March 31, 2009

Bits Bucket For March 31, 2009

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Comment by Fresno Dude
2009-03-31 05:59:47

An appraiser came by last week, something about “a difference in price” for doing the short sale. We were also told earlier that there was a “bidding war”, but “a difference in price” would seem to indicate the price war is between the lender and a possible buyer. Anyway, as a renter, this is the third house we have been in where we have had to move because the owner wanted to sell, and my wife is rabid foaming at the mouth about “we have to buy a house so we won’t go through this again”. So, I am going to retire this July and move to Eau Claire, Wisconsin, and buy a house if the economy does not deteriorate so badly that my wife takes note of it. A 3 bedroom two bath goes for about $150,000. There is the $8000 rebate for the first time buyer and that could be viewed as a hedge against a further price drop. Here in California, there is a law that says a renter now has to be given 60 days notice when a house is being sold, so I am wondering if the notice will be coming soon. We do have a 5th wheel trailer we can move into if the place is sold and the buyer wants possession before I retire.

Comment by aNYCdj
2009-03-31 06:28:47

The 60 days only matters if you have no lease.(or its about to expire) A lease always goes with the sale of the house. And if they wanted you to break the lease and move, well they should pay you for your inconvenience.

 
Comment by DinOR
2009-03-31 06:37:32

Fresno Dude,

Tell it brother! I’ve been beating on that scenario for the last oh… several years? Given that nearly every property is “in play” where LL’s are concerned, renting sure ain’t no lay up.

Interesting to note you’re moving “back east”. A trend that seems to be gaining momentum. Any chance you’d consider living back there for just part of the year?

Comment by Fresno Dude
2009-03-31 07:13:16

There is no lease right now. The first rental move was because of a divorce, the second because the LL (who was a realtor) wanted to sell just before the housing crash after the first lease was up, and the third is a short sale, probably because the LL is a contractor who does painting, so his business has to be down and he cannot make payments where the rent does not cover the payment. As for Wisconsin in the winter, both my wife and I grew up in a cold climate so we know what we are in for, like one Christmas when we were there it was –35 degrees. We have a 5th wheel trailer good for a very cold climate (wood frame, no slide outs, very good insulation) and the Ford Diesel F350 with manual transmission to pull it. We may very well spend the last month of my working living in the 5th wheel. By the way, the RV manufacturers are just about all going out of business, especially the ones making the more upscale RVs. Check www dot rv dot net on that. I would like to snow bird, but wife does not like the idea. Out of curiosity I would like to see Slab City (an old army base near Niland California where people park free for the winter) and Quartzsite in Arizona, which is the largest gathering of RVs in the USA every winter.

Comment by jbunniii
2009-03-31 08:03:33

I lived in Wisconsin for a year and can say that the summer was MUCH more unpleasant than the winter. Humidity is seriously disgusting, and the number of insects, many of which bite humans, is almost impossible to overstate.

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Comment by Julius
2009-03-31 08:06:45

Wisconsin state bird = mosquito

 
Comment by Fresno Dude
2009-03-31 08:21:49

When in college I did mosquito abatement. A lot can be done, but there always seems to be a fish pond, abandoned swimming pool, bucket, or tree hollow that is not found.

 
 
Comment by Chip
2009-03-31 09:21:02

Are/were people able to deduction loan interest on an RV, as a second home, like they could do with a boat if it has a toidy?

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Comment by desertdweller
2009-03-31 15:04:46

Fresno, Quartzite is a major retiree hangout. Lots of rvs for forever. Just kidding, just lots of em. And the Rock show end of January is a huge draw.

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Comment by mikey
2009-03-31 06:59:30

Good luck Fresno Dude and Welcome Home.

Eau Claire is nice city and great shelter from the storm of California. I suspect that you are prepared for the social and climate change seeing you picked it. My niece and her hubby live in the area and love it. Lots to do from fishing to snow sports.

It is my middle pit stop on my road trips to the Canadian border where I grab some grub, gas up and load up on fresh fruits and veggies for relatives from the road side venders in the summers. It gets a little cold in winter and it is family oriented when the snow flakes fly but it’s sure warm and comfortable small town America in the summers :)

Comment by Fresno Dude
2009-03-31 07:19:19

Yes, and has a low crime rate and good health facilities which is nice to have in retirement. Also, it is a university town so more intellectually stimulating than most small towns of 60,000. Real estate did not shoot up there like it did in California so I am hoping that buying in Eau Claire will not result in much loss of home value as the depression develops. Further loss of home prices could occur if folks cannot make their home payments when out of work, but my wife is really stress about the thought of doing another rental. Myself, I would just live in the 5th wheel for a year, do some travel, and see what develops with housing.

Comment by mikey
2009-03-31 07:50:22

Yup..you’e got it all up there Fresno Dude :)

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Comment by DinOR
2009-03-31 08:22:17

Certainly sounds like you’ve got all the right gear to pull it off but I think it really makes a statement when you’d actually consider living in an RV before dealing w/ yet -another- flaky LL?

Insofar as the endless… comments about the “ungodly humidity” and mosquitos that will “carry you away” I call BS. I grew up in Chicago and vacationed all throughout that area and it is my considered opinion these depictions are the product of MW’s that moved away and fabricate grossly misstated flaws to reinforce their own decision to have moved away. Just as everyone from your pastor to your gym teacher told you not to move to the west coast as surely you will become engulfed in group grope orgies and rampant drug abuse.

Is. It. Humid? Yes. Is. It. Bearable? Yes. ( Millions of people actually DO live there to this day! )

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Comment by Steve W
2009-03-31 09:40:48

Agreed on the humidity aspect, generally there are just a handful of annoying bad days (as opposed to 3 months in, say, Houston). But those skeeters are annoying up in America’s Dairyland–they just love those short summers. Anyway, if you wear bug repellent, crisis will be averted.

Dino, you’re right on about the complainers–they’re moving away for whatever reason and rationalizing always helps. Generally some truth in it, but often exaggerated.

 
Comment by mad_renter
2009-03-31 11:00:59

Mosquito’s aren’t so bad. How bad they are depends on the conditions, which varies year to year. And, the good thing about mosquitoes is.. if you get bit enough, it stops becoming so much of a bother as your body adjusts to that anti-coagulant. There are also quite a few effective ways of dealing with them. (Thermacell’s being nearly magical in that regard).

Now.. horse flies…

 
Comment by Olympiagal
2009-03-31 12:13:24

.. if you get bit enough, it stops becoming so much of a bother as your body adjusts to that anti-coagulant.

WHAT? Wrong! I dub thee: Mr. or Ms. ‘Total McHooeyPants’! Jeebus! I can’t even speak past the astonished sputtering, here!
I don’t know what YOUR blood is made of, perhaps gruel mixed with starter fluid, but MY blood is made of something utterly intoxicating to mosquitoes, such that they travel for miles and miles to seek me out, and I neverrrrrrrrr have adjusted to that anti-coagulant.
I just… I mean, what? I…there’s….Arrrrgh…! ARRRRGH, I say!

 
Comment by Hrundi V. Bakshi
2009-03-31 13:12:52

I think there’s some truth to it.

My parents own some property in northern WI, and years ago they had one of my mother’s cousins log off part of it. We were visiting while he was cutting the trees, and went off into the woods to see him. We chatted a while, waving our hands at the clouds of mosquitos and swatting like crazy while he stood there COVERED in them. I asked how he didn’t go nuts with all of the bug bites, but he said he’d been working in the woods for so many years, he couldn’t even feel them any more.

 
Comment by bluprint
2009-03-31 14:54:20

everyone from your pastor to your gym teacher told you not to move to the west coast as surely you will become engulfed in group grope orgies

Wouldn’t that just encourage young people to move to the west coast? They should have said the opposite: “Those people are even more boringer than we are!!”

 
Comment by desertdweller
2009-03-31 15:13:35

Oly is right. You guys must exude serious stank or something, cause if you smelled as sweet as Oly says she does, and I do, then you too would be in a cloud of mosquitos.
I never heard of anti-coagulant regarding mosquitos, just screaming and itching. And that doesnt’ retard the f/rs.

 
Comment by Olympiagal
2009-03-31 17:14:39

I asked how he didn’t go nuts with all of the bug bites, but he said he’d been working in the woods for so many years, he couldn’t even feel them any more.

1. Well, maybe he’s just not very attentive, Mr. Hrundi V. Bakshi. Or maybe he’s drunk, or else maybe slathered in lard! Did you test him to see? And what happened to YOU, while you were standing there chatting to the poor person? Maybe you were like a freakin’ magnet! And then you shoveled them onto him.

2. Say, is that reallly your name? Or are you just making it up? You sound like a desert with almond slivers.

3. …Look, whatever, I don’t care, I accept your name, with almond slivers, pretend or not.
b. And I now thank desertdweller for your support. Thank you, desertdweller. I can see you know what a Mosquito-Mecca looks like. You’re sensitive and kind. That’s what I like about you.

 
 
Comment by REhobbyist
2009-03-31 13:38:59

Fresno dude, I find it hard to believe that you can’t find a nice house for $150,000 in Fresno.

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Comment by Fresno Dude
2009-03-31 15:31:28

Well, it’s getting close to that price, but really, you have to have lived in Fresno smog and heat (good grief, I am making up the counterpart for how bad mosquitoes are in Wisconsin) to understand about getting out of California.

 
Comment by SanFranciscoBayAreaGal
2009-03-31 16:23:25

Fresno Dude,

Have you looked above Fresno? Bass Lake area?

 
 
 
Comment by DennisN
2009-03-31 08:33:42

A college roommate of mine is now a music professor there at UW-EC. He seems to like it, although he’s quite easy going.

Comment by ecofeco
2009-03-31 14:14:32

Just checked google maps. Very pretty.

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Comment by Ernest
2009-03-31 06:02:02

Pension insurer shifted to stocks

Concern increases as losses mount; Failing plans could overwhelm agency

WASHINGTON - Just months before the start of last year’s stock market collapse, the federal agency that insures the retirement funds of 44 million Americans departed from its conservative investment strategy and decided to put much of its $64 billion insurance fund into stocks.

Switching from a heavy reliance on bonds, the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds.

The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn…

boston dot com

Comment by Best Wishes
2009-03-31 06:05:17

There goes another shoe dropping!!!!!!!!!! Pension Funds are in bigggggg trouble.

Comment by Julius
2009-03-31 09:23:50

How long till the bailout?

 
Comment by Pondering the Mess
2009-03-31 09:30:00

I tell everyone of my generation (people who are barely old enough to remember Reagan and who’ve know nothing other than the Consumer Culture) that there will be NO pensions when we retire, and Social Security / Medicare / Medicade will all pay peanuts if they’re still around. The only choice for the future is to ensure it yourself (and watch as the government tries to take as much of it as possible.)

Sadly, most of the people of my generation: are in debt over their heads, don’t believe me (”They HAVE to keep our pensions” they’ll say after the 3rd round of pension reductions in 10 years), don’t have any clue where their 401k money is going (I’m not saying I have the answer to this, but not know or caring is not good!), or have stunningly bad financial ideas (”real estate only goes up!” investing all your retirement money in the stock of your own company is good “because you know what goes on there.” and so on.)

I don’t expect any change from my generation, sadly.

Comment by Jim A.
2009-03-31 10:18:12

Don’t feel so bad, I’d argue that MOST cohorts don’t worry too much about retirement until they get to their 40s and 50s.

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Comment by REhobbyist
2009-03-31 13:44:16

I was planning to take a lump sum instead of pension when I retire. Then I found out that I would lose my health insurance if I took that option. Now I can’t make up my mind.

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Comment by desertdweller
2009-03-31 15:17:34

And there goes the other leg of a possible retirement for me and my coworkers. IF and when my co decides to abrogate its contracts, and I have no doubt it will, then we will have the PGBC to issue our pensions. Soooo, not only will “I” not get “My” SS, but seriously possibility that the PGBC will not be covered, then my meager 401k-never matched plan.
I can see that there are alot of people in similar situations. And it won’t be pretty.
Can you say “Golden Girls” living for us all? I wish I were like ‘Rose’.

 
 
Comment by WT Economist
2009-03-31 06:06:23

Bush’s last gift to the Obama Administration. When taxes are raised to offset the losses, Republicans will complain about “spending increases” even though the benefits people actually get are unchanged.

Comment by Blue Skye
2009-03-31 06:38:11

I hope this guy Millard gets a chapter in some future forensic history book. Apparently he is one of the Lehman gang.

Maybe all of you PPT conspiracy guys were on to something.

Comment by WT Economist
2009-03-31 06:46:08

He’s a Giuliani guy. We’re still paying the debts for the Giuliani Administration here in NYC.

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Comment by Blano
2009-03-31 06:10:04

Just great.

Comment by DinOR
2009-03-31 06:42:24

Just as renting is no longer a “simple arrangement” any more ( neither is owning bonds ) Last year about this time, muni’s took a 20% hit as HF’s dumped them to cover their margin calls.

When you’ve taken the kind of hit… well the kind of hit nearly everyone has, a 5% Return isn’t going to fill the hole. But more importantly we should focus on how they got into so much stress to begin with? IMHO.

Comment by mikey
2009-03-31 07:13:40

From Wisconsin…the state’s once, largest mortgage company suddenly shuts down and is sued by State and States 2nd largest bank. Now it begins, the race to the courthouse and here comes the FBI :)

Central States Mortgage begins liquidation

The company that operates Central States Mortgage Co. began the process of liquidating the once-giant mortgage lender when it filed for receivership late Friday.

The Wauwatosa company, CSMC Inc., which had written more than $500 million in loans last year, suddenly shut its doors March 9, throwing about 220 people in five states out of work. Wisconsin has filed a $3 million wage lien against the mortgage banker/broker, which owes wages for March and commissions for February and March. The state is investigating whether CSMC violated plant closure laws when it shut down.

The receivership is the latest in a series of serious problems to besiege the company, which was once the state’s largest mortgage banker. Mortgage bankers write loans that are quickly sold to investors on the secondary market.

…Among the woes at the company that is overseen by a bitterly divided board of directors: An Illinois lender recently demanded payment of a $33 million loan; Associated Bank accused CSMC of fraud and persuaded a judge to freeze more than $2 million in CSMC assets; sources say the FBI is engaged in a wide-ranging probe of CSMC; and CSMC is engaged in a bitter dispute with its founder and former top executive, Richard Jungen.

…CSMC in February sued Jungen and other former executives, accusing them of defrauding the company out of $15 million. Jungen and the others vehemently denied wrongdoing. Stephen Kravit, Jungen’s lawyer, has noted the problems with Associated and the other lenders occurred well after Jungen left the company last summer.

http://www.jsonline.com/business/42018242.html

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Comment by Housing Wizard
2009-03-31 07:20:23

Shore up FDIC ,shore up under funded Pension funds , shore up big and small banks and unregulated hedge funds , shore up credit card defaults , shore up bonus contracts , shore up Wall Street ,shore up equity loan defaults ,shore up Car Companies , shore up loans ,shore up Investment firms and unregulated banks and firms ,shore up Insurance Companies and Credit Default Swaps , shore up Freddie and Fanny ,shore up Foreign Banks and Countries ,shore up liar loan borrowers , shore up toxic assets ,shore up jobs ,and on and on . Didn’t the Government Think Tank realize that this was going to cost trillions and trillions and trillions of dollars ? And all of this shoring up is the paying off of fake value and gambling .

In spite of all this shoring up ,I get a notice that funds that are owed to me are subject to Bk proceedings and I stand in line with all the other creditors .

Comment by whino
2009-03-31 08:03:51

‘In spite of all this shoring up ,I get a notice that funds that are owed to me are subject to Bk proceedings and I stand in line with all the other creditors.”

Holy cow wizard, and this couldent have come at a worse time. We read about this stuff all the time, but it hits home when one of our own HBBer’s gets bulldozed during this downturn. I hope your able to get full payment of the owed funds.

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Comment by DinOR
2009-03-31 08:56:26

I recently spoke w/ an atty. regarding our local bank FAILURE here in OR and the pronosis isn’t good. He explained that in FDIC receivership, THEY take 1st position. After all, they need to be made whole after honoring Deadbeat Bank’s obligations to depositors.

After telling him Deadbeat Bank ran up a $50 mil. tab in bad debt he told me the chances of common shareholders recovering dime (1) is almost nil!

But the guy wasn’t without compassion. He said that in small towns this kind of bank FAILURE can be d-e-v-a-s-t-a-t-i-n-g and totally destroy trust. He understood that most investable assets will be “mattressed away” for sometime to come ( further ) exacerbating our plight. Guy seemed to be coming from experience.

 
 
Comment by Pondering the Mess
2009-03-31 09:32:24

Ouch… My sympathies - I read what happened on the other thread a few days back, and you don’t deserve this on top of it.

No justice, it seems…

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Comment by X-GSfixer
2009-03-31 13:47:22

You would think that Weyerhauser would be working overtime, with all this “shoring up” going on……

Oregon will look like North Dakota, by the time all this “shoring up” is finished.

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Comment by aNYCdj
2009-03-31 06:25:11

Lets see 20% 30%+ loss … will their heads roll out the door too?

This is why its so hard to find a job today if you are smart….everyone you meet is a moron.
————————————————————-
Just months before the start of last year’s stock market collapse

Comment by Arizona Slim
2009-03-31 06:51:26

I hear you on the “everyone you meet is a moron” part. Reason #1 why I’ve never married.

It’s bad enough to have to deal with these people at work. I’d hate to go home to one too.

Comment by mikey
2009-03-31 07:22:12

lol

Slim doesn’t want a T-shirt with the pointing arrow that reads “I’m with my moron”
:)

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Comment by aNYCdj
2009-03-31 07:24:34

I got lucky slim i actually have a GF who i respect and is pretty damn smart …not a whole lot we disagree on. And she is always interested in the latest really stupid home buyers foibles.

There is no reason for us to be this underemployed in America. but she doesn’t drive being a NYC girl. So that would be a very big lifestyle change if we moved anywhere else.

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Comment by Blano
2009-03-31 07:27:39

You’re gonna hear about that one, lol.

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Comment by polly
2009-03-31 08:23:34

OK, I’ll start. Just because a lot of the women you meet are morons, doesn’t mean all women are. However, as with men, the sorting process may be arduous

Please note, that if you insist on only dating women who are “stylish” then you must expect to find that you have limited yourself to a pool of people who want to participate in society’s trends, including the recent trend in overspending. Yes, I’m perfectly aware you guys are more hardwired to respond to visual cues then we are, but if you can get over it you will have more success finding non-morons. Start with shoes. Women who have lots and lots of really high stilleto shoes are not your first target if you are looking for a companion who can resist following the crowd.

Love,
Polly - the chick who hates chick flicks

 
Comment by Kim
2009-03-31 09:03:27

+1000 Polly!

Good thing my DH didn’t judge me by my shoes when we first met. I haven’t bought a pair for myself in two years FWIW.

 
Comment by Olympiagal
2009-03-31 09:13:05

Women who have lots and lots of really high stilleto shoes are not your first target if you are looking for a companion who can resist following the crowd.

AhEM! With at least one exception IIIIII can personally think of, Ms. Polly McGeneralizer. :)

Anyway, I don’t have ‘lots and lots’. Just ‘lots’. And you know why? So I can stamp on the crowd.

 
Comment by Olympiagal
2009-03-31 09:23:48

Love,
Polly - the chick who hates chick flicks

But who DOES have a pink hammer…

;)

 
Comment by Blano
2009-03-31 10:38:55

“Polly - the chick who hates chick flicks”

Sounds good…..pink hammer or not.

 
Comment by polly
2009-03-31 11:03:38

Now, now, Oly. You know that you are hardly a person who easily falls into categories. We can’t have a world where everyone is like you. I mean, the poor frogs would be filing harassment law suits left and right and there wouldn’t be enough mushrooms left for those of us who reallly appreciate them.

Also, I specified “lots and lots” for a reason. And I also specified “first target” for a reason as I am sure that there are others, like you, who have somehow acquired these foot torture devices without absorbing the conventional thinking that made them so popular. And also, maybe your foot is long enough to absorb the height of the spikey heel without falling over because you are so tall and all that stuff.

 
Comment by Elanor
2009-03-31 11:34:57

I am awed by any woman who can actually walk in stiletto heels. That definitely takes a certain talent. If she looks graceful doing so, she earns my deepest admiration. Respect, not so much, but certainly admiration.

 
Comment by Olympiagal
2009-03-31 11:37:56

Let me address your post in a tidy fashion:
First of all, those frogs ENJOY being captured and fondled.
Secondly, it’s probably true about the mushrooms.
Thirdly, I just like shoes. But certainly not in an annoying squealy-girly ‘Sex in the City’ way, which I have never watched, btw, but I understand spends lots of time glorifying shoe shopping, which I disapprove of, unless it’s ME doing it*. But I only buy shoes on sale, you see. Anyway, I’m not tall, I’m only 5′7″. THe biggest part on me is my mouth (hahahaha! That’s funny) but I still don’t fall over, and that is because I have exquisite balance, learned from climbing trees barefoot in the rain, all soggy and muddy, in search of frogs or just for fun. So I think that counts for something, and entirely balances out the girly frou-frou cotton-candy pink with silver rhinestone buckles high-heels.
Balance, you see, balance.

