Bits Bucket For March 1, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Nah first
Did anyone watch the ABC world news last night? They covered Buffet’s letter, then said however bershire stock did relatively well last year being only down 10% vs 38% for the S&P. I’m like WFT did he just say? The book value dropped 10% but the stock was down like 40%. I’m sure I was just hearing things. But THEN they keep going on, and have one of those cheesy ‘interviews’ where the news anchor goes deeper but asking the reporter some ‘canned’ questions. Then they both start saying stuff about how stockholders must be happy only having lost 10% in Bershire stock. Is this the level our MSM operates on, they can’t take 5 seconds to plot the chart to see how much the stock dropped before going on the air and making complete fools of themselves?? Did anyone else see this? Truly a bunch of jack*sses.
I’m telling you, the real crisis is a crisis of transparency. The whole financial sector is a house of cards built on cronyism, distortion, and outright fraud. Read “Liar’s Poker” by Michael Lewis.
Excellent book, I finished it a few months ago, and really enjoyed it. Make sure you bring a barf bag, this is a journey inside of the lives of the “best and brightest” on Wall St. Trust me, you will be as thoroughly disgusted as I was/am at how this whole system works.
It is very difficult to “out” ‘da flock. It is even against the law in some countries to speak about them. Obama is surrounded by them, hemmed-in tight, little room to maneuver. Too many citizens have become slaves, the yolk of debt fastened securely. A total “dog-n-pony” show, this government by the people.
Debtbeats…
Defaults drag down prospects for builders
Efforts to reduce costs not paying down debt
By Mike Freeman
Union-Tribune Staff Writer
2:00 a.m. March 1, 2009
As San Diego’s housing downturn drags into a fourth year, homeowners and home builders are increasingly having the same problem: keeping up with their mortgages.
In the past six months, a series of builders has defaulted on loans or lost property to foreclosure. Loans taken out to construct neighborhoods or buy land are coming due after years of slower-than-expected sales, leaving builders with many empty lots and not enough cash flow.
http://www3.signonsandiego.com/stories/2009/mar/01/1n1default215430-defaults-drag-down-prospects-buil/?zIndex=60337
“In September, HomeFed, the master developer of San Elijo Hills in San Marcos, repurchased a 131-unit condo site for $6 million from national home builder D.R. Horton. Horton had bought the land three years earlier for $36 million. Curt Noland, a vice president for HomeFed, said D.R. Horton was motivated to sell before the end of year because of tax reasons.”
“Land has lost 95 percent of its value,” said Graham Weiss, president of GW Realty Co., which specializes in residential land sales. “If you were selling a home for $400,000 and now you’re selling it for $275,000, most of that (decline) comes out of the land.”
That’s quite a hair cut on the land. I thought they weren’t making any more land?
“Land has lost 95 percent of its value,” said Graham Weiss, president of GW Realty Co., which specializes in residential land sales. “If you were selling a home for $400,000 and now you’re selling it for $275,000, most of that (decline) comes out of the land.”
Music, sweet music. In some areas, one could argue that land is worth less than zero as homes are selling for much less than the cost of construction. Nothing makes me more happy than to watch land crater. When I was looking for small acreage several years ago, I was completely shut out of the market by developers who swooped in and bid the prices up into the stratosphere.
That is because land, in most (nearly all) areas of the country is essentially worthless. There’s more land then we can possibly consume in 100 generations in most areas, it’s like charging for air; good F-ing luck.
Waterfront land, land in major cities, and other restricted areas can have a real shortage. But places like Vegas? Or California/Florida (anything off the coast)? Have you people ever seen a satellite map of CA or FL? Except for a narrow strip along the coast, nearly the entire state is empty. In FL, as soon as you’re 5 miles off the coast (anywhere but Miami) your in the boonies. I’m talking totally undeveloped, land for miles, shoot a cannon, do a nuclear test style boonies. Take a drive across Alligator Alley, or better yet, Rt 60, and then tell me we have anything that even approaches a land shortage in FL. That’s why places like Wellington/Weston/anything west of the turnpike the land is really only worth what it costs to put a house on it. Raw land out there MIGHT be worth 1K/acre.
“There’s more land then we can possibly consume in 100 generations in most areas, it’s like charging for air; good F-ing luck.”
This has been my point years before there ever came a bubble. What is it something like 90%+ of the US land mass is UNDEVELOPED? Raw land regardless of area is an expense, year after year unless you’re tilling it for crop or cutting timber from it and even then, after paying local property tax extortionists, it seldom pays.
A lot of Florida is so-called “waste land” which is not even productive for agriculture nor could it readily be that way.
Even JAX, one of Florida’s oldest cities (don’t believe the hype about St. Auggie–it was, and is, a village) is pretty much a city with a suburban ring, and then … nothing. It’s friggin’ empty.
Technically the only land getting made these days comes out of volcanoes, mid-ocean trenches, or in a few cases, land fill in coastal low lands. But the important point is that the price of existing land can fall by quite a lot in a crash. In fact, the same shortage of land that makes the price hypersensitive to demand during the boom morphs into a faster crash when demand falls. Surprisingly, the supply curve for a fixed supply of land can actually slope down to the right, suggesting that when demand drops and the bubble bursts, the popping bubble results in a self-reinforcing increase in the quantity of land supplied in conjunction with a decline in the price.
The implied short-term equilibrium price can actually go negative, as there is cost of capital losses to holding on to land when its value is falling by 95 percent or so which would translate into a negative price under the assumption of rational expectations. BTW, I realize none of you may have covered the case of a downsloping supply curve in your college economics class, but it makes sense when you think about it, as nobody wants to hold on to falling knives if they can avoid doing so.
Falling knifecatcher is rethinking investment in big C.
UPDATE 1-Abu Dhabi reviewing Citigroup investment -sources
Sun Mar 1, 2009 1:47pm GMT
By Stanley Carvalho
ABU DHABI, March 1 (Reuters) - Abu Dhabi is assessing its $7.5 billion investment in Citigroup (C) as the bank’s problems deepen and consequences of a possible nationalisation become clearer, according to sources close to the Abu Dhabi Investment Authority (ADIA).
ADIA invested $7.5 billon last year in Citi through convertible bonds that pay 11 percent in interest, but it must start converting the bonds into 235.6 million shares in Citigroup from March next year.
“Nothing has changed from ADIA’s perspective at this point. ADIA’s convertible bonds are due for conversion in a phased manner between March 2010 and September 2011, and that stands,” an Abu Dhabi government official told Reuters.
“But it is carefully assessing its options due to the latest events — although no decision is taken yet,” he said, declining to be named.
A spokesman for ADIA, thought to be the world’s largest sovereign fund, declined to comment.
This is kinda funny. Looking back on all the “plans”, the foriegn savior was in style for a while.
BTW, some posters are putting multiple links in a comment. That ensures your comment will be in spam box hell until I can get down there and sort it out, which might be days.
that sounds more like Spam Box Purgatory.
“Abandon hope all ye comments that end up in Spam Box Hell”
“…in spam box hell” and as one of our creative posters noted, lost and shrouded in the mysterious Arizona Haze…forever.
Spooky stuff Huh ?
I must keep the condemned souls of spam box hell in stiches, because they never let my dirty jokes see the light of day.
Are there a set of rules for posting? I would never have guessed multiple links although I doubt I have tried.
Ben,
It would be really helpful if you could outline what will land our posts in purgatory so that we can avoid doing it in the future. I’ve had a couple that went into the spam box and never seemed to come out, and, while a very minor annoyance, I’d like to avoid it in the future if at all possible.
Or a login system for those who post here often? Or a tag we can add to the end of our posts that gets stripped off, but let’s the system know not to flag as spam? Trusted poster tag?
‘Or a login system for those who post here often? Or a tag we can add to the end of our posts that gets stripped off, but let’s the system know not to flag as spam? Trusted poster tag?’
What good ideas, Michael! Yeah, Ben, do this! And be sure to put ME, Olympiagal, on the list of ‘trusted posters’.
I, in return, will not discuss cannibalism, Sweet Baby Jeebus coming over to hang out and drink beers on my porch, leprechauns and/or Bigfoot, or make cruel jests, or point out other posters’ numerous character flaws, or all the other things that seem to result in my posts being so frequently filtered out*. Nope, none of those, and that INCLUDES discussing my panties.
*Unless it’s, like, totally germane to the discussion. But you can trust ME.
Not everyone who suffered last year from “worse than expected” economic outcomes is placing the blame on events which “nobody could have foreseen.”
Buffett Takes Blame For Firm’s Ugly Year
Berkshire Chief Cites Purchase of Oil Shares; Fourth-Quarter Profit Plunged 96 Percent
By Josh Funk
Associated Press
Sunday, March 1, 2009; Page A14
OMAHA, Feb. 28 — The widely followed investor Warren E. Buffett issued his annual letter to shareholders yesterday, accepting blame for Berkshire Hathaway’s worst showing in his 44 years as chairman and chief executive.
“During 2008 I did some dumb things in investments,” he wrote, adding later, “I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
Does it make sense to try and eat from the hand you bit?
Buffett defends using derivatives at Berkshire
Sat Feb 28, 2009 7:59pm GMT
By Jonathan Stempel
NEW YORK (Reuters) - Saying “derivatives are dangerous,” Warren Buffett defended his use of them after they played the main role in driving Berkshire Hathaway Inc annual profit to a six-year low.
Live by the sword, die by the sword.
Berkshire & Tide detergent will not be found in America…after…2010
Everyone here who said Buffett was making mistakes pat yourself in the back. (wasn’t me, but others did)
Most everyone did with the put options he wrote. He was counting on inflation to do most of the heavy lifting but that depends on wage inflation which seems unlikely with Chindia waiting on the sidelines.
Also, read about his misinvestment in Conoco Phillips.
As always, the letter is totally worth reading in great detail but he seems to have grasped the endgame of the FIRE economy only after making some of the bets. He’s changing his tune rapidly (look at his muni bonds insurance section.)
“…wage inflation which seems unlikely with Chindia waiting on the sidelines.”
I don’t suppose unemployment ramping up towards ten percent tends to create much wage inflation, either. What’s worse, with CA state employees getting furloughed out of ten percent of their pay and many private sector workers taking a pay cut to keep the company afloat, even those who are still working are facing circumstances likely to contribute to asset price deflation.
You’re Prof. Accountant, right?
Cash-flow to pay for afore-mentioned mortgage = discounted cash-flow from income.
No income = no payments implies foreclosure implies bank must sell asset at the then prevalent discounted cash-flow from income which intersects with massive oversupply of labor = lower wages = lower prices.
Fancy schmancy way of saying home prices are falling, d*mbass!!!
“Fancy schmancy way of saying home prices are falling, d*mbass!!!”
Drinking again, and on a Sunday no less? Bad Pussycat…
I don’t gamble…unless they allow ME to cheat too
Hahaha, looks like all the higher taxes and big government Buffett always advocated ain’t helping his returns, couldn’t happen to a better guy.
That’s some faulty logic and reasoning there LA girl.
