Bits Bucket For February 4, 2009
Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
No surprise that gadget sales are down, the cuts will keep right on coming. By the end of this year 2008 will look damn good.
Japan’s Panasonic to cut 15,000 jobs, shut 27 plants to cope with slump; forecasts annual loss
Yuri Kageyama, AP Business Writer Wednesday February 4, 2009
TOKYO (AP) — Panasonic Corp. said Wednesday it will slash 15,000 jobs and shut down 27 plants worldwide, joining a slew of major Japanese companies announcing deep cuts as the global slowdown batters the world’s second-largest economy.
The world’s largest maker of plasma display TVs also announced a net loss for the October-December quarter and lowered its forecast for the fiscal year through March to a net loss of 380 billion yen ($4.2 billion), its first annual loss in six years.
Panasonic blamed the dismal results on the global slowdown set off by the U.S. financial crisis, the rapid surge of the yen and sudden price drops. Sales slid in a wide range of products, including flat-panel TVs, DVD recorders, microwaves, lamps and semiconductors, it said.
Asian markets were up nonetheless, reports this morning cite the NAR’s December pending sales number as playing a role. Methinks someone needs to clue our Asian friends into the dubious nature of those numbers.
Asia markets were up because of the China PMI numbers released.
Oh the numbers might be perfectly accurate. What most people don’t get however is that they’re meaningless in terms of actually helping the economy recover. At this point all the sales are from very excited knife-catchers who thing they’re getting steals. All one needs to do is look at the new home starts numbers - setting new record lows every month - to see that. All this flipping doesn’t help the general economy one bit, in fact it actually hurts by taking resources away from other things that would be more productive.
Do you mean we cannot build an economy on people selling houses to each other?
Someone forgot to tell the media that back in 2005/2006.
At what price should people who have jobs and qualify under traditional standards (28% DTI, reliable work, 20% down, etc) be buying a primary house?
I’m guessing that the bottom will be when the median price reflects the median income (factoring in the state of the economy at that point, of course), plus a little undershoot.
Pardon me for raining on this parade, but how many gadgets do we really need?
RE: how many gadgets do we really need?
Exactly, AZ…The crap the wireless phone mfg’ers are building into their units is completely bizarre.
“Heh, yeah, mofo dude with ‘yo boxer underwear showing…-dig that digital, high-def, movie on your 1″x1″ screen.
Huh?
From Suzanne and fresh cupcakes to the “Witches Brew” and 3.3 trillion in equity vapors.
“It’s like a runaway train gaining momentum,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market…
“A witch’s brew of economic insecurity, foreclosures and tightened lending standards are helping to keep hard-hit markets down and to widen the scope of markets showing declines,” Humphries said in a statement accompanying the report
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE29HSrxA4rI
Non food sales are getting hammered. I read a report yesterday that said bulk sales of can goods are on the rise. So ammo sales and can goods are sharply rising.
Costco Expects Profit ‘Substantially Below’ Estimates…
Feb. 4 (Bloomberg) — Costco Wholesale Corp., the biggest U.S. warehouse-club chain, said profit will be “substantially below” analysts’ estimates after the company cut prices to keep customers as the recession deepens.
Earnings per share for the fiscal second quarter will miss the First Call consensus estimate of 70 cents, the Issaquah, Washington-based retailer said in a statement. Sales in January were little changed at $5.1 billion, and revenue at outlets open at least a year fell 2 percent last month.
“General economic conditions have negatively affected our sales, primarily in non-foods,” Chief Financial Officer Richard Galanti said in the statement. “Our margins have also been impacted by aggressive merchandise pricing in our core merchandise business to drive sales.”
Galanti also said the company is being hurt by lower gasoline prices and the surging U.S. dollar, which cuts the value of overseas sales. Excluding exchange-rate movements, non-U.S. same-store sales rose 4 percent.
I made my own contribution to the paranoid fringe movement in 2007 by stocking a pantry. It was pretty cheap insurance against unstable prices and what I percieved was a strained and fragile delivery system. BTW, it is very nice to never “have to” trek down into town for some ingredient.
Having said that, I do not think that increased sales of bulk canned foods necessarily indicates a rise in disaster survival preparedness. It may well be the result of frugality. It is cheaper to prepare your own food than to eat out or buy frozen food isle MREs. Once you take this step and start to look at the cost of a meal, you notice that the larger containers give you a lot more 0z/$. Then you check out the per case price at the wholesale store and those big gallon cans. Then you experiment with big batch cooking and freeze/can the extras.
This has been my exodus anyway, raising four eating machine kids on a tight budget with a spreadsheet analysis mindset. Kids gone now, but I am still in the same mode. Regulars on my list:
Lasagna
Chili
Chicken noodle soup (or holiday bird special)
Beef Bourguignon & such
Pizza & Bread (less for the freezer now that the kids are up & out)
Fruit in season by the bushel
If I weren’t such a renter these days, garden veggies would rank
With kids, the food budget can rival the house payment. Economy in the kitchen can easily cut the cost to eat by half, and with some effort by half again.
Of course, if you’re not raising kids, you can use the extra money to buy the best cuts of steak, good wine to go with the above, plus take the red head out to eat things you can’t pronounce.
http://www.equipped.com/earthqk.htm
A friend forwarded me this emergency preparedness list after Hurricane Katrina, and I’ve acquired most of the items on it. Have also acquired a three-month supply of bulk foods, including freeze-dried and MREs. Hopefully I never have to use any of it, but by the time you need it, it’s too late.
Particularly interesting, veddy interesting is the category..
At the Bedside.
Methinks a Crowbar or Wrecking bar is an interesting “toy”?
At Each Bedside
1
Flashlight w/ fresh batteries or plug-in rechargeable style within reach while still in bed *
1
Crowbar or Wrecking Bar
1 pr.
Leather Work Gloves
1 pr.
Quick donning Shoes or Boots or, at a minimum, hard soled slippers
1
Robe, minimum - Work Clothes in an easy to grab bag would be best, to put on after safely exiting the residence
When I worked in an earthquake-prone area, I put a 16-oz plastic Coke bottle filled with water in a couple of places in every room in the house - close enough that I could grab one quickly and in the places I was likely to hunker. The house was equipped with earthquake alarms - interesting looking gadgets on the wall with a sensitive thin piece of metal that would trigger the alarm if it moved a pre-set amount.
After reading about the tsunami several years back, I wonder if a pet isn’t a good earthquake alarm. They seem to sense stuff like that a lot faster than we do.
Good info, and I can relate.
My favorite site for info and tips on food storage and that kind of thing is
Simply Living Smart
If you register, they have lots of great videos that you can view.
I’ve taken to making my own pizza from scratch. It really isn’t that difficult. For years I would spend $8-9 on a take-and-bake pizza from Costco or the like. Now that I even make the crust from scratch, I’ve been able to get the price of a medium peperoni/mushroom/olive pizza down to around $1.
Get your start here http://www dot annamariavolpi dot com/pizza_recipe.html
We make our dough in a bread machine, and make large batches of sauce that we freeze in small containers for use on pizza or in pasta.
The reasons have nothing to do with money. And it doesn’t take that much time.
Good info all of you…Thanks…
With all due respect (and don’t take this the wrong way…..
Showing up at a friend’s house for dinner and getting home-made pizza, is usually the same experience as showing up for a party, and finding out the only beer is the party-thrower’s home brew.
‘…and finding out the only beer is the party-thrower’s home brew.’
Well, no one has ever complained hereabouts, Mr. Man.
I brew in 5 gallon batches, and it’s generally gone quicklyyyyyyyyy…..
(hiccup)
In my experience, home brew is generally far superior to the p*** water sold by Anheiser-Busch!
(Once again, with apologies to those who are great home-brewers…….)
My experience with home brews has been limited mainly to stuff that tasted like panther-p#ss.
Why do you hate America? Oh wait, the last American-only brewery got sold to foreigners. (That was their tagline on the napkins at the amusement park).
I mostly drink (when I infrequently have a beer, 1-2 times a year) Anheiser-Busch “piss-water”
Cuz thats the kind of people I run with……..
DennisN,
( While we’re sharing recipes here? ) try:
http://www.italiancookingandliving.com
What would you expect from a guy from Cicero, IL? I ‘especially’ rec. the Ancovy and Bread Crumb sauce, great w/ pasta or even bread! It’s so flavorful a little goes a long… way! ( Not rec. for “1st dates” though? )
Sean Callebs over on CNN is doing an ongoing article on living on Food Stamps for a month. He’s given himself $176 to do it on.
Sadly, he doesn’t seem to have a ‘comments’ section on the CNN site (or not one I could find easily), as I was almost shouting at him when he put a packet of ready-made Mac ‘n Cheese into his basket- while pontificating over the benefits of buying generic supermarket brands over named ones.
Yes, Sean, its good advice to buy generic where you can - but c’mon!
Mac ‘n Cheese! In a packet!!!
You’re ‘unemployed’!! Learn to make it yourself!!
How hard can it be to buy the ingredients and make it yourself for a fraction of the packet cost!?! What you have - more of than anything at the moment is - time….
I’m half hopeful, and half fearful that in a year from now we’ll be seeing cases of severe malnutrition in vast swathes of the US population.
Half hopeful that with all that spare time on their hands, people will clue up and learn how to make food for themselves.
Half fearful that most won’t figure it out and slowly starve themselves to death on a continuous diet of Mickey D’s ’screaming bargains’ of 2 for $5 every day…
Someone talk me down.
No, don’t talk me down - I’m just seeing this as another business opportunity - along with teaching basic numeracy I’m now thinking of giving ‘less than $5 a day for a family of 4 cooking classes’….
I foresee a whole new line of reality TV series generically called “How Low Can You Go.” The goal will be to see how little you have to spend to get through some period of time, kind of like “Survivor” meets the Home Shopping Channel.
“I’m half hopeful, and half fearful that in a year from now we’ll be seeing cases of severe malnutrition in vast swathes of the US population.”
You already can find ‘em. Many do not realize that you can be severely obese and malnourished at the same time. I can think of nothing sadder.
Recent news story: well-nourished kids are getting vitamin pills they don’t need, while kids who are NOT getting all their nutrients from their diet aren’t getting vitamins either.
Geez, even having the kids eat Total at breakfast (oh yeah, we skipped breakfast or it’s a packaged strudel that we’re going to crumble all over the bus) would go a long way. Thank goodness they put vitamins in the flour, or these kids would be keeling over at school. And thank you, President Reagan, for school meals with no Vitamin C. I hear scurvy is considered cute in the under-8 set.
Bottom line: removing Home Ec from the curriculum (which used to include a nutrition module) was one of the dumbest things we ever did as a nation. Home Ec should be required for all high school students. It should focus on personal finance and practical cooking and cleaning skills for good health and safety. Throw out the sewing machines, though–waste of time in a world where the only fabric comes from Joann’s and costs more by the yard than new clothing. Just go to the gol-durn thrift store!
Amen on Home Ec, gator.
Though truth be told I learnt more about how to cook and nourish myself properly from my thrifty and clever mom. However, I realise that many won’t have that advantage.
Then again, she was a Southern Gal, and looked on things like Collard Greens, Black Eyed Peas and misshapen Pork Belly cuts as succulent delicacies rather than supermarket wastage. Nothing ever ‘came out of a packet’ in our house.
…..
Maybe for the first class they could have a compulsory showing of “Supersize Me” by Morgan Spurlock…..
…man that was a horror flick, and not in a good way.
Amen, Nota! But I disagree with no sewing machines. Sewing, altering and repairing clothing are extremely useful skills. Everyone should at least learn how to hem stuff and sew on buttons properly.
Way back when I was in junior high school, everyone had to take a semester of Home Ec and a semester of Shop. I am very thankful to have had both classes. I can wield a hammer, drill and saw with confidence due to my excellent shop teacher, Mr. Buzz Cut.
Testify, not a gator and Elanor! But I must agree with Elanor that everyone should learn the most basic sewing stuff–I have a friend who confessed to me that he just throws shirts away if a button pops off. For want of a button?! Boy, did I rebuke him! You shoulda heard me. All his buttons exploded off him right then and there like tiddleywinks, they was so terrified and weakened by the fiery blast of my towering indignation. Then I showed him how to thread a needle and sew on a button. He had never. even. threaded. a. needle.
Can you imagine?! And this is a smart guy! And I ALSO know women who don’t know how to change a car tire!
Craziness.
As for having to take Home Ec, my mother was a Home Ec. teacher and my dad was an Eagle Scout Marine Corp Sgt. Life at home was an education.
I ran away at an early age. They helped me pack.
‘Life at home was an education.’
Wow. I bet. Say, can you sew severed limbs back on? Betcha can. And I bet you use a nice even ‘hem stitch’ to do it, so’s the leaky and unsightly seam doesn’t even show!
Pretty.
Now I’m trying figure out how get the limb turned inside out for that stitch.
Damn you, Olygirl!
“..trying TO figure out…”
Dman my dyslexia.
Nee…del?
The problem is for single people like me. I can’t reasonably cook great meals for savings over what I would get at a restaurant. Take for instance tacos: by the time I bought beef, cheese, shells, tomatoes, lettuce, picante, salsa…it would be a lot cheaper to go to Taco Bell, or even Chipotle.
To economize, I’ve gotten into the habit of only reheating Progresso soups. If there is something I want to eat otherwise, then I have to go out.
My wife and I will cook a roast big enough for 8 people, eat a meal out of it and package/freeze the rest in single serving containers. This could work just as well for single folks. You just have to prepare stuff that freezes well.
Only if you like eating the SAME DAMN THING for a week
at a time.
I agree with Moman……..you can go out and eat cheaper than you can cook for yourself, when you calculate how much stuff you end up throwing out when it goes bad.
Greens, fresh fruit and milk don’t freeze very well.
You don’t have to eat the same meal day after day. If you cook a meal for 3 for a single person, it’s only 2 repeats which can be spread over 2 weeks. Easy enough. I agree that greens and fresh fruit don’t freeze well, but you can buy small quantities of that stuff at the grocery store so you don’t waste any. With a little creativity, cooking for small groups can be just as healthy and inexpensive as cooking for large groups, it just feels like a lot of work.
With regards to the milk thing, are you saying you actually order milk when eating out and don’t keep any at home?
Yes…..on the infrequent mornings when I have breakfast.
That, or orange juice.
Not a Mormon or anything, just never developed the coffee drinking addiction.
Al is right. I used to live on $20 a week for food in college and there was no way I could have done that eating out. I never had the money to eat out. It wasn’t really that bad and I never gained weight. Americans are so spoiled… I will stop right there.
The reason I asked about the milk thing is because I can finish off one of those 3 bags in a bigger bag deals myself before it goes bad, probably because I don’t drink coffee either.
Twenty bucks a week gets you a half sack of groceries at the store nowadays, assuming you don’t buy any kind of uncanned meat.
The nearest Costco is 80 miles away, the nearest Sam’s Club (which I hate) is 15.
I don’t eat out every night……..but when I have to work late, it is just as cheap (and takes a lot less time) for me to eat out, as it is for me to go spend 10-20 bucks at the store to make one dinner for myself.
Everybody has their own unique set of circumstances.
I agree GS, it is much cheaper to eat out than it is to cook at home for one person. Everything you buy at the grocery store is geared towards families in their ridiculous price breaks of buy a quantity of 10 to get a lower price per unit.
Even the grocery stores are complaining that the food prices are not coming down in line with the commodity price drops.
Man, you are a piker. Progresso? Overpriced. Lettuce should be bought by the head, not pre-cut. Salsa? Get that giant jar on sale w/ coupon. Giant glass jar of jalapenos from Mexican store. Giant pile of corn tortillas (50ct)–NOT shells, those are a ripoff product for stupid whitey. Just reheat in microwave for pliancy. Leftover meat from yesterday’s chicken, steak, whatever. 4 cup bag of shredded cheese, bought on sale, frozen until needed.
Now you have supplies for many, many taco nights.
You can even cook your own beans (avoid kidney beans though–they will not soften up) and then turn them into refried by mashing with fork, ricer, or cuisinart and frying in iron skillet with grease of choice. Or be lazy like me and mash kidney beans out of the can, no refrying required. Stopped doing that when bean prices ran up, though. Dry pintos are nice. You might have to pay 10 cents more for the bag without all the rocks in it.
The only thing you can’t get in bulk (because it goes bad) is sour cream, which you shouldn’t be eating anyway. I have used greek yogurt (strained plain yogurt) in place of sour cream for a few years and it keeps well and tastes great. Or you could just go with cheese and avocadoes when they’re in season.
Gator - even kidney beans can be brought under control. The trick with any dried beans is to soak them overnight and then boil them without salt. For a very long time (about 1 hour at least)
Salt is the enemy of dried beans - in fact the Mexicans have a phrase for it - “little bombadiers”. Putting salt in them makes them stand up in the pan, and doesn’t break down all the enzymes that causes the infamous flatulence that beans are accused of (unfairly, IMHO).
Hence the ‘little bombadiers’ setting off small explosions in your trousers, I guess…
ex-GS and Momon - I hear you. It IS really hard to feed yourself properly when supermarkets only seem to pack stuff for 8 people at a time, and when decent shops are a long way away. Cooking for yourself can be a waste of time and energy.
I guess the point I’m trying to make is that, for families, it takes a little more planning and time to cook cheaply than it does to live off fast food. Or packet Mac ‘n Cheese.
I’d also guess that in the coming months a lot of people are going to be reconsidering their relationship with food.
Some people will be smacking their foreheads in disgust at the thought of their lives spent buying stuff they can make better and cheaper at home.
Some probably won’t - but I’m looking forward to the day when I’m not accused of being a ‘dweeb’ for trying to marry half a kohlrabi, a pound of pinto beans and an egg into something edible…
RE: If I weren’t such a renter these days, garden veggies would rank
Garden co-op’s (where people pitch in to rent a few acres of a farmer’s fields) are growing (no pun intended) here in less congested areas of New England.
Florida, too. Thinking about getting in on one, but here they are veggies and meat, and you have to accept a lot of meat.
costco? price cuts? Take that you Inflationistas..