*I don’t care if that’s hypocritical!

 
Comment by Olympiagal
2009-03-31 11:52:03

I am awed by any woman who can actually walk in stiletto heels. That definitely takes a certain talent. If she looks graceful doing so, she earns my deepest admiration. Respect, not so much, but certainly admiration

Well, I don’t do much plain old boring ‘walking’ in them.
*waves hand in a dismissive gesture indicating colossal disapproval of simply ‘walking’ around in stilettos*

See, I march. Or else I posture.
Jeeze, Elanor, as a pathologist you surely know that the bipedal spine combines poorly with stilettos when locomoting any distance farther than about, say, 3 feet?
They’s for style man! Style.

Hey! Look! There’s a robin outside!

 
Comment by Olympiagal
2009-03-31 11:54:11

Hey! Look! There’s a robin outside!

That was a non sequitur, huh. But there really is a robin right outside, I’m happy to report.

 
Comment by mikey
2009-03-31 12:01:27

b..b.. but Olygal, you do know, that the “Frog = Prince KISSING thing ISN’T just a fairytale…Right ?

ribbit …ribbit :)

 
Comment by Olympiagal
2009-03-31 12:24:10

b..b.. but Olygal, you do know, that the “Frog = Prince KISSING thing ISN’T just a fairytale…Right ?
ribbit …ribbit

Hmmmm…
Except I think I like frogs more than I like princes.
So can’t you just turn into, say, a bigger frog? :)

 
Comment by mikey
2009-03-31 12:57:22

For you I would Olygal, but then again, I don’t believe they allow unaccompanied 192 lb frogs fly west on 747-400’s. We need another plan ;)

 
Comment by Olympiagal
2009-03-31 13:40:53

I don’t believe they allow unaccompanied 192 lb frogs to fly west on 747-400’s.

Not even on Delta?! Stupid airlines!
Hey, I know! Maybe you could just hijack one!

…..Oh! No, wait! Nononononono!!…
*hastily disavows all abetting sort of phrases *

 
Comment by REhobbyist
2009-03-31 13:49:30

I thought that Slim is a woman. Which would mean that she is dissing men.

 
Comment by mikey
2009-03-31 13:55:54

Sheesh Olygal, that last comment should have the whole array of NSA ray XT5 super computers crapping puppies and shooting out my rap sheet…thx, I’ll never be able to fly again :(

 
Comment by Prime_Is_Contained
2009-03-31 15:08:33

“Please note, that if you insist on only dating women who are “stylish” then you must expect to find that you have limited yourself to a pool of people who want to participate in society’s trends, including the recent trend in overspending. ”

Great post, polly. This statement applies equally well for both sexes. For me, the ability to think for oneself and not slavishly follow convention is a HUGE plus in a woman.

And it can be applied in reverse as well: I like to believe that my mode of transport and dress has done a good job of signalling to all the women that I wish to avoid dating that we are definitely not right for each other. :-)

 
Comment by SanFranciscoBayAreaGal
2009-03-31 16:30:24

I believe Arizona Slim is a woman.

 
Comment by Olympiagal
2009-03-31 16:36:34

that last comment should have the whole array of NSA ray XT5 super computers crapping puppies and shooting out my rap sheet…thx, I’ll never be able to fly again

Not withoutt’n yer magical cape, Mr. Mikey.
But you know what? This is YOUR fault. I ain’t the one who is a 192 pound kissing frog and all full of fanciful theories.

Anyway, I’ll pay your bail, I already told you that.

 
Comment by mikey
2009-03-31 17:02:17

Oly,

I have never needed bail money but then again, I’ve never really gotten caught..well, red-handed at least ;)

 
 
Comment by DinOR
2009-03-31 07:43:40

Depends. I’ve always thought in terms of making an attempt to at least bring people ‘up’ to your level?

Granted, some people are more effort than they’re worth and simply can’t get up to speed no matter ‘how’ much time you’d be willing to invest in them? But most folks if given half a chance and proper motivation -can- deliver!

My problem is the ones where you give them a 15 min. break ( and then have to “re-train” them? )

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Comment by mikey
2009-03-31 07:56:57

Say What DinOR ?
;)

 
Comment by DinOR
2009-03-31 08:33:31

mikey,

I had an old 1st Class Petty Officer from Bar Harbor, ME. Great guy, really funny. His motto was, “Give me all the dregs. Empty the GD brig if you have to! I’LL turn them into sailors!”

And I’ve kind of lived by that. It’s served me well. Now… that I’ve gotten a little older, I don’t have the patience I once had but I think we’ve all seen what the “best and brightest” are capable of?

 
Comment by mikey
2009-03-31 11:14:18

Just before loading out for Nam, my crazy colonel in Okinawa had to send a heavily armed airborne infantry platoon down to the local Stockade help the Provost Marshall “See the Light”. We were serious and meant business too, those guys were going to Nam WITH US per Westmoreland’s order.

It didn’t say much for us, our colonel or Westmoreland but that’s where we KEEP most of our “best and brightest”. After a tense stand-off we got just about everybody except the convicted rapists and murderers I believe.

Although I worked with a MP Brigade later, there was always something internally satisfying about pointing a locked and loaded M-60 machine gun at bunch of neverous big MP’s that I KNEW so well.
:)

 
 
Comment by hip in zilker
2009-03-31 08:07:30

Aw, Slim, you just haven’t met the right moron yet. Don’t give up hope. :-D

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Comment by Faster Pussycat, Sell Sell
2009-03-31 08:53:52

ROTFLMAO!!!

This is dynamite. Water through the nose.

 
Comment by mikey
2009-03-31 13:39:40

Don’t just laugh FPSS…spread some gasoline, this a big one :)

 
Comment by ecofeco
2009-03-31 14:35:11

Damn! That IS funny! I think I’ve hurt myself.

(been there done that)

 
 
Comment by are they crazy
2009-03-31 09:08:39

So true, Slim. My circle of friends remains small. I’m constantly surprised how ignorant people are. I”m more perplexed that they seem to function at all.

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Comment by Olympiagal
2009-03-31 09:17:22

Sigh…
I, too, am constantly surprised at how iggerant everybody is. All these semi-evolved baldish monkeys with their newfangled opposable thumbs seem to do nothing but lurch from one silly idea and/or activity to another, incessantly.
I often feel quite superior to them, right up to when I suddenly notice that me and my thumbs’ve been lurching from one silly idea and/or activity to another.

 
Comment by NoSingleOne
2009-03-31 10:44:41

I have a small circle of friends precisely because I subject anyone who will listen to constant tirades about how ignorant and hypocritical the entire world is.

My buddies smile and indulge me for about 5 minutes before settling in comfortably in front of the latest game on the idiot box with a bag of Cheetos and a beer. The Zen of Indifferent Couch-potatoism continues to elude me, however.

Even though I hope to someday drink from the fountain of Enlightenment, I fear that Ignorance truly IS bliss…a paradox that eats at me daily.

 
Comment by mikey
2009-03-31 11:37:27

You women have it pegged right. I too, don’t care for marriage either, for the simple fact that I don’t believe in Slavery of any kind.

Especially.. my own
:)

 
Comment by Olympiagal
2009-03-31 12:58:23

You women have it pegged right. I too, don’t care for marriage either, for the simple fact that I don’t believe in Slavery of any kind.

Nonsense, man! Husbands are great! I love husbands. The more the better—within reason— and, of course, as long as they aren’t mine, and can be sent home as soon as they get tedious and bossy.*

*And they do. They always, always do….

Sigh.

 
Comment by mikey
2009-03-31 13:35:47

Sheesh..Madam Frog Lady,

…Olygal, I mean, don’t you have TV, a radio or other meaningful “entertainment” up there in the Washington Woods ?

;)

 
Comment by Olympiagal
2009-03-31 13:56:44

…Olygal, I mean, don’t you have TV, a radio or other meaningful “entertainment” up there in the Washington Woods ?

I sure do, and I just told you about it. But I can see that I have transgressed into the ‘Too Much Information’ category.

Sorry about that.

 
Comment by Olympiagal
2009-03-31 13:57:45

transgressed

I meant, ‘trespassed’.
Sorry.

 
Comment by mikey
2009-03-31 14:07:16

Yeah Oly, you better Cool It before Ben says something or I’m Frog Marched away.
;)

 
 
 
Comment by mrktMaven
2009-03-31 10:45:06

It’s not a coincidence.

Comment by ecofeco
2009-03-31 14:39:27

Exactly.

What’s the old saying? “In the land of the blind, the one eyed man is… persecuted.”

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Comment by packman
2009-03-31 06:44:13

Got a link to that Ernest? I can’t find it from boston dot com.

Comment by Ernest
Comment by packman
2009-03-31 06:52:31

thx

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Comment by cobaltblue
2009-03-31 06:56:38

Now, this is an appropriate time for scads of annuity issuers and insurance companies to threaten to go bankrupt, and ask for a bailout!

After all, Turbo Tax Tim has a brand new case of Mt. Blanc pens, and an itchy trigger finger.

It’s time the Timster started dismantling another industry, GM is so March 2009.

Comment by NoSingleOne
2009-03-31 09:02:52

It would be lovely if some of the invective directed at the 70-day old administration was instead directed at the “genius” financiers enthralled with the “wisdom” of the free market who got us into this mess.

If memory serves, they are largely the false prophets who sneered at pension managers choosing the safety of government bonds while the Dow exploded with false profits. Didn’t they spend the last 10 years cheerleading the very same large cap stocks that are now “too big to fail”?

Suddenly AM radio talk shows and FNC are overwhelmed by outraged patriots wailing incessantly about “socialization” and the evils of bailing out TBTFs, when they are the same ones who sneered at conservative investors for not diverting bond funds into the corrupted and unregulated stock market.

Why is it that the jokers who suddenly worry about the sanctity of the Contract Clause the same ones who supported creatively interpreting the Constitutional right to due process and habeas corpus for the past 8 years?

Several smart people on this blog have noted that the biggest hit to capitalism was not inflicted by ad hoc socialists in the new administration, but by the unchecked greed of the capitalists themselves.

When it comes to the seductive punditry and sudden clairvoyance of the minority party, just remember the advice Cassandra gave to Priam of Troy: Beware the Greeks bearing gifts.

Comment by Pondering the Mess
2009-03-31 09:44:09

‘It would be lovely if some of the invective directed at the 70-day old administration was instead directed at the “genius” financiers enthralled with the “wisdom” of the free market who got us into this mess. ”

Oh, most of here hate them too, and don’t really believe either party cares at all about any of us. The rage at the current administration comes from all the BS about “hope and change” that is now followed up by basically rolling over and doing whatever the bankers want (Bailouts, print money, etc.) I doubt most people here expected otherwise, but the sheer cowardice that is on display in the higher ranks of government is sickening.

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Comment by LehighValleyGuy
2009-03-31 09:56:30

You need to focus a little better. You’re jabbing in too many different directions at once.

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Comment by NoSingleOne
2009-03-31 10:31:41

Ok, let me boil down the essence of my rant then:

The same people who claim they are motivated by the Constitution when opposing government intervention in rewriting contracts were perfectly willing to ignore the Constitution when it came to our rights to privacy and foreigners rights to due process.

It reminds me of the theocrats who conveniently ignore the Bible when it suits them as they rain biblical condemnation on those whom they disagree with.

I’m no fan of all the bailouts and the rolling over of the current administration, but I am sick of the false righteousness of their loyal opposition in pretending that they suddenly have all the answers.

Screw the partisanship and the kowtowing and start putting the people of this country first.

 
Comment by Julius
2009-03-31 14:20:04

“The same people who claim they are motivated by the Constitution when opposing government intervention in rewriting contracts were perfectly willing to ignore the Constitution when it came to our rights to privacy and foreigners rights to due process.”

Not all of us were. There are some of us that are always on the side of the Constitution (and personal freedom) regardless of the issue.

Quit thinking that everyone who dislikes Obama is automatically a Republican robot.

 
 
 
 
Comment by MazNJ
2009-03-31 09:26:50

So when they try to actually cash out this position when pension funds crumble, we can expect more downward pressure on the market? 8)

 
Comment by REhobbyist
2009-03-31 13:40:59

And apparently the guy in charge of the Pension Guarantee Fund last year was a former Lehman executive. Sheesh.

 
Comment by ecofeco
2009-03-31 14:48:19

None of this would be a problem if we had just used Social Security to invest in the stock market as well.

man I hate to plagiarize but…

BBBWWAAAHAHAHAHAHAHAHAHAHAHAHAHAH……

*snark off*

Seriously. Can you imagine? Those blankity blanki blankity blanks actually wanted to invest SS in the stock market?! HOLY COW!

 
 
Comment by Mole Man
2009-03-31 06:03:24

Carnegie Mellon economist Allan H. Meltzer on the economic crisis: The Sky Is Not Falling
“What do you think about this being the end of capitalism?” the German reporter asks the Carnegie Mellon University economist.
“I think that is the stupidest question I have heard in 40 years of talking to journalists,” he replies.

Comment by AbsoluteBeginner
2009-03-31 07:11:36

‘This parrot is no more! It has ceased to be! ‘

Comment by ecofeco
2009-03-31 14:49:53

No it’s not! There! See?! It moved!

Comment by CA renter
2009-04-01 03:28:11

LOL! :)

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Comment by FB wants a do over
2009-03-31 06:06:48

Not first

 
Comment by rusty
2009-03-31 06:07:49

not second :-)

Comment by mikey
2009-03-31 07:40:44

Who’s on first ?
:)

 
 
Comment by wmbz
2009-03-31 06:09:39

Fannie Delinquency Rate Sees Record Rise To 2.77%
Monday 03/30/2009 10:33 AM ET - Dow Jones News

NEW YORK -(Dow Jones)- Fannie Mae (FNM) saw the largest increase in a month of its single-family delinquency rate among prime borrowers in January.
The mortgage finance company said this rate shot up to a historic high of 2.77% in January from 2.42% in December, a record 35 basis point increase that hasn’t been seen since the company started tracking these numbers in 1998. This compares to a delinquency rate of 1.06% in January 2008.
While these numbers are still low, it represents an increased stress on the company from its mortgage holdings. These numbers are expected to rise as the unemployment rate continues to tick upwards, and job losses drag even credit-worthy borrowers into missing payments.
On the business front, Fannie committed to buy nearly $2.4 billion of mortgage bonds in February, down a bit from its net commitments of nearly $3 billion in January.
The mortgage giant’s investment portfolio shrunk by 1.3%, keeping its total balance at $784.7 billion, well short of the curbs set by its regulator, according to a monthly report from the company.

 
Comment by Blano
2009-03-31 06:11:07

Not last.

Comment by Arizona Slim
2009-03-31 06:52:46

Not tall.

Comment by bluprint
2009-03-31 07:08:09

Not slim.

Comment by cobaltblue
2009-03-31 07:39:41

Not an ipsedixitism if I ever didn’t hear one!

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Comment by aNYCdj
2009-03-31 07:53:50

Hmmm cobalt is that anything like “sexting”?????

 
Comment by Olympiagal
2009-03-31 09:52:11

Not an ipsedixitism if I ever didn’t hear one!

Azure person, every single time I decide I’m never ever gonna listen to another thing you post, you come up with something like this, and I have to change my mind.

Sigh.
Can’t you just be more consistent, or something?

 
Comment by Olympiagal
2009-03-31 14:01:39

Can’t you just be more consistent, or something?

I mean, be a ween*ie all of the time, or be a ween*ie none of the time. Is what I mean.

 
Comment by ecofeco
2009-03-31 14:52:45

Wow! I had to look that up.

But Olygal, what do you mean? Did you not look up the definition?

An ipse-dixitism is an unsupported or dogmatic assertion; it is a term sometimes used to point out a missing argument.

 
 
 
 
 
Comment by Julius
2009-03-31 06:11:17

So…the media today continues to try to call a bottom on this recession despite the fact that job losses continue to mount and fundamentals are still extremely weak in many arenas.

What say you? I personally think this recession is nowhere near over, especially given that a Chrysler bankruptcy is very likely in the next 30 days or so.

Comment by wmbz
2009-03-31 06:22:30

“I personally think this recession is nowhere near over, especially given that a Chrysler bankruptcy is very likely in the next 30 days or so”.

And GM has it’s hands full also, more calls for bankruptcy. Of course they should have filed BK last year.

“Underscoring the urgent situation, GM may report tomorrow that March U.S sales plunged 48 percent, based on the average estimate of 7 analysts surveyed by Bloomberg”.

Comment by Blue Skye
2009-03-31 06:42:53

“they should have filed BK last year.”

It reads to me as they did. It’s just being handled by the Executive Branch rather than by the Judicial.

Concentration of power.

Comment by Prime_Is_Contained
2009-03-31 08:39:10

No, under a real BK they would have been able to conserve FAR more cash. This process has not been nearly as effective at saving the companies as a real pre-packaged BK would have been.

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Comment by Julius
2009-03-31 09:07:55

Absolutely true. Plus it simply delays the sort of changes needed to make GM lean and profltable again. (I exclude Chrysler because that company is simply an unmitigated disaster at this point. It has a very poor product lineup, poor leadership, the worst sales of the Detroit Three by far, a long-time reputation for abysmal reliability, and it’s current hope for “salvation” lies with Fiat (!?!), a perpetually broke Italian automaker that is probably in need of a bailout/major restructuring itself. As far as I’m concerned, Chrysler should simply file Chapter 7 and liquidate.)

Earth to GM: if you axe your moronic upper managers and replace them with competent people (as Ford did), drop your overall dealer count by at least a third, get the UAW to accept a pay/benefit scale that is actually reasonable, eliminate the “jobs bank”, close ALL the under-utilized (and often idle) factories you have, dump your inessential brands (you only really need Chevy and Caddy) and give your engineers what they need to design decent cars, you might be in decent shape. In a few years.

 
Comment by Blue Skye
2009-03-31 09:09:32

A classic case of “government help”?

 
Comment by sleepless_near_seattle
2009-03-31 12:55:07

“(you only really need Chevy and Caddy)”

I think they should also buy Jeep.

 
 
 
 
Comment by NoSingleOne
2009-03-31 09:06:34

The recession isn’t over, but there will be lots of news of “recovery”, which is merely the normal Spring rebound…which just so happens to be from the most abysmal Winter in living memory.

Comment by Julius
2009-03-31 09:27:21

I still have the odd feeling that something will eventually happen that will make what happened so far look like a joke.

There is still way too much overspending, credit dependence, overpriced housing, etc. This has to all shake out before any real recovery happens.

We’re in the bottom of the fourth inning…but this sucker’s a tripleheader, with extra innings likely in each game.

 
Comment by Pondering the Mess
2009-03-31 09:47:13

I can imagine an insane future with hordes of people in soup lines under the watchful glare of large TV’s that blare about how “the recovery is around the corner” and how “the market” - which at that point consists of nothing but government owned/bailed-out companies - “is going up” even as the currency continues to plummet. It’s all spin at this point - get out there and buy something you can’t afford to keep ‘merika strong!

Comment by ecofeco
2009-03-31 14:56:13

Double plus good!

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Comment by are they crazy
2009-03-31 09:13:48

I still think it’s tightened credit that will keep the recession going. Even if you gave everyone back their jobs, they still couldn’t make it. So many were living off loose credit that has evaporated. Most can’t/won’t live within their means. If the economy is 70% dependent on consumer spending, the levels of the bubble are gone probably for the rest of our lifetimes, IMHO.

 
Comment by Chip
2009-03-31 09:42:04

Yesterday I heard in a radio discussion the thinking that GM would drop all brands except Chevy and Cadillac. I think Buick is very popular in China and it was in parts of the Mideast. Wonder if they’ll slap a Buick badge on Chevys for such markets. Seems like they’ve effectively done that for many years, just pimping the interiors a little more.

Comment by CrackerJim
2009-03-31 12:11:41

“Wonder if they’ll slap a Buick badge on Chevys for such markets. Seems like they’ve effectively done that for many years, just pimping the interiors a little more.”

You mean similar to Lexus vs Toyota?

Comment by X-GSfixer
2009-03-31 14:11:29

That’s always bothered me…….this “too many brands” argument evidently doesn’t apply to any of the overseas manufacturers.

Toyota: Toyota, Lexus, Scion
Honda: Honda, Acura
Nissan: Nissan, Infiniti

I think the case could be made that too much “choice” can be bad in some ways. If nothing else, cars are more expensive to repair, because nobody’s parts interchange anymore.

In the good old days, you used to be able to go to the parts counter and say “I need a GM alternator”…….they all used the same alternator (that cost about $20), and the only thing you had to worry about was if it had one or two groove pulleys.

