Bits Bucket For April 15, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Attention knifecatchers: Per the WSJ this morning, banks and GSE lenders are accelerating their foreclosure efforts, which are expected to grease the skids for another 20% decline in house prices.
Buy now or be priced out forever indeed!
As I posted last night in yesterday’s bits buckets, CME Housing Futures appear to price in another 17.7 percent decline in San Diego home prices through August 2010. And I haven’t checked this carefully, but I believe that if you went back in time and traced CME Futures prices over the course of the housing correction, you would discover that actual price declines have generally proven larger than CME Futures market participants expected.
But I read home sales are way up and the economy is getting better. well home sales are up in Phoenix if the house is priced under 200K. I think the expensive homes are not selling at all.
I trust Realtors(tm) because they are PROFESSIONALS. They know the market and help people buy good investments. They tried to help me get a house in 2002 when the prices started going up about $1000 per month for a $120,000 house.
Several of them told me that if i “Didn’t buy now, I’d be priced out FOREVER.”
Well, i thought the prices were too high and pushing the limits of affordability that would have made me a debt-slave for 30 years.
So……….I didn’t buy.
Since I am priced out forever, i don’t bother looking anymore.
Whenever a Realtor approaches me about buying, I tell them i got priced out forever in 2002-2003. Forever is a long time.
that funny im going to use that.
Diogenes, I would like to commend you for the world’s all-time best, number one reply to ANY realtwhore, forever. Thank you. I am going to stitch a sampler with this saying on it - with attribution, of course.
No, no!
We NEED expensive housing because, ummm… well, your house is your savings… right? How else can we sustain our eCONomy of buying Dummers and Extrusions with HELOC money based upon liar loans and fraud? Gah, if this keeps up, we’ll have to invest, save, and produce, and that’s not the ‘merikan way!
We need to change this to:
“Sell now, or be priced IN forever!!!”
CPI fell 0.1% in March. Year over year, consumer prices fell 0.4%, the first annual decline since August 1955.
A combo special!
Cash is still king.
Stop eating and start smoking so we can inflate our way out of this mess!
“Core inflation, which excludes energy and food, rose 0.2 percent ”
“More than half of the increase in costs outside of food and energy came from an 11 percent rise in tobacco prices, the biggest one-month surge in that category since December 1988.”
“New car prices also rose in March by 0.6 percent”
Really?
“Stop eating and start smoking so we can inflate our way out of this mess!”
Didn`t you hear, you can`t smoke unless you make more than $250,000.00 a year.
Ironic how tax increases are used to prop up the CPI.
RE: More than half of the increase in costs outside of food and energy came from an 11 percent rise in tobacco prices, the biggest one-month surge in that category since December 1988.”
Oregon tax on beer makers up 1900%!
Adios micro-breweries…
HELLO Idaho!
hd74man,
LOL! Right, like micro’s aren’t expensive enough already? Just moved from not worth it to -definitely- not worth it.
It didn’t fall where I live. I’ve seen 25%+ price increases across the board.
It seems to have stabilized for the moment.
I have a co-worker who is buying a house for the 1st time in Centreville, VA in Fairfax County. The house is selling for $400k and they are putting down 10%. I asked him can he and his wife afford this house and he said yes but it is on their upper end of mortgage payments they want to make. Meaning they aren’t buying new furniture any time soon. The house was bought in ‘06 for $600k and come with upgrade Bling Bling kitchen. So this house is going to sit mostly empty with no furniture, but they are owning. I just shook my head in disgusted. I know that they make between $120k and $150k and have no kids. Both are secure with jobs, but I have a feeling they are stretching for this property.
‘Meaning they aren’t buying new furniture any time soon…So this house is going to sit mostly empty with no furniture, but they are owning.’
Yes, we have seen this a few times before.
Yep they are moving from a 1-bedroom apartment to a big house. Someone can do the math on this.
No furniture…talk about an open floor plan…
The vast majority of my furniture was either given to me or bought on craigs list for next to nothing. There is no need for expensive furniture.
Yes,but you can’t do that anymore because of the threat of bedbugs! No second hand furniture for me! I most decidedly do not want bedbugs.
Great Southeast thread yesterday.
“Yes, we have seen this a few times before.”
The guy fixing my bathroom up said he’d been in a bunch of houses in Pittsford and Brighton (nice areas of Rochester, NY) that had no furniture.
That was 2004, I think.
Some former neighbors up the street bought a three bedroom 1800 sq ft San Diego fixer-upper for $500,000 back in 2005. This was viewed as a bargain at the time. Unfortunately, the place had no working stove when they moved in, necessitating makeshift efforts at food preparation. So far as I am aware, they never did manage to purchase a stove before they were foreclosed and divorced.
4 primary causes for failed marriages
1) in-law meddling
2) financial difficulties
3) uneven splitting of chores
4) inadequate appliances
Bad table manners, Gigi, have broken up more marriages than infidelity.
5) Infedelity (falling in love with another house)
0) Suzanne
But more to the point with a 120-150k income the house is certainly within their reach. I know that neck of the woods - back in the day it was a convenient gas/food stop on the way to Shenandoah, now it’s full of federal govt types. Which is a good thing really because those jobs will stay. In fact there may be more pressure to move offices out from DC to the suburbs/exurbs. While I wouldn’t buy right now, a DINK couple with a longer term perspective might actually come out even.
Ah, the ‘merikan dream!
I just hope that they HELOCED to get a Dummer, Extrusion, etc. since it is far more important to have an overpriced, gas-guzzling “bling ride” than silly stuff like a working stove, saved money, etc.
It doesn’t take that much effort to go to Sears and buy a stove.
It’s even easier to hit Craig’s List - appliances are all over the place for sale due to foreclosure.
I was able to get an $1800 washer and dryer for $300.00 here in SD - as long as I could get it the same day.
“Moving Sale” - they were cleaning the place out. Looked like they were trying to stay a day ahead of the sheriff. . . .
Just sayin . . . a good deal is a good deal.
(The house was bought in ‘06 for $600k and come with upgrade Bling Bling kitchen.)
Do they at least cook their own meals using cheap unprocessed ingrediants?
(Both are secure with jobs.)
My advice is cook a pound of dried beans and a two cups of rice on the weekend. Whoever gets home first can stir fry in some veggies and a little bit of sausage, and it can feed you all week.
Of course, formica countertops allow the same plan, and rice makers are cheap.
Rice cooker: best wedding gift we received. Still going strong after 26+ years, too!
They really don’t make stuff like they used to.
I have to agree. The rice cooker is one of those things I looked down on as an unneeded gadget before I had one, but we use it all the time. (Though mine is a newer, fancy Japanese wunderkind.)
How difficult is to cook rice?
1 Clean and wash the rice.
2 Add twice the water
3 Boil, lower heat, and cook 10 minutes. Walla cooked rice. Dam I wish I had a rice cooker.
Ah, but the rice cooker automatically turns itself off when the rice is done! Never over- or undercooked. It’s…it’s MAGIC!
Zojirushi-like! -
A couple making $130k/yr buying a $400k house actually sounds quite reasonable relative to many of the other horror stories out there. I really don’t see the big deal. With a 30 year mortgage at 5.5% for 360k they should be paying $2000 a month with a good chunk of change left over for furniture….especially without children.
I fail to see why this is fiscally imprudent unless they have loads of prior debt.
But Darth, the fact that they can only put 10% down tells you that they are habitual spenders, so it will be hard for them to come up with the extra money every month for the mortgage/taxes. Not to mention the fact that similar houses will be $350K in the fall.
I disagree. Having 40k (10%) on hand for a down payment is no indication of being a habitual spender. In fact I would argue the opposite especially in this day and age.
Darth, did you recently catch a falling knife, because that’s what you’re sounding like as you defend someone making a house purchase in this market, solely on the basis of the buyer’s ability to pay. How much a month did you buy your car for, ha, ha.
If they make $130K/year and live in a one-bed apartment, then they are habitual spenders. If they were even halfway frugal, they could almost save that $40K within a year, two years tops.
Darth, did you recently catch a falling knife, because that’s what you’re sounding like as you defend someone making a house purchase in this market
He finds your lack of faith, disturbing.
Seriously though, I can understand where Darth is coming from. When rates are so low some people find it silly to use a large down payment. They probably assume the money will be put to better use in higher yielding investments. A quaint notion these days, but one I can understand.
Btw, Centreville is only going to keep declining. Not a wise purchase, IMHO.
There’s a lot of info missing here and I wouldn’t be so quick to judge.
You don’t know how long their salaries have been at that level or how old they are or any major events in their life.
Presume they’re 30 years old and have raised their salaries from college grad 35ks to that level over a period of time, completed their masters, and paid off 150k of student debt, fully funded their 401ks and such. Are they still habitual spenders?
Its one thing to state a direction of a market or an overall aggregate unaffordability of properties, but when talking about individuals, means and standard deviations tend to be not that hot.
If I could get away with it, wouldn’t it be better for me to only put 10% down and keep the rest of the cash in the bank versus putting down all of my savings?
Similar houses will be $350K in the fall. YOU WIN !!!!!
Tried telling some relatives who just HAD to buy in Winchester VA, to wait two years and they would buy the house of their dreams for a song. But they have to buy NOW, now, now, now. This was after they were LUCKY enough to just sell a much bigger more expensive house in Fairfax County.
I don’t have a good feeling about the Centerville couple. They scrimped and saved in their 1 BR apt to get a DP so they could move to the burbs and have a family. Now they have the house. Next they will start popping out puppies (not said sarcastically, I have kids and I adore them). They have no frickin’ idea how much it costs to get the pups raised to school age, assuming they want to remain dual income.
Too, too high a nut.
It sounds like they can probably afford it yes. Nevertheless it sounds like a very unwise move to me, for several reasons:
- NoVA still has a ways to go down price-wise - especially the Centreville area which is way overbuilt (I work right up the street in Dulles). NoVA will get some boost from government spending I’m sure, but nevertheless prices still will come down probably another 15% or so.
- That being the case - your friends will most likely be underwater in about 2 years.
- Why the hurry? If they only have money for 10% down and no furniture, and if they don’t have any kids - seems like they should remain renting for a while, and buy at the bottom. There is plenty of time.
Yours Truly was conceived while my parents were still living in an apartment. My folks moved into their newly constructed house a few weeks before I was born.
It’s funny to hear a comment on this blog suggesting that as long as one can afford the payments on a house that the decision to buy is not unreasonable. There are plenty of people who could affordably bought in FL in 2005 who would disagree that their decisions to buy were reasonable.
This is one of those too-often-repeated scenarios where people believe that just because a house can be purchased for $200K less than it was 3 years ago means it is a bargain. My wife falls for that all the time with the 50%-off jewelry sales.
There is a failure to see the “bigger picture” or even admit that there might be a “bigger picture”.
We are going through for a fundamental reboot of the US economy and people think just because they can make the payments now, they will be able to do so for the next 30 years?
What are they smoking? Don’t bogart it, pass it over here!
They’re smoking fatties rolled at Bretton Woods.
Dayum…I still have my 2 Fratenity of Man LP’s….dont bogart that joint my friend…pass it over to meeeeeeeeee!
——————————————–
What are they smoking? Don’t bogart it, pass it over here!
FPSS: “We are going through for a fundamental reboot of the US economy and people think just because they can make the payments now, they will be able to do so for the next 30 years?
This means you see a downturn time-line wise that exceeds the Great Depression.
No, I don’t think I do actually but I do see some fundamental reorganization of the US economy, and I can safely say two things:
(a) Nobody knows what it will look like, and
(b) It is guaranteed not to look like the past.
This can be an interesting discussion. How do we think the economy will look like in the future? What are your thoughts? Inquiring minds want to know?
