as prices plunged. This raised hopes that the sector might be stabilizing. See full story.
But most economists expect home sales to fall further, at least temporarily, because of the credit crunch.
The government estimates that 482,000 new homes were sold in 2008. This is 37.9% below the 776,000 homes sold in 2007, a record decline.
Inventories of unsold homes have fallen every month this year, and fell 10% in December. But because of the slow sales pace, the inventory represented 12.9 months supply, up from 12.5 months in November.
Do these numbers include the 70% of foreclosed homes that the banks own that haven’t been listed on the MLS???
Try not to catch yerself a falling knife.
Financial Times
New US home sales plunge to record low
By Alan Rappeport in New York
Published: January 29 2009 16:05 | Last updated: January 29 2009 16:05
Sales of new homes in the US plunged to a record low last month as buyers continued to wait for prices to fall further, government figures showed on Thursday.
New home sales fell by 14.7 per cent in December to an annual rate of 331,000 from a revised rate of 388,000 in November. It was the sharpest decline since 1994. December sales were off by 44.8 per cent on the year.
The median home price also fell in December after ticking up the previous month. New houses fetched $206,500, down from $219,700 in November. The 7 per cent annual drop in the median home price was the steepest since 1970. The commerce department began keeping records in 1963.
“Until prices reach market-clearing levels, sales will remain weak and housing starts are going to stay under downward pressure,” said Joshua Shapiro, chief US economist at MFR.
We recently saw the news from the Census Bureau that privately-owned housing starts in December were at a seasonally adjusted annual rate of 550,000. A crude comparison to the most current new-home sales rate of 331,000 suggests that the home builders are adding to the extant glut of vacant, unneeded, unwanted, unaffordable new homes at a rate of 219,000 per annum, +/- statistical error. It must be time for more housing stimulus!
Every congressman should get a copy of this article.
“…A third of the loans used to finance Washington area commercial buildings and then sold to Wall Street are coming due in the next five years, leaving investors scrambling to find new funding.
Many owners of office towers, hotels, shopping malls and apartment buildings relied on interest-only loans and planned to refinance them when they came due. That’s become increasingly difficult to do in the almost completely frozen credit markets.
If owners can’t refinance their loans, they could be forced to sell at a time when their properties are worth less. They could lose money and be forced to lay off workers. ..”
WaPo
Didn’t you have a saying about “size” and “staying power”?
LOL
Saw that article. The amazing thing is the charts showing the due date of those loans - there’s a peak in 2012 but then a much bigger peak around 2017! ($8 billion in VA, $3B in MD, $2B in DC - thereabouts).
If this is true around the country- this to me says that the pain - the deleveraging - hasn’t even really started in the commercial sector; we’re still singing the national anthem!
Link to graphs
(though probably needs a subscription)
I’ve seen this reversal wedge pattern in this and other downturns. The market creates a low (750) then rallies above (943) the 50 day simple moving average (SMA). Threafter, it pulls back below the 50 day SMA and attempts to rally again. After the rally fails, the market sets a new low.
Maybe it’s different this time. However, it would not surprise me to see a 600 handle on the S & P. Keep in mind, this is just one potential outcome among several. Awareness and preparation for other potential outcomes makes a huge difference in this game.
Looks like a head and shoulders chart pattern to me.
I’m looking closely at that setup too. However, it’s not reflected in the MACD like back in October when we topped. In fact, the MACD looks eerily similar to mid Jan. 08 through June. It fell 200 points thereafter. This is a pivotal point. It could go either way.
A packed room of financiers turned out to hear from the world’s leading doomsayers at a dinner Wednesday night. Niall Ferguson, the history professor and author of “The Ascent of Money: A Financial History of the World”; Nouriel Roubini, known as Dr. Doom (he actually introduces himself that way to people); Nassim N. Taleb, author of “The Black Swan: The Impact of the Highly Improbable”; Robert Engle, a professor at New York University, and Daniel Kahneman, a Nobel award winner; all regaled the room with prognostications of more financial gloom….”
…
He also suggested that we are about to enter what he calls a “global lost decade.” It will be worst in he United States, he said, marking “the twilight of the American hegemony.”
http://dealbook.blogs.nytimes.com/2009/01/29/nassim-taleb-i-was-happy-lehman-went-bust/
The only good news: these mopes cannot make moneys trading. They have all tried and they have all failed (in Mr. Taleb’s case - spectacularly.
Engle is a Nobel Prize recipient as well as Kahneman…
“The only good news: these mopes cannot make moneys trading. They have all tried and they have all failed (in Mr. Taleb’s case - spectacularly.”
Schadenfreudist.
Taleb’s an idiot, and his followers are idiots. Yet another ‘normal curve fundamentalist’. “When you have a hammer, everything looks like a nail,” in a world of screws, bolts, and washers. Good luck with that.
“Niall Ferguson”
Oooh, that’s my boyfriend. I loved the “Ascent of Money”!
It looks like finger pointing day, on the Housing Bubble Blog:
Some say it is the Republicans, some say it is the Democrats, some Wall Street, and still others point to Bankers.
I have to say that we are all culpable, at some level. I am a conservative, but not Republican. I am culpable for believing “smaller government, lower tax” Republicans. I thought they were actually honest, and would follow their ideological lines. At every level of government, I voted for people who fed at the public trough, and sought their own interests (good ole Adam Smith) first, rather than the good of their country. I wanted to believe all the campaign drool about “country first”, etc.
It is easy for me to see the fault of Democrats, with respect to financial matters. Most Democrats genuinely want to do good with someone else’s money. And most programs have some merit. The problem is that my Democratic friends are often “Institutionalists”, meaning that they have never had to manage a company budget, meet a payroll, are generate a profit, with the reality of bankruptcy facing them if they failed.
The reality that is staring me in the face is that most of my quote “Conservative Republican” politicians are no different. I have to agree with what other HBB posters have said, that the Republicans preach small government and free markets, but their actions betray their ideologies.
Bottom line for me: they really are all the same, and I am responsible for voting for the entire mess the past 30 years.