I’ve refinanced a house in less time than it takes for the counter guy to enter the data to spit out the part # now……then, you usually have to wait for it to show up from the main warehouse the next day.

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Comment by Jas Jain
2009-03-31 06:14:22


Case-Shiller Composite-20:

-28.6% 1-Month Annual Rate

-26.5% 3-Month Annual Rate

-22.6% 6-Month Annual Rate

-19.0% YoY

DECLINE IS ACCELERATING.

Jas

Comment by Julius
2009-03-31 06:15:53

Holy cow. So much for the declines “leveling out”…

Comment by Julius
2009-03-31 06:18:52

Hahahaha just LOOK at this Reuters story…

“Most housing indexes overstate downturn”

NEW YORK, March 30 (Reuters) - Most closely watched U.S. home price measures lack enough local data to truly reflect house values and are overstating the extent of price drops, executives at a real estate analytics firm said on Monday.

Some key markets in those indexes are dominated by distressed foreclosure sales, exaggerating the price weakness that is often extrapolated to the national market, the co-founders of Collateral Intelligence said on a conference call conducted by UBS.

http://www.reuters.com/article/marketsNews/idUSN3033601520090330

Comment by Dave of the North
2009-03-31 06:30:55

Collateral Intelligence is suffering from collateral brain damage

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Comment by Bob in Vegas
2009-03-31 07:29:25

No, they’re just manipulating the statistics and lying.

I learned in graduate school that if you torture a data set long enough, it will confess to anything.

 
Comment by oxide
2009-03-31 08:38:00

I am SO stealing that. :cool:

 
Comment by bananarepublic
2009-03-31 09:28:38

I’ve been tracking Case-Shiller data for Los Angeles, and it looks like this summer prices will finally be below the inflation-adjusted numbers. Right now they are still about 17% higher, putting us around 2003 prices.

I will not, however, be using this as a buy signal. I am not going to try to guess when prices have bottomed. As long as the chart is headed down I will wait. Also, in the 90’s prices recovered briefly 3 times, only to continue downward. So there will be at least a couple of dead cat bounces coming. I’m not falling for them, regardless of what our POS news media says.

 
Comment by Julius
2009-03-31 13:34:24

Oh yeah…heck even the Great Depression featured half a dozen or so asset price dead cat bounces before finally hitting rock bottom.

 
 
Comment by packman
2009-03-31 06:37:28

There is starting to become a huge discrepancy between the Case/Shiller numbers vs. the numbers put out by the FHFA (formerly OFHEO). It’ll be interesting to see how this plays out. Case/Shiller seems to be the “industry norm” for tracking the numbers, but of course FHFA is the government figures. It’ll be interesting to see if a big fight is brewing. Unfortunately we can take a guess what would be the outcome of such a fight. :-(

It’s ironic because just about two years ago I think the OFHEO actually made adjustments to become more “Case/Shiller-like” - officially (they stated as such), apparently because they realized that the C/S numbers were more accurate.

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Comment by jbunniii
2009-03-31 08:12:31

Case-Shiller is much more comprehensive. FHFA/OFHEO covers only sales of single-family (detached) houses with mortgages securitized by Fannie Mae or Freddie Mac, which are surely a small minority in the bubble markets such as California.

 
Comment by Julius
2009-03-31 08:12:55

Shadow Government Stats has a very interesting set of articles about how the US government has been manipulating and distorting various economic data for at least the last 50 years.

Suffice it to say if you see a major discrepancy between government numbers and somebody else’s numbers, reality probably rests closer to the non-government stats.

 
Comment by DinOR
2009-03-31 09:01:35

jbunniii/Julius,

Right, and if they want to get p!ssy about it, just go ask PMI ?

 
Comment by mikey
2009-03-31 10:40:42

Having problems with all those numbers and stats…

“We’re from the government, and we’re here to help”

:)

 
Comment by ecofeco
2009-03-31 15:40:10

Hate to throw cold water here, but commercial stats are just as subject manipulation.

I LIKE discrepancies between gov figures and commercial figures. That way, I know the truth lies somewhere in between. (or somewhere completely outside)

 
 
Comment by Professor Bear
2009-03-31 12:23:02

“Most closely watched U.S. home price measures lack enough local data to truly reflect house values and are overstating the extent of price drops, executives at a real estate analytics firm said on Monday.”

What they are really saying is that ‘all real estate is local’ and ‘it’s different here’, wherever here happens to be. Figures don’t lie, but liars do figure.

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Comment by mikey
2009-03-31 18:23:05

Counting backwards from your pinkie to your thumb on the left hand:

10,9,8,7,6
+ the 5 the fingers on your right hand
= 11
:)

 
Comment by packman
2009-03-31 18:59:29

Ha ha - or put another way:

Counting backwards from your pinkie to your thumb on the left hand:

10,9,8,7,6
minus the 5 the fingers on your right hand

= 1 finger left. Where did the extra finger come from?

 
 
 
Comment by Bill in Los Angeles
2009-03-31 06:57:32

Holy cow. So much for the declines “leveling out”…

Yeah! Where’s Manny? LOL.

 
 
Comment by packman
2009-03-31 06:30:12

Wow.

I’m here to eat a bit of crow. I honestly thought the declines would begin decelerating right about now, and that January’s YoY numbers would perhaps be about -18% (vs. December’s -18.6%), based in part on an “Obama bounce” - some anticipation of things like his housing plan propping things up. So far that seems to have no effect - at least the anticipation factor (the plan wasn’t announced until late Feb).

It’s interesting that now the downslope is much steeper than the upslope, especially when factoring in inflation. On the frontside of the bubble the fastest the gains ever got was 17.12%, and that was after the “elbow” of 2004, when the frenzy really was going full steam and after prices were already about 60% too high (index was at 170).

Now we’re reaching full steam on the downslope much later - the index is down to 146 already! That to me confirms for certain that we’re going to overshoot on the downside, and by a lot.

Comment by exeter
2009-03-31 06:39:02

Damn pollyanna crow eaters….. ;_)

Comment by mikey
2009-03-31 08:13:14

Wow..the downward slope of the curve is a CLIFF !?!.

Readjusts my calculations and tries it with my purple crayon :)

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Comment by muir
2009-03-31 11:28:49

“I’m here to eat a bit of crow.”

Told ya

:-)

[a little gamy, salt doesn't seem to help]

 
 
 
Comment by bananarepublic
2009-03-31 09:33:11

“That to me confirms for certain that we’re going to overshoot on the downside, and by a lot.”

Yep.

Also remember that on a dollar basis, a 17% increase on the way up is not as significant as a 17% decrease on the way down.

$500,000
17% increase equals $85,000

$585,000
17% decrease equals $99,450

In other words, ouch.

 
Comment by Pondering the Mess
2009-03-31 09:51:20

Still have a long way to go, too… Many Option-ARM / ALT-A holes like Maryland, Northern Virginia, DC, etc. where idiots with decent credit bought houses at 5 to 10 times their income have not yet blown up. Apparently, having a higher credit score was supposed to “magically” let one afford something clearly unaffordable - I think we can guess how well that is playing out. The unfortunate part is that the Bubble is taking forever to deflate in these places and thus we still have a higher percentage of morons who think “recovery is just around the corner!” than places that have been blased by subprime.

Comment by Faster Pussycat, Sell Sell
2009-03-31 10:29:47

Not true, not true about the “taking forever”.

What you are seeing is (relatively-speaking) “strong hands”. The decline is masked in the early stage because of that but it becomes a waterfall very quickly.

You saw the same thing last time on Park Ave in 1992-1993 and Pacific Heights in SF in the same time frame.

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Comment by VaBeyatch in Virginia Beach
2009-03-31 11:11:28

I have a local friend who used what he called “a drug dealer loan” to buy his house. He put down a decent chunk, and of course pays a large portion of his paycheck to his house (probably was 50%+ at the time he got the loan). The flipside is he is now friends with people in high places, so securing better jobs is easier. His pay has gone up as well, so the payments aren’t so bad. In the end tho, he doesn’t really care, he is happy because that’s what he wanted. I’d say it was over 5 x his income when he bought, but now that’s changed. But it wasn’t unmanageable, especially if you don’t go nuts buying other things.

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Comment by neuromance
2009-03-31 18:44:13

He won his bet that his income would go up.

As the global credit meltdown indicates, many, if not most people, lost on theirs.

 
 
 
Comment by Observer
2009-03-31 12:26:55

The downslope is always steeper and quicker than the upslope. It is a fact of nature, that it is much easier to destroy than to create

 
 
Comment by cobaltblue
2009-03-31 07:08:58

Case-Shiller Composite-20:

-28.6% 1-Month Annual Rate

-26.5% 3-Month Annual Rate

-22.6% 6-Month Annual Rate

-19.0% YoY

DECLINE IS ACCELERATING.

Jas

Time for the LAY girl and Sean Snaith-Inthegrass to emerge in the cinematic apologia style. May I humbly suggest -

“My Magnificent Careen” or,

“How to Lose Money in RE Without Really Trying”, or

“They Shoot RE Whores, Don’t They?”

Other nominations?

Comment by Julius
2009-03-31 08:16:05

Money magazine’s forecasts for the biggest home price declines by locale.

http://money.cnn.com/magazines/moneymag/moneymag_realestate/2009/index.html

Comment by VaBeyatch in Virginia Beach
2009-03-31 09:08:16

Yay! Virginia Beach is 13th!

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Comment by Faster Pussycat, Sell Sell
2009-03-31 10:35:17

Yes, we have no bananas!

You’re gonna believe Money magazine about anything?!? Money?!?

Wow, delusions run deep. :-D

 
Comment by VaBeyatch in Virginia Beach
2009-03-31 11:15:38

What I believe is one thing. Trying to convince the masses that information I’ve learned on a blog says to me that prices will go down doesn’t go far. When major print publications echo things (that to us are age old) I can shove it in their face, and it will help re-enforce what my views have been for a long time. This is ammo.

 
Comment by REhobbyist
2009-03-31 13:59:14

I’m glad that my town,Sacramento is on the list. A lot of people here say that it has bottomed, and this supports my view that it has further to fall.

 
 
Comment by Don't Know Nothin About Buyin No House
2009-03-31 12:47:03

Thanks for the link.

Considering all the markets they could have chosen, some interesting choices/inclusions on the list. Wish I could find their methodology - the why and the how of markets chosen.

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Comment by Professor Bear
2009-03-31 08:08:36

NPR’s headline news reported the accelerating housing price crash as evidence that it is “still a buyer’s market.” Anyone dumb enough to buy into this conventional wisdom in California a year or so ago is now out $100,000 or so in home equity losses.

Keep up the dumb real estate shillery, MSM! I am going to wait until home prices stop dropping like a rock before I even think about looking around at what is left of the housing bubble rubble as a potential home to purchase.

P.S. The NAR is a major NPR sponsor.

Comment by Julius
2009-03-31 08:23:30

Yeah, it’s only relatively recently that I’ve realized just how biased NPR is. Unfortunately the local NPR station is pretty much the only source of news content available in Cleveland on the radio dial, so I’m stuck with it.

Comment by ET-Chicago
2009-03-31 09:06:55

Yeah, it’s only relatively recently that I’ve realized just how biased NPR is.

In terms of the real estate and credit bubbles, there are many news organizations doing some excellent reportage — NPR, Wall Street Journal, New York Times, and Bloomberg included — though it may be mixed in with a good deal of dreck.

Do they rely too heavily on propaganda from the likes of NAR and the NAHB? Absolutely. Were they cheerleading for far too long? Sure. But they have been producing some good information as well.

One has to be able to read or listen critically and skeptically. It has been ever thus.

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Comment by Gadfly
2009-03-31 09:23:54

I really started to notice the bias when the march to Iraq invasion started in late `02. Phony left gatekeepers.

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Comment by NoSingleOne
2009-03-31 09:27:33

Come again?

Which news outlets aren’t biased??

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Comment by Julius
2009-03-31 09:33:25

Some are more biased than others. But you’re correct, I don’t really trust anyone from the MSM at this point.

 
Comment by Olympiagal
2009-03-31 13:51:47

Some are more biased than others. But you’re correct, I don’t really trust anyone from the MSM at this point.

I pretty much stopped reading the newspaper and watching the teevee for information as soon as I found this blog. There just isn’t no point to heeding that pretend MSM stuff, except for light entertainment— like a circus, only the clowns are wearing dark suits and with no beepy noses and no clapping seals—and also if I feel like shouting at the little wiggling heads on the screen, like for old times sake.

And you know what? Everyone thinks I must be a genious and know wise secret things nowadays.

Thanks, Ben! Thanks HBBers!

 
Comment by Matt_in_TX
2009-03-31 15:44:49

A space news blog is lamenting the loss of another space beat journalist who got the axe at the Houston Chronicle. I’ve lived in Houston for almost a year now and didn’t even know we had a Chronicle.

 
 
 
Comment by Asparagus
2009-03-31 09:10:49

Buyers market…sellers market…?

What about Broken market…No market…frozen market…

Comment by ecofeco
2009-03-31 15:48:09

How about a meat market, where everything is slaughtered and dead and overpriced? :lol:

…or in the old slang of hooking up at the bar, everyone is on the make but nobody is getting any?

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Comment by bananarepublic
2009-03-31 09:37:31

I think what they meant is buyers have the leverage. When prices were going up they called it a sellers market, but really the people selling were actually giving up gains they could have kept (temporarily) by not selling.

Put another way, a sellers market is a market where you can easily sell something. A buyers market is a market where you can easily buy it. And I am not talking about the availability of credit. Just with regards to which side has the control.

Of course, buying real estate when it is going down like today isn’t a buyer or seller market. It is suicide.

 
Comment by Don't Know Nothin About Buyin No House
2009-03-31 12:52:46

PB,

Your strategies make sense, especially for someone like you with good links to monitor closely the markets you are interested in and a strong grasp of trends.

Only wild card is the credit markets. If getting a loan is harder now than say in two years, then somebody with lots of cash might be able to do as well today as in two years?

Comment by Professor Bear
2009-03-31 13:14:23

“…somebody with lots of cash might be able to do as well today as in two years…”

The problem at the moment is the comps have not adjusted to reflect the market reality of a glut of empty homes against the backdrop of falling or vanishing incomes due to the recession. I expect the comps to have adjusted lower by two years from now, and also for many more would-be buyers agreeing that real estate is the worst possible investment. Today there are too many credit-drunk investors still out on the loose for my taste.

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Comment by neuromance
2009-03-31 18:46:37

Any outlet in which the Real Estate Industrial Complex (REIC) advertises, is going to try to be favorable to the REIC. After all, the REIC is paying their bills.

Some years ago, there was a bit of a brouhaha with car magazines, and the realization that their articles might not be unbiased towards the car companies advertising in them.

 
 
Comment by Chip
2009-03-31 09:44:31

Jas - nice number-crunching. Thanks.

 
Comment by packman
2009-03-31 10:31:33

Extrapolating a monthly change to an annual rate though is fairly meaningless, because it’s not seasonally adjusted. Prices always fall faster (or rise slower) in the winter than in the summer.

What really matters are the YoY numbers (still down dramatically, but not in the 20’s%).

Comment by Professor Bear
2009-03-31 11:22:59

“Extrapolating a monthly change to an annual rate though is fairly meaningless,…”

I disagree (as made obvious by my frequent conversion of daily or monthly rates to annual). Conversion to an annual rate of change is helpful for an apples-to-apples comparison of rates across different time horizons. However, one should not interpret annualized rates of change as a prediction. Clearly an annualized rate of change projected from a shorter time period will be less reliable as a measure of the long-term rate of change.

Comment by packman
2009-03-31 11:49:08

But you only get a valid apples-to-apples extrapolation comparison if you remove seasonality.

In particular if you look at Case/Shiller numbers there is always a “hump” in the summer. This is valid in the real estate market. So if you extrapolate fall/winter numbers you will always get worse-than-true results, and if you extrapolate spring/summer numbers you will always get better-than-true results.

For example, last June the comp-20 index went from 168.60 to 167.77. Extrapolated out this is only a -5.91% annual change. However the YoY change was -15.88%, which is the meaningful number.

You could still use monthly extrapolation as meaningful data - if you adjust for seasonality, but that’s not easy since you have to then factor in monthly changes going back N years, a much more complex formula (though more accurate).

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Comment by cactus
2009-03-31 12:53:08

Case-Shiller Composite-20:

-28.6% 1-Month Annual Rate

-26.5% 3-Month Annual Rate

-22.6% 6-Month Annual Rate

-19.0% YoY

DECLINE IS ACCELERATING

“its in the bag” as they used to say

Jas are you still long Treasuries even at this low interest rate ?

 
 
Comment by Fresno Dude
2009-03-31 06:14:30

An appraiser came by last week, something about “a difference in price” for doing the short sale. We were also told earlier that there was a “bidding war”, but “a difference in price” would seem to indicate the price war is between the lender and a possible buyer. Anyway, as a renter, this is the third house we have been in where we have had to move because the owner wanted to sell, and my wife is saying “we have to buy a house so we won’t go through this again”. So, I am going to retire this July and move to Eau Claire, Wisconsin, and buy a house if the economy does not deteriorate so badly that my wife takes note of it. A 3 bedroom two bath goes for about $150,000. There is the $8000 rebate for the first time buyer and that could be viewed as a hedge against a further price drop. Here in California, there is a law that says a renter now has to be given 60 days notice when a house is being sold, so I am wondering if the notice will be coming soon.

Comment by Fresno Dude
2009-03-31 06:54:55

Sorry about the double post. My first post did a hang fire and then popped ahead of other posts. I thought the automatic editor on my first post did not like the word rabid about my wife’s desire to get a house

Comment by CA renter
2009-04-01 03:42:46

Sorry to hear about your LL, Fresno.

Your idea about living in the RV sounds really good to me, especially if it’s just the two of you, and you like each other! ;)

 
 
Comment by Blue Skye
2009-03-31 06:57:39

Renter’s Fatigue.

 
 
Comment by hobo in mass
2009-03-31 06:14:43

Can somebody help me understand CDS’s? My understanding is somewhere below the 101 level. I read somewhere that a bank could lend money, buy a CDS to cover that loan, and then loan more money as the original money was no longer a risk. My question is, if the CDS issuer goes under and can’t make good on the CDS does the owner of the bank have to repeal loans, come up with more capital, or something else?

Comment by FB wants a do over
2009-03-31 06:37:25

Answers B and C

B. Come up with more capital.
C. Something else (in the case of AIG the government back stops the CDS)

Comment by bluprint
2009-03-31 07:11:33

D. be declared insolvent by the FDIC and taken over.

Comment by FB wants a do over
2009-03-31 07:52:49

E. Have the insurer gives out bonuses.

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Comment by jfp
2009-03-31 06:44:42

My understanding is what they need to maintain is a particular leverage ratio. So, if the CDS is now to be treated as a regular mortgage that can default instead of something as safe as a treasury, then they suddenly count in the leverage ratio. This being the case the banks can deleverage by:

1. Raising more capital from investors.
2. Raising more capital through savings accounts with attractive interest rates.
3. Selling the CDS’s.
4. Beg the government for money.
5. Bankruptcy.

Options one and three probably won’t work out so well for them at the moment. Option two is difficult because the banks must compete with the GSEs like fannie and freddie for a lot of loans. It’s harder to get appropriately higher interest rates. So if a bank is really bad off, the options seem to be limited to 4 and 5.

Comment by bluto
2009-03-31 07:58:02

Close a loan normally has a capital requirement (say 1/10th) of the value that you have to maintain as equity. If you have insurance against default (the CDS) you need far less capital (say 1/50th of the loan) another way to look at this is given the same capital you can have 5x as many insured loans as non-insured loans. If the insurance goes bad though, you’ll need to raise 5x the starting capital for the loans covered by that insurance.
This changes your options a little. 1 doesn’t change , 2 doesn’t count as capital (it has to be equity not deposits). 3 doesn’t solve the leverage problem (the CDS let you lever things up so not having it means you still need more capital).

The new option is to reduce your assets so selling loans or not making new ones (slower than liquidiation).

4 doesn’t change but it’s more or less a subset of 1.

The final option for a bank is government control (receivership/conservatorship) rather than bankruptcy.

Comment by jfp
2009-03-31 11:49:13

Thanks!

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Comment by exeter
2009-03-31 06:14:58

U.S. home values sink at record pace in January

http://tinyurl.com/dk5wqu

Eat it realtor crime syndicate

Comment by exeter
2009-03-31 06:42:04

New marketwatch link to story.

http://tinyurl.com/cnt9ps

 
Comment by bluprint
2009-03-31 06:51:57

So it’s been what, just over a year now since the out edges started crumbling? Cali, Florida, Arizona…

If I have understood you in the last year, prices in the northeast haven’t really come down in a lot of places (upstate NY, VT, places like that) during that time. I’ve seen the same here in frogballs. Prices on the really expensive houses have started crumbling but not a lot of movement other than that…

Until recently. It seems right around January or so is when the numbers I track started to show it start to crumble. I don’t have Feb numbers yet and look forward to the rest of the year. But I really think this year we are going to see the interior of the country fall apart. Flyover country and all that…

Comment by exeter
2009-03-31 07:14:19

That is an interesting geographic observation that parallels my observations bluprint. Formerly I would spend an hour a week perusing REO’s but now it seems to be fast moving. Last night I saw even more stuff (newer structures in nice suburban areas, land, you name it) hitting the street in areas that don’t follow a pattern. It’s very random.