I haven’t seen any evidence of it, but what the hey..
The cost of healthcare for us DBA’s is still incresing annually. No deflation there. Non-essentials at Costco might be seeing deflation, but I have not seen a roll back on food prices at Costco.
incresing=increasing (it’s early)
My impression of 90% of Costco’s floorspace is that of a large convenience store. Instead of paying a dollar for a candy bar at Stop ‘n Rob, Costco might offer a box of ten for $9.
I agree. If you’re a junk food junkie, Costco is the place. Proteins (eggs, chicken, cheese) are a good deal there. “Stop ‘n Rob”, Joey, that’s a good one.
I am in Thousand Oaks, btw.
“The cost of healthcare for us DBA’s is still incresing annually. No deflation there. Non-essentials at Costco might be seeing deflation, but I have not seen a roll back on food prices at Costco.”
Healthcare is the perfect industry. No price controls (monopolistic and the AMA, AHA & Big Pharma are significant shareholders in the federal government), No competition from 3rd world countries, a 3rd party pays its customers bills, and there is zero elasticity of demand.
All the trillions the Fed is printing will eventually end up somewhere in the healthcare industry.
I remember reading the Wall Street Journal a while back, where they had a story about companies setting up deals with Indian hospitals to do major procedures.
The guy in question had to have a major surgury. Had the choice of doing it in a US hospital, and paying all the deductibles on a $100K plus bill
-or-
Fly to India (airfare covered), have the surgury and recovery there (100%) covered, NO out of pocket expenses for the patient…..total bill, $20K
Since about 75% of the doctors around here are from India anyway, what’s the difference?
The US Medical-Industrial complex is setting themselves up for a rude awakening, unless they start doing something to get a handle on their costs.
This is called a “medical vacation” and people fly to other countries as well.
I had an acquaintance fly to Budapest for dental work. What would have cost him $3000 here cost him $100 there plus the total trip cost of $1200.
No brainer. But I don’t blame the doctors. I blame the insurance companies, big pharma and the AMA for not getting rid of incompetent doctors and therefore causing insurance rates to be high from the malpractice fallout.
Probably more of those $2.50 off deals floating around.
Wonder if there is any further discounts on the Coffin’s end of biz?
“So ammo sales and can goods are sharply rising.”
Good inflation hedges that double as survival insurance…
The nice thing about having a year supply of food and owning your house is that you can be unemployed for a year and still be OK.
“…owning your house…”
I assume you mean with a fully paid mortgage? Otherwise, better to rent, as you have the option to move in to a cheaper rental without facing the underwater owner’s dilemma (either sell at a loss into a bad economy, or try to keep paying the mortgage out of savings, assuming you have any…).
My house is paid up–yet I still have to pay $400+/month to the local school board to rent my house! (Of course, it’s better than paying an additional $400/month to a HOA…even having a paid-up house in a HOA is no better than renting).
I’m not sure if renting isn’t ALWAYS the best option…and this opinion is from a paid-up homeowner.
“The Underwater Owner’s Dilemma”
Is that opening on Broadway? I’ve heard it’s “emotionally powerful”!
Other than the $180/month in property taxes, $100 in electrical and $120 in propane heat (averaged over the year) I have no other “necessary” recurring bills. Considering I also get $400 / month for renting the apartment above my garage, I am in good shape having a year supply of food and no job.
Unemployment benefits should also easily cover those costs and help me feed my family until the benefits run out.
If all goes well I should soon be able to generate all of my own heat/power using wood on my land. At todays prices it would still be cheaper (and easier) to pay the utility companies, but the potential for hyperinflation is too real to remain dependent upon those services. Besides, if we get a bad ice storm I could be without power (and water) for weeks and I would prefer to have a backup power source. Few people consider how fragile yet necessary our power grid has become. Most homes have no heat without electricity, and in the country they have no water (well pump needs electricity).
My strategy is to arrange my life so that I can be “jobless” for many years and still provide for my family. I use to keep 6+ months of salary in savings in case of a job loss, but I have transformed much of that savings into a long-term plan for sustainability without traditional income as a software developer.
If only I could eliminate that unconstitutional confiscation of property that is embodied by the property tax.
“My house is paid up - yet I still have to pay $400+/month to the local school board to rent my house!”
My 30-yr fixed mortgage payment is $425.84/mo for 1,550-sqft, 3br/2ba, 10-yr old spec home.
Our local gun stores and Wal-Marts can’t keep ammo in stock. One salesman told me they have been wide open for the past 8 months on gun & ammo sales. Gun ranges are packed down here in S.Carolina.
My wife just got her permit to carry, robbery and burglaries are on the rise in our neck of the woods.
the Wally’s up here stopped selling firearms a couple of years ago. That’s not national?
They still sell ammo.
the Wally’s up here stopped selling firearms a couple of years ago. That’s not national?
In South Carolina Wally world sells ammo of all ranges, rifles, shot guns,22 pistols and pellet guns.
RE: My wife just got her permit to carry, robbery and burglaries are on the rise in our neck of the woods.
I was up in the Maine north country doin’ some winter sports stuff last weekend. My co-hort in adventure lives in Skowhegan, ME which is a town of around 2k in central ME.
In otherwords-this is very rural country for the east coast.
He indicated that there’s a least a bank robbery or convenience store stick-up about every 3 or 4 days now.
He’s not sure if it’s the meth & smack junkies or simply the financially desperate.
Things will really come to a head when masked armed gangs go into restaurants or any other public venue and rob the patrons ala “Honeybunny” in the final scene of “Pulp Fiction”…
LOL…and everybody was laughin’ and ridiculing the gun and ammo talkers here a year ago.
I am not, since I am thinking of doing the same thing.
The protection of my family is more important to me, so this is something that I will have to take on and make sure that my whole family knows how to use firearms and shoot correctly.
Yeah, but when the criminal takes you by surprise (their MO, btw), what do you do then?
I can get police to come back me up on the job, but a crazy dude can still kill me before they get there.
Your ace in the hole is only as good as your skill in prestidigitation.
I can’t think of a single instance in which a gun would make me more safe. I mean this in all seriousness. If I manage to get off a shot and hit Thugston Thuggery The Third in the leg, he can still blow my head off. I gain nothing.
Practice makes perfect, and I’m not talking about shooting, I’m talking about reacting. Far too many people go about their day oblivious to what’s is happening around them nor ever considering how they would react if accosted.
So true, dude.
I had a couple of situations many years ago where things would have gone very wrong, if not for my tendency to be aware of my surroundings and prepare for the worst.
It is ALWAYS a good idea to plan for the worst — and I’m an avid supporter of the right to bear arms.
Reportedly, shortages of 5.56mm and 9mm are due to the ongoing military ops in Eye-rak and Afghanistan.
I’m partial to 7.62mm……..can’t chop down trees with 5.56.
Just looked for some 5.56mm at Outdoor World today. Out.
Like this Wmbz?????
Police strive to keep military-style rifles out of hands of crooks
By Glenn Smith (Contact)
The Post and Courier
Monday, February 2, 2009
Dozens of people were around a James Island nightspot Friday when a drug deal soured and a gunman opened fire with a military-style rifle. He left behind a bullet-riddled car, a pile of shell casings and several alarmed sheriff’s deputies who would have been outgunned if they’d showed up just a few minutes earlier, authorities said.
“If a deputy comes up on a guy with a AK-47 or something like that, he would not be prepared,” Charleston County Sheriff’s Maj. John Clark said today. “Those guns can penetrate a vest, depending on the round.”
Law enforcement officials said the James Island incident, which left one man dead, underscores the need to crack down on the illegal use of military-style weapons, such as AK-47s and SKS rifles.
These semi-automatic guns have become increasingly prevalent among drug dealers and other criminals in South Carolina, and they have been blamed for several violent shootings across the state, police officials said. Yet South Carolina law has no specific provisions or penalties for criminals caught with military-style rifles, authorities said.
“It’s a giant loophole,” Charleston Mayor Joe Riley said. “A criminal who cannot possess a handgun could legally possess an AK-47, which I think is a scary thought for most citizens.”
Riley and law enforcement leaders are pushing to expand current state laws governing the illegal use and possession of firearms to include military-style rifles, which they define as “assault weapons.” They also want to bar anyone convicted of a crime carrying a sentence of two years or more from possessing these guns. They propose stiffer penalties as well for those caught illegally carrying military-style guns.
Read more in tomorrow’s editions of The Post and Courier.
Mmm, sounds like a great vacation spot!
Armor-piercing rounds, coming to a sketchy corner near you!
I thought a convicted felon cannot own ANY type of firearm. They just charged an ex-con with illegal fire arms possesion around here for deer hunting with a black powder muzzle loader.
“These guns can penetrate a vest…..”
Yeah…….so can about every rifle round in common use.
They must be looking for a budget increase, so they can buy all the officers an AR-15, Mini-14 or HK MP-5 to play with.
Oh yea, like that!
We had a women gunned own not far from where we live, last week at a local bank at 11:00 A.M. on a weekday. She drove up to an ATM he came around the corner shot her five times, stole her money and car.
They caught him two days later, but unfortunately he will stand trial and cost us a bundle when he should be taking a dirt nap now!
Don’t know where you live, but things in Flyover Country work a little different.
Local case from about 15 years ago….
Three guys tried to rob a liquor store. Owners of the liquor store had bigger guns…….two robbers DOA in the store, the third DOA in the parking lot (according to some witnesses, by a shotgun blast to the back, while laying wounded on the ground).
Local DA tried to prosecute owners for manslaughter. Had to have a jury trial. Verdict (in 45 minutes) by a jury of their peers: NOT GUILTY.
I’m always been of the opinion that when you raise the cost of doing business, you will get less business. This can be good or bad.
RE: Law enforcement officials said the James Island incident, which left one man dead, underscores the need to crack down on the illegal use of military-style weapons, such as AK-47s and SKS rifles.
These semi-automatic guns have become increasingly prevalent among drug dealers and other criminals in South Carolina, and they have been blamed for several violent shootings across the state, police officials said. Yet South Carolina law has no specific provisions or penalties for criminals caught with military-style rifles, authorities said.
“It’s a giant loophole,” Charleston Mayor Joe Riley said. “A criminal who cannot possess a handgun could legally possess an AK-47, which I think is a scary thought for most citizens.”
Whatta crock of Joe Gobbels disinformation.
Assault type weapons are tied to like .025% of incidents involving firearms. They are EXPENSIVE and required FFL documentation for legality.
As far a possession goes-a convicted FELON cannot possess ANY type of firearm.
Obviously, court mandated prison times are not serving as a deterrant to the procuring of weapons by FELONS!
The quotes are all cop propoganda in their attempts to trash the 2nd Amendment and disarm the law abiding citizenry, so as to empower their union contract shakedowns of municipal government for more money-’cause they will be the only ones with guns.
However, be that as it may, with the US goin’ 3rd World, SC cops had better gun up. There are lots of AR-15 and H&K carrying coppers here in the Northeast.
“As far a possession goes-a convicted FELON cannot possess ANY type of firearm.”
I beg to differ. Convicted felons can own any damn thing they want, because they have no respect for the law.
Law enforcement officials said the James Island incident, which left one man dead, underscores the need to crack down on the illegal use of military-style weapons, such as AK-47s and SKS rifles.
Wrong, you idiots. You need to crack down severely on ALL crimes involving firearms. The NRA has pushed hard for actual ENFORCEMENT of existing gunlaws, instead of the rampant plea-bargaining that goes on now. Displaying a firearm in the commision of a crime should result in an automatic ten-year Federal prison term. Discharging the gun should add another ten, and if you kill or injure someone, you should be tried by a special gun crimes court, and if found guilty, executed the next day by firing squad (appropriately). Can you imagine what that would do to gun crime?
Yea, Sammy! Well said!
No Pork! LOL!
http://www.cnn.com/2009/POLITICS/02/02/gop.stimulus.worries/index.html
“Extraordinarily low mortgage yields are absolutely necessary to compensate potential home buyers for home price deflation risk and heightened unemployment risk,” Lonski said. “That will probably require more intervention from the government.”
http://www.cnbc.com/id/29011060
When are these morons going to get it? Extraordinarily low mortgage yields guarantee that there will be severe price deflation once the rates go back up (normalize). The people helped by low rates are those looking to re-fi, not those looking to buy. Buying when rates are at multi-decade lows assures you price depreciation right off the bat.
Buy when rates are high (and therefore prices low), refi when rates are low. Then you have the best possible situation, low rates, and a low home loan balance. Buying when rates are low, you’ve got no where to go but down, rates go up (you can’t refi) and home values go down (you definitely can’t refi).
“Buying when rates are at multi-decade lows assures you price depreciation right off the bat…
Buying when rates are low, you’ve got no where to go but down, rates go up (you can’t refi) and home values go down (you definitely can’t refi).”
I have suggested the same here from time to time. Either the gubmint is looking for a few good knifecatchers, or they are just clueless.
My vote is on “clueless”
They’re pouring trillions into the financial system to offset bond price deflation, while supporting a policy which will guarantee more of the same.
BUT - follow the money - who does the policy enrich? Those who pay the politicians.
It seems to me that the leaders of this country and its corporations are more feckless and venal than the average person can comprehend.
“Of course no one actually watches CNBC, except in the way that hipsters drink Pabst and grow mullets and go to monster truck rallies. It is enjoyably kitschy to hear Larry Kudlow praise the virtues of laissez faire capitalism as if the last two centuries hadn’t happened, and to watch the flashing banner alerts and wonder at how our culture has become so addicted to primary colors.
But their crass aesthetic and ideological immaturity aren’t the primary reasons to disregard the network. The real problem with mullets and Pabst and Toby Keith songs, and with CNBC, is that there are people, large swaths of humanity, in fact, who apparently regard the above unironically. And there are others who trade based on how they suspect the hoi polloi will react to the news of the hour. And so on. Conflicts of interest abound, performance assessments are entirely absent, and the only service provided is stimulation, not information…”
Condor Options
But some of the chicks look hot.
Of course no one actually watches CNBC, except in the way that hipsters drink Pabst and grow mullets and go to monster truck rallies.
Point of order: Pabst, Old Style, and their regional brethren are often 50% or more cheaper than other beers available at a watering hole, even the ubiquitous “watery domestics” churned out by the big boys.
I certainly remember a time when every buck in my pocket counted — at that point in my life, I certainly wasn’t drinking PBR with an ironic gleam in my eye. I wanted to make sure I saw whatever band I was seeing and was able to have a few drinks.
(I leave mullets and Monster Truck rallies untouched, however.)
Ditto, ditto, ditto! Tastes better, less watery, and gosh darn it, cheaper than Bud, Michelob, and Miller.
I especially go for it at one of those local places with a $10 CC minimum, since I can have two for a fiver and still have change left for a tip.
With Bud and Co. you are paying for TV ads.
Hey! I LIKE Toby Keith! I been singing ‘Whiskey for my men, beer for my horses’ for at least 3 days straight now.
I’ll fight yer right now, ya unpatriotic commie!
“…and wonder at how our culture has become so addicted to primary colors”
OK, BofA is now Screaming Eagles red (hurt my eyes driving by the local branch today), and citibank is blue. Which bank is green?
Ben gobbled my post so I’ll try again just beause I like the experts descirptive vernacular
U.S. Property Owners Lost $3.3 Trillion in Home Value
“It’s like a runaway train gaining momentum,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market
“A witch’s brew of economic insecurity, foreclosures and tightened lending standards are helping to keep hard-hit markets down and to widen the scope of markets showing declines,” Humphries said in a statement accompanying the report
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE29HSrxA4rI
“The people helped by low rates are those looking to re-fi, not those looking to buy.”
The GOP plan would cover loans up to $625K. Who is that intended to help?
A very astute observation. Just like Treasuries, lower interest = higher price, and vice versa.
With a mortgage, lower interest again = higher price, and artificially low rates virtually guarantees price deflation.
This very simple fact needs to percolate through the population.
Plus - who does a higher price help? The Real Estate Industrial Complex - the people who bribe the politicians lavishly.
Higher prices certainly don’t help citizens, or the economy. Trying to keep so much money locked up in real estate prevents money from being invested in other segments of the economy.
People working two jobs and eating Ramen noodles to service the mortgage may make NAR, Toll and the big financial companies happy, but it starves money from the rest of the economy.
Yesterday, Jane said:
“For the betterment of my civilian understanding, please tell me why the Navy guys hated it when the Marines were on board?”
I was on a helecopter assault ship.. Tarawa, LHA1.
800 Navy and when depolyed or doing an amphib. operation, we’d carry 1500 Marines.
No Marines: No wait at the mess deck, no wait at the ship’s store, no crowds in the gym, easy to walk around the ship, plenty of hot water, etc.
The Marines show up, and fuggedaboudit. Long line at the mess deck, soda machines empty, don’t even try to buy a candy bar from the ship’s store, long wait for a hair cut, don’t even try to get into the tiny gym…
So that’s why you guys kept putting my dad ashore in WWII….
My dad learned how to fix airplanes in Burma during WW II. So luckily he returned. His dad helped develop munitions for the old Atlas Powder Co., which was allied with DuPont.
I missed Vietnam by a few years, and said and did some disrespectful things which I know now were, well, stupid.
Hats off to all who served.
Freedom ain’t free.
‘Hats off to all who served.
Freedom ain’t free.’
Ditto.
Ditto on that, Milkcrate and Oly!
I’ll add a billion nano-dittos.
That’s right. Freedom costs a $1.05
So it’s nothing to do with marines, but more like the natural effects of an almost 200% increase in population in cramped quarters.
Slightly worse than that. Us Navy guys actually had stuff to do, like running the boilers, steering the ship, performing repair and maintenance on the ship, dispursing supplies, accounting, etc.
Some of the marines had to do aircraft maintenance, and they would provide a few people to work the mess hall and such. But the vast majority of them had little to do except stand around in lines all day.
And, us Navy guys complained about our lounges and berthing compartments. 3 high bunks, 1 tv for 100 guys, few tables, little to do other than cards or slappin’ bones (dominoes) for entertainment. The marines had it worse. 4 high bunks, half the locker space, even less room in the lounges.
