Bits Bucket For February 11, 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
February 11, 2009
Economic Forecast Grim on East End (Excerpts)
By Lisa Finn
“This is an unusual set of numbers for the Hamptons,” said Ammirati. ” The Hamptons never had this level of lis pendens, and almost never had a foreclosure sale. Now we’re getting a couple a month.”
“The change has been that we’re not getting the gang from Manhattan – at least, not yet. This is the time of year when renters would be coming out, looking for a place, and it doesn’t seem to me that they’re coming. This is frightening. The Hamptons are still kind of up in the air. I don’t think we’re going to have the great season we had last summer.”
http://www.indyeastend.com/Articles-i-2009-02-11-85004.113117_Economic_Forecast_Grim_on_East_End.html
maybe the twenty-somethings from WallStreet need to work a few years longer nowadays before they can retire …
Who is more destructive to society - these 20 somethings who make (used to) millions in annual bonuses for ruining the economy or the millions of civil service workers who retire eraly on pensions and benefits that America can no longer afford?
Probably the 20 somethings. The retired civil service worker is more likely to spend all of their money on small things, which is a better benefit to the economy.
Small things come from China.
Big mansions and alimony stays in the US.
Civil servants buy Fords. Wall Street scum buy Benzes.
Retired civile servants also do things like take care of their grandkids and volunteer at local schools and libraries. 20-something former masters of the universe? Not so much.
And civil servants actually provide useful services that are entirely necessary in an advanced society.
Depends. Who screwed everything up? (rhetorical question alert!)
My brother who is in structured finance and his 3 other friend used to rent a small house in the Hampton’s from Memorial Day to Labor Day for $75,000. Then the price went up to $120,000 for the season so they stopped. These guys were in their 30’s and were making decent money. He still makes good money buy now has a wife and kids and I doubt if my sil would allow it.
I would think the money would have to be more than decent to have a quarter share of a $75,000 a season toy. Or one has to be foolish. You think people are looking back and regretting what they spent?
20K to 30K per person for a rental was pocket change for these guys. They would charter private jets to go golfing all over the world. It is interesting to hear them say they hate their jobs but rationalize staying in the financial industry because the money is great.
A gal I went to high school with landed a job as an investment banker on Wall St. after college. She met her husband while working there, and they both retired at the age of 35.
call girls say the same thing
call girls say the same thing
Prostituting your brains is different that prostituting your body
Yeah, it’s worse.
$75K??? For one summer?
Surely you could rent for cheaper on the Rhode Island coast. Or, you could buy a house and couple acres outright in Oil City PA for that. And it’s almost the same distance from Manhattan.
Oh wait, it’s that ego thing again, isn’t it.
You are comparing caviar with chopped liver. Do you know people who live in Manhattan really believe they are special and different? How can anyone ever suggest going places like you just mentioned. EWEEE & Yuck .Some of these people feel degraded if they have to visit another borough of NY like queens.
They forgot to add the obligatory “Nobody saw this coming.”
Pimco Says World Economic Crisis Faces ‘Second Wave’ (Update4)
By Wes Goodman
Feb. 11 (Bloomberg) — Pacific Investment Management Co., which runs the world’s biggest bond fund, said the global economy faces a “second wave” of turmoil unless governments adopt larger spending plans.
“The economic setback is still in its early stages,” Koyo Ozeki, head of Asia-Pacific credit research at Pimco’s Tokyo office, wrote in a report published today on the company’s Web site. “Any further decline in housing prices could accelerate the downturn, intensifying the pernicious feedback loop and possibly leading to a second wave in the financial crisis in the next six to 12 months.”
The lack of specifics in U.S. Treasury Secretary Timothy Geithner’s financial-system rescue plan triggered a 4.9 percent slide in the Standard & Poor’s 500 Index yesterday, the steepest since President Barack Obama’s inauguration. Advanced economies are in a “depression” that may get worse, Dominique Strauss- Kahn, Managing Director of the International Monetary Fund, said on Feb. 7.
Ozeki this month said investors may want to hold off buying Japanese corporate debt until yields rise to reflect the full extent of the slump. Pimco is also avoiding longer-maturity bonds elsewhere in Asia as governments increase spending, Douglas Hodge, managing director for the region, said in an interview yesterday. Bill Gross, Pimco’s co-chief investment officer, said on Feb. 5 the Federal Reserve will have to buy Treasuries to curb yields as debt sales increase.
they are again Pimping their own merchandise. Where would the pimps be if the FED no longer guaranteed to buy these worthless Treasuries from them for an even higher price?
Agree. I believe Gross and company are due for a slow an methodical JT insertion, which they will get over the next 6 to 12 months.
What I like at this point is the Alt A wave is headed in; its all the collateral damage. Basically there are just massive numbers of people hopelessly underwater waiting for prices to return. They will disintegrate and fail over the next 4-5 years and keep prices suppressed for a long time. Should dramatically increase the value of my savings.
I’m seeing the incentives and other bull as dragging this out and sucking in some knife catchers too.
Trying to see if I can buy a “primary residence” in someplace like Detroit area for under 2000$. Have the wife “live” there for the summer so its a primary residence. Then collect the rebate. Have to talk with an accountant about how to make this legal.
You would make your wife live in Detroit during the summer to collect a $200 (10% of $2000) rebate?
Why?
You can buy brand new 3 bedroom 2-bath with swimming pool in Victorville for $80,000.
Or $50,000 for a stucco box in Florida.
Either seems better than Detroit
Aw, come on James. Do you not love your wife? I mean, come on. Sending her to Detroit for a lousy 200 bucks?
No no no. My wife has family outside of detroit. My point was to see if I could scam the system by purchasing a house for under <2000$ in Detroit. Then collect on the big tax credit.
I’d have to talk with an accountant/lawyer but you would be eligible for the stupid 15K tax break.
Detroit and Michigan are pretty nice in the late spring/early summer. DIA, music scene, the lakes, great fishing exc. Its not as bad as made out by the natives here in LA. Lots of decent clubs. Excellent Arabic and Greek food.
From a lot of the East coasters/ mid westerners that visit think LA is a dump. Dry, polution, dust, not many parks exc. So much litter here; mostly from the illegals, my wife doesn’t understand why her fellow Mexicans don’t pick up stuff.
Don’t get me started on the heat in Zona either.
For what its worth, beach is very nice, National parks are nice but you are really far from them in LA. In the summer most of the southern mountians are as hot as zona. The gulf stream warms the water all along the east coast. So, for a portion of the year, the beach is nicer in say Carolina, Virginia, New Jersey or New York than in LA.
Comparing California to Michigan or New Jersey isn’t realistic. Basically, California is just so much larger.
Not sure about the beach in Georgia, Maine, Mass or Maryland. Some of those areas have a too many swamps right around the beach.
Florida has the best beaches for the largest part of the year though. Hence, the appeal of Miami.
Hopefully, this post encourages more people to move back east.
CA beaches suck. Like swimming in Alaska. Maybe nice views of the sunset, but, swimming in lake Erie from June to October is better. Lakeside home prices are insane, still!
I don’t think $200 is worth the hassle, do you? From what I’ve read about those cheap places in Detroit, they’re worth less than zero. They’re untenable, and just bleed you dry through taxes and maintenance.
prop tax?
“Any further decline in housing prices”
Uh-oh…
After yesterday, it seems to me a depression is baked in.
same in Europe, many news sources are saying today economic conditions are worse than ever (at least the trend is really bad …). I think all Euro countries will violate the Euro pact 3% budget deficit ceiling this year; some might go as high as 10% budget deficit. All EU governments are on the same track towards (hyper)inflation, even the newspapers have started to write about the risks.
gold is again near the all time high in euro and close to breaking out in dollars.
Unfortunately in my country all efforts are again going towards supporting homeprices and homeowners. The proposal to do away with the HMD (the biggest drain on the Dutch national budget) seems to be off the table already. According to the ‘experts’ now is the worst time ever to change the HMD rules. Instead of less subsidy for rich homeowners, they will cut pensions, increase the VAT and people will have to work 2-5 years longer (and pay income taxes 2-5 years longer as well …).
HMD….Homes of Mass Destruction?
I’m afraid it might get to ‘Homes Mass Destruction’ : there is more and more talk about demolishing whole neighborhoods with older homes, in order to keep prices rising
for those who wondered: HMD = home mortgage deduction. In Netherlands all costs related to buying / owning a home, including the mortgage of course, are 100% deductible for income tax. Income tax is by far the biggest tax over here, and tax rate is around 50% for most (potential) home owners, so effectively half of the cost of a home is paid by the tax office.
Ehh gads! That’s a BIT market distorting, no? So I have a 3K a month MTG, add in HOA, taxes and insurance and I’m at 4K a month. In your country I’d get to take a straight write off of 48K a year? My gawd that’s insanity!
In the US that 48K a year turns into a write off of about 30K a year (in the beginning of the MTG) and slowly climbs down from there. But, it’s actually MUCH worse then that because the 30K isn’t a direct write off. You have to give up the STD deduction to take the 30K a year. So that 30K becomes much, much less then that (any tax gurus want to do the math?).
For most middle income people, the MTG interest deduction is a trap; some slick talking RE agent makes it seem like a “huge” savings to them, when, in fact, it offers little/no help to their tax situation. The deduction is a big deal to those buying 500K+ homes though, another savings to the wealthy who least need it (just like Save our Homes, the biggest winners are the millionaires on Palm Beach, but the little guy thinks he’s winning too. The little guy is wrong, he’s paying taxes FOR the guy on Palm Beach).
Michael-
In a state with no income tax, like Florida, the mortgage interest deduction benefit is vastly overstated by the real estate industry because, as you noted, your savings are offset by the loss of the standard deduction.
In states with an income tax, the benefit of the mortgage interest and real estate tax deduction kicks in right away if your state income tax exceeds the standard deduction.
Here in North Carolina, the marginal state income tax rate maxes out at 8%. For many middle class people, the tax savings is about 30-36% of interest and real estate taxes because the state income tax exceeds the standard deduction.
to Michael Fink:
yes, in Netherlands you would get a 48K writeoff on your income taxes. What happens as a result of this market distortion is that people (especially those with high incomes) buy the most expensive home they can get a mortgage for, so they don’t have to pay income taxes (in the first bracket you mostly pay social taxes, no simple way to avoid them). Although we officially have 52% income tax in the highest brackets, people with the highest incomes pay effectively close to zero.
So effectively our HMD is mostly a subsidy for high income homeowners, who use this subsidy to play the RE game leveraged to the max (some of them just take out the maximum mortgage they can get and put the full amount on a savings account - that yields a riskfree 4-5% a year currently, while the effective cost of the mortgage is below 2%). I hope when the Dutch housingcrash comes it will be so sudden that none of them can escape in time
I like the way you think XD
Here’s a bit from a weasel (Mervyn King) from across The Channel: (from Yahoo Finance)
“I have every sympathy with savers. They were clearly one group that did not cause any of the problems,” said King.
However, King said savers would have been hit harder if interest rates had not been cut sharply because the recession would have been deeper and unemployment higher.
King also refused to take any blame for the recession or the near collapse of the banking system and dismissed suggestions that the Bank of England’s forecasting model was at fault for not projecting the turn of events in 2008.
Again, he said it was the collapse of confidence after the collapse of U.S. investment house Lehman Brothers last September that triggered the change in economic fortunes.”
These plutocrats really are high on their own supply.
sure, total idiots and a**holes; I hope they all go down the drain together with their bankster system. Time to start building some guillotines …
“I have every sympathy with savers. They were clearly one group that did not cause any of the problems,” said King.
If savers didn’t and don’t cause problems, shouldn’t we encourage people to save?
Here’s one saver who is being hit hard by lower interest rates….
I’m a prudent retiree trying to live off the income from savings. Whacking deposit interest down from around 5% to around 2.5% has cut my annual income in half.
and you are not even talking currency depreciation into account; again down several % today, both in euro or dollar. This all looks really bad for savers and superb for debtors
“However, King said savers would have been hit harder if interest rates had not been cut sharply because the recession would have been deeper and unemployment higher.”
And how would he know how long or bad the recession would be?
NHZ: I look at the Swedish real estate prices and they still seem to be quite ridiculous. I lived in Stockholm for 2 years and it seems that the Swedes feel it’s different there regardless of the economy. I wonder if they’ll keep trying to hold out for high prices like the Dutch……..
who knows … if I remember correctly the Swedes had a housing bust 10 years ago or so; they probably forgot about that, just like the Dutch who had a -40% correction in 1980.