The collapse has just arrived in flyover country and the northeast folks. And it’s in front of us, not behind us. The time is here to put brass balls, patience and diligence to work.

Comment by Blue Skye
2009-03-31 07:58:37

Exeter,

How do you peruse REOs? I peruse the local listings on a few RE company websites, but they don’t indicate if the properties are REO.

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Comment by exeter
2009-03-31 08:57:10

It’s the link on bens foreclosure site.

 
 
Comment by Mikey(2)
2009-03-31 08:55:37

In my neck of the woods, most people are wussies, afraid to insult the sellers or be embarrassed by the rejection of their offers. These same conflict-averse people are the same ones that pay the sticker price for a car, preferring to spend money to avoid an uncomfortable situation.

If more buyers had the balls to make low offers, sellers’ acquiescence would be quicker. But as long as buyers are going to wait for prices to fall, asking prices are going to be sticky.

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Comment by Julius
2009-03-31 09:30:58

The foreclosure feedback loop is heating up - layoffs => foreclosures => destroyed banks => more layoffs

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Comment by ecofeco
2009-03-31 15:58:28

Lather, rinse repeat.

Seriously, my 9yo niece understands this feedback loop. I think she should be running the Fed, because if this is what an MBA and a PhD get you these days, I’ll take the “uneducated” kid any time.

Oh, that’s right, they were CROOKS!

 
 
 
Comment by Don't Know Nothin About Buyin No House
2009-03-31 13:06:56

Frogballs :)

 
 
Comment by cobaltblue
2009-03-31 07:54:07

I know what I want

But I just don’t know

How to go about

Gettin it

“Manic Depression” - by Jimi H (and he don’t live today)

Comment by exeter
2009-03-31 08:00:25

Krazy Kerry!!!!

 
Comment by Olympiagal
2009-03-31 11:22:30

Azure person; speakin’ of Jimi:

http://tinyurl.com/d2n54f

‘Jimi Hendrix childhood home torn down’ March 31, 2009

‘Despite an eight-year, $100,000-plus effort by Pete Sikov — a Seattle real-estate investor who at first wasn’t a Hendrix devotee, but became one — the historic structure is gone.’

Comment by ecofeco
2009-03-31 16:00:42

It’s the same in Texas. “Historical” means tear it down, it’s on valuable land.

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Comment by jay
2009-03-31 18:26:53

they say 29% fall, the house i’m buying sold for 205k in 2005, the bank took my offer of 77k…so a 62% fall from peak purchase. of course the house was supposed to be worth more in 2006 at the very peak. all i can say is wow…and is it possible for it to go down more…you bet. i figure the $7700 back in taxes will cover that or pay to do the fixing required. I actually hope it keeps falling, so i can get a rental on the cheap too! everyone either needs to own a place or rent a place…and the banks are not going to pay me ____ for years to come.

 
 
Comment by Jas Jain
2009-03-31 06:20:27

Cae-Shiller:
From Max AREA

-48.5% Phoenix - AZ
-46.5% Las Vegas
-43.4% Miami
-43.1% San Francisco
-40.8% San Diego
-39.2% Los Angeles
-39.0% Detroit - MI
-37.3% Tampa - FL
-31.5% Washington

-30.2% Composite-10

-29.8% Minneapolis - MN

-29.1% Composite-20

-22.4% Chicago
-19.8% Atlanta - GA
-19.7% Seattle - WA
-17.5% Portland - OR
-17.4% Boston
-16.7% Cleveland - OH
-16.0% New York
-12.8% Denver
-11.0% Charlotte - NC
-10.8% Dallas - TX

Jas

Comment by FB wants a do over
2009-03-31 06:38:58

I don’t think the NAR would appreciate you posting figures from the heavily depressed areas. Just saying.

Comment by Pinch-a-penny
2009-03-31 06:48:03

Last time I checked with the MAR, Boston was booming, and if you did not buy right now, you would be left behind as a renter for the rest of your life…
:-D

 
 
Comment by Darrell_in_PHX
2009-03-31 09:59:35

We’re #1…. We’re #1. Woot, woot… we’re #1.

For awhile Case-Shiller was tracking my house fairly well. Then this winter we fell off a cliff in my hood as the foreclosures actually started being liquidated.

Peak price for my ‘hood was $270K. 2 years ago I was trying to sell for $250K, but wanted to drop the price to $230K. 14 months ago I had it appraised for a sub 5% refi…. $236K.

Over the winter, one behind me sold for $130K, and one down the street for $118K. Okay, they were foreclsoure houses in bad shape.

Still, I think 48% off peak may be accurate for the whole of the area, but some places are worse, and a few not that bad.

Comment by cactus
2009-03-31 12:57:08

soon it will be cheaper for me to buy in Phoenix than rent

I pay 1195 per month 1700 square feet in Ahwatukee older area near Knox and 40th no pool

Comment by jay
2009-03-31 18:32:53

yes, and it will bring buyers bank for sure. i’m buying, my brothers buying a rental, my mom is going to buy, and a friend is buying. of course there are 80k properties coming tomarket or bank owned so far so there are plent of pickings. i may buy 2 if the price is right, i would have to get an even better deal to buy a second!. i’m going 77k cash provided the inspection report is good tomorrow! 1700 sq/ft with pool. the bank took my offer and did not try to get me higher! so if you have cash, don’t believe you can’t lowball!

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Comment by mina
Comment by mina
2009-03-31 06:31:59

wait for the link to show up. sorry I must have messed up my html.

Comment by Blano
2009-03-31 06:43:18

No soup for you!!!

Comment by Olympiagal
2009-03-31 09:28:01

Hahaahah! Ahhh….I loved that episode. And I love soup.

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Comment by mikey
2009-03-31 09:37:39

The soup line forms to the left and no cutting in Olygal ;)

 
Comment by Olympiagal
2009-03-31 10:39:45

But I’m HUNGRYYYYYYY! Actually, I AM hungry. I only had about a half pound of bacon and 2 eggs for breakfast, and one of them was a pullet egg.

 
Comment by NoSingleOne
2009-03-31 10:52:35

I feel like Lennie from “Of Mice and Men”…all I really want is a farm of my own and something soft to pet.

The sad part of that novel is that in the end it was really Lennie who was the lucky one, not George.

 
Comment by Olympiagal
2009-03-31 13:27:03

The sad part of that novel is that in the end it was really Lennie who was the lucky one, not George.

Hmmmm. You know what, my good Alaskan, you need to drink more beer and then go buy a farm and some bunnies. ‘Cause you are developing a dark world view, for sure.

 
Comment by NoSingleOne
2009-03-31 14:08:28

Well these economic collapses and subsequent unveiling of mankind’s true nature seem to have that effect on one’s world view. Steinbeck, Hemingway and Fitzgerald lived through the Depression and none of them got rich by writing books with happy endings.

Misanthropy, thy name is NSO…

 
Comment by ecofeco
2009-03-31 16:40:29

:lol: I like to tell people I’m nicest misanthrope they’ll ever meet.

 
Comment by ecofeco
2009-03-31 16:41:59

…then I see real quick who gets it or not. :wink:

 
Comment by Olympiagal
2009-03-31 16:54:19

NoSingyOne, I’ve read your posts for over a year now, and it seems to me you’re presently getting all darker and attenuated.
Well, stop it! Stop it, man! Maybe you need spring to arrive, or maybe you need a good brisk slapping, but unfortunately, I’m not handy to give you the slapping, so you’ll have to hire it out.

Anyway: I don’t know what you’re talking about when you say ‘mankind’s true nature’. Whassat? We have one? That’s freakin’ news to me. Like; ‘Where’s my grassy veldt? Where’d me tasty bananas gone to? Where did my nice hairy hide go and why’m I bald nowadays and my forehead bulges out? Why are my thumbs all bendy and get me into trouble when I grasp tools?’

If you’re so dark and gloomy, what do YOU think mankind’s true nature is? No, really, I want to know. (In an esssay of less than 700 words.)

Everybody gets to grade you, so think smart:

Begin!:

 
Comment by Olympiagal
2009-03-31 16:56:36

Oh, and NoSingy, I noticed you deliberately disrespected Cheetos and beer, which gives you an automatic -20 on my grading scale, so you should apply yourself.

Jeeze, man, why is everyone so GLOOMY lately? This is what we wanted, I thought.

 
 
Comment by Faster Pussycat, Sell Sell
2009-03-31 10:54:15

I’ve actually been to that soup place - and yes, the soup was both pricey and totally excellent!

And the line moves very quickly so I can see why he’d get all huffy. It’s a high-paced midtown food place for regular office-goers, etc. not one-timers.

And since then, it’s been shut down and he’s sold the rights and left the US.

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Comment by skroodle
2009-03-31 06:24:24

My Manhattan Project
How I helped build the bomb that blew up Wall Street.
* By Michael Osinski
* Published Mar 29, 2009

I have been called the devil by strangers and “the Facilitator” by friends. It’s not uncommon for people, when I tell them what I used to do, to ask if I feel guilty. I do, somewhat, and it nags at me. When I put it out of mind, it inevitably resurfaces, like a shipwreck at low tide. It’s been eight years since I compiled a program, but the last one lived on, becoming the industry standard that seeded itself into every investment bank in the world.

I wrote the software that turned mortgages into bonds.

http://nymag.com/news/business/55687/

Comment by Sleepr Cell
2009-03-31 08:40:53

I just read that story. If it doenst make your blood boil you don’t have a pulse.

J Robert Oppenheimer, upon seeing the first test of the bomb that blew Hiroshima into the stone age is said to have quoted a line from the Bagvad Gita “Now, I am become Death, the destroyer of worlds.” A reference to the god Vishnu.

I wonder how this guy feels.

Comment by Sleepr Cell
2009-03-31 09:30:10

Correction:

The Oppenheimer quote refers to Shiva and the bomb tested at trinity was the type dropped on Nagasaki. I should check my facts before I blog.

Guess I’ll stick to architecture and leave journalisim to the newspapers. Oh,…wait..

 
Comment by mikey
2009-03-31 09:42:48

“J Robert Oppenheimer, upon seeing the first test of the bomb that blew Hiroshima into the stone age is said to have quoted a line from the Bagvad Gita “Now, I am become Death, the destroyer of worlds.” A reference to the god Vishnu.

I wonder how this guy feels”

Not as bad as someone who has to deal directly with the bodies that they have created I’m sure.

 
 
Comment by Pondering the Mess
2009-03-31 09:54:14

Wow… talk about leaving a “legacy”

 
 
Comment by mina
Comment by realestateskeptic
2009-03-31 07:22:24

Sorry to say that although he is probably right, somebody who caused, and profited from the last bubble (tech) and was ultimately barred from the industry really shouldn’t be allowed to write squat. Though it is nice to hear from the criminals about the next crime wave…. He really was a hideous figure back then and I believe he plead out to security fraud charges.

Comment by packman
2009-03-31 09:49:43

Yep - you pretty much have to take everything he says with a grain of salt, being that he’s a known pumper (i.e. in essence a liar), and thus barred from securities by the SEC as a result.

That being said:
- Not everything that a liar says is lies. In this case he presents compelling data.
- Blodget has excellent insights IMO into macro-level views of things like this. He did a great piece last month on the nature of boom and bust cycles, and how they’re feed by human nature.

Comment by packman
2009-03-31 09:56:05

Side notes -

A. That reset chart is quite old now - 2 years old. It would be nice to see something more recent. Any ARM reset chart will *always* show a wave of resets N years out, because that’s how ARMs work. (That being said - this wave is certainly bigger than a normal-sized wave due to massive amount of loans made in 2004-2006)

B. The ARM reset chart isn’t as ominous as he makes it out to be, in large part because mortgage rates are - once again - at new historic lows. So while the ARMs are resetting now, the payments aren’t necessarily taking huge leaps (or at least as big as would otherwise be given historically normal interest rates).

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Comment by skroodle
2009-03-31 06:37:33

http://www.suntimes.com/business/1503942,sun-times-media-group-bankruptcy-033109.article

Sun-Times Media Group files for bankruptcy
Recommend (2)
Comments

March 31, 2009
BY DAVID ROEDER Staff Reporter

Read Chairman and CEO Jeremy Halbreich’s letter to readers

Sun-Times Media Group Inc., owner of the Chicago Sun-Times and many suburban newspapers, today voluntarily filed for Chapter 11 bankruptcy protection with the aim of reorganizing operations, settling a tax liability and making the company fit for a buyer.

Comment by Eudemon
2009-03-31 07:18:04

Yet another newspaper company off the rails.

No matter. Now that the proposal is out there, Sun-Times & Co. will be able to declare themselves a non-profit and be funded by taxpayers.

The “free” media will be paid for by YOU, whether you buy the paper or not.

Whaddaya think of that?

Comment by SanFranciscoBayAreaGal
2009-03-31 16:51:54

Link please.

 
 
Comment by Prime_Is_Contained
2009-03-31 08:49:22

Where’s their bailout???

 
Comment by bananarepublic
2009-03-31 09:40:34

I really love seeing these propaganda outfits go out of business.

Good riddance.

 
 
Comment by Blano
2009-03-31 06:40:41

Cerberus cutting the production portion of Chrysler loose. They just wanted the financial arm all along anyways.

http://www.marketwatch.com/news/story/cerberus-lose-stake-chrysler-auto/story.aspx?guid=%7B05A9826C%2DF592%2D4338%2DB499%2D02F89A71F917%7D&dist=TNMostRead

Comment by Arizona Slim
2009-03-31 06:55:56

I’m not sure I’d be so interested in a financial arm. Those things can really smack you in the balance sheet.

 
Comment by Blue Skye
2009-03-31 07:02:42

Read it again. Obama is taking it away as part of his reorganization plan.

Comment by Blano
2009-03-31 07:20:59

I see what you’re saying, though I’ve read that that was part of Cerberus’ plan anyways.

 
Comment by Pinch-a-penny
2009-03-31 07:21:48

Just a quick question? What power does Obama have to take things away without proper restitution? I would be very afraid of Obama having the ability to decide who owns what, and what can be done.
I agree that Beggers can’t be choosers, but still, where does the slippery slope end?

Comment by Bob in Vegas
2009-03-31 07:35:58

Obama isn’t really “taking it away.” The deal is that they agree to the goverment’s terms or they don’t get the bailout they want…

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Comment by Blue Skye
2009-03-31 08:00:22

Their stake is worthless in BK anyway.

 
 
Comment by In Colorado
2009-03-31 08:28:44

Just a quick question? What power does Obama have to take things away without proper restitution?

Good point. How much is Cerberus paying the Feds to take Chrysler off their hands?

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Comment by DennisN
2009-03-31 08:43:53

If the government takes your property, you should get compensated with market value. But what’s market value for a worthless property?

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Comment by Arizona Slim
2009-03-31 09:34:22

Zero!

 
 
 
 
 
Comment by lucy
2009-03-31 07:07:00

continuing a discussion from yesterday..

VirginiaTechDan, you asked
“How can a bank go belly up and depositors lose ALL of their money when only 10% of the loans go bad?”

I don’t believe it can (assuming no fraud). Do you have any examples?

What can happen is that 10% of bad loans can wipe out shareholder equity and make the bank insolvent. At this point the FIDC would step in and pay off depositors and try to realize assets.

Another issue is the timing miss-match. Where the bank has made long-term loans these cannot be used to pay off depositors. So the bank may be unable to find cash to pay depositors even though it has performing loans.

Comment by bluto
2009-03-31 09:59:07

He’s talking about banking excluding the FDIC guarantee, which is using the federal printing presses to make good on the bank’s promises. If there was not FDIC, the bank would have a small fraction of the deposits available, and timing mismatch is the reason. The deposits are demand (meaning I can legally expect all of it in currency at any time), the loans are long term assets which if sold today would be worth a portion of their eventual value (even if they are good).

In VTDan’s view (which is correct, but expensive) demand deposits should be true demand deposits (more like the bank currently offers safety deposit boxes) in which only a single owner retains the right to demand the contents at any time. Financing for a bank’s loans would come from the bank’s term borrowing. Note that in such a scenario demand deposits would require a fee since all they are offering is access to their vault and perhaps checking privledges.

To answer his question that preceeds and ties with that one:
With out committing fraud or printing money, how can two people both believe they have claim to the same dollar at the same time?

Because most of the time (and the change is usually simultanious and very fast), neither person will exercise that claim. It has been much cheaper for society if we allow them the pleasant fiction (with a larger entity backing that claim if a single corp or region demands exercise of that claim). That may change as increased volatility increases the cost of providing them that pleasant fiction.

Comment by VirginiaTechDan
2009-03-31 10:54:47

Allowing that “pleasant fiction” is the cause of inflation and allows the bank to pay me 3% and then lend 10x my gold at 5% and turns what most people perceive as a 2% spread into 48% profit on deposits based upon me risking my gold. If I am going to lend my money (gold, not bank notes) to a bank which I know will be lending 10x as many bank notes (all backed by 1 gold coin) then I will expect a MUCH HIGHER interest rate to compensate for the 10x leverage on my deposit. The bank maintains the fiction that they are only lending out the coin to one person at a 2% spread.

The problem is that the bank has to offer the same “interest” for people who deposit gold notes as people whom deposit gold-coins. Internally, the bank reverses the reserve requirement when notes are deposited, but does not have to reverse the requirement when new reserves (real gold) are deposited. So the original depositors of real gold are getting shafted as well as everyone who accepts a diluted bank note as if it were 100% backed by gold.

Comment by VirginiaTechDan
2009-03-31 11:28:53

Essentially, fractional reserve banking is a ponzi-scheme that can only go on as long more and more real gold is deposited into the bank. As soon as the supply of real gold in unable to allow the supply of paper gold to expand enough to cover the interest due on the paper gold you get systemic failure. Therefore, we close the gold window. Now the scheme can go on until people realize they are simply trading monopoly money that is all created from nothing.

Assume I own 100% of all gold in the world, and I lend you 100% of that gold and expect you to pay me back at 5% interest… where do you find that new gold? Now suppose that that 100% of gold serves as my reserve which allows me to issue 1000 bank notes all of which promise to pay “on demand”. The fraud is obvious.

The Federal Reserve owns 100% of all “dollars” and lends them all into circulation as Federal Reserve Notes. Defaults occur unless you have a exponential growth in the number of FRN.

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Comment by Austin_Martin
2009-03-31 10:10:20

It’s all a matter of size.

Say that a bank has $1 trillion in deposits, $999 billion in loans.

If they had to write down the loan values by $50 billion(say 10% of loans are now worth 50% of their original value), that’s a lot of dineros.

If they are only worth $50 billion, that’s their entire worth wiped out.

Comment by VirginiaTechDan
2009-03-31 10:58:01

Reserve requirements have NOTHING TO DO WITH LOANS vs “deposits” and everything to do with hard money vs deposits that promise to pay hard money. By the very nature every loan that creates new money from nothing (fractionally backed) results in new money being deposited such that money deposited always equals loans outstanding.

 
 
Comment by VirginiaTechDan
2009-03-31 10:44:32

Lucy, in the great depression many banks failed and depositors lost everything. FDIC is irrelevant because all it does is print money to cover the real losses.

Borrowing short, while lending long is the moral equivalent of naked shorting with the *assumption* you will be able to secure rights to the money for the duration of your long loan. Sure this is what all banks do, but that doesn’t make it “right”.

I think the key points from yesterdays discussion were the difference between bank capitalization requirements and reserve requirements. These are two different things.

If I lend you $10 at interest, you would think I was crazy if I asked you to keep $1 “in reserve”. You would only borrow $9 because that last $1 would be doing neither of us any good. When people borrow money from others there is NEVER any reserve requirement because the expectation is that you would pay off the principle rather than pay interest on money that you are not allowed to spend.

So if we take the perspective that banks are borrowing money from depositors and therefore paying interest, then there should be no “reserve” requirement because the depositors know they *lent* the money, thus no reserve requirement on CDs.

However, if the expectation of the *depositor* is that the bank is merely keeping their money safe with the ability to write checks and that the money is *always available for immediate withdraw* then we have a very different scenario. Here the depositor does not “intend” to lend the bank money, the bank is merely a trustee for someone else’s property.

The bank happens to be the trustee for 1000’s of customers and on any given day only a small percent of the money in trust (not owned by the bank) is withdrawn. Seeing this situation, the bank could easily make some money by lending out this cash-in-trust and depositors would be none the wiser as long as the bank always kept enough in *reserve* to cover their daily withdraws.