10 ways the new economy will look different
1 VALUE AS THE NEW VIRTUE
2 RETURN OF THE TIGHTWAD
3 EBAY AMERICA
4 MONEY IN THE MATTRESSES
5 THE NEW BIG THREE
6 THE MOVABLE RÉSUMÉ
7 ‘GREEN NEW DEAL’
8 STODGY IS CHIC
9 D.I.Y. INVESTING
10 BUST OF THE BOOMTOWNS
http://www.csmonitor.com/2009/0412/p13s01-usec.html?ref
“The migration bubble of the middle of this decade, fueled by easy credit and superheated housing growth in newer parts of the Sun Belt and exurbs throughout the country, seems to have popped,” writes William Frey, a senior fellow at the Metropolitan Policy Program of the Brookings Institution, in a March 20 analysis.
In the 12 months ending in July 2008, greater New York lost only 144,000 residents, its lowest such outflow since at least 1990. At the same time, Phoenix attracted only about half as many new residents as before. Tampa and Orlando attracted fewer migrants than at any time in almost 20 years.
Interesting. And wasn’t this predicted here at least a year ago?
“It’s funny to hear a comment on this blog suggesting that as long as one can afford the payments on a house that the decision to buy is not unreasonable.”
I’ve made those observations myself Mikey(2). I hear some very toned down rationalizations by a number of people here. From what I can tell, they are potential FB’ers who are hoping against all odds that their stupid move to buy in the last 8 years wasn’t so stupid afterall.
I can write a check for a house. It doesn’t mean it’s a good idea.
When there are a million other egregious examples out there (like the stated income strawberry picker buying a half million dollar home), picking on this couple seems like a waste of time to me. Not the greatest of decisions for them, but they’re probably neither going to foreclose nor ask for a bailout.
fundamental reboot of the US economy ??
doing more with less ??
Consuming less than you earn.
What if you’re earning nothing?
Food stamps, charity handouts, death.
All good alternatives.
Darth,
$130K, let’s call it 70K take home, less 401K contribution. Add $1K/mo for taxes on the house and something for insurance. Add those two nice car payments and the membership at the club. That leaves maybe $350 per week for food and clothing and “lifestyle”.
Add the interest on the $40K downpayment, which they probably borrowed here and there.
HAHA….I remember when earning $350 per week meant the good life!
I’m going to agree with the Sith Lord on this one–we’ve definitely seen worse. They’ve got a down payment and 3x income is doable if you don’t buy all the bling and don’t have kids.
Yeah, their house probably will be underwater in 6 mos or a year. I’d like to make the claim that for most of recorded history, after someone buys a place they’re underwater (when you account for inflation, taxes, cost depreciation, stuff breaking, new roofs, etc.) Just about every purchase we all make is underwater the second we take it off the lot and the shelf. It’s not an investment one can count on.
So if they got the dough and want their own place, well, let them. their choice.
It is their choice.
But I look at it this way, they will be underwater by the amount of their down payment before its 2010! Why not wait until they have 20% down?
My wife and I are looking to buy this winter. It will not be the bottom… but for where we wish to buy I think it will be ‘good enough.’ We’ll buy 25%+ down, with six months reserves and a furniture fund *and* additional money left over for a rainy day (new car fund, as mine is about to hit 200k miles).
We’ll make the switch when, after taxes, we get more for about our current rent.
Same commute… nicer schools, etc.
But I’m also keeping my eyes wide open. I’m watching $/ft^2 PLUMMET where I wish to buy. Yet every coworker asks me “why do you not buy now?” Ummm… Math!
So I’m all for someone buying when they are ready. It just doesn’t sound like this couple is *really* ready.
Got Popcorn?
Neil
You continue to be a shining example of wisdom, which is amazing considering you are probably half my wise-ass old age. Best of luck in pulling the trigger at the right time. Truly mean it.
BTW, I only lost 20% of my 401k! -
Taxes in Virginia wouldn’t be anywhere near $1k/month for a $400k house. I think I was paying $2k/year for a $300k place a few years back. And that was in a higher tax area.
How about $5,600/yr in `08 for a $600K (Zillow) late 50’s 3/2 ranch. A mere $480/sqft in McLean. [No it's not Cheney's place]
Don’t forget the $500 electricity bill in summer unless they have a multi-zoned house.
#2…House means Family…and wifey will manage to forget to take her pills on time.
—————————————–
I fail to see why this is fiscally imprudent unless they have loads of prior debt.
#3 husbandey gets a vasectomy. Then there wouldn’t be a oops and “honey I’m pregnant.”
Ground breaking; husband takes responsibility
+1 !!!
What? Men taking responsibility? Blasphemous!
Most women I’ve met WANT kids. (not all, just most)
A vasectomy may mean “divorce.”
What he said.
95% of the time, wifey decides on her own that it’s time to have kids, and stops taking the pills. Sometimes she mentions this to hubby, sometimes not. She then proceeds to cut hubby off (either by accident, or on purpose) until the time of the month is “optimum”.
Hubby, on the other hand (still being in his 20s or early 30s):
-Hates condoms
-Still lets the little head do a lot of thinking for the big one, and
-Is not adamatly opposed to having kids at some point.
And for those women who think that a vasectomy is “no big deal”……..it’s like a slow-motion kick in the jewels.
My prior post about vasectomies never showed, even though there wasn’t anything offensive (I don’t think).
Eco, a vasectomy often also means “I’m done having kids and you ain’t gettin’ any ’til you get snipped.”
For the most women I met who want kids; you really need to expand your horizon.
If you think taking birth control pills is a walk in the park you need to do some reading.
The pill SUX.
We’re having a bit of an issue Chez Renfield these days over that.
I am on strike holding the No-Baby Bag anymore after lo these five years and he’s promised for those five years now to get the ol’ nuts cracked. But now he’s gone to the length of emailing a few clinics so we’ll see.
I’m at the point that where if I get up the duff, HE’S gotta take the “pat” leave!!
HE’S the one don’t want kids - I don’t care either way.
(Aw, he’s a big sweetie, but I’ll be dangnabbed if after all this time I’m taking that noxious medication ANY more.)
darthrealtor : “A couple making $130k/yr buying a $400k house actually sounds quite reasonable relative to many of the other horror stories out there. I really don’t see the big deal.”
It’s not a big deal, if they can buy a great house for $400k. It’s a huge deal, if they buy a POS for $400k. The fact that they can afford the payments does not mean that the house is a good deal.
My wife and I are in a similar situation. We can afford to buy a house right now for $400k. Actually we can pay for it cash. The question is not whether we can afford it, but what we can afford for such amount of money. And the answer is that for $400k in a desirable area of Chicago one can buy nothing more but a dump.
If some FB thinks that I am going to part with my hard earned money for their POS that has not updated for the last time 30 years ago they are mistaken big time. I will buy a house for $400k some day, but I will get the house that is selling today for more than $800k.
Actually - they will have furniture. They will probably go to Rooms to Go and furnish the whole house on a No Payments for 3 years plan. Then, in three years, they will take out a HELOC loan and pay off the furniture and take a vacation. They deserve a vacation since they have worked so hard at owning a house. Welcome to America - where home equity is a past - quaint concept. Everyone is doing it – that is why we are sooooooo happy and successful.
Actually - they will have furniture ??
Makes me recall my early days with our home (which I built)…No furniture ?? Hell, we had no carpet or drapes in the living room and dinning room…Just the plywood floor…It stayed that way for many years until we were in a position to finish it the way we wanted to…
No biggy. Hit up craigslist, you can find tons of deals on furniture. If they don’t have much other debt, I don’t see a huge deal on this.
A friend of mine stretched to move into an expensive neighborhood. He does fine now. Oddly enough, the neighbors are mostly well to do CTOs and such, so now he has lots of new connections.
This is going to sound strange, but I think because he drives a very high end car and lives in a fat house, it brings better pay offers and more of them.
Its never what you know, its who you know.
“This is going to sound strange, but I think because he drives a very high end car and lives in a fat house, it brings better pay offers and more of them.”
Intensely true. If you want to get ahead, mimic the boss. Everyone thinks they do things the right way, especially the boss (hey it got him there right?). The boss is gonna pick you out as having the right stuff. Step 2: take on something that needs to get done but the boss doesn’t have time to do it.
Winners do the above. Losers sit in their cubes, dressed like slobs, munching trail mix & whining about what an idiot the boss is.
“Intensely true. If you want to get ahead, mimic the boss. Everyone thinks they do things the right way, especially the boss (hey it got him there right?). The boss is gonna pick you out as having the right stuff. Step 2: take on something that needs to get done but the boss doesn’t have time to do it.
“Winners do the above. Losers sit in their cubes, dressed like slobs, munching trail mix & whining about what an idiot the boss is.”
Um, unless the boss is a complete idiot in an idiot’s game, he/she’ll pick up on the brown-nose sham immediately. In this quite possible latter scenario, said “winner” will end up flogging themselve’s with one hand in front of the mirror (for being a pathetic suck-up) while simultaneously wiping the smelly brown stuff off their nose with the other.
DOC
I’m not talking about brown nosing. That’s different.
If the boss dresses a certain way, dress in a similar fashion. If the boss drives a Mercedes, drive a car that shows you respect value, if on a smaller income scale. If the boss thinks it’s important to pick up the phone instead of letting it go to voice mail, do the same. The objective is to mimic values & be competent. Right or wrong, it works.
“If the boss dresses a certain way, dress in a similar fashion. If the boss drives a Mercedes, drive a car that shows you respect value, if on a smaller income scale. If the boss thinks it’s important to pick up the phone instead of letting it go to voice mail, do the same. The objective is to mimic values & be competent. Right or wrong, it works.”
Point taken Jon.
I guess my assertion is that while it may indeed work (especially if Boss’ values/style/traits are in-line with one’s own), “mimicking” (even when subtly out of line with one’s individuality) could very well leave him/her feeling like a fake, incongruent turd. Raise or no raise.
DOC
How about - start business on side and put boss out of business. Then buy his fancy car after it gets repossessed.
Yeah, we all like winners. Like all those suits on Wall Street. Are they winners, really. Stuff and status, big deal. Followers are losers.
Man, they should have moved to Maryland!
You can get houses that are falling apart for comparable money. Then, you won’t need new furniture because the old stuff will go nicely with the old, crumbling, overpriced house.
Glad to see that they bought at their upper limit since, as well all know “income only goes up!” and you never need to spend money on stuff like cars, health care, job loss, unexpected kids, etc. Right… Since when did amount of money spent per month >= monthly income become the standard? Seriously, do these people look at their bank statements in horror at their $100 savings per month and figure, “Man, I could have gotten a bit more stucco for that extra $100?!”
Not to mention that Centreville, Va is quickly becoming Manassas II, complete with the MS-13 Gangs roaming the streets at night
And THAT is the real problem. Until things shake out a bit more, there are a lot of areas that are at risk. Maybe not all of them, but a lot. And way more than most people believe.
My wife and I live in No.Va. and are in roughly the same income bracket as the couple in question here. We’re different in that we have tons of student-loan debt, but we could probably swing a purchase now if we wanted. But we’re in no hurry to do so. I personally think that most of No. Va. (apart from the Loudon and Prince William exurbs) has a LONG way to fall yet. The prices got so jumbo here that I suspect the second wave of resets for Option-ARMs and Alt-As is going to cut a very nasty swath through Fairfax, Arlington and Alexandria. Our neighborhood in Arlington (where we rent dirt cheap) has only just started to decline.
They are stretching it. My wife and I make 50% more (and have extremely secure jobs), and we wouldn’t consider taking on a mortgage that is 50% higher than theirs ($360k x 1.5 = $540k). We also have over 5 times as much to put down on a house, and were planning on using some of the money to buy furniture.