I have read the stories from experts in other EU countries about why ‘it is different’ there; the arguments are different for every country, but of course it’s all bubble thinking.
home prices are still pretty stable in most of Europe. I heard France is down 9%, Spain down 5% (who can believe that?), Netherlands and Germany still climbing. But probably most of these statistics are dead wrong. On the EU borders and the British islands it’s a different story of course, looking more like the US crash. It’s going to take many, many years before the EU bubble is done for good
A period of wild mania, followed by severe depression. There’s a medical term for that.
Hey BO.. consider including some mood stabilisers in that recovery package.
I doubt it well have much effect, knowing that a big chunk of the US is already hooked on tranquilizers, ritalin etc.
from Bennie’s blog
“…The Use of Authorities Under Section 13(3) of the Federal Reserve Act Section 13(3) of the Federal Reserve Act authorizes the Federal Reserve Board to make secured loans to individuals, partnerships, or corporations in “unusual and exigent circumstances” and when the borrower is “unable to secure adequate credit accommodations from other banking institutions.” This authority, added to the Federal Reserve Act in 1932, was intended to give the Federal Reserve the flexibility to respond to emergency conditions. Prior to 2008, credit had not been extended under this authority since the 1930s.1 However, responding to the extraordinarily stressed conditions in financial markets, the Board has used this authority on a number of occasions over the past year…”
http://www.federalreserve.gov/newsevents/testimony/bernanke20090210a.htm
A limitless use of power overseen by incompetent congress people. The prefect recipe for disaster.
Many rail against Mr. Geithner or Mr. Bernanke or President Obama; wrong. The US Congress put us in this mess. I get depressed also.
What happened yesterday?
yeah.. if yesterday is the worst we can expect to suffer from the unveiling and implementation of this Porkulous package, we are truely blessed.
“What happened yesterday?”
——
What I saw yesterday is that they are totally clueless, blind and have no idea what to do next.
That was the good news.
The bad news is that they will, through strenuous efforts, find a way to muddle their way to a depression.
“They” being: Obama, Frank, Pelosi, Fed, Tres, the Republicans with their “tax cuts” as a Universal panacea philosophy, and of course, the “greed is good” crowd of arrogant a__holes that I am listening to right now. (10:31 AM EST)
——-
Anyways, that is what I saw yesterday.
This is what I am seeing today.
The stock market played another inning of Government by Dow. If Geithner tries to bail them out, oh horrors that’s socialism. Dow goes down. If Geithner doesn’t try to bail them out, then they don’t get their entitlement $$ and half mil. Dow goes down. If Geithner just prints enough to pay everyone’s debt, that’s inflation. Dow goes down.
They are taking my 401K hostage.
The whole stock market is one big scam. Naive people worked themselves sick, including my mom, while sinking as much into their 401k as possible, only to find out that they were lining the pockets of the wealthy.
funny way to put that, since you gave up control of your money when you let the company and the 401K servicer have control of your money…
401K/357B–biggest scam Wall Street has running. Enjoy having all that dumb money in mutual funds so the banksters can throw your funds at private equity IPOs and enrich their friends.
Just think of how better off we would be if we had privatized SS.
Oh wait…
you’re absolutely right, ecofeco .. and if anything could prove it, witness this Bubble.
Privatizing a portion of SS when the population handles their finances like a bunch of ignorant children is tantamount to throwing SS funds down the crapper.
Privatization demands some modicum of attention to, if not the astute and careful handling of, one’s finances in a competitive environment such as Wall Street.
Such ambitious expectations might be realized if they follow social maturity.. but are doomed to fail if they precede it.
So for the time being it’s far better to let the grownups in govt make the decisions for us.
+1
RE: After yesterday, it seems to me a depression is baked in.
The Wall Street “Derivative/CDO Fraudsters” vs. the “Muddleheads ” of Congress, captained by Barney Frank & Co.
NO CONTEST…game over, the Fat Lady has sang, packed her bags, checked her passport, and headed to safer shores.
Got guns?
Yes.
Add a couple of other characters and that is what I saw yesterday in this black comedy.
Australia and China have both realized: The US no longer follows a sound fiscal policy.
The US is gambling freedom on a risky printing press policy
The end of an unwritten, 15-year-old agreement brings great uncertainty.
The Age - 5th Feb 2009
(Australian Website)
http://tinyurl.com/bsqa27
The risk is massive inflation but that has never been a matter to concern Bernanke nor, it seems, the team President Obama has assembled. And US debt can be paid with inflated dollars. China is onto the tactic, which explains why it is keen to convert its dollars into iron, coal and, I suspect, vast amounts of mineral wealth as well as property overseas. China must act, however, while the US dollar is strong. Don’t be surprised if the Chinalco deal is but the first of many and keep your eyes on our resource stocks. There are many games being played at a geopolitical level and many a twist and turn to come.
China Needs U.S. Guarantees for Treasuries, Yu Says
Feb. 11 (Bloomberg) — China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.
The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt….”
This is my biggest fear….no more free foriegn capital bailing our corrupt government out any more. if that happens get the gun and ammo ready!
Geitner to China: Treasuries are always a money loser unless their is deflation. So, we’re printing dollars as fast as we can.
How will the Chinese respond if they think serious inflation is a probable event? (I infer from the article that is their concern)
The US is deliberately devaluing the dollar. How should any country respond? Some countries are devaluing in kind, some cannot devalue their currency.
How should any country respond?
What’s obvious mathematically or financially becomes murky when considering politics. I agree with your premise.
some cannot devalue their currency.
Why not? Seriously, I don’t understand this comment. Are three any currencies that, if fixed to a hard standard like gold, can’t be unfixed? Are there any which are pegged to a foreign currency (e.g. dollar) that can’t be unpegged?
I assume you don’t mean this in a literal sense but in a practical sense. They COULD devalue but its impractical because…
Impractical because past events make a current devaluation politically unstabilizing.
Well Hoz,
Remember that China has been devaluing their currency for a long time to increase exports and spur productivity.
The devaluation would make our exports rise and increase capital inflows. That would help the debt situation a lot.
China would lose some of their economic growth and doesn’t want that to happen. So, its kind a tight squeeze for them. Inflation was running at >5% per year there for much of the 90s.
It is not clear that the Yuan would appreciate if the Chinese government let the currency float. In the last 2.5 yrs, the Yuan has appreciated 21% against the dollar.
New Zealand proved that you cannot devalue your way to prosperity.
So, for you deflationists out there: postal service announced rate hikes of 5% yesterday. My water bill and DirecTV bill are going up 10%, food prices have not fallen at all, gasoline here is $2.56/gal, and home prices in Humboldt are down perhaps 10-15%.. Where is the deflation?
…Or is it simply the few people with money now have to support aged establishments with higher prices due less customers?
When I gave up DirecTV, I was paying $59.99 per month and decided that it was a waste given that I rarely even watched TV. I canceled. They offered me the same package for $29.99 for a year. Methinks you need to play hardball with DirecTV.
Deflationist
Purchased 2 new coats, one leather for 200 bucks 60-70% off. New high quality T shirts were 10 bucks 50% off. New Dress shirts for $8 bucks 80% off. Gas is still half what it was just 6 months ago. Purchased a used minivan for 20-25% less than I could have puchased it 6 months ago, will probably fall more. My Father in law just purchased a new Camry hybrid for 20k which I think is about 3 grand less than he could have purchased it last year. If he wanted an SUV he could have had one for a song. I can buy a flat screen for far less than he paid a year ago. Housing is off 20-30%. Rents are falling according to recent posts. Dump your direct TV and go with Net Flix a fraction of the cost and prices have fallen. I’ve picked up some stocks for a fraction of prior cost. Plenty of deflation out there.
Like many others have said before…
Inflation with things you need
Deflation with things you want
“……seeks guarantees…….won’t be eroded by “reckless policies”……”
A lot of US taxpayers have been asking for the same thing for 40 years.
Can you say “Fat effing chance”?
China is selling…but who is buying US debt right now?
The way I see it, the US will buy the debt back from the Chinese with US dollars. Then inflation will really kick in when the Chinese buy stuff with these dollars.
The way I see it is China is following the time-honored traddition: Don’t Panic. But if you do panic, panic first.
Looks like China is methodically and slowly reducing its US holdings through reduced purchases of Treasury debt and instead is converting the on-going inflow of dollars into hard assets. In effect forcing other countries to figure out what to do with all these dollars.
Chile: China is converting the on-going inflow of dollars into hard assets.
such as buying farms in Saskatchewan and then renting it back to the original farmer
“China is selling…but who is buying US debt right now?”
The Federal Reserve.
Talk about the ultimate financial circle-j**k.
Yeah, but if China is selling U.S. debt for U.S. dollars, then they are effectively trading actual debt for claims on the same debt. It’s a wash.
On the other hand, if China starts trading dollars for assets (land, gold, other currency, something else) on a huge scale, that could cause a problemo for the dollar.
Here’s a Q.. If American demand for Chinese exports collapses, how do millions of Chinese _not_ get thrown out of work, and then start marching on Peking when their children start to starve to death? I’m not sure China (or any other nation whose economic growth depends on exporting to the US) has as much leverage as people seem to think. If you owe the bank $100,000 it’s your problem, if you owe the bank $100,000,000,000 it’s _their_ problem..
The Chinese communist dictatorship needs to export to provide jobs, without which they lose stability, which is their main source of legitimacy.
Granted, relying on a dictator’s self interest is no way to run an economy, but it _is_ a factor…
And if all else fails, we can bomb the industrial capacity in China flat, and get the same golden age of manufacturing that we had in the 1940s and 1950s after bombing Germany and Japan flat.
Walk away, USA.
heh.. same thing i was thinking.. China best pull in it’s horns a bit.
Two scenarios of bloodshed in America: 1) civil war between the savers and the save-nots or 2) China unleashes neutron bombs over 90% of the U.S. population, wiping out 270 million indiscriminately and grabbing the resources and the remaining 10% become employed cleaning the toilets of Chinese middle class.
I think number 2 is more likely. Forget guns and ammo.
China wants some of this?
well.. come and get it..
#2 - And we wouldn’t strike back?
If we inflate away the world will turn its back on us. I think that we had better ramp up the manufacture of consumables and use less oil, really, really fast.
Paranoid much?
I want to extend a hearty thanks to realestateskeptic for an excellent analysis of the stimulus and the political forces behind it. Thanks so much, it really cleared some things up for me.
Where can it be found?
Wow, Key Lime, howdy! Haven’t seen you around for a while. It’s in yesterday’s bits bucket. It’s easy to miss, it was a very quiet, but powerful short statement. I’ll see if I can find it and re-post.
Comment by realestateskeptic
2009-02-10 11:51:40
Just saying that I think he has oversaturated the airwaves. I voted for him and hope he does well for all of our sakes. I was not a Bush supporter either. Today, Geitner gets up and says nothing so the market tanks. Wait until you have something to say before you say anything.
Its a shame Pelosi boxed Obama in on the stimulus bill by loading it up with nonsense, forcing him to do all this PR work. Now he is having to burn his political capital to save a bill that should have been a no brainer under the circumstances. It will be strange to see Obama lining up with the centrist Repubs to save the bill in conference. Pelosi is absolutely the worst politician I have seen in years (as to political acumen, not scandal - we have plenty of those) . She was ineffective as majority leader when Bush was there and is now like a cinder block for Obama.
She was the primary motormouth behind Stimulus II last summer. As you imply, she is simply not good at her craft - the voters were expecting Stimulus II by the election. It would have been better for him if she would have kept quiet last year and allowed him to introduce it himself upon taking office.
In other words, they could have spent 2008 roasting a lame duck - but instead she tried to bum rush the White House about nine months too early.
Thanks…. I think. I consider myself a moderate but despise incompetency. Unfortunately, the stupidity and incompetence isn’t limited to one party. Pelosi is particularly ineffective both when in and out of power. She has to get smacked down for this plan to come out of committee and pass the Senate. Why she sets herself up to look so powerless is beyond me, she can’t miscalculate that badly time and time again can she? She could have done so much good for the last 3+ years but squandered it. Also it drives me crazy that she can’t speak about numbers. When she does - she constantly misspeaks saying its “hundreds of thousands” when she means millions and says Millions when they are talking about Billions. I just hope she knows how many zeros are in each….
Nancy P is probably my least fav politician, I just can’t stand her. She (as you point out) is a number idiot, which I find just terrifying given her role. The reason we got into this mess is because most of the population doesn’t know the difference between 1 million and 1 billion. That our leaders don’t either… Well, it keeps me up at night. She certainly appears to be an utter moron who somehow woke up in office, and now will do anything to protect that position.
Hey, Don’t forget MY rep, Stenny Hoyer. No spending is bad spending if it’s in his district. He may have toned down his pork-seeking rhetoric now that he’s in the leadership, but that leopard didn’t change his spots.