Actually, the department I was in had it better than most, even Navy. We had about 20 people, and pretty large office space that we just used as our office. We had a large table for cards, tv (we even broke the rules and had a vcr), we even had a fridge, lots of other space. Several of us brought in our Comodore 64s. We broke the rules and loaded games on the Navy PCs. We even wrote our own games that we ran on the ship mainframes we opperated. Heck, we even had extra lockers that we installed into our office space.
Automated Data Processing was a goooood division to be in.
People from other supply divisions would ask us why they never saw any of us down in the supply department’s berthing lounge. We’d say it was because we were always working so many hours. In reality it was because we had the best hangout place on the ship. Heck, even our CPO and Div Officer would hang out in our office because it was nicer than the ward room and CPO lounge.
Your office sounds like my kinda place. And I like the, ahem, long hours work ethic.
I was on USS Guam (LPH-9) and, yeah, the embarked Marines were a pain. I was a CIWS tech and one day the crew of the 47 right above our mount decided to wash out their helo. Not good. Nothing got ruined, thank heaven, but our electronics enclosure was covered in mud. Our FCC and whoever was in charge of those guys had a nice long discussion. From then on we did our troubleshooting, which often required us to have scopes and meters connected to fully energized and opened circuits, under tarps.
We got revenge, though. We were doing a towed target test fire and we told them to move the helo. They refused. When we broke the target into pieces a chunk went through one of the blades, through the side of the 47, and hit the deck hard enough to knock off a chunk of non-skid.
Other than eating all the geedunk, lounging around every square inch of available space, making the chow line huge and keeping me up all night with their weight lifting (gym was right above my berthing space) they were okay guys.
Since I was an “Airdale” ( also on Darrell’s ship ) I can say the Marine Aviators were really good guys. But when you’re working 18 hour days on the Flight Deck I really didn’t have the energy to get involved in some kind of “stare down” in a passageway w/ the grunts.
BTW, when I say the Marines were a pain, I am incorrect. Individually they were good guys. In small groups they were good guys. When there’s a thousand of them sitting in a passagewy and on ladderwells cleaning their weapons? That’s a pain!
RE: The Marines show up, and fuggedaboudit. Long line at the mess deck, soda machines empty, don’t even try to buy a candy bar from the ship’s store, long wait for a hair cut, don’t even try to get into the tiny gym…
LOL, great post DinP. Talk about right from the horses mouth.
As a WW II vet, have you read the first 2 books of Kevin Atkinson’s “The Liberation Trilogy”?
He’s of Pulitzer Prize quality -great stuff!
In business aviation, it seems like a big percentage of the maintenance/avionics techs are ex-Navy/USMC. Mainly due to the fact that when they are on a cruise, a “Job titles don’t matter, let’s do what it takes to get it done” attitude prevails.
My experience with USAF types, is that (for the most part) they are too “specialized”…….they know all kinds of stuff about 1-2 systems on the airplane, but have never worked on the whole airplane before.
I could be biased, though…..have been around Navy Aviators all my life (one was a “plankowner” on the Bennington CV-20, my school librarian’s husband was a Navy Cross winner for putting a 1000 lb’er into an IJN carrier in 1944, most of the guys I used to work with were either AMMs during Vietnam (on the “Tico”, Hancock, Oriskany, Kitty Hawk, Constellation) and/or were Senior Chiefs in the Reserve with VF-201 and VP-67.
I feel sorry for today’s kids…….all they have to look up to are sports stars, skate-boarders, and movie/TV/music personalities
Hey, Thanks Darryl! I appreciate the heads up.
Don’t know what I can do to help the kid work his way around it, other than to suggest that he might want to keep in mind the fact that the Navy is providing his three squares for the time being, and to attempt to maintain a light footprint.
OTOH, in a duress situation, the Marines are just being given a ride to someplace they can get shot at easier.
I can see how it would be hard duty, sharing close quarters like that though.
“…GM said it estimated the overall annualised selling rate for cars at 9.8m in the US in January, compared with 10.3m in December, and less than China’s estimated selling rate of 10.7m last month.
”This is the first time in history that China has surpassed the US,” said Michael DiGiovanni, GM’s head of global sales and industry analysis….”
FT
We’re number 2, we’re number 2
No problem we’ll catch back up around 2012 once all of the $40,000.00 Volt’s start being “snapped” up by savvy buyers!
Pow-Pow-Powerwheeeels!
Is all the talk about possible inflation just to scare us to spend?
Lately I’ve seen some talk in HBB from regular posters about buying a house before dollars are worthless.
It begs the question.
Is there a MSM propaganda campaign directed from the PTB to get us to part with our “hoarded” dollars?
I understand the relationship between printing presses and inflation.
That’s not the issue or my question, the question is very simply is there an effort to scare us into buying?
“the question is very simply is there an effort to scare us into buying?”
The simple answer is yes. The same tactic was used during the bubble. “Buy now or be priced out forever”. And I think some people bought because they were genuinely afraid it was their last chance to own a home.
However, I would use the analogy this way: Suppose a guy was told to “RUN!” or he’d get eaten up by the boogeyman. So he runs right into a buzz saw and his legs are cut off. The next time he’s told to “RUN!”, he can’t do it. And those who didn’t run, well, they saw what happened to the guy who ran and they’d like to keep their legs.
BTW, the prevailing mood in the US is fear and it has been so since 9/11. People in fear are easily controlled, which is why we haven’t seen the riots yet in the US that is seen elsewhere.
As evidenced by Cheney today - “high probability of a terrorest attack”. Part of me thinks he would be happy with that, given that nothing stimulates the economy like a good old war!
We’re already in 2 wars and look at where we’re at.
Bush and Cheney are out of office. Let it go.
‘Suppose a guy was told to “RUN!” or he’d get eaten up by the boogeyman. So he runs right into a buzz saw and his legs are cut off. The next time he’s told to “RUN!”, he can’t do it…’
Well, now, THERE’S the sort of vivid image I like to have in my head. Thanks, palmy.
Oh, but you should add a part where the boogeyman then eats the left-over legs. Or you could put a leprechaun in there somewhere. All of the truly superior works of literature have leprechauns in them.
Guys (and gals), please stop making me laugh. I’m making cold calls and need to keep a serious demeanor.
Only my opinion, but no. Widespread stupidity should not be construed as a conspiracy.
..the boogeyman is NOT a conspiracy theory !
At midnight, when I was sleeping, SHE’d use my computer to shop on eBay
hahahaha
yep the boogeyman/woman is Real.
What did she buy, mikey? I am filled with curiosity. Teacups, maybe?
Beenie-babies……especially those super rare ones that are “worth” a thousand bucks.
An whatever you do, DON”T TOUCH THE TAG!!!!!!!
Ahhhh, there you go. *shakes head sympathetically *
Your boogeyman is one crazy beyatch, clearly. Hey! Do you recall when one super ‘rare and precious’ beanie went for, I think it was something like $11,000? Can that be right? It was a ton of bucks, I remember. It was an elephant beanie I think. Wow.
I’d love it if some enterprising person tracked down the holder of this beanie and asked them how they feel about their beanie now…probably the poor sap couldn’t manage a word, past all the crying and blubbering. I mean, do you know how much Pabst and Toby Keith albums you could BUY for 11K?!
…do you know how much Pabst and Toby Keith albums you could BUY for 11K?!
Wow. I didn’t know that Pabst and Toby ever made an album together!
RE: Widespread stupidity should not be construed as a conspiracy.
“TAXES ARE FOR THE LITTLE PEOPLE”
Signed,
Leona “Queen of Mean” Helmsley-Wicked Witch of the East Side
Tom “Limo-Man” Daschle-US Senator-Health industry lobbyist
Nancy “Bail-out” Kellegan-Defunct US Budgetary Supervisor
Tim “What me resign?” Gienthner-US Treasury Secretary
One of those names doesn’t belong there! Leona Helmsley is MY HERO! She only got the jail sentence because the didn’t backpedal and show pretend remorse for sticking it to the man. She’s much more of a class-act than those other three.
Plus, she left her entire estate to her dog. (And care of dogs in general–there was a great story in the New Yorker about it a few months ago.)
RE: Leona Helmsley is MY HERO!
LMAO, Reuven…
The appointment jackels smoked by Leona!
You’ve definitely proven why Congress has a 9% (and sinking) public approval rating.
All members should be immediately audited by the IRS.
hd74man,
No argument here! “All The President’s Tax Cheats” ( Michelle Malkin’s synd. column today, appropriately titled )
What bugged me was Daschle’s use of “musical primary residences”. He had a $1.9mil. estate in DC but straddled the issue b/c he still had to run in South Dakota. In the end his tax savings were nominal, but let’s not gloss over the fact that the “pay off” comes when you SELL!
RE: “All The President’s Tax Cheats”
Din/Or~
What’s really bizarre is why did Daschle let the process get so far?
Arrogance, hubris? A why don’t they eat cake” mentality?
People are absolutely outraged at everything connected to government today. You should see number of the posts in Craig’s List Rant and Rave attackin’ cops and firemen.
The rage and vitriol is unreal.
Congress’s public approval rating is completely in the toilet; the rumblings continue about Geithner; and then you have these Kellegan & Dascle revelations?
It’s all fookin’ surreal.
The Feds don’t have a wit of crediblity left. I still say, there should be an immediate IRS audit of all these sanctimonious schmucks.
IMHO, as long as all the money is going to the banks, it’s like the money is just disappearing. Getting printed, then getting destroyed. Consumers never get their hands on it, so long as the banks aren’t lending. We just rack up debt, (miraculously the dollar stays strong).
What might make me worry about inflation:
1. A deep tax cut. Consumers now have more money in their pockets.
2. Universal Healthcare. I don’t have it totally mapped out yet, but I think this could start a new bubble for RX and Medical investment. With interest rates at 0, this could be a driver (of course there might be tangible benefits from it).
3. Constricted supply for essentials. If companies are producing less, will the supply/demand equilibrium shift to a higher prices.
Number one.. Big tax cuts, or otherwise put more money in consumer’s pockets. Will they spend it?
Consumers are as fearful as banks. While banks are afraid to lend, consumers are afraid to spend. I don’t think it’ll cause price inflation.
Number two.. universal healthcare. If it happens at all, it’ll be years from now.. so no price inflation yet.
Three. Constricted supply. Currently, manufacturers / businesses have no orders. They are starving and forced to lay off people. Were it me, and if there was a shortage of something, I’d jump at the chance to produce and sell it. Competition for these table scraps would be tough. Price would be bid downwards, not up, imo.
Asparagus on #3;
Lower sales volumes result in higher margin requirements temporarily (fixed capacity and overhead). Prices get cut though, in an attempt to keep market share and fill capacity. There can hardly be upward price pressure in a falling volume market, because of overcapacity.
Price inflation is possible.. it’s not just talk. But we can’t have price inflation until deflation has run it’s course.
What price-deflationary pressures now exist? Falling property prices, the most costly consumer item.
What could possibly stop RE prices from falling to affordability? Nothing.
What’s the earliest that price inflation can take hold? When RE’s price bottom arrives, imo.
Why do you keep fighting the tape? The market is already yelling, inflation ahead. Housing is not deflationary even when it falls another 40%. Housing is a bursting bubble. IMHO 90%+ of its impact on the economy has happened.
I do not anticipate hyperinflation any more than deflation, but the probabilities of deflation are now 0.10 (in any normal year they are 0.05). I do anticipate declining housing prices for the next 3 -4 yrs.
Falling rents must be inflationary too. LOL
Hey Faster how you doing?
I am on my mean and nasty pills so watch out puddy tat or I’ll sick my wolverine on you.
Hoz,
Thanks for the UYG tip.
Mike
I respectfully ask the same question, regardless of the inflation/deflation question, is the MSM being pushed to sell John C Public on the idea of buy now or the inflation boogyman around the corner will get you?
I mean, how far off can I be? They do want us to spend to “stimulate the economy” don’t they?”
Is there a knowing coordinated propaganda campaign going on to scare the Public into buying or, unbeknown to us all, did MSM just find religion and is now reporting the truth?
I don’t think that the MSM is part of any great conspiracy, given that they pretty much just parrot whatever they are told by ‘experts’ without critical thought. I’m also inclined to believe that a majority of the ‘experts’ believe inflation is coming. Rule of thumb: lowering interest rates and increasing money supply causes inflation.
Of course rules of thumb aren’t rules and they only work under the right conditions. The massive destruction of buying power due to deleveraging is more than counteracting increases in the money supply. Lowering interest rates isn’t generating much more demand while kicking the crap out of supply, so no inflationary pressure there either. If there is a conspiracy, it’s amongst those few ‘experts’ that can figure this out but chose to play the salesman role instead of the analyst.
Sic my wolverine on you? Hey, this Michigan alum resembles that remark!
I am on my mean and nasty pills so watch out puddy tat
I’m off to Philly for a while so I’ll see you in a week, pardner!
Headed to the Barnes Foundation which if y’all don’t know is the greatest art museum of Impressionist and Modern art that nobody in the US has ever heard of.
Bye bye, Fasty! Don’t kill anyone. Less’n they totally deserves it.
..the probabilities of deflation are now 0.10 (in any normal year they are 0.05).
Assuming that’s accurate, if something is twice as likely to happen as it is normally, does smart money bet straight up against it happening?
It’s taken 2 or 3 years of house bubble deflation for the beginnings of price deflation to appear… same with rising unemployment .. same with failing businesses. These indicators lag by years.
Property normally lives in a world of it’s own and only slowly reacts to market changes. The reverse is true as well. Changes in property prices need time before they are reflected in the general economy.
You predict 4 years of property price decline and I’ll predict 4 years of a generalized price decline. Both of us will be proved correct.
Aside from speculationers, we have had a mostly credit fueled “building” based economy. When the building grinds to a hault, the supporting industries grind to a hault. Unemployment soars. Credit contracts. All associated asset prices collapse.
There will be no big inflation until the next credit based building boom kicks in and suppliers to such get busy and have to pay increasing wages to staff up.
I don’t think the market is an oracle on this. Two decades minimum of winding this up and it is supposed to be happy days again in six more months?
My comapny makes compressors that are used to move cement powder that is used to pour foundations for the millions of extra houses and malls and office buildings we “were” building. End of game. Machinists will be unemployed. Miners will be unemployed. Foundries and ships will be idle. I’ll be fishing.
The market crashed in 1929, right? Also in 2001. The market fell again in 1930, only more so. Same deal in 2008 after a Greenspan hail Mary. The market fall in 1931 dwarfs anything else. So, 2009 or more hail Mary’s so we deal with this later? Either way down has to happen before up.
I rather think that a lot more flesh and bone has got to go through the meat grinder before we even have fertilizer for another crop, much less a market for it. Save your seed.
Blue Skye,
Quite a good run of posts there by all. I’m definitely of the opinion we -will- be contending w/ some rather nasty inflation down the road. Very nasty.
It’s just that right now, we need to get ourselves up off the mat to even be able to consider lasting another round? I’ll burn that bridge when I ‘get’ to it.
I thought about typing in some ofthe questions from the “Anxiety Quiz” we were given for “Safety Day” today. But they printed it in black ink on red paper so it would raise my blood pressure trying to read it.
Someone yesterday asked for advise re: buying or staying in a rental that is not all one wants.
There was good advise given but no one told him what I think is one of the best reasons to rent.
You can rent something you would never, ever buy!
You may love renting a place that will never make sense economically to buy.
Ever.
I love it where I rent (cheaply,) and, if I buy elsewhere in the near future I have no plans to give up the rental.
Would I buy where I live? Highly unlikely.
Am I enjoying the views from my two balconies in the 19th floor and my granite countertops, marble baths…?
Yes.
My inexpensive rental (older building) before this was on an Island. Think sand and what it does to metal. Think storm surge.
Did I love walking on an almost deserted stretch of beach for 8 miles?
Yes.
I thought you were making a pitch for my gf, until you mentioned all the expensive frills.
I rent, but modestly.
Blue, I rent a Lehman Brothers receivership condo.
How much cheaper can I go?
Seriously, my rent is cheaper than most rentals.
I think that I have a valid point.
It’s possible to rent and feel happy in a property that you know would be insane to buy.
The beach rental was for the 2/2 was $1500 (a 1/1 for $1200)
I had the beach on both sides. On the island newer building units went for $800K+ my 35 year old building sold units at peak for $400k+ (pre bubble for 150K)
I rent for $1650 on an HOA of $750/month + taxes in 2008 of $680/month. It will never make sense to own here!
I think this is a point others have not touched on: live it up (on the cheap) where you would never buy!
You do have a good point. I do this strategically as well. This summer I will dock in Kingston, Westport, Ottowa and Montreal City.
Muir, when you say receivership condo, are you talking a property that the bank seized and hasn’t sold off yet? Doesn’t that mean you’ll be moving soonish? I guess if you’re packing light, no biggee.
One year contract.
Court approved the rentals (which was, of course, advocated by the court appointed management company)
President Obama complains banks aren’t lending money fast enough and in great enough quantities.
Gary North explains: “They are not lending because bankers are fearful that they will not be repaid. They are so terrified by this economy that they would rather put the money with the Federal Reserve System, receive essentially no interest, and suffer losses on interest paid to depositors. They would rather lose a little money, month by month, than put their money at risk by lending it. This gives some indication of just how bad the present economy is………The case for price deflation rests on one primary idea: banks will not lend, even though they have reserves to lend. So far, this has proven to be the case. Banks are keeping excess reserves with the Federal Reserve, thereby refusing to lend money to the general public.”
Dr. North has argued that deflation is not possible. Now that we’re experiencing price deflation he argues that it’s only temporary. Moreover, he’s saying banks aren’t lending. This is not quite true. Lending has slowed considerably as commercial banks go back to the old-fashioned custom of lending to borrowers who are unlikely to default. He also overlooks the fact that many consumers have suddenly cut back on borrowing and are striving to save. Economists seem to have trouble grappling with this phenomenon.