But that explains what I’ve seen in this area when going to open houses, especially high-end areas like McLean, Oakton, or Vienna. Either folks can comfortably afford their houses, or they can’t. And some of them haven’t been able to afford their house for the last decade or more. They bought the big house, but they don’t have the money to maintain it. There’s nothing like going to a $750k open house and seeing paint on the floor and ceiling because the owners couldn’t afford professional painters and they did it themselves. Or dorm-room furniture from 15 years ago.
Yet another brilliant use of tax dollars?
Jupiter to get new $460,000 mobile emergency operations vehicle
By BILL DIPAOLO
Palm Beach Post Staff Writer
Tuesday, April 14, 2009
JUPITER — When the new $460,000 emergency vehicle is delivered next month, town officials say residents will get quicker response during power outages, hurricanes and crime scenes.
“It’s a moving substation for police and a portable town hall for town officials,” said Town Manager Andy Lukasik.
The mobile unit includes:
* A slide-out room that has six computer-ready workstations. Police and town officials will be able to take 911 calls, look up records and dispatch from the vehicle. Town officials will have access to town documents and services.
* A slide-out area for a command/control room with two work stations and conference table. Printing, copying, scanning and fax machines, with 16 telephone lines and television reception.
But resident John Parsons questions whether the expense is worthwhile.
“For the few times we will have to use it, that’s an awful lot of money,” said Parsons.
Heh. My company is in this industry. God bless ‘em, they just gotta have that Mobile Command unit. LOL
Do they have six computer-ready cops to man said workstations?
For those of you that don’t live in (on?) Jupiter, please be careful when you drive through the town, or in any other little boondock like Jupiter. They need your money pretty bad.
The Canadian version of the AAA noted some years ago about many Florida towns resorting to nailing snowbirds for going as little as 1 mph over the speed limit and other little nit picky “infractions” so that the local county can raise fine $$$…
They don’t just nail snowbirds; they nail anyone. Locals know to watch out.
Good way to get out of a ticket…if you see a cop just as you know he’s already gunned you, wave at him. Especially in a small town, their egos (as a rule) are big enough to assume they must know you even if they can’t discern who it is and don’t recognize the car.
My wife was a medic for a while. She taught me that.
There were tons of cops out on Easter night in Connecticut. More than usual. Our route takes us on routes 95, 91 and 15 (Merritt).
Wow, the G.I. Joe Mobile Command Center!
Great stuff!
Does this town even have enough cops to staff their Mobile Command Center? Maybe toss in a few old tanks, too, for “extra security.” Right…
When I saw the title for this article, I though it referred to Jupiter the planet… and yet, spending tax dollars on a G.I. Joe Mobile Space Command Center that orbits Jupiter makes about as much sense…
Hey, our local Sheriff has two! My brother, who’s a deputy Sheriff, says one of the Lieutenants was living in one of them when his wife kicked him out for fooling around with one of the hotties on staff. Other than that, he’s not sure if either has ever been used.
Fire Department just ordered one. Lot’s of red paint on what’s basically a big RV. But remember, these folks are heroes. Public safety professionals. Most are veterans too.
Can’t spend enough taxes for these guys!
A lot of needless/useless expenditures were paid for w/ homeland security money. Spend it or lose it, as the saying goes. Before the Bush bashing starts, there has been more oversight with homeland. This has been going on for at least thirty years. Most large law enforcement departments have people hired just for securing gov’t grants. Big government guarantees a lot of wasted tax dollars. It’s more than just ear marks.
Have no fear–the Border Czar is here!
Just make sure that ALL your fingers are fully extended as you wave (as tempting as it may be to wave a single digit).
Wave the hand and ask at the same time can you read between the lines?
It seems like a waste of money, but $460k is a drop in the bucket compared to the hundreds of billions chimp wasted in Iraq.
A drop in the bucket.
Guvvies just love their bright & shiny objects, don’t they?
If the SHTF they’ll likely be sitting inside their air-conditioned MEOVs sipping joe while the locals try to get fresh water, edible food, and try to hold of the looters.
“.. (he’s) been walking these streets so long, singing the same old song..” -Glenn Campbell
An oldie but a goodie!
“It seems like a waste of money, but $460k is a drop in the bucket compared to the hundreds of billions chimp wasted in Iraq.
A drop in the bucket.”
And those hundreds of billions are just a drop in the bucket compared to the trillions stolen by the Narcissistic Kenyan Marxist and his henchmen.
Yesterday, we had a demo from a company trying to sell us some equipment upgrade at work. Something that got my attention was some cables being sold separately.
The company representative said the cables were 600 dollars each; we all were surprised by the price, and his response was: ‘Well, they are US made; that’s why they are so expensive’
This is probably why a lot of companies leave the US and outsorce jobs; it is not an viable option to manufacture here anymore.
There’s no way the manufacturing jobs will ever come back to the US when we can’t compete.
What type of cables? electrical, communication,data?
Its probably marked up 1000%.
audio cables
I know audio cables are going to fiber optic cables, is that a possibility for your work?
Back in ‘72, the profit margin on audio cables (video cables were virtually nonexistent)at Radio Shack was over 50%. I worked there and sold them and made fine commission. Fleece the Sheeple.
Consumers often pay most attention to the big hit, shaving by dollars, and yet succumb to any attendant connectivity costs.
Consumers beware!! Educate yourselves. Google is free!
Your Friend and Consumer Advocate,
Bwahaha! Rip off! It’s like the $200 monster cable RCA cables. Why not use $10 balanced XLR cables instead? Lamp cord for speaker wire, $4 XLR mic cables for audio patch cables on the home stereo (when it’s not cheap plastic fiber cables).
The new business model for IT and Home Entertainment:
Sell the gear at cost……make the profit on charging ridiculous bucks for the interconnect cables.
Best Buy wants 30 bucks for a 3 foot long HMCI cable to go between my DVD player and my big screen.
Not knowing anything about your business, why do you think that company even offers the US made cables?
Wouldn’t you be more interested in working with a company that has gone out and found the best value for those cables?
Are they those infamous Monster cables?
Brett,
maybe your company could afford to spend the extra $ for the US made cables if they cut costs elsewhere and used some Chinese drywall here and there in the office.
as always, ignorant people generalize. there are obviously some issues with many Chinese products, but not all. Have you personally inspected every single Chinese products being sold in the US?
There are many countries besides the US that do a fine job manufacturing products that are later sold in the US. Maybe the toilet paper you use to wipe your a$$?
Yeah, we deal with quite a few Chinese made electrical components, small motors, and such. Their quality has improved by leaps and bounds IMHO. I’m sure a lot of it is because of American and Japanese engineering, supervision, and Q.C., but still with each passing year they gain more mfg. experience.
the biggest scam are those HDMI cables. I think I paid a buck or two online (as opposed to the 50-75 buck stuff they were selling at best buy. I plugged it in, my tv worked, I was pleased.
Were they made in the US? lol
LOL, Exactly! HDMI can be such a scam. Its a digital standard with VERY tight tolerances and it either works, or it doesn’t . Its a digital signal, there is no “degradation” as long as the necessary specification of all the little zeros and ones make it through. All of the hype about twisted pair-oxygenfree-unobtanium BS is just that. BS!
Theres a sucker born every minute
I’m not ignorant, just a little slow. I swear I have tested virtually every Chinese-made product but not actually the drywall yet. The toilet paper is a little crappy.
“The toilet paper is a little crappy”.
Try it with some ketchup.
As long as we are discussing HDMI cables……..I currently have my DVD hooked to my LED TV with three of the old style audio/video cables I had laying around (Both units had Inputs/outputs for these cables and an HDMI cable).
Any benefit or improvement to picture quality with a standard (not BlueRay) DVD player by using the HDMI input vs. the old stuff?.
Oh yeah! If you have video and audio with three cables, you’re using composite video. That’s no good.
If you just have video with the three cables then that’s component, it’s pretty close to HDMI in quality.
The Chinese know that they have to shape up on quality if they are to remain eating the Americans’ lunch. I bought a pair of frying pans made in China…excellent quality. Same with some clothing…excellent quality and dirt cheap. One thing about the Chinese (especially that it is in the culture) — they learn and adapt quick. And they take drastic action when things go wrong…Many Chinese products today in 2009 are leaps beyond the dollar store quality you used to expect even 5 years ago.
How many of you are old enough to remember when Japanese products were rightly considered to be junk? Remember the early Datsuns?
Then along came Honda, Sony, Canon, etc. and the rest, as they say, is history.
Bill, that was thanks to an American named Edwards Deming who invent Total Quality Control.
He tried to sell the idea to American car companies and other mfgs, who told him to take a flying leap.
Chinese made stuff isn’t always a bad deal. Sometimes the choice is Chinese made, or unavailable new at about any price.
A lot of automotive restoration parts are made over there. Can’t/won’t be made here, because the limited production run won’t pay for the tooling and/or labor, or would be ridiculously priced if it were.
Brett,
As I recall it was only a little while ago you were commiserating on the lack of job opportunity available to you. It appears your concern is only for whether YOU have job or not and what is the cheapest stuff you can buy with your wages. To heck with the other 300 million US.
Since I’m quite o-l-d (”Stand By Me” ring a bell?), I can remember when “made in Japan” was an epithet. What junk they made . . . way back then.
But, I’m still waiting for the day when I don’t have to throw the Cheap Chinese Chit my wife so often buys into the garbage after just a few days usage.
Try http://www.monoprice.com for audio/video cables on the cheap. Their stuff is surprizingly good quality - it’s all I use now in my HT.
I’ve bought from them. Prices can’t be beat. Allows you to see exactly the huge profit BestBuy and Wal*Mart make on audio/video cables.
I looked. I got cheaper on eBay
Plus they don’t have purple patch cables. Even though I don’t see the back of the rack often, purple cables make me smile.
Is HDMI that much better? I think I hooked up the new TV bypassing all that because I didn’t want to pay for the cable.
I also vouch for monoprice. They ship by the US Postal Service, which is faster & cheaper on these items than anyone else.
I can strongly recommend the quality of their cables. Excellent quality, great prices.
MRIS numbers for DC area are out for March. We’re definitely seeing a flattening of prices in my area (Loudoun county) now. Chances are it is a spring thing - virtually the same flattening as early 2007 when the same thing happened before prices started plummeting again in the fall. However it’s different from last year since 2008 there was no early-year flattening at all - prices just continued their late-2007 dropping all through the spring of 2008.
One interesting thing is that the sale price % is still very low - in fact this past month was the lowest on record at 88.81% ! That to me indicates that there’s quite the battle going on between foreclosure sales and normal sales - people are still asking very high prices but having to relent on very low offers due to having to compete with foreclosures.
22151 is sold out
green (gov) jobs a comin
Whoo Hoo- Loudoun County coming on down-
That’s Ok, I can wait out all the Spring Ma & Pa re-sellers that are realizing that the foreclosures & shorts in the neighborhood are their new COMPS.
It will be “Springs’ sprung, Falls fell, winters here & WE CAN”T SELL !!!!”
Commercial RE showing cracks now
http://www.cnbc.com/id/30208539
Some how, I think MSM will end up spinning this as some how positive news. We are not even close to being out of this thing.
UBS sees $1.75B Q1 loss, to cut 8,700 jobs
By ERNST E. ABEGG, Associated Press Writer Ernst E. Abegg, Associated Press Writer 1 hr 4 mins ago
ZURICH – UBS AG, Switzerland’s largest bank, said Wednesday it expects a first quarter loss of nearly 2 billion Swiss francs ($1.75 billion) and announced plans to cut 8,700 jobs worldwide by the end of next year.
The job cuts will hit the United States and Switzerland particularly hard because that is where the bank has its largest payrolls, a bank spokesman said.