Personally, I despise Barney Frank the most, but Dodd and Pelosi are high up on the list. I started my day nauseated after listening to his mush-mouthed ramblings on CNBC this morning. Apparently, he doesn’t consider himself at all responsible for this mess since he only became the chairman of the House Financial Services Committee in 2007. All of his years of pimping for Fannie and Freddie had no bearing on our current situation.
I was serious as a heart attack, realestate. It was an awesome analysis.
“She could have done so much good for the last 3+ years but squandered it.”
And THAT is exactly me beef with her. She let the gangbangers keep on raping the kids, in more ways than one, and held back those who wanted the stop the rape, while she looked on exhorting the kids to wiggle nicely. It’s a harsh metatphor, but an apt one.
“me beef”. I meant “MY beef”. “the stop” I meant “TO stop”.
Sheesh. Just made another cuppa.
Pelosi was pushed up the ladder to fill the void created when people senior to her moved on to bigger and better things… not because she was qualified.
She’s another richie who glided into power she doesn’t deserve … it’s no surprise she declined to impeach Bush, they practically go to the same country club…
RE: Why she sets herself up to look so powerless is beyond me, she can’t miscalculate that badly time and time again can she? She could have done so much good for the last 3+ years but squandered it.
WTF?
What’s so difficult to understand here?
Pelosi is the radical feminist wife of a billionaire California real estate mogul, elected by a constituency of liberal moonbats.
You think she’s got any sort of grasp on a set of socio/political realities common to the middle class?
Thanks for the insight. I knew her constituency, and her leanings, but not the rest of the stuff. If her husband was a Billionaire in CA real estate, maybe they took a big haircut? Perhaps then she’ll understand the difference between Billion and Million? Its clear she’s clueless, scary clueless….
Pelosi got her House seat via the corrupt Burton brothers. They groomed her to take over one of their seats when they no longer could serve in the House.
Pelosi also comes from a family of politicians. Here’s a link take a read:
http://tinyurl.com/yfbfbr
Thanks. A few things come to mind… TERM LIMITS. Family limits - no more Bush, Clinton, Kennedy, Pelosi, Cuomo, Jackson, you get the point. Funny that Rahm Emanuel nominated her for Leader. I can just hear it these past few days. “I put you there and we can take you down.” Nobody with a net worth of more than $10,000,000 should be able to serve (unless you made the money yourself). Bye Bye Kerry, Rockerfeller, and many Repubs…. I’m not really serious abotu most of this stuff, but I would miss Patrick Kennedy, Jay R., John Kerry or any future Bush, Clinton or Cuomo.
She’s only second in line for the oval office.
From the UK Telegraph:
Air freight drops as global trade siezes up.
The scale of the downturn in world trade was underlined by figures on Tuesday from airport operator BAA showing a 16pc plunge in cargo moved by air.
By Rupert Neate
Last Updated: 8:58AM GMT 10 Feb 2009
BAA, which runs Heathrow, Gatwick and Stansted airports, said the number of tonnes of air cargo declined by 15.9pc in January, on top of a 15.1pc fall in December. The airport operator said cargo volumes are dropping at all UK airports as a “direct result of the global economic downturn”. It said freight volumes in the whole of 2008 were down 1.4pc compared to 2007, largely due the sustained drop at the end of the year.
It comes as the cost of sending cargo by ship has dropped to virtually nothing on some routes. Lloyds List, the shipping newspaper, reported last month that spot freight rates for Asia to Europe fell to zero last month as shippers were prepared to carry some goods for free just to keep their ships in operation.
Passenger traffic at BAA airports in January also dropped 6.3pc to 9.4m. The decline was felt the hardest in domestic UK travel which declined 12pc. European traffic was down 6pc, followed by transatlantic routes down 5.9pc, and other long-haul traffic down 1.9pc.
Traffic at Gatwick and Stansted airports declined by 10.8pc and 11.2pc, respectively. Gatwick suffered a 24pc decline in long-haul flights, due largely to the collapse of Zoom and XL airlines.
Southampton airport recorded am 11.5pc drop in passenger numbers and traffic at the group’s Scottish airports – Glasgow, Edinburgh and Aberdeen – dropped 8.7pc.
For every business right now, overhead must be killing them.
So they need to cut the overhead, before their competition does.
Easier said than done. For most, they are so entrenched in their business practices that they refuse to see the bigger picture.
How many people did you see trying to cut their living costs when they saw the storm coming?
I was being a bit facetious Puddy. You’re 100% right -they’re geared for “grow or die” - now for many of them - comes the dying part.
Sustainable growth for companies is easier said than done.
They just get so high on the boom side of the cycle that they never plan for the bust.
FPSS, I’m curious: do you see this bust causing a swing from debt-based business operation to cash-based business operation (like a couple of generations ago)?
I’m thinking it may… Curious what others think.
There are many cash-based businesses. Berkshire owns most of them. LOL
But, in general, no, I don’t expect things to change. Everyone craves leverage down to the proverbial shoeshine boy.
Interesting….
“Everyone craves leverage down to the proverbial shoeshine boy.”
But everyone craved leverage in the 1920s as well–and then the GD generation wouldn’t touch it.
They didn’t have “debt monetization in overdrive” as official fiscal policy.
So late-60’s, here we come again!
PS :- I have actually had people tell me, if you’re not levered, you “lose out’. Now that they have “lost out”, they still crave leverage. Unbelievable!
Fuel is cheap right now though as compared to last year.
the part about cargo by ship is pretty outdated; rates are up strongly over the last weeks, although still relatively low. Air freight has been declining for more than a year already, AFAIK.
the strange thing is that they never talk about the benefits, like far less traffic jams, less energy consumption, maybe slightly better service in the shops
hehe, yeah, I’m loving it, personally
I work in a business that occasionally used bulk airfreight for big movements. We are moving several tons in May to Europe. The broker has given us a price and space on a carrier, but has warned us that the carrier may be out of business by then.
Atlas/Polar?
Atlas.
Does this mean I can look forward to stress-free air travel again in the near future? Airlines that actually care about customer service? I’m in a dream world.
I am afraid it means just the opposite: the airlines will squeeze the customer to the maximum. There will be less traffic at the airports though.
Come to Asia
“Airlines” and “Customer Service” haven’t belonged in the same sentence for decades.
The one time I booked my own travel instead of using the company travel office, the airline went bankrupt the morning of my 10:30AM trip. I guess I just wasn’t in the rumor loop.
Neat plan in the WSJ today on how to deal with the banks. I’ll butcher it here, but if your interested, it’s on the last page of the A section.
Basically, take all the garbage off the books, cancel the old shares (worth 0), and issue all new shares. Now, here’s the rub (and the part that I think is a great idea). Take those new shares and give them to the American taxpayer, the amount you paid in taxes determines how many shares you get. That way we all benefit (or at least the 50% of us that pay income tax) from the potential upside in the banks.
What do you guys think? Wiping out the commons would hurt me personally, but, frankly, it’s probably the right thing to do. But I really love the idea of giving the shares back to the American taxpayer, that’s a truly innovative and new idea.
I’d prefer just letting the rotten financial institutions fail. The whole system is rotten anyway. To use a real estate metaphor, it’s a tear down.
But then what (after the failure)? Allow new banks to come in? Or something else? Not trying to be obtuse, but, if we did let them all fail (which, I agree, is what they deserve) what happens then? Would they all just move across the street to a new building, put up a new name, and then start the whole ponzi over again?
Not all finanicial institutions are failing. And they’re the ones that should come to the fore, but can’t because BofA and others are sucking up all the oxygen. We won’t be able to have healthy financial institutions if the unhealthy are allowed to prosper at the expense of the healthy.
Imagine how some of the posters around here would feel if some of us boomers refused to ever die and just lived in a state of permanent decreptitude and life support at the expense of everyone else.
That’s ok. I’ve got my zombie boomer survival kit. If the zombie boomers come for me I’ll just ask them to program the VCR.
We’re going to do that, Palmetto. And I think the next generation should exact their revenge by kicking ours to the curb by discontinuing SS/Medicare.
Put ‘em on the ice flows.
palmetto, you’ve described everything that is currently wrong with this country.
The old guard (establishment, status quo, big corps, whatever you want to call it) is killing innovation and punishing competency.
If anyone here reads any science news, then you know how badly new tech is being surpressed.
ohmigod, I’m having a flashback to France in 1980!!! aaaaiiiiiii!!!
“…If you want to sputter, choke, and turn purple with rage at the people who wrecked your retirement, you might start with Cramer himself, the most prolific dispenser of bad advice to the investing public….”
http://www.slate.com/id/2210720/
now that they are at it, maybe they can do the same for homes: all taxpayers (and savers) get their share of any price appreciation for homes from owners that were ’saved’ with government bailout money. Probably difficult to implement because of all the possible fraud, but who knows …
For years the Forest Service had a policy of “out by 10am” - i.e. put out all fires as quickly as possible. Eventually they realized that this was bad policy, that it encouraged growth of underbrush to the point where eventually one massive wildfire would happen and burn the whole forest to ashes.
I sure wish the government/Fed had caught on to that wisdom years ago, but it’s too late - the forest has become brush-choked and it’s now ablaze.
I say let it burn down. Many seeds and roots survive, and the forest will regenerate.
Yet if the Fire Company let houses burn with live children in them under the same logic, consumers might turn against them.
Likewise you would not let your crops burn out of control, just to tidy things up a bit. Controlled burn gives a better result.
Bad stewardship allows too many thorns to take root. Fire the managers. Fire is a good thing.
I always wondered why people with children moved into houses surrounded by a forest that burn every few years.
Maybe Darwin was reincarnated as a real estate agent?
And I have further wondered why those people are apparently incapable of foreseeing that if they would just cut brush out, oh, 75 feet from the house, it would greatly reduce the probability of that house burning.
Maybe every once in a while those people could mow more than just thier little postage stamp piece of land.
The analogies abound.
“And I have further wondered why those people are apparently incapable of foreseeing that if they would just cut brush out, oh, 75 feet from the house, it would greatly reduce the probability of that house burning.”
It’s not always by choice. The Tahoe Regional Planning Agency is so militant that they wouldn’t allow thinning on private property, and would levy huge fines even for the removal of dead trees. Then, a massive fire burned down hundreds, if not thousands, of structures a few years ago. Only now are they rethinking their idiotic policies.
Sounds like Cal-Fire’s current mantra. But there batallion chiefs make $200K+. And no wonder why there is a budget problem.
And some seeds actually need fire for them to open e.g. the serotinous cones of lodgepole pine (and others). Just in case you were wonderin’
Little anecdote: Got a letter from my HS reunion committee trying to entice me to attend. It essentially listed the jobs of a bunch of fignuts that I hated with a sort of “Aren’t they doin’ so great? Hunh? Hunh?” attitude. One works for PIMPCO, another for structured finance, one for commercial RE, another for M&A, etc. etc. Just horrible. I fear what I would do if I come across them. Thinking about writing a letter threatening to go “wilding” on them if I ever see them again. “What’s the frequency Kenneth!?”
“C’mon baby, eat the rich
Put the bite on that son of a b1tch”
“What’s the frequency Kenneth!?”
God! I haven’t heard that in ages!
We need to turn them banks into post offices — Utilization instead of Nationalization.
Cancel existing equity, convert existing debt to equity, issue new guaranteed debt.
Alternatively, cancel equity, liquidate junk assets, sell clean bank to market, give bondholders proceeds. Wash. Rinse. Repeat.
The problem is that past taxpayers — ie the generations in charge — are the ones who caused the problem, and future taxpayers are the ones who will suffer.
How about giving all the shares to citizens age 0 to 30 equally?
I would remind you that some of the biggest banking and financial fraud was committed by 20 and 30 somethings.
I think Casey Serin is only 24.
I expect to hear eventually that he lost 6 houses in the Victoria fires.
“But I really love the idea of giving the shares back to the American taxpayer, that’s a truly innovative and new idea.”
Alas, it’s not an innovative idea. It’s called communism. The government will effectively hold those shares which is effectively nationalization.
The toxic debt problem is insoluble. It’s trying to reinflate the bubble by saying that something now worthless will be worth something someday. Nobody is going to buy this bunk….except the FED.
Our politicians and leaders know this….they just don’t want to let the rest of the world know they know this….they have to pretend that they are doing something.
Sounds to me like the Milo’s corporation in Catch-22: “Everyone wins, because everybody has a share.”
Yep, sure. The taxpayer will never be able to cash its share, but meanwhile the CEOs will be living the high life taking care of “taxpayer’s investments”.