Two points-
1. This did not start with Ronald Reagan, but much earlier (yes, he continued it).
2. When it comes to blame for government financial matters, most people start with the President, but please read your Constitution. It is Congress that has the power to spend money and create budgets that the President signs.
Each of us needs to look at our own political guy/gal and extend that same criticism to him/her, as to the President. It really is time to throw the whole gang out, and send some farmers, merchants, machinists, loggers, etc. back to Washington to clean up what the supposed “highly trained” and “well educated” have created and perpetuated. We always poke fun at lawyers because the vast majority that serve in Washington are in fact, leagal beagles. But, maybe that really is part of the problem. We need people that have had to fix real problems, and managed their respective budgets properly, in the process.
And yes, it makes me sick when supposed “Capitalists” such as Jack Welch start justifying the misuse of public monies in the name of retaining talent. When any small company has a cash crisis, the talented get laid off just like the guy that takes out the garbage. Give me a break!
The federal government won the war against small government in 1865, and killed the concept in 1931.
There’s only 1 President. There are millions of civil servants.
I was pretty satisfied when we got around to blaming the mis-pricing of money by the Fed, under several presidents, on the last several bubbles, cucmulating in the latest Treasuries bubble. When your central bank manipulates something as fundamental as interest rates, you haven’t got a free market, have you?
Ever notice how so many of our Representatives have a background in Real Estate?
Anybody have time to actually read through the darned stimulus bill?
http://www.rules.house.gov/111/LegText/111_hr1_text.pdf
Best part I’ve been directed to thus far is sec. 1112 on pp 14.
“None of the funds provided by this Act may be made available to the State of Illinois, or any agency of the State, unless (1) the use of such funds by the State is approved in legislation enacted by the State after the date of the enactment of this Act, or (2) Rod. R. Blagojevich no longer holds the office of the governor of the State of Illinois.”
I like it! That paragraph, I mean.
ROFLMAO!
So much for carrying on the mantle of Ghandi and Mandela.
A little-publicized element of the “stimulus” bill is that govt will now be paying 65% of unemployed workers’ COBRA bill each month.
It gets worse (or better depending on your viewpoint). If you are at least 55 years old or have worked for the company at least 10 years when you are laid off, you may keep COBRA until you reach age 65 and Medicare coverage begins.
Since they now have cheap, permanent medical coverage, a LOT of people will end up working permanently in the shadow economy, where it’s all on a cash basis and no taxes are paid. That means the ever fewer suckers who hold “regular” jobs will be paying more and more of the taxes.
If the government is going to subsidize unemployment, there will be more unemployed.
I don’t notice a lot of 65 year olds working in the shadow economy due.
I bet most of the 55-65 year olds won’t work at all.
Point well made. However, the 55+ age group takes a hit with age discrimination. This provision is probably about encouraging them to take “early retirement” rather than adding to the pool of job hunters. Its about manipulating the numbers if you ask me.
There is a whole lot more to be upset about in regards to TARP 2.0 than this, IMO.
A 65% subsidy for COBRA benefits is going to amount to $300-600 per month. Even if you were given this subsidy until you reach 65, I doubt that the “free” $3600-$7200 per year are going to influence you one way or another, especially since you are going to have to kick in $2000-4000 to get that “free” subsidy. That 35% that you still have to pay is probably pretty close to the amount you would pay if you were employed, so what’s the difference?
I guess the argument would be that medical coverage costs the same whether you are paying taxes or not. Do you really think that a significant number of people are going to avoid taxes just for this reason? It sounds to me like it would help a lot more people that want medical coverage but can’t afford it than it would people that want to avoid paying taxes.
I think it would allow a lot of people to take “voluntary” retirement and start receiving pensions at age 55 and not go back work(GM/Ford/IBM/HP/Kodak/Caterpillar/etc) .
I think it would also allow a lot of companies to “offer” voluntary retirement to all the workers over 55.
End result, the new retirement age is 55.
Can you provide a link to this? Urgently need documentation on this. Thanks
Well, hell I guess that’s good news for me, anyway. Health insurance under COBRA is still plenty expensive..I would work just to pay for it.
I read this as a further expansion of the socialization of medicine.
No job? No problem. We have a plan.
“If the government is going to subsidize unemployment, there will be more unemployed.”
But Bill, the unemployment number will go down!
“A little-publicized element of the “stimulus” bill is that govt will now be paying 65% of unemployed workers’ COBRA bill each month.”
Yea !!! That was my biggest fear of the layoff COBRA very expensive
Classic vozzie sign-off last night, for those who missed it:
“nytol…fist fulla pills and a 12 pack of bud is bettern cuttiner @#$%in head off.”
At least, he didn’t say “fistula”.
“At least, he didn’t say “fistula”. ”
Yeah, but too many nights doing that will cause you to need one. :.)
Come on! that’s a step up for the Voz. Usually he hits the Pale Ale and that crap is murderous.
Who puts the Whoop, in the Whoop-Dee-Doop-Dee-Doo?
Who puts the Blam, in the Blam-A-Lam-A-Ding-Dong?
Rodeo Clowns have hard life.
in all seriousness.
I wrote that after reading about some sort of “family slaying and suicide” due to some sort of financial calamity….
its just money, its not real.
*full disclosure, long BZF.
The investment seeks to earn current income reflective of money market rates in Brazil available to foreign investors and to provide exposure to changes in the value of the Brazilian Real relative to the U.S. dollar. The fund normally invests in a combination of U.S. money market securities with forward currency contracts and currency swaps which is designed to create a position economically similar to a money market security denominated in Brazilian Real. The average portfolio maturity is 90 days or less. It does not purchase any money market securities with a remaining maturity of more than 397 calendar days. The fund is nondiversified.
Come December you’ll know.
Et por moi; in for a Real, in for real. I’ll stick with the 12.77% and punt. I hate f’kn commissions and management fees. Parasites, the lot of them.
Hiz says,
“Unfortunately
We then lose 70% of all research jobs, 90% of the rest of the manufacturing jobs, 90% of all hospital jobs (incl doctors), 70% of all engineering jobs and 95+% of all computer programming jobs.
There is no safe job.
It would get really ugly really fast. The social upheaval would make this country a very unpleasant place to live.”