“They are not lending because bankers are fearful that they will not be repaid. ”
Arguably, a lack of concern about borrowers’ ability to repay their loans is what got us INTO this mess in the frist place.
ArguablyCertainly, …FTFY
The banks are absolute in the right to not loan out this money. They are simply being prudent. Duh. The banks aren’t charity wards - they’re businesses.
Convenient though, that newfound prudence.
they are Predators.
Where have all the fatted calves gone?
They were slaughtered. (Sheesh, is this blood -n- guts day on the Bits Bucket?)
BINGO! WE HAVE A WINNER!
As some astute observers have recently pointed out, it was not so much banks as it was nontraditional lenders (e.g. the New Centurys and Countrywides) who loaned money without worrying about whether it would or could be repaid. When the subprime industry imploded and other bad actors stopped making crazy loans, the surviving lenders appear reluctant to lend, but they would have never loaned on inflated collateral to begin with. Nobody from the Fed to the FDIC to top political mouthpieces on down the chain seems willing to openly admit that real estate prices were inflated to unsustainably, unaffordably high levels, and will have to come back down before it is prudent for banks to lend again.
Banks aren’t lending because there’s so few people left that are good credit risks that still want money from them! There are tons of people with 500 FICOs that are beating their door in for loans on 1M dollar homes. But not many people with 10-20% down, 700+ FICO, stable income and job, AND asking for less then 3X their household income (loan amount). That’s a VERY, VERY small pool of people. The banks are lending where appropriate and not lending to people who won’t, or can’t, pay them back. What a concept!
Not to mention many people now believe that the housing market is still falling, so why would they borrow?
“Dr. North has argued that deflation is not possible.”
Lol. This guy should do stand-up, or maybe get out a little more often.
Dr. North was the foremost Prophet of Doom during Y2K.
Well, at least his track record is consistant.
I will never cease to chuckle remembering all the brainsters who couldn’t figure out that the first year of a millenium starts with a “1″ at the end, not a “0″.
Why let such a trifling detail get in the way of a good party?
FWIW someone posted, or a couple of someones posted a month or so ago that they were being courted for Refi’s when they didn’t ask for them, so as I understood their posts, the banks were getting by lending on a technicality, by lending to refi those who didn’t ask for or didnt’ need to refi, thereby bypassing most/all demands by feds to loan.
The Realities of the $ BILL in America.
The dollar($) bill may not be worth a lot anymore but it is still considered REAL money.
A great number of people are suddenly realizing that they OWE other people an awful lot of that REAL money
Yep. The Ultimate Financial Solution is cash.
“A feast is made for laughter, and wine maketh merry: but money answereth all things.” Ecclesiastes 10:19
But a great number are walking away from those debts, too. When that happens, it’s inflationary. It might hurt asset prices, but it’s the small creditor class that owns assets mostly, and inflation is driven by the spenders. The spenders are the debtors, and wiping out their debt gives them more to spend. I agree with hoz, most of the deflationary effects have been felt. Next up, inflation.
I was re-reading my August 1965 copy of National Geographic last night and for some reason read through the adverts at the beginning of the issue. I found an ad from State Farm Insurance which read “When you’re thinking of spending $20,000 or so on a new home, why think about saving $23,50 or so on a State Farm Homeowners Policy?”
It’s odd how our viewpoint changes. I understand that there’s been inflation, but back in 1965 spending $20,000 on a new house was considered a really big deal.
Just got some biographical info from my great-great-grandfather who immigrated in the early 1800’s, and moved to Gettysburg where he bought a house. I wish I had brought it with me for the details, but one thing I do remember is that his declared real estate value was $500. It wasn’t a tiny house by the way. It’s still there, complete with pockmarks from bullets. There was a window in the top floor that was convenient for snipers, so the poor house got it pretty bad.
his declared real estate value was $500 In that era, the US Govt was selling land in the midwest for $1.25/acre.
We had sound money back then, and an economy based on industrial production, not speculation and services. Between the Great Society and Nixon taking us off the Gold Standard, our economy and country went to hell in a handbasket. Thank you Boomers, for perpetuating those terrible errors.
For sure we thought if we cleaned up the air and water for you, and all loved one another, everything would be OK.
What’s Generation Me’s plan to save the world for our grandchildren?
Interesting, that idea that Nixon took us off the gold standard.
Is it safe to say that with OB in the house, what plays out now is on Generation ME?
This generation blame stuff is easy! Never mind the fundamentals.
Most of us Boomers were children during Johnson’s Great Society and Nixon’s presidency. So it’s kinda hard to see how we are responsible for their policies. BTW, Johnson also supported civil rights, and Nixon opened relations with China. So neither of them was all bad.
I get a little cranky over Boomers being blamed for everything that’s gone wrong with this country for the past 50 years.
When Nixon left office, Slim was all of 16 years old.
+1
Young whippersnapper! I was 20.
“I get a little cranky over Boomers being blamed for everything that’s gone wrong with this country for the past 50 years.”
I think the Boomers were the first group to fall for the idea that the personal is political - ie getting in touch with your inner child or wearing countercultural clothing as having political consequences, when it is actually just kind of fun, and not scary, risky or boring, like staging a strike or something.
Not to discount the many Boomers who did great things, or blame the whole generation (that would be dumb).
Also, there’s just so many of you, you demand a lot of cultural spotlight time (just read Pagan Kennedy sometime). Patsy & Edina on Ab Fab are the ultimate Boomer parodies (and as the child of a Boomer, yes I relate to Saffy).
“We had sound money back then”
I seem to recall that the secret service was formed back then because an estimated 1/3 of all currency in circulation was counterfeit.
“Thank you Boomers, for perpetuating those terrible errors.”
Thank you in return, however I had nothing to to do with this mess, Ricky (from Lucy)!
HS Class of 63
$20k in 1965? Sounds like a huge amount for that genre. My parents bought their second house which was a major step up for $5k in 1965. This was in a very vibrant mill town/village with lots of successful local dairys. The house was enormous (lots of bro’s and sis), 2 living rooms, dining room, large kitchen, den, 5 bedrooms, two staircases, etc, barn with milking parlor too.
OK - sorry but that doesn’t sound right. Where did you live - the love canal?
My house growing up was $30k in 1969 - decent sized house but nothing special - 1.5 acres in semi-rural NC. It later sold for $60k in 1986, and in 2002 for $140k.
I have a hard time believing in a $5k house you describe in 1965, unless there are extenuating circumstances.
lol. No love canal but Rutland Co. VT, but you’re quite correct. I just got off the phone with the matriarch. 1963 they sold 3bed/1bath two level shack for $4500. Bought the previously mentioned shack for $10k and put 5k down on it.
Gasp! Don’t they know that they would have been better off only putting 2k down, and investing that extra 3k in something that would make a better profit?!!?
My parents first house was $19,000, brand new, 1960. Value 1979, $45,000 ( w/added dormer). 1988, when sold $179,000. Estimates: 1992-$149,000 1996 $ 179,000 1998-$199,000 2000-$249,000 2003- 329,000 2005 $489,000 2006 $ 529,000 Today $449,000 next year, how low? who knows? Nassau county LI.
1960 = $19,000 (new)
2005 = $489,000 (45 years old)
Hwy, looks into the future, utilizing the NAR real estate constant…
Hang on to it for gods sake!, by 2050…. it’ll be like those 100 year old houses in Pasadena…worth an easy: $12,225,000.00
That would equal what happen to the lucky owners between 1960 & 2005
My parents bought a house in the early 60’s for 20K. The monthly payment was about $110, which was about 1/2 of 1 weeks take home pay for my dad (he was a tool and die maker). My mom stayed at home.
According to zillow, that house today (in Fountain Valley, CA) is worth 593K, and was woth 700K at the peak of the bubble and 300K in 2000. My parents sold it in the late 60’s for about 25K, when we left California.
My wife and I are currently living in a house owned by her grandparents on 40 acres. They bought it in ~1965 (it was their second house) for 8,000. It was a tar-paper shack at that time, no running water (they have since finished the place and added running water and more house). They sold 3/4 of the timber for $5500, so net was 2500 bucks.
Soros spent millions to help B.O. get elected, and was initially consulted on his ideas to ’stimulate’ our economy. At this point they have turned a deaf ear to George’s ideas.
No telling what kind of gobbledygook they will come up with, but it will be a huge lumbering beast.
(Reuters) - Setting up a ‘bad bank’ to absorb toxic assets of troubled U.S. lenders — a move the Obama administration is debating — would be an error on political and financial grounds, billionaire financier George Soros said.
The process would lead to difficulties in valuing toxic securities and generate covert subsidies for affected banks, generating “tremendous political resistance to any further (bailout),” Soros wrote in a commentary in the Wall Street Journal on Wednesday.
The U.S. administration is thought to be considering creating a government entity to take toxic assets off banks’ balance sheets as part of a $900 billion stimulus package President Barack Obama hopes to see passed by mid-February.
European leaders are reviewing similar options — already under discussion by the German, British and Dutch governments — and will take their proposals to April’s G20 meeting, European Union economic chief Joaquin Almunia said on Monday.
Soros said he favored putting toxic assets into a ’side pocket’, where the appropriate amount of capital — equity and unsecured debentures — would be sequestered.
This would cleanse the banks’ balance sheets while leaving them undercapitalized. “The same $1 trillion that is now destined to fund the (U.S.) bad bank could then be used to infuse capital into the good banks,” he wrote.
Several of OBwan’s economics dream team have long term experience with economies of bail and disaster capitalism. Expect more of the same…
Augh!!!!
Side pockets!!!
Taking the worst of the hedge fund world and bringing them mainstream!
Same as an SPIV/SIV, its carried at cost until you realize the value.
Hello, flaming pile of crap accounting.
This has been abused by some hedge funds to the extreme:
1000 shares at 1K each.
Oops, we’re investing in hard to value assets. Let’s not tell you about them and shift 25 percent of our capital into 5 seperate side pockets representing each individual investment (that we wont tell you about). Oh, look, we can value this one we had a gain on and then collect a performance fee on our profits! Umm, we can’t value the other ones.
Day ( Last Day - 1 of hedge fund ):
Ok, we’re recognizing these all as losses. No performance fee for us, we’re sad. No, we don’t have to give back prior ones.
RE: No telling what kind of gobbledygook they will come up with
This federal bail-out is a demented farce.
Check out what happens in Maine….
$2.38 billion from the Feds for a state of 1.2mil.
Breakdown-
10% to balance the state budget (yup, gotta keep all those public employees in 100% paid health care and 6 week vacations. Jobs?
Jobs? Where’s the job’s? Nothin’ here, but a bail-out for poor state budget planning. Multiply X 49.
$190 million in “school aid” and to repair/renovate public school buildings…So WTF have all the towns and cities done with their state reimbursement and property tax monies?) Jobs? So a few politically connected drywall companies get some biz, and the special ed empire builders get to hire some more female aides for Liam the special needs kid.
$434 million for Medicaid…Gotta keep the living dead alive in all those $83k per year nursing homes and meds for the legions of obese fast food eaters and butt puffers. Jobs? A good bud works as a maintenance supervisor for a string of 16 homes. He said the bed pan cleaners have a pretty good turnover…problem is, the corporate high honcho’s only make the position’s part time, so as to avoid paying health insurance and a benefit package. Starting pay…$7.00 pr hour.
And a final $9.2 million in extended unemployment insurance and job re-training…Job re-training for what? The thousands of lost paper mill jobs with their average $65k salaries and benefit packages? More likely it’s for the expansion of the legions of state employed unionized social service workers with an average pay of $25k which has been the dominant employemtn re-entry field for the last decade.
All just a complete bail-out scam to compensate for inept and dysfunctional government at all levels.
http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2009/02/04/stimulus_bill_as_maine_goes
In August of 1965, I was in looking at RE in Viet Nam. It was expensive, had snakes and I soon learned that the neighbors would be very “unhappy” with me.
Thanks again Uncle Sam
Sorry Mikey:
You had a chance to stay in school and drag it out as long as possible.
Yea..I was hoping for a college deferment but Dick Cheney must have stolen ALL of the frigging FORMS
hahaha Darth was such a hoarder of the deferment forms.
And as somebody who was going to University of MD during the war pointed out: No finals. Somehow there was always a big demonstration closing down campus during finals. Now I’m sure that there was a critical mass of students who were trying to hold huge demonstrations every week. But they only got enough participation by rank and file students during finals week. Effectively, it was like making it snow. (not a bad trick in June.
Yet, for some reason I cannot fathom, many posters believe that South America is different because people were so happy at the consulate cocktails luncheon they attended.
Just the same as everybody in Bolivia is just getting along fine with the new socialist president… Same for Hugo Chavez and friends… It is all fun and games with oil at 150… Now that it is hovering around 40 (with a 30% discount for Thugos heavy oil) he is nice and cooperative with his neighbors… Do not let the media controlled by former bus drivers lead you in any other direction though…
Latam is far more complex than a Us vs. Them theme. BTW, Venezuela under Thugo is exactly the same as Ayn Rants US in atlas shrugged… Everything the state touches turns to $hit…
Oh, I can believe that.
Point taken.
So…
One would think with all the money that Daschle saved on taxes, that he wouldn’t be relegated to cereal boxes for his eye wear.
Just sayin’
Daschle learned to step down quick when Bammy says so. He saw what happened to Blago when he refused to go quietly. Solis may be next.
But, y’know, if I’m Daschle, I’m wondering how Geithner gets a free pass.
Daschle is a politician (needs voter approval to stay in office), Geithner is a technocrat (needs some politician’s approval to stay in office).
Daschle was a politician.
More to the point, he was enough of a political veteran to realize that A.) he faced a tough, acrimonious confirmation hearing; B.) he realized there would be increased scrutiny of any other improper behavior on his part, real or imagined; and C.) he risked tainting upcoming healthcare initiatives even if he was confirmed.
Daschle’s ordained role was very much predicated on his ability to work the legislative backrooms on both sides of the aisle — and in all likelihood, those abilities would’ve been seriously diminished, if not completely hamstrung.
Money talks, health walks.
One is an exception. Two is the beginning of a trend.
What was it Goldfinger said? Once is happenstance, twice is coincidence. The third time it’s enemy action.
Well given that we’ve already had three, what should we do about this enemy?
(and who is the enemy?)
Doesn’t everyone understand the meaning of BOHICA?
Barack Obama’s Hell in California?
Barack Obama — He Isn’t Cheney’s Assclown?
Pogo responding to Porky with “YEP, SON, WE HAVE MET THE ENEMY AND HE IS US.” In 1972, it was the title of a book, US
BOHICA - “Bend Over, Here It Comes Again”
Closely analagous to “Same Sh!t, Different Day”
I’m pissed off about both of those guys. Really pissed off. When I owed $10K the IRS came after me with a vengeance. Tried twice to garnish my paycheck…would have let me keep only $1,200 of it per month. I had to go on a payment plan. Sucks to be a nobody.
LOL! Them’s some ugly spectacles! He also looks alot older in that picture than the last time I saw him. Oh well…see ya Tommy Boy!
Actually, I was kind of excited to see a (potential) high government official with such far-out eyewear. Most of our top guys and gals dress in Unforgettable-Wear. And that includes their glasses.
Yea what’s zup with his Sally Jesse Rafael glasses? LOL!
I am so damn glad that whiny,wimpy d. bag is out, he’s probably pissed that he went ahead and finally payed his taxes.
“…Farther afield, the financial sectors of countries such as Canada, Japan and Australia remain relatively unscathed. And round the world, thousands of regional banks, co-operatives and specialist lenders are open for - admittedly less - business. There are more than 8,000 banks in the US alone.
Governments must be mindful of this before throwing the book at the sector and micromanaging it into submission. What is more, throughout this decade, banks have accounted for only about half of the market value of the total financial services industry, according to Oliver Wyman. There are many other businesses out there, such as asset managers and bancassurers, competing directly with banks. New rules for some and not for others would create an unwieldy mess.
Still, political winds mean regulatory changes are coming. But these must be simple and few rather than complex and far-reaching. Minimum capital requirements that are comparable across borders will help reduce systemic risk. Mark-to-model must also die. Most crucial, though, is an improvement in transparency. Regulators will not keep up with the crooked (or benign) whizz-kid bankers of tomorrow. Let investors do that job. But they need a clear view of the numbers to do so.”
FT - LEX
Too late for the US, the good banks have already been lumped in with the bad banks.
Creeping Socialism Now! Anybody remember those buttons from Sen. Goldwater?
“Too late for the US, the good banks have already been lumped in with the bad banks.”
Accusing good banks of failing to lend when asset prices (e.g. housing) are rapidly deflating is pretty unfair. Why should a private bank have to make loans on falling knife collateral? That is not the American way, nor is propping up subprime mortgage lending kingpins that made really stupid decisions a few years back…
“Why should a private bank have to make loans on falling knife collateral? ”
I’d gladly lend on falling-knife collateral—-at about 25-30% LTV, of course…
Markets have a case of Messianxiety today. And regarding which way to jump, I have a hint: Gravity only points one direction…
MarketWatch dot com
February 4 2009 9:34 A.M. EST
Mulling which way to jump
Momentum fails to carry over from Tuesday’s rally, stock futures indicate. Disney and Kraft to weigh on blue chips.
The MarketWatch folks are on a roll today…
Too popular for Wall Street?
History shows that stocks don’t ordinarily do very well when the occupant of the Oval Office has a high approval rating, reports Mark Hulbert.
To the moon right now - up 1.3%
Up 4.23% right now. 1680 pts. Course I bet on inflation.
I’m betting on inflation, too.
Vooommm - over my head
Of what specifically do you speak hoz?
“I’m betting on inflation, too.”
me too
Whoa - big drop there all of the sudden - anyone know what’s up?
Obama must have become more popular.
ADP Says U.S. Companies Reduced Payrolls by 522,000
Feb. 4 (Bloomberg) — Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.
The drop in the ADP Employer Services gauge was less than economists forecast and followed a revised cut of 659,000 for the prior month.