Less focus on exporting Chinese toxic poison around the globe…more focus on keeping 1 Billion people from giving the Gov’t slave leaders Mr. Potato’s: “angry eyes”.
So, this means commodity prices continue to go up, right?
“…The collapse in global demand for Chinese goods has devastated export-dependent coastal areas. The government says at least 20 million migrant workers have lost their jobs”
:…Exports fell 17.5 percent in January from the same month in 2008, the third monthly decline and a sharper drop than December’s 2.8 percent, according to customs data released Tuesday. JP Morgan said it was the biggest monthly decline since October 1998.”
“The numbers are terrible. The environment is awful,” said Citigroup economist Ken Peng. “The pressures on employment will be huge.”
http://finance.yahoo.com/news/Chinese-exports-imports-apf-14320200.html
Too bad
Maybe FXP will bounce back? Too bad it no longer trades as it was intended. I knew China was really cooked once Cramer started praising China and when he recommended FXI. Its down 17% since he recommended it, but FXP is up nowhere near 34% and now trades inverse to the DOW not the Chinese markets. Oh well…
Sorry - I shouldn’t have bought it and ruined it for the rest of you.
Palmetto, packman, Sagesse, mrktMaven, Muggy, SFC, Michael Fink, Rancher, and Bill in Carolina, thank you all for your input re Naples. I sincerely appreciate it.
My gig is newly diagnosed cardiomyopathy. 2-3 years. Have that much money, with a do-it-yourself exit. no family, so I am cool.
ATE-UP
When you say “your gig” - you mean diagnosis? Or are you a doctor specializing in that?
A describtion
http://en.wikipedia.org/wiki/Cardiomyopathy
I am so sad. If you have insurance, maybe the Mayo, Cornell, Harvard, or John Hopkins can help you.
“description”
My thoughts and best wishes to you, ATE. Please consider getting a second opinion.
Sorry to hear this, agree with palmetto
Can you expand on this? Please.
Pacemaker.
Sorry to hear this. For what it’s worth, I’ve read of peeps with cardiomyopathy doing well after chelation therapy (EDTA) despite the MDs writing them off. Worth a look–may add years at least? Good luck.
yeah, and I heard chelation therapy is the new quack cure-all… good for asthma, autism, allergies, and fibromyalgia…
it’s actually a fairly hazardous procedure intended to treat Mercury poisoning. if you do not have Mercury poisoning, I would avoid.
ETC-216 would probably save us.
Unfortunatly that drug is in the development stage and since it might cure heart disease, Pfizer will make sure it never sees the light of day. Conflicts with their cholesterol reducing drugs.
Mine in only minor but no males seem to make it past their 50s in my family.
Ugh, it’s late, I just got back from Orlando (business)… I’ll be gone for a few more days. Ate, I’d like to know more about what you like to do, so we can get you in the right spot.
Some goofy realtor in Vegas is saying that the market is now “Undervalued”. The value (Price) is what a someone is willing to pay, not what a stupid realtor thinks it should be.
AHAHAHAHAHAHHA LOL.
I am so glad that I am renting in Henderson and watching the prices fall!!
I don’t value it at all. Does that make it undervalued?
Obama seeks to help banks avoid foreclosing
The Associated Press
Tuesday, February 10, 2009
FORT MYERS, Fla. — President Barack Obama says he’ll be unveiling an “overall housing strategy” in the weeks ahead, but he’s already looking at ways to help homeowners avoid foreclosure.
He told an audience in Fort Myers, on today that there needs to be a system in which banks recognize that it’s in their best interest not to foreclose on homes.
Obama says it’s more difficult than it used to be for homeowners to work out a deal with a bank to avoid foreclosure, because so many mortgages these days are held not by a bank, but by a group of investors. Obama says there need to be changes made so that the companies “servicing” those mortgages have the flexibility to seek options other than foreclosure.
Obama says part of the housing crisis is caused by people who bought homes they couldn’t afford. But he says there’s a bigger group who, amid declining home values, are now dealing with a mortgage that’s higher than the value of their homes.
Dealing with a mortgage that`s higher than the value of their or the mortgage holders home. So. Happened to me in the early 80`s. I got up every morning, went to work and paid my bills. There was not always work in my field so at times I did something else. There was about 5 years that I paid my mortgage while I was upside down on the house.
While I agree with you and your show of personal responsibility, I think that we (and our leaders) know that it’s different this time. People who bought at/near the peak are NEVER going to recover. And, because of the size of their financial misstep, even if they pay off the home, will be damaged financially for the rest of their lives. Middle class people simply can’t afford to have a 300-400K FULLY leveraged “investment” go against them. If that 400K goes to 200K, that’s 200K in real money lost. Then the 200K extra in loan amount; it turns into about a 400K loss.
Middle class America can’t take 400K losses; especially when there’s no hope of ever making it up.
Now, I do agree with you, and with your display of character in the past. However, in this case, most of these people just need to walk away. They can’t afford the losses, they can’t afford the home, they are terribly over leveraged. Basically, they are better off starting from 0 then starting from -200K.
People who chose to stay, and pay off the 400K loan (again, assuming they are middle class) will never recover from that mistake. That’s what foreclosure/BK is for, to prevent people from making one mistake that destroys the rest of their lives. This is exactly that kind of mistake!
I am not too sure how someone that bought a house with no money down would loose anything.
Because they borrowed the entire amount doesn’t mean that they can’t lose anything. They borrowed 400K to buy something that’s only worth 200K, the moment that transaction was done they LOST 200K.
Now, what I think your saying is that this isn’t an actual loss, which is true, ASSUMING that they walk away. If they choose to stay and continue to pay the MTG, then, indeed, they have lost 200K. This isn’t an intellectual exercise, it’s real money; just because they didn’t have 200K to lose, doesn’t mean that they don’t now find themselves another 200K in the hole. And, in fact, the situation is much worse; they don’t just have to pay back the 200K that they lost, but also INTEREST on the money that they lost. So the 200K loss becomes more like 400K over the life of the loan.
My point being that normal people (middle class) can’t afford a 400K loss, it’s just not an option for them. Most people who make 50K a year, but had 200K in CC debt would quickly decide BK is the right option. Well, that’s exactly the situation these homeowners are in, they have 200K in CC debt (albeit tax-deductible and at a decent interest rate). That 200K loss isn’t going to be made up, it’s just going to be rolled forward. The only way out is to walk, take the credit hit (or BK) and buy again.
Perhaps, but they’re losing opportunities nonetheless. My peers are saddled with horrific debt service on condos, cars, and cards - they’re losing precious time and a helluva opportunity (at least as long as they keep up the payments).
(preface): jeff saturday - hats off you truly are a responsible person, and did the right thing it sounds like.
Michael - agree you’re right though this is one time where I think it is in many folks’ best interest to just walk away and start over. A good analogy is marriage. I’ve known a few people that perhaps made poor decisions and have had some problems, but then worked through those problems and have gone on to have very successful marriages. However conversely sometimes people just really marry the wrong person, and rather than trying to work things out it’s just best to cut it off and start over, rather than expend a lifetime of effort and still have it fail. It doesn’t erase the fact that a bad decision was made, and there are consequences certainly, but the bad consequences are sometimes significantly less than otherwise (trying to make something work that’s doomed to failure).
A huge volume of people just made really bad marriage (housing) decisions, in their Fed/gov - induced drunken stupor. Now as the hangover hits the next day - annulments are in order. It is not best to try to make these doomed-from-the start marriages work, like Obama and others are trying to do.
Jeff:
You had a reasonable chance to pay it off, how do you pay off $200-300K underwater today?
The reason this scam went on for so long is companies hired the dumbest most severely stupid employees they could find, so they would work for FREE on commission, and wouldn’t question a $600K crap box, or a zero down cash back scam.
——————–
There was not always work in my field so at times I did something else. There was about 5 years that I paid my mortgage while I was upside down on the house
Perhaps I have more of a chip on my shoulder because when I was trying to buy a house to raise my kids in, house prices escalated out of sight, and I listened to people who owned and refied and bought houses brag about how much money they had made and what a huge mistake I was making not buying after I sold our too small house and began what has turned into three and a half and counting years of renting. But at least now my wife and kids know that all those “victims” who called their husband-father an idiot were wrong.
jeff saturday
We have been renting as long, after selling our oversized McCr*p Box, and finally are feeling vindicated when it comes to the “buy now or be priced out forever” family members.I can totally relate to your post.
There was a time when we were questioning our decision not to buy, but financially that would have been suicide. We’re writing one check, and the time is close. Hang in there. You’re not alone.
(So Ca)
Thanks Wipeout, I remember days in 06 and 07 doubting my decision and wondering if I had really screwed up. When those days happened I would come to this blog and read a whole days worth of posts and that would generally reinforce my decision not to jump off a financial cliff, kinda like going to an AA meeting for an alcoholic (which I am) who is near taking a drink after years of sobriety. On that note I should probably thank Ben for helping save not only my but my kids financial future.
Well said again, Mike. It’s really different this time, Mr. Saturday. In some cases, people have no choice but to walk away after resets or job losses. It’s a matter of survival.
Keep in mind, unlike previous economic expansions, housing and finance were the engines of economic growth. As these growth engines collapsed, their economic impact rippled onto other industries like lumber, furniture, autos, and so on. Now, as other industries contract, they are rippling back onto housing and finance, furthering depressing prices, balance sheets, and so on. It’s a downward spiral.
..Obama says part of the housing crisis is caused by people who bought homes they couldn’t afford…
The entire crisis is due to people borrowing more money than they could ever hope to repay. That borrowed money was carelessly gambled on RE appreciating forever.. spent on cars.. vacations.. remodeling.. landscaping.. clueless business startups.. basically spending borrowed money like drunken sailors and living it up..
Their inability to repay eventually came to a head, and so began the defaults and foreclosures. This in turn caused property values across the board to fall, creating those “with a mortgage that’s higher than the value of their homes.”
As for this segment of people who can afford to repay their loans, but prefer walk because “Daddy! I just bought this new car last week, and it’s resale value is half of what I paid! I refuse to repay this loan! I don’t want this car anymore! WAaaaaaaa.. sniff..” .. don’t bail them out.. Don’t be a wuss.. don’t get involved.. don’t try and restructure their loans or force lenders to absolve the sin.
They need to learn a lesson. Suffering will insure there remains a lasting impression. Everyone who was instrumental in allowing this to happen needs to learn a lesson.. including government.
Spend your time, energy and (our) money on encouraging the healthy parts of the economy to recover.. those parts which are being dragged downwards by the diseased and dead wood.
Prune. Water. Fertilize.
Uncle Buffett is distributing cash in envelopes (strings attached), and here I am waiting for 11% passbook savings rates, guess I’ll go see if any of my favorite drinks are on sale today…
“…he committed $6.5 billion to help McLean, Virginia-based candy manufacturer Mars buy chewing gum maker Wm. Wrigley Jr. Co. In September and October, he agreed to spend $8 billion on preferred shares of General Electric Co. and Goldman Sachs Group Inc. that pay 10 percent annual interest.
Later deals have yielded even more favorable terms. In the past week, Buffett agreed to buy preferred shares in Milwaukee- based motorcycle maker Harley-Davidson Inc. that pay 15 percent and Sealed Air Corp., an Elmwood Park, New Jersey, packaging company, paying 12 percent.
“I wouldn’t be surprised if there’s not much news from the fourth quarter,” Yoshikami said, referring to Berkshire’s next stock-purchase disclosure. “When you can get a 10 percent return that’s virtually guaranteed on preferred shares, why buy stock?
Buffett, Who Invests ‘Forever,’ Found Losses in 2008:
http://www.bloomberg.com/apps/news?pid=20601213&sid=aGweDfQQmWzQ&refer=home
Harley Davidson? Oh dear.
Gosh, maybe that’s why I bought ONE share (B) two weeks ago for my IRA. Down a bit now but great for the long run. Still, the P/E is temporarily a bit high.
So - I’m feelin’ pretty good these days.
Asset-backed securities - not so much.
After generally being issued at a rate of about $80-100 B every month the past few years, issuance is virtually zero the last 4 months.
“Bring out your Fed”
“Bring out your Fed”
“Bring out your Fed”
Thanks to Pametto, packman Sagese, mrktMaven, Muggy, Michael Fink, SFC, Rancher, and Bill in Carolina for their info re Naples. Lived in Florida five years, Spring Hill and New Port Riche, trying to go back, and having a difficult time deciding where with all the potential social turmoil in the future. Will rent. Age 53. Conservative, but love the ocean. So all input is appreciated, again thank you.