Personally, I think you are setting up a false dichotomy falacy… Keep the mega-rich, mega-rich, OR no one has any job and the country nd the economy die.
However, let’s assume for the sake of argument that this is not a flase dichotomy. Let’s say that our choices are, 1) keep the mega-rich, mega-rich by printing $10 trillion out of thin air, meaning we’re going to get massive inflation as the money supply gets totally out of whack with the amount of goods and services in the “real”economy… or 2) 75% unemployment, everyone in default, soup lines, end of the economy as we have known it.
Well, then I pick 2! 1) is an attempt… a false hope that somehow we can reboot the matrix, and the poorest 80% of the population can return to spending 110% of their income while the top 20% own all the ropes that the poor are hanging themselves with. 1) will fail, and in the end do far more damage.
2) we know can REALLY reboot the system. Bring everyone back to $0, and let hard-work and real productivity be rewarded again.
I hope you know me well enough to know I’m not one of the end-of-the-world-nuts, though many called me that 2-3 years ago when I was predicting a 40+% decline in house prices with a 75% drop in many areas not only possible but likely.
I’ve never been a “stock the basement with food and ammo” type guy. I’m ex Navy. I’m 7th consecutive generation U.S. military vet reaching back to the Revolution (okay, my Heatian ancestors were on the wrong side of that one, but they defected and switched sides in exchange for citizenship) . My nephiew is 8th generation, and my son is in ROTC.
But, I must say… This bad bank proposal has me ready to grab my gun and storm the bastille.
We’re going to spend upto $2 trillion (you know that is just the first round of many to come, so really more like $5 trillion) to ensure that idiots that loaned money to poor people, get thier money back.
NO!!!!
If that is the way it is going to be, let the revolution begin.
Isn’t it a bit curious how someone who in one post offers up the most dire of potential outcomes with 70%~90% unemployment in numerous sectors, can promptly go on to a new post that ridicules other doomsayers like Roubini and Taleb?
What’s the logic? Is this crisis is too big…or it’s not big enough? It all depends on how you have it played I guess.
I do not try to pick favorites. I invest on probabilities.
Every scenario can be calculated. The US is 80% service economy and these jobs would be toast in a depression. Not fiction. Computer programmers et ilk are just service jobs.
As for Mssrs. Roubini et al, I think their conclusions are in super nova territory unless we go into depression. They were right on their direction, they are just lousy traders.
We cannot reboot the system without having hundreds of millions of people suffer. Is it worth it? to you maybe, but I do not think you have thought it through.
I wrote a year or two ago, that the US would deliberately devalue the dollar to save the banks. There is no change in my opinion.
The market obviously is perceiving the same as the TIPS keep widening over the treasuries.
I try to look objectively at all data. I do not keep (to the best of my knowledge) a bias to any scenario.
The data says, “You’re looking wrong”. Persist in your biases if it makes you feel better, but if you want to preserve capital don’t bet on deflation or depression. They are supernovas.
As FSSP often asks: “Devalue the dollar against what?”
Do you think that the China, Japan, EU et al. will just sit and wait? It is “Beggar thy neighbour”. I think you are oversimplifying the situation Hoz.
I find your posts really helpful, hoz. I think you have common sense, which isn’t so common.
Thank you for the well reasoned response. Don’t get me wrong, your arguments are thought provoking and like many here, I do factor them into my own ongoing internal debate. That said, I cannot bring myself to totally subscribe to such a view that attributes so much control to the PTB.
So all the same, I’ll stick to my “bias” with appropriate hedges. BTW, I’m puzzled as to what exactly makes one view (deflation) a “bias” while the opposing view (stag/inflation) is somehow objectively unbiased.
super nova.
sellin books YO !
its the worst of the worst, cant get worse, end of times, black swan….gmme a @#$%^in break.
shattereed fundamentals, brink of disaster, hell-in-a-handbasket…
Gross is simply talking his book. I suspect he is growing increasingly desperate as the following quote demonstrates:
Make no mistake, the current conundrum that must be solved is: how to make the price of 120 million U.S. barns stop going down in price and then to make them go up again. That, however, is easier said than done. One of the wisest men I know has this serious but admittedly impractical solution: have the government buy one million new/unoccupied homes, blow them up, and then start all over again. Absent that, he’s not quite sure what to do, nor am I, with the exception of the next paragraph’s proposal.
Investment Outlook, Bill Gross | August 2008
sounds like they studied the Netherlands for inspiration on perpetually rising homeprices …
home demolition is a sure and often used tactic here; usually it’s homes from ex-gov. housing corporations (they own most of the Dutch rental housing stock). They demolish homes that are ‘no longer wanted’ (perfectly OK, but sometimes a bit outdated) so they can build new ones with much higher rents, or even privately owned luxury homes. One reason for demolishing older homes is that Dutch law makes it impossible to increase rents more than inflation. These corporations get huge subsidies from government for each home that is demolished, sometimes up to 125K.
Lately politicians have suggested that they will need to demolish privately owned homes as well, in order to support homeprices (not the official objective, of course). The owners of the properties are fully compensated, obviously. The argument of the kleptocrats is that if they don’t do this, there will be too many vacancies in some areas which is bad for the neighborhood (can you believe it? in a country where the pundits argue that there is a severe shortage of housing, when they need justification for sky high homeprices).
Some housing experts say demolition strategy is one of the main topics for the next 10 years in the Dutch housing market.
Maybe they can invite the US Army to do some Iran practising in Netherlands? Or just blow up the dikes, which would eliminate about 75% of the Dutch housing stock?
Or just blow up the dikes, which would eliminate about 75% of the Dutch housing stock?
Like rinse repeat ?
“.. I want companies to face up to their owners and yes – their creditors. I want management to focus not on their options, but on mine and that of other investors. We have the option to buy or to not buy your securities. And that option should be based not just on the increasingly revealing financial statistics that have had to be dragged kicking and screaming out of the bowels of corporate back-offices, but on the investor friendly/investor honest/investor first attitudes of management. My fear is that this newborn faux hostility in the investment attitudes of lenders and stockholders will go the way of many other short-term jiggles in the inevitable march of capitalistic excess. I sense we are not yet “mad as hell” nor are we to the point of “not taking it anymore.” But we should be. It’s our money – or in the case of PIMCO – the money of our clients whom we represent. Sure it’s got to go somewhere, but we should require some Buffett-like answers. Value and honesty should dominate corporate decision-making just like it does at Berkshire Hathaway.”