I am hesitant to bring gold into this discussion, but I think it helps clarify the “real” vs. the paper. So the bank has 100 gold coins that it has issued 100 gold notes to the depositors whom keep the notes in their wallets to use them for trade. The bank realizes that even on his busiest days withdraws never exceed deposits by more than 10 gold coins. With this knowledge, the bank realizes it can create 1000 gold notes and no more than 100 gold coins will be withdrawn on any given day. The bank then lends 1000 gold notes fully expecting them to be repaid *before* depositors demand all 100 of the gold coins in storage. If everything goes well, the bank earns interest on 1000 gold coins notes, his naked short position is covered, and the bank ends up with (assume 5% interest) 150 gold coins at the end of the first year. The bank made a 50% return on the only real gold.

The problem is that if even 10% of the loans go bad, the bank loses 100% of the depositors gold. This is money the depositors thought was just in “safe keeping” because it was not intentionally lent and they were given notes “payable on demand” to get their property back out of the bank.

Today’s banking system simply added complexity built on top of defaulted bank notes to the point that what is really going on is obscured. The gold is the high-powered money, the notes are the low-powered money. Today the FED issues high-powered money and the banks multiply it with low-powered money.

I hope I was able to explain this for you so you understand the scam.

Dan

Comment by NoSingleOne
2009-03-31 11:24:45

So to summarize: fractional reserve banking is a joke, 30:1 leveraged stocks don’t count as an “asset”, and the braggodocio from Greenspan et alia about all the financial “innovations” of the last 30 years was really just a smokescreen for schemes to dodge the regulators.

Pray tell, how does letting the foxes guard the henhouse guarantee a chicken in every pot?

Comment by ecofeco
2009-03-31 18:25:57

Who said anything about a chicken in YOUR pot? :wink:

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Comment by mathguy
2009-04-01 00:59:56

Dan,

I can hear a past scenario from here on the HBB getting regurgitated, but you’re leaving out some steps. The bank doesn’t just say they have 1000 gold coins when they only have 100. First, the notes they give out for gold coins are receipts. So they have gold and someone else has receipts with the expectation that the receipts are worth the gold. So the bank then loans out the *REAL* gold.. Well, about 90% of it anyway. Now they have paper that says someone owes them 90 gold coins. This is where the money “creation” comes from. 1 person has 100 coins worth of paper, and another person has 90 coins worth of paper.

At this point, we still don’t have the 10x multiplier that people talk about when discussing money creation. In fact, we have only a 1.9x multiplier. Now theoretically, the guy who just borrowed all 90 of those coins doesn’t need them *instantaneously*, so in the *theoretical* scenario, he deposits all those coins into the *same* bank. I’ll get to the real world in a minute, but for now operate on this assumption…

At this point the bank has 100 coin notes outstanding to the original depositor on account. 10 of those coins are in a “reserve” area where they can’t be touched(because of the 10% reserve requirement).
The bank also has 90 coin notes outstanding to the guy who borrowed the 90 coins, then deposited them back in the same account. Which means they have 90 coins on deposit from that guy, and can lend out 81 of his coins while maintaining a 10% reserve. This is an important part of the theory to note, because in reality, if we are at the same bank, we might go “whoa, I only have 100 real coins, I can’t lend out 200 when I only have 100″, but the theory holds because in the real world,

1) it might be a different bank that gets the 90 gold coin deposit and they don’t know the guy owes the same 90 coins so they can lend on it by virtue of being ignorant.

2) gold(cash) is anonymous.

So even though theory states it is one bank that creates 10x the money supply, in reality it is multiple banks creating the multiplier by lending when the loaned money is deposited.

Also the 10x theoretical multiplier is never really achieved, because the guy only keeps say 80 coins on deposit, and the other 10 are in his pocket so he can pay the butcher. In other words, the money actually circulating must be removed from the summation equation. So rather than 1 + .9 + .81 + .729 + … = 10 we get something like

1+ .8 + .64 + … = 7x in a small scale system. As the system gets larger, we probably more closely approach the theoretical 10x money supply multiplier.

Anyway, the bank doesn’t just magically create the money… A lot of people are on the hook for loans. The debt *IS* real. The bank charges an interest rate because the money is at risk of default.

So far I find nothing wrong with any of this. I have a good or service (gold) that I wish to lend to someone for a return, and that person believes they can use my good or service (gold) to better their economic position. We mutually agree to let a third party broker the exchange and manage it (the bank).

If you don’t subscribe, don’t put your money in a bank!!! The banks want to operate as a business. We find value in them providing this money “middleman” service to us to earn an interest rate, so we let them keep part of the money from the loans. Banks have found all kinds of good services to provide for us while they manage our money. If a loan goes bad, they even eat the loss (most of the time), and still pay us interest! Pretty good risk/reward under normal circumstances. This is all with the 10% reserve requirement.

Now, if loans go bad, say the bank has the full 10x multiplier out there, and there is a complete meltdown. The whole string of who owes what on bad loans needs to be unwound. If everything is at the same bank, banks will seize funds in your deposit account and credit them to your loan account (if your loan is bad). You might still owe more than you have on deposit though. What could end up happening is net depositors get some of the gold back, but they also get IOU’s from the bank representing your unpaid loan.

If that IOU can never be collected on, then you are out of that portion of your deposit. So put your money into a bank with your eyes wide open!!! But if you take no risk, you will earn no reward.

Long story short, yes there are complex banking scenarios. That which you don’t understand you may fear. But if you work to understand, then you can take reasonable risks, diversify, and come out ahead. Screaming about the banks is just screaming about your own lack of understanding. If you understand, and you think it is a poor risk, don’t put your money into that vehicle.

In fact, place a bet AGAINST the bank successfully operating, and you can manage to have a good return on your money if you correctly identify the poor bank management.

On the other hand, we could talk all day about working in or out of pre-existing government systems, trying to change them, or trying to avoid them while being a good moral citizen. And while it has something to do with Banking, the Fed, politics, FIAT currency, and propoganda, it has little(not nothing) to do with the concept of fractional reserve banking.

 
 
Comment by Matt_in_TX
2009-03-31 16:18:51

I suspect it is rather less than 10%.

 
 
Comment by Tim
2009-03-31 07:33:07

“Ford to cover car payments if buyer loses job. . . Ford Motor Co. said Tuesday it is offering a payment protection plan to help reassure consumers who may be putting off buying a new car because of worries about losing their job . . . Ford said Tuesday it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1.”

I know Ford is doing better than most right now, but how unethical is this? Worried about losing your job, why not buy a new car? Ford pays your car note, Obama forces others to pay your mortgage, taxes go up dramatically for well-educated, innovative, workaholics, millions lose their jobs, etc. . . Hopefully some will instead chose to protect their families from poverty, but we all know many will just get a new car instead.

Comment by bluprint
2009-03-31 07:35:19

Unethical? It is effectively a lowering of price. Is it unethical to lower price?

Comment by Tim
2009-03-31 07:40:02

Yes! It is unethical to specifically target ppl worrying about losing their jobs whom should be more worried about becoming a larger drain on society and protecting their families. Same as lowering price? What are you talking about, the benefit only applies to those that do in fact lose their jobs. They specifically chose not to lower the price. Your posts have become more random and questionable. Are you having a bad month?

Comment by bluprint
2009-03-31 07:47:28

It provides a hedge against the risk of losing ones job. We are all at risk of losing a job (assuming we rely on w2 income). This mitigates some of that risk for all such people, hence effectively lowering the expected overall cost of the vehicle.

Anyone who works a w2 job and ISN’T worried about losing their job at any point in time is crazy.

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Comment by Tim
2009-03-31 07:54:34

Not at all. The “hedge” is paid for by those that don’t lose their jobs and, thus, dont get the benefit of the lower price. I did not see anything in the plan that said you either pick the hedge or get X dollars off as you are implying (ie, which would need to occur for your point to valid).

Also, if you are worried about losing your job, don’t be looking for new cars period. Excessive debt got us into this mess. As for everyone having the same expectation of job loss, that just isn’t a true statement.

 
Comment by bluprint
2009-03-31 08:06:26

Also, if you are worried about losing your job, don’t be looking for new cars period.

Preaching to the choir.

As to the other, I suppose we’ll just disagree. I perceive that before the Ford action, everyone (excluding people to whom this doesn’t apply, unemployed, selfemployed, etc) had a certain probability that he may lose his job.

If you are going to buy a car or not doesn’t affect the odds of that event occurring. If you buy a Ford, comparing with the incentive to without, the expected cost of the vehicle has now declined. Why? Because the expected benefit (which offsets the expected cost of the vehicle) you receive from the incentive would be properly expressed approximately as:

“% probability you lose your job” x ($700 x “# months unemployed if you do lose your job”)

This cannot be a negtive number in this instance. At best it can be zero, but that’s unlikely. It’s more likely that if you are a W2 employee and you perceive the probability of losing your job as 0, you are underestimating.

Its a bit like insurance. Ford has sort of packaged in some insurance with the vehicle. Who pays for it? Everyone who buys a car (and perhaps taxpayers via TARP or bailouts or other such nonsense). But only the people who experience a qualifying event get the benefit.

Not that I don’t think it’s effing stupid. I just don’t think its unethical. Nor do I think it targets people who think they have a high probability (or who KNOW its going to happen) of losing their job in the next few weeks. Those peope shouldn’t be buying a car at all now, and only paying cash for a very cheap one if they must do so.

 
Comment by Manny
2009-03-31 08:40:15

Bluprint:

This is the Ford version of public assistance to the deadbeats. Those of us that do not have a “job”, ie W2 income are forced to subsidize those that have W2 jobs.

Ford isn’t just giving away $8400 ($700 X 12 months) out of the goodness of their heart. No, they pass that $8400 along to everyone else.

And even if those that do not lose their jobs are in effect raising the cost of a car for me. Say you’re a W2 cube drone. You think maybe this isn’t the right time to buy a new car for $30K. You don’t buy. Ford has less demand, it lowers the price on the car to $29K. I buy it for $29K, save $1K.

But now the W2 drone thinks, hell it doesn’t matter if I lose my job or not. Let’s go buy the car. And he pays $30K, which then also forces me to pay $30K, since Ford has no incentive to lower the price anymore.

And to add insult to injury, my taxes are going up so Ford can get billions more from Uncle Barry. It is beyond bull s h i t what’s happening in this country.

 
Comment by realestateskeptic
2009-03-31 08:43:46

We can’t save people from themselves. I suspect you are also against issuing anyone with less then a 650 FICO score a credit card? After all, its us folks who pay off our monthly balance and have good credit who have to endure higher rates then would be expected to pay for and cover the defaulters. No different here, is it.

Plus - there have been very few if any defaults/claims under the Hyundai program, so far its been all upside for them as their sales are actually positive. I am just shocked Ford and GM didn’t do it first and that it took them so long. Well thinking about it, I am not surprised ;-)

 
Comment by Tim
2009-03-31 08:55:24

I’m not worried about saving ppl from themselves. I am worried about those living within their means having to subsidize those that don’t, especially if the risk is known in advance prior to the purchase.

Also, your credit card comparision is inaccurate. Many of us pay our bills off every month and have zero carrying costs. Also, there are ways to manage risk effectively, such as offering higher rates to those with bad credit and limited balances. If you are simply asking whether I am against bad business policies that try to socialize unwarranted risk, the answer is yes.

 
Comment by Tim
2009-03-31 09:08:29

I still respect you blu - it just really bothers me that after all this talk about the ramifications of moral hazard in the mortgage business ppl are trying to increase sales in the automobile industry by introducing greater moral hazard, especially in light of related recent events such as government intervention in such industry. Why not just cut the cost for everybody, and if someone wants to buy insurance on their own so be it? The program is clearly targeted to benefit those most at risk of job loss, who is exactly the group that should not be buying. I would like to see ppl worried about their jobs trying to get their debts to a min. to lesson the impact on everyone. I would also strongly suggest to anyone that said such programs have been a success elsewhere that such conclusions be reserved until we are on the otherside of the recession. If you just can’t wait, I would suggest that the mortgage industry is a clear example of the ramifications of manipulating moral hazard to increase sales. We know how that turned out.

 
Comment by Julius
2009-03-31 09:57:02

“it just really bothers me that after all this talk about the ramifications of moral hazard in the mortgage business ppl are trying to increase sales in the automobile industry by introducing greater moral hazard, especially in light of related recent events such as government intervention in such industry.”

Bingo. This is nothing more than an illegitimate method of inflating sales at an automaker whose products don’t sell strongly to begin with.

 
Comment by NoSingleOne
2009-03-31 11:06:50

Jon Stewart to Jim Cramer:

“We’re both snake oil salesmen, to a certain extent. But, we do label the show as snake oil here. Isn’t there a problem with selling snake oil and labeling it as vitamin tonic?”

 
Comment by X-GSfixer
2009-03-31 11:09:15

So basically the argument against this program is that bringing more buyers into the market for cars, makes cars more expensive due to increased demand for cars?

If I had to make a living selling anything to the cheapskates that seem to inhabit this blog, I’d probably quit before you guys put me in the poorhouse.

You guys are taking this stuff too personal. :)

 
Comment by VirginiaTechDan
2009-03-31 11:42:04

bluprint is right,
All Ford has done is bundle unemployment insurance with their vehicles. Thus increasing the “value” of their vehicles instead of lowering the price. Either way, you are now getting more for your money.

Unless you are willing to say that it is unethical to make a profit at selling insurance your position is inconsistant.

The reason it is moral to make a profit selling insurance is because there is an equal opportunity to LOSE MONEY selling insurance. If Ford underestimates the number of people who will lose their job, then Ford will lose money. If Ford over estimates (because they believe people will overpay for insurance) then Ford can make money. Nothing immoral.

Perhaps you could negotiate with Ford to exchange the unemployment guarantee for a discount on the vehicle. If they assume 10% unemployment probability then you should be able to negotiate an $840 discount. If you don’t like forced bundling, then your complaint must also extend to almost every other company. All car companies sell “bundles” that force you to buy something you do not want to get something else you do want… this isn’t socialism because there is no FORCE involved.

 
Comment by Julius
2009-03-31 13:12:14

VirginiaTechDan,

True as your post may be there are a few unintended consequences that result from what Ford is up to here.

First, whenever an automaker tries to pack the market by using gimmicks such as this, a sharp decline in the resale value of its cars usually results. Owners do not appreciate finding out three to five years down the line that the value of their vehicles has depreciated down to nearly nothing since they bought it (look up the resale value of the Focus and Taurus to see what I’m talking about here). In the past, the Big Three’s gimmick of choice was to offer EPIC cash discounts on new cars. They tried that this time, and it’s not working. Hence, this gimmick appears, and it’s an awfully stupid one. A similar (but not identical) historical example of this was the “selling strategy” that Mitsubishi used in the late 90s/early 00s. In the past, Mitsubishi deliberately targeted the “people who really shouldn’t be buying a new car” crowd by handing out low-interest credit to all sorts of people with shaky finances. The result was a tidal wave of Mitsubishi repos and a precipitous decline in the resale value of Mitsubishis, which made responsible buyers even less interested in the brand.

Second, one has to ask why Ford should have to resort to such tactics in the first place. “Here, we’re so desperate to sell you a car that we’ll even take it back if you lose your job.” No Ford, the correct answer would be to cut your output to match demand and lay off the excess UAW linemen that now inhabit your (idle) plants. But since merely suggesting layoffs of sacred UAW workers has become politically incorrect among the MSM, this will never happen, so we’re left with nonsensical “sales strategies” like this one.

 
Comment by VirginiaTechDan
2009-03-31 13:35:21

Julius, you are right about all of the side effects, but those side effects are what you get when you have government supported price manipulation.

I think it is a terrible idea because the people in charge at Ford have proven to have no idea what the economy will do in the future and have no business getting into the insurance business. Particularly at a time when if their insurance business fails, then they are doubly screwed on the car sales business. THis is doubling down. Dumb business moves all around.

People have no business complaining about their assets losing value. In a productive society EVERYONE is attempting to create something of greater value that devalue everyone else’s assets. It is time that people got over it and be grateful for what you have.

 
Comment by John
2009-03-31 14:26:17

True, Ford is selling unemployment insurance with their vehicles and nobody is forced to purchase one of their cars. Unfortuantely, you can be sure that their risk models will assume unemployment will remain at this level and that their customer base will exactly mirror society on the whole. In reality, unemployment will almost surely exceed their expectations and this program will assure that a much higher percentage of their customers become unemployed than the general populace. In the end they will need a massive bailout. To me, this seems an extension of the horrible risk modeling that got us into this mess. I can’t imagine how anyone on this blog can support their plan, but I suppose people’s attitudes change with their situations.

 
Comment by Julius
2009-03-31 14:26:59

“People have no business complaining about their assets losing value. In a productive society EVERYONE is attempting to create something of greater value that devalue everyone else’s assets. It is time that people got over it and be grateful for what you have.”

I agree, and the people who are always whining about their cars’ resale value are usually the people who think they always need a new one every few years. Nevertheless, the general poor resale value of Ford vehicles has been an important contributor to their sales woes over the last couple of decades.

 
 
 
Comment by Incredulous (the original)
2009-03-31 07:56:34

Yes, it is unethical when the taxpayer is going to have to make up the difference. Nothing is free, except in the vote-buying fantasyland of this administration.

Ford doesn’t have the money to cover the payments, so who do you think is going to provide it?

And, yes, trying to sell costly cars to people worried about losing their jobs is unethical in and of itself. That tiny voice in ones head screaming “Bad! Bad! Bad!” is called a conscience, and is very much worth heeding.

Comment by bluprint
2009-03-31 08:09:19

I agree it is undesirable for taxpayers to be bailing out car companies and banks. It’s unethical for politicians to be doling out money to their corporate masters. But that’s not what we’re talking about. This is simply a question of whether a particular incentive (regardless of how the company is funded) is unethical.

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Comment by VirginiaTechDan
2009-03-31 11:48:12

We agree on the incentive, but how moral is it to make a bet where you know the counter-party can only pay because of bailout money stolen from taxpayers? I consider that immoral because you know where your money is coming from.

Yesterday I argued that making a bet via derivatives or 3x leveraged ETF is immoral because you know your profits are not being paid by the counter-party, but by the tax payer.

Those complaining about gaming fords “guarantee” and then turn around and invest in banks and funds that they know are insolvent but fully expect a government bailout (via FDIC, AIG, etc) are hypocrites.

 
Comment by bluprint
2009-03-31 12:34:17

Considering that some great majority of tax payers/citizens (or whatever else you might call all of us) pretty much support the status quo (including the theft occuring against themselves), I don’t find myself crying about the “po’ old taxpayer/voter/citizen”. Mostly they get what they vote for, they just don’t realize it.

I don’t support the theft but there is nothing I can do about it. If I am able to liberate a particular counterparty from some of his ill-gotten gains through otherwise fair methods (stocks or whatever) then I will. If I could discern that it came from some particular person I would give it back but thats not really an option.

I live here. This is my home. I wish it (the system) were different but there is nothing I can do about that.

Most of the tenents spend all their time arguing about which color to paint the walls. Blue and red seem to be the most popular as that is what most of them are arguing about. The guy in the corner wants it painted green. He’s kinda flaky (or maybe just kooky) but hes ok and has good weed.

I’m just trying to protect my head from the rain coming in through the giant hole in the roof.

 
 
Comment by Eudemon
2009-03-31 09:36:21

Yes…

But as several posters here said maybe 4-5 days ago, screwing people out of their money is Rational. It is Rational to take the money and run. It is Rational to take advantage of the ignorant (note - I didn’t say stupid…I said uninformed).

The extent to which people rationalize their own lack of ethics and INDIVIDUAL responsibility toward building a better future for others shouldn’t ever be underestimated.

The result of a lack of ethics and responsibility at the individual level is Big Government. And, here we are.

So, once again, who is it exactly that is behaving Rationally? Honest schmucks, or the folks that take advantage of a rigged system that 98% of the population knows nothing about?

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Comment by Faster Pussycat, Sell Sell
2009-03-31 14:14:27

Sure, it’s rational.

It may be unethical and it even may be immoral but I don’t think you quite grasp the meaning of the word “rational”.

 
Comment by Eudemon
2009-03-31 16:48:18

Are you sure?

Rational:

1. agreeable to or in accord with reason; reasonable; sensible.

2. Having or exercising reason, sound judgement or good sense.

3. Being in one’s full possession of one’s reason; sane; lucid.

4. Endowed with the faculty of reason.

5. Of or pertaining to a rational number.

6. Capable of measurement in terms of the metrical unit or mora.

Synomyns: intelligent, wise, judicious.
Antonyms: stupid, insane.

Faster, that’s the definition of “rational” as per the Random House College Dictionary.

I maintain that as per definitions 1-5 above, I think that unethical and immoral behavior is highly IRRATIONAL. Even in the here and now. You can argue in favor of definitions 6 and 7 all you want (with considerable reason), but I won’t address either because neither formed the basis of my original premise.