It’s called a red herring argument or a non-sequitur. But infestorgrrls everywhere blame the bear market on the mean ol’ gubmint. Usual bogeyman = No explanation needed.
Are you trying to say the market doesnt respond to the government? I’d hazard a guess that Berkshire Hathaway lost the most last year in the 4th quarter when it became obvious that the government was going to expand.
I’m saying the government is responding to the market, and the market would have tanked long ago (along with Bear Stearns and Lehman) if the gov’t and the Fed hadn’t stepped in with its bailout shell game of keeping them from hiding the real market value of their bad bets. Instead the slide is happening more gradually than it would have otherwise.
Only an Ayn Rand tool (like Greenspan) would believe that bull-oney about the Wall Street collapsing because the free market is being attacked by socialists. If anything, the socialists are trying to save the unsavable.
Your guess is crap. We all know why the markets dove in the 4th quarter — in fact we at the HBB knew before almost anybody else.
Government expansion is the only thing keeping us from a failed country best described as Mad Max meets Oliver Twist.
So you would say government expansion has made us a successful country?
No more than a life boat makes for a successful cruise. Too bad they didn’t have more of them on the Titanic. Of course the Titanic designers said that their ship, like real estate and stocks, couldn’t go down.
Sooo We need more lifeboats or unlike the Titanic the US canot sink. I am personally already seeking a lifeboat so I can get in on the endgame action early
I don’t get people who whine and moan about inflated housing prices all day and then don’t bat an eyelash at 39.6 federal tax brackets (coming soon under O’s proposal); 9.75% sales tax (coming this summer in LA - thanks Mayor Villaraigosa); and all the other myriad of car taxes, gas taxes, fees and crap we pay the government. Wake up people.
By the way, for the non-socialist, non-envy mongers here, John and Ken from am 640 KFI are staging a huge tax protest in Fullerton next Saturday. LAIG will be there front and center!
I don’t get people who whine and moan about inflated housing prices all day and then don’t bat an eyelash at 39.6 federal tax brackets
It might have something to do with years of lay offs, offshoring, pay cuts, etc., while the uber rich got richer and richer. And the fact that the gov’t will grow regardless of who sits in the white house and controls congress. So they figure that the high income earners can do some of the heavy lifting for a change.
I hope that they are as successful as the Chicago Tea Party rallies.
No way, LAIG. The masses don’t feel sorry for the rich anymore. They did more to cause this mess than anyone else, and now have also become the biggest welfare queens in history.
I’m glad to see ‘em get taxed more, since they can help pay for their own bailouts.
We were already at about 37% under the Bush tax cuts between federal and California, not counting the subsidy my husband gives MediCal by seeing patients at $23 per consult. Now we have more of an incentive to make less money….
But but but…. we NEED rich people!!!! LMAO..
A 39% marginal rate for these rat bastards is waaaaaaay to generous.
la - you can always move you know, there are some states with not state income tax and some with no sales tax.
If you don’t like the Obama taxes — which by the way don’t kick in for another two years — feel free to go back to the tax rates as they were under President Reagan.
As I kept telling my Republitarian friends, your taxes were raised 4 years ago, you just don’t have to pay them yet.
I may not agree with all of O’s strategies, but this ain’t his fault.
You people don’t realize that you are falling for the whole “rich vs poor” divide and conquer technique. Class envy is engineered in Argentina and the result is that the poor *hate* the middle class guy (rich by their standards, lower middle class by ours) and blame him for the crisis. The “rich” that would pay a high income tax are not the ones who created this mess. It is the “super elite” for which the term “rich” does not do justice that created this mess and these people are practically above the tax code. Higher tax brackets are designed to prevent the “rich” from joining the “elite” or accumulating enough wealth to be a threat.
Also, the idea that government is “saving” the economy by allowing a “slower decline” shows a complete ignorance of economics. The only thing the government has done is transfer wealth from producers to consumers thus destroy the capital base of the country (world). The government does not produce anything and can only reallocate resources by threat of violence against those who acted responsibly.
So are you saying that people who have jobs aren’t producers?
And those very same people who have jobs are not somebody’s customers?
Any money spent by the government is consumptive spending… just because someone produces does not mean they produce more than they consume. The government is subsidizing over consumption by taking money from those who under-consume (savers).
The result is a destruction of the capital base (savings) to fund present consumption in the false belief that consumption can precede production.
What kind of stupidity is this to blame your average doctor/accountant/lawyer who makes 250K-400K for the nonsense that went on on Wall Street? The people who cheated and profited are long gone with the money, anyway they don’t get paid by paychecks they make dividends and stuff, soaking the “rich” educated professional class only sinks our economy down further. Duh.
Expecting the wealthy class to return a small portion of what they’ve been given is not “soaking the rich”.
Nice try.
“Expecting the wealthy class to return a small portion of what they’ve been given is not “soaking the rich”.”
You seem to be wealthy class wannabe. If you ever make it, your tune may change.
“You seem to be wealthy class wannabe.”
So I strive the same economic security that every other person on the planet desires which is unique in what way? Do you hear me squealin’ and whining about paying income taxes that I rightfully owe?
I have a responsibility to demand that those earning big $$$$ pay the at least the same percentage of their income in taxes that I do.
Looks like the Obama plans to backstop real estate prices aren’t helping real estate investors make any dough, as home prices are still dropping at the fastest rate in recorded history, and at an accelerating pace no less! By the time prices bottom out and stay there for twenty or so years, I expect lots of self-styled real estate investors will have lost the shirts on their backs.
“… home prices are still dropping at the fastest rate in recorded history.”
Keep in mind these dropping home prices translate into an awful lot of vanishing bank collateral, which means an awful lot of taxpayer money is going to have to flow into the banks to keep them solvent.
Support the NAR; They’re the guys who are spending their own money trying to convince FBs to hang on to their alligators and keep up with the payments rather than walking and leaving the taxpayers holding an empty bag.
‘Support the NAR….’
‘ My name is George. I’m unemployed and I live with my parents.’
re: banks
combo think you’ll like this.
(add http://www.) miamiherald.com/134/story/926956.html
–
When I hear Billions for Real Estate, I smile, here’s one building where loses will exceed one billion (YES, one building, ONE BILLION)
–
This is also a shedenfreud on steroids story.
‘ My name is George. I’m unemployed and I live with my parents.’
It’s only funny until it happens to you. For a lot of people, it’s become their only option. I had a friend who lost his job and had to move his wife and three kids into his parents place. I don’t laugh at the trials of the unemployed. It’s just not funny.
I remember when my wife and I were looking back near the peak, fall of 2006. Realtors’ office handled two houses next to each other; put the picture for one on the MLS printout for the other. Wife and I made an appointment for the cheaper house, listed for $549k, I think, which we thought was the nicer one, listed at $699k. Well, we weren’t too long into the walk-through when we figured out something was screwy. The tour was aborted after we started waving around the printout, pointing out things that weren’t jibing, and everybody realized the mistake . The realtor didn’t really say anything nasty after we told her the house was way out of our league; she just literally– I mean, literally– put her nose straight up in the air, looked right through us, and bade farewell to our realtor. I would be absolutely delighted if that realtor were unemployed now. You really should “Be nice to people on your way up….”
I don’t laugh at the trials of the unemployed. It’s just not funny.
Agreed. Not everyone getting is a bum, a scammer or a deadbeat.
‘It’s only funny until it happens to you. For a lot of people, it’s become their only option. I had a friend who lost his job and had to move his wife and three kids into his parents place. I don’t laugh at the trials of the unemployed. It’s just not funny.’
You don’t watch Seinfeld do you? Check the Wiki on my George quote and see how the NAR is criticized here. We hammer them. Maybe if we do the opposite, we would get a softer landing? WE do want a soft landing. This is not getting funny any more.
home prices are still dropping ??
Commercial also…Generally speaking CAP rates have jumped min. 15%…Some area’s have jumped 30% +…The vultures are circling as the sellers are cutting each other up…No emotion decision making in commercial…
Me thinks that Global Warming will cause many coastlines (most of southern Florida) to be under water. That of course means that these folks will need to move inland and I think that will happen before 20 years goes by.
So folks in Florida may be under water in more ways than they thought!
I personally don’t think DINKs (dual income — no kids) should speculate on buying up single family housing. I expect Mr Market will teach these greater fools the lesson of a lifetime in the next two decades, as their “smartest guys in the room” real estate investments go along a similar path to the Japanese real estate market’s from 1989-2009.
Speaking of smartest guy in the room, where is Tom Adkins? I need to feed my TA “jones”. The TA Peter Schiff vids on Medcafe are getting old.
Roidy
P.S. This doesn’t surprise me about Warren B. He is getting along in years and doesn’t appear to understand the current environment. Poor guy seems to think that Wall Street is for investors instead of actually a rigged roulette game.
RE: WB
Yep, he lives in corn-fed-beef country where a hand-shake and a smile still mean something, not eff-you.
Oh, please! WB is no cow-poke.
You might want to read sometime what he did to the Buffalo newspapers and the lawsuit that followed on anti-competitive stuff.
I wouldn’t fall for the gee-shucks-i’m-just-so-ornery routine. His parents and grandparents were both in DC politics and he was born with a silver spoon on third base.
Is he absurdly smart? Damn straight!
Is he really clever in manipulating his image? Damn straight as well!
I’m not a big emoticon guy, but perhaps I should’ve added this:
Hahaha, looks like all the higher taxes and big government
Er, um, he was reporting the results for 2008, you know.
RE: Hahaha, looks like all the higher taxes and big government Buffett always advocated ain’t helping his returns, couldn’t happen to a better guy.
Alright, LAIG…long time no post.
Nice to see you back with the pack!
“Nice to see you back with the pack!”
+1 I value everyone’s opinion.
” looks like all the higher taxes and big government Buffett always advocated ain’t helping his returns, couldn’t happen to a better guy.”
I agree. You Go Girl!
where have you been?
Warren would never make a good “day trader” or Vegas gambler, because then… he’d have to always tell/boast about his winnings, while forgetting to mention his x1 or x2 bets that he made that went…somewhat wrong.
Buffett discovered long ago that he is not a trader. He diddled around with charts and such until he came across Ben Graham’s writings, and that’s when he saw the light, that’s when he became an investor rather than a speculator or a trader.
He was lucky; He discovered who he was (and who he wasn’t) at a very early age. Some people take a lot longer to make this discovery. Some people never make it at all.
I wouldn’t believe everything he says. He’s as obsessed with building a mythology as any other rich man.
He played around with pairs-trading and capital-structure arb plenty. Also, his speculation in the silver futures market is fairly legendary and has been for the better part of 20 years.
It’s basically a function of size. Once you hit a certain size, you can only do certain kinds of stuff (like value-investing) because the rest of the stuff is capacity-constrained.
“…It’s basically a function of size.”
You keep mentioning this…
Perhaps you have forgotten my thoughts on timing.
Timing is everything.
Particularly if you don’t have the size.
Y’all are sooooooooooo easy.
size matters, so she says.
skill matters
laughter matters
Timing is everything.
Skill = timing.
Redundancy alert!
skill = right timing, check.
mistiming = laughter.
redundancy has its applications.