Investment Outlook
Mar 2002
Mr. Gross is not talking his book. He does not need to talk his book. Why don’t you try reading his writings with an open mind? Like a lot of individuals he is trying to find a solution to 28 years of corporate mismanagement. And,as opposed to me who did nothing, he wrote about it and complained about it and talked to anyone that would listen.
With all due respect, Gross talks his book and so, for that matter, does Buffet.
Clearly, if 10% have 90% of the money, and aren’t patriotically spending it for food and WalMart bills, then why don’t we nationalize the rich.
We’d all be out of work for awhile, but we could spend 10 times as much while we were waiting for some of us to stop spending and start figuring out how to set up companies and stuff to, you know, make stuff and things.
The rich are supposed to be spending their money on good sports teams so we don’t think these kinds of thoughts.
To me a thief is a thief, whether it’s Bernie Madoff, or a strawberry picker who lied on his mortgage application.
Just as I’m reading from people on the HBB blog who wonder who would hire a former investment banker, I feel that we shouldn’t hire former real-estate agents, mortgage brokers, and anyone who defaulted on a home (with the exception of folks who only had one fixed-rate mortgage). They’re just as guilty; they just didn’t have the skill or opportunity to steal more.
“They’re just as guilty”
I don’t agree. I don’t expect a strawberry picker to be as educated as the head of a hedge fund. And I think there’s a difference between someone who kills a guy in a barroom brawl and someone who commits premeditated mass murder.
Choose your battles.
Anyone else notice the Cato Institute’s full-page ad in the WaPo today? Me likey.
Link
(warning pdf)
There is no disagreement that we
need action by our government,
a recovery plan that will help to
jumpstart the economy.
— PRESIDENT-ELECT BARACK OBAMA, JANUARY 9 , 2009
With all due respect Mr. President, that is not true.
Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.
(list of signatures follows)
bull friggin’ s—
tax cutting is the equivalent of government spending (and the net is the deficit)
they just want the money spent on themselves and their buddies, rather than on their enemies
mighty funny that they bring up Keynes when they are suggesting moves from the same playbook! liars!
Um…. no. They’re advocating both cutting taxes and cutting spending. Read it again please.
And… no idea where you get “they just want the money spent on themselves and their buddies, rather than on their enemies” from. If you see a proposal to increase government contributions to the CATO institute, please provide some info.
tax cutting is the equivalent of government spending (and the net is the deficit)
Wrong!
Tax cutting returns the wealth to those it properly belongs in the first place. The private individual has an incentive and personal responsibility to use his wealth as he sees fit. Government spending has no incentive to spend efficiently. There is no profit motive.
Your words in italics above are merely a slogan meme pushed by the gulfstream socialists.
posted a link with text… it’ll be here eventually….
Jan. 29 (Bloomberg) — Oh, the sweet, saccharine smell of pretense.
It looks as though the days may be numbered for General Electric Co.’s top-notch, AAA credit rating. Sure, the debt swamis at Moody’s Investors Service and Standard & Poor’s haven’t cut it yet. Just give them time, though, for there’s little doubt about how this story should end.
The first step, going by the usual script, is for one of the raters to declare there’s an outside chance it will unleash the dreaded downgrade, years after the bond markets stopped believing its ratings anyway. S&P did that Dec. 18, saying there’s a 1-in-3 possibility it would cut the pristine ratings at GE and its finance arm, GE Capital Corp., within two years.
Step two is for the other big rating company to say “me, too.” True to form, Moody’s this week said it will begin its own review of GE and GE Capital.
Next comes the elaborate dance. Months pass. Hands are wrung, and images of deep reflection evoked. Out of nowhere, one of the raters then says it has begun last-chance, we-really-mean- it-now deliberations, laying the groundwork for the final blow, which may or may not come swiftly. Whichever rater gets there last looks all the more foolish. Meanwhile, the rest of us scratch our heads, amazed at the whole charade.
This description of the rating agencies made me laugh. They should all be in jail.
ratings agencies: legalized graft
Today’s WSJ has an article on the ripple effect of one family’s layoff (I think you need to be a subscriber to see it.)
This quote got me:
The math wasn’t pretty. Mr. Smith had earned about $90,000 at Metrostudy. His wife, Kimberly, earns about the same at a retail marketing firm. The family concluded it needed to cut its spending nearly in half.
The Smiths weren’t unusually lavish spenders, but they rarely stopped to think before spending money: new computers at Christmas, new videogames for the kids’ birthdays, a new car at the first sign of trouble from the old one. If the money in the checking account wasn’t enough to cover it, well, that’s what credit cards were for. They accumulated more than $25,000 in credit-card debt.
Now they realized those carefree spending habits were the first thing that had to go.
The husband worked at a housing research firm which consulted for homebuilders. (Doesn’t he deserve to lose his job? I don’t mean to be cruel, but if his advice was anything but “STOP BUILDING” he was dangerously wrong.)
Anyway, back on topic: They were earning $180K/year and were living beyond their means before the husband lost his job! 25K in revolving debt? Who were they trying to fool?
I think we can make an educated guess about the value of his professional advice from this personal story …
If your neighbor loses his job it is a recession, if you lose your job then it is a depression.
I am here to confirm that we are in a depression.
A contract that I was working on (and providing the vast majority of our small companies revenue) was cut with only 2 days notice due to a “freeze on all new contracts” issued by a major earth moving equipment manufacturer. Until this week this funding was assumed 95% safe and management had not planned contingencies for losing it. They planned on losing everything else, but not this.
Fortunately, it looks like a new contract from another customer might hit in the next few weeks if they can get the funding through bureaucracy before any more bad economic news is announced. Otherwise, I am taking this news as a 2 month notice (how long until the companies savings are gone).
I was suspecting something was up when they decided to schedule yearly performance reviews 4 months early.