Worse is considering what one’s own irrational behavior does to one’s progeny. We now are witnessing the after effects of the irrationality of those who deemed themselves rational for behavior in the manners that others here have suggested.

I don’t know about you, but I think it’s highly irrational to pursue ill-gotten gains now and pay for it later with a loss of freedom.

It’s even more irrational to place your kids in that position.

 
Comment by Faster Pussycat, Sell Sell
2009-03-31 17:21:38

Maybe they don’t have progeny and don’t give a flyin’ f*** about those that have them. Maybe they only care about themselves. Maybe they have no ethics or morals whatsoever.

Your arguments are not coherent. They are emotional which is the opposite of rational.

As I said before, I wouldn’t confuse immoral with irrational.

 
Comment by Eudemon
2009-03-31 21:40:00

I’m not.

Your argument only serves to justify the behavior of societal derelicts.

If you don’t see how being a crook or taking advantage of a rigged system at someone else’s expense ISN’T the result of emotional stimuli, then you’ve got some additional thinking to do.

The few that behave unethically or immorally in absence of emotional stimuli are psychopaths. You know, the folks with no sense of morality or ethics.

Humankind is largely guided by morals and ethics. If you have neither, you are not sane. You are irrational.

 
Comment by Eudemon
2009-03-31 21:46:30

“Isn’t” should be “is”.

It’s late. But you get my drift.

 
 
Comment by VaBeyatch in Virginia Beach
2009-03-31 11:38:09

Credit card companies like Amex have been sending me offers for insurance that gives similar coverage. I think they want you to tell them you are out of a job so they can cut off your access to run up more debt on the card.

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Comment by whino
2009-03-31 08:29:03

And GM follows Ford’s lead!!!!

DETROIT (AP) — General Motors says it will make car payments for some customers who lose their jobs.

The automaker’s new CEO Fritz Henderson says under GM’s new “Total Confidence” program, the company will make up to nine car payments of $500 each for customers who have lost their jobs through no fault of their own.

Customers must qualify for state unemployment to be eligible for the program. The program starts April 1 and runs until April 30.

The news comes hours after rival Ford Motor Co. said it would take over customers’ payments of up $700 for a year in the event of job loss.

 
Comment by In Colorado
2009-03-31 08:29:55

Apparently this tactic has workled well for Hyundai, hence the copycats.

 
Comment by Manny
2009-03-31 08:34:11

HOPE

&

CHANGE

how’s that working for everyone so far?

Comment by Blondiegirl
2009-03-31 08:48:37

I HOPE Obama doesn’t take my CHANGE!

 
Comment by Pondering the Mess
2009-03-31 09:59:40

Chains we can believe in!

 
Comment by ylekiot1
2009-03-31 14:50:33

I tell people, you want change? So does Obama (he’ll take your dollars too)!

 
 
Comment by Prime_Is_Contained
2009-03-31 08:59:00

A different way of looking at this is that Ford may just be saving themselves the cost of a repo. Some fraction of people who bought a new car and then lost their jobs will be unable to make payments; normally, the lender would have to pay for a repo. But in this climate, the chances of selling the repo’ed car are slim to none. So why repo at all, and then have to worry about storing the d*mn thing? It may be cheaper and more efficient just to let the car-debtor think they still own it, as well as store it and maintain it.

The fact that this bundled “insurance” may incent some buyers could just be a side-benefit.

Comment by Tim
2009-03-31 09:22:38

I have not read the other plans, but the Ford’s plan is to encourage ppl that have not bought yet to buy new cars. It is those that would not otherwise buy that I am most concerned with. Other than that, I agree with your ponts.

 
 
Comment by Pondering the Mess
2009-03-31 09:58:21

Hey, that’s a great idea!

We should also sell houses at high prices to deadbeats… maybe we’ll make them not put any money down or have the loan explode on them years later. Yeah - what could go wrong with that? More debt is good, right?!

 
Comment by ecofeco
2009-03-31 19:07:20

Car payment insurance has been around for decades. So has mortgage payments insurance. So has CC payment insurance.

It’s not available to everyone and not offered everywhere, but it exists and has for a long time.

(God I just LOVE throwing straw men into the fire!)

 
 
Comment by Faster Pussycat, Sell Sell
2009-03-31 08:15:35

The U.S. government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

Almost GDP. This will end well for sure.

Comment by hip in zilker
2009-03-31 08:27:11

“Almost GDP”

That is very very scary.

I think I need to go out and put some mulch on my plants.

Comment by Manny
2009-03-31 10:34:23

Dems 2007: Bush’s $500B deficit is treasonous and he needs to be impeached (and don’t anyone mention the fact that Dems run Congress and authorized every dime)

Dems 2009: $2T deficits as far as the eye is good for the economy. Anyone who says otherwise is un-American and a closet racist.

 
Comment by Olympiagal
2009-03-31 10:41:22

I think I need to go out and put some mulch on my plants.

Gosh, I hear yer. I about spontaneously emitted some nutrients! (And I’m not even near my garden right now.)

 
 
Comment by bluprint
2009-03-31 08:30:26

Faster, a while back during one of the inflation/deflation discussions you were talking about how all the spending is really just monetization of past inflatoin. Part of what you posted was as follows:

New credit ain’t happenin’ (this is obvious! who’s gonna borrow more right now?)
To understand whether or not “excess” monetization takes place you really have to step into the derivatives world where close to $700T (yeah T) of credit is sitting in various forms. (These are notional dollars so they don’t quite correspond to the actual amount of credit but let’s assume 10% does. So that’s $70T.)

Talk to me after they print 10% of that $70T = $7T or so. Then I’ll jump into your camp.

Are we there yet?

Comment by Faster Pussycat, Sell Sell
2009-03-31 08:40:05

Not yet.

A lot of that is “sterilized” - and the article makes no distinction between the two. The headwinds are still deflationary as credit contracts, home prices fall, jobs are lost and the derivatives go kablooie.

It’s worth keeping track of (but we all knew that.)

 
 
Comment by mikey
2009-03-31 13:16:58

Yeah, for sure.

We may all need to borrow Timmy’s “personal copy” of TurboTax to fix that 12.8 Trillion Dollar thingy.

 
Comment by jay
2009-03-31 18:42:35

yes, i heard that and do you all think your money is safe for the future in cash. can you say inflation or debasement of our currency. I don’t trust have a dime in the banks and waiting for the gov’t to steal it through inflation! can’t wait to get my first 77k house!

 
 
Comment by Faster Pussycat, Sell Sell
2009-03-31 08:26:07

Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

Stick it to the sheeple!!!

LOVIN’ IT!

They’re gonna learn the meaning of the word lien. And that banks will behave in their own self-interest against an “asset” of negative value - somebody has to pay for insurance, maintenance, property taxes … and … demolition.

BWAHAHAHHAHAHHAHAHAHHAHAHHAHAHAHHAHAHHHHHHHHHHH!!!

Comment by Blue Skye
2009-03-31 09:33:23

For it won’t be long
Till I’m gonna need
Somebody to lien on

 
Comment by Prime_Is_Contained
2009-03-31 09:35:52

I’ve actually been surprised that there hasn’t been more coverage of this issue/risk in the MSM.

And I’ve also been surprised that cities are not dealing with securing/mowing/maintaining vacant properties more aggressively, and then putting liens on the properties. It would be an effective way to encourage lenders to deal with the problem inventory. It could also be an effective way to address some of the cities’ budgetary pain during the downturn.

It’s good for the neighborhoods; it’s good for the other owners; it’s good for everyone except the lenders and distant LLs.

Cities should actually be competing to be the MOST punative, since that would encourage lenders to pay attention to the inventory in their locale, deal with it, and get it off their books.

The sooner they do that, the sooner new owners will be occupying the premises and taking care of the place.

Comment by Faster Pussycat, Sell Sell
2009-03-31 09:45:13

cities are not dealing

No money, darling! They’re broke too.

Comment by Prime_Is_Contained
2009-03-31 10:50:54

Yes, but if they pursued my strategy aggressively, they could COLLECT the money to fund the operations. Of course they would charge way more for these services than they would cost to provide–that’s what would make them punative.

There would obviously be a cash-recovery cycle that would cause a lag between when they start doing the work & putting liens in place, and when the closings on a property with liens results in cash-flow to the city. But if the pricing were punative enough it would generate an uptick in sales and closings, thus shorting the cash-recovery cycle.

And if the pricing were punative enough, I’m sure the effort could be self-funding and net positive cash-flow for the cities.

If they’re SO hard-up for cash that they can’t fund the work themselves, they could even contract out the work to independents, who would then have the benefit of the liens. Heck, _I’d_ fund it out of my own pocket if the rates were punative enough to guarantee a good return. This could even have the positive side-effect of encouraging the independent contractors doing the work to keep an eye on the houses, to ensure the board-ups are still in place, etc–after all, keeping some value in the house helps ensure the value of their liens.

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Comment by Faster Pussycat, Sell Sell
2009-03-31 10:58:24

No, I figured out that part about it being “cash-flow positive” by myself but it actually requires:

(a) critical thinkers, and
(b) an administration willing to expend money (lawsuits, regulation, enforcers) now to get a lot of benefits later.

Not happenin’, my friend!

 
Comment by Prime_Is_Contained
2009-03-31 15:11:46

“Not happenin’, my friend!”

Excellent point!

I was assuming sensible, math-capable local politicians who can reason, and when have we ever had that??? :-)

Of course, if we should happen on an existence proof of such a local leader _anywhere_ then there would be the chance for the idea to get picked up and spread. We’ll see… At least let me dream! :-)

 
 
 
 
Comment by Eudemon
2009-03-31 09:55:09

And I thought the current administration was going to help people like Ms. James. Hope doesn’t have much value, apparently.

HAAAAAAAAAAAAAAAAAAAHAHAHAHAHAHAHA!!!!!

Comment by Faster Pussycat, Sell Sell
2009-03-31 09:58:35

Long critical thinking and short hope has always been a arbitrageur’s wet dream. ;-)

Comment by Prime_Is_Contained
2009-03-31 10:52:32

“Long critical thinking and short hope has always been a arbitrageur’s wet dream.”

GREAT quote!! I’m definitely going to steal this one…

:-)

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Comment by wmbz
2009-03-31 10:07:06

“I thought, ‘What kind of game is this?’ ” Ms. James, 41

Just one of those games you didn’t play very well.

Comment by Faster Pussycat, Sell Sell
2009-03-31 10:40:57

SNAP.

That was a good one! ;-)

 
 
 
Comment by realestateskeptic
2009-03-31 08:29:52

Ouch! 50%+ haircut…..

Hancock Tower sells for $660m at auction
March 31, 2009
The John Hancock Tower was sold today for $660.6 million at a foreclosure auction in New York City.

The signature Back Bay building was acquired by a partnership between Normandy Real Estate Partners and Five Mile Capital Partners, which have been quietly buying some of the debt on the building since June.

The partnership was the only entity to bid for the Hancock during the auction, which lasted less than 10 minutes.

The firms initiated foreclosure after the Hancock’s previous owner, Broadway Partners of New York, defaulted on some of the loans it used to buy property for $1.3 billion in late 2006.

Normandy, a leading real estate private firm in the Northeast, will take over management responsibilities of the Hancock.

The firm, based in Morristown, N.J., has more than 4 million square feet of space under management in Boston.

As part of the auction, Normandy also purchased 10 Universal City Plaza in Burbank, Calif., for $304.8 million.

Comment by polly
2009-03-31 08:51:45

The blue tower that used to pop glass panels out on passers by? Seriously?

Comment by Arizona Slim
2009-03-31 09:39:35

There was a University of Arizona building that did the same thing. Gould Simpson had a pedestrian-shielding barrier around it for years.

 
Comment by Olympiagal
2009-03-31 09:50:18

Speaking of big blue glass towers….

http://tinyurl.com/d8xr4a
‘Layoff aftershocks hit WaMu neighborhood’

‘In December, JPMorgan Chase announced it would lay off more than 9,000 at WaMu operations nationwide, including 3,400 at WaMu’s former headquarters…
“Every single one of our customers mentions it,” Soncrant said. “It’s, like, ‘Where’s the line?’ …
On weekday mornings, she’s now alone on a shift that once required three staffers. WaMu no longer represents the bulk of the cafe’s business, and many of those employees who remain have cut discretionary expenses, such as coffee, knowing their days at JPMorgan Chase are numbered…’

A year and a half ago, I think it was, I complained noisily to you all that I’d been compelled to drive up to the Emerald City and actually enter the WaMu building yet again, for a stupid meeting, and sure it was all big and fancy, posh furniture, the receptionists had big white capped teeth, but infiltrating my lungs and steadily pervading the atmosphere was the stealthy and unmistakable scent of…of…pure evil!!! Eviiiiiillllll….!!!

* cough, cough…*
Sorry. Got carried away there.

But yeah, it was all evil-like and everything.

Comment by Faster Pussycat, Sell Sell
2009-03-31 10:48:52

Take me down to the Emerald City
Where the grass is green, and the girls are pretty.

Oh, won’t you pleaaaaase take me home?

OK, I got a bit carried away too but that’s the game we seem to be playing. ;-)

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Comment by bluprint
2009-03-31 12:07:24

I would have thought this to be more appropriate:

I used to love her,
but I had to kill.
I had to put her,
six feet under.
But I can still
hear her complain.

 
 
Comment by NoSingleOne
2009-03-31 11:32:07

I must have just missed you. I was at the WaMu building the day they were seized by the Feds. Lots of cameras and everything…that building looked a lot smaller that day, for sure.

I’ll be in Seattle for a meeting next month. Any recommendations on where to eat? I love the Flying Fish, but seem to wind up there a little too often.

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Comment by Olympiagal
2009-03-31 17:33:31

I must have just missed you. I was at the WaMu building the day they were seized by the Feds.

I was there before that by several months. Them at WaMu was still all smug and with an unhurried air* when I was last there, in the actual building. Offensive.
Offensive! I like evil-doers to look more harried and anxious.
Of course, now they do…

Lots of cameras and everything…that building looked a lot smaller that day, for sure.

Good.

I’ll be in Seattle for a meeting next month. Any recommendations on where to eat? I love the Flying Fish, but seem to wind up there a little too often.

Oh, yeah? Like what days?

 
 
Comment by ecofeco
2009-03-31 19:17:26

You want evil? They’re hiring again… at much lower wages.

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Comment by wmbz
2009-03-31 08:31:23

Beyond AIG: A Bill to let Big Government Set Your Salary…
By Byron York
Chief Political Correspondent 3/31/09

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

In addition, the bill gives Geithner the authority to decide what pay is “unreasonable” or “excessive.” And it directs the Treasury Department to come up with a method to evaluate “the performance of the individual executive or employee to whom the payment relates.”

The bill passed the Financial Services Committee last week, 38 to 22, on a nearly party-line vote. (All Democrats voted for it, and all Republicans, with the exception of Reps. Ed Royce of California and Walter Jones of North Carolina, voted against it.)

Comment by packman
2009-03-31 08:37:38

Wow. Holy crap that is unbelievable. Ayn Rand couldn’t have come up with anything that insidious!

Comment by Blano
2009-03-31 08:53:19

The door was opened last fall to a massive expansion of guvmint power……these yahoos are going to grab as much as they can.

Comment by NoSingleOne
2009-03-31 12:18:01

There is no “massive expansion of government power”. There is an ad hoc expansion to deal with the mess left after the lack of government oversight of the financial industry for the past 30 years or so.

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Comment by packman
2009-03-31 12:35:58

Ha ha - OK yeah. When does the government ever do anything “ad hoc”? Not very often.

 
Comment by NoSingleOne
2009-03-31 13:08:56

True, an ad hoc approach can later become standard government policy if we aren’t careful. However I see nothing wrong with imposing salary caps on financial robber barons who treated our money like they were in a casino, and compensated themselves handsomely for the privilege. It is simply speeding up a much needed reform.

 
Comment by packman
2009-03-31 14:13:26

The best salary cap is unemployment. If we wanted true reform, that’s what they’d get. The rest is smoke and mirrors and lip service.

No offense, but references to “robber barons” implies to me a naive implication that the government is looking out for our best interest against the robber barons - whereas in reality the government is usually in cahoots with them. Just look at the people in key government finance positions - where are they all from, and who are their friends? They are foxes supposedly guarding the henhouse.

 
 
 
Comment by Faster Pussycat, Sell Sell
2009-03-31 08:58:45

If you need to ask …

Comment by Faster Pussycat, Sell Sell
2009-03-31 09:03:12

That comment was for below to the So. Orange dude.

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Comment by bananarepublic
2009-03-31 09:50:08

So you think we should bail these companies out and then have no say over what they are paid? Now THAT is unbelievable.

Comment by packman
2009-03-31 11:18:52

We should not be bailing out companies, period. Two wrongs do not make a right.

This bill to me just shows - even moreso than already seen - that the bailouts aren’t about helping the economy at all. They are power play - pure and simple.

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Comment by NoSingleOne
2009-03-31 12:22:29

If the companies don’t want gov’t bailout funding, they don’t have to spend it (Paulson forced all of them to accept some of it to “hide” the weak sisters). No one is forcing them to.

If they choose to spend it, then they are de facto nationalized…and no government servants deserve million dollar pay packages, especially for a job poorly done.

 
 
Comment by realestateskeptic
2009-03-31 11:48:00

B’rep, you trust too much. Granted you got to complain before and gloat now but soon you will see that the new boss is basically the same as the old boss, just looks a little different and has a different cover story. NONE of these people, regardless of party should be trusted. Do you trust Geithner more than Darth Cheney. Barney Frank more than Phil Graham, Pelosi more than Specter?

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Comment by WT Economist
2009-03-31 08:54:36

The federal government (specifically the IRS) already limits the compensation of non-profit employees to “reasonable compensation,” so they are not making the idea up. The limitation is in exchange for the tax exemption.

Needless to say that provision hasn’t been enforced much in recent years, as non-profit organizations have been pillaged almost as much as public and private ones. I wouldn’t mind them getting tough on the non-profiteers.

How about this: “reasonable compensation” for someone merely doing a job (as opposed to inventing something special or starting a new firm that booms) is no more than what the President of the United States earns.

Comment by bluprint
2009-03-31 09:04:05

Are you saying that the President is, by some broad measure, the most productive person in the country? (aside from the inventors or entreprenuers you excluded)

Comment by WT Economist
2009-03-31 09:41:08

The most potentially productive (or destructive) I’d say, as a result of the most responsibility.

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Comment by CA renter
2009-04-01 04:37:32

Comment by bluprint
2009-03-31 09:04:05
Are you saying that the President is, by some broad measure, the most productive person in the country? (aside from the inventors or entreprenuers you excluded

———————–

Are you saying the top earners in this country — management and people in finance — are the most productive???? Seriously?

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Comment by bananarepublic
2009-03-31 09:44:22

“The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government.”

I like this a lot. If the owners of the company can’t set wage limits, who can? And when we start putting money into these companies, we become owners. It also gives the same companies a lot of incentive not to take the money.

I like it. I like it a lot.

Comment by CA renter
2009-04-01 04:38:40

Me too.

 
 
Comment by Anon In DC
2009-03-31 10:44:04

The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — OF COMPANIES THAT HAVE RECEIVED A CAPITAL INVESTMENT FROM THE US GOVERNMENT.

Sounds good to me.

Comment by In Colorado
2009-03-31 11:26:23

Maybe they should buy IBM or HP. That way the big cheeses will get the same raises they give their worker bees: 0%.

Comment by packman
2009-03-31 14:23:41

Not all companies are like that - my company’s executives gave themselves no pay raise this year. The worker bees got some, depending on conditions - my department generally got 5-6%.

These are things the MSM won’t report on, though.

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Comment by In Montana
2009-03-31 08:32:10

Was at a special interest forum and a guy asks if he should buy a house in South Orange NJ while his wife attends Seton Hall. All the replies except mine pretty much said go for it - it’s a great time to buy! etc. and of course I threw a wet blanket on it.

Or is So Orange “different”? LOL

Comment by MrBubble
2009-03-31 09:07:09

Same comment from a woman looking to buy in Chico, CA last weekend in Napa. I opened up my laptop, showed her the Ivy Zellman chart (my background picture) and explained. Another satisfied non-customer!

MrBubble

 
 
Comment by Jas Jain
2009-03-31 08:34:28


Home Prices In N. California Down 5.2% Compared to 8 Years Ago! (In Nominal Dollars)

Case-Shiller home price index is the most accurate measure of what is happening to home prices in a given area (it is based on repeat sale prices of the same homes over time). The San Francisco metro consists of most of the populated counties in N. California. The San Francisco area index price for January 2009 is 5.2% below the January 2001 price!

Most of this decline right now is concentrated in rural areas but it is only a matter of time before prices in all zip codes are at 8-year lows. As the depression spreads lot of smart people, and some out of economic necessity, will sell their homes in the expensive areas and move to cheaper areas.