Pesky Pussycat.
Skill = right timing.
wrong timing = no skill = FAIL
laughter = desperate backup recovery device.
But you’re right, failure needs a backup plan.
That’s not redundancy though. That would be a second Blue Skye waiting in the clothes closet ready to jump out and substitute.
laughter = desperate backup recovery device.
only for children.
Success is the result of a series of course corrections.
Blue Skye has no closet. good thing!
PB - have you read the Berkshire 2008 annual letter? Much of it relates to what is discussed here on HBB.
http://www.berkshirehathaway.com/letters/2008ltr.pdf
Berkshire’s Corporate Performance vs. the S&P 500
1965…2008
(Hwy, impersonating Jay Leno): Shut up!
It’s a good thing I didn’t listen to WB’s recent call to buy. On top of everything else, you know his losses are going to weigh heavy on individual investors. We could be on the verge of a market crash or the mother of all short squeezes, as a result.
Enjoy
http://www.miamiherald.com/134/story/926956.html
Scientific question: Are women’s brains wired to make them more adept at managing investments than men are?
Failing at Harvard: Ivy Cash King Tumbles
Harvard University Pays the Price for Exotic Bets
By BERNARD CONDON and NATHAN VARDI
Forbes dot com
March 1, 2009
…
The strain of market turmoil is visible in staff turnover at the management company, which axed 25% of its staff recently and is on its fifth chief in four years. Mendillo, 50, came to Harvard last July after running Wellesley’s small endowment. She declines to comment. But how much blame she should get is unclear; the big bets on derivatives and exotic holdings were in place before she got there. The bad bet on interest rates–a swap in which Harvard was paying a high fixed-interest rate and collecting a low short-term rate–goes back to a mandate from former Harvard President Lawrence Summers.
Jack R. Meyer, 64, a revered money manager who headed Harvard’s endowment until 2005, offers a few guarded comments. “The liquidity thing most concerns me–that should not have happened,” he says. Though he wasn’t there at the time, Meyer says Harvard Management bought the commodity and foreign stock derivatives as a way to get exposure to those asset classes while freeing up cash to put to work elsewhere. The strategy, he says, “drained liquidity” from the endowment in recent months. “Many endowments stretched too far, and I think Harvard did as well,” he says.
A well edowed woman who knows how to manage her assets……….priceless.
Problem is that she’ll be cleaning out sloppy seconds for a while.
+1 LOL!
Problem is she’ll be busy cleaning out sloppy seconds for a long time.
patience….
Lawrence Summers? THE Lawrence Summers who heads the White House Economic Council?
This is the same doofus who has marginalized Paul Volcker’s input into Obama’s policies, argued for supply side economics, lobbied Chris Dodd to remove caps on executive pay, mentored Tim Geithner, and wants all of the stimulus budget to go to tax cuts?
Why this guy gets any traction at all as an academic economist after all the wrong calls he has made just amazes me. When pompous windbags like him call the shots that I really do start to believe that Team Obama really doesn’t have a clue.
But he’s from Haavaad
“Why this guy gets any traction at all as an academic economist after all the wrong calls he has made just amazes me.”
Because he runs with, ‘da flock.
I’m waiting for the women academics in Obamaville to run his arse out, too….
Very perplexing pick. Anyone here have any insight? (No knee-jerks, please.) Hoz, maybe?
THE Lawrence Summers who hypothesized that perhaps women’s brains are not properly wired for scientific endeavor (but that doesn’t mean they aren’t better than men as investment managers…)
Book Review
Men, Science And Evolutionary Theory
Harvey Mansfield, 02.26.09, 12:01 AM EST
In a new book on human biology, nurture loses to nature.
Men: Evolutionary and Life History
By Richard G. Bribiescas (Harvard, $17.95)
“It doesn’t take a degree in biology to notice that men and women are utterly different.”
Imagine Larry Summers making that statement when he was president of Harvard, instead of the much milder query he raised about the capacity of women in science that was surely one factor in his ousting as president. Yet here is a Yale professor, published by Harvard University Press in the new paperback edition of Men: Evolutionary and Life History, going much further than Summers in the opening sentence of his book.
I listened to Summers talk once (in person). He is a friggin’ meathead, okay? For once the profs weren’t totally powerless against an administrator because he made one stupid comment and stupid move too many (he lost his whole Afro-American studies dep’t to Princeton) and they ran him out of town on a rail.
Why this guy gets ANY traction is a damn good question!
I think it’s a matter of providing intellectual cover for the powers that be, like the way Plato of all the Greeks was preserved instead of burned by the Christians.
‘like the way Plato of all the Greeks was preserved instead of burned by the Christians.’
Or else stuffed into a shadowy cave!
Hahahahahhah!
That’s like, funniness or else irony, there.
If I recall correctly I recently read that Stanford’s endowment lost roughly 30% +….
Those guys still got 20 & 2% for running the Harvard fund didn’t they?
Dudes, Dudettes,
I’m in a dark place, and I need to start running more and writing more music to manage my anger and mood swings. No time for ruminating on the intarwebs. I’ve reached information-critical-mass. My friends categorize my bouts as comet-like, returning only every-so-often, but burning hard and fast. I’ve been here before, and I know I’ll be fine, but I also know the amount of physical and emotional energy it’s going to take to get through this.
Thanks everyone for the awesome advice and zingers.
F the Snaith, F the Florida, F the Hedgies, F the gold, F the rice-hoarders, F the 6 percenters, F the hogs that filled up at trough… F ‘em all.
Take care and stay sane.
“I need to start running more and writing more music”
Muggy run down by the beach…dwell on the redundancy of the waves…and whether all those pieces of sand…really ever were… once-upon-a-time…solid granite rocks…things change, even stocks & house prices!
(Hwy goes back to planting gourd seeds, while humming… America the beautiful)
….Dwell on the fact that for every grain of sand on every beach on Earth there is a star somewhere in space and time… and how many creatures faced, or are facing far more than we are now. What would Klingons or Farangys do faced with our “minnie depression”?
Take care of yourself, Muggy.
I find that pouring energy into creative output (musical or otherwise) is a good way to shake off such a state. I hope you have some pals to play with down there as well — there’s nothing like bashing it out loudly with a few friends. (Makes me wish a was a drummer … sometimes.)
Were all in a dark place; some of us understand that better than others. Im glad you’re taking care of yourself. We’ll still be around for you to come take a peek at. Enjoy life.
I agree. None of us are cheering these crashes anymore, although we do know real estate prices will have to come down further for affordability.
There are starting to be many unemployed people who were not irresponsible/lying/greedy about real estate. Wishing bad tidings on realtards is one thing, but when you get blindsided by unemployment, life can be miserable for you and thouse who worry about you.
I too, feel the darkness.
You still have to look out for number 1, lest you get caught up in serious financial problems yourself. It’s a matter of making sure you can survive so you can have enough resources to help those you love.
Speak for yourself, Scroogy-McScroogeMuffin!
I’m cheering it loud and clear like a little soldier full of sugary caffeine delights and a brand-new drum on a bright sunny day.
Paging, Olygal, paging Olygal. Please report for the parade with the cymbals immediately!
RE: Please report for the parade with the cymbals immediately!
In your pink Tu-Tu and diamond tiara!
‘…like a little soldier full of sugary caffeine delights and a brand-new drum on a bright sunny day.’
I’m so in love! Why, I think I’m gettin’ the vapours…
*pats flushed cheeks and wonders where I put the smelling salts *
Especially if you got a big shiny gun with good timing as part of your uniform.
Oh, and a cummerbund. I just dig cummerbunds. It’s surely some psychological thingie.
Anyway, enough chatter! I gotta go pack for the parade!
+1 Bill in L.A - one of the only times we’ve agreed on anything
I posted in the Bits Bucket yesterday about how my schadenfreude is running on empty.
While I’m still gleeful at sending out Joshua Trees to those that deserve them, I’m not enjoying watching otherwise innocent people getting sucked down the plughole.
So, to ameliorate our despair, we’re going to beautiful Topanga Canyon this afternoon to look at a some rentals. They actually have some now at sane prices.
I need some trees and hills to stifle the wiggly feelings. Its a lot healthier than chocolate.
All the adults are guilty. Had you tried to talk two years ago to many of those people now losing their jobs to describe to them what is coming and try to get them to work with you to halt the insanity, they would’ve brushed you off as some kind of mad idiot or worse. They would have saw you as crazy, insane to deny what “every” reasonable person knows.
Why is that relevant to their non-innocence? Because we live in a country with voting, after all. If the options on the ballot are undesirable, the citizens allowed it to get that way, and have not come together to change it. Instead, some respond by becoming holier than thou and refusing to vote, others cling to jingoism, others cling to globalization or other isms. Most are just lazy, unwilling to think at all, and parrot whatever gives them a sense of security whether it makes sense or not.
Thus, even those who played by the rules bear some responsibility.
Its kinda like climate change. Even if I drive an energy efficient vehicle to my solar-heated home, to the extent I tolerate a society that makes the kinds of choices we have made, I have some responsibility for matters. Thus, when the 3rd once-in-a-thousand-years, Category 5 hurricane wipes out my city, I can’t in good conscience say, “Why did this hurricane wipe out innocent me?”
Some might see this as the natural result, consistent with natural selection — dysfunctional societies are destroyed. And, given that this society allows citizens some input into decisions, citizens are collectively responsible, even if they have abdicated their role (or allowed it to be severely constrained). Thus, there are no innocent adults. Thus, I am still cheering the crash, because it is, in the end, the only hope we have. Crash and rebuild, or delay the crash, keep building even more unsustainable structures, and be destroyed by the inevitable crash that follows. To cheer the crash now is morally fine, because it is to cheer the possibility that maybe we will be able to re-build. Which is why government efforts to prevent the crash deserve the boos they get around here.
IAT
‘Its a lot healthier than chocolate.’
Interestingly enough, I just barely, within the last 3 minutes, finished eating an entire bag of raspberry flavored dark chocolates. And I feel great. Very healthy.
(I got them on sale, after Valentine’s Day, 75% off, so I loaded up, ’cause I’m wise.)
Are we twins?
I just polished off a bag of dark chocolate except mine had assorted nuts instead of raspberries.
Also, sale. Also, loaded up. Also, wise.
‘Are we twins?’
We must be. Anyway, what kind of nuts? That’s an important detail.
Well, it’s all mixed up but hazelnuts, pistachios and almonds.
No walnuts though which didn’t seem right. But I compensated.
‘But I compensated.’
I just somehow knew you would. And I’m also happy this didn’t turn out to be some sort of sordid innuendo. For awhile there I was giggling lightly, but also in a lightly alert fashion. Do you know what I mean?
That’s ’cause I drank some super good vodka tonight. Super good vodka makes me giggle lots. Tequila causes me to cut my hair, and mescal…well, actually, I don’t recall what mescal results in. I know there’s fires and stuff, but that can happen anyhow, and is certainly not to be blamed on ME.
Don’t sweat it. Here, have a potato!
(hands her a potato.)
I love potatoes!