I am sure that the unemployment created by the “new contract freeze” is probably on the order of 20K or more reported job losses in small companies.
Consider this a warning that things can and will change over night.
Sorry to hear that Dan. Hope you can find something good! Are you perchance in the NoVA area? If so, what’s your thing?
I’m a software engineer living in the Virginia Tech area. I escaped the NoVA area 4 years ago (dodging a 150K+ loss on my house if I had stayed).
Moving is out of the question, especially to a big city. I have no debt, own my home, and get $400/month in rent that can be stretched to feed the family if necessary. My biggest problem will be one of liquidity because I keep most of my savings in tangibles.
If you know of any work that I could do from this area I would be very interested :).
My backup plan is starting a home based business serving the local community, preferably doing something that will be in demand during a recession and has little dependence upon foreign resources. I figure this mess will not end until we have hyperinflation, so I might as well plan on it.
Maybe though doubt it - got an email address or something I can send info to? Guess this board doesn’t support ezim.
Google Booze Allen Hamilton. A colleague sent me a link to a web site a few days ago. They are in the Virginia area and many other places. They are hiring software engineers.
Booze Allen Hamilton:
http://money.cnn.com/galleries/2009/fortune/0901/gallery.bestcos_mosthiring.fortune/11.html
Dan - with you on this one. I started a company doing tech business too and a large aerospace company is my largest customer, and they are not doing too well. What looked like a sure fire bet is now gone, and I’m back to drumming up some more business.
Savings are decent but I hope we see some signs of life soon. Best of luck to you.
Usually when you think of counterfeit it’s paper money. This is bound to catch on, since it is harder to reproduce good fake paper, like the treasury…
Record number of fake £1 coins in circulation as fraudsters increase supply by 27%
By Lucy Ballinger
Last updated at 4:07 PM on 29th January 2009
Record numbers of fake £1 coins are being pumped into the economy threatening to undermine confidence in the money supply.
Criminal gangs using specialised machinery are believed to be behind the dramatic surge of the fake coins in circulation in the past year.
The rising number of counterfeit £1 coins means that one in every 40 is now worthless.
The total amount of fake £1 coins has hit £37.5million - the highest amount since the coin was introduced in 1983 - and a rise of 26 per cent since 2007, when 30million coins were found to be fakes.
Interesting - what source?
http://www.dailymail.co.uk/news/article-1131713/Record-number-fake-1-coins-circulation-fraudsters-increase-supply-27.html
Here’s an article that mentions how to spot the fakes:
link
so, the FED is getting a little help in ballooning the money supply?
I never understand why they are so negative about these counterfeiting operations. It seems to me that they are doing exactly what Dr. Ben ordered, except that the first receivers of this new money are not the WallStreet flavor of gangsters.
You see the problem is that there is no interest paid on that new money… what good is it to issue new money if there is no interest due… oh wait, Fed Funds rate is now 0… never mind.
(tin foil hat)
An end-around effort to help push Britain into the EU?
(/tin foil hat)
I remember from news stories that both in 2007 and especially in 2008, euro counterfeiting has surged; so the 2006 number is definitely unrealistic now. Most problems are with 50 euro bills though, not coins (maybe too much copper in them?).
From today’s Bangor Daily News:
1/29/09
Editorial
The sin of ‘house lust’
In his new book “House Lust,” writer Daniel McGinn explores the complex relationship Americans have with their homes. It’s not an abstract exercise; if one cause could be attributed to the current recession, it’s that too many Americans confused the value of their homes with their personal wealth.
The worst came from those who bought houses they could not afford to pay for and lost to the bank. But the problem goes deeper into mainstream America and lies with a mind-set that includes measuring personal financial success against one’s neighbors, and having unaffordable expectations about what a home should be.
Mr. McGinn traveled the country, talking with people about their feelings, aspirations and values relating to their homes. A woman in Bellingham, Wash., who owns a house with hardwood floors, multiple bathrooms and granite countertops, confides: “My house is really pretty, with plenty of room, but it just doesn’t do it for me. My artistic imagination isn’t lit up by it — It’s too much ‘practical,’ and not enough ‘dreamy.’ It’s a little soul-less.” That sort of assessment seems more appropriate for a potential spouse, not a building.
Mr. McGinn defines “house lust” using comedian Jeff Foxworthy’s “You might be a redneck” routine: “If you can instantly identify whether a countertop is made of Argentine Balmoral or Giallo Imperial granite, you may have House Lust. If, upon hearing that a friend has bought a new home, you can’t resist asking its square footage, the lot size, and the year it was built, it’s very possible that you have House Lust.”
“Homes and real estate have always had a peculiar hold on the American psyche,” he writes. “Our Founding Fathers considered land ownership a prerequisite to voting. A generation later, their pioneer descendants settled the West, drawn largely by an irresistible lure: cheap (or even free) land.”
But “house lust” is a recent phenomenon, Mr. McGinn notes, quoting Yale economist Robert Shiller: “Before the last decades of the 20th century, it is striking that there was relatively little public discussion [in newspapers] of home prices.”
In his self-described holy war against the United States, Osama bin Laden aimed to ruin the national economy through fear. In a perversely ironic twist, many Americans turned to their homes as a refuge from a scary world. Instead of flying to Europe, they added a sunroom or an entertainment room. Some sold their homes in the New York area for seven-figure prices and built enormous waterfront homes in Maine. And the values kept climbing, even if personal income did not. Then, when a flight to Florida for a vacation no longer seemed life-threatening, many borrowed on the value of their homes to pay for the trip. Or for a new boat. Or to pay off the credit cards.
A more grounded expectation for housing is in order. If your house is structurally sound, dry and warm, you are ahead of most of the people in the world. By all means, decorate, paint, insulate and improve. But as the lyric in a Bob Dylan song warns, “And don’t go mistaking Paradise for that home across the road.”
http://www.bangordailynews.com/detail/98258.html
Stimulus, schmimulus, today’s economic news does not bode well for recovery in 2009. Of course, housing is going to bottom out by the end of this year, right????