Employers are slashing workers as clogged credit markets and slumps from housing to manufacturing threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending, which represents about 70 percent of the economy.
“We’re in for several more months of bleeding on the jobs front,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.
President Hussein is currently working on the situation.
Pressboard, OUR President didn’t start this mess…
Found on a Looney Toon Popsicle stick:
“What’s the difference between Rash Limpbaughs & Diogenes?”
Diogenes lantern was lit.
“OUR President didn’t start this mess…”
What do you estimate is the half life on that meme?
Among the literate or illiterate?
Makes a difference, you know.
The fact that DoughHead, full of denial, still refuses to take responsibility for anything is ETERNAL until he himself has a lucid moment and steps up to his own rhetoric and repents.
That’s not what the pont I was making, I apologize.
There are only so many months before the masses start blaming our current beloved leader for not paying their mortgage and gas bill.
They will still hate the shrub, but he’s over and he’s not coming back.
“We’re in for several more months of bleeding on the jobs front,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.
And then what Joel?
And then what Joel? We’re dead?
Here’s a question for the crowd - if the world just lost over 40% of its accumulated wealth in the last 4 months, does that constitute a “crash”?
Do you think the MSM is under-reporting the facts?
…if the world just lost over 40% of its accumulated wealth…
The core problem is how that “wealth” is accounted for. For
example, much R/E “wealth” was imaginary.
Exactly. One would have to define what “wealth” is, not only in terms of what are the assets (houses, equities, etc.) but whether we’re talking truly macro values vs. a summation of micro values - which by far are not the same things.
E.g. take the value of Google. Current true value of the company is about $21B, in tangible assets. However the sum total of the stock equity is $110B - about five times as much.
If the CEO died in a plane crash, the stock would probably jump down say 10% overnight. Does that mean the “wealth” of the company went down? No. The wealth of the company is $21B, not $110B, and would remain so.
Likewise two years ago Google’s stock was twice what is is now, thus their market cap was $220B. Was there $110B of “wealth” lost as the stock went down by 50% to $110B? No. Because it wasn’t true macro wealth (asset value), it was instead the sum of all the micro wealths (individual stock prices).
Same principle for supposed home equity. The wealth is only truly there if you sell it, and only on a micro level (individual house). If everyone tried to sell their home at once, we’d see the value plummet - i.e. like we are. Thus the true value of homes in the U.S. isn’t equal to the sum total of the supposed equity value.
i dunno.. True wealth has real value.. true value.. meaning it can be exchanged for money or for other goods?
If a bank wants solid collateral and is willing to accept either home equity or gold coins before lending money, is there any practical reason for calling one of those things wealth but not the other?
As long as the bank is happy to lend real money, does it matter that a bank might be mistaken?
Does it matter that either form of “wealth” might be overvalued or experience a serious decline in value?
Again - it’s a macro vs. micro thing. The same principle applies to gold coins. If everyone who owned them decided at once to cash them in, the price would shoot downwards. Thus the total value is not equal to the sum of the parts - under these conditions.
I add “under these conditions” referring to any time there’s a bubble in some asset - be it stocks, houses, gold, beanie babies, whatever.
In a bubble condition, demand is temporarily and unnaturally high due to speculation, and thus prices are high relative to the true value of the asset. During the bubble (or even not during a bubble) - any one seller can indeed sell their asset for the high price, and thus to them the value was equal to the high price. However at a macro level - if there are more sellers than buyers, the price goes down, eventually to it’s natural true value. The delta between the true non-bubble normal-market-conditions value and the bubble-inflated value was imaginary value (wealth), at the macro level.
Regarding banks - banks right now are *not* lending at the full “value” of homes, because they know that prices are going down, and still inflated beyond norms.
It’s actually not quite as simple as I’m making it out - in addition to an asset’s core value there is some value also in the expectations of the asset’s future value. Key is that I wouldn’t consider this a component of “wealth”.
In other words (brass tacks), personally I would break up any asset into two components:
A. Core value
B. Expectations of future value growth
The price of an object is generally based on A + B. However I would consider “wealth” to be just A.
Quotations like “the world just lost 40% of it’s accumulated wealth” presume that wealth = A + B, which I think is wrong.
A. Core value
B. Expectations of future value growth
A + B = Price
But where does equity fit in? Equity is not an expectation of future value growth.. it’s a reflection of past growth.
Equity is how much more the house is worth today as compared to when it last sold. The market has decided that this house has grown in value. A bank (or a sale) will prove that equity has real wealth-value by trading money for that equity.
Equity is how much more the house is worth today as compared to when it last sold.
ok.. that came out all wrong.. equity is the difference between a home’s value and what is owed on it. If it’s 100% paid off, there’s 100% equity value.
Lets specifically speak of “bubble equity”:
You buy in 2003 for 100K (cash.. no loan), and the house is valued at $200K in 2006.
$100K in “phantom” equity has been added.
Is that 100K in added equity an Expectation of future value growth ?
No.. it is a reflection of past growth.
I that equity true wealth?
Well, the banks thought so, and willingly HELOC’d lots of real money to the owners on request.
But just because the bank allowed you to HELOC, doesn’t make it wealth.
If:
1. You buy a home for $100k, with $100k mortgage (0 down)
2. Appraised value goes up to $200k
3. You HELOC another $100k
4. You sell the home for $150k
Does that mean that at step 3 the “wealth” value of the home was $200k?
No.
The bank just thought the wealth value of the home was $200k. In reality it was still just $150k.
This delta is then realized (mark-to-market to true value) when you have to bring $50k cash to the table in order to sell your home.
The extra $50k was phantom wealth. You had $50k cash in your pocket so you thought it was real wealth, however you didn’t realize that there was an invisible - real - offset of -$50k because your mortgage debt was $50k more than the house was worth.
That’s what’s confusing most people - in this case the positive wealth is tangible (cash in hand), but the negative offset (actual contribution to their net worth) is not tangible, until such time as they actually go to sell the house. It is real nonetheless.
“The bank just thought”.. and there lies the problem as I see it. We can’t stop people from thinking and acting based on their beliefs.
How do we take the human factor out of economic equations? If everyone thinks an appraisal is accurate and everyone is willing to back that up with cold hard cash, can everyone be wrong?
If we now need to define “wrong”, forget I asked..
Much about the markets is purely subjective and i don’t think we’ll ever be able to change that. Bubbles and other psycho-economic maladies will always be a threat.
Not imaginary, when you can HELOC it, and then walk away.
Many HELOCs are being frozen.
Imaginary.
“The core problem is how that “wealth” is accounted for. For
example, much R/E “wealth” was imaginary”
No argument here.
I guess then we should say that one’s “life expectancy” is an imaginary concept.
Good analogy, though it’s not imaginary if you include the word “expectancy”. If you leave that off and just say “life” then it’s a different matter. Same is true of “wealth” vs. “expected wealth”.
If someone were to ask you “how many times have you flown on an airplane in your life” - would you include only the times up to this point, or would you include all the times you think you’ll fly before you die? If so, then yeah that’s imaginary, as in that includes what you imagine you’ll fly in later years.
There you go.
It’s perceived wealth not salable wealth.
Likewise, a homeowner with 1999 cost basis has not lost money; the homeowner simply lost a profit taking opportunity.
They cash-out refi-ed, and have simply put themsleves in the position of having to walk-away to realize the gain.
Wells Fargo cancels Vegas event
NEW YORK (CNN) — Wells Fargo announced Tuesday it would cancel a four-day business meeting in Las Vegas, Nevada, after news reports tagged it a “pricey Las Vegas casino junket.”
The company, one of nine banks to receive funds from the first round of government bailout money last fall, called the reports “intentionally misleading.”
“The event is not a ‘junket’ for executives but a four-day business meeting and recognition event for hard-working team members who made homeownership achievable and sustainable for borrowers across the nation,” the company said in a statement.
Citing an Associated Press story, CNN reported that Wells Fargo had booked 12 nights at two of the city’s most expensive hotels, drawing questions and criticism from Capitol Hill on whether the bank, the recipient of $25 billion from the Treasury’s bailout plan, misused taxpayer money.
Oh No! Not PIMPCO …
Feb. 4 (Bloomberg) — Pacific Investment Management Co., manager of the largest bond fund, will cut jobs in the London and Munich offices employing 180 people as asset growth slows with the decline in financial markets worldwide.
Pimco “is looking to make a small number of selective cuts in non-strategic positions,” spokeswoman Sally Todd said in a telephone interview today. She declined to say how many workers will lose their jobs, which departments will be affected or the last time the Newport Beach, California-based company had cuts.
wonder if “spokeswoman” is a non-strategic position in today’s economy?
how does that go? BWAAHAHAHHAHAHAHAH (??)
My friend has the last job they will ever cut….Because if he got fired the employees response would be:
“WE’RE FREAKIN DOOMED!!!!” in the great Mogambo style
He is the editor of the Xerox Company Newsletter. So her job is safe too.
Maybe it’s just me, but how can anybody take a company seriously that is named Pimp Co?
Well I’ll be, now who could have seen this coming?
GM, Ford Sales Collapse May Force More Restructuring & Mo Gubmint monies…
Feb. 4 (Bloomberg) — General Motors Corp., Ford Motor Co. and Chrysler LLC aren’t yet finding the market levels they say they need to end losses and may require deeper restructuring and more federal money to survive.
“The straight truth is there’s no sign of a bottom,” said Jim Hossack, an analyst at AutoPacific Inc. in Tustin, California. “How far down is the bottom, when is it, what does it look like? No man alive knows, and we thought we did.”
U.S. industrywide deliveries in January tumbled 37 percent to 656,976 as the recession ravaged demand. That translates into an annual rate of 9.6 million, and the fourth month of a rate of less than 10.7 million, after an average of more than 16 million vehicles in this decade, research firm Autodata Corp. said.
An unpredictable sales outlook complicates plans for GM and Chrysler to meet a Feb. 17 deadline to prove they are viable and keep $17.4 billion in U.S. loans they need to avoid bankruptcy. It also increases the likelihood Ford, which has shunned the government handouts, will need to ask for aid.
But buyers of new cars will be able to deduct state sales taxes and loan interest, so it’s all good.
That still won’t get me off of my paid-for, fix-and-maintain-’em-myself bicycles.
I hear ya, actually I am livid over this. This downturn and last summer’s oil price spike offered this nation the best chance in decades to challenge the hegemony of the automobile culture. Instead, the pols opt to serve their corporate donors in Detroit and placate their union foot soldiers.
When, not if, oil spikes again - well, they asked for it.
Judging by the different ways that the big 3 and and the banks were treated on the bailout packages, I’m not so convinced that Detroit is calling the shots. Oil and banking concerns have much more power, don’t you think?
(Totally agree on the missed opportunity, though, edgewater.)
Professor Mike Rozeff sees high price inflation ahead: “The finances of the U.S. government are weakening, and this is the planned policy of the Obama administration. There are no credible plans in sight that have been made public to alter this in the long run. There is rather weak talk from the President’s advisors but no plan. Future federal commitments loom large. Federal guarantees and bailouts are large and growing. Federal deficits are already huge. All of this points to a weaker dollar.”
“Weaker dollar” means too many dollars chasing too few goods, thus producing rapid price rises. Inflation. However, at this moment people don’t feel they’re suffering a surplus of money and the shadow of price deflation stalks the land.
I read that article on Lew Rockwell along with some other articles in a similar vein. The key point is that while the Fed has doubled the monetary base, they have sterilized it by paying the banks interest to keep their excess reserves at the FED.
The problem is that the FED will not be able to keep that money sterilized much longer in the face of Obama forcing the banks to lend and the huge increase in government spending. Once the dam breaks, you can expect the dollar to fall by 50% relatively quickly.
There is no escaping this eventual reality.
Maybe this my force a shift back to the “Customer is always Right” form of business in America due to the old and quaint financial Laws of “Wants and Needs.”
I don’t want or need your crappy Loan because I’m renting, happy and saving a little money.
I don’t want or need your over-priced POS “Dream House” of a moneypit because I am saving for MY OWN retirement Dreams.
I don’t want or need your crappy new car because my insurance company and the cops say that I shouldn’t travel at 0-60 mph in 7.0001 split seconds and the speed limit is still 65 mph.
I don’t want or need your cheap a$$ made fiber-board furniture set because I intend to bump Granny off for hers.
I don’t want or need your new 54 inch HDTV and $3,000 worth of accessories because I have a perfectly good old 32 inch, a converter box and I enjoy gambling on free reception.
Most American’s really have all they NEED already, otherwise we’d have a HELL of a lot more blood and bodies in the streets from bullet holes or starvation. Their Wants are a different equation, figured out by business, advertizing and their own oversized EGOs
Mikey, you rock.
Shhhhh mikey. THEY will hear you. THEY are clearing out Guantanimo for people like you. Shhhhh. Forget your heathen, dangerous thoughts.
Gitmo doesn’t scare me. I did 3 days in the legendary improvised” Ponderosa Stockade” with a poncho, c-rats and a canteen of dirty water in Nam for stealing a jeep when I got back to base camp.
I had planned to drive to the nearest USAF base, steal a frigging C-130 and fly home. I don’t remember if I either ran out of booze or couldn’t figure out how to start the stupid engines
“Give it to…mikey!” …”He’ll eat anything!”
You’re the kind of American…. “Dickey Boy” Cheney warned us all about, …fear your countryman… who does not think as you do!
Starting a C-130 is easy, so it must have been the booze. Just grab the prop and give her a pull while a buddy pumps that gas and pushes on the throttle inside the plane. Repeat 3 more times.
‘I had planned to drive to the nearest USAF base, steal a frigging C-130 and fly home. I don’t remember if I either ran out of booze or couldn’t figure out how to start the stupid engines’
Oh, my gosh, let’s party some time, mikey! I mean it!
(Oh, and you, too, Al. I’ll bring the home-brew and Cheez-whiz.*)
*Actually I won’t eat Cheez-whiz. I said that for dramatic style. Cheez-whiz and pickled jellyfish are the only things in the world I won’t eat.
I may have tried that Al.
Somewhere along the line I lost two other drunk paratroopers that wanted to go home with me to meet my sister
Mortgage interest rates @ 14+ %
(Kilroy was here!)
“Bring it on…. Fat Boy FED!”
…the last line uttered: “Kill the Beeeeeaaaasssssssstt!”
Higher-end home sales are slipping
By Roger Showley
Union-Tribune Staff Writer
2:00 a.m. February 4, 2009
While bargain hunters got more active in California’s depressed real estate market last year, the million-dollar market was slowing down.
Research firm MDA DataQuick reported yesterday that sales of homes for $1 million or more were down 42.5 percent, hitting the weakest sales pace since 2003.
Analysts attributed the decline to tougher loan standards and seller resistance to low-ball offers.
…
High-end homes weren’t immune to the foreclosure trend. There were 1,612 foreclosures and 5,243 notices of default on California homes that previously sold for more than $1 million.
Pat Kramer of Prudential California Realty in Rancho Santa Fe said it is taking longer to close deals, partly because banks are taking longer than usual to approve loans. Kramer said some sellers are reducing their asking prices.
“Eventually, it catches up to even the wealthiest,” Kramer said.
She predicted sales will pick up by May.
“In the last 30 days all of the showings picked up on all the properties across the board, regardless of where they are located,” Kramer said. “People are writing more offers. Interest has picked up.”
Realtors™ make the dumbest predictions.
Do you think Norm ever saw Ivy Zelman’s prime and Alt-A ARM reset graph? I think not.
University of San Diego real estate economist Norm Miller estimated that top-end homes may have lost 10 percent to 15 percent in value in 2008 – enough to represent about half the drop-off in sales count as those homes sank below the million-dollar mark.
Miller said costly homes likely will hold more of their value this year than lower-priced homes because fewer owners are subject to default and foreclosure and thus are not forced to sell.
“Miller said costly homes likely will hold more of their value this year than lower-priced homes because fewer owners are subject to default and foreclosure and thus are not forced to sell.”
yes and when the ARM re-sets they can get such good rates on their Jumbo loan …
“She predicted that sales would pick by May”
Oh Yeah…and the Great mikey and his Magic 8 Ball predicts California will experience a cataclysmic event and slide off into an ocean of debt by May. What’s the Odd’s ?
I think your cataclysmic event is more likely than a pick up in high-end sales by May. We have run out of rich guys who enjoy catching falling knives.
April, May and June, then August and Sept are traditionally the busiest times for residential RE.
There may very well be an uptick.
In today’s interview on Bloomberg Meredith Whitney outlined banking sector realities. Policymakers should take note.
In short, as the shadow banking system shrinks and demand for housing falls to historic norms, the need for banks will decrease. There is overcapacity. Markets are telling us we need less banks not more.
Rescuing bad assets from insolvent banks’ balance sheets will not add value to the economy. It will not save jobs in the banking sector. There is overcapacity. Layoffs are inevitable. In fact, it will suck away available capital that could be used to create new jobs in other sectors.
Here is the Bloomberg Video link to the aforementioned interview:
http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vVLSGmxf63Po.asf&vCat=/av&RND=934175228&A=
In fact, it will suck away available capital that could be used to create new jobs in other sectors.
wait a minute. Why not extend what’s true for banking to other sectors? Weren’t all of them over inflated and don’t all need to shrink? I think so.
Yo! BO! Stop trying to stimulate an over stimulated economy.
Do you have a link to the Whitney interview ??
tried. it didn’t post.
New York Times: Snooty restaurants will be nice to you now — maybe even suck up a little.
By FRANK BRUNI
Published: February 3, 2009
… Battered hard already by the recession and petrified of what’s to come, restaurants are talking sweet and reaching out in ways they didn’t six or even three months ago. They’re cutting special deals, adding little perks, relaxing demands and making an extra effort to be accessible.
They’ve seldom wanted you so bad, so they’ve rarely treated you so good. If you can still afford to dine out, you’re likely finding yourself enfolded in what the restaurateur Stephen Hanson— who recently closed two Manhattan restaurants, including Fiamma — describes as a big, tight embrace.