Sorry for double post. Thought Ben pulled it, and wanted to thank everyone. No, that is my diagnosis. Goes back to long ago “C” extensive drug problem. Can’t say the word, even to myself. Clean 15 years.
Our thoughts and best energy are with you. Please don’t give up - new discoveries are happening daily and the more you learn about this condition the more you can fight it. Hugs.
I can’t find a link to it, however I heard on the radio this morning that ACORN protestors shut down a foreclosure auction by the city of DC yesterday. They were apparently shouting “no sales” or some gibberish as they took over the meeting room where the auction was being held.
This will do wonders for foreclosure resale values.
Reminds me of the farm crisis….
That one brought us big time corporate farming, will this one bring corporate housing to all?
Can’t wait for “McMansion-Aid”
Wife and I went to see a foreclosure yesterday. Bank is asking price is 60% of the 2005 price.
The previous owner had:
1. fixed the roof,
2. added aluminum siding,
3. completely redone the landscaping,
4. painted the entire interior….
5. and finally, stopped making payments and got foreclosed on.
Seeing this house has brightened my outlook for our house buying potential.
Martin Wolf in the FT:
Has Barack Obama’s presidency already failed? In normal times, this would be a ludicrous question. But these are not normal times. They are times of great danger. Today, the new US administration can disown responsibility for its inheritance; tomorrow, it will own it. Today, it can offer solutions; tomorrow it will have become the problem. Today, it is in control of events; tomorrow, events will take control of it. Doing too little is now far riskier than doing too much. If he fails to act decisively, the president risks being overwhelmed, like his predecessor. The costs to the US and the world of another failed presidency do not bear contemplating.
Ooooh, looks like the Candy-Crappin’ Unicorn™ has failed to crap candy, and the believers are getting antsy.
BWAHAHHAHAHAHHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHH!!!
More proof that we’re at a major inflection point with regards to collective public opinion. The expectations for a mid to late 2009 strong recovery are off the charts - they’re screamin’!
Since when has FT been a liberal paper?
It’s financially-conservative-upper-crusty-intellectually-liberal pretty much in the same vein as the Economist.
FT? Liberal? Are we reading the same publication? Geez, if you think they’re liberal… holy cow!
“Today, it is in control of events”… ?
“Today, it can offer solutions”… ?
“Doing too little is now far riskier than doing too much.”…??
and.. These are times of great danger.. and.. The costs of failure do not bear contemplating..
That diatribe is pretty much exactly what BO has been trying to sell all along. Seems to me Martin Wolf believes with all his heart.
Some more from Marti Wolf in FT:
“All along two contrasting views have been held on what ails the financial system. The first is that this is essentially a panic. The second is that this is a problem of insolvency.
Under the first view, the prices of a defined set of “toxic assets” have been driven below their long-run value … The solution, many suggest, is for governments to make a market, buy assets or insure banks against losses. …
Under the second view, a sizeable proportion of financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities.
…
Personally, I have little doubt that the second view is correct and, as the world economy deteriorates, will become ever more so. But this is not the heart of the matter. That is whether, in the presence of such uncertainty, it can be right to base policy on hoping for the best. The answer is clear: rational policymakers must assume the worst. If this proved pessimistic, they would end up with an over-capitalised financial system. If the optimistic choice turned out to be wrong, they would have zombie banks and a discredited government. …
Why then is the administration making what appears to be a blunder? It may be that it is hoping for the best. But it also seems it has set itself the wrong question. It has not asked what needs to be done to be sure of a solution. It has asked itself, instead, what is the best it can do given three arbitrary, self-imposed constraints: no nationalisation; no losses for bondholders; and no more money from Congress. Yet why does a new administration, confronting a huge crisis, not try to change the terms of debate? This timidity is depressing.
…
The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. “
IMHO, chances of admitting reality are slim if not nonexistent.
Seems to me ACORN would have a good, limited purpose depending on the facts. However, like all forms of social activism, it gets carried away by either ideology or narcissism, or a combination of both.
I think ACORN’s problem is that, despite being liberal, they bought into the ownership society/owning a house changes everything stuff. It isn’t owning a house that makes the people that own them better off. When my dad was a kid, his father was a produce buyer for grocery stores in Massachusetts. Every year or two, grandpa got a better job and they moved - to a new apartment. At some point (after some army time), he had a job for a company that was large enough that he could get better jobs within the same company and in the same area, so they bought a house, because it made sense then to stabalize their housing costs and not be subject to the whim of a landlord.
It isn’t owning a house that makes you wealthier. It is making more money as you progress in your career while keeping your housing costs stable. If you aren’t in a situtation to get better jobs or raises within your job in the same place, the house will not fix things.
Yea, until housing prices catch up with labor prices we are all doomed.
…and as jobs are not stable…
Judean Peoples Front? Umph off. We’re the Peoples Front of Judea.
I thought we were the Popular Front?
No, he’s over there.
Splitter!
ACORN - A bunch a worthless want to be activists who would be better served if they actually got real jobs or concentrated on completing their education. They are taking MY tax dollars to work in direct opposition to my beliefs. Good times.
Mr. Geithner gave an impressive performance yesterday. He struck the right tone. Wall Street expected truckloads of free money. Tough.
Unlike popular media reports, there were lots of unfavorable details in the plan — shareholder say on pay, restrictions on salaries, dividends, and buybacks; plus, a system wide stress test, mortgage modifications, and transparency.
Let’s hope he sticks to the principles outlined. It’s a good start.
I am of a similar opinion. I do not like Mr. Geithner or Mr. Summers (author of the plan), but it is a plan instead of a reaction.
How is it a plan?
It neither acknowledges that the banks are insolvent nor does it give a plan to recapitalize them.
We all know that private capital is not foolish enough to come in because these banks have negative worth.
Nor does it suggest that they are going to be nationalized.
They have solved nothing. They are pulling a Japan with the banks and they know it.
http://www.financialstability.gov/docs/fact-sheet.pdf
Why don’t you read the plan? 7 pg pdf.
Not Japan, that route have worked if this problem was smaller; we already know the Federal Reserve is not going to raise rates. Japan raised rates. This is only going to cost $7 -10 T. The government guarantee is a hidden cost that expands exponentially with each failure.
Nationalization would cost around $14T. This is a leveraged plan of $1T to control $10T. It should work provided the dollar stays in a relatively narrow trading band and foreign entities stay tied to the dollar.
It is walking a tightrope across a precipice with gale force winds blowing.
I would have liked to see something different in the plan, but I am just a mope out of the inner loop. “A good plan violently executed now is better than a perfect plan next week.”
Gen. George S. Patton, Jr
If your plan is to walk across a precipice with gale winds, you’ve ALREADY failed.
Woosie
Are you afraid to walk across a precipice in gale force winds!? I am shocked.
It won’t be the first time, it won’t be the last time that the US has been on the tightrope economically. There is always a gale force wind from somewhere.
There is nothing in the plan that is new. I read Tim’s speech and have read the plan all the way through. It’s just throwing more money at the problem. The stress test is a bunch of bull plop. Quote: “In conducting these excercises, supervisors recognize the need not to adopt an overly conservative posture or take steps that could inappropriately constrain lending.” HAHAHAAHA. Yup. Gotta throw more puppies into the grist mill!
The gist is that a few debt chains will be lightened so that new ones can be placed upon you. Inflate or die.
Death seems preferable to having these jagoffs continue with this stupid game for the forseeable future. Buncha babies can’t even take their medicine. Your “industry” is institutional vapirism. Now they’re all crying because they’ve run out of veins to suck dry.
You read and heard the white noise and not the plan “government guarantee”.
Oh I understand the government guarantee aspect. You don’t need the ability to read between the lines for that. I just don’t believe in that concept. Too bad for me eh comrade?
They have to segment the banks and assemble the resources to do unpopular things. The outline is the first step.
It’s unpopular to cancel shareholder equity. Investors hate it. It’s unpopular to give the banks and investors free money. Taxpayers hate it. Mr. Geithner has to carefully balance these to warring forces against the economy’s need for credit.
All the banks are not insolvent. There are solvent banks, semi-solvent banks (with some capital and time they may or may not survive), and completely insolvent zombies. It’s difficult to determine which banks survive because asset prices are moving targets, they can depreciate or appreciate over time.
If you segment them by size, ALL the largest ones are insolvent.
The tiny mosquitoes at the bottom of the pile don’t count.
So, when the stocks of the banks are Zero, and they are removed from the stock index, the index goes up automatically?
Nope.
Mathematically, the return of the index is just the weighted average of the returns of the individual stocks.
The futures reflect this information, BTW. That’s the link you’re missing.
If you segment them by size, ALL the largest ones are insolvent.
The tiny mosquitoes at the bottom of the pile don’t count.
Why not?
If there’s enough of them, that’s a lot of biomass.
I confess that I don’t know the proportions, but small, solvent banks mean there are micro-climates of local liquidity, no? (Mixing my ecological metaphors, I am.)
14Tr….gosh, that’s only about $300,000 per taxpayer. What’s the beef?
If you can look into the seeds of time, and say which grain will grow and which will not, speak then unto me.- William Shakspeare
Whose Banks these are?
I think I know.
Their house is a burning village though.
You will not see me shopping here,
Too watch these hoods fill up with dough.
-Bill FrozenCon
Well said old mole!
Here’s one last bit of mole trivia for the day: a group of moles is known as not a flock or a pride but a labour.
A most interesting piece of useless trivia!
It gives a whole new meaning to a woman going into labour or the labour party in Great Britain.
I’m an out-and-proud Obama fan, but I thought the “plan” was suspiciously short on details about process.
Referring to Paulson’s actions, Geithner said, “Policy was always behind the curve, always chasing the escalating crisis,” but he did little to assure me that he’s landed in front of the curve instead of introducing more reactionary measures and adjusting in an ad hoc fashion, as Paulson and Bernanke did.
Perhaps one can argue that it wasn’t the proper time or place to air such details, but time is short. I certainly hope they’ve discussed implementation/impacts more thoroughly than it seems.
A better start, imo, would be to not rush things. Take the time to formulate a workable plan.
But this option was never on the table.
Instead, the BO administration is gonna show us what being a pent-up buyer flush with OPM is really all about.
Its still a BIG fat chance at screwing up..with NO benefits for me, the poor slub who works for cash so what good as tax reductions and credits, I don’t want more credit.
A job to pay off what i owe is desperately needed, or how about a reduction of principle on my cards so i can buy a new suit and shoes to look good at interviews. Or at least 0% interest for 5 years so all my payments go to the principle, not interest.
see Timmy boy is a useless old geezer to me
————————————-
Let’s hope he sticks to the principles outlined. It’s a good start.
I especially liked the part when Geithner said : “…and remember, I’m not only the hair club president, but I’m also a client.”
Am I the only one who thinks Geithner is “The Commish’s” lost twin brother? Miller Genuine Draft commercial.
If this keeps “up”…I’ll have to make a decision…some tin foil wraps @ the .99 cent store…or…buy stocks on the S&P 500!
“…Toll Brothers said it is focusing on maintaining liquidity”
Toll Brothers 1st-quarter home building revenue falls 51 percent as downturn continues
(”Shorty” the parrot):
“Squuuuaaaaaak, Squuuuaaaaaak… less than 1 dollar”
“Squuuuaaaaaak, Squuuuaaaaaak… less than 1 dollar”
(parrot’s head bobbing up & down)
http://finance.yahoo.com/news/Toll-Brothers-1Q-home-apf-14321347.html
at this point the .99 cent store is the better deal no doubt.
Can’t wait to tell Mom this one. She’s been a Toll-hater since they started paving Chester County, PA farmland over with their McCrapboxes.
People in Connecticut are not happy with Dodd and Lieberman.
http://www.observer.com/2009/politics/nutmegged-can-dodd-and-lieberman-survive
“The culprit is obvious: the nagging saga of Dodd’s mortgage dealings with Countrywide Financial, which were first reported last June. The suggestion was that Dodd, the chairman of the Senate Banking Committee, received a sweetheart deal reserved for “friends” of the company’s chairman. But only this week, nearly eight months after the story broke, did Dodd provide the media with documentation to substantiate his claims of innocence.”
But Dodd will survive according to this source, for reasons that are instructive for those of you elsewhere in the country.
Only special deal Democrats show up at primaries, so if you have their backing, you are the Democratic nominee. No one else matters. They might even keep competitors off the ballot. And since the Republicans are discredited in the Northeast (they are the party that sucks away tax dollars from here and then calls us big spenders) hacks like Dodd get a pass in the general election.
Machine politics. Try running for alderman in Chicago. In 2006 I watched as two local squeaky clean family guy candidates were disqualified on technicalities while across town two convicted felons still made the ballot.