Jobless claims hit record peak, durable orders slide
Thu Jan 29, 2009 1:37pm EST
By Lucia Mutikani
WASHINGTON (Reuters) - The number of Americans claiming jobless benefits hit a record high in mid-January, while orders for long-lasting factory goods fell for a fifth month in December, according to data on Thursday that showed the economy in steep decline.
Piling on the gloom for an economy mired in recession for more than a year, sales of newly built single-family homes slumped to their lowest levels since records started in 1963.
The batch of bleak data cast doubt on whether the economy would begin to recover in the second half of the year, since stability in the housing market, the root of the worst financial crisis in more than 70 years, may be a prerequisite.
It also underlined the urgency of efforts by the Obama administration to rush a stimulus plan totaling $825 billion or more through Congress.
“I don’t think we are going to see a recovery until 2010. It’s possible the economy can bottom sometime in the fall or the winter, but it will be pretty rough sailing ahead, especially for the next quarter or two,” said Michael Darda, chief economist at MKM Partners in Greenwich Connecticut.
The number of people staying on state jobless benefits rolls after drawing an initial week of aid jumped 159,000 to a higher-than-forecast 4.78 million in the week ended January 17, the most recent week for which data is available.
It was the highest reading on records dating to 1967.
Initial claims for unemployment insurance rose to 588,000 last week, up marginally from a week earlier.
Of course, housing is going to bottom out by the end of this year, right????
Or, according to a mortgage guy I recently spoke to, in the middle of this year. HA!
I think you may have missed the bottom in interest rates.
If you can’t say anything nice about housing, you are in the right place.
latest news
U.S. Dec. new-home sales weaker than 390,000 pace expected
MARKETWATCH FIRST TAKE
If you can’t say anything nice …
Commentary: Let’s put a moratorium on housing news we know will be bad
By MarketWatch
Last update: 11:25 a.m. EST Jan. 29, 2009
CHICAGO (MarketWatch) — Let’s face it: There isn’t going to be any good housing news for a while. So since we can’t say anything nice, let’s quit saying anything at all.
Housing is in a downward spiral, and there appears no way out at the moment. New-home sales plummeted nearly 15% in December, capping off the worst year in the home-building business and the existing-home market if not ever than certainly since the Great Depression. See Economic Report.
The problem with housing is clearly an economic one, as trampled consumer confidence, mounting job losses and soaring mortgage delinquencies take their toll on everyone, whether they are thinking of jumping into the housing market or not.
But psychology now plays just as important a role in this mess: Being hit repeatedly with messages such as “record-low home sales,” “record drop in home prices” and “record-high foreclosures” makes any sane person want to stock up the cellar, bar the windows and huddle around the fireplace. You’re not going to tour model homes in that condition.
So how about for 2009 we give up on the monthly sales numbers and builder-confidence surveys and home-price indexes. We already know 2009 isn’t going to be any better than 2008 in the housing market. Let’s just wait until next January to confirm that and avoid all the angst in between.
“So how about for 2009 we give up on the monthly sales numbers and builder-confidence surveys and home-price indexes. We already know 2009 isn’t going to be any better than 2008 in the housing market. Let’s just wait until next January to confirm that and avoid all the angst in between”.
Oh HELL no! I want the “bad” news about the housing market to be pumped 24/7. Just like the ‘good’ news was, screw the NAR and their ilk.
gold touching new alltime high in euros today.
lots of bad news in the EU media: pension fund buffers are crashing, layoff numbers keep growing quickly, strikes and social unrest in more and more countries (most EU citizens like those in the US are spoiled children, they cannot accept that the good times couldn’t last …). Homeprices are still doing well on the EU mainland and I’m told prices in Germany (like those in Netherlands) are on the rise again.
Dutch consumer and homeowner organisations are trying to force the banks (using political pressure) to pass the 2% ECB bank lending rates directly into mortgage rates (currently 4-4.5%). If that happens, we will could have another price surge in Netherlands because the effective rate would go from 2 to 1% (because of HMD). With most people using 100-110% I/O loans this is scary …
The consumer / homeowner organisations claim homeowners simply deserve these low rates. They are totally clueless IMHO but who knows, maybe they will get what they are asking for, including an even bigger housing crash down the road.
Davos meeting must be going well.
“They are totally clueless IMHO but who knows, maybe they will get what they are asking for, including an even bigger housing crash down the road”.
Well they can keep snorting the coke for a long time, but one day the heart will blow a valve, and hit it’s knees in a hurry. What goes up, must come down.
new all time high today in Euro Gold at EUR 702.
After the minor pullback yesterday it’s probably off to the races now, just like some years ago when the EUR 350 ceiling was broken…
Still a ways off in $ - 907 right now, previous high was 1040. That was back when the $ plunged last year.
In Davos, Switzerland, today the world’s leading technocrats are gathering to drum up a global stimulus plan. Ironically, the U.S. is looking in relatively good shape compared to the economies of many countries in Europe and Asia.
“We cannot underestimate the challenges and dangers that the world economy faces in 2009,” warned Stephen Roach, chairman of Morgan Stanley Asia, at the meeting yesterday. “It will most likely be the first year since World War II when GDP actually contracts.”
And since we are in “a global recession the likes of which we have never seen,” Roach insisted there will be “no quick fix.”
“We can’t delude ourselves that [economic stimulus] is going to jump-start the U.S. economy… The concept of a vigorous ‘V’-shaped recovery is for business cycles of the past, but not for this post-bubble, post-crisis business cycle. It is going to be a long slog in 2010, and 2011.”
Yep, a strike in this business climate is a pure genius move by the steelworkers union. Screw the union they don’t want to work get a job else where.
Refinery Workers to Reject Offer, Threaten to Strike (Update3)
By Aaron Clark and Jordan Burke
Jan. 29 (Bloomberg) — The United Steelworkers union plans to reject a contract offer from Royal Dutch Shell Plc, setting the stage for a nationwide strike of 30,000 workers at U.S. refineries processing about two-thirds of the country’s oil.
Failure to reach a new accord “poses a real threat of strike action,” Gary Beevers, the Steelworkers’ international vice president in charge of the talks, said in a written message to union members. The offer is the third made so far by Shell and all have been rejected by the union, which is seeking a “substantial wage increase” with a cost of living adjustment.