Jas

Comment by Prime_Is_Contained
2009-03-31 09:40:06

Yep; prices typically go up from the inside-out, and down from the outside-in.

 
Comment by Professor Bear
2009-03-31 15:34:11

“As the depression spreads lot of smart people, and some out of economic necessity, will sell their homes in the expensive areas and move to cheaper areas.”

Consequently demand might hold up better in cheaper areas as the high end near the water capitulates. I heard a personal anecdote to this effect today — SIL in Utarr is expecting an offer from a Hawaiian buyer. One would guess that inmigration from CA to the heartland might have a similar effect — just like in the early 1990s.

 
Comment by ecofeco
2009-03-31 19:31:32

In Texas, +/- $100k houses are selling just fine. Sales ARE down, but nothing compared to +/- $200K, which are just about dead, let alone the $250+ inner city townhouses, which ARE dead.

 
 
Comment by bananarepublic
2009-03-31 08:37:00

To all the haters (aka Republicans)….

U.S. President Barack Obama benefits from a broadly held perception that others bear the bulk of responsibility for state of the U.S. economy, according to a Washington Post/ABC News poll published on Tuesday.

Asked who was responsible for the economic meltdown, 80 percent in the poll blamed banks, financial institutions and corporations. Some 70 percent also blamed consumers for taking on too much debt and the former Bush administration for lax regulation. Only 26 percent said the Obama administration was not doing enough to turn the situation around.

Truth hurts.

Comment by Blue Skye
2009-03-31 09:40:58

Hurt me with the Truth bananna!

or with an opion poll.

Make Love, not Hate.

Comment by bananarepublic
2009-03-31 09:47:51

LOL. Now that is total BS.

Sorry, couldn’t resist.

Comment by Blue Skye
2009-03-31 10:07:03

see…laughing is good for you.

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Comment by Blano
2009-03-31 09:51:55

Boooorrrrrriiiiiinnnnnngggggg. Post something meaningful for once.

Hey Ben, isn’t this the political BS you were getting a little tired of???

 
Comment by Prime_Is_Contained
2009-03-31 10:15:31

“Only 26 percent said the Obama administration was not doing enough to turn the situation around.”

You get the data that you poll for.

I would like to know how many respondents thought that the Obama administration was doing TOO MUCH to turn the situation around. But I’m sure they didn’t allow respondents a way to express that in the poll.

Comment by jeff saturday
2009-03-31 10:34:53

“I would like to know how many respondents thought that the Obama administration was doing TOO MUCH to turn the situation around.”

How many nasty accidents and roll overs occur when over compensating steering on highways.

 
 
Comment by packman
2009-03-31 10:24:38

So sheeples’ opinion = truth now, Michelle?

IMO Obama *certainly* had very little to do with our economic problems right now.

Obama will however be a direct cause of the economic problems that we’ll have in the 10-20 year period from now. *That* is what I fault him for.

Comment by Blue Skye
2009-03-31 12:03:20

I don’t think we should get too puckered up over this. Our President may truely be the man we deserved at this point in our nation’s crash, but his personal part in the big picture will be rather small. Most people still think this party can be salvaged with a new bottle of gin. It can’t.

The consequences of our national mania must play out, no matter the actors on stage. Real heroes (or villians) cannot come to the fore yet. Recovery cannot start until the collapse completes. JMO.

Comment by Julius
2009-03-31 13:28:09

Yeah…we had the most outrageously excessive parade of credit in world history over the last decade or so. You don’t just undo all that by clapping your hands, smiling, and saying “OK, now we’re gonna try to do things right.”

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Comment by VirginiaTechDan
2009-03-31 12:07:36

Exactly.. Obama’s moves are the OPPOSITE OF HELPING and so he is to blame for making things worse.

bananarepublic cannot see past the two party sham and is foolish enough to think that truth can be discovered by a vote.

 
 
Comment by Matt_in_TX
2009-03-31 17:44:38

Apparently 70% thinks he’s doing TOO much? ;)

 
 
Comment by ahansen
2009-03-31 09:10:06

…and speaking of Sheeple, why do I get the impression these guys are alumnae of Goldman Sachs?

All hail the running dogs!

youtube.com/watch?v=D2FX9rviEhw&feature

Comment by Blano
2009-03-31 09:55:57

That was cute, but those guys have waaaaay to much time on their hands.

 
 
Comment by whino
2009-03-31 09:29:56

Angry French workers facing layoffs hold 4 bosses at Caterpillar plant

PARIS (AP) — Angry French workers facing layoffs at a Caterpillar factory briefly detained four of their bosses Tuesday at the U.S. manufacturer’s plant in the Alps to protest job cuts, a regional official said.

It is the third time in the past few weeks that French workers have seized their bosses to protest job losses stemming from the global economic crisis.

In a new twist, the mayor of the small town of Pont-Saint-Esprit in southern France was prevented from leaving city hall by townspeople angry over municipal management amid the economic downturn. Phone calls to the mayor’s office went unanswered, but the local police confirmed there was a “crisis.”

Comment by VaBeyatch in Virginia Beach
2009-03-31 14:33:04

… would you like freedom fries with that?

Comment by Faster Pussycat, Sell Sell
2009-03-31 15:30:06

Only if they’re made in horse fat.

Comment by Olympiagal
2009-03-31 17:18:50

You! *gasp *

I’m paying attention to this part of your activities!

*makes a note, and in the firmest part of my pink hinter-brain, that never gets wiped *

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Comment by Faster Pussycat, Sell Sell
2009-03-31 18:32:35

It’s called “freedom”, lady, and I want my freedom with my freedom fries. ;-)

 
 
Comment by Eudemon
2009-03-31 17:29:36

Vous allez au zoo et dinez avec les Parisiennes, Chat du Vite?

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Comment by whino
2009-03-31 09:58:06

Fed’s Move to Lower Mortgage Rates May Backfire On Market

For some, the government’s mortgage rate initiative has other, more worrisome aspects. At its most basic, it has the looks of a lending boom built on cheap money and poor underwriting standards aimed at the lower end of the housing market, driven by government-controlled entities such as Fannie Mae and Freddie Mac, as well as the Federal Housing Administration.

Edward Pinto, a former chief credit officer at Fannie Mae, says loan-to-value ratios are still dangerously high for most of the loans the government is making and that it is setting up a whole new group of borrowers for home foreclosure. He calls it reminiscent of the subprime fiasco.

“We have the lowest prices in six years, the lowest mortgage rates in a generation and they’re sill trying to pump up the market,” says Pinto.

He also worries that Fannie and Freddie will have trouble “rolling over” the debt, as Freddie did in the summer of 2008, when it had to exchange short-term for longer-term debt, an event some consider a contributing factor to the necessity of the government’s takeover.

“Stop interfering,” is Pinto’s advice to the government. “Say you’re done; you’re not going to announce any new programs, ones that you’ve never done before. Let the market adjust to what you have done.”

http://finance.yahoo.com/news/Feds-Move-to-Lower-Mortgage-cnbc-14798136.html?sec=topStories&pos=6&asset=TBD&ccode=TBD

Comment by wmbz
2009-03-31 13:37:57

“Stop interfering,” is Pinto’s advice to the government.

LOL! I notice that Mr. Pinto is a former CCO at Fannie.

That’s all gubermint knows how to do, they ain’t gonna stop.

 
Comment by ecofeco
2009-03-31 19:37:55

The same “market” that got us into this mess will adjust and magically fix everything?

Yeah, I’ll trust those guys to make it right. :rolleyes:

 
 
Comment by wmbz
2009-03-31 10:17:29

LOL! You just can’t make this stuff up. The D.C. clown troupe just keeps rolling along!

Tuesday, March 31st, 2009
samhsa.com

The federal government understands your pain and wants to help. It has established a web site to which you may turn for guidance: “Economic turmoil (e.g., increased unemployment, foreclosures, loss of investments and other financial distress) can result in a whole host of negative health effects - both physical and mental. It can be particularly devastating to your emotional and mental well-being. Although each of us is affected differently by economic troubles, these problems can add tremendous stress, which in turn can substantially increase the risk for developing such problems as:
“Depression…Anxiety…Compulsive Behaviors (over-eating, excessive gambling, spending, etc.)…Substance Abuse.”

Comment by Zombie Banks
2009-03-31 12:39:49

They forgot the dreaded zombie syndrome.

 
Comment by Shizo
2009-03-31 13:24:18

Insert BIG PHARMA here. I’ve always wondered how the whole, “whoops, I lost my health care, now what do I do about SLOWLY ramping off the depression pills so I don’t kill everyone within shooting range” is going to play out. Think “they” will be held responsible (both shooters and pharma)?

 
Comment by sleepless_near_seattle
2009-03-31 15:00:46

Huh. No mention of visqueen or duct tape. What was I supposed to do with this stuff again?

 
Comment by dude
2009-03-31 16:12:34

My wife last night typed in, “Best way to” in the google search bar on firefox. The first suggestion was … “lose weight” , second suggestion … “commit suicide.”

Comment by Julius
2009-03-31 17:41:53

Hahaha I just tried this…the third suggestion is “best way to smoke weed”.

 
 
 
Comment by whino
2009-03-31 10:19:35

Can some of the smart people here spell out for me why investors would want mark to fantasy on assets held by banks? I cannot see why they would?

Bank stocks rebounded Tuesday on reports that the Financial Accounting Standards Board (FASB) may send mark-to-market accounting by the wayside.

Mark-to-market accounting has been a hot topic in recent months, as many financial institutions have been forced to write down billions of dollars in distressed assets. Proponents for the accounting practice argue that it provides necessary transparency for investors assess company value. However, lobbyists are pushing for a change that would allow banks to use their own judgment in valuing assets. Such a practice could bolster profits by 20% or more, according to some analysts. A vote to determine whether any changes will be made is scheduled for April 2.

Investors are optimistic, sending bank shares on the rebound after a poor session on Monday. Bank of America (NYSE: BAC - News), Citi (NYSE: C - News), and Wells Fargo (NYSE: WFC - News) are all up at least 5%. The enthusiasm is somewhat tempered, however, in that volume is running below average across the Index.

Comment by Faster Pussycat, Sell Sell
2009-03-31 10:36:37

You pay me to mark-to-fantasy. The paycheck is higher than the cut in the mark.

I make money; you get government cheese; and we all live happily ever after.

 
Comment by bluprint
2009-03-31 10:50:11

Can you post a link please? I’m writing a paper on this subject as we speak..

I’ll add to FPSS and point out that this affects reserve requirements as well.

Comment by VirginiaTechDan
2009-03-31 12:03:07

Reserve or capital requirements? With all of the debate about fractional reserve lending I think it would be useful to identify the difference between capital requirements and “reserves”.

If mark-to-fantasy is allowed to be used as “reserves” for “on-demand” deposits… well that is just STUPID!

Comment by bluprint
2009-03-31 12:16:39

Thanks for the correction. I should have said capital requirements. Reserves are supposed to be held in cash or as a deposit at the Fed.

My point being that it affects the formal liquidity of banks, which is what regulation operates on, as opposed to some “real” measure of liquidity (assuming an investor had the means or ability to extrapolate from the financial statements what the balance sheet REALLY looks like).

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Comment by packman
2009-03-31 12:41:27

Here’s a link to the story on Bloomie.

Congressional pressure to relax the M2M rules - surprise - as lobbied by the banks. And - surprise - under this change all of the sudden banks would become a heck of a lot more profitable (for now).

Oh, and it just so happens that a lot of bonuses are tied to profits.

Go figure.

Comment by bluprint
2009-03-31 14:38:25

Ok group, so what’s the effect of this rule change on stocks? How do changes in EPS affect stock prices?

Some argue (convincgly) that the market doesn’t care about net income or EPS that only changes in free cash-flow really have a measurable affect on stock price. Theoretically the MtM change shouldn’t affect free cash flow right? But it WILL affect the equation normally used to determine free cash flow.

So what is the net affect? Is the market going to be able to discount the value of these firms appropriately?

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Comment by packman
2009-03-31 19:14:47

“Some argue (convincgly) that the market doesn’t care about net income or EPS that only changes in free cash-flow really have a measurable affect on stock price.”

Well that’s kind of like saying that a trucking company doesn’t care about gas prices or tire prices or wages, they only care about costs. It’s not a valid statement since they are tied together - cash flow is derived from earnings, as are EPS of course. Anyone who says that the market doesn’t care about earnings is cuckoo.

My take on the M2M rule change this is that the investment community mostly knows that relaxing (or removing) M2M rules is essentially kicking the can down the road to some extent - the main disagreement would be to what extent. Many (IMO the foolish ones) believe that market prices for these MBS are too low - that they will rebound at some point in the not-too-distant future, and M2M rules as existing pose a bankruptcy risk to the companies holding these securities. So even though prices may rise in the future it doesn’t matter - just the act of marking these down in the short term would bankrupt the company before they have a chance to reap the expected rebound in the future. That I think is why the market was up so much today - relaxing the rules allows them to postpone the writedowns until they no longer are writedowns.

If instead you believe (IMO correctly) that the prices for these MBS will *never* rebound - then indeed they’re kicking the can down the road, postponing the inevitable. Being that stock prices should be based on future earnings expectations, such a view would not raise your stock price targets.

Which is why I mention that I think SRS is a good play right now. There’s too much optimism behind this rule change, IMO.

Just a layman’s view though. There are others on HBB more knowledgeable than I.

 
 
 
Comment by whino
2009-03-31 13:08:03

Sorry for the delay in providing the link bluprint, I had to step away to break-up a cat fight and got distracted with other things. :-D

http://finance.yahoo.com/news/Bank-Stocks-Rebound-on-indie-14798242.html

 
 
 
Comment by wmbz
2009-03-31 10:39:47

Neighbour from hell ‘blew up own home’ minutes before eviction!

By Andrew Levy
Last updated at 6:11 PM on 31st March 2009

A neighbour from hell is feared to have committed suicide today by blowing up his home minutes before he was due to be evicted.

Wheelchair-bound Donald Joyce, 58, had been ordered to leave his two-bedroom bungalow after a campaign of harrassment against neighbours during which he blocked access to homes, filmed through windows, and shouted abuse.

Bailiffs were due to remove him at 10.30am yesterday but a series of explosions destroyed the building at 9.45am, sending rubble flying into the air and destroying a nearby wall.

A giant radio aerial was also thrown across the cul-de-sac in Cherry Hinton, near Cambridge.

Neighbours several doors away described their homes shaking from the shock waves.

More than 20 firefighters were called in to fight a raging blaze that broke out but were unable to prevent it engulfing the building and razing it to the ground.

Neighbour Jean Veasey, who is in her 80s, said: ‘It was absolutely terrifying. The noise and the heat were horrific.

‘Joyce did it. There’s no doubt. We haven’t seen him since, no one has. It’s the sort of thing he would do.’

Care worker Dorcas Sithole, 37, described a huge fireball engulfing the house.

‘There were three huge explosions this morning - bangs so loud I thought a plane had crashed,’ she said.

‘I only live a few doors down. The house started to shake so I ran outside and saw the building, which was an inferno.

‘If there was someone in the house there is no way they could have survived. The flames were leaping 30ft into the air and there was a lot of thick, black smoke. The heat was intense.’

Comment by Julius
2009-03-31 14:32:17

Well, I guess that took another house out of circulation.

Good grief.

 
Comment by dude
2009-03-31 16:17:38

Unfortunately there will be a lot more of this before we’re through. I will give this guy brownie points for taking himself out before doing anyone else harm, though.

 
Comment by ecofeco
2009-03-31 19:45:04

He wasn’t there. I can almost guarantee it. People like that are really just cowards… like most bullies. When they pull crap like this they never actually put themselves in harm way.

 
Comment by jay
2009-03-31 20:28:03

i have had some neighbors in apartments over the years i wish would have done something like this. i just hope i would have been out at the time, since i have lived in apartments. my buddy lived in an aparment the neighbor lost her job and drank all the time and yelled all night long and banged on the walls. i really would have laughed if the nut had wacked herself!

just this morning i went to the dumpster and threw a heavy bag of trash, it hit inside the dumpster and made a loud bang! anyhow, i heard some guy yell motherfu__er! I looked around and did not see him, but i’m sure he is a wacko who better not _uck with me. I would never blow myself up!

all kinds of wacked out people out there ready to cause problems!maybe he just lost his house…lol

 
 
Comment by packman
2009-03-31 11:00:02

WTF is going on with SRS today? It’s supposed to be twice the inverse of the DJ RE index, but currently:

^DJUSRE: -3.91%
SRS: -11.26%

Something’s not right.

Comment by packman
2009-03-31 11:03:22

To add - most RE companies are down big today, e.g. Lennar is down 15%, Ryland down 3%, etc - presumably due to Lennar’s bad quarter and the Case/Shiller numbers. So it seems to be an SRS discrepancy not a DJUSRE discrepancy.

Comment by packman
2009-03-31 13:10:49

OK so nevermind.

- SRS is mostly commercial not residential - the two are very different today.

- Yahoo tracking of ^DJUSRE was broken - it was down 3.91% yesterday, but up today. (IYR is the same index, correctly tracked).

 
Comment by Faster Pussycat, Sell Sell
2009-03-31 14:01:07

My guess is something extraordinarily simple:

Index reporting is real-time or near real-time (since you can’t trade an index - you can trade an index fund or an ETF but the actual index is just a mathematical construct.)

SRS data was delayed (typically 10- to 20- minutes.)

 
 
Comment by Muir
2009-03-31 13:38:00

packman,

It ended correctly.

DJUSRE 7.64

SRS (-13.37%)

My guess: mark to fantasy/never land is now priced in.

Comment by packman
2009-03-31 13:49:05

Yeah for some reason the Yahoo ^DJUSRE didn’t track right today - it’s correct on other boards though.

IYR is the equivalent though and is tracking right.

These are commercial not residential, which is why the discrepancy between them and the homebuilders. Apparently the M2M thing didn’t help the residential market today.

(I posted this earlier - hasn’t shown up for some reason tho)

FWIW - seems like it’d be a good time to get into SRS. M2M is just kicking the can down the road - sooner or later these losses have to be realized, and when they do profits will once again fall.

Comment by Muir
2009-03-31 14:28:20

“These are commercial not residential, which is why the discrepancy between them and the homebuilders. Apparently the M2M thing didn’t help the residential market today.”

=

commercial real estate = banks = m2m = good?

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Comment by packman
2009-03-31 14:33:35

I guess. I think normally both residential and commercial would have been up big today due to M2M. However residential got the double-whammy of bad Case/Shiller numbers and a bad quarter from Lennar (one of the biggest) - neither of these affected commercial.

As has been said many times on there though - commercial is the “next shoe to drop” (already doing so to a great extent). Which is why it seems like SRS is a good play still.

 
Comment by Muir
2009-03-31 15:17:01

packman,

I’ve been tracking your post since you posted.

Here’s my take:

SPDR S&P Homebuilders (ETF) ( NYSE:XHB )

Ticker Symbol:,XHB
Holdings:,As Of Mon Mar 30 00:00:00 EDT 2009

Mohawk Inds Inc
Kb Home,
D R Horton Inc
Ryland Group Inc
Nvr Inc,
Sherwin Williams Co,
Pulte Homes Inc,
Aaron Rents Inc,
M D C Hldgs Inc,
Rent A Ctr Inc New
Toll Brothers Inc,
Lowes Cos Inc
Lennar Corp
Leggett & Platt Inc
Lennox Intl Inc
Home Depot Inc
Owens Corning New
Bed Bath & Beyond Inc
Centex Corp
Masco Corp
Williams Sonoma
Simpson Manufacturing Co In
Aim Stit Stic Prime Por

_____

As you see, most are Consumer Discretionary.

Then you compare DJUSRE (I’ll post the link to all components after this post)
DJUSRE are mostly REIT.

My logic is the banks are into REIT and the M2M—> M2Infinity affects them.

Then I look at the components of XHB.
Citi will not be affected by Bed bath and beyond or Home Depot.
Following FPSS follow the money path to victory theorem….

 
Comment by packman
2009-03-31 19:23:37

Thanks Muir. I saw the details on DJUSRE as well (same as IYR). I hadn’t seen XHB though.

 
 
 
 
 
Comment by M Gal
2009-03-31 11:04:27

The Missoulian has finally started covering the housing market, and the coverage is (predictably) awful. The reporter is Betsy Cohen. She seems to get a weekly piece.

Here was her first effort. Straight out of the MOR press release.
http://www.missoulian.com/articles/2009/03/29/bnews/br11.txt

Since then she’s apparently been at least trying to respond to the e-comments. Still, the pieces are insane. “What happens when the local economy has always been over-inflated, and young couples earning modest incomes have always struggled to afford a house, even in fat times?” http://www.missoulian.com/articles/2009/03/23/business/biz11.txt

Here’s the latest. Great news that a family of 4 making the median income can buy 89% of the median house! http://www.missoulian.com/articles/2009/03/30/news/top/news01.txt

 
Comment by salinasron
2009-03-31 11:31:50

Ah, spent last weekend in Bakersfield, CA. All I heard from family and friends was that it was now time to buy a house because prices are going up. Especially obnoxious were those who bought second homes over towards the central coast. It seems that as prices have dropped that some of them are tripping all over themselves to out bid another because they truly feel that prices will go higher. It is going to take at least another year to readjust these mind sets.