Some people love machine politics - they’re elitists who for some masochistic reason think machine politicians know what’s best for the rest of us. Chicago is brimming with such types - as I’m sure most major cities are.
Machine politics. Try running for alderman in Chicago.
Or any office in Chicago, really.
Things are much better than they have been in a while, perhaps since the Harold Washington years (?) — Green candidates often pull 20% to 30% of the vote now (something relatively few Republicans can pull off in Chicago, where they’re regularly trounced by 50%+ margins), and non-machine Dems occasionally take major seats. Still, we have a long way to go.
Some people love machine politics - they’re elitists who for some masochistic reason think machine politicians know what’s best for the rest of us.
Elitists? They’re aren’t elitists. They’re simply power-grabbers.
There’s nothing “elite” about that.
power grabber + an ideology = elitist
I disagree.
There are plenty of examples throughout history where that equation does not equal elitism.
Mussolini, Mao, and Palin (three completely different ideological examples, for argument’s sake) come to mind immediately …
Mussoulini, Mao…and Palin?
Yeah.
Better company than she deserves … I know, I know.
Take out Palin, add Pol Pot, Hitler and yourself and now you have completed your Elitist Algonquin round table.
Thanks Palmetto. You are a great guy and if/when I get down there, we’ll have lunch or something! Even if I have to drive 200 miles to do it. Damn state is sooooo big!!!!!!!!!!!
Don’t let it fool you. We are totally out of land in FL, according to ever RE agent I’ve ever met.
Pensacola to Key West is about a 12 hour drive.
More like 14 hours or so. If you stop, or encounter any traffic in South Florida ( you will ) more like 15 hours or so.
Its a long drive from Pensacola to Key West.
Been there, done that
..
How We Can Restore Confidence
By Charles T. Munger
Wednesday, February 11, 2009
Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed — mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes. …
The consensus was grounded in Secretary of State George Marshall’s concept of moral duty, supplemented by prudential considerations. The modern form of this duty would demand at least some increase in conventional taxes or the imposition of some new consumption taxes. In so doing, the needed and cheering economic message, “We will do what it takes,” would get a corollary: “and without unacceptably devaluing our money.” Surely the more complex message is more responsible, considering that, first, our practices of running twin deficits depend on drawing from reserves of trust that are not infinite and, second, the message of the corollary would not be widely believed unless it was accompanied by some new taxes…”
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021003122.html
I like Charlie. It is unfortunate that we have to deal with the current idiotic Congress.
So do I. He’s a great guy, and very entertaining.
I don’t think he’s likely to see the end of this crisis though (age-wise, I mean.) Plus, it’s quite entertaining to watch Buffett play “straight man” to Charlie’s outbursts.
Munger: He [Jeremy Siegel] is demented.
Buffett: C’mon, Charlie, he’s a nice guy.
ROTFLMAO
“Indeed, it is conceivable that, if legislation were adopted in a bipartisan way, instead of as a consequence of partisan hatred, the solutions that curbed excess and improved safeguards in our financial system could reduce national pain instead of increasing it.”
What a dreamer. I can conceive monkeys flying out of Charlie’s butt first.
C’mon!!! Someone as smart as Charlie knows the drill as well as you do.
You think someone gets to be at the top of their profession like he has without a basic understanding of the nexus of politics and finance?
Maybe I was unduly flippant, but I think his thesis misses the mark when he peppers his statement with “it is conceivable” and “ifs”. You might as well stick multiple plans up on a dart board and have every member of Congress have a throw at it. Whichever plan has the most darts wins. Conceivable, bipartisan and just a silly as his statement.
I like Munger too, but it’s too bad all he can come up with are more/new taxes. That wouldn’t be necessary if spending wasn’t so out of control. Nobody talks about cutting spending in real dollars anymore, which is what really should happen.
Blasphemous taxing rich paper pushers the same as working people.
———————————
Moreover, increasing taxes in some instances might easily gain bipartisan approval. Surely both political parties can now join in taxing the “carry” part of the compensation of hedge fund managers as if it was more constructively earned in, say, cab driving.
We restored confidence after the dot.com bust and what was accomplished? The suckers were set up for another kill.
“free-market capitalism”
Really? Smells more like a Kleptocracy to me — totally different.
Of course, who in the media is going the right description when, if they do so, they might insight the serfs to riot.
Neo-feudalism is so much closer to the truth.
I liked his line about hedge fund managers being less valuable than cab drivers (a rare Munger understatement).
“Surely the more complex message is more responsible, considering that, first, our practices of running twin deficits depend on drawing from reserves of trust that are not infinite…
Did anyone give the Fed the memo on the concept of trust as a critical and ephemeral form of bank capital? Or are they still entrenched in that bizarro MIT financial engineering paradigm that dominates their thinking?
How about some humor this morning:
A 97 year old man goes into his doctor’s office and says, “Doc, I want
my sex drive lowered.”
“Sir”, replied the doctor, “You’re 97. Don’t you think your sex drive
is all in your head?”
“You’re damned right it is!” replied the old man.
“That’s why I want it lowered!”
Hey guys, I spoke with the guy who oversees my SEP account, and he says everything is going to be fine. Lots of opportunities out there, and since we’ve previously seen a GD, the government has a better handle on how to deal with it today; besides, he says, they can’t allow it to fail. Phew, do I feel better.
One thing he consistently mentions is that (and I quote loosely) there is “an enormous amount of cash out there; companies are sitting on tons of cash; more than there has ever been.” To me, this “fact” seems to guide his more-or-less optimistic view.
Anyway, sorry to waste Ben’s band width as this is way beyond my small little mind; but I thought you would all like to know that things are going to be just fine. That’s snark, btw. I would be interested in hearing what this talk about cash is.
The myth of cash-on-the-sidelines persists through every recession.
Every dollar of cash is a dollar of liability on somebody else’s balance sheet. That’s what a debt-based currency means.
MSFT allegedly has a lot of it, yet it has not helped to support the stock’s price.
well.. for some numbers, check out the “Depository Trust & Clearing Corporation” on wikipedia..
This entity “clears and settles” securities transactions in the capitals markets, worldwide. It also holds securities. Just about everything passes through their hands. Mutual funds, insurance transactions, etc. It basically does paperwork on trades.
It currently has custody of various assets (mostly things like stocks and bonds) valued at $40 trillion.
In 2007, total transactions it handled were valued at $1.86 Quadrillion.. that’s 1,860 Trillion dollars. (current bailout plan is around one T?)
And the DTCC is not the only financial services company of this type in the world.. but it’s the biggest.
yup.. there’s a lot of money floating around out there..
Irrelevant.
- Transaction values = assets x volume, thus isn’t a measure of actual assets, let alone the cash portion of assets. We can swap apples all day and send the transaction values sky high, but it doesn’t change the asset values.
- “Assets” may be $40 Trillion - but not much of that (or any really in the case of DTCC) is “cash” (note that “cash” is in the eye of the beholder).
- Many of those may be considered liquid, but only in a micro scale. Sure someone can sell their Microsoft stock at $19 a share right now, but the sum macro total of MS value - cash equivalent - is not $19 times the number of shares, because if everyone tried to sell those shares and get true cash the price would plummet to near zero before most could.
pardon me, but i don’t see where there can be any argument.
Forget stocks. Just consider gold.. there’s about 5 billion troy ounces floating around somewhere.. It could be transformed into cash immediately. At $900 an oz, that’s around $4.5 trillion, to spend on whatever one chooses.
Does that or does that not represent ““an enormous amount of cash out there”?
Do lots of people now hold gold? Haven’t a whole lot of stocks and bonds and other stuff been converted into things like PMs and treasuries and CDs recently?
That value did not simply evaporate when converted.. it’s just in storage. It’s waiting..
Other cash equivalents.. liquid assets of all sorts. What’s M3? … about $7 or $8T now? I have no idea.
What’s the cash value of actual physical properties of all kinds? Think there might be $20T total? $40T? Maybe $100T?
I agree that the cash-out value of stocks, bonds and various securities is somewhat debatable, but it’s obvious that there’s gotta be one hell of a lot of money available to be spent if people want to convert their stuff to cash.
Yes but of that gold the U.S. only has about a 5th or so ($1T), or the equivalent of about 3 weeks’ GDP. Most of that is in federal reserves, not really available as cash.
Not much.
M1 is $1.5T, again just about a months’ GDP.
M2 is a fair amount more - about $8T (6 months GDP or so), though that’s mostly time deposits (CD’s etc) - not very liquid.
Note however that M1 and M2 have been growing a fair amount due to the bailouts and such. Regardless - it’s all still small relative to the numbers quoted for DTCC. The vast bulk of those numbers is vapor with respect to actual cash being available for investment.
As FPSS mentions - the whole “cash on the sidelines” thing is a myth. Sure there’s lots of cash out there, but certainly not more now relative to normal times, and what cash is there must be diverted from existing investments, it’s not just waiting in folks’ mattresses to be used.
I pointed to DTCC numbers only for the sake of illustrating how much money is being thrown around out there. We’re talking $$ Quadrillions. Thousands of Trillions.
I find it hard to accept such enormous trade numbers while also supporting the claim that people have little spending power.. so I’ll leave it to you. ;=)
I say put him in a box with combotechie and let them fight it out - should be fun to watch.
he says, they can’t allow it to fail. Phew, do I feel better.
—————————————————————————————-
For whom? them or you? I think the full text should read, “He says, they can’t allow it to fail …for them.”
Looking at all this going on…
There aren’t any real shortages.
Food. We have plenty.
Fuel. Seems we have enough peak people.
Stuff. Seems like everyone had stuff. Clothes, toys, appliances.
Shelter. There seems to be an abundance.
Entertainment. Way too much of that.
Flush toilets, toilet paper and the wall St Journal. Were set there.
Somehow, with all that, everyone still manages to complain.
All this stuff is just banking problems that has been thrown upon the rest of us. Spend some time working out the price/wage phenomena.
Let the debt go bad. Start some shiney new banks with out the leverage. Do some negotiations with companies on debt levels.
This is very fight club like times. Destroy the debt record and start over. Time for operation Mayhem.
But do we have enough Manolo Blahnik’s and iPod’s, that’s the real question?
The iPod is the ultimate adult pacifier.
Big city tip # 31:
Don’t wear your iPod on the subway at 2 a.m.
For a brief while, I thought you had said the Manolo’s were the true adult pacifiers, and then I thought of Olygal and her pink sparkly shoes, and Buñuel’s shoe-fetish in his films, and then I put it all together in my head …
Aaah, twisted, twisted, twisted. Just the right thing for this blog though.
Tell you what, when lovely spring comes and the wetlands start to sprout amphibians I’ll put on my cutest pair of pink sparkly high-heels, catch a bunch of frogs and suction-pad them to my feet and then post the photo in Ben’s gallery.
That’ll be a whole new level of twisted, baybee.
Speaking of wetlands, Olygal, thanks for recommending Stalker (I’m pretty sure it was you) — wettest movie I’ve ever seen, including Open Water. Also it made me think, which I’d been meaning to try anyway.
“Don’t wear your iPod on the subway at 2 a.m.”
People who don’t realize that having all your senses working for you when in a potentially vulnerable situation may be particularly susceptible to evolution in action.
They aren’t IPods they are IPhones they wear.
“…The Boditalk Escort is a small pink bullet vibe. But, unlike other bullet vibes, this one has the ability to vibe in sync with your cell phone (or iPhone). But will its call make you come? Or will it make you want to send it straight to voicemail? And how exactly does the darn thing work?
Like any good Apple-compatible product, the Boditalk Escort is pretty much plug and play. There’s no need to sync it to your cell or use any Bluetooth voodoo to get this vibe working — just put in some batteries, slide it into “C” mode, and wait for someone to call (or just dial up your voicemail! That works too.). As long as there’s an in use cell phone within three meters of the toy, it happily buzzes away. Apparently this has something to do with radio waves—but as long as you’re getting off, who cares about the technical stuff?
If you’re short on minutes, you’ll be glad to know that the Boditalk Escort isn’t just a cell phone vibrator—it’s a regular vibrator too. So if you’re tired of waiting for the call that won’t (make you) come, you can put the vibe into “P” mode and control the vibrations yourself….”
Marital Aid Test Kitchen: The Boditalk Escort Is Calling, But Will You Pick Up The Phone?
Now you know why they carry IPhones on the subway at 2am.
Deflation or disinflation?
Robert Ophèle
11 February 2009
“…Several months of negative inflation are not enough to produce deflation. For deflation to occur, a continuous and self-sustaining process of decline in the general price level needs to arise. There are currently several powerful brakes on and obstacles to the emergence of such a process:
* Price and wage dynamics remain very positive.