*falls off chair giggling *
Jeeze, this is some awesome vodka! I even went outside and ran around a tree* before I banged back inside to see if you confessed to some louche activity.
*Western Hemlock, about 80 feet tall.
It’s raining here, very lightly, but with a studied, serious air that portends a night full of steady light rain. Also, it smells like patchouly when you walk on the moss.
We’re gonna get 14 inches of snow tonight. But I gotta plenty to eat.
But I just finished off the last of those chocolates. Dammit! I’m snowed in minus my fix.
And I hate the patchouli stink but I don’t know what it is.
1. 14 inches of snow predicted? Really? Wow. I hope the power doesn’t go out. Then you can spend all day tomorrow on your computer, helping us all be wiser and pointing out our faults.
*falls off chair giggling *
No, but really! Since you can’t be out gadding about and getting distracted, this could be fun.
2. Noooooo! You poor fellow!
3. You’re thinking of a different patchouly. I used to hate it, because it smelled like pretend hippies, or pretend hippie incense, or something, but now I’ve smelled the real smell. It’s nothing like. Look, it’s hard to describe.
‘…or something, but now I’ve smelled the real smell. It’s nothing like. Look, it’s hard to describe.’
______________________________________
No, it really is a true experience, the time I learned that patchouly smelled good. I was out rootling around in my front yard, just poking around in the dirt and laying full tilt in the soggy gravel and playing with sticks…man, I was filthy, all covered over in moss and forest detritus and woodland crap, and I was even wearing a plaid lumberjack type of jacket, and my hair was glued to my head with warm rain, and then I noticed a lovely fragrance rising up from the earth, and I thought, ‘Hey, this is what patchouly tries to smell like’.
Just like that!
I hope that makes it all clear?
Oh, and it was night, too.
YO MUGGY:
start listening to zydeco music it will clear up your mind, make you happy and even make an old man dance.
I think its the right music for this depression….and my way out of debt.
(not a lot of debt, I just like to not have to pay any more payments each month)
’start listening to zydeco music it will clear up your mind, make you happy and even make an old man dance.’
You’ve mentioned zydeco quite a bit, and each time you do I have to sit back in my wooden chair and think of thinky thoughts regarding zydeco. Zydeco is one of the very, very few things I don’t have immediate and bold opinions upon. Now, I know I love frogs and pie and beer, I know I hate Surinam toads and pickled jellyfish and developers, and so forth, but I’m still just quite conflicted on Zydeco.
I recall years ago when as a teen I would drive through Utarr blizzards in my jeep, whipping gusts of white stinging snow snarling and roaring and battering us like a ping pong ball all along the long empty roads. The jeep top would flap like a sail and we’d go semi-airborn and go skittering along the black–iced highway, all of us screaming together, before the ballast dropped us back and we could proceed on to the next terrifying episode. Then I would reach out a cold, chapped red hand and pop in a Zydeco tape that I was really fond of, and crank it. The song I liked best was ‘Sugar Bee’ by Clifton or Cleveland Chenier, or something like that–I can’t remember all the details, and it’s been years since I’ve had a cassette-tape player.
Anyway. I’m not getting my point across, I can tell.
Oly:
That is why you click on my handle and there is a new myspace play list of 10 songs….almost an hour of zydeco rock and blues….should cheer anyone up.
Then you have in my friends who have some incredible music to explore.
Or check out some videos I have taped of the bands when they come to NYC:
http://www.youtube.com/user/aNYCdj
The gym really helps. Plus, you need some time for yourself at the end of the day. Mix it up. Try new things like weights, yoga, Zumba, or snorkeling. Hope you come back soon.
Take a break, visit the farm and wiggly your toes in the river this summer
Quitter.
-1 Uncalled for, Joe.
as a regular, I like the comment.
+1
since you are a lawyer.
off with your head.
Its just a Flame Out….It happens to all of us…Just pull back on the stick to minimum controllable a set her down….Follow what makes you smile and laugh Muggy…The darkness will go away…
You know - I think I may speak for many of us to say that we’re all feeling this burnout.
We’ve been buried in this thing before most even realized there were problems. It’s been a long time of discussing negitive news, and it’s emotionally draining.
I have been trying to break the cycle and get my mind of it. It’s rough.
Human biochemistry is a wonderous thing to behold, Mugster. It’s nearing springtime and you have no spring. (or summer or winter or autumn.) You’ve also been playing house husband with a toddler. THAT will drive any thoughtful adult crazy after a time…regardless of the angelic nature of your charge. This is why women got fed up and demanded equal job opportunities once upon a time. Caring for the unformed requires a mindset that negates one’s academic training, and sometimes it gets lonely –even if you’re constitutionally so inclined….
RESET IS CRITICAL. Take a trip (with or without your little guy,) and go running in the snow. Or the dry desert. Work a couple of nights in a soup kitchen, or just watch DVD’s in a cheap motel at a truckstop somewhere you’ve never been before. Visit a botanical garden (or your local herpitorium,) and talk to the curator.
Change of air, sweetie. Works every time. As does Time itself. Obviously, you’re not alone in your funk…just check out the responses you’re getting here on the blog! Such as we are, we’re the repository of your lost sanity.
If you’d like to chat offline, I’m at dvsntt at bnis dot net. Hang in there, okay?
Ahansen…I was hoping you were lurking to post for Muggy…
You’ve also been playing house husband with a toddler. THAT will drive any thoughtful adult crazy after a time…regardless of the angelic nature of your charge.
An excellent point, and one I can testify to directly.
+1 ditto, here!
“I’m in a dark place, and I need to start running more and writing more music to manage my anger and mood swings.”
Join the club, my friend.
The fact that you recognize unhealthy emotions effects–and are looking at ways to lessen them is a great thing, and shows you’re way ahead of the curve.
I was rubbing elbows with a Psychiatrist at work right after 911. He said he was instructing his especially freaked-out clients to spend NO MORE THAN 15 MINUTES READING/WATCHING BAD NEWS.
This makes sense as one can become saturated with all the negative BS and become “addicted to chaos.”
I find engaging in my hobbies, reading and watching good movies mitigates the effect this calamity on my psyche. Oh, and of course, HUMOR is very therapeutic!! Gotta just laugh, laugh and laugh…find the humor in everything.
DOC
While I disagree with you about the Lad, I feel where you’re coming from. It’s a frustrating situation. Keep your head up, you’re doing fine.
Been there myself and pulled away from here (and other things) around the holidays. I mostly just quickly browse now and look for good tips and links and steer clear of the “us vs them” arguments. Too much time spent on hearing the same things over and over. (see also: definition of insanity)
One thing always brings my mind back: going to the gym and getting back into a physical regimen. Just don’t overdue it or you’ll have the same issue there. Ease into it. Everything in moderation.
Good luck to you, Muggs.
Take care of yourself. By taking care of yourself you will be a better husband and parent to your beautiful child.
I will miss you Muggy. Please come back when you are ready.
I wish you and your family all the best.
Sanity and tranquility are luxuries which must by all means be conserved and cherished during periods like this one. Enjoy your cute little baby and try not to worry about the hot pot of economic stew in which we collectively swim — keep swimming and it will eventually cool down again!
Obama’s “plan” is designed to save a few fingers and toes in the leper colony. Most of his intended patients have already lost their forarms and lower legs financially.
With each passing day, the candidates for “help” grows smaller and smaller. And by all accounts it will take banks weeks and months to ramp up into the program.
The bailout is already become yesterday’s news
Let me see if i get this straight:
-If banks are allowed to collapse, then assets will get marked to market, which tanks the financial system and hastens global economic collapse.
-if AIG is allowed to collapse, then the remaining derivatives will get cashed out, bankrupting all other insurers and forcing a mark to market of all outstanding level 3 bank assets.
-If ANYTHING gets marked to market, the sudden transparency of toxic assets is revealed to the investing public and people lose all faith in the financial system entirely.
So ALL of these bailouts are, as a common denominator, purely for the sake of destroying the transparency of the financial system, hiding the fact that under free market rules it is completely insolvent.
Don’t believe for a second the government doesn’t know how bad it is…their rosy projections and reassurances are masking the largest coverup of all time.
Sad. If this global transparency problem had gotten fixed when the Enron/Arthur Andersen debacle had taken place, we might never have arrived at this place. But certain political factions had fought tooth and nail to let the market police itself…and this is the result. Nice.
(Sir Greenisspent, whispering in Cheney’s ear) : “Paddle NoSingleOne… ’till he can’t stand”
But certain political factions had fought tooth and nail to let the market police itself…and this is the result.
In the face of all evidence to the contrary, we still to this day hear that the “real solution” is to let the market police itself, because the market automatically does what’s right and good and true, no questions asked — like driving a derivatives market to a ludicrous $500 - $600 trillion (depending on who’s counting those lil’ rainbow magick ponies and when).
How can the free market be insolvent when the free market is always right?
If ANYTHING gets marked to market, the sudden transparency of toxic assets is revealed to the investing public and people lose all faith in the financial system entirely.
Bingo, NoSingleOne. I don’t believe for a moment they are not weighing that in every decision they make. They are just putting in the balance the possiblity of a sudden meltdown against the possiblitiy of slow and orderly decadence, and choosing the latter. Even with all its follies, you have to agree that this new administration was dealt a really sh&^%y hand. Think what would happen in places like Irak, Afghanistan, Pakistan, Israel, etc., if the American were to implode on itself in a matter of months. It defies imagination. It would be worse than any Hollywood catastrophe flick you’ve ever seen.
Reporting from Beijing — “Empty,” says Jack Rodman, an expert in distressed real estate, as he points from the window of his 40th-floor office toward a silver-skinned prism rising out of the Beijing skyline.
“Beautiful building, but not a single tenant.
Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines.
Now, six months after the Games ended, the city continues to dazzle by night, with neon and floodlights dancing across the skyline. By day, though, it is obvious that many are “see-through” buildings, to use the term coined during the Texas real estate bust of the 1980s.
By Rodman’s calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn’t include huge projects developed by the government. He says 100 million square feet of office space is vacant — a 14-year supply if it filled up at the same rate as in the best years, 2004 through ‘06, when about 7 million square feet a year was leased.
More capacity in 2006 than in all of Manhattan. Anybody notice a slight problem?
BWAHAHHAHAHAHAHHAHAHHAHAHHHHHHHHHHHHHHHHHHH!!!
Oh man! Is this really correct? 14 years? You know what I’m reminded of? Tokyo commercial real estate in the late 80s’. It was “worth more” than all of California.
Remember Japan, Inc and “The Japan That Can Say No”?
Roidy
The guy they quote is seriously smart.
Somewhere (not this article) there was a quote about how when other people quote statistics, they are getting it from somewhere. This guy apparently showed the reporter the entire list of addresses with the numbers.
Now, that’s research!
Wow…Talk about front end loading….
How many years supply is it when demand is contracting?
I wonder what a condo conversion on this office space will look like, Chinese style.
The Chinese have the ability to create demand for these new spaces by demolishing older buildings.
The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.
Not $75,000. Remove a zero—it’s seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market.
Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people.