Comment by ecofeco
2009-03-31 19:49:51

Short of the “Big One” the Cali mindset will never in our lifetimes re-adjust to reality. :lol:

 
 
Comment by bananarepublic
2009-03-31 11:39:31

Here’s another way of looking at the Case-Shiller data. Prices have fallen back to…

AZ-Phoenix (January 2003)
CA-Los Angeles (September 2003)
CA-San Diego (August 2002)
CA-San Francisco (October 2000)
CO-Denver (March 2002)
DC-Washington (March 2004)
FL-Miami (October 2003)
FL-Tampa (February 2004)
GA-Atlanta (June 2001)
IL-Chicago (May 2003)
MA-Boston (April 2003)
MI-Detroit (August 1996)
MN-Minneapolis (June 2001)
NC-Charlotte (December 2005)
NV-Las Vegas (May 2003)
NY-New York (October 2004)
OH-Cleveland (August 2000)
OR-Portland (August 2005)
TX-Dallas (March 2002)
WA-Seattle (June 2005)

Detroit is making progress.

 
Comment by Professor Bear
2009-03-31 14:03:04

“CA-San Diego (August 2002)”

That is close to the timing of the unwinding suggested by Radar Logic data, for which the 28-day average was last under $189 per square foot as of April 2002.

 
Comment by dude
2009-03-31 16:23:20

Does San Fransisco outdo LA because it includes places like Stinkton and Modesthole?

 
Comment by bananarepublic
2009-03-31 16:38:41

Here is another interesting aspect to the numbers. How fast are the gains during the bubble being given back?

Take Phoenix, for example. All of the appreciation from January 2003 to September 2003 was wiped out with 1 month of declines.

In Atlanta, all appreciation from June 2001 to May 2002 was wiped out with 1 month of declines.

In Chicago, all appreciation from May 2003 to December 2003 was wiped out with 1 month of declines.

In Dallas, all appreciation from March 2002 to July 2003 was wiped out with 1 month of declines.

This bubble is unwinding at a terrifying rate in many parts of the country. This also means we should hit bottom quicker.

 
Comment by Central Valley Guy
2009-03-31 17:54:05

Are you sure for Detroit that’s not supposed to read *1896*?

 
 
Comment by wmbz
2009-03-31 11:48:14

We’ll need to get the price of gas back up to $4.00 bucks plus to get sales going again…

Hybrid car sales go from 60 to 0 at breakneck speed.

The gas-electric vehicles are piling up on dealers’ lots as anxiety over gasoline prices evaporates. But more hybrid models are on the way.
By Ken Bensinger
March 17, 2009
The Ford and Honda hybrids due out this month are among dozens planned for the coming years as automakers try to meet new fuel-efficiency standards and please politicians overseeing the industry’s multibillion-dollar bailout.

Unfortunately for the automakers, hybrids are a tough sell these days.

Americans have cut back on buying vehicles of all types as the economy continues its slide. But the slowdown has been particularly brutal for hybrids, which use electricity and gasoline as power sources. They were the industry’s darling just last summer, but sales have collapsed as consumers refuse to pay a premium for a fuel-efficient vehicle now that the average price of a gallon of gasoline nationally has slipped below $2.

“When gas prices came down, the priority of buying a hybrid fell off quite quickly,” said Wes Brown, a partner at Los Angeles-based market research firm Iceology. “Yet even as consumer interest declined, the manufacturers have continued to pump them out.”

Last month, only 15,144 hybrids sold nationwide, down almost two-thirds from April, when the segment’s sales peaked and gas averaged $3.57 a gallon. That’s far larger than the drop in industry sales for the period and scarcely a better showing than January, when hybrid sales were at their lowest since early 2005.

In July, U.S. Toyota dealers didn’t have enough Prius models in stock to last two days, and many were charging thousands of dollars above sticker price for the few they had.

Today there are about 80 days’ worth on hand, and dealers are working much harder — even with the help of $500 factory rebates — to move the egg-shaped gas-savers off lots from Santa Monica to Miami.

This month, Honda is offering $2,000 in cash, financing and leasing incentives to buyers of the formerly sold-out Civic hybrid, while a dealer in northern Michigan is dangling $6,000 cash back to those willing to buy a hulking Chevy Tahoe hybrid.

Comment by Blano
2009-03-31 12:22:58

What kind of moron would pay $40,000 for a Chevy Volt??

Comment by wmbz
2009-03-31 14:07:54

A green one!

 
Comment by aNYCdj
2009-03-31 14:23:18

The kind of responsible moron who will put 25% down and expect the govmint to pay the rest. datz who!

 
Comment by measton
2009-03-31 15:16:10

The kind who thinks
1. The dollar will be worth a fraction of what it is now. Thus oil will cost a lot more in the very near future.
2. The kind that thinks there could be shortages and rationing in our future, if there is an economic collapse, a war, a terrorist attack, ect ect. Or if it turns out that the gas and oil companies have been lieing about their proven reserves to keep their stock price up, or that OPEC members have been lieing about their reserves in order to keep their production permit high, or to influence politics.
3. The kind who believes global warming is real and man made and a disaster in the making, and wants to support any technology that will reduce it.
4. The kind who wants to send as little money as possible to our good friends in Saudi Arabia and Iran.

Now let’s compare that to the moron who buys a Cadilac Escalade, or other comparable giant SUV, a BMW or other luxury car.

Comment by Prime_Is_Contained
2009-03-31 15:53:44

Negatory. I believe almost all of those things, and am definitely not rushing out to buy a hybrid.

Call me when they get significantly better than my cr*ppy old 82 diesel Jetta, and when they are more environmentally friendly than running my POS on biodiesel/waste-veggie-oil.

When someone comes out with a hybrid turbo-diesel that gets 80 MPG, sure, I’ll buy one new for cash.

For now…. BORING! Next.

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Comment by dude
2009-03-31 16:26:17

+1

BTW, how much energy went into producing that shiny new hybrid?

 
Comment by Eudemon
2009-03-31 17:46:54

And how much energy will have to go into making defunct, electric batteries safe for the environment?

What to do with them? Bury them in Yucca Mountain alongside fluorescent light bulbs? Oh, yeah, that’s right….

 
Comment by measton
2009-03-31 20:59:18

None of your arguements affect 1 and 2 in my post.

Driving a car into the ground is certainly more efficient than buying new.

Veggie oil is great, but not everyone has access to it.

Batteries are already recycled. This is not an issue.

The mercury released by a fluorescent bulb if thrown away is a tiny fx of the mercury released by coal used to light an incandescent bulb.

Totaling energy used to build any new car is difficult. If price is a surrogate I think you still come out on top. Certainly Taxi companies have noticed that these can save money.

San Francisco’s first 15 hybrid taxis, all Ford Escapes, have made it to about the 300,000-mile mark — nearing the city’s official taxi retirement age — and are being taken off the road. Their longevity shows that hybrid technology is more durable than previously imagined; they also have saved drivers about $9,000 a year, depending on gas prices and number of shifts driven.

ie 27,000 dollars over the 3 year life of the car.

DETROIT - The 2009 Toyota Prius Touring edition offers the best value for a new car, according to Consumer Reports magazine

The ranking takes into account the total cost of ownership over five years, and weighs fuel costs, maintenance and repairs, insurance costs, depreciation, financing rates and taxes against the price and reliability

I have a civic hybrid with 125k, Cost so far, filters and oil every 10k mi, Tires at 75k, plugs at 110k, breaks at 110k. Average mpg over the life of the car (rain heat snow city highway ect ) close to 50mpg. I’d say pretty economical so far.

 
Comment by Eudemon
2009-03-31 21:59:57

If you’re as enviro-conscious as you proport, then why aren’t you driving Honda’s new natural gas-powered car?

And, aside from autos, are you proclaiming loudly the virtues of nuclear power? You should be. France is upwards of 80% nuclear, using U.S. technology and designs for the past 20 years.

 
 
Comment by Blano
2009-03-31 16:29:12

Even if you believe all those things (#3 is ridiculous but we’ll save that for another day), a Volt can only go 40 miles currently on a battery. FORTY miles!!!! Not 4,000 or even 400………40.

And you’re willing to part with 40K (plus interest charges if you finance) for THAT????

Have at it. I’ll take the Escalade.

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Comment by measton
2009-03-31 21:05:57

#3
Take a quick trip to Alaska and look at the glaciers. Then take a look at world temp vs CO2 levels over the last million years. Then take a look at the vast majority of scientists that support the theory.

The volt can go 40 miles on electricity alone. It can go where ever you want if you put a little gas in it. The idea is that 90+% of our trips are less than 40 miles. So you could commute to work and run errands each day without burning a drop of gas, but when you leave town for a long trip just gas it up and drive as far as you want. The gas engine works as a generator and is not linked to the transmission.

 
 
 
 
Comment by In Colorado
2009-03-31 13:40:09

Plus the fact that people aren’t buying cars at all has to be a factor as well.

Comment by Zombie Banks
2009-03-31 17:22:45

I have an ‘06 accord with 20k miles and on a personal note I refuse to drive around fearing I may help out the economy.
So I blog, exercise and eat at home. Afterall I am a Zombie.

 
 
Comment by Chip
2009-03-31 19:27:38

There’s another problem - it’s the gallons-per-mile issue that some researchers at Duke’s business school wrote about.

In 10,000 miles of driving, a change from 33MPG to 50MPG saves exactly the same 100 gallons that going from 25MPG to 33MPG, or 20MPG to 25MPG, or 16.5MPG to 20MPG does. The decreasing marginal utility in terms of the amount of fuel saved, even at $5/gallon, would put a lot of people off buying cars that get better than around 30MPG, unless the vehicle cost were almost equal to that of a non-hybrid.

 
 
Comment by wmbz
2009-03-31 12:25:31

From TDR… LOL!

“We were trying to imagine the car that General Motors/US Federal Government would come up with. Surely, it would have to be safe…and wheel chair accessible…and fuel-efficient. It would probably have to have warning lights telling you where to exit in case of emergency…and maybe some kind of GPS system for blind drivers”.

“The new government-run industry would probably have to abandon the assembly line; the idea would be to create as many jobs as possible. So workers would put the new cars together with old-fashioned screwdrivers and adjustable wrenches, stopping frequently for ‘get out the vote’ rallies and other consciousness-raising events. So, it would take months to produce a car…and you’d have to wait for a new one, just as they did in the old Soviet Union”.

“New cars could be designed by Congress like any other important piece of legislation. Onto a hefty chassis could be bolted hundreds of riders, amendments, exceptions and earmarks. Maybe a solar collector on the roof - made by a large campaign contributor in Atlanta? Maybe an extra steering wheel in case the driver has a sudden heart attack (helpfully suggested by a supplier of steering wheels…and put forward by his Senator). Maybe a smoke detector that automatically shuts down the engine if it senses the driver is having a cigarette, as earnestly proposed by the anti-smoking lobby”.

“And let’s not talk about paint color. Color is a sensitive topic in America. Probably all the cars would have to be either desert beige…or even camouflage pattern so as to be useful for military transport in case the country is invaded”.

 
Comment by reuven
2009-03-31 12:58:19

Back from Taipei!

The more I see other countries, the more I realize how doomed the United States of America is.

Some examples:

* Yes, Taipei has a pollution/smog problem, shoddy architecture, but it’s extremely civilized. In the night markets, where huge crowds converge to shop and eat, you won’t see any litter in the street.

* We went to see the Taiwan National Orchestra (a friend of mine was guest-conducting them). The audience was mostly young people. In the United States, audiences for “Classical” (and all Western Art music) are mostly older people.

* Kids dress neatly. No tattoos or falling down pants.

* People don’t seem to be greedy. Folks ride scooters or take mass transit to work. Apartments are small. People save for things (this I deduced from some conversations with locals.)

We’ll never compete with these cultures.

And, of course, Taiwan still has a large manufacturing industry. They actually make things. Their economy isn’t just selling condos and derivatives to each other.

The flight back was a little more crowded than the flight out, but still I got “operational upgrades” from business to first! (This means first didn’t sell out, and they were moving people up to make room for paying customers in coach.)

We transferred at Narita (Tokyo) I’ll also give a plug for the High-Tech bidets in the Narita first-class lounge, complete with blow-drier.

Comment by mikey
2009-03-31 14:41:20

reuven

Did you get down to Taichung or Sun Moon Lake or did you pretty much hang around the Grand Hotel locations and central tourist spots of Taipie on your trip ?

Comment by reuven
2009-03-31 15:14:51

We spent time in and around the City (the purpose of the trip was to see my friend Conduct at the Chang Kai-Shek Cultural center, so it was a short trip–three full days there). We try to avoid the obvious tourist-spots, though I was compelled to go to Taipei 101.

Comment by Zombie Banks
2009-03-31 15:31:38

When you are out of the country do you worry about America? Are you afraid you’ll come home and find out there is another useless law that just passed? I swear.

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Comment by mikey
2009-03-31 17:10:32

I liked Tiawan, my family was USAF and did a MAAG assignment over there. I visited and took leave there several times.

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Comment by cougar91
2009-03-31 17:55:27

Hi reuven,

I guess I just missed you at the Taipei 101, was there late last week. Did you happen to have eaten at the basement food court? That was something else, was it not? Everything tasted so great and so reasonably priced.

I agreed with just about everything you said except for one: I think people in other places can just be as greedy. Yes people ride mass transit and scooters and live in small apartments but only because they are forced to more than anything else because land prices in Taipei and many other densely populated Asian countries are high and traffic is a mess so driving around in your own car and living in large apartments isn’t for everyone. You are absolutely correct that people in Asian countries do save a lot of their income, but that doesn’t prevent them from slipping into economic hardship. I am in Tokyo now and Japan has a very high savings rate, yet the economy is in the pits and there doesn’t seem to be much activity around town other than what the government is spending on public infrastructures.

I think a “reasonable” amount of savings + some amount of spending is the best. America did too little of the former and too much of the latter so now it has to reverse course. I think some of these Asian countries need to do less saving and a little more spending.

Comment by reuven
2009-03-31 18:08:19

We ate at a basement food court under a complex that had a Mistukoshi, not too far from Taipei 101. I was amazed at the variety and quality. Compared to a US food court, this was astounding.

 
Comment by reuven
2009-03-31 19:02:33

You might have seen me! I was at Taipei 101 on Friday. I look like this http://farm4.static.flickr.com/3655/3390472759_73ee4688a0.jpg

Comment by cougar91
2009-03-31 21:03:46

Ah, I missed you by one day, was there on Thur. I also took the super-elevator up to the top to see that balancing steelball, quite something to see. Taipei has lots of earthquakes so the design for such a tall skyscraper has to take that into consideration.

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Comment by Matt_in_TX
2009-03-31 17:55:48

When I flew through Taiwan, my baggage was searched three times while waiting in the terminal. It got pretty annoying to get up and leave the gate area to queue up to be searched then go back into the gate area. Just to do it all over again 45 minutes later.

Comment by cougar91
2009-03-31 21:05:19

Do you look suspicious? :-D

 
 
 
Comment by Blue Skye
2009-03-31 13:29:22

A lot of the indicators show us in worse shape at this point than 1982 (I seem to remember that being FPSS’s fav).

Continuing unemployment claims are at an all time record, north of 5 million. That pencils out to over $100 billion per year in UI benefit payouts. Destimulating.

This ride’s a real screamer!

Comment by Faster Pussycat, Sell Sell
2009-03-31 13:40:19

So aren’t you glad that you’re one of the few that was prepared? ;-)

Comment by Blue Skye
2009-03-31 13:47:36

HAHAHAHAHAHAHAHAHAHAHAHAHHAH!!!!!

yes

 
 
Comment by packman
2009-03-31 13:58:14

1982 - oh to be young and naive again.

My memory from then, as an early teen, was helping my Dad clear out a new lot he had bought, in order to build his dream home. It took several months with chain saws and brush fires. (we did leave a lot of the nice old trees). When we were done, he staked out the corners of the house that he had planned.

Then interest rates went through the roof, and it was “so much for that idea”, and he later just sold the empty lot.

It is interesting to now be more directly affected by a big downturn. As a kid you don’t really grasp it (if your parents don’t lose their job and/or home at least).

 
Comment by dude
2009-03-31 16:30:43

“A lot of the indicators show us in worse shape at this point than 1982″

Just wait ’til the recession really gets going!

Comment by Faster Pussycat, Sell Sell
2009-03-31 17:51:57

+1 on this.

There seems to be a lot of arrogance in Washington that they have stemmed the bleeding but they don’t quite fully grasp the problem.

 
 
Comment by ecofeco
2009-03-31 20:07:21

The Bureau of Labor Statistics says we have traded 1,200,000 jobs paying $96,000 a year for $34,000 jobs.

This ride isn’t a screamer. It’s rocket sled to the bottom!

 
 
Comment by ylekiot1
2009-03-31 14:34:52

What a day, I need some more Credit crunch cereal with Cap’n Bernanke on the box….

 
Comment by jeff saturday
2009-03-31 16:52:52

This is what you do when your company slows down. It shouldn’t be that hard to figure out for high paid executives, union leaders or politicians.

Honda to cut North American production, worker payMarch 31, 2009 7:26 PM ET

All Thomson Reuters newsWASHINGTON (Reuters) - Honda Motor Co Ltd said on Tuesday it would cut production in North America by 62,000 vehicles by shutting down factories for 13 days starting in May and said it would cut pay for salaried and factory workers.

Comment by Matt_in_TX
2009-03-31 18:18:35

((SPOILER))

Car company sold one of their more worthless European assets recently. A month later, that asset is platinum at the top of the charts.

Their timing is… incredible.

(Details redacted as an anti-spoiler measure.)

 
 
Comment by Faster Pussycat, Sell Sell
2009-03-31 18:29:26

President Barack Obama has determined that a prepackaged bankruptcy is the best way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.

Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat Spa, said members of Congress who have been briefed on the subject and two other people familiar with the administration’s deliberations.

Wow, I guess I have to hand it to the Candy-Crappin’ Unicorn™. Faced with the inevitable, he actually took a quick decision.

Good for him!

Comment by Muir
2009-03-31 20:13:46

Hmmm….

If only he’d remember those promises he made…
It’d be fun to see the banks treated that way.
(Oh, well…)

Comment by Faster Pussycat, Sell Sell
2009-03-31 20:50:38

The perfect is the enemy of the good.

- Voltaire

 
Comment by measton
2009-03-31 21:08:51

Many banks are being treated that way just not the big ones, but I still hold out hope.

 
 
 
Comment by reuven
2009-03-31 18:46:58

Even if you give the “I DESERVE A FREE HOUSE BECAUSE I’M POOR” folks a free house, they STILL complain!

An article in today’s Times talks about banks that decline to foreclose, presumably because the house needs to be demolished, and it’s cheaper to not foreclose than to assume possession.

SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

After Ms. James had her tenants move out, vandals hit the home. It is set for demolition, but the title is still in her name.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.


So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

What exactly, does this woman want? She got her friggin’ house FOR FREE! She hasn’t paid the mortgage in months and months, and the bank GAVE it to her. She won’t be happy until Barack Obama writes her a check for $1,000,000, hugs her, and declares April 1, 2009 to be Mercy James day, in her honor.

 
Comment by neuromance
2009-03-31 19:02:10

How is it that those who engineered this debacle are being made whole from this bailout?

How did they manage to take the economy hostage (or at least make the citizenry believe they have taken the economy hostage)?

I look at Rick Wagoner, of GM, walking away with 23 million (do a Google search on “Wagoner severance”) as he shepherded the company into the ground. Now, I know the economic situation now is restrictive, but he’s already made a lot of money. Why can’t he just collect unemployment like everyone else?

It’s like there’s no consequence to failure at the highest levels of industry. In fact, it’s richly rewarded. Subsidize failure - be it a CEO of a bank or an auto company, or a teenage welfare mother - and what do you get? More of that failure.

Comment by ecofeco
2009-03-31 20:15:05

How dare you question the captains of industry! I shall have to report you to Homeland Security! We simply will not tolerate that kind of uppity thinking!

 
Comment by SaladSD
2009-03-31 23:13:48

Technically speaking, he’s not getting severance. After 32 years with the company this multi-million dollar payout reflects the pension he “earned.” With the way they structured pensions, GM can’t afford to have any line workers or executives.

 
 
Comment by Muir
2009-03-31 20:15:12

__

Last post!

Let’s see if I can sneak this one in —–> he, he, he.

Comment by Faster Pussycat, Sell Sell
2009-03-31 21:08:51

FAIL!

 
Comment by Claire
2009-03-31 21:23:36

You’re not!

Comment by CA renter
2009-04-01 05:03:17

I’m last! :)

 
 
 
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