The bank said clients have continued to withdraw their money from the bank in the wake of its decision to cooperate more closely with foreign authorities over tax evasion.
The company, which has been hard-hit by subprime-related losses, said it will “adapt its size to the changed market conditions and lower levels of business.” It said it expects cost savings of 3.5 to 4 billion francs by the end of 2010 compared to 2008 levels.
At least the loss was under $10 bn. I guess the crisis must be bottoming out?
“The bank said clients have continued to withdraw their money from the bank in the wake of its decision to cooperate more closely with foreign authorities over tax evasion.”
There appears to be quite a shift from Switzerland to the Bahamas and Caymans. Most people don’t realize that the tax shelters in the Caribbean are vastly larger than those in Switzerland now. I’m guessing the whole UBS tax shelter thing is either just lip service, or someone from UBS pissed off the wrong people, or a combination of the two.
Side note - yesterday Glenn Beck mentioned he was vacationing in Cape Cod, and say yacht after yacht going by flying the Caymans flag, knowing full well that these were mostly American financiers, and said he wishes that one would get hijacked by pirates so that the Navy could pull up alongside and say “sorry, but there’s nothing we can do - what with you flying a Caymans flag an all”.
I thought it was pretty funny.
…get hijacked by pirates so that the Navy could pull up…
That would be really funny. Pirates hijacked by other pirates <:)
Maybe they could set on deck, drink beer and tell each
stories about past hijackings..
I wonder if pirates have a secret handshake?
Yeah, the grab you by the nuts
Maybe not a secret handshake, but I’ll bet those guys would end up having an ahrrrrrrrrrrrgument.
Hahaahahaah! Funniness.
“The disconnect between the better-off and the struggling masses can also be found in Indonesia, Malaysia and the Philippines, as well as in China and India. It will come to a head as the fallout from the credit crisis heads Asia’s way.”
Federal minimum wage in the US of A = $6.50
Businesstainment box @ the New Yankee’s Stadium x1 game = $28,000
Sports in America needs more taxpayer assisted monies…where is that TRAP application form?
William Pesek Jr.
Anarchy in Streets Builds When GDP Isn’t Shared: William Pesek
April 15 (Bloomberg)
Maybe the masses should begin showing their rage by simply not buying overpriced sports motif clothes and shoes - and cease their adoration of overpaid players, which only gives the owners even more cover for their shennanigans.
Real change starts with personal decisions.
I think sports helps keep peoples minds off of their financial troubles. It seems that baseball was pretty popular during the depression years.
Although, I have to admit, when I drive by Jerry Jones’ new stadium, I wonder if that $1.1 billion might have been better spent.
Sure, everyone needs a distraction from their troubles, but without the willing financial support of the masses these owners would be up a creek.
Sports, music, and other entertainment forms are better off in the hands of the people anyway - not the corporations.
“Agreed!” says Slim, who is listening to Tucson’s volunteer-powered community radio, KXCI. Said station has quite a reputation for supporting local unsigned bands.
Volunteer powered? Are the volunteers wired in series or in parallel? Where do they connect the leads?
Sounds like “The Matrix.”
Knowing KXCI, those volunteers are wired in parallel. If they were wired in series, the whole station would fail if one of them did.
that $1.1 billion might have been better spent ??
He is a Texan…The facility needed to match his ego…
Owner Tom Hicks (Dallas Stars & Texas Rangers) is in danger of losing his franchises right now.
Its really kinda funny considering his teams both play out of facilities paid for by tax payers.
Aw ‘cmon. Is $250 overpriced for a pair of sneakers
with a trendy logo? Where is everyone’s sense of priorities?
What are the neighbors going to think when they realize
that you aren’t fashion forward?
Neighbors? Think? When did they start doing that?
A lot of the kids around here wear Sketchers. I usually shop Payless. Anyway, one day my son exclaimed with wonder and glee, “Mom, everyone else’s shoes have an ‘S’ on them, but *mine* have a ‘C’!!”
Unfortunately that was back in kindergarten, now he knows better. Sigh.
Memories of grade school “You’re kicks are soooo bobo, your momma got them at” jokes. Seriously, I’m willing to let go of a little extra cash to not have sore / damaged feet.
I think this “designer” clothes thing is limited to SoCal and NYC for the most part. Out here in Fly-overville,the kids around here don’t seem to throw money away, for the most part.
My teen age daughters get most of their clothes from Kohls, or American Eagle (their big sister works there and gets a big discount). Shoes are whatever New Balance tennies are on sale at Kohl’s, twice a year. One does happen to spend a little more on her riding boots (the cheap ones have fit issues). All of their friends are the same way. Prom dresses are an issue, but they get the most brownie points among themselves by being able to find dresses that don’t cost an arm and a leg.
They do blow money on KU Jayhawks shirts though……but they did get free hats last year, attending the parade at the end of basketball season…..
Maybe the masses should begin showing their rage by simply not buying overpriced sports motif clothes and shoes
Modern day “Bread and Circus”… there’s a reason the NFL, MLB, and NBA are government-sacntioned monopolies. Having said that, I admit to enjoying the occasional Red Sox game at Fenway or Patriots game at Foxboro.
“TRAP”…that’s a good one!
People are beginning to notice that the financial sector has undergone malignant growth to a size which threatens to kill off the US economy. However, administering chemotherapy may cut off politicians from a prized source of campaign finance. Good luck with that plan.
Newsweek
Wealth of Nations
Posted Monday, April 13, 2009 3:31 PM
Is the Financial Sector Too Big?
Barrett Sheridan
Many think so. Former IMF chief economist Simon Johnson wrote in the Atlantic recently that “from 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits…this decade, it reached 41 percent.” He calls it a “quiet coup.” Felix Salmon at Reuters complains that “financial services companies are meant to be intermediaries, middlemen. And any time that the middleman is taking 41 percent of the total profits in what’s meant to be a highly competitive industry, there’s something very wrong.” And the New York Times this weekend wrote almost gleefully of an impending shift in job demand among students at the nation’s top universities. “Early indications suggest new career directions that are tethered less to the dream of an immediate six-figure paycheck on Wall Street than to the demands of a new public agenda to solve the nation’s problems,” the paper declared.
Color me skeptical. For all the TARPs and PPIPs, Congress and the Administration have so far done nothing in the way of long-term, structural reform of the financial sector. There are some proposals on the table, but unless the new regulation is dramatic, I don’t think the lure of billions will soon give way to the lure of science labs and Teach For America. There will be a hiccup, to be sure, since there are fewer jobs on the Street this year, but what’s to prevent the rubber band from snapping back to its original shape after the economy stabilizes?
Dang straight. I’ve made the point several times to lots of folks - just look at the percentage of both skyscrapers and also neighborhood building that are banks. Given that the banking industry doesn’t actually *produce* anything - it’s incredible how much resources are actually put into it.
I’m working on a theory of the tyranny of skyscrapers– a detailed explication of the Tower of Babel phenomenon. Basically the idea is that large buildings forcibly impose a form of social organization that is unnatural and unsustainable from an anthropological point of view.
Tyler Durden would agree.
“Basically the idea is that large buildings forcibly impose a form of social organization that is unnatural and unsustainable from an anthropological point of view.”
Kunstler has been saying something similar for a while. I dunno, stairs aren’t the worst thing in the world.
stairs aren’t the worst thing in the world until you get to a certain age, then they are.
The problem I see is that when a lot of people live or work in a large building, you have more collective decisions that need to be made about how to maintain the roof, elevators, HVAC, etc. Any time there are individual decisions to be made that affect a large number of people, a minority is going to be unhappy. Therefore you have more scope for tyranny of the majority, and less overall well-being in society.
Also, a large building, because of its permanence and inflexibility, hinders the free movement of people and ties the land down to a specific use for a long time.
Finally, there are issues relating to the construction, ownership, and control of the building. To build a large structure usually takes a mega-corp, the many problems with which have been noted elsewhere.
To me the implications of the original statement are much bigger than just what happens inside the building. What about all the organization/infrastructure required outside the building to support transporting people to and from the building as well as bringing power and supplies in and carrying the waste out?
It’s huge…and the point that it requires an unnatural level of human organization (and cooperation?) is interesting to me.
Again, I dunno. I’d wager that FPSS is using less resources in his daily life than I am motoring around Florida. There are no skyscrapers near me at all.
Don’t forget how in all dystopic futures that aren’t total wastelands, people are stuck in huge, towering, hive-like structures.
Yep, gotta get rid of that individuality… get the with program and start consuming!
Le Corbusier lives!
Metropolis, Blade Runner, and tons of other sci-fi, noir, and Anime flicks feature such towering landscapes.
Just look at Dubai, Vegas, Shanghai, etc. - the city of towers and globalization go hand in hand.
I just finished The Omnivore’s Dilemma and was struck by a comment from one of the farmers:
Author: Yes your farm is great local stuff, but how would feed, say, New York City?
Farmer: Why do we a New York City?
Many natural systems are best run decentralized. Profit is best run centralized. I don’t know how to get over this fundamental difference.
“Profit is best run centralized”
Can you obliterate on this?
“I’d wager that FPSS is using less resources in his daily life than I am motoring around Florida.”
That’s ’cause you’re not counting all the hidden costs– taxes, bailouts, etc. needed to keep NYC going.
No, I bet if you added those in, it would still be less.
Anyway, the argument wasn’t about taxes or money or costs - it was about “resources” and that one is pretty watertight. Cities do use less resources.
You seem to have missed the point in your overzealous reach for “taxes” and “bailout” - we were talking about how much “stuff” you consume - like oil and water.
You consume less water in NYC than in Florida?
Anyway, you probably don’t want to mention this thread to your fellow NY’ers– I bet a lot of them would be pretty mad to find out they’ve been paying 3x the cost of living as Florida and getting to use LESS resources in return.
I think the point is that there are resource efficiencies involved in having a lot of people living in a small area. People can walk places or take public transit instead of driving everywhere, attached housing costs less to heat per square foot than single family homes, etc.
hang in, they’re being replaced w government buildings
The lure of billions is what is driving the Teach for America. They plan on getting those jobs after putting in their two years.
Oh, brother. Does this little news story get me going.
Why? Because I’ve been trying to become a guest speaker at my alma mater. I figured that, with all the turmoil out there, that the young economics majors of the University of Michigan might want to hear about careers outside the FIRE sector. (Yours Truly majored in economics and has happily pursued a life as far from FIRE as one can get.)
Well, the response from the student economics society has been deafening. You’d think I was proposing a lecture on robbing a bank or something.
No, wait. Isn’t that what’s being done right now? And we, the taxpayers, are the bank?
“Well, the response from the student economics society has been deafening. You’d think I was proposing a lecture on robbing a bank or something.”
You might as well tell them you went to Ohio State. You’ll get about as far.
Slim,
Maybe the Bear Down crowd would be more receptive?
What do you see happening in Tucson these days? Do you have any bottom predictions for that market?
Funny you should mention the Bear Down crowd. I’m what’s known as an Eller Associate at the University of Arizona’s business college. Meaning that I volunteer to judge student case competitions, help interview business college applicants, that sort of thing.
Well, lemme tell you, my, ahem, diverse career experience is just what they’re looking for at the Eller College. They want their students to experience as many things in the world of business as possible.
I graduated from Eller. I get nice glossy alum publications every quarter but otherwise I feel out of touch. I am glad to hear they are keeping up the innovative thinking and hope you can/enjoy contributing.
Appreciate your view of Tucson market. From the internet, seeing exactly as you say - lots of property sitting and priced too high. Most don’t even appear close to 2003 prices, at least in the foothills.
About those Tucson market predictions…
There’s still a lot of brave talk about Tucson not being as bad-off as Phoenix. But that doesn’t mean that it’s sunshine and butterflies around here.