Detroit, which has lost half its population in the past 50 years, is deceptively large, covering 139 square miles. Manhattan, San Francisco and Boston could, as a group, fit inside the city’s boundaries. There is no major grocery chain in the city, and only two movie theaters. Much of the neighborhood economy revolves around rib joints, hot dog stands and liquor stores.
Well, hello there, Cleveland!!!
BWAHAHHAHAHAHHAHAHHAHAHHHHHHHHHHHHHHHHHHHH!!!
Where are all the wanna-be investor “slumlords” when you need them…just like McScrooge Duck, in the vault… counting their money.
They are too worried about their own safety to do that. I read somewhere that if you combine all the abandoned buildings, streets, etc. in Detroit, the area would cover the space of San Francisco. Sobering.
Read the editorial in detnews DOT com today “Elect a crazy council, get crazy results
Nowhere is Michigan’s brain drain on greater display than in the Detroit City Council chambers.
My hopes for Detroit’s future faded as I watched the tape of last Tuesday’s council meeting…
It was a tragic circus, a festival of ignorance that confirmed the No. 1 obstacle to Detroit’s progress is the bargain basement leaders that city voters elect.”
Another Union success story (along with their enablers in Congress)…they taught the Big Three some lessons, they taught The Man some lessons, and they feel great for themselves as they round up the votes of Republican-haters for the next election.
Sorry, but when I consider these people and now cap-and-trade just around the corner, I don’t see any way this country (given it’s present make-up) can pull itself out of this mess.
Welcome to the Third World!!!
(or, as some might say, “fairness”)
I do not think it was a “union” success story, as I doubt any union members have actually lived in Detroit in decades. I live about 5 miles from a GM plant in Texas and none of the workers live anywhere close to the factory and none live in the city that plant is in.
Detroit is just an example of how industry never gave anything back to the city. The problem goes back over 50 years.
RE: Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people.
Motor City Breakdown…a rare decent read from RS
http://www.rollingstone.com/news/story/26217951/motor_city_breakdown
+1 Thanks, HD. I can relate to winter glum.
From this morning’s SFGate:
The 2008 National Association of Home Builders/Wells Fargo Housing Opportunity Index released earlier this month shows that the median home price in Stanislaus [County, California] has fallen to $160,000, a 10-year low.
That means that county residents earning the median income of $56,500 can afford to buy 71.1 percent of the homes for sale, a sharp rise from the 3 percent of homes they could afford before the housing bubble burst.
Median home price is 3x median income? 71% can afford to buy? Something must be wrong here.
That last paragraph isn’t supposed to be italics - thats me, not the article.
Yeah. Jobs.
Palm Coast (32137 and 32164) looks like St. Lucie — short sale after short sale, 115-130K gets you a decent SFH.
Here in Southside Jax, you can now find an abundant supply of condos and townhomes for 115-150K and they are falling fast. I saw a 2bdrm conversion for 60K last night.
Ever wondered what happened to those condo-tels in Daytona? Check out 32118 — 45K plus will get you 350+ sqft of pure condo-hell.
Condo-tels are for the seriously brain-damaged only. 4.5K is probably (seriously) too much for on in Daytona. Basically you’re renting a hotel room in advance, why on earth would anyone pay a big premium to do that? And, on top of it, you’re turning over all the management of your hotel room to a company that has it’s OWN rooms in the very same hotel. Why on earth would they rent yours when they have plenty of their own.
The value of most condo-tels is 0. Plain and simple, it’s a stupid idea, no demand for it (except to flip to the dumber guy next month), and it just doesn’t make any economic sense.
If you’ve an extended gig on an opposite coast and must travel between home and work (say, Congressperson, mission/launch planner, adjunct professor, race team,) a condo-hotel can be a godsend. Just having a familiar, safe, comfortable quarters waiting day or night when you get off the plane makes all the difference in performance and efficiency for some. 45K for a five+year engagement? Not a bad outlay in my opinion.
Similarly the suite could be used to house company execs who need a place to stay when they come into town.
That price range is getting within the realm of do-ability. Folks spend that much on their pick up trucks…or at least, they used to.
You could just rent a small place, and a cleaning person.
Lots of airline staff flying regular routes already do that. They share. This is hardly a brand new concept.
You don’t need a condo-tel.
Pardon my French, but who the h@ll would want to live in Jacksonville? Anything resembling a north wind leaves Jacksonville smelling like a s**thole.
US Military and their families live here.
I owe a lot to the military. I’m awed by many military personnel.
Yet, that doesn’t mean the city doesn’t stink to high heaven. The military should have better digs than that.
President Valdis Zatlers named Valdis Dombrovskis as prime minister and asked him to form a new government, according to media reports on Thursday. Dombrovskis, a 37-year-old former finance minister, is from the centre-right party, New Era.
Following his nomination, Dombrovskis said that Latvia was “on the verge of bankruptcy” and would need to cut the budget by at least $1.27 billion or risk financial collapse, the BBC reported.
Bye Bye Baltics
I’m gonna miss you so;
Bye Bye Baltics,
Why’d you have to go?
No more sunshine,
It’s followed you away;
I’ll cry Baltics,
Till you’re home to stay.
That’s all well and good, but the riots and marches on their governments are a symptom of distrust in free market capitalism, and a foreshadowing of the return of a communist government.
For all of its flaws, communism provided Eastern Europe and Russia with stability, and that is what they really crave. It would be a disaster if they viewed the free market as being much worse for their standard of living than communism was…even though it might be true, at least in the short term.
The Gulags, torture and all. Yes, we should wish this all back on iron curtain countries.
Are you even marginally literate? Read my comment again and point out where I said communism is a good thing.
Testify, NoSingle. I have a good friend from Riga, Latvia. His family got out when he was a kid. He doesn’t like to discuss his old life much but a few things have let me know that it was absolutely wretched. So, last summer he went back for a visit, and he said he was incredulous to hear some people mourning the demise of the communist state and wishing it was back. He kept asking me ‘Can they really be that stupid? Do they not remember? It really disheartened him, he was depressed for freakin’ days.
He kept asking me ‘Can they really be that stupid? Do they not remember? It really disheartened him, he was depressed for freakin’ days.
I cheered him up as best I could, as befits a good pal like me.
When he would brokenheartedly ask me these questions I would reach out and take his hand and pat it soothingly and murmur gently: ‘Dear, they’re people, ain’t they? So, yeah, they can definitely be that stupid.’
That’s what friends are for.
(Oh, whatever. He got over it.)
Surely there are superior NON-VERBAL ways of cheering people up?
Nope. *firm fluffy head-shake*
He’s too grouchy for that sort of cheering up. This’s a deep-seated sort of gloom, such as would not be eased even by me.
And that’s a rare condition.
Wow! Don’t have a cow! Did I give you a coronary or something?
‘Wow! Don’t have a cow! Did I give you a coronary or something?’
What…? No, I was replying to Fasty. Who are YOU, anyway?
Oly –
I heard a couple of talks this weekend by L. Tom Perry. He was born in 1922 and his dad lost his banking sector job in 1929. There was a fair amount of doom and gloom in at least one of the talks (I entertained one of my children straight through the second one, so I am not sure about how it compared). It seems he is seeing signs we are headed into GDII. I take it that means the LDS General Authorities concur on the matter, as I assume they coordinate their messages for the faithful (does this sound right to you?).
At any rate, it makes me uneasy when General Authorities go about dropping open suggestions that we are heading into another depression. Throngs of faithful church members will hear this and act as though it is so, potentially helping to bring this prophecy from on high come into being. People thinking and acting as though a depression is on the way can help precipitate one. (Similar comments apply to all the scare talk we have heard from Bernanke, Paulson, Bush and OBwan.)
For all of its flaws, communism provided Eastern Europe and Russia with stability, and that is what they really crave. It would be a disaster if they viewed the free market as being much worse for their standard of living than communism was…even though it might be true, at least in the short term.
Yes, the citizens of those those countries are after stability and order. But I’m not sure it’s a “disaster” if they view the free market as less-than-optimal. When the “free market” fails so grandly, isn’t logical that some countries will reject it as a viable option?
We in the US seem to have this notion that the “free market” (ambiguous quotes intended) and “capitalism” (ditto) and “democracy” (ditto) should unfold in precisely one fashion — the way we perceive them to be.
We seem to want to remake the world in our image, when all we can do is help put these philosophical tools in place and encourage their use. In reality, neither free market principles or democratic principles can flower the same way twice. There are simply too many variables, whether cultural, geographic, ethnographic, temporal, or economic.
Our particular brands of capitalism and democracy are unique: some countries implement them in ways that seem right to us, but most either will not or cannot. And some may slip backwards into ideologies we think are inferior, or repressive, or inefficient, or ill-conceived (or many other things).
“For all of its flaws, communism provided Eastern Europe and Russia with stability, and that is what they really crave. It would be a disaster if they viewed the free market as being much worse for their standard of living than communism was…even though it might be true, at least in the short term.”
I’m reminded of prisoners who received three squares, a roof and a bed for years, who are released–only to commit a crime so they can get back in prison to their “predictable” world. Also think I read somewhere last week of an Asian begging police to put him back in prison because he was unable to find work.
DOC
capitalism has been free since 1913
read about 1921, no gov and all good
Nah, Nationalism is the answer. Find a suitable Outsider to pin all your woes upon.
The dangerous thing is that Latvia is a NATO ally now and if things get too bad we will be forced to move troops in.
I believe I am at least marginally literate and therefore, qualified to comment.
How is it that you know what the Latvians “really” crave? And, if it is true that some Latvians “really” crave stability, it is possible that other Latvians “really” crave other things? That there might be, um, a divergence of opinion?
OK, your comment technically referred only to Eastern Europeans and Russians (although the comment to which you responded was referring specifically to Latvians). But same question. Perhaps your name is really NSO Bartkautkis. Or Elena NSO Sheremetyevo.
Not wishing to ride you in particular, NSO. Your approach–not letting moderation get in the way of confident assertion of generalities–is a common one on this blog. Which blog, I hasten to add, is for the most part extremely informative and educational.
WCD,
Your argument is a good example of the “No True Scotsman” fallacy a.k.a. a self-sealing argument. To paraphrase: “Since you are not a Latvian, you cannot possibly have any insight into commonly reported trends or news about Latvia.” Huh??? I didn’t know that I was not allowed to have an opinion about any ethnic group other than my own.
Let me ask you: does any Latvian know what all Latvians “really” crave? Do you know what all Americans really crave, or Kalifornians, or even Napa Valleyians, for that matter?
Anyway, thank you for deconstructing my opinion while safely not offering your own. Luckily we’re a free country and all allowed to interpret what we read on the Internets with the appropriate aplomb and skepticism.
Sounds like Eastern Europe is really upping the pressure on Western Europe to deliver additional bailout funds. It’s getting very interesting over there.
Dude, they need to bail out the PIGS first (Portugal-Italy-Greece-Spain) with Ireland as a free chaser.
Eastern Europe is gonna get hung out to dry like always.
Who wants some Polish sausage?
“Who wants some Polish sausage?”
I guess we can expect to see even more Eastern Europeans hiring themselves out to American pornographers, eh?