Predicting that “the consumer will just shut down” and that 2009 would be “a very, very tough year,” Mr. Hanson told peers at a conference in Manhattan last month, “You need to hug the customer.”
Trust me: the hugging had already begun.
doh! I just posted this, whoops.
They only want to hug you so they can lift your wallet.
Figuratively…maybe literally too.
Why the hour long wait at Claimjumpers last Friday night then?
The NAR: housing affordability at a record level:
http://economix.blogs.nytimes.com/2009/01/30/housing-affordability-at-record-high/#comment-31349
The article doesn’t say what criteria they are using these days, since they shift them around to make the numbers look good. No way they should be presenting this as a consistent, 40-year series.
Holy crap that is the most blatant lying I think I have ever seen.
I know the CAR changed the way they calculated the affordability index a couple of years ago to use ARMs - the number magically went from 4% to 23% overnight. Presumably this data / graph does likewise, though you would think you would see an instantaneous jump then. So they must have smoothed it out somewhat.
My favorite comment: “Yeah, as long as you can come up with a 100% down payment.”
The U.S. Census Bureau’s vacancy table is out.
http://www.census.gov/hhes/www/housing/hvs/qtr408/q408tab4.html
19 million empty homes.
The key is not so much the size of the number (it’s always been higher than most people would think) - but the fact that the vacancy rate is still going up, despite record-low housing starts.
This points out how high the rate of “consolidation” is right now - e.g. people moving back in with their parents, multi-family households, etc.
Preach it, Packman. When I was Back East visiting the parental units, Mom told me that the next-door neighbors, who have two adult children, have both offspring living with them. And the older offspring now has a wife. Mom thinks things are a bit crowded over there.
The number of housing finishes were not low in 2008, they were sky high with 2.2 million units added.
It will take several years to work that off, even if the increase of 976,000 households for 2008 is maintained.
The number of housng units for sale increased only 2.3%. But the number for rent, “held off market,” or vacant “for other reasons” went up a lot, in the latter case by 11.5%.
Where do you see that data?
Being that the number of starts in 2007 was only 1.5M annualized at its highest level (beginning of the year), and for 2008 was only 1.2M at its highest level, I don’t see how there could have been 2.2M finishes in 2008.
Single-family houses sold in 2008 was less than 500k, I can’t see how finishes could be more than 4 times that.
My data’s per this, FYI.
Look here - only 617k single-family housing completions through Q3 in 2008:
Link
(warning PDF)
Previous years:
2004: 1,532k
2005: 1,636k
2006: 1,654k
2007: 1,218k
2008 looks like it’ll be about 800k
The data on completions may be inferred from the total number of housing units in the table linked above — it went up by 2.2 million from the fourth quarter of 2007 to the fourth quarter of 2008.
There must be units finishing up from prior years. Remember, we had a condo boom, and big buildings take longer to finish than one-family homes.
Hmm - you’re right that’s weird. The census’s own data doesn’t seem to jive at all.
The 2.2M delta does include total housing units (single-family and otherwise), however this is way above their other data for the total housing units (in the pdf I linked). Even when accounting for *all* units in the pdf - it’s still just 837k units through Q3 of 2008 - there’s no way that Q4 had 1.5M units added!
201 Q1 SF
209 Q2 SF
207 Q3 SF
69 Q1 2+
67 Q2 2+
84 Q3 2+
—————
837k total units through Q3
It seems like they’re using two different polling methods and coming up with completely different (way different) data!
Odd.
Odd? Nope. Normal.
SO, we had large stock, bond and commidity drops late last year as hedge funds tried to liquidate to meet redemption requests.
Then, a large portion of the hedge funds locked the doors. We’ve been working on the bottom since.
So, when do the hedge funds have to unlock the doors and have to liquidate again?
“…So, when do the hedge funds have to unlock the doors and have to liquidate again?”
Me thinks some fingers got severed with those quickly slamming “gates” ….those with all “digits” remaining… are quite happy to be able to count to 10.
From the Orlando Sentinel
http://www.orlandosentinel.com/business/orl-bighouse0309feb03,0,5247475.story
What obscenely vain indulgence. A 90,000 sq.ft. house with an 8,000 sq.ft. master bedroom. I was in Isleworth once, for a wedding reception at the club. Huge houses for the rich and famous, like Shaq, but nothing approaching this that I can remember. I can’t think of enough derogatory adjectives. Wonder if this half-finished monster is within eyesight of the other owners out there. Barf.
It occurred to me after posting this that maybe he’s just being shrewd. Dimedropped will know better than I - maybe the property tax on the unfinished house is way, way less than on a finished one. Reminds me in a way of Germany in the lat 60s - People would build a house and not apply the stucco for years and years, because of the property tax.
Smart guy:
“…a shipment of Chinese marble for the exterior and the home’s columns”
OMFG! The “master suite” alone is 5 times bigger than my entire house and I’ve got all the room I need or want. If I lived anywhere near that monstrosity I would be incredibly tempted to burn it to the ground.
Burn it down.
Has anyone ever heard of a program that offers HUD/foreclosures at a lower price to Fire/EMS/Police Officers??? A friend was telling me about is today but I can’t seem to find any info on it, so I figured this was the best place to ask…Thanks!
Yep, it’s called the Good Neighbor Program.
http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm
Google ‘HUD Good Neighbor Next Door Program’.
Thanks!
RE: TARP $500K pay cap
Will top financial executives at TARP-funded banks jump ship at offers north of $500K from non-TARP banks? (This is what Econ 1 reasoning suggests would happen…)
PB - that’s an interesting question, a perfect bird-in-the-hand one. Given how slippery these banksters are, and the fact that I haven’t read of any TARP-imposed curb on how much they can spend on teams of lawyers and bean counters to circumvent the limit, my guess is that they’re likely to stay put.
Guarantee you they’ll find ways around it.
Sorry, but these people run the government, for the most part. They won’t allow the puppets in DC to screw them over. The $500k limit is just a red herring IMO - sugar to help force the medicine go down - ala the way the TARP bailout was shamelessly pushed through the Senate by adding all the pork sugar.
Seeing as these same executives destroyed the banks they worked for, I doubt there will be many takers from the healthy banks. But it is a dumb country so go figure.
The folks that brought us this disaster may leave? And this is bad, why?
Here’s the workout:
Work at Bank A for $500,000 for x10 months
(rob loot & pillage…i.e., make arrangements with Bank x)
Resign…x2 weeks later,…
Business newspaper announces you’re being hired at Bank x (salary is not disclosed) and you & they couldn’t be happier.
or…. something along those lines.
Marketwatch is already on it. They might pull it off, but they can’t hide it nearly as well anymore:
http://www.marketwatch.com/news/story/how-long-until-wall-street/story.aspx?guid={7EEAC4BE-DE4F-4D97-BAA0-A0270B4E0889}&dist=TNMostRead
“…but the Street looks for loopholes”
PB, you live in SD, yes? I was talking to a friend of mine, she lives in “AbNormal Heights” - she said she had to call the cops because two gay prostitutes were beating each other up over turf outside her house. I thought SD was chill, no?
BTW, this is my friend who is a 28 y.o., smokin’ hot vet, she’s looking for a man. She’s blond and parties hard. She even his a sweet southern accent. I am not making any of this up.
I figure HBB is as good a place as any to go fish on her behalf.
The only problem is she hates talking about money; that’s a serious issue for a lot of you, lol…
HHB Vice Squad tickets Muggy $7.95 for pimping smokin’ hot blondes on blog time…and requests phone number of said “person of Interest”
PB is married with children.
Pics Muggy, PICS!!!!
Depends on what war she was in. Those WWII babes are just too serious, hotties or not.
Orlando commercial RE vacancies predicted to exceed 25% by 2012. Ouch!
http://www.orlandosentinel.com/business/orl-ellis-economist-rough-times-ahead-020309,0,2511274.story
This was put out by the chief economist of CB Richard Ellis at a big RE meeting in Orlando on Monday. This will put a crimp in the style of Orlando’s big-spending mayor.
There aren’t very many decent jobs in Central Florida. If you don’t work in the amusement/hospitality business, you worked “in real estate”
Restaurants Stop Playing Hard to Get (New York)
http://www.nytimes.com/2009/02/04/dining/04note.html?pagewanted=1&8dpc&_r=1
3 quotes:
“I’m betting that the answer is “yes” — and that if you eat out regularly in New York, you’ve noticed a different reception, an altered mood: extreme solicitousness tinged with outright desperation.”
“Not even the best-known chefs and most acclaimed restaurants are immune from the pressure to give diners more for less, and wild spending for extreme luxury is rapidly falling out of fashion.”
“And all sorts of rules and rigidities could crumble. The 21 Club recently abandoned requirements — in place for more than 75 years — that men wear neckties at dinner.”
“At Del Posto in Chelsea, whose owners include Mario Batali, Lidia Bastianich and Joseph Bastianich, the price for the most extravagant, 20-course meal was reduced last month to $175 from $250. The price for a nine-course tasting menu fell to $125 from $175.”
Good thing they lowered the price on that 20 course meal because I was worried people would have to downsize to the 9 course and go home hungry!
Our Mom used to absolutely torture my older brother and me, much to the endless delight of my little sister, by insisting that boys should know how to shop and cook too.
Dinner and cheap wine at mikey’s may not be as pretty, but it sure doesn’t cost $175 a POP
Ooops!…Thanks Mom
I don’t go to those types of restaurants. Not then, not now. The places I go to are always happy to see me.
Ha! This reminds me of a time many years ago when I was passing through Washington and two friends suggested we meet for dinner at The Prime Rib on K Street. I didn’t know anything about Washington eateries and thought we were talking about something like Barney’s Steak House in Orlando. So I showed up in slacks and a short-sleeved shirt. They wouldn’t let me in without a coat and tie. Finally we settled on me borrowing a way-too-small jacket of their and a tie that didn’t quite match my madras-plaid shirt. I looked ridiculous, but we drank a lot and I cheerfully endured the good-natured ribbing by my friends. Haven’t been to Washington since. Barney’s is my speed.
What is up with this ‘Obama rally’? Stupidest story ever told.
Burned my fingers trying to short cubes yesterday (QQQQ). It’s easy to borrow stuff right now (which is odd), but put premiums remain high (by my lights). I must have been manic or something because I stubbornly refused to listen to what the market was telling me. “Oh sure, it broke overhead resistance [which means I'm wrong], but it’s sure to dive now.” Not.
Goodness gracious, does the slaughter in the tech industry mean nothing? Okay, I did see that $6B line item for making federal buildings “green”. Hmm, try turning off the lights when you leave the room, and, uh, not wearing suits in the summer. But seriously, the consumer and b2b electronics industry is taking it in the shorts. I don’t care how many they laid off! Less earnings, negative revenue growth, so take the “growth expectation” fat off the P/E ratio, and shrink the share price with the “E”.
I’m trying to scalp Federated for a few points on the downside, oops, I mean “Macy’s”. Somebody tell me that 11% down YoY sales but only 4% store closings doesn’t mean more pain on the horizon! Skeeeroooed. Macy’s sucks, anyway. Good riddance. (Hey, Bloomie’s went BK in the late ’80’s and emerged–but Federated might be done.)
I don’t see a rally
10 year rate going higher almost 3%
QE next ?
Yeah, speaking of the 10-year, WTH happened to the fear of quantitative easing???
2007 got marreid and lowered dependants to ensure no big tax due in April. Result, $15K returns. Lowered witholding for 2008. Result $9K in returns on their way.
First, need to lower the witholdings further.
Second, what to do with the $9K?
I owe $180K, 14 years left on 15-year, 4.75% on my house (now worth no more than $130K and falling). (Government pays $2500 of my $8K annual interest)
I owe $40K on credit cards, $25K of it at 5% or less until paid off. $15K at variable, currently 11%. Much of it from, not one, but 2 divorces since 2002. (2002 and 2004).
Wife owes $60K in student loans at about 5%. (Government pays about $500 of the $3K interest)
No liquid savings. ($70K in 401(k)s)
Cash flow…
$4200 a month take home.
$1650 house payment
$800 payments on the credit cards
$969 child support (11 payments left.. WOOT!)
$200 in smaller stuff including life insurance, gas, etc.
So, about $600 disposable.
My wife pays everything else out of her checks, and has about $800 disposable.
Okay, what to do with the $9K?
I think the obvious is to pay down the 11% credit card. I’m spending $1000 a year just to rent that money.
Then again, $9K in savings savings incase one of us losses our job would be wise. My wife works in IT for the hospital chain, and my company has $0 debt and 50% revenue growth last year, down from 55% the year before. If there were layoffs, it would hit other departments long before mine. So, we are as safe as any can be in this environment.
An alternative is start saving a down payment for a house. I fully expect that within 2 years I’ll be able to buy a nicer house for half what I owe on this one. I only half joke about doing a buy and dump like everyone else is doing. In this case, the liquid savings option and the start to build a down option actually overlap.
Of course, there is always the can food, ammo and gold option.
So, I ask, what should I do with the money?
WHINER COMPLAINER…..
I’m not even getting spam when i post my resume on Craigslist anymore….seriously i used to get 30-40 50 a week now its 1-2 a day…if that…
Even the spammers realize we are so screwed.
“I think the obvious is to pay down the 11% credit card. I’m spending $1000 a year just to rent that money.”
thats what i would do
Darryl, you seem like a fairly bright guy. How on earth did you get into this hole you’re in? Holytomoly
I was married for 15 years to a woman whom I could not convince to get a job.
2001-2002 my 401(k) (that was heavily in stock of a former employeer… a utility… the money was there to avoid what I knew was coming to the tech stocks. You may have heard of the company… WorldCom) got wiped out. Then I got laid off.
My ex and I then split when I got a job 1200 miles away and she would not move. I lost everything in the divorce, EXCEPT the small amount marital debt.
Add a few thousand in moving expenses ( by that, I mean the cost of setting up a whole new household as I left the marrige with half-a-pickup full of stuff. Mostly useless. A student desk my dad bought me when I was a teen. A curio cabnet with a few collectables I’d gotten as presents over the years. A 10-year-old component sterio/cd player system. Clothes. A couple hunting rifles my dad gave me. That’s about it. )
And I got to pay $10K for my layer and $5K for hers.
Also, the new job paid 10% less than the last job I had during the marriage.
And, what did I get for my $15K in lawyer fees? $800 a month alimony for 5 years and $969 child support. 45% of my take home went to me ex. Oh, except I also get to pay 70% of medical bills, and therefore, everytime there was a runny nose, the ex would run the kid to the emergency room. I don’t think there has been a year with less than $2K a year in medical bills. Oh, that reminds me.. I also had to finish paying off the braces at $200 a month for the first year or two after the divorce.
Then I went and did something REAL stupid. 8 months after that divorce was final, I got married again. Then 18 months later, divorced again. Add another $5K debt during that marriage, and another $5K to make her go away.
I then waited 3 years to get married again. In 2007.
She owned a house she bought in 2003. She also had a second for $40K from medical bills and her own legal battle with her Ex. I tried SOOOOO hard to get her to sell the house in 2007. Actually had it on the market, but she just wouldn’t lower the price. I couldn’t talk her into dumping it.
I DID get her to move her 401(k) out of stocks and bonds into treasuries.
darrell,
Sounds like you are a serial killer! How many lives do you have?
I’m been through it myself(no kids, so not as bad), hang in there it gets better over time. I find it prudent though not mingling assets with my new partner. As they say, “hindsight is 20/20″
Pay off the 11% cards. Ditch that unpleasant reminder of the past and starting using that 1,000 yearly rental to pay down something else.
Also, have you thought about contacting the ex, to cut a deal on finishing up the child support, for a discount? Not likely there are tax consequences to that, since all of the payments will be in 2009 anyway. She could be hurting for cash and take the $9K, saving you almost $1,600. You’ve cut the rope - instant gratification. Win-win.
Good idea, but….
The kid is already 18, and may be moving out as early as Aug to go away to college. If she does leave home, I can get the child support ended early and give the last 5 or 6 month directly to my duaghter as tuition and board.
I’ll be giving her $6K a year for college. If she’s with mom and I’m paying child support through Jan ‘10, then it counts as the $6K for the freshman year.
I thought child-support normally ended at age 18; is that not true?
Darrell, very sorry to hear the financial sitch; love and money can certainly collide in painful and damaging ways. Your situation is certainly more challenging that I would have expected for a bright guy who “gets it”.
Personally, I would probably save some cash for a true emergency; having none would prevent me from sleeping well. After that, pay down the highest-rate card or see if you can bargain w/the ex for an even higher rate of savings as suggested below.
Best of luck with it…
19 for a Colorado divorce…
“very sorry to hear the financial sitch”
I don’t get peoples’ reactions.
Our total debt, house+credit cards+student loans is only 2x our combined annual gross income. 3x is safe, right? 4-5 common?
Yeah, our money flow is tight.. $7K a month coming in and $5.5K fixed expenses… But, of that $5.5K, better than $1.5K is direct debt reduction ($700 off house, $600 off credit cards, and $300 off student loans).
Pretty safe jobs.
Honestly, I think I’m in much better shape than most of the people my wife or I work with. Much, much better shape than most 40 year olds.
Darrell, I’m not trying to be hard on you, so please bear that in mind while reading this… It sounds like the situation is largely the result of unfortunate love & money collision as I said above.
But the situation certainly doens’t look good to me. You are fine on the “cash flow” statement (e.g. living within your current means), but not so good on the “balance sheet” statement. You essentially have a negative net-worth. That can’t be good, can it, even if it’s “better than most people we work with”?
I would also note that cash-flow only looks good if your jobs really are “pretty safe”; and many people who felt pretty safe not long ago (including several of my friends) are either unemployed or concerned about it now. I hope you are right in assessing the safety.
But “balance sheet”-wise, what you describe sounds like $150K of debt and effectively no assets (house is already netted out as -$50K, so don’t add that back in).
That sounds like trouble to me, to be roughly half-way through your adult working years and have essentially nothing to show for it (ignoring the 70K retirement savings of course). Call it $80K negative net worth if you count that in, which I suppose would be more fair.