I am seeing lots of properties that are just sitting, sitting, sitting with “for sale” signs creaking in the breeze. They’re priced too high for what the local market will bear. But try telling the owners that.
I’m also seeing properties that sold during the bubble years of 2003-2007 coming back onto the market. ARM resets, I suspect.
I just posted this up above, under the link SUGuy posted, from the article:
“The migration bubble of the middle of this decade, fueled by easy credit and superheated housing growth in newer parts of the Sun Belt and exurbs throughout the country, seems to have popped,” writes William Frey, a senior fellow at the Metropolitan Policy Program of the Brookings Institution, in a March 20 analysis.
In the 12 months ending in July 2008, greater New York lost only 144,000 residents, its lowest such outflow since at least 1990. At the same time, Phoenix attracted only about half as many new residents as before. Tampa and Orlando attracted fewer migrants than at any time in almost 20 years.
So those ‘for sale’ signs might just be creaking for quite a while to come….
ECONOMICS
Just Make It Sound Nicer
By Barrett Sheridan | NEWSWEEK
Published Apr 11, 2009
From the magazine issue dated Apr 20, 2009
As the financial crisis evolves, so does the vocabulary being used to describe—or obscure—it. Looking to neuter some of the most loaded terms, policy wonks and businessmen are feeling the urge to rebrand. Last week NEWSWEEK’s Dan Gross noted Treasury Secretary Tim Geithner’s transformation of toxic assets into “legacy assets”—and that’s just the most salient tweak. A bailout, for instance, sounds much friendlier when it’s deemed “exceptional assistance,” as Geithner recently phrased it. Federal Reserve chairman Ben Bernanke and British Prime Minister Gordon Brown have backed international financial regulation, though they prefer to call it “macroprudential oversight.”
…
Hey, it worked for the Pentagon, right? So why not? After all, we are at war - in a sense.
War is not so entertaining when “we” are the target.
No no, we’re in A Time Of War™! Don’t make me send you to the Ministry of Peace for re-education.
It’s always interesting to see if the MSM will take the bait or use more pointed but accurate terms already in the parlance.
Edgewater is spot-on in comparing this to the DOD’s longstanding attempts to manipulate the language of war, casualty, and loss.
Sometimes the fight over terminology is itself like a war of attrition: the new doublespeak is explained at first, then persistent use by the government entity wears resistance down and the doublespeak becomes widely accepted, without the ironic quotes, qualifying descriptions, snide asides, or additional explanation that previously clarified the government’s willfully obtuse word choices.
Spot on ET….
WINSTON!!
Now that I remember who Winston is, this article is almost creepy.
The Fed’s liquidity pump must be running on high blast today. I guess they are beefing up the DJIA in anticipation of the upcoming unemployment report.
Speaking of UBS:
ZURICH (AP) — UBS AG, Switzerland’s largest bank, said Wednesday it expects a first quarter loss of nearly 2 billion Swiss francs ($1.75 billion) and announced plans to cut 8,700 jobs worldwide by the end of next year.
The job cuts will hit the United States and Switzerland particularly hard because that is where the bank has its largest payrolls, a bank spokesman said.
The bank said clients have continued to withdraw their money from the bank in the wake of its decision to cooperate more closely with foreign authorities over tax evasion.
The company, which has been hard-hit by subprime-related losses, said it will “adapt its size to the changed market conditions and lower levels of business.” It said it expects cost savings of 3.5 to 4 billion francs by the end of 2010 compared to 2008 levels.
In prepared remarks for the annual shareholders meeting, new Chief Executive Oswald Gruebel said the bank knows where it has to set to work.
“It will be a long road back to success without any quick fixes,” said Gruebel. “Rather, we will move forward step by step in a rigorous and disciplined manner.”
Gruebel said the bank plans to cut 2,500 jobs in Switzerland, where more than one-third of the global staff is based.
Spokesman Serge Steiner gave no breakdown by country but said the impact on the U.S. employees would also be heavy because that is another major center of UBS operations. The bank says 38 percent of its employees are in the Western Hemisphere.
Could this be the news which is cheering on the Wall Street bovine-brained bull brigade to dump monies into the DJIA?
latest news
U.S. factory output down 15.7% in recession, 63-year low
ECONOMIC REPORT
Biggest drop in industrial output since VE Day
U.S. production falls 1.5% in March, despite bounce in autos and utilities
By Rex Nutting, MarketWatch
Last update: 9:59 a.m. EDT April 15, 2009
WASHINGTON (MarketWatch) — The output of the nation’s factories, mines and utilities fell 1.5% in March, retreating in spite of higher production of motor vehicles and a boost from utilities, the Federal Reserve reported Wednesday.
Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II, when production of equipment used in the war effort ground to a halt. In the past year, industrial production has fallen 12.8%.
Output fell at a 20% annualized rate during the first quarter, and it’s now at the same level as December 1998, the Fed’s latest data showed.
Factory production dropped 1.7% in March. Factory output has fallen 15.7% during the recession, also the largest decline since 1945-1946.
Underscoring the trend in manufacturing, factory output has dropped 15% in the past 12 months and has fallen for five consecutive quarters.
Capacity utilization fell by a full percentage point, to 69.3%, the lowest since the data series begins in 1967. In manufacturing, capacity utilization fell to 65.8%, which means a third of the nation’s manufacturing capacity is idle.
Output was much lower than expected by economists surveyed by MarketWatch, who had been looking for a smaller 0.8% decline.
“…a third of the nation’s manufacturing capacity is idle.”
No, nothing to see here. Moving along, say, how about those bank “stress tests?!”
Interesting that someone pointed to a site with the percentage that makes up the GDP, and if you went back to 1950, you would see that manufacturing was roughly 30% of GDP, while Banking was just 7 or 8%. Now manufacturing is about 11% and banking/finance is almost 20%.
This country has been sliding for a long, long time, and it is about time to stop it, unless we want to end up like France, without the hot french women….
You know they don’t shave or there, right?
What? Facial hair doesn’t bother me.
As long as you brought it up…I’ve long wondered why shaving *there* tends to come up talking about women, but not about men.
It’s been my sad experience that many men, from countries all over the world, don’t shave there, either…whether Frenchmen OR American! :-O
It’s not a V. It’s an L, Norm. Hope now. Despair later.
Perfect storm brewing: Mortgage applications are recessing while hundreds of thousands of foreclosure homes pile into latent inventory, waiting to eventually be brought to the housing market for sale.
latest news
U.S. output down 13.3% in recession, most since WWII
Mortgage applications fell 11% last week: MBA
By Amy Hoak, MarketWatch
Last update: 7:26 a.m. EDT April 15, 2009
CHICAGO (MarketWatch) — The volume of mortgage applications filed last week fell a seasonally adjusted 11% compared with the week before, even as mortgage rates dropped, the Mortgage Bankers Association reported on Wednesday.
The results of the MBA’s weekly survey were not adjusted for the Easter/Passover weekend, which may have contributed to why application volume declined, according to the industry group. Mortgage-application volume was still up 45.6% last week when compared with the same week in 2008.
The survey covers about half of all U.S. retail residential mortgage applications.
The volume of refinance applications fell an unadjusted 10.9% for the week ended April 10, compared with the week before. Applications filed for mortgages to purchase a home were down a seasonally adjusted 11.3%.
Big Sis applied for $285K and was told 150 is the magic number. All the people paying 150K for similar homes are killing off yesteryear’s hope and spending. Plus, credit card rate increases are shutting even more wallets. We are digging in deep.
Turning Japanese, I really think so.
Breaking Bad from the AMC premium channels is about the housing crisis in Arizona. Meth cooking when things go bad! It took me a while to understand. Housing crisis showing up in Burn Notice (in Miami) also.
Roidy
Housing crisis? Huh?
The main character has lung cancer and no insurance.
Of course he has cancer and no insurance. You’re right. Why no insurance? Look at his pool - filthy. Look at his house -much more than he needs. He can’t replace hot water heater. A 15 dollar charge on his Master Card is a big deal even before he had caner. A pair of jeans for his kid is a big buying decision. He owns a late model car that he has not paid off. He’s a FB! Get it? It’s not a subplot but the main plot. His house and debt are the reasons he is like he is except for the cancer.
Roidy
Back when I had cable, I LOVED The Shield and Rescue Me. Both regularly had housing subplots, but one would expect that since they write blazingly fast and honest, which, of course, is why I loved the shows.
Caught Rescue Me the other night for the first time in a while. Still seems great.
Nyet! It is Albuquerque NM, yo! Best tv show ever.
Speaking of Albuquerque, …
I saw a news report last night that the city is considering using bulldozers on some unfinished homes which have become magnets for vandals and other nuisances.
Here is my attempt at a link. If it fails try googling the title of the article which is .
While my other comment with a link is in moderation purgatory, I will mention that the city of Albuquerque is reportedly considering demolishing several unfinished houses which have become crime/nuisance magnets.
Some excerpts — “City officials say some of the homes are valued at close to $300,000. Despite that, they have been condemned because of all the problems, and the builder has two weeks to get things back in shape or else the city plans to roll in the bulldozers.”
If you are too impatient to wait for the moderated post, you can “Google” the title, “Neighbors say unfinished homes are a nuisance”.
The builder, Longford Homes, happens to be the same company that built the house I am currently renting.
Jim Rogers: How He’s Investing After the Crisis
http://www.businessweek.com/investor/content/apr2009/pi20090414_131044.htm?campaign_id=yhoo
“We’ve had the worst credit excesses in world history, mainly in the U.S. You can’t end a problem like that with no pain. Somebody’s got to suffer. ”
Therein lies the rub: the people that suffer, should be the ones that started it.
the people that suffer, should be the ones that started it ??
Not in the USA…Massive double standard exists in our country in many areas…
“Therein lies the rub: the people that suffer, should be the ones that started it.”
That’s just crazy talk! What are you, some kinda dang anti-capitalist socialeest/commie?!
Same ol’ same ol’ - still pumping commodities.
He cracks on diversification, stating that anyone who’s been diversified in the last 3 years has lost money. I’m curious though how much money he’s made betting on Asia and commodities. My guess is he’s really taken a bath - much moreso than people who would have diversified.
Nevertheless he’s spot on about a lot of things, e.g. the problems with so much debt, how bankruptcies help clean out the weak parts of the economy, etc.
One of the good guys. Few and far between.
I think thats a great idea. If Goldman Sachs is liquid enough to return TARP, then pull all Government backed programs it benefit’s from!
U.S. Planning to Reveal Data on Health of Top Banks
The Goldman move also puts pressure on the administration to decide what conditions will apply to institutions that return their bailout funds. It is unclear if Goldman, for example, will continue to be allowed to benefit from an indirect subsidy effectively worth billions of dollars from a federal government guarantee on its debt, a program the Federal Deposit Insurance Corporation adopted last fall when the credit markets froze and it was virtually impossible for companies to raise cash. In ordinary times, regulators do not reveal the results of bank exams or disclose the names of troubled banks for fear of instigating bank runs or market stampedes out of a stock. But as top officials at the Treasury and the Federal Reserve Bank focused on the intensity with which the markets would look for signals about the nation’s biggest banks at the conclusion of the stress tests, the administration reconsidered its earlier decision to say little.
http://www.nytimes.com/2009/04/15/business/economy/15bailout.html?hp
The Fed should also refuse to make any more below-market-interest (aka subsidized) loans to Goldman Sachs.
Buisness week
Monday afternoon, Goldman Sachs (NYSE:GS - News) reported much larger than expected first-quarter profits on the heels of the strong earnings Wells Fargo (NYSE:WFC - News) reported last week.
No one should be surprised.
The Federal Reserve has provided the banks with lots of cheap funds through various emergency lending facilities and quantitative easing.