“I guess we can expect to see even more Eastern Europeans hiring themselves out to American pornographers, eh?”
Those statuesque euros are real hotties…’til that little voice says, “okay, you can eat now.”
Ain’t noone hirin’ ‘em to eat. Nor the pseudo-muscly male himbos either.
Yes Edgewater. They are begging, but it falls into deaf ears. Western Europe has plenty of problems on its own to worry about.
AP: Merkel rejects bailout plan for eastern EU nations.
http://news.yahoo.com/s/ap/20090301/ap_on_re_eu/eu_eu_summit_9
A woman who once originated subprime mortgages now spends her days answering desperate calls from people in danger of foreclosure …
… “Thank you for calling 888-995-HOPE,” the 30-year-old mortgage counselor says in a crisp, friendly voice. “May I have your phone number, please? Are you behind on your mortgage right now?” …
… There is some irony to Rillo being on the receiving end of calls like this. She once profited from the loose-lending spree that led to many of today’s foreclosures. From the late 1990s until she was laid off two years ago, Rillo was a loan officer at one of the country’s most notorious subprime lenders, Ameriquest Mortgage Co.
Link
Irony? No, my friend. THAT is poetic justice!
Observing the one-link-per-comment limit then, let’s start with the four links I’ve been trying to post since Friday.
1.For desertdweller:
Magical Misery Tour
Observing the one-link-per-comment limit then, let’s start with the four links I’ve been trying to post since Friday.
2:For desertdweller
Proposed Route
Thanks lavi d!
I forget..where are we now?
Rent to own…or …own to rent?
I think that you were in a vault with a duck counting his money ?
Rent to own…or …own to rent?
Let’s see what’s behind door number 3, Alex.
When easy capital swirled around the world, the governments and citizens of central and eastern Europe were a fine sales opportunity.
Now, things are very different. Hungary has been left with a towering debt to GDP ratio.
Borrowing its way out of this situation is impossible.
And its debt burden has made international exchanges worry about - and heavily sell - the national currency, the forint.
Which wouldn’t be the end of the world - a cheap currency can boost exports - but for the fact that Hungary has an awful lot of of foreign currency loans to pay back.
Everyone - including the former central bank governor - seems to have a mortgage in Swiss francs.
And as the value of the forint has fallen, day after day, so the cost of a Swiss franc-backed mortgage has risen.
Next up: Polish sausage. You know you want some!
BWAHAHHAHAHHAHAHHAHAHAHHAHAHHAHHHHHHHHHHHHH!!!
Ha indeed, now Merkel has already rebuffed anymore blanket bailouts for the east.
Ost Front 2009
I think that you were in a vault with a duck counting his money ?
Aflaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaac!!!!!!!!!!
Went to a “home show” yesterday. I’ve never been to one of these things before, but it is basically a industry display event where vendors have booths to display their wares.
Anyway I was talking to one of the vendors who expressed you can get vinyl siding installed for cheap now a days (he said a dollar a foot, but I have no idea how much it ever costed, I could just tell he thought that was next to nothing) b/c most of the vinyl siding business used to depend on financing. According to him, banks are only willing to finance people with 750 or better now (he seemed to act like that included nobody) so now most of the work is for people who have cash to pay for it.
So just another example of where cash gets you a better deal now.
Or a 750+ credit score.
Vinyl siding can be very,very expensive !
I have a idiot (distant) cousin in CA that paid over 800k… just to STARE at his neighbor’s vinyl siding
The paradox: Those with the highest credit scores are those who are least likely to actually want to use credit. Their scores got high by paying off any credit bills as quickly as possible or paying full balance on credit cards, things like that. The only people who can borrow money are those that abhor borrowing.
Right, BubbleViewer, but some interesting things are happening for us debt-abhorrers. The other day I got an envelope from American Express and opened it quickly, thinking it was the “We’ll pay you $300 to close your account” promotion.” That’s an easy $300 bucks if you ask me.
It turned out what they were offering was not that I close the account, but a new American Express “Plum” for businesses. Anyone got the offer? Anyway, it was quite interesting and I’m mulling whether to get it. It gives you two months with 0 interest to pay off any purchases, but if you pay the full balance within 10 days of the closing statement date, they give you 1% back in the next statement. Of course there is an annual fee, but it is waived for the first year. Anyone has tried this card? Does it have any hidden tricks?
Apparently not all vinyl siding is equal. Vinyl jobs out here run in the 5 figure range. I was talking with my brother about this and we decided to compare notes (he is in NC). He says that out there a vinyl job takes one day to install. The one’s I’ve seen out here take over a week. I told him that the crews out here take a long time cutting the siding with a circular saw. “They use a saw out there?” he replied. The use xacto knives out here.
Having installed vinyl siding when I was in college, you got to be kidding withe xacto knife.
The most expensive part of a vinyl siding job is the soffet and the window sills. The aluminum used to cover that portion is very very expensive. You can always tell a poor job by the window sills.
That’s what he said. I too found it hard to believe.
Government expands national program to buy foreclosures
By KATRINA A. GOGGINS
The Associated Press
Sunday, March 01, 2009
IRMO, S.C. — The federal government is spending $4 billion to buy and fix up foreclosed homes despite concerns over how the money is being distributed, questions about oversight and fears that the program amounts to a windfall for banks that repossessed the properties.
Now, even before the first dollars are spent, another $2 billion is on the way under the economic stimulus package signed last month by President Barack Obama.
In January, the Department of Housing and Urban Development signed off on hundreds of grants to all 50 states. The Neighborhood Stabilization Program, as it’s known, was passed last year as part of a housing rescue plan that was regarded at the time as the most significant housing legislation in a generation.
But critics have assailed the program for the lack of money it will send some hard-hit communities and the discontent stirring among residents who want a say in what happens to their neighborhoods.
“What houses are gonna be involved? We still don’t know that and we’re a month away from the funds arriving,” said Mike Aaron, president of the Livingston Avenue Area Commission, a group in a foreclosure-ridden area of the Columbus, Ohio. “That’s what’s making us uneasy right now.”
The total amount coming into Ohio, for example, is $258 million, and Columbus is getting $23 million of that. Those figures do not include new money from the stimulus package and HUD has said it has not yet decided what the guidelines for the new grants will be.
“…the program amounts to a windfall for banks that repossessed the properties.”
No surprises there.
So many horrible quotes in this article in this morning’s Washington Post.
Problem is, there’s no way to know when the market will hit bottom, acknowledges Diego, who says, “You can’t help being a little bit paranoid watching the news.” Nevertheless, he and Jessalynn are confident that their jobs — he’s an IT systems manager in downtown Washington; she’s the catering sales manager for the Ritz-Carlton in Georgetown — are safe from layoffs. And they believe it’s still true that building equity in a home is far better than sinking a couple thousand dollars every month into that black hole where rent money goes.
“We know that every housing market cycle since the Great Depression has seen home prices rebound from their bottom within a year or two of the beginning of the downturn,” says Kaufmann. “So, in at least five years from now, we should be well off the bottom.”
Diego, wearing glasses, jeans and layered gray T-shirts, has already spent countless hours researching the housing and mortgage markets online — and watching house-buying reality shows on HGTV. The effort has given him a thorough enough crash course in real estate to confidently declare to Messerschmitt, “We’re ready to buy today.”
The first home the couple looks at in Hidden Creek is an empty, 1,850-square-foot townhouse built in 2005 and priced at $349,000. The Gomezes know from the listing that it’s a short sale — the seller owes the bank more than the house is worth. They would have to check the Montgomery County real estate records to learn the unpleasant truth about its history: Some poor soul bought this place for $514,595 and then watched its value plunge more than $150,000 in three years.
They looked at four short sales in a row. Every single previously owned house they looked at was either a foreclosure or a short sale, yet they think it’s a great time to buy. And then it ends with that poor Dad trying to convince them not to buy:
His daughter tells him they’ve already considered all these issues. By the end of the evening, Brown feels reassured. “Jessalynn and Diego have analyzed the bejeezus out of it,” he says. “I mean, they had charts and tables … So I said, ‘Okay, sounds like you’ve thought it through.’ “
Experience keeps a dear school but fools will learn in no other.
- Ben Franklin
Experian stronglholds safe passage; yet, you’ll assimilate credit with the others.
-stem-cell bot
There’s no fool like a greater fool…
Reading that article was kind of like watching a slasher film. The audience keeps screaming “Don’t go in there!” and yet they do.
Time and time again, the Gomezes almost get it, but not quite, as the missus illustrates near the end of the piece:
“… Jessalynn is worrying aloud: “What if the market doesn’t come out of this, and we can’t leave because we can’t sell?” She pauses. “We don’t want to have to stay in the house for 10 years, but if we have to, it’s big enough.”‘
10 years commuting the 270 corridor? Oh my. Sounds like a dream come true.
On the bright side, these depressions are always great news for the horror film genre.
All the good creative stuff comes out of the woodwork. I bet you a sadistic serial-killer hunting down Realtor™’s kinda horror flick would sell really well.
Nightmare on NAR Street.
Yeah..I can handle “Nightmare on NAR Street”
Grabs popcorn bowl and hides under the warm, fuzzy RENTERS blanket, munches and waits for the screams
I dunno - that’s exactly where the young cute Johnny Depp was in the original when he got sucked in, and only blood come out.
This’s like a theme! One of them Jungian collective unconscious thingies in action! Only I’m still waiting for my comment on horror films to appear in today’s next thread.
Sigh. I wish Ben would just trust me, and not automatically filter my posts….
best … idea … EVER!
Seriously!
Great platform to satirize their stupid headshots.
“10 years commuting the 270 corridor?”
not if you lose your job, then the house
“Reading that article was kind of like watching a slasher film. The audience keeps screaming “Don’t go in there!” and yet they do.”
I’m screaming, “Go there!” If she’s hell bent on committing financial suicide, who am I to stand in her way. We need to rid ourselves of these people and the financial parasites they support.
Reading this article is like looking at a 2005 episode of House Hunters with all of the NAR talking points since then thrown in for good measure.
“What we’d love to have is brand-new build,” Jessalynn says at one point, because, she admits, with a sheepish smile, “I don’t want other people’s stuff and germs.”
She’s quite the piece of work.
She’ll commit financial suicide, just in time for us to bail her out.
Now’s a good time to buy cabins and hunting property at low prices
(just bring your own out-house, candles, coonskin cap and cash)
The market isn’t favorable for people desperate to sell, but it’s warmed up for people with cash. (cash for trash?)
“There are a lot of vultures circling in the air, and I really don’t blame them,” Wulff said. “And a lot of people who would be buying now are waiting to see if they can get financing
(plenty of roadkill for everyone)
http://www.jsonline.com/realestate/40388847.html
If they are waiting for financing then this game has a long way to go.
More knifecatchers = great news for taxpayers.
Take one for the team, boy-o!!!
as a city dweller, you sometimes just cant see the coon-skin CAP recovery…
I am officially trademarking the “tin-foil-coon-skin-cap-n-trade”
Actually, I can.