Shell offered union workers a three-year contract with a $500 signing bonus and a 2.5 percent hourly wage increase in the second and third years, the memo showed. Workers would receive a 75 cent-an-hour pay increase in the first year. The current agreement expires at 12:01 a.m. on Feb. 1. Members have already authorized the union to call a strike.
“This is a contract negotiation that the market needs to take seriously because the impact of a strike is potentially extreme,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York.
They are very experienced. The head of the steelworkers union have MBAs from the same ivy league schools the C level employees went to.
In the early 80’s steelworkers unions were able to extract 30% raises.
Of course, inflation was 18% at the time.
Support union labor…. it’s the right thing to do.
REAL ESTATE
Time To Buy?
Cheap rates and foreclosure sales lure house hunters.
By Andrew Murr | Newsweek Web Exclusive
Jan 29, 2009
Falling housing prices spelled opportunity to A. J. Harpold. The Los Angeles-based entertainment assistant, 29, had been looking for a year to buy her first home when she joined 2,300 other potential buyers at a foreclosure auction recently at the L.A. Convention Center. Her target: Lot 14, a 4 BR, 2 BA San Fernando Valley bungalow she’d inspected with her real-estate agent and contractor. As the auctioneer cried the prices and the tuxedo-clad bidders’ assistant roamed the aisles, Harpold jumped in at $330,000. Another bidder topped her. She came back at $350,000, then $370,000 before she won at $385,000 ($404,000 counting a 5 percent auction fee). “The price was just right,” she says, noting that she’d be paying 35 percent less than the home’s 2006 sale price of $665,000.
Getting a loan remains problematic, but buyers with good credit are able to get approvals. Harpold, who makes about $60,000 yearly by splitting time as an assistant to Marty Kudelka, Justin Timberlake’s choreographer, as well as to dancer and actress Mayte Garcia, Prince’s ex-wife, says banks have told her she has “exceptional credit” with a FICO score of more than 800, which she earned by having plenty of savings and little credit-card debt. She is still working out the details of her loan, but she says she’s considering a 30-year mortgage, with no points, at 5.3 percent. She’s hoping to keep her down payment low, around 5 percent, “so I can have more liquid cash to fix up the house.” (FHA-insured loans still call for as little as 3 percent down payment.)
How do you compete against that? She’s 2011’s foreclosure story.
I am seriously wondering if these knife-catchers and “make it rain” politicians will ever allow me to buy a home with traditional rubrics.
Rentaz4life
“I am seriously wondering if these knife-catchers and “make it rain” politicians will ever allow me to buy a home with traditional rubrics”.
There are millions of people out there who seriously believe that the present situation only very temporary, and that a big turn around is just around the corner.
I spoke with a fellow yesterday that said to me, “well this down turn happened fast, so we’ll get out of it fast”.
No response from me, no reason, he has no clue what caused it and no clue what’s in store. It has been said before, that many lessons will be learned. I’m not so sure, the general public is generally clueless, so they won’t learn because they are ineducable.
Thanks for your words WMBZ. I get very angry at all of this sometimes.
I would like to be able to exist with out all of these nutbags gaming the frick out of the system. I know I’ll take flack for playing the complainer card, but seriously, I have a reasonable job and income, what’s wrong with expecting a reasonable house?
(searches for pitchfork in garage)
“I have a reasonable job and income, what’s wrong with expecting a reasonable house”?
You will get it, the unreasonableness will be flushed from the system, and it isn’t that far off!
“You will get it, the unreasonableness will be flushed from the system, and it isn’t that far off!”
Too late! I’m bloggin’ live from my local bank. They’re closed but I’m still swinging my pitchfork around!
60k a year buying a 400K house = over 6x income
as they say in LA “Whatever “
Looks like we erased all of yesterday’s market gains.
Why does this reminds me of Newton’s Third Law.
Tomorrow should be interesting. Another down day like this and I’ll dip my toe in on the long side again for a trade or two.
While the panel reports from on high, bailout business as usual plays out on the ground.
US policymakers slammed over crisis
By Andrew Ward in Washington
Published: January 29 2009 20:22 | Last updated: January 29 2009 20:22
A congressional panel has blamed complacent policymakers for missing warning signs of the financial crisis and called for tighter regulations to prevent it happening again.
In a draft report released on Thursday, the Congressional Oversight Panel recommended greater supervision of financial institutions deemed “too big to fail” and limits on leverage.
…
“The present regulatory system has failed to effectively manage risk, require sufficient transparency and ensure fair dealings,” the report said. The panel argued that the crisis should have “come as no surprise”, citing signs as far back as the savings and loan crisis of the 1980s as evidence of trouble ahead.
…
In its first report last month, the panel, chaired by Elizabeth Warren, a Harvard law professor, attacked the administration of George W. Bush for its handling of the troubled asset relief programme set up last year to stabilise the financial sector.
Thursday’s report took a broader look at the crisis. “If companies that are now deemed too big to fail had been better regulated . . . then these companies could have been allowed to fail or to reorganise without taxpayer bail-outs,” it concluded.
The report comes as the Obama administration draws up plans for how to use a second $350bn tranche of financial bail-out funds. There is mounting speculation that the administration will propose additional measures to clean up “toxic assets” on Wall Street.
Copyright The Financial Times Limited 2009
Jan. 29 (Bloomberg) — Vice President Joe Biden said the Obama administration will wait to see if the second $350 billion installment of the federal rescue money “unclogs” credit markets before establishing a government-run bank to purchase bad assets.
“Once we do that and see whether or not we can get this system kick-started, the credit system flowing more, that’s when we’ll make the judgment whether anything else is necessary,” Biden said in an interview today on CNBC.
“Vice President Joe Biden said the Obama administration will wait to see if the second $350 billion installment of the federal rescue money “unclogs” credit markets before establishing a government-run bank to purchase bad assets”.
Well comb over, I can tell you with 100% certainty that ‘it’ won’t unclog anything, but then again I’m talking to a guy that thought FDR was president in 1929 and went on TV to speak to the American public.
This fellow is among the clueless and is way out of the ‘loop’. What a jackass.