Prices excluding energy and food products are little affected by changes in energy and food prices. This was true when prices were rising and it should remain true as they fall….”
http://www.voxeu.org/index.php?q=node%2F3025
The paper deals with France and the Euro region, the dynamics are the same for the US.
with all due respect, it looks like the “deflationary” spiral is already in effect in some sectors of the US economy (though not in others), while by his def., “disinflation” is what we are currently seeing in the supermarket (sigh).
“* Price and wage dynamics remain very positive.”
I guess my perceptions are clouded by the CA view. We have furloughed state govt workers (10 pct wage cut) and unemployment at 9.3 pct in Dec and recently rising at the fastest rate by far since 1976 or so (100 pct wage cuts for unemployed workers).
Of course, if you average the wages of whomever is working (which I am guessing is SOP for macroeconomists who took an econometrics course in grad school), you get the wrong answer, as those who lost their jobs are selected out of the sample. Rising productivity and rising unemployment naturally go hand-in-hand, as deadwood is the first to get cut when something’s gotta give.
*warning, off topic*
I’ve seen a few Firesign Theater comments on here. Does anyone know what album had a skit where a teacher keeps asking the class to be quiet, and they don’t listen to her, and then she finally yells SHUT UP!!!! I want to send it to a teacher friend.
I think the teacher was named “Sister Mary Elephant”, if that’s any help.
That sounds like Sister Mary Elephant from a Cheech and Chong album.
Turns out the teacher yelling SHUT UP! was a Cheech & Chong creation of 1973. Try this link for a Windows Media clip of the skit.
That was a Cheech and Chong bit . . .
Yep. Sister Mary Elephant.
No wonder I couldn’t find a reference to it. Thanks!
Knew I could count on the HBB.
I think that was Cheech and Chong….”Sister Mary Elephant”
PBS Frontline will run a presentation called “Inside the Meltdown” on 17 February. See Frontline DOT org for details.
Can’t wait, although I didn’t read anything on the documentary to indicate they’ll mention the Derivatives nightmare.
another alltime high for euro gold and most other currencies today; plus a convincing breakout in $ gold from the downtrend of the last few months; probably a new alltime high in dollars within a few days too.
congratulations FED and debtors around the world, the future is Weimar
A little Jim Rogers fact checking:
http://www.cnbc.com/id/29117866
What’’s that called?…when you “choke off” the supply to increase the price…;-)
Exxon: “Hey Chevron, what price do you think we can get folks to tolerate?”
Chevron: “I don’t know, but I’m quite certain $4.60 per gallon won’t work…ask Mobil.”
Mobil: ” We’re thinking folks can pay $2.50, what do you think Texaco?”
Texaco: “Well oil price are going lower, what kind of an excuse can we make up that sounds plausible?”
Valero: “Come on you guys, we lost some volume, we have to make it up somewhere right?”
“…Refiners took in 214,000 fewer barrels of crude last week and gasoline production fell, the EIA reported.”
“…The companies that own refineries are seeing the same dour headlines about job losses, and have slashed production as they try do match supply with demand.”
“…That means there is less gas on the market, and consumers are seeing that at the pump.”
“Weak product demand is forcing these refiners to curtail activities, cutting runs, and that backs crude up into terminals, pipelines and floating storage, …”At the same time, it reduces gasoline production.”
The oil industry makes around 6% profit on a gallon of gasoline.. If gas is $3 a gal, that’s an 18 cents profit.
State plus Federal tax on a gallon of gas in Calif is around 60 cents, so govt makes a 20% “profit”.
Since the govt profits 3 times as much as the oil industry and therefore has a lot more to gain when prices rise than does the oil biz, why not suspect the govt is behind any increased gasoline prices?
btw, falling demand or not.. a suffering business and workforce or not… California is raising the gas tax by 10 cents a gal if i recall what i read this morning.. and the loot won’t be shared with the oil companies.
hmmm… pretty sure i screwed that up good.. hope nobody notices.
The gas tax is going up 12 cents per gallon, not 10.. but that’s not where i screwed up.
Not 12, 13 cents.
I checked today for the first time in quite a while on the buy prices for AU from Apmex.
Krugerands are 20 over spot. Last fall they were buying for 50 over spot. Either way I don’t own an ounce of gold that is not worth more than I paid for it. Silver is another issue…
I so miss Aladisane….
Should I have referred to the coin dealer as a “Bullion Brahmin”?
Aladinsane must be raking in tons of virtual money every day now…
hard to believe that I purchased gold shortly ago at EUR 540-560 (some even at EUR 340 some years ago); it’s now at EUR 740. Unbelievable how fast things are spiraling out of control …
Don’t wet yourself just yet nhz. You only have bragging rights when you sell.
Wrong, you make your money when you buy.
it’s not for making money, more a fire insurance. I’m not making any real money on this.
Just looked at 3 bdrm 2004 condo-convert less than 5 minutes away. During the boom they were selling for 200 K. I still have the sales packet. Most were sold to young couples and flippers.
Seller is asking 70K today. Pmt works out to about 800 a month, a couple hundred bucks less than rent. It’s a fancy place. Good schools for kids and University of North Florida right up the street. It was one of 3 places we looked at renting after moving here. This is a stunning new reality.
That’s probably way too high.
First, look at how much debt the condo-corporation has taken on. Then, look what the maintenance, etc. is on the place. And what happens when half your neighbors default?
Right now, any one who buys a condo in the most speculative states (FL, CA, NY, NJ, IL, etc.) is gonna get their proverbial b@lls cut off by a industrial strength pair of shears.
Hey, don’t leave AZ out of that list! Lots of people being fed their own egg sacks here.
Sorry, I wasn’t trying to be comprehensive just indicative.
I wholeheartedly agree. I HATE!! associations. It’s still stunning, however, to see the plague move closer and closer to home, to nearby neighborhoods, to observe it up close. The wait is over. The plague is here. Armageddon is coming this spring.
Couldn’t agree more mrktMaven.
Question for the brain trust……..
Company I work for is having “cash flow” issues…….(I’m at a remote facility in flyover country, HQ is on one of the coasts).
Yesterday , I received an e-mail stating that a “security breach” had happened, possibly copromising payroll data…..they recommended reporting it to the credit agencies, and possibly changing bank account #s. This, of course, would screw up direct deposits, since there is only a couple of days to the next pay period.
Today, we got notice that there will be NO Direct Deposits @ the next pay period, all payroll will be paid by mailing paychecks.
Any significance to this? What are my rights as an employee, re: filing for unemployment if a company files Ch 11 and/or a payroll check doesn’t show or bounces?
The probability is that you are not going to get your last paycheck. I would cash it immediately if I were you.
I’d also plan as best as I could on not counting on that money.
And I thought I was just being paranoid………:)
The water in this situation is muddied by the possibility that the client may want to work out a 1099 arrangement with me, if my current employer goes down the crapper.
I’d like to find another job, so I can just wash my hands of this mess, but in the last month I’ve circulated my resume to all my contacts and to a couple of specialist employment agencies…..got one call for a job I’m totally unqualified for, and started a 1099 deal on a 1-2 day/week basis (that could turn into something more substantial in 9-12 months). There is every indication that I’ll be out of work for a year, if the current economic trends continue.
The idiots in D.C. are fighting yesterday’s battle. It’s not about making the banks solvent, so they will loan money. It’s about 80% of the working stiffs in the USA being insolvent in 6 months, if the employment situation continues to deteriorate.
I’m relatively well prepared to deal with a job loss (if you can ever be prepared for that), but these idiots in D.C. are crazy if they think I’m going to go out and borrow money, and/or buy any big ticket items anytime soon.
The sooner we face up to the reality that the current administration / Congress has no inclination to help anyone but itself, the better.
They know exactly what they are doing. It’s a wild spending spree. If they thought they could get away with a 100% spending / 0% economic recovery bill, they would write and pass it in a heartbeat.
Even if i’m dead wrong, and they have all the good intentions in the world, they are proving themselves incapable of promoting a recovery. So, it’s 6 of one, and a half dozen of the other..
joey, your comments used to make me cringe but now I can appreciate your lone voice in a noisy cluttered new world order. NWO
I am scared of turning into an old skinny lady working at walmart. I hope my investments can stay along for the long ride.
Yeah, I just got an email from a hot single guy in marketing for a fancy company and he told me in one month he lost his job and already moved back to the midwest from carlsbad. He’d been there for twelve years.
Also wage claims get high priority in Bankruptcy and some states have “guarantee” funds or claim procedures for wages due. Small solace I’m sure. Good Luck and I hope we are all just paranoid and that if your lucky, someone is just stealing your identity as we speak
in the 2000 blow out I was working as a SQL server DBA for a bombed dot com.
my client hired me for a ridiculous hourly wage to retrieve his data from our now closed, off-limits and network-less data center, to find a place a host it and to get it up and running.
the job lasted long enough for me to get a new perm job. meanwhile of course that guy also imploded a month or two later.
crazy times, here we come again. I wonder how F@cked Company .com is doing these days? time to go check …
I wonder how F@cked Company .com is doing these days? time to go check …
Those responsible for listing f@cked companies on F@ckedCompany, have been f@cked.
Don’t deposit that money in your own bank. My father lost his last check that way once. Bank took it back out of his account after some other the companies other checks to them bounced.
cash the check, THEN deposit the cash in your account.
end all permissions for direct deposit so they don’t try to yank money for overpayments or some other pretext
that probably means closing current checking acct and opening new one with new acct #. not as big a deal as it sounds.
Cash it at the bank on the check……they should know if its good and GET THE CASH!
—————————————————–
I would cash it immediately if I were you.
I wish I had that same stunning reality over here on the Northern san diego county coastal area.
I am afraid to look at prices….anybody?
Just saw another one w/garage. It was directed at the luxury market during the boom. Currently appraised 210K. Originally sold for ~250K. Asking 125K today. Prime location.
The same here in Chicago. We need at least 50% drop, before it makes sense to start looking. I am waiting for 80% from the peak.
Sounds like the $15,000 house tax credit is gone, according to early reports.
WSJ:
“Lawmakers haven’t released specifics of the deal, but people familiar with the talks say the White House agreed to trim a payroll tax holiday, reduce proposed aid to ailing state governments and scale back initiatives to provide health care for laid-off workers. In exchange for giving ground on those issues, White House and Congressional negotiators restored some $9 billion in funds for school modernization, which had been stripped out the Senate bill. A measure to shield certain middle-income taxpayers from the alternative minimum tax remains part of the package, people familiar with the talks say. But the final bill would sharply scale back some tax breaks for buying cars and houses that had been adopted by the Senate.”
Good. We need less consumption, not more.
+1 Yes, that is a positive development - should it prove true.
Pure gold over on MSN. Suze gets slammed!
http://articles.moneycentral.msn.com/RetirementandWills/CreateaPlan/stop-listening-to-suze-orman.aspx
That was great! I’d love to have her and Babs “I stole Mr. Ed’s face” Corcoran face off in a death match. The winner would subsequently be fed to the lions.
Suze discusses her relationship with Kathy Travis, producer of her show:
NYT Magazine: Are you married?
Suze Orman: I’m in a relationship with life. My life is just out there. I’m on the road every day. I love my life.
Meaning what? Do you live with anyone?
K.T. is my life partner. K.T. stands for Kathy Travis. We’re going on seven years. I have never been with a man in my whole life. I’m still a 55-year-old virgin.
Suze Orman Comes Out for GLBT Financial Equal Rights:
(continued from NYT Magazine interview:)
Would you like to get married to K.T.?
Yes. Absolutely. Both of us have millions of dollars in our name. It’s killing me that upon my death, K.T. is going to lose 50 percent of everything I have to estate taxes. Or vice versa.
So what? This has nothing to do with the fact that as a financial “advisor” she’s an obnoxious whore who wrote a book called “Young, Broke, and Fabulous” in which she advises 20yo’s to leverage themselves to the hilt.
I can’t stand her, and the Advocate can kiss my a–.
Cramer’s lost sister.
Darn good article.
last para
“Three years from now, people will decide that Japanese policymakers weren’t so stupid after all,” he said. “We’re going to discover that there really was no solution, no way to snap your fingers and make it all better. The only solution is time.”
http://articles.moneycentral.msn.com/Investing/SuperModels/geithners-first-test-is-a-disaster.aspx
This fits with my current working theory: they will try like h*ll, fail miserably to contain the fallout, and thus debunk the theory that GD-I was so bad due to bad policy reactions, as well as the myth of Fed omnipotence.
The pain of the bust will be proportional to the size of the excesses.
“The only solution is time.”