Just not at $50K a pop + need lots of acreage + midwestern land where you can shoot pheasants and boar and deer. Throw in ice-boxes too to store that outdoors.
Not semi-suburban shee-yat.
Property tax burden hurts the state in about every way
March 01, 2009 5:00AM
By Tom Golisano
Upstate New York pays the highest property taxes in the county. That’s not news to any of us who pay taxes here.
The surprise is that our property taxes are significantly — and disproportionately — higher than those paid by in other parts of the state. The resulting price we pay goes beyond dollars and cents and hurts our communities, our families and our economy.
According to the New York State Comptroller’s Office, property taxes on a home in Rochester valued at $100,000 are just under $4,000. Taxes on a $100,000 home in Yonkers (Westchester County) are less than half that ($1,773) while in Southampton (Suffolk County) they are almost one-10th of that ($456).
The result is a competitive disadvantage, or a “property tax surcharge,” felt in every part of our lives:
http://blog.syracuse.com/opinion/2009/03/property_tax_burden_hurts_the.html#more
Our accidental Governor is planning to make sure NYS remains a basket case for a few decades. On the bright side if you want to be lazy and feed from the Govt cheese NY State is the place to live.
A $100,000 house in Rochester (which is Western NY, not Upstate) would be a Million dollar house closer to NYC. The taxes are for the services you get from the state, namely the schools and welfare for all your nonworking neighbors. It doesn’t matter the price of the houses, the state needs a certain amount to run.
That is why falling realestate values will not result in lower taxes.
There are no $100,000 homes in Southhampton.
You’ll pay $4,000 per year even when your Rochester house is worth $50,000.
You’ll pay that even if it cost $1.
And it wouldn’t cash-flow with taxes, insurance and maintenance because there are no jobs there.
So the true worth is negative. Good luck explaining that to the government short-bus idjits.
As Italy’s Banks Tighten Lending, Desperate Firms Call on the Mafia
By Mary Jordan
Washington Post Foreign Service
Sunday, March 1, 2009; Page A01
… As banks stop lending amid the global financial crisis, the likes of Mauro are increasingly becoming the face of Italian finance. The Mafia and its loan sharks, nearly everyone agrees, smell blood in the troubled waters.
“It’s a fantastic time for the Mafia. They have the cash,” said Antonio Roccuzzo, the author of several books on organized crime. “The Mafia has enormous liquidity. It may be the only Italian ‘company’ without any cash problem.” …
… Many experts say organized crime is already the biggest business in Italy. Now, Fara said, the untaxed underground economy is growing even larger. “Certainly I am worried,” he said. “The banking system doesn’t work, and the private one that is operating is often managed by organized crime.”
The consequences for Italy and its 58 million people are huge …
There’s a difference between a mafia bank and a non-mafia bank?
Yes there is… You know what to expect from the Mafia variety…
-
unknown unknowns
technologicalistic
failure born son
-
teh goo-glah cant really understand the “unknown unknowns” because all your data are belong to us.
The technology treadmill has reached critical mass, and the goog-glah cannot understand the failures.
25 People to Blame for the Financial Crisis
http://www.time.com/time/specials/packages/0,28757,1877351,00.html
Phil Grimm is top which isn’t a surprise at all.
There’re no complaints from me on the top three: Gramm, Cox, and Mozilo. There’s no way I’d have Greenspan as low as 17 or GWB at 15. Both should be higher, especially Greenspan.
They got the correct mobster at the top of the list. He needs to be hung for crimes against humanity.
4:Also found a Real Estate Blog:
Bubbleinfo, North County, (San Diego) CA, run by a realtor who also has YouTube site.
4:Also found a Real Estate Blog:
Bubbleinfo, North County, (San Diego) CA, run by a realtor who also has… wait for it
5:… a YouTube site.
http://www.theonion.com/content/video/obama_win_causes_obsessive
Now that the Messiah has won the election - and is rapidly showing himself to be “not all that” - his mindless and insufferable supporters have no more purpose for their empty and pathetic lives.
Do those who are avoiding long positions in stocks have a strike price at which they would get back in? How does DJIA = 3,800 sound?
Financial Bookshelf: ‘The Great Depression Ahead’
By EILEEN AJ CONNELLY – 2 days ago
NEW YORK (AP) — If the economy looks like it’s going downhill now, just wait.
Government data released Friday showed the economy is slowing down much more dramatically than economists expected. But the current economic woes will pale in comparison to the big storm that’s coming, predicts Harry S. Dent Jr. in his book “The Great Depression Ahead.”
“If you thought 2008 was scary, 2010 to 2012 will bring on the greatest economic and banking crisis since the early 1930s,” Dent writes, forecasting that real estate, stocks and commodities will all fall much further than they have already. The founder of HS Dent, an economic research and forecasting company in Tampa, Fla., Dent maintains the sharpest part of the decline will last at least two years. He sees the Dow Jones industrial average falling as low as 3,800, or just over half its current value.
Dow is too narrow but S&P 450 would not surprise me.
Earnings are dropping fast and with that the multiples being paid are just too steep.
The hope-catchers and the DCA crowd is gonna get bushwhacked.
Bank of England aims to avoid slide to deflation: Telegraph
MARKET SNAPSHOT
Stocks look to new lows as March begins
After worst first two months on record, new lows loom; jobs report on tap
By Nick Godt, MarketWatch
Last update: 10:24 a.m. EST Feb. 28, 2009
‘It’s going to take at least several years to recover. And that’s what people are starting to get, now that they’re looking past the original euphoria that the new administration was going to arrive and fix everything quickly.’
— Doug Roberts, Channel Capital Research
NEW YORK (MarketWatch) — With the market slumping to fresh 12-year lows in the last stretch of February, stocks will kick off the month of March on an increasingly uncertain footing while investors try to determine where the bottom lies for the economy and the bear market alike.
“The path to least resistance remains down,” said Alec Young, market strategist at Standard & Poor’s. “We need some real capitulation, and for people to stop buying the dips and let it crash. Then, we could get a new low.”
Data on U.S. employment and nonfarm payrolls, due next Friday, might get the ball rolling.
“Everyone knows it’s going to be bad,” Young said. “But we need even the most bullish people to give up and [the jobs report] might be the catalyst.”
Watch out what you wish for!
“…and for people to stop buying the dips and let it crash…”
Ya don’t suppose he means you, do you PB?
giggle
I don’t buy the dips. I confess that I have sent a trickle of money into the stock market since the Wall Street meltdown last fall, but this is more of a hedge against dollar devaluation risk than a buy the dips bet that the stock market will soon once again start always going up. It is a struggle for me to do this, as my heart and mind scream at me that only a fool would buy stocks at this point in financial history when they might be poised for a bigger decline than has already occurred (Paul in Florida brought up this point in a post yesterday). But I figure that if I think investing in stocks is a terrible investing idea, lots of others must be thinking the same way, whereas I know plenty of fools who still seem to think there has never been a better time to buy residential real estate.
Just an observer, calling it like I see it. Said Thursday that I hoped we rallied from here. It will be very unpleasant if we don’t. The pain will spill onto the streets.
What’s more, isn’t that the same as saying you’re wishing for a housing crash? I don’t understand how so many people on this board can separate the housing market from the stock market after all the discussion about MEW. Like the job market, today’s stock market is a measure of the housing bubble collapse and policymakers’ response to it. It’s a major part of the story.
I would be interested in what you base your hope of a recovery at this level. To me, it doesn’t even seem like anything has dropped to a “normal” level yet, but is racing toward it and will probably zoom right past on the downswing. Houses, stocks (earnings), food, gas, wages, whatever. The only thing going up is gov’t waste. What would be the foundation of this “recovery” from here?
I share your sentiment about the downside. I’m just growing tired of people thinking I’m enjoying the carnage. I’m just calling it like I see it. I’d hate to see more pain here — it would be overwhelming — but suspect it’s already in the pipeline.
“I’d hate to see more pain here — it would be overwhelming — but suspect it’s already in the pipeline.”
The upside to the pain, if there is one, is that it should finally create a sense of urgency to make changes that are long overdue. The economy of the past is dead and isn’t coming back. We need to move toward the economy of the future, whatever that is. The danger is the sense of urgency could manifest itself in ways that ultimately aren’t helpful. There are plenty of examples from the 30’s. There’s probably some threshold of pain that’s more helpful than harmful. We seem to be on a path to shoot right past that into the “harmful” realm sometime during the next two years.
I agree we need to make changes. Typically, you want to roll changes out over a period of time. Give people the opportunity to reflect. Give proponents the opportunity to counter claims, build consensus, and move everyone along.
At a minimum, give recipients the opportunity to acknowledge the added value you present before closing. At this rate, no one in the communication channel knows exactly what they are buying or selling. It’s a strategy for confusion.
I’m loving the carnage, love it.
I wanna see the homeless begging for scraps on the street. I wanna see the grandmas squeal like a pig once the JT goes in. I wanna see a grandpa reduced to eating dogfood.
I really want to see blood on the street. I won’t be happy until I see the first McMansion owner decapitate his children.
Blood, blood, blood! I got me some bloodlust and it don’t matter if it goes against all human sensibility and every sensibility on the HBB.
It’s coming anyway. Why deny the obvious?
Wow, chill out!
We have already seen McMansiontards on killing sprees … happens all the time. The homeless are everywhere.
What we haven’t seen are stories of ruined seniors, at least not since that rash of 2006 scammers. With FDIC and SSI, it may never get as bad as it once was, anyway.
Just providing a welcome and much-needed counterbalance to all the delicate doilies on the blog.
Oh, look at him, he sprained his wrist because he had to use capital letters. Let’s make changes to make this a better world, etc., etc., etc.
I often avoid caps for this very danger, though it’s more of a brain sprain than a weak hand.
decapitating little children, hmmm. Time to put the cork in the bottle and we’ll roll you up in the living room rug, so’s nothing gets broken on accident.
The sentiment of wanting to see pain though, it will bubble up. This generation has no basis for quiet suffering.
pass the Rubicon.
Further drops aren’t even required for further carnage, if things just stagnated at this level through 2012 it will get really nasty, which makes his forecast all the more disturbing.
Santa Anna winds of change are blowing through top economic policy circles. Watch out for the uncontrolled financial conflagrations which may soon follow this discussion.
February 26, 2009, 11:14 am
Volcker Supports Popping Bubbles, Regulating Hedge Funds
In testimony today before the congressional Joint Economic Committee, Paul Volcker, who is chairman of President Barack Obama’s Economic Recovery Advisory Board, called for beefed up regulation to prevent future crises.
Volcker repeated global regulatory objectives outlined by the G30, a nonprofit group comprising senior representatives of the public and private sectors and academia world-wide, in a report that he helped craft. “The G-30 Report recognizes what I believe is common ground among most analysts. Specifically, all banking organizations should come with the framework of an official safety net, with the natural corollary of regulation and supervision,” Volcker said.
However, he also mentioned some regulatory proposals that U.S. lawmakers and policymakers should consider.