Bad bank could cost $4 trillion. More if commercial R/E loans are included.
I wonder if that includes corp. debt, consumer debt such as auto and credit card… No, can’t be. Those are add-ons for later, right?
Would it not be cheaper to just start over, create a new banking system? Liquidate these clowns already. Four trillion is a lot of money in a fractional reserve system.
Yeah… let’s do that! Put the money into medium banks that are not in bad shape so they can grow into new bigger banks.
Then bring back Glass-Stiegal, no interstate banks, and many of the other Depression era regualtions that were intended to make sure it didn’t happen again!
The Glass-Steagall Act of 1933 was repealed on Nov. 12th, 1999. It was indeed a sad day for our nation, Darrell.
“Those are add-ons for later, right”?
Sure, they are all dart board numbers.
4 trillion, 6 trillion etc… The PTB have clearly stated ‘they’ will not be constrained by any number figure in their quest to ‘fix’ it!
“…The Russian leader mocked U.S. businessmen who he said had boasted at last year’s Davos meeting of the U.S. economy’s fundamental strength and “cloudless” prospects. “Today, investment banks, the pride of Wall Street, have virtually ceased to exist,” he said.
Earlier, Mr. Wen called for an expansion of regulatory “coverage of the international financial system, with particular emphasis on strengthening the supervision on major reserve currencies.”
While Mr. Wen never named the U.S., his critique of its failings was as sweeping as Mr. Putin’s. The financial crisis, he said, was “attributable to inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit” — and other excesses….”
WSJ
Rarely trust the Russians. They can pay me back for shutting the markets in 97, then I’ll listen.
Were you ever out camping, in the cold and wet, and all you had was wet wood and one book of matches and a pocket knife and maybe a half-read paperback book? And so - no big deal - you started carving little pieces of kindling off one of the logs, getting some of different sizes, and you built a little teepee out of them, and stuffed a few pieces of rolled up paper inside and lit it? And for awhile it burnt and you had a little fire, and so you tried positioning some of the big pieces around, trying to get them to catch?
And you blew, and got sparks going on some of the big pieces but couldn’t get the thing to catch, and you said, no big deal, this will work if I keep trying, so you did it again with a few more pieces of paper, and a few more matches, but still no luck? And then you kept trying but kept making a bigger and bigger mess with all the half-burned damp muck? And finally you tore up the whole damn book and made one final arrangement of kindling and logs and then you struck the whole damn book of matches and now you really did have a big blaze for a little awhile, but it wasn’t long before you could see that this, too, wasn’t going to catch?
And then you sat their shivering in the cold and dark with no more possibility of making a fire, and not even a book to read the next day?
Ummm…. Nope!
But I have showed up after 3 or 4 other guys were trying madly to get their wet wood going, and were just on the verge of giving up in disgust–and then gotten it started in a matter of minutes. They love you and hate you at the same time when that happens.
Be the fire.
Paul, was that a metaphor for the bailouts, or your last camping experience?
I’m actually quite amazed that anyone would think I would compose something like this for any other reason than to try to create an interesting metaphor/allegory.
Is this an extended metaphor, or are you having a bad holiday?
But, listen, I hope I packed a flashlight and some dry socks…
all I got.
nope never happened that way. ever..
MAKE A @#$%IN FIRE !!!
What IS your problem this evening?
Well, ella, I’d prefer you called it an allegory, but thanks for reading. We are currently somewhere between the last two sentences of the second paragraph.
who is this we you speak of?
though the prospects may seem dim at the momment, the re-invention process is well underway…..
what dreams may come….
The U.S. economy. The fire will go out, and so will hope for fire.
In a sense I agree with you that the re-invention process is well underway. I see the re-invention process as a transition toward a police state, and it will be world-wide in scope. A good life, if you are the police.
hey, go cash yer checks at CBGB.
Central Bank Government Bank.
or do what I do…
listen to Country, Blue Grass, and Blues…
suns gonna shine, and people are gonna do….it aint Mad Max, bro.
Interesting - I’ve played and been around bluegrass music most of my life - never ever seen anybody spell it with two words. . . where you say you from, son?
Texas baby,
born and bred hillbilly……
LOL at the whole conversation.
Great allegory, BTW. You should throw in a few “kitchen sink” attempts though too, like flint and steel, battery and steel wool, rod and bow and such. I think there are probably a few good analogies to those flying around Davos right now.
(yes I was a scout)
50 million here, 50 million there, pretty soon you’ve got a room full of people:
From the UK Times online:
The Times - January 29, 2009
Global unemployment heads towards 50 million Carl Mortished, International Business Editor
Unemployment is mounting around the world as big international companies, including Boeing, Starbucks, ConocoPhillips, GKN, in Britain, and SAP, of Germany, rush to cut costs.
The jobs scythe, which could put 50 million people out of work worldwide, according to the International Labour Organisation (ILO), is reaching beyond the financial sector and into every corner of the global economy.
The employment attrition, which began last September with the collapse of Lehman Brothers, the investment bank, is bearing down on blue-collar and managerial staff in the aerospace, motor, energy, retailing and electronics industries.
The rapidity of the downturn and the speed at which the corporate sector is responding with job cuts is creating alarm. Oil company bosses, who months ago were complaining of skill shortages, are now slashing jobs after a precipitous fall in oil prices.
Remember the Idaho Falls ponzi scheme alleged to be around 60 million?
I spoke with little brother today, and he said the feds probably won’t touch this case, it will be a local prosecution.
Also, apparently Daren Palmer’s brother, Brady, has been charged with fraud in an unrelated case due to allegedly witholding title and not paying off loans for tradeins at an auto dealership.
In related news, sister Rosie was arrested on suspicion of solicitation of prostitution. (JK)
We’ll always….
Be together….
always…
be together….
Change Change Changity Change-chsa-Chi-Bop—
Thats the way it should be….
OH YEAH !!!!
Oh ol Injun buddy, try the Lienie’s Creamy Dark twill be more toward thy temperament. Stay away from the doo wops just go for the straight hops.
And the Chi Bop is gone and we have nothing exciting to read about in Wisconsin. (didja notice I capitalized Injun?)
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