The Fed has permitted the banks and financial houses to park vast sums of unmarketable paper on its books — securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these paragons of finance with fresh, cheap funds to lend at healthy rates on credit cards, auto loans, and even mortgages.
While the Fed cuts the banks slack, the bankers are busy turning the screws on their debtors by raising credit card rates and fees, and harassing distressed borrowers with all the zeal the Roman army displayed sacking Palestine.
easy gravy in extra bank spreads
It takes good banking skills to borrow at 3%, lend at 5%, and make a profit.
It takes much less business acumen to borrow at 2%, lend at 5%, and make a profit — which is exactly what has happened. The extra fees are just gravy.
Increasing the spread for banks is akin to subsidizing parts purchases for car companies. The folks at GM (NYSE:GM - News) would look like wizards if the Fed had been similarly generous to them.
This all comes at a cost to someone — America’s elderly.
Many retirees depend on interest from certificates of deposit. Those rates are down dramatically and as CDs expire, retirees are compelled to reinvest their savings at lower rates and live on less income. They can take comfort that their sacrifices are helping pay off Wall Street’s losses from the lavish bonuses that were paid bankers — for example, the $70.3 million Goldman doled out to CEO Lloyd Blankfein in 2007.
lavish welfare for failing U.S. banks
Starting to see a bit more anger in the MSM.
I suspect the fraction of the population that gets much of their income from the abysmal interest on bank deposits like CDs, is very small and of little account at the national level.
very small, or very old
What percentage do you think retirees have in CD’s, and bonds. My guess is that it is rather high particularly after the recent stock market crash.
“I suspect the fraction of the population that gets much of their income from the abysmal interest on bank deposits like CDs, is very small and of little account at the national level.”
And therein lies the problem; savers are considered to be of little account at the national level. So they are advised to “go eat your cat food, you horrible un-American cash hoarder. That’ll teach you to not spend and not go head over heels in debt”!
What percentage do you think retirees have in CD’s, and bonds. Most retirees I know have nothing in either & rely on pensions or Social Security. I’d like more data on this, though.
Yep. The same with most retirees I know. Oh, and part time jobs as well.
Anyone scared to DEBT by the printing presses?
You gotta roll with it. If you don’t want to be a debtor, become a creditor and loan to the feral gubment. Also hedge against the dollar by buying bullion for cash.
BTW: Soon you will see palladium eagles at your favorite coin shop…
http://www.platinum.matthey.com/media_room/new_palladium_coin_bill_passed_in_the_us_19119081.html
Yes, but last time I mentioned it, I was lambasted.
However, “scared” is wrong word, more like mystified about what to do.
(Why not roll up this question with cougar91 and packman’s response below)
(packman made a suggestion that I’ve thought about but hasn’t been specific so far.)
If I think run-away inflation is coming, I would load up on FIXED rate debt up to my eyeballs. That way the fixed rate debt would worth very little after the run-away inflation. Think of fixed rate debt as a fixed rate bond and you know what happens to fixed rate bond when inflation goes through the roof.
Oops this was suppose to be a response to mrktMaven’s comment above.
What would your suggestion be for loading up on fixed-rate debt?
Sounds rhetorical - but actually seriously I’m curious. The primary method we all know of course is fixed-rate mortgage, however that’s not wise right now due to falling home prices. So what other options are there?
2-3 years or so from now when house prices start to bottom - IMO that will be a *great* time to use fixed-rate mortgages. Until then?
loading up on fixed-rate debt ??
I posted on this a few days ago…I know a number of people (very astute & successful) that are doing this…They are refinancing their personal residences and pulling out a lot of cash at these low fixed rate mortgages…They are going to make safe bets with the cash in anticipation of higher rates down the road and at that time move into tax free’s…
I too would like answer, meanwhile, commodities ETFs?
That’s one, since commodity prices should go up with inflation. But I would never suggest anyone to use borrowed money to buy volatile assets and commodity assets are as volatile as they come.
ETFs aren’t debt though.
You could margin them (especially since many ETFs have built-in margin) - the general concept of margining implies loans - I guess at fixed rate. But then you’re paying the penalty of buying an asset that’s very risky; similar to housing actually.
In general - I would maintain that it’s virtually impossible to load up on fixed-rate debt, unless that debt is either:
a) high interest rate, such that future gains due to inflation are wiped out by short-term losses due to lack of inflation, or
b) secured by a risky asset and/or margin.
I was thinking straight up Natural resources ETFs based on some index.
Nothing 2x or 3x (those have a built in decay as many here can attest)
And not bought on margin.
Anyone, any ideas?
I have thought along the following pair “trade”:
Right now mortgage rate is lowest ever recorded, but if you buy a house now the price of the house is still going down. So can you buy a house now using the lowest mortgage rate and but make sure the price of your house doesn’t got down, or at least hedged? One could argue that if I buy a house right now and simultaneously enter into a CME futures position on housing prices for your particular region for the notional amount that is equal to the prices you paid for your house, then your downside will be mostly hedged. In order for this to work the price of the house you buy must match the discount already reflected on CME future contact prices. And since future contract only involves notional amount, you only need a small margin account to maintain the contract.
Of course this is all in theory. Implementational practicality not withstanding.
That only makes sense if you are expecting dramatic inflation in your personal income.
I should have qualified my comment: don’t load up on ANY debt if you don’t have any way of servicing it, no matter what your opinion on inflation is. I was writing thinking my own circumstances: a lot of liquid cash savings and no problem whatsoever in paying back debt if I decide to incurred it.
However let’s say you have $1 m in cash and not doing much. You believe high inflation is coming, 10%+. If I could borrow $1 m with a fixed rate, let’s say 7%, I would pull the trigger in a heartbeat. The value of that debt (or bond) with fixed coupon payments falls with high inflation. As long as you don’t piss away the borrowed $1 m recklessly, you should be fine.
This is equivalent of pulling a interest rate swap trade, paying fixed while receiving float. Of course if you have deflation, then it works against you.
Bingo,
I’ve started wondering how much of a home’s value is that it’s the cheapest pay fixed swap most people will ever have (and more interestingly how much of the recent run up was people expecting inflation to continue to be high even after it had fallen). Most housing common sense is really common sense for entering pay fixed swaps in inflation.
That’s why I’ve decided that houses are close enough for a bottom for me. I’ve got a good job in deflation, can afford the loss (1.5x income) and am far more worried about upcoming inflation than even several years of deflation.
I think that would mean only government employees should be loading up on debt then.
I can’t imagine wages for any other workforce increasing at the rate of inflation.
I work for the government. We are expecting 5% - 10% across the Board pay cuts. 5% for most employees. 10% for upper management (me).
Federal, State or Muni?
“I can’t imagine wages for any other workforce increasing at the rate of inflation”
And this is where we’ve crossed the Rubicon.
Real inflation past 30 years: +/- 15%
Real wage change for J6P past 30 years: +/- (-)15%
Just keep in mind that after the hyperinflation in Germany the government imposed “Windfall Profit” taxes for those who had debt wiped out.
Also, they can and will change the rules as they go. They can and will rewrite contracts. Assuming the rules are “fixed” is the biggest mistake you can make when playing with debt.
Simon Johnson, the professor and former IMF honcho who wrote the Atlantic article Exeter and several others linked to recently, is on NPR’s Fresh Air today talking about Goldman, bailouts, and our “financial oligarchy.”
http://www.npr.org/templates/rundowns/rundown.php?prgId=13
The shows are usually available to stream online by mid-afternoon.
Ha! Johnson proposed making execs at TARP-enhanced firms take their bonuses in toxic, er legacy, assets.
Brilliant. I’d say we should use those assetts to pay FED officials as well.
Sir Gerald Moore: “I was at dinner last evening, and halfway through the pudding, this four-year-old child came alone, dragging a little toy cart. And on the cart was a fresh turd. Her own, I suppose. The parents just shook their heads and smiled. I’ve made a big investment in you, Peter. Time and money, and it’s not working. Now, I could just shake my head and smile. But in my house, when a turd appears, we throw it out. We dispose of it. We flush it away. We don’t put it on the table and call it caviar.”
- Tom Wolfe, Bonfire of the Vanities
The man appears to be above capture by big money from the financial services sector. Very impressive!!!
Financial Times
Is America the new Russia?
By Martin Wolf
Published: April 14 2009 21:47 | Last updated: April 14 2009 21:47
Is the US Russia? The question seems provocative, if not outrageous. Yet the person asking it is Simon Johnson, former chief economist at the International Monetary Fund and a professor at the Sloan School of Management at the Massachusetts Institute of Technology. In an article in the May issue of the Atlantic Monthly, Prof Johnson compares the hold of the “financial oligarchy” over US policy with that of business elites in emerging countries. Do such comparisons make sense? The answer is Yes, but only up to a point.
“In its depth and suddenness,” argues Prof Johnson, “the US economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets.” The similarity is evident: large inflows of foreign capital; torrid credit growth; excessive leverage; bubbles in asset prices, particularly property; and, finally, asset-price collapses and financial catastrophe.
“But,” adds Prof Johnson, “there’s a deeper and more disturbing similarity: elite business interests – financiers, in the case of the US – played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse.” Moreover, “the great wealth that the financial sector created and concentrated gave bankers enormous political weight.”
Now, argues Prof Johnson, the weight of the financial sector is preventing resolution of the crisis. Banks “do not want to recognise the full extent of their losses, because that would likely expose them as insolvent … This behaviour is corrosive: unhealthy banks either do not lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and, as it does, bank assets themselves continue to deteriorate – creating a highly destructive cycle.”
You have problem with Corporate Communist Capitalism©®™, comrade?
Maybe time in financial Siberia change your mind, yes?
Any chance OBwan might tap Professor Johnson as the next Fed chairman? Just a thought. It would be mighty nice to have someone in that position whose actions can not easily be construed as catering to the whims of Megabank, Inc.
It’s a nice thought.
You know someone would go bonkers with his IMF past, though — the same people fussing about the Amero and a global reserve currency would try to paint Johnson as an internationalist mole.
Our local ski resort-RE boondoggle may be TU. Too bad the ski runs were already cut. The owner-developer has been living large…
“2007 Child Support Enforcement Division order signed by an administrative judge explains where Maclay’s personal wealth comes from—and where it goes. The document states Maclay’s parents sold him the ranch assets for a fraction of their value. He then received an $18.5 million financing package to begin planning and developing the Bitterroot Resort, which Gill has said could cost as much as $200 million. That loan also bankrolls Maclay’s homes, vacations and vehicles, and pays him a monthly draw, according to the document.
“Specifically, the order shows Maclay built a $2.225 million home. He spent $18,000 annually on dozens of trips around the world, which he claimed were for business. He purchased two Land Cruisers. Business expenses included paying then-COO Jim Gill $11,000 monthly and Maclay’s fiancée, for whom Maclay created a job, $3,000 per month…
“In addition to the court documents uncovered by the Independent, the Ravalli Republic reported last week that Maclay has had three liens placed on his property after failing to pay a local marketing firm and a construction company. A Ravalli County judge ruled March 16 that Maclay must pay Maverick Marketing Group of Hamilton $48,602. Last November, SK Geotechnical Corp. of Missoula filed a $38,031 lien on land owned by Bitterroot Trails, LLC, one of Maclay’s business entities, and filed another March 26 after the balance wasn’t paid.”
http://www.missoulanews.com/index.cfm?do=article.details&id=874FCC3F-14D1-1357-9CCE15335FA0299D&useLayout=0&print
parents sold him the ranch assets for a fraction of their value ??
Thats a “No No”…Its a gift as far as the IRS is concerned….Here comes the tax man…
I thought market to model pricing was allowed now?