IMO, the only solution is pain. We can rip off the band aid at once, or we can keep on peeling it off slowly. So time itself will not do any good. Only pain will, because after the pain is over we can start anew.
Notice how Obama’s mood changed once he got in office? I imagine he and his advisors had a chance to look at the real numbers, and were shocked.
It’s always shocking when you see how Republicans ran the place.
He has every right to be shocked. Clinton was also shocked to see how daddy and Ronnie screwed the country up too.
One more thing. Happy talk is total BS. I like the honesty. Refreshing. I’ve had enough lies to last a lifetime.
Gag
His mood changed during the transition period.
If you watched his weekly addresses on the Change.gov site, he was Mr. Grave and Serious. It was as if the man had lost his ability to smile.
You could tell that he had a major “Oh, shhhhh–t!” moment after the election.
It is shock that has been cumulating since FDR’s “New Deal”. Gov’t keeps getting bigger and bigger and there is nothing that can stop it until it eats itself. See how this is going to turn out?
He is now at the mercy of the power club , and the blind anger that put him there. An angry mob is noone’s friend, and he knows it.
The big question is where he will try to redirect the anger of the mob. Got Gypsies?
Dunno if it’s already been posted, but interesting article IMO:
Big Lessons in Finance From a Little Bank You’ve Never Heard Of:
What’s striking, however, is the attitude Price expresses in talking of the new program. He’s enough of a profit-making businessman to know that when the government is offering 5 percent equity money, he’d be a damn fool not to take it, even if his bank is already well capitalized. And yet he’s sensitive enough about obligation that he feels comes with taking taxpayer money that he was anxious to use it in a visible way to benefit his community and his customers, as well as his shareholders.
In truth, Citizens won’t literally be using its federal bailout money to make these mortgage loans. In fact, no bank would — using money that costs 5 percent to make 5.5 percent loans won’t get you very far in the banking business. But what each dollar of government capital does for Citizens, or any other bank, is give it the ability to go out and borrow another $9 from depositors or the Federal Home Loan Bank at a rate of 2.5 percent or less.
Anyone else notice that even though the dollar is very strong vs. other currencies (index at 86 - right at 2-month highs and close to the recent peak of 88), and that oil is plummeting (new multi-year lows today), that gold is at 6-month highs? Seems to be quite a disconnect there these days.
Just wondering.
OIl as measured by West Texas is not an indication of the price of oil in the demand market. The price of gas is far more accurate.
prices as of 21:20 pm GMT
Brent Blend 44.18
Tapis 51.93
Alaska North Slope 37.50
Dubai 1M 42.74
Louisiana Sweet 44.20
Urals 43.33
WTI 35.90
Oman 1M 44.68
Minas 54.28
Forties 44.23
Bonny Light 47.38
It is just manipulation of a small part of the market, not the price that we pay for imports.
This is probably too late in the day to ask, but all things considered, oil kind of looks like a buy right now, at least as insurance. It tested the lows and seems to have found some kind of appropriate price.
Short of trading actual commodities contracts, what’s the best way to take a position in oil vs. the dollar? USO? USO options? OIL? Stocks of actual oil producers (don’t like that, I think the people running them are morons, although they are good at getting fat tax breaks)? Something else?
Worried about picking up USO leaps in that sometimes these index instruments can behave in strange ways, and who knows what happens over the next year or so. Am I just being paranoid?
Paranoid, no. All reasonable questions.
The average price of oil traded in the US is currently $48/bbl. The NYMEX deals in oil at Cushing, OK. ever hear of it?
“Delivery
F.O.B. seller’s facility, Cushing, Oklahoma, at any pipeline or storage facility with pipeline access to TEPPCO, Cushing storage, or Equilon Pipeline Co., by in-tank transfer, in-line transfer, book-out, or inter-facility transfer”
Cushing can handle 2MM bbls/day with total storage of 44MM bbls.
USO is tied to front month Cushing NYMEX futures. There are no storage spaces left to hold the oil. It is one reason why prices are higher overseas - fewer oil tankers to transport.
Oil appears to be historically cheap relative to other essential commodities. If the Hoteling rule is to hold at some point in the near future the price of oil should reflect scarcity. Each dollar drop causes more and more producers to shut off marginal wells from Southern Illinois to Canada. At this price Canada should shut down all tar sands as cost ineffective.
USO is an excellent play for a longer term investor. I do not pick bottoms, oil might go to $10 (although, I think it won’t). I know that in 5 years oil will be closer to 200 than to 50. Ergo an investment of $26 will result in a nominal 400% profit over the next 5 years.
So where would oil be if those currencies weren’t weakening? $25? $20?
Could $30~$35 bbl be all she wrote?
Blue Sky said:
“14Tr….gosh, that’s only about $300,000 per taxpayer. What’s the beef?”
100 million households, so, $1K each is $100B, $10K each is $1T, and $100K each = $10T. Are you saying only 1/3rd of households pay taxes?
I went with half, it’s an easy niumber; $280K each. Quibble about the fraction, it doesn’t change the order of magnitude. With numbers like that, it’s OK to use the sliderule.
I spent most of my working life wondering where all the money came from for all those fancy boats and cars and houses.
YUP no safeguards for credit card holders…they have until june 2010 to screw everyone anyway they can…before the Cc bill of rights kick in….yes kongrezz gave cc companies 18 months to jack us around.
Solvency for the banks…so how will they survive with tens of millions of insolvent customers?
How long till China starts to directly subsidize shipping costs?
Why, the cost of shipping American Girl dolls from China to the US is insignificant?
A dry bulk ore carrier costs $12,000/day, 10,000 tons of ore uses one hatch. The cost to ship is not a material factor. It is far more expensive to have demurrage costs from the goods sitting on the dock. .
Nice trade Vozzie
To gutsy for me, but you deserve the profits.
I buy the parent, you buy the child and the child goes darting up. MS
you know, its served with a side of Mit-Sushi.
cant wait for the Cordial.
you knows I likes to drinks after I eats…
Good ol boy!
I eats cuz I drinks and I drinks cuz the doc says it aint good for me and I says “there are more old drunks than there are old doctors.”
Looking at buying a delapidateed house up here for 50K and getting my tax credit by renovationing and then moving some kin folk out of the area! Whooo whooo peace,quiet and fewer nagging pests.
Commercial rents are cratering in my neck of the woods. Im thinking the Commercial slide picks up a bit more speed. Though I would like another house, a new office space would be better suited for her- she needs more hobby space as she loves doing taxes. Good thing too, cuz I hate taxes…
not quite buying time, but we are getting there.
Just don’t buy it in one of those craters! Many of them are still active and could erupt. Typical Oregonian looking for a Mt. Hood enema.
February 11, 2009
$171B Worth of Loans To Mature in ’09
SAN DIEGO-The Mortgage Bankers Association released the results of its new Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes at its conference here this week that reports $171 billion of commercial/multifamily mortgages held by non-bank lenders and investors will mature in 2009. According to the survey, the volume of loans maturing varies considerably by the type of investor holding the loan.
Short-term floating-rate mortgages in CMBS and mortgages held by credit companies, warehouse facilities and other investors are more likely to mature in 2009 and 2010 than are fixed-rate CMBS mortgages, mortgages held by life insurance companies or multifamily mortgages held or guaranteed by Fannie Mae, Freddie Mac or FHA. Approximately $120 billion of non-bank commercial/multifamily mortgages are scheduled to mature 2010. …”
Globe Street
What are rates on hard money these days?
(The lazy want to know)
Long junky loans short financial institutions is just an old fashioned arbitrage…
18% junk bonds.
junk financials….2.78%.
Little perfect blue buildings.
Little boxes made of ticky tacky,
Little boxes on the hillside,
Little boxes all the same.
There’s a green one and a pink one
And a blue one and a yellow one,
And they’re all made out of ticky tacky
And they all look just the same.
Ms. Malvina Reynolds
You talkin’ about Daly City, bro’?
Ms. Reynolds wrote this about Daly City, but Mr. V is writing about the long junk bank debt (current yield ~18%)/ short banks stocks (current yield ~3%). Government bailout (if the Treasury dept wants private investors to pony up, they will have to bailout the current bond holders) brings the bonds to 6% yield and the stock should be unchanged from the dilution. If the government lets the banks fail, there are enough assets to cover the bonds for 38% plus the stock is worthless, risk is 0.77%. It is a nice risk reward. In 1996 this would have been done all day long to the max. No more. Many other places and countries to invest with less risk.
No reasonable bond investor will touch a bank bond if the government keeps confiscating them without due process. aka BK or FDIC liquidation hearing.
2.11.09
Treasury Operations:
142.448 submitted. all accepted.
107.747 Maturing. add 34.701 billion.
still adding dollars….at an alarming rate..
and the “men of the people” on Capitol hill have the “private bankers” answering questions…..
the theatre of the absurd has no demon.
Raining dollars….
It’s Raining money! Hallelujah! - It’s Raining money! Amen!
I’m gonna go out to run and let myself get
Absolutely soaking wet!
It’s Raining Money! Hallelujah!
It’s Raining Money! Every Specimen!
Pink, blue, yellow and green
Weak and strong and devalued and obscene
NEW YORK, Feb 11 (Reuters) - Stanford Financial Group, which says it oversees more than $50 billion of assets, is being investigated by U.S. regulators over its business, a person familiar with the matter said on Wednesday.
The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) are looking into the company, the person said.
Earlier Wednesday, BusinessWeek said in its online edition that the SEC, FINRA and the Florida Office of Financial Regulation were investigating Stanford’s ability to pay high yields on CDs, even as it invests CD money largely in stocks, real estate, hedge funds and precious metals, many of which have lost value in recent months.
The report comes as investors, politicians and regulators focus more on the returns that investment firms promise and actually provide, in the wake of accused swindler Bernard Madoff’s alleged $50 billion Ponzi scheme….”
I really hope it is not a ponzi scheme… This would make Madoff’s look like a piker.
I would be surprised if it wasn’t.
MSFT Balmer added to depression camp. Anyone else?
He’s just justifying the company’s crappy performance. No innovation, nothing works right and the stock price reflects his lack of leadership.
“…His warning of a protracted downturn that COULD become a depression…”
The entire letter to Congress on why he wanted them to sign the stimulus bill.
Ballmer to Congress: Act Now on Stimulus Agreement
http://microsoftontheissues.com/cs/blogs/mscorp/archive/2009/02/11/ballmer-to-congress-act-now-on-stimulus-agreement.aspx
U.S., Russian satellites collide in space
By Jim Wolf
WASHINGTON (Reuters) - A privately owned U.S. communications satellite collided with a defunct Russian satellite in the first such mishap in space, a U.S. military spokesman said on Wednesday.
The crash, which took place on Tuesday in low-earth orbit, involved a spacecraft of Iridium Satellite LLC and a Russian communications satellite, said Air Force Colonel Les Kodlick of the U.S. Strategic Command.
“We believe it’s the first time that two satellites have collided in orbit,” he said, adding the debris was potentially a problem for space operations….”
If this weren’t Reuters, I would suspect the Onion. How the F**k do satellites collide in space. Luke Skywalker couldn’t even shoot the bad guys at close range with a laser blaster in space.
They don’t. There’s more to this story than is being told. What, is unclear and we may never know.
..might be a message to Iran who was so proud to announce it’s first launch last week. “We may or may not allow you in our space.”
Well, i’m sure that message was sucessfully sent.. question is if it was deliberate or not.
or may be a message “from russia with love”….
..Iridium, of Bethesda, Md., uses more than 60 satellites to provide voice and data services for about 300,000 subscribers globally. It said the collision has “minimal impact” on service due to its backup capacity.
Now if I were the Pentagon and planning ahead for any imaginable contingency, I might make a profitable deal with some private company to modify one or two of “their” satellites.. maybe pull most of the communication gear, fill it with fuel, add a couple directional jets.. This thing could maintain orbit forever… and when required could target whatever i wanted it to.
So, for whatever reason, we take out a defunct Russian military unit (nuke reactor onboard). It’s tame on the face of it. Who could claim it was deliberate? There’s no reason a private company would do such a thing.
If the Russians aren’t responsible, it sure looks like an accident to them. (btw, the collision happened over Siberia).
And there’s no reason to think otherwise.. except for the anonymous, cryptic late night phone call Ahmadinejad received last month.. or that strange intel blurb that passed by Putin’s secretary’s desk.
But if such things really happen anywhere but in spy novels, this scenario is likely 5 levels below and way off to the side of what actually went down.
My theory: spooks killing two birds with one stone (pun intended).
E.g. they test satellite-killer technologies, and at the same time give a credible excuse for needing to launch more Iridium satellites with new-and-improved sat-phone eavesdropping technologies.