If you want the “strictly financially optimal” result of what to do, I think it would be to prepare for bankruptcy in the best manner possible. That would include racking up as much credit-card debt as possible by paying living expenses on them while using all available cash-flow to pay down the student-loan debt that cannot be released by BK. Since you’re 50K underwater on the house, it would probably also include stopping payments there and living there for free as long as possibleand cranking up student-loan payments.
I didn’t advocate that in my original post, and some may argue that it’s unethical, but I do think it’s the financially optimal move. YMMV.
Since they changed the bankruptcy laws 3 years ago, you can’t go chapter 7 unless you have less than median income. My wife and I have 3x median income.
Chapter 13 is all we could do, and that would do us no good since we already have very low interest rate on all the debt and can easily pay off all the non-house debt in 3-4 years on our income.
I think the far better solution is to cut the credit card debt in half over the next year(Easy to do with $9K in tax returns coming), then be prepared to buy another house and dump this one in a couple years.
Yes, the $60K in student loans suck, but my wife got a $20K raise when she finished the program a couple years ago. Too bad the government only lets us keep half the raise.
Do we plan on retiring in 20 years????? Absolutely not. No one my age should have any delusion that they’ll be able to retire at 60.
I’d file bankruptcy…
The obvious is correct.
But, may I add, you might want to have some food storage stashed away as well. Three months worth of granola bars and peanut butter doesn’t really take up that much room nor will it take very much of your 9K to buy it.
Also, put your credit cars on ice, literally. Fill freezer bags with water, drop in the cards and freeze them. In case of emergency just thaw out the cards. If the emergency passes before they thaw then it wasn’t that big an emergency to begin with. Maybe you could put them in frozen peanut butter to gain synergy with my suggestion above. That would also keep you from cheating by just reading the numbers off through your clear ice.
“Maybe you could put them in frozen peanut butter to gain synergy with my suggestion above. That would also keep you from cheating by just reading the numbers off through your clear ice.”
ROFL.
I love Obama.
WASHINGTON – The Obama administration plans to limit pay to $500,000 a year for executives of government-assisted financial institutions in a new get-tough approach to bankers and Wall Street, a senior administration official said Tuesday.
“If the taxpayers are helping you, then you’ve got certain responsibilities to not be living high on the hog,” President Barack Obama said in an interview with “NBC Nightly News”.
I just hope there aren’t too many ways to squirm out of this. But the more I see of Barack the more I like him! Finally a decent guy in the White House.
Long overdue!
There are times when I just want to kiss him. But I think his wife and the Secret Service and his wife would have something to say about that.
They are a breath of fresh air, aren’t they!
Good for the man who got my vote! There is no way W would have ever done such a thing to members of his “base” as to cap their pay at a measly $500K.
No kidding. W would have tried to figure out how to give them MORE. We are living with his mess now!
“I just hope there aren’t too many ways to squirm out of this.”
As I suggested above, anyone who is paid over $1m a year in salary likely has options outside their current firm at above $500K. But perhaps not in the current economic conditions… perhaps some of those TARP recipient firm CEOs got stucco…
There’s only about a million ways to squirm out of it.
BO might be oblivious to them but it’s far more likely just political posturing.
My first impression was the announcement of limiting salaries and forcing banks to lend (?!) is a trail balloon.. see how the peons, MSM, markets and bankers react to it.
Threats alone may be enough to force banks to kneel before the Messiah. BO can always up the stakes if he likes. Nationalizing the banks is a goal the lefties have only allowed themselves to dream of thus far. They know they lack the strength to actually pull it off at this time, but that’s not to say they won’t test the waters.
500K Salary cap? Riiight, just tossing out a little bone to the down trodden taxpayer, so they will think B.O. is standing up to Mr.Big.
How would you know, are they going to publish copies of their pay checks and tax returns. They’ll just go around any obstacles that may pop up, they are old hands at the game and some rookie isn’t gonna screw up their cash cow.
As with most things, this will disappear from the MSM in short order. As much more important things need to be handled. LOL!
“Nationalizing the banks is a goal the lefties have only allowed themselves to dream of thus far.”
You clearly don’t know any lefties, then. Lefties get worked up about fair trade and organic coffee and labour laws. Nationalizing banks is not on their radar, as far as I know.
Oh, based on your posts, I am sure you would consider me a “lefty”, though. (You would be correct, I am a south paw
).
..not on their radar, as far as I know.
How could one not know but by deliberately ignoring it? We’re sitting in the middle of the info superhighway.
Use wikipedia if you’re search challenged. Search “leftism” or leftist or “left wing politics” or similar, and see what pops up. You’ll no doubt see references to socialism.
Then search socialism. Read about what the left (well, the very few leftists who are awake and realize what they support) supports. You’ll see phrases like “State ownership of the means of production.”
Continue searching phrases and words of which meanings you are unsure of. In about 5 minutes of study you’ll no longer need to say “as far as I know”. You’ll know.
Armed thus and with the tiniest bit of additional effort, you may then come to realize why and how the left’s general interest in and opinion of relatively mundane things like organic coffee, labor laws and fair trade are actually based on fundamental socialist principles.
“The Obama administration plans to limit pay to $500,000 a year for executives of government-assisted financial institutions ”
I’m sure there won’t be any unintended consequences here, right?
Right?
YES you will hire people like me who would appreciate the ridiculously HIGH salary cap…..PS…can i return some of it..
——————————————————-
I’m sure there won’t be any unintended consequences here, right?
Everything in life has unintended consequences.
“I’m sure there won’t be any unintended consequences here, right?”
Goldman Sachs wants to pay back the 10B it borrowed so it doesn’t have to follow these rules
Can one live in NYC for under $500K/year?
borrow? thats for little people like us. When you get big and mighty like GS, you grab the tax payers by the scruff and have them guarantee your toxic paper. Starting next week….
George Packer: ‘The Ponzi State’
1 hour discussion on the housing collapse in Florida today.
onpointradio dot org
“… When houses were hot here, they were very hot. Maybe the hottest. And as long as there was a new buyer chasing the sun, it seemed it would go on forever.
Until it didn’t. New Yorker writer George Packer calls it the “Ponzi State.” He’s been out in the home foreclosure deserts of Florida, watching a world fall apart.”
More like “Ponzi Nation”®©™
“Wells Fargo has canceled a pricey Las Vegas casino employee junket, after a torrent of criticism that it was misusing $25 billion in taxpayer bailout money. ”
Well, that’s their story. Maybe they were afraid to run into Ben Jones and his ragtag team of..what are you? Desperados?
I like your explanation better, ella!
So much for a new Sea World in Dubai.
http://www.orlandosentinel.com/travel/attractions/orl-kassab0409feb04,0,2251456.column
UK’s Gordon Brown “suggests world heading for a ‘depression’”
http://www.timesonline.co.uk/tol/news/politics/article5660573.ece
I glad that somebody high up finally has at least broken the ice on it. Too bad it didn’t say, “After regularly reading the Yanks’ Housing Bubble Blog…”
Note that Gordo calls for a coordinated worldwide stimulus. What’s he setting the stage for?
A worldwide whoopie-fest?
That sounds….hot?
Yeah, let’s invite the Obamas. Judging from their Inaugural Ball performances, they’d be, well, ummmm…
…I’d best keep this post clean.
Jimmy Durante: “It’s a catastroke!”
Wow, there’s more doomsday language surrounding this second stimulus than there was surrounding TARP last fall. What’s the matter, are the special interest groups getting a little impatient?
The former insiders are now the outsiders… and whining about it.
It’s good to auction a record amount of debt when yields are at record low levels.
U.S. crude inventories hit 18 months high last week
U.S. to auction $67 billion in quarterly refunding
Treasury to revive 7-year note; more 30-year bonds to be sold as deficit swells
By Greg Robb, MarketWatch
Last update: 12:43 p.m. EST Feb. 4, 2009
WASHINGTON (MarketWatch) — The Treasury Department will auction a record $67 billion in notes and bonds next week and plans several major changes to its auction schedule as the government struggles to come up with the funds to finance a deficit expected to top $1.6 trillion this fiscal year.
“as the government struggles to come up with the funds to finance a deficit expected to top $1.6 trillion this fiscal year.”
As housing bubble turns into all of America bubble
I bet our kids refuse to pay
AMERICATHON!
It’s a bad time to start a trade war. Are these politicians trying to relive the 1930s?
Japan slams Buy American plan
By Mure Dickie in Tokyo
Published: February 4 2009 12:01 | Last updated: February 4 2009 12:01
Taro Aso, Japan’s prime minister, has condemned the proposed Buy American provision in Washington’s forthcoming US economic stimulus bill as a violation of established norms of international trade.
Mr Aso’s remarks in the Japanese Diet highlight concerns among US trading partners about the requirement for US companies to use domestic steel and manufacturing products in projects funded by the stimulus bill.
The European Union has warned of possible trade litigation against the US if Washington presses ahead with the Buy American provision.
Critics of the bill have been heartened by comments from Barack Obama, US president, who said it should not send a “protectionist message”.
Then why not strike the clause right now? In other articles it seemed to say he was going to “try” to remove it. So what’s it going to be?
So we should just double-down, then call it “World’s Stimulus Plan?”
If these morons were smart, they would just let it slide. If it becomes apparant that a large percentage of the “stimulus” money is going to go overseas to buy steel, construction equipment, etc., Congress will have a hard time selling this to J6P.
Contrary to appearances, we don’t have a monopoly on stupid politicians.
It is amazing how strongly our “trading partners” are out against us trying to focus on internal welfare. It has nothing to do with Trade Barriers. What a freakin entitlement mentality. Japan is a master at self stimulation and perhaps we should take heed and do it their way. Subsidize out steel mills so that imports cannot compete. None of these export-to-the-USA-for-a-living friends of ours would complain about that. Or let’s do it like the EU and enact all kinds of unique design requirements so that only domestic suppliers can even bid. Or the Canadians; ever try to sell something in Canada that the Canadians make? Hey, you can’t even do it without you print your label in Canook. Need I mention fishbait?
Anyway, these guys don’t get it. The US, and Canada and the EU have sent 10s of millions of manufacturing jobs to China. That is what we all need to reverse.
None of these jokers have figured out that we already have a “buy America” program on all government projects, have for years.
BWAHAHAHAHAHAHAHAH…..
BO has been party to so many foolish miscalculations in only 2 weeks, I’m beginning to suspect Karl Rove somehow has a hand in it.. maybe a mole in the WH.. or double agents in the Cabinet.
You voted for and supported chimp, so please spare us the BS.
We are not buying it. When your party crashes the country you don’t get a voice at the table anymore.
Next!
Of course. I’m nothing but an observer, way up here in the peanut gallery.. got my beer.. got popcorn.. munch.. munch..
Hey! Did you see that? wtf was he thinking? Throw that bum out! At least score it an error for chrissake.. jeeze.
whew .. Anyway, where was I.. Oh yeah. You guys are definately in charge, and you can do it! Keep on keepin’ on. Don’t give up no matter what!
banana,
You’re missing something in your euphoria of heel stomping.
The honeymoon is slipping by, slipping by.
“It is amazing how strongly our “trading partners” are out against us trying to focus on internal welfare.”
Blue Skye, I like your posts, but I don’t know why you are making this into a personal or patriotic issue. I’ve written some sort of everlovin’ essay in response, but I want to preface it by saying that I would love to see a return to American-made goods and local industry, but I have a bone to pick with you about this “entitled trade partners business”
The US has done extremely well by liberalizing global trade and if the rules are changed part way through the game, why would you expect trading partners to say, “OK, we understand you’re having a bad day. You just change the game around until you’re feeling better, and then, when you are back in great shape, give us a call. In the meantime we’ll hold your spot at the top, and not retaliate by implementing protectionist policies ourselves.” Your trading partners, ie. China, want the US economy to do well because it is in their best interests (too big to fail, which I think is a dangerous long-term strategy). However, if Obama threatens to damage the whole system to save the US economy, then at least some bets are off. How could it be otherwise? The protest is along the lines of you can’t have it both ways.
Since the 1940s the US has had the upper hand in trade negotiations with *everyone* else in the world (well, except maybe OPEC-y places, but that’s a story for another day). Not only financially fully armed, but backed up with military might and global cultural influence coming into any major trade deal. It’s not like trade deals in the past were made out of the goodness of anyone’s heart, or Barney Frank and some teens from Americorps are handling international trading policy. In fact, you can’t even chalk it up to government incompetence: industry holds a lot of sway in international trade deals which are officially handled by government. The developing world can’t get generic drugs for treating AIDS and other deadly diseases, they can only get brand name. American pharmaceutical companies get heavily involved in those negotiations, and there is a connection. America has generally been the top guy in any room, and your trade deals have reflected that.
So, what happened if it wasn’t soft dealing? Multinationals happened, and if you get confused and make this a patriotic issue, you are taking some nasty bait, I think. Money does not respect borders.
“America” the government, “America” the people, and “America” the home of many international corporations aren’t always the same country. (And I say that as a not-knee-jerk-anti-corporation kind of person.) There is a lot of tension right now, while people wait to see if America stays on top, and we have a continuation of the American century. If so, we all kind of know the rules of the game, and know who butters our bread and who might blow us up, and that’s comforting. If it’s all changing around, and there is (a) a new superpower really emerging (b) a power struggle, where America is only one player, it’s stressful and scary and you can expect your former trading partners to scramble around looking for the most advantageous position and you will be scrambling too. It’s not entitlement, it’s self-preservation.
It’s really quite simple.
If we don’t have not just jobs, but jobs we can live on, we can’t buy the things the world has to sell to us. Period.
Current events anyone?
And despite the current events. America is still the LARGEST market in the world. Pissing off your biggest customer isn’t good business.
And while global trade is good, it should never get to the point where another nation is dictating your way of life.
ella,
I tried to listen to you, I think you are reasonable and sincere. My perspective is one who has raised lots of kids, and carried an ill spendaholic spouse on my back, for countless years, working, borrowing to fulfill my mission, paying all that there is, and hoping for the best. My teat is worn out. My armor is rusted. The kids are fat, the Ex wears spangles. I don’t have a global strategy. I’m exhausted. They think I am selfish if I withdraw. My neighbors love me too, I have spread money all over town in my grandiose lifestyle. They expect more from me than I have. I would give my life to save freedom, but not to save codependance. I expect to be hated for this.
I think your argument ran out of momentum. If you want to give it another go, maybe you can convince me to give you more of what I don’t have.
P.S.
OB, bring my sons home from Iraq. Rather soon please.
Sorry, it was pretty long. I don’t know how to make it shorter.
I’ll try again: I am completely sympathetic that you feel burdened. I just think you are misunderstanding who is placing that burden upon you.
What you are reading as “entitlement” in trading partners that are upset by this move toward protectionism is something else entirely. The loss of money and burden you may personally be experiencing (as with your neighbours), is not largesse that has gone to other countries. It would be like assuming that Walmart is welfare for Chinese people! Money went to China, but on the way it made some very powerful Americans very rich, even as it displaced other Americans. If you change the rules and that causes a collapse in the Chinese economy, it may be for the best in the long run. I don’t like the current system at all, either. But it is natural for China to get mad that “you” walk away from your end of the deal. If they want to retaliate by not buying American products, I think that’s actually fair, not “entitled”.
The potential for mutual protectionism is the main thing that everyone is in an uproar over, and if you go for it, you will have to take the good with the bad.
You feel NAFTA was no good for you, I don’t think it was good for me either! It was good for multinationals, so if you want to vent some frustration, give it to them. They have gotten quite entitled.
Anyway, thanks for listening if you made it to the end.
“maybe you can convince me to give you more of what I don’t have.”
Can you tell me what you have given, though? On balance, “you” have been the winner. Not really you, personally, that cash might flow right past you, but America on balance. In all seriousness, I don’t know what you think other countries are taking from you.
For example, yesterday you were suggesting Canadians expect money from Obama to build bridges here (?), or in some way you would give us money. But I don’t believe anyone is saying that. Just that you wanted free trade (you had the upper hand in negotiations, and still have it), but you can’t have free trade and protectionism. We gave tax money to American auto plants here, for our own protection, for example. So, I don’t get why you feel like something is being taken from you.
____
“I think your argument ran out of momentum.”
OK, sorry, it was pretty long. I don’t know how to make it shorter.
I’ll try again: I am completely sympathetic that you feel burdened. I just think you are misunderstanding who is placing that burden upon you.
What you are reading as “entitlement” in trading partners that are upset by this move toward protectionism is something else entirely. The loss of money and burden you may personally be experiencing (as with your neighbours), is not largesse that has gone to other countries. It would be like assuming that Walmart is welfare for Chinese people! Money went to China, but on the way it made some very powerful Americans very rich, even as it displaced other Americans. If America change the rules and that causes a collapse in the Chinese economy, it may be for the best in the long run. I don’t like the current system at all, either. But it is natural for China to get mad that “you” walk away from your end of the deal. If they want to retaliate by not buying American products, I think that’s actually fair, not “entitled”.
The potential for mutual protectionism is the main thing that everyone is in an uproar over, and if you go for it, you will have to take the good with the bad.
You feel NAFTA was no good for you, I don’t think it was good for me either! It was good for multinationals, so if you want to vent some frustration, give it to them. They have gotten quite entitled.
Anyway, thanks for listening if you made it to the end.
Oh darn, I kind of blew it, on these posts. Blue Skye, wherever you are, have a good night. At the end of the day, I think we actually want the same thing.
Sorry, for saying it all so terribly. If I could send you a beer, I would, eh.
Oh no, a catastrophe is coming if they don’t ‘do’ something! They’ll do something you can bet, and it will f— things up even more.
Obama: Catastrophe coming if Congress doesn’t act…
WASHINGTON (AP) - Republicans tried to push back against the ballooning size of President Barack Obama’s economic recovery plan Wednesday, even as he warned that the financial crisis will turn into “a catastrophe” if the bill isn’t passed quickly.
Obama summoned centrist senators to the White House Wednesday afternoon to discuss a plan to cut more than $50 billion in spending from the measure, which breached the $900 billion barrier in the Senate on Tuesday and appears headed higher.