There’s a “downhill” joke in here somewhere.
These are some nice hair cuts on commercial real estate.
Plunging Value on Mall, Resorts Dent Mortgage Bonds(Correct)
By Sarah Mulholland
April 14 (Bloomberg) — A Southern California mall and two resort hotels had their appraisals slashed by as much as 57 percent, causing interest payments on securities backed by the commercial mortgages to fall short, according to loan servicer data.
The value of the Promenade Shops at Dos Lagos in Corona, California, was cut to $69.6 million after the borrower missed payments, down from $163 million when loan was originated in July 2007, according to data from Trepp LLC.
A $209 million loan taken out to finance the Westin La Paloma Resort & Spa in Tucson, Arizona, and the Westin Hilton Head Island Resort & Spa in South Carolina had its value reduced by 25 percent of the original amount, according to the analysts.
“Anytime appraisal reductions cause interest shortfalls, investors have reason to be concerned,” said Manus Clancy, managing director at Trepp.
When a borrower becomes delinquent, the servicer has the property reappraised to determine the current value. If the property is worth significantly less than when the mortgage was taken out, the servicer can stop advancing full payments on the loan because it is unlikely the money will be recovered in the event of foreclosure, causing interest owed to some bondholders to fall short.
Default Scare
Both the Promenade Shops and Westin loans were bundled and sold as part of the same commercial mortgage debt offering, according to Bloomberg data. The Westin loan was sliced and sold in two offerings, the data show.
The borrowers are Tucson-based Transwest Partners/NCH Corp. for Westin and Poag & McEwen in Memphis, Tennessee, for the Promenade Shops.
The two loans spooked investors when they first became delinquent in November because they were large and were underwritten using optimistic forecasts on income growth. Spreads on AAA commercial-mortgage backed debt hit a record high 15.3 percentage points more than benchmark interest rates on Nov. 20, according to Bank of America data, two days after the pending defaults were highlighted in a report from Credit Suisse Group AG.
Top-rated commercial mortgage backed-securities are currently trading at about 992 basis points more then the benchmark swap rate, according to the Bank of America data. Spreads on the debt have narrowed since U.S. Treasury Secretary Timothy Geithner said the government’s plan to lend as much as $1 trillion toward the purchase of securities and loans clogging bank balance sheets would include older bonds backed by commercial real estate.
Late payments on commercial mortgages are up 43 percent this year to 1.57 percent, according to Standard and Poor’s.
The Fithp are coming, the Fithp are coming!
Metro Detroit median price lowest since Realcomp began tracking in 1993: $42,500
March year over year drop: 52.7 percent
City of Detroit median price: $5,800
http://www.detnews.com/article/20090415/BIZ/904150347/1001/Metro+home+sales+up++but+prices+plunge
$5,800 sounds like a great deal, until you factor in the cost of the 50 caliber gun turrets and Sherman tank you’d need to actually live in those parts of Detroit.
More likely, that $5,800 buys you a burned-out shell, surrounded by hundreds of other burned-out shells. Some of the pictures I’ve seen of Detroit are truly frightening. I never thought that any part of the USA would look like that.
New Business Idea # 41
Buy up some houses, a whole block even, in Detroit and start an urban survivalist camp for yuppies.
Some artsy fartsy types already have their own little ‘hood going.
I never thought that any part of the USA would look like that. You haven’t seen many reservations over the last 20 years, I guess.
“Some of the pictures I’ve seen of Detroit are truly frightening. I never thought that any part of the USA would look like that.”
I am sincerely not being rude, flip or sarcastic when I say, “You need to get out more often.”
EVERY major city has an area just like that and has for decades. And every state a has at least one town that looks like that.
Our standard of living has been declining since the 70s. Just so slowly that no one noticed.
But it’s much easier to think of ‘good’ and ‘bad’ places. This way, if your city is wearing the white hat, people will pay more to live there.
When I suggest we have slums in our tourist town, people tend to flip out.
My husband likes to remind me that the real slums are in Bombay and Calcutta.
Ah yes, the theory of relativity.
Barbarians at the gate.
homebuilders Lennar Corp. (LEN:8.53, +0.75, +9.6%) and KB Home (KBH:15.64, +1.39, +9.8%) , led gains on the S&P 500.
12:20
from the actual report:
“Reports from the Federal Reserve Banks indicate that overall economic activity contracted further or remained weak. However, five of the twelve Districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level.
Manufacturing activity weakened across a broad range of industries in most Districts, with only a few exceptions. Nonfinancial service activity continued to contract across Districts. Retail spending remained sluggish, although some Districts noted a slight improvement in sales compared with the previous reporting period. Residential real estate markets continued to be weak. Home prices and construction were still falling in most areas, but better-than-expected buyer traffic led to a scattered pickup in sales in a number of Districts. Nonresidential real estate conditions continued to deteriorate. Difficulty obtaining commercial real estate financing was constraining construction and investment activity. Spending on business travel declined as corporations cut back. Reports on tourism were mixed. Bankers reported tight credit conditions, rising delinquencies, and some deterioration of loan quality.”
This was meant to be posted on the beige book post below.
Can you believe this?!!
This was touted as good news!?!
Prof??
“Good news comrades! Now we only beat you once a week!”
WASHINGTON - The economy continued to worsen all across the United States in March and early April, amid scattered signs that the pace of the decline was lessening in some regions, the Federal Reserve reported Wednesday in its Beige Book account of the economy. “Overall economic activity contracted further or remained weak,” the Fed said, based on reports from thousands of business sources across the country. “However, five of the 12 districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level.” The report, written by the economics staff at the Dallas Fed, generally agrees with comments by top policymakers that there are some signs that the economy may be getting worse at a slower pace
link to the actual beige book, no talking heads.
http://www.federalreserve.gov/FOMC/BeigeBook/2009/20090415/fullreport20090415.pdf
Obama on simplifying the tax code…
“We need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to game the system,” Obama said.
I love that man. And I am not even gay!
http://news.yahoo.com/s/ap/20090415/ap_on_go_pr_wh/obama;_ylt=ApcOKrj_C03ogIhdvQI5eckDW7oF
denial is the first stage.
LOL
My wife laughed at that one!
You’re married??????????? Good thing I was sitting down.
19 years. Put that in your pipe and smoke it!
And then pass it.
and you a bush hater!
LOL.
Get back to me when it ACTUALLY gets simpler.
Talkers talk.
I guess nobody has informed the home building industry leaders that there are hundreds of thousands of foreclosure homes that have yet to enter the used home market that will be competing with any new product they build for the foreseeable future? Or are they counting on hair of the dog stimulus measures to somehow make up for the evaporation of demand that ensued when the housing bubble burst?
And so far as I am concerned, an HMI reading of 14 is still in the basement — never mind the increase. Isn’t a reading of 50 considered neutral? How many times in the history of the index before last October was it ever at a level of 14? These folks are grasping at straws, IMO.
latest news
Beige Book notes pace of decline slowing in some regions
ECONOMIC REPORT
Home builders feel surge of hope
Sentiment index jumps to six-month high in April, but level is still depressed
By Rex Nutting, MarketWatch
Last update: 1:11 p.m. EDT April 15, 2009
Comments: 28
WASHINGTON (MarketWatch) - With mortgage rates near all-time lows and a home buyer tax credit in place, U.S. home builders were much more optimistic about the housing market in April than they were in March, but they are still a long way from feeling good about their business, according to a monthly survey released Wednesday by a trade group.
The National Association of Home Builders said its home builders’ index rose to 14 in April from 9 in March. It’s the first time the index has been in double digits since October, when it was also at 14.
It was the largest one-month increase in the index in more than five years, but it still shows that only about one in seven builders thinks business is good or fair.
“This is a very encouraging sign that we are at or near the bottom of the current housing depression,” said NAHB chief economist David Crowe.
Wouldn’t the bottom be when the index is zero? Who’s the one guy who thinks business is good?
“Obama to ‘tea-bag’ protesters: I’ve already cut taxes ”
MarketWatch filthy headline of the day.
He has?? Well then that must make him one of us!!!! (rolls eyes)
Blano, never Dirty Sanchez a stand alone post…
Dirty Sanchez??? Is it Wikipedia time again??
Im sick of yer mouth and yer 2% milk.
Hit the road get truckin….
its not personal Blano…Im just mean sumbitch sometimes.
weening the blogs a bit, I must say. I dont wanna leave you on the farm. No telephone to call you at home. Im alone on the throne. gettin myself stoned.
sticky like glue.
Huh?
Yeah banana, great guy that Osama Obama.
This broad should be forced out of her job. Like I said last night, these people are a bunch of nuts. Totally out of control.
http://www.washingtontimes.com/news/2009/apr/16/napolitano-stands-rightwing-extremism/
Riiiiiight… Given the lone wolf nuts punching holes in people with rifles lately, she’s merely advising on the nattering nuts and ninnys. Besides, you may have well posted a link from fox noise.
Credit card loss rates have in the past closely tracked the rate of unemployment. But in this recession that relationship is breaking down. Economists say this is because job losses, which pushed unemployment rates to 8.5 per cent in March, have compounded other sources of financial distress such as the housing slump, stock market volatility, and the collapse of consumer confidence.
Capital One said its net charge-off rate for US cardholders – debts it believes it will never collect – rose to 9.33 per cent in March, up 1.27 percentage points in one month.
Couldn’t happen to a nicer company.
What’s in your wallet?
Evidently, a lot more cash after stiffing Capital One.
(FPSS laugh)
This will drive those c.c. rates up but good. Maybe the gov’t can subsidize lower c.c. rates too?
Apparently “what’s in their wallet” was holes.
I made some shorting COF last year - wish I’d have held on longer though. Rising credit card defaults are a no-brainer, just got impatient and figured they were already priced in after some good-sized drops.
Is there a word for negative synergy?
From the Southhampton Press:
“For a cool $400,000 you can spend summer in the Hamptons at the Water Mill house belonging to Rick Hilton, Paris Hilton’s father. According to Newsday, the Hiltons are asking for $400,000 for the Memorial Day to Labor Day season. The 10,000-square-foot traditional-style home has six bedrooms, 7.5 bathrooms and a heated pool. The house is on 2.7 hedge-enclosed acres. The home rented for around $350,000 in 2007, and again in 2008, but I don’t know for how much”.
Who knows if they’ll get this amount (I doubt it) because so many people are StarF_ckers. But the rest of the Hamptons is sucking big wind. In many cases, asking prices have at least 50% to come down by.
Dollar Optimism Drops to One-Year Low as Fed Dilutes Currency
By Ye Xie
April 15 (Bloomberg) — Expectations for a weaker dollar increased to the highest level in a year after the Federal Reserve diluted the currency to lift the economy out of a recession, a survey of Bloomberg users showed.
Participants turned bearish on the dollar over the next six months for the first time since January, according to 1,349 respondents from Paris to New York in the Bloomberg Professional Global Confidence Index. They were most bullish on Brazil’s real since August and expected the Mexican peso to rally for the first time since January, as the Group of 20 nations pledged on April 2 to spend $1 trillion to revive global economic growth.
The Fed’s broad dollar index has declined 4.7 percent against 26 of the U.S.’s major trading partners, since touching a 4 1/2-year high on March 3. Fed Chairman Ben S. Bernanke joined central bankers in Japan, Switzerland and the U.K. on March 18 by printing money to buy debt assets after exhausting other monetary-policy tools. Bernanke said yesterday there are signs that the “sharp decline” in the U.S. economy is slowing.
“We are likely to see a gradual decline of the dollar,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, a survey participant. “The economic stimulus will pay off. Optimism has fed into commodities and commodities currencies at the expense of the dollar.”
So - anyone else in the boat of being tired of this rally? My shorts are getting hammered.