The former Federal Reserve chairman weighed in on a debate over the role of government officials in popping bubbles. “The first and most fundamental lesson of the crisis is that future policy should be alert to, and take appropriate measures to deal with, persistent and ultimately destabilizing economic imbalances. I realize that is a large and continuing challenge of international as well as domestic proportions, but it is the essence of prudent economic management,” Volcker said.
He didn’t specifically mention the Fed, but discussion has been heating up over whether the central bank should act pre-emptively to pop bubbles. Volcker’s successor at the Fed, Alan Greenspan, famously stood against such a policy. “[T]he degree of monetary tightening that would be required to contain or offset a bubble of any substantial dimension appears to be so great as to risk an unacceptable amount of collateral damage to the wider economy,” Greenspan said in 2002.
However, in the last year Fed officials have been rethinking the policy. “[O]bviously, the last decade has shown that bursting bubbles can be an extraordinarily dangerous and costly phenomenon for the economy, and there is no doubt that as we emerge from the financial crisis, we will all be looking at that issue and what can be done about it,” current Fed Chairman Ben Bernanke said in October.
This is another example where the housing bubble collapse stimulates policy responses affecting financial institutions and the stock market. More regulations and restrictions affect earnings potential, the price of bank stocks, and the overall stock market. R&R also affects the amount of leverage and earnings potential of entities borrowing from banks.
Ssssssssssshhhhhh, I need the knifecatchers in order to play my shorts.
“[T]he degree of monetary tightening that would be required to contain or offset a bubble of any substantial dimension appears to be so great as to risk an unacceptable amount of collateral damage to the wider economy,” Greenspan said in 2002.
I guess the current episode pretty much blew away this false hypothesis.
“[T]he degree of monetary tightening that would be required to contain or offset a bubble of any substantial dimension appears to be so great as to risk an unacceptable amount of collateral damage to the wider economy,” Greenspan said in 2002.
It was a matter of who was harmed, when, and to what degree. GWB would have been harmed then and some people would have recovered more slowly from the bursting of the tech bubble. Instead, we pursued a policy that ultimately collapsed the economy and has put us on a path to GD II. There was also quite a lot of harm prior to the bursting of the housing bubble.
However, I’m not sure we want to treat all potential bubbles the same way. Some lasting good did come from the tech bubble. It’s much harder to make that case with the housing bubble and the collateral damage from the bursting of the housing bubble will exceed that of any bursting bubble in history. Thanks Uncle Alan.
“Some lasting good did come from the tech bubble.”
The question seems to be whether one can get the benefits of a period of rapid technological advance without the drawback of a mania. History has few encouraging examples of which I am aware.
What attracted me to the HBB long, long ago, was that it was so far ahead of the crowd; a contrarian’s dream come true.
Now it may be time to take the opposite approach of the crowd on the stock market. With just about everyone having given up on equities, and the stock market a master of proving the maximum number of people wrong, will the ultimate surprise be a move UP, and not down? At a market peak, optimism prevails; at the bottom, despair reigns. Humans project the present into the future (wired for bubbles), whether it’s irrational exuberance or irrational pessimism–and with both enhanced by the MSM.
Instead of the unemployment rate, what about the employment rate? Or the percentage of homes NOT in foreclosure or default, and the percentage of mortgages that are current? And the percentage of homes that have no debt? And the percentage of banks loans that are current?
Ben, how about a SCB (Stock Crash Blog) that takes the opposite stance, just like you so successfully did with the HBB?
You might be onto something Potter. Let us know how that works out for you.
And give George’s money back.
Wow, … maybe I’m not the only crazy person buying equities right now…
I can vouch for that
“…will the ultimate surprise be a move UP, and not down?”
This opinion pops up a lot lately on the financial sites. It just seems a little too convenient to be truly contrarian at this point in time. It just seems too many people are still looking for the bottom at the moment.
Too many fundamentals running in the opposite direction. Too much money drained out of the system. Too much carnage.
Some of these “rallies” are caused by short-covering. Dumbasses clearing their shorts and trying to go long may actually help the fall.
Like the subprime buyers in yesteryear’s housing market that drove prices up and up, there are levered buyers in the stock market keeping prices from falling further. Until these clowns are taken to the woodshed it won’t be safe to go ultra-long. Like all the new restrictions placed on home buyers (20 pct down etc), we are likely to see more restrictions affecting these guys. Banks could cut their lines further or regulators could force banks to cut their lines further.
What’s more, stocks are becoming a luxury to some households facing unemployment, wage cuts, and budgetary restrictions. Plus, corps are suspending dividends, buybacks, and company matches. Entities are hoarding cash. Some may even be forced to sell at these levels to raise cash for daily needs.
Will people be willing to ride the market up to bubblicious levels again? Or will they be constantly looking to monetize any gains?
I don’t know how the herd is going to react now that we’ve seen a 50% decline in the market. Will this change expectations?
Can the market still sell a dream of riches to the average person?
People haven’t given up on the stock market. They’re still talking about it. This market is, and has been for 6 years now, a market for traders.
Buy and hold is a mantra for investors that go willingly to slaughter if they don’t know when to sell. Wall street will only tell you to sell when you’ve already been drained.
A tenants’ mutiny at Grand Central Market was resolved last week after a group of merchants who had withheld their February rents came to an agreement with the landlord and paid up.
As part of the resolution with landlord The Yellin Company, rents will be lowered and advertising fees charged to the tenants will be eliminated.
Adele Yellin, president of the Yellin Company, said that the move will lower costs for the 40 merchants.
“We do understand the pressure that our tenants are under in these times and we’ve taken steps to reduce their rent by eliminating the advertising budget,” Yellin said.
Aah, this should really stick in the craw of the hyperinflationists.
Take it in your craw, boy, take it all the way down your craw.
BWAHAHHAHAHAHHAHAHHAHAHAHHHHHHHHHHHHHHHHHH!!!
Faster:
My GF worked in Grand central market Adriannas caravan a spice store…replaced by penzeys another spice store…over the rent issue
I guess penzeys has deep pockets…and GCM didn’t care about the small business owner wanting to keep at least breaking even.
I pledge obfuscation to the blog of the Disjointed Message of Timbabwe, and to the Repudiated debt on which it commands: one Nay-tion seriously flawed, regrettable, with Pithiness and Credit for the fall.
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“We are breaking up AIG but we are trying to do it in a way that preserves value for the taxpayer, the employees and the businesses,” said a person close to the plan, which was revealed by the Financial Times last week.”
-win-win-win-
the news has gone beyond the sublime.
http://www.rcwhalen.com/pdf/cds_aei.pdf
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caution 10 page pdf.
my summary:
We the people cry out for simplified transparency. Yet, we are provided almost none. The rule changes, the bail-outs, the deliberate obfuscation, the command-and-control cannot and will not protect you and your family from “the Bezzle”
my favorite line from the piece: “I believe that the world of OTC derivatives and structured finance has brought the global system to its knees because of intellectual capture.”-Chris Whalen, InstitutionalRiskAnalytics.
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all your data (moneys) are belong to us.
LONDON — The race for the door at hedge funds isn’t letting up.
With financial markets in disarray and the alleged fraud by money manager Bernard Madoff casting a pall on the industry, investors have been demanding their money back at a relentless rate in the first weeks of 2009. That is forcing some of the world’s best-known hedge-fund managers, who had hoped that massive withdrawals in December would be the worst of it, to brace for another wave.
WSJ: Another Wave of Withdrawals Expected to Hit Hedge Funds
May I be the first to say: HAW-HAW!
The hedge fund collapse has to be one of the slowest collapsing bubbles in the history of investing, no? How can markets respond efficiently when the fund manager can barricade the door and prevent the occupants of the burning theater from leaving before they are consumed by the flames?
The United American Socialist Republic
U.A.S.R.
KIEV, Ukraine — Steel and chemical factories, once the muscle of Ukraine’s economy, are dismissing thousands of workers. Cities have had days without heat or water because they cannot pay their bills, and Kiev’s subway service is being threatened. Lines are sprouting at banks, the currency is wilting and even a government default seems possible.
Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering. And its predicament poses a real threat for other European economies and former Soviet republics.
NYTimes: Ukraine Teeters as Citizens Blame Banks and Government
HSBC to scale back US lending
By Peter Thal Larsen and Kate Burgess
Published: March 1 2009 19:03 | Last updated: March 1 2009 19:03
HSBC will announce plans on Monday to scale back its US consumer finance operations as the bank launches a £12bn-plus rights issue designed to re-establish its position as one of the world’s best-capitalised banks.
The bank is expected to say that it is further shrinking HSBC Finance Corporation, its US-based credit card and mortgage lender, which has suffered mounting losses as a result of the subprime mortgage meltdown and subsequent US recession.
Subprime lending didn’t work out very well for HSBC, I take it?
Down the rabbit hole,
Ever lower it goes.
Where it ends,
Nobody knows.
BULLETIN
HSBC TO RAISE $17.7 BILLION IN RIGHTS ISSUE AS PRETAX PROFIT DROPS 62%
Asian Shares Drop On Bank Woes; Nikkei Falls 3.2%
By MarketWatch
Last update: 10:20 p.m. EST March 1, 2009
SINGAPORE (MarketWatch) — Asian shares were falling at the start of the week amid worries about the health of large U.S. banks and the economy more broadly, with financial stocks falling again and sellers coming into Japanese auto companies.
Risk aversion also hit the currency market, sending the euro and Asian currencies tumbling.
“There’s just no good news,” said Macquarie Private Wealth associate director David Halliday. “The U.S. economy is in the worst shape it’s been for probably 50 or 60 years, so it’s hard for equities to rally.”
Japan’s Nikkei 225 was down 3.2% with Australia’s S&P/ASX 200 down 2.7% after hitting a three-month low, while South Korea’s Kospi Composite was down 3.2% to its lowest intraday level since December 5 and Hong Kong’s Hang Seng Index was down 2.7%.
The falls followed declines on Wall Street Friday, with the Dow Jones Industrial Average dropping 11.72% for February as a whole, down six months in a row for its longest monthly losing streak since late 2002.
Concerns about the financial sector remained. Monday, the Wall Street Journal quoted people familiar with the matter as saying American International Group Inc. would receive up to an additional $30 billion in federal assistance as part of a revamp of its government bailout.
Why should decoupled nations’ equities depend whatever on what goes on in the U.S.? ‘Tis a puzzlement!
It smells like capitulation every Monday any more…
MarketWatch dot com
March 2 2009 8:51 A.M. EST
Bulletin
U.S. real disposable incomes up 1.5%, outstrip growth in consumer spending
Sub-7,000 Dow dead ahead
Bears mold a big snowball
Futures get as snowed under as New York and the East Coast. Investors fret financials all over again. Overseas action makes for a bearish backdrop.
In like a slam, out like a lion? Yikes?
Will the housing market also retrace to 1997 levels, or have the housing market and stock market become decoupled (similarly to the U.S. and Asian stock markets)?
March 2 2009 9:41 A.M. EST
Bulletin
Dow industrials below 7,000 mark for first time since Oct. 28, 1997
March comes in like a slam
Stocks, like the East Coast, are snowed under. Investors fret financials all over again. Dow industrials below 7,000 for first time since 1997.