Republican Sens. Susan Collins and Olympia Snowe of Maine, as well as Ben Nelson, D-Neb., have tentatively agreed to cutting more than $50 billion from the bill, a Nelson spokesman said, though details weren’t yet available.
Their effort is central to building at least some bipartisan support for the bill, which has come under increasing attack for too much spending unrelated to jolting the economy right away.
Obama indicated he’s amenable to changes.
“No plan is perfect, and we should work to make it stronger,” Obama said at the White House Wednesday. “Let’s not make the perfect the enemy of the essential. Let’s show people all over our country who are looking for leadership in this difficult time that we are equal to the task.”
The cost of the plan expanded past $900 billion after the Senate on Tuesday added money for medical research and tax breaks for car purchases. An effort to add $25 billion more for infrastructure projects—which narrowly failed to advance—is likely to be revived.
The cost could go higher Wednesday if a tax break for homebuyers is made more generous.
Sen. Johnny Isakson, R-Ga., is pressing for a tax credit of up to $15,000 for everyone who buys a home this year, at a cost of about $20 billion. The pending measure would award a $7,500 tax credit only to first-time homebuyers.
Taken together, the developments prompted a scolding from the Senate’s top Republican.
“At some point, we’re going to have to learn to say no,” said Sen. Mitch McConnell of Kentucky. “If we’re going to help the economy, we need to get a hold of this bill. And making it bigger isn’t the answer.”
“At some point, we’re going to have to learn to say no,” said Sen. Mitch McConnell
Okay Mitch, then why not start with the NAR’s push for the $15k tax credit, that’s as good of place as any?
Is this one of these tax credits that’s actually an interest-free loan that must be repaid to Uncle Sam via his IRS boyz?
The $7.5k was, but I recall hearing that they wanted to remove that provision in this latest bill.
That’s my bet, it ain’t “free” money.
AS edgewater said… They are working to remove the need to repay the loan, making it a handout.
“Catastrophe coming if Congress doesn’t act…”
Didn’t we all hear that a few months ago??
“At some point, we’re going to have to learn to say no,” said Sen. Mitch McConnell.
Like you said no to tobacco companies, Sen. McConnell?
Like you said no when the financial industry kept doing stupid things that imperiled our national health, Sen. McConnell?
Like you said no to UBS and Citigroup, two of your most generous campaign contributors, Sen. McConnell?
Like you said no to profligate tax cuts for rich fellers, Sen. McConnell?
Like you said no to infringements on our civil liberties, Sen. McConnell?
When do you say no, Sen. McConnell?
Weasel!
What Mitch means is that his party learned to say “No” when the opposing party took over. And not a minute before.
Nancy M.B. Pelosi reported today that if they don’t do something soon, we will keep losing 500 Million jobs a month here in the U.S.
LOL! The poor thing is a gibbering idiot.
Wow! That’s more than the population of the U.S. We really are in deep trouble then!
500 thousand… 500 million. You know what she meant.
One of the people here yesterday was talking about billions in lost house value, when he clearly meant trillion.
Heck, when I calculated how tall a stack of $100 bills, I came up with 67 miles instead of 670 miles.
Those darb orders of magnitude.
So when she was pushing that $800 Billion Porkulous Bill, she may have actually thought it was only gonna cost us $800 Million.. we may never know..
WASHINGTON (AP) — A key House lawmaker is telling top Securities and Exchange Commission officials that the agency is failing to cooperate with a committee probe into its failure to uncover the alleged $50 billion Bernard Madoff fraud.
Pennsylvania Democrat Paul Kanjorski vented frustration after an SEC official said they can’t answer lawmakers’ questions about the Madoff case because it’s under investigation.
Kanjorski, chairman of the House subcommittee, accused the agency officials of impeding the panel’s investigation, calling it a “lack of cooperation” and an “abuse of authority.”
The officials say the SEC is looking at possible changes in the wake of the scandal, including more frequent examinations of investment advisers and improving its process for assessing risk.
Has anyone of these scum been strung up yet????????? The entire management of the SEC needs to be thrown to the wolves.
Hey meat.. Since you are on the short list of potential candidates of Supreme Ruler of Planet Earth, i have to ask.. Is there anyone at all whom you do not want thrown to the wolves?
I have to side with meaty on this one the SEC is a JOKE. Question is who do we throw the bums at when the wolves are ready to pop?
NEW YORK (Reuters) - Goldman Sachs CFO David Viniar said the bank is keen to avoid restrictions it agreed to after receiving funds from the U.S. government late last year and it is looking to pay the money back as soon as possible.
The investment bank, which received a $10 billion capital injection from the U.S. Treasury’s Troubled Asset Relief Program in October, is not happy with the strings that came attached to the money.
Compensation restrictions and certain capital requirements were part of the original injection, and extra limitations may be in store after U.S. President Barack Obama imposed tough new rules limiting pay for companies receiving government aid.
“We would like to get out from under that,” Viniar said, adding that the bank aims to pay back the $10 billion this year.
Viniar said Goldman Sachs is also cautious about buying a bank, a move many have urged upon the investment bank to ensure its access to stable deposit funding.
A report last week said that banks paid out $18.4 billion of bonuses, a fact that Obama called “shameful.”
But Goldman can potentially pay back its $10 billion, and avoid salary caps, by issuing preferred stock rather than common stock, Viniar said
Wow where can I sign up for those restricted shares that allow me to buy a company that overpays failed management? I imagine that the gov will loan the money to a Hedge Fund to buy the shares and thus we will be paying for the higher salaries anyway.
“The length and severity of depressions depend partly on the magnitude of the ‘real’ maladjustments, which developed during the preceding boom and partly on the aggravating monetary and credit conditions.”
Gotfried Haberler, Prosperity and Depression, 1937
Wow, thanks for that. I feel much better now. Clear sailing ahead. Pay no attention to that red sky this morning.
Disappearing dividends…& Mr. Volker has an audience!
Wall Street… is back-to-the-future: 1958
This one’s good for a yuk
http://online.wsj.com/article/SB123378062602049003.html
Seems that Panetta, BO’s pick to head the CIA, has earned hundreds of thousands of dollars last year in consulting fees from banks that are receiving bailout money.
Russia was downgraded today. I wonder when they are going to get around to us?
Roidy
http://www.cnbc.com/id/15840232?video=1021717159&play=1
No worries, they will be the first!
Bank of America tumbles on nationalization worries…
NEW YORK (Reuters) - Bank of America Corp (NYSE:BAC - News) shares fell below $5 for the first time since 1990 and declined for a fifth straight day on concern the government might nationalize the largest U.S. bank and wipe out shareholders.
Shares fell 12 percent as reports persisted that spiraling losses on mortgages and corporate loans might lead to government control of the Charlotte, North Carolina lender. Bank of America and newly acquired Merrill Lynch & Co ended 2008 with $2.49 trillion of assets.
“Until we get some clarity that even the largest banks will remain in shareholder hands, this downward spiral is just going to continue,” said Nancy Bush, an analyst with NAB Research.
In late afternoon trading, Bank of America shares were down 63 cents at $4.67. The cost of protecting the bank’s debt against default with credit default swaps rose 0.3 of a percentage point.
According to the Charlotte Observer, Chief Executive Kenneth Lewis in a memo to employees said the bank’s board “unanimously” supported Bank of America’s business model last week in “the longest board meeting in anyone’s memory.” He also acknowledged employees’ disappointment about lowered bonus payouts.
You know, WFC July $10 puts are only $1.60/contract. That’s looking like some easy money to me…
BAC claims Fed and Treasury coerced it to close on MER for good of country.
WSJ — In Mer deal us played hardball
In other news:
The other day on the bus I glanced a blurp over someone’s shoulder (yeah, I know) that some nation psychiatric association wants to add compulsive spending to its offical list of recognized disorders when it amends that list in 2012.
Doing so, according to the article, would make compulsive spenders eligible for a wide range of treatments and benefits. No joke! Anyone else hear of this?
Like someone posted the other day - better grab yourself a disability before they’re all taken! It’s the way of the nanny state.
How do you stop a rhino from charging? Take away its creidt card.
How do you stop a compulsive spender from charging? 50-cal round right between the eyes.
Carl Spackler:License to kill gophers by the government of the United Nations. Man, free to kill gophers at will. To kill, you must know your enemy, and in this case my enemy is a varmint. And a varmint will never quit - ever. They’re like the Viet Cong - Varmint Cong. So you have to fall back on superior intelligence and superior firepower. And that’s all she wrote.
“Be the ball…”
Psychiastrists, psychologists, and so called therapists have been inventing psychiatric disorders for decades, but now they’ve hit the motherload with alleged variants of autism and the ever-lucrative ADT. Half the country is drugged for non-existent disorders, and eventually the other half will be diagnosed and drugged, too.
The money to be made from inventing disorders is astounding, and the suckers who fall for all of this are even more astounding. In the ’80s everyone suddenly had Chronic Fatigue Syndrome; in the ’90s they suddenly had Irritable Bowel Syndrome, and now in the new century everyone is supposedly suffering from ADT, autism, addiction, or uncontrollable fat. Rushing to the rescue are thousands of dubious scientists, and endless quacks, getting billions in grants for stem cell and other “research” on their claims to be on the verge of curing everything from ugliness to old age. These claims get bigger and bigger to keep the investors interested and government grant money pouring in.
Now that global warming is losing popularity, even as the hacks shrill louder and louder to keep the hysteria going, you know something bigger and better has to take its place, or an awful lot of overpaid people are going to be in food lines. Of course, over-spending will become an official disease, and those diagnosing and treating it will make fortunes. This is whole idea.
Before drug companies and doctors were allowed to advertise to the public (this started in the Yuppie era), most of these alleged disorders did not exist. They’re great for draining insurance accounts and making bad therapists rich beyond their own dreams.
I forgot to list my favorite fake condition: Recovered Memory Syndrome, now discredited in the U.S. after a decade-long witch-hunt, but making a big splash in the U.K.
Innocent people went to jail and had their lives destroyed over that crap.
BTW, Incredulous, you are correct.
Some sure fire pick up lines for you guys that haven’t been able to bag that special lady. Been working for generations here in the deep south, happy to share… : - )
Did you fart?
cuz you blew me away.
Are yer parents retarded?
cuz ya sure are special.
My Love fer you is like diarrhea
I can’t hold it in.
Do you have a library card?
cuz I’d like to sign you out
Is there a mirror in yer pants?
cuz I can see myself in em.
You might not be the best lookin girl here,
but beauty’s only a light switch away.
I know I’m not no Fred Flintstone,
but I bet I can make yer bed-rock.
Yer eyes are as blue as window cleaner.
If yer gunna regret this in the mornin,
we kin sleep til afternoon.
Meant to say WAAAAAYYY off any aforementioned topic!!!
Here ya go cougar……your time has come!!!!
How do you make a $1.6 billion budget deficit go away, AZ style?
$1.1 billion in cuts and fee increases….
And assume the federal government will send you $500 million as part of a future stimulus program.
Most AZ state government workers start getting 2 days off per month, without pay, starting next week.
10% pay cut. Sounds highly inflationary to me.
It is inflationary if they do 20% less work for 10% less pay. The cost of public services will have risen.
It will rise anyway, as non-wage benefits will not fall.
“…in the absence of a policy action the average output gap will average 6.8 percent over the next two years. Do the math: if anything like the historical relationship between output and inflation holds, we’re looking at major deflation.
OK, maybe that relationship won’t hold — getting to actual deflation may take a deeper slump than merely reducing the inflation rate. And maybe a regression driven in part by 80s data isn’t a good guide to current events. But deflation is a huge risk — and getting out of a deflationary trap is very, very hard.
We truly are flirting with disaster”
Nobel Winner Crown Prince Krugman is hitting the panic button.
PANIC !!!
If you can keep your head while those around you are losing theirs, you are probably the one holding the axe.
I have news for the “clown prince”.
People have already hit the panic button. Already in coffee shops, they have started “upgrading” stuff to the point where I order one size smaller than what I want and they “upgrade” me to the size I actually want.
My cellphone died, and I went to get a new one (LG Chocolate 3) from my provider. After tons of completely boll*cks-y haggling, we settled on a price provided I paid upfront with them giving me a $50 debit card “to spend on something nice”.
True cost of phone = $4.19
Nope, not making that up. I have all the receipts in case any one wants to run an audit.
Hoz ya gonna step in with some wonk to talk about the decelerating disinflation.
it rhymes with Deaf Laotions.
Beer Lao !!!!!!!!!!!!
TsingTao
Mr. Paul Krugman is very fortunate to have the Nobel Prize. His recent blog entries are as depressing as Mr. Fama’s writings.
Vozzie, we have already panicked. The time to panic was a year ago, the time to move forward is now. The problem with economics as a science is that it looks ass backward and does not take into consideration present orders for goods and services.
With the current ‘just in time inventory’ management, there is reason to believe that companies built up 4th Q inventory for realization of a later profit. Economists worry about the inventory build up which has no significant meaning. The item that should have been addressed by the economic pundits and was ignored by most was the negative GDP deflator. That was a first since 1954.
I do not know the future, but I do a decent job of risk analysis. Frankly, I do not understand the economic reason for any further stimulus. (There is a huge social reason - the present third world infrastructure. e.g. When there is a power failure for any reason -earthquake, storms etc - in any city in Japan for 30 minutes the Diet has hearings and CEOS have been replaced. A situation like Kentucky is beyond belief, as an electric disaster it is as inept handling as Katrina).
“What the hell has Hoover got to do with it? Besides, I had a better year than he did.”
Mr. Babe Ruth on his new salary contract that was larger than the president’s salary.
Does Mr. Krugman know how to trade?
I will give you two things to watch and watch daily:
1) Baltic Dry shipping which is up 50% from its November low
2) Vale up 55% from its low.
A position in Vale is not suitable for anyone but me, myself and I (aka: do your own research). It is an excellent indicator of foreign trade.
“The great thing about science is, your bad ideas don’t count against you. Trading is a little bit different. Your bad ideas can lose you money.” Mr. James Simons (If you do not know about the man, read up on Renaissance Technologies - the only firm that could cause me to change my mind.)
BDI is up 50 pct from lows. How much is it down from its high?
LA times had an idiotic editorial by “Michael Hiltzik” today saying the Federal Government should use my tax dollars to subsidize toxic mortgages
Consider the scale of the problem. The number of homes threatened by foreclosure today is estimated as high as 8 million, quadruple the number a year and a half ago. Experts agree it’s a massive drag on the economy. It undermines communities, drives home prices down, potentially below fair market value, and creates huge losses for banks and mortgage investors.
Another idiot who thinks that it’s possible for things to sell below “market value”.
(Closing italics)
If they manage to do this what can one do for financial protection? My guess is nothing, we’d be only a fly’s eyelash away from bolshevism.
Oof.
Listening to that “Ponzi State” conversation with George Packer. I really recommend it!
Nice fact: In the middle of this decade 10,000 real estate brokers in Florida were convicted criminals.
Nice show, touching on the environment, impact on the broader economy (Packer sees Florida as a bellwether for the national economy), short term thinking, political implications, it’s all there.
Money quote: “Because the whole state depends on tourism, constuction and real estate, and because it doesn’t have an income tax, and that is a key factor here, has seen its revenue dry up in the last couple of years…will Florida politicians and leaders begin to think about a new way to build their economy because perhaps real estate and housing are not the most stable foundation for growth in the 21st century.” It’s not news over here, but it’s nice to hear.
Also, paraphrased: Because there is a very weak tax infrastructure in Florida, services (like county judges, libraries) must be paid for by bonds which are floated on the the premise of future growth, now that growth is shut off, now has 8BN revenue shortfall projections. The state treasurer says there as never been a downturn like this (0% growth)
Aside from the income tax thing, Florida’s economy sounds a lot like the part of BC I live in: tourism, construction, housing (and drug money, actually). Property values based on retirees all wanting to move here…our other big export is lumber. Oh oh.
How can it all be there unless there was mention of the housing bubble which affected the entire country, perhaps the entire world, in a manner similar to FL? And if so, why mention anything else?
From wiki.. “George Packer (born August 13, 1960) is a liberal American journalist, novelist and playwright.”
Hmm.. I don’t see “economist” listed there. Might he be your typical leftist intellectual blaming capitalism for all the woes in Florida?
Actually, he said he was interested in Florida as a microcosm of what was happening in the country at large. That was the point of his story.
No, I didn’t hear him blame capitalism, he just suggested that maybe housing isn’t a good thing to base an entire economy on and said that many of the national lenders involved he was hearing about in Florida later showed up as players in the Wall Street bust. Does that offend you?
He didn’t claim to be an economist, just a journalist.
Isn’t your axe sharp yet
?
Corus of yays - Condo King bank about to go under
I’ve been saying it and practicing for years; BUY AMERICAN!
Tripe, balderdash, tommyrot, crap, hokum etc.
The problem is that we squandered an incredible opportunity to take advantage of lower labor costs overseas to reinvest in sound American businesses as a result of ridiculous capital gain taxes promulgated by Republicans as trickle down economics and other garbage. These lowered taxes without an incentive to reinvest in the US is our long term problem.
There are few economic advantages to reinvest in the US because of the current personal advantageous tax structure. The 6 month capital gains should be lengthened to 2 years, the depreciation allowance should be set by the company to any period they want. The current system is advantageous for corporate stripping not for reinvestment.
Reinvestment has to be legislated as the more profitable choice. The only way a corporate tax cut would make any difference would be if they gave moneys to the corporations for staying open. 75% of all US Corporations pay no taxes.
Our telecommunications, roads, water, electric grid are already in worse shape than many emerging market countries. I do not wish to regress to the stone ages. I want my cell phone to download as fast in the US as it does in Korea, Australia, Japan and China among other nations.
Any ‘Buy American’ program is silly. Cerberus buys Chrysler to strip and now I am supposed to buy a Chrysler.
“Don’t buy any American product made by a company that is being stripped.” Better yet change the tax laws to make stripping unprofitable and reinvesting in the US profitable again.