Not really rooting for the economy to go in the crapper - but if it’s inevitable (as I think it is - at least further in the crapper), it should just go ahead and do it already.
Tired enough to reload on some long stuff this morning, just in case.
I for one welcome every delay possible. When it finally goes into the crapper the time to prepare is over.
Banking holidays and counter-party risk mean that playing the game by moving money around on internet managed accounts is a sure way to be caught without a chair when the music stops. Sure you may be rich in some database, but the government will only let you have access to it slowly.
Invest in things that have minimal counter-party risk and are not centrally located and easy for the government to “grab”.
Anyone else feel a bit ’soviet’ now that the government is starting to look less like a protector and more like a really, really big corporate bully that everyone works for?
I very much dislike adding ‘government’ to my ‘mistrust’ list, because it makes me feel pretty unprotected.
I guess some would say it’s always been like this and only now is when we’re noticing. I have to wonder if it hasn’t only been like this since sometime in the ’80s.
I think of that effect as, “waking up”. Congratulations, now you can work to protect yourself and those you love.
Yeah, and I guess one of the first steps in that case is to get any of my wealth away from that entity that I can, preferably all of it.
Therefore I can only assume those who criticise ‘wealthy’ tax evaders (koffGeithnerkoff) are still wrongly assuming the government is on their side? In such a world tax evasion would be a good (and moral) thing.
If this is the world we live in then indeed the tax evaders are the most aware and should be emulated by citizens.
Morally yes. Practically no. You won’t do well getting yourself incarcerated by big brother. Only the elites can be tax cheats.
“I very much dislike adding ‘government’ to my ‘mistrust’ list, because it makes me feel pretty unprotected.”
Ditto all the rest of us. But we have to face reality and deal with it. We are going to have to rebuild civilization from the ground up.
I recommend this site and mises dot org for a thorough re-education. Let’s strengthen our networks, spread the word, and keep going.
Me: I’m pissed, and hammered just like you.
Unfortunately I have a ton of April 35 SPG puts that were well in the money at one point but are now going to expire worthless. Also suffering from decay in SRS and FAZ. To top it off my oil is going nowhere and the GLD calls are well off their highs. Oh, the icing on the cake is my retail put plays (URBN, AZO, TIF and BBBY) are all heading north.
Unbelievable that I am taking heavy losses even as we move ever closer to complete collapse. At this rate, when I score the inevitable percentage gains, they will be off a tiny capital base
My zingers are CTX (They were well on their way to bankruptcy before stupid PHM came along), and CCL. Who would think that cruise bookings would actually be *up* right now? I’m shaking my head at that one, and still thinking they’ll come down soon.
I’d really hate to have to do stop losses, but at this rate they’re not far around the corner.
Right but early is a disease I’ve had far too often.
Don’t you guys think the Fed will have to ensure the stock market generally goes up for the rest of the year in order to fulfill the predicted bottoming out of the economy by the fourth quarter? Or do you still think that individual (read non-government-entity) market participants set stock prices through free (manipulated) share trading?
Yep, getting hammered here too. I’m holding small positions in SKF and SRS, plus some oil for the longer term. Fortunately most of my trading funds is in cash at the moment. Its not worth fighting the tape any more than I already am, but I am sure not about to contribute to the madness on the upside.
“…but I am sure not about to contribute to the madness on the upside.”
Doesn’t running the money press tend to create a lot of nominal upside for stocks?
Let’s see, I’ve been hinting at this for what? Weeks?
I READ the beige book, this rally is unkillable.
I read NOTHING positive to warrant what the markets did today.
Kim, be careful
Zimbabwefication.
That’s fun to say.
Normally these days it’s just about when I start thinking I should go long for a bit that we get a good plunge.
The NYSE chief himself is doubting the rally, yet the rally continues. Something is still rotten in the State of Denmark.
NYSE chief cautious over March rally
By Anuj Gangahar and Chrystia Freeland in New York
Published: April 15 2009 23:30 | Last updated: April 15 2009 23:30
The March stock market rally that fuelled hopes of a broader economic recovery was deceptive because “real money” investors remained on the sidelines, according to the chief executive of NYSE Euronext, the world’s largest stock exchange.
In rare comments about market movements, Duncan Niederauer said in an interview with the Financial Times that the rally was driven by short-term traders trying to take advantage of high volatility and not by large institutional or other long-term investors.
Mr Niederauer suggested the high trading volumes and gains in leading indices did not necessarily reflect any real conviction that the worst of the economic crisis was over.
He said the volumes had been concentrated in a handful of stocks.
In fact, he said volumes had held up well because of what he termed a “traders’ market” in which participants tried to take advantage of greater volatility without needing to take a view on, or believe in, the long-term prospects for recovery.
He said: “The real money investors are still waiting. I think they’re waiting, they’re watching. They want to make sure that what we saw in March is real. And I think once they are convinced you will know it. The market will have a totally different tone to it.”
I’m starting to wonder if it IS inflation-induced. There seems no other reason for it. If it lasts through May…
Well if that were the case it would scare me a lot more than just a “bear-market rally” now…
I think of it as an inflationary offset to the crash which should be playing out. The stock market is held aloft on top of a high velocity blast of Fed-injected liquidity.
OK, so now I have to ask…
If that is the case (*if*) then how long before those ’surging’ share prices also ‘trickle down’ into surging consumer (even ‘CPI’) prices? (They already are for food energy and other non-CPI luxuries here in Aus.)
Yes I understand that hyper-inflation is just a tinfoil-hatter’s wet dream, but you get where I’m going with this.
Keep in mind that to a lowly secretary ’surging’ inflation in anything is very chill-inducing.
“…how long before those ’surging’ share prices also ‘trickle down’ into surging consumer (even ‘CPI’) prices?”
The rate of change of the money supply shows well-marked cycles that match closely those of economic activity in general and precede the latter by a long interval. On the average, the rate of change of the money supply has reached its peak 16 months before the peak in general business and has reached its trough over . . . 12 months before the trough in general business . . . Moreover, the timing varies considerably from cycle to cycle — since 1907 the shortest time span by which the monetary peak preceded the general business peak was 13 months, the longest 24 months; the corresponding range at troughs is 5 months to 21 months.
– Milton Friedman (1958) –
Succinct version: The transmission of monetary policy to the real economy is characterized by long and variable lags.
Also never forget another astute Friedman observation:
Inflation is everywhere and always a monetary phenomenon.
Finally, bear in mind that deflation to Bernanke is as Kryptonite to Superman.
“Also never forget another astute Friedman observation:
Inflation is everywhere and always a monetary phenomenon.”
The money is going to the big banks I don’t think its going to the spenders of yesterday who could borrow Hundreds of thousands with no credit ? we had our Inflation its over. The only inflation we are going to get now is higher taxes and fees of all kinds.
A forty plus percent decline in California housing market values qualifies as deflation in my book.
Wall Street Journal
* HEARD ON THE STREET
* APRIL 15, 2009, 9:30 P.M. ET
A Deflated Fed Battles to Keep Prices Up
By JUSTIN LAHART
In 2002, Ben Bernanke gave a speech titled “Deflation: Making Sure ‘It’ Doesn’t Happen Here.”
Now it’s happened.
On Wednesday, the Labor Department reported that in March the consumer-price index slipped 0.4% below its year-earlier level, the first decline in over 50 years. The “core” CPI, which excludes food and energy prices, was up 1.8%, but it is possible that even people who don’t drive or eat could see price declines in the months to come.
Up until the financial crisis hit, much of the world was focused on filling U.S. consumers’ widening maw. But now consumers are on a diet, and it is hard to imagine them returning to their spendthrift ways anytime soon. That leaves anyone in the business of selling goods and services to Americans in a bind. To stay afloat, they will all compete harder for the sales that are left. Stiffer competition makes for lower prices.
Amid continuing credit woes, a protracted spell of deflation would be particularly unwelcome. Falling prices would make it tougher for borrowers to pay off debt, leading to even more defaults and even tougher lending standards. Mr. Bernanke knows this, and is fighting back.
One of the deflation-fighting measures the Federal Reserve chief outlined in his 2002 speech was that the government could ramp up spending or lower taxes, and the Fed could buy the Treasurys issued to finance such moves. In practice, that is like printing money and handing it out to households, and it is pretty much what is happening now.
When the fight is between falling prices and the Fed, it is hard to predict which will prevail. But it isn’t hard to predict that the outcome will be messy.
“So - anyone else in the boat of being tired of this rally? My shorts are getting hammered.”
Don’t care about this rally but I did sell my IRA in S&P 500 to break even after 5 YEARS. Bought a GNMA mutual fund. Watch the treasury for signs of FB behavior as in the government is the new crazed borrower in town. I own TBT.
Had my second written offer turned down on a house today, my offer was $180,000.00 on a house they were asking $440,000.00
Not listed as a foreclosure but the people have moved out and taken all the appliances with them, besides that it`s a nice house. My first offer on a house was about 6 months ago and eventually sold for more money than I had offered, what is a little upsetting is that I am sure these banks or investors would not be able to hold out without bailout money, and on the same day that I send a check to the IRS and make my monthly tax deposit for my company I am told by a bank that has probably benefitted from my tax dollars, sorry you`re not even close.
I hope more folks make offers like that.
+100 for you.
Are they saying anything to you like “give us your best offer” or even countering or saying anything at all???
I love offers like those.
Not this time, just that they had turned down an offer in the low 300`s, whether that`s true or not I don`t know. And if they ask me to give my best offer, I will tell them I just did.
Good man.
Bingo! I too have suspected that one of the primary purposes of bailout money was to give Megabank, Inc some breathing room against the need to unload REO properties in order to raise cash.
“Bingo! I too have suspected that one of the primary purposes of bailout money was to give Megabank, Inc some breathing room against the need to unload REO properties in order to raise cash.”
And no more Mark to Market acounting just value your uncollectable debt at whatever at whatever you think is fair.
BTW I expect they will eventually collect some of the debt one way or another? like selling it to criminals who will break your legs. happy days for sociopaths in debt collection land ahead.
I’m guessing 12.6 percent unemployment still leads the pack??
http://www.detnews.com/article/20090415/BIZ/904150433/1361/Michigan+s+jobless+rate+hits+12.6+percent+in+March
This is why we keep giving them rap and hip op 24/7 pacify the masses.
Keep hope alive…keep the meth labs in your own community…Almost like escape from NY wall them in and the police look the other way as long as you don’t cause trouble. It will come to that..
Albuquerque is warming up the bulldozers
Rrrr [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[
—–[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[
It is time to enjoy a real life version of Bastiat’s “Broken Window Fallacy.”
Shippers slowing down to save $ The slow boat to China is a reality.
I thought you guys might like to know you aren’t the only po’ folks this year.
This was in the Morning Herald this morning.
I personally liked the conclusion that all this means the Government/RBA ‘hasn’t done enough to prop up the economy’!
The Herald printing something like this is a bit like the Head Cheerleader turning up wearing an upside-down cross…
You’ve just lost $25,000 - but years of earning will ease the pain
Jacob Saulwick
April 16, 2009
THE average Australian lost $25,000 in wealth in the past year, the steepest fall on record.
According to figures compiled by Treasury, the total wealth of the private sector in Australia stood at $4850 billion at the end of December.
That pool diminished last year, alongside property prices and sharemarket values, and slumped more than 2 per cent in the last three months of 2008.
Extrapolating from Treasury’s figures, released yesterday by the Bureau of Statistics, a CommSec economist, Savanth Sebastian, said wealth per person had slumped from $249,000 to $224,000 during 2008.
Adjusted for inflation, wealth had slumped more than 12 per cent for the year, the biggest fall in almost 50 years of figures.
“It is important to keep in mind that while wealth levels have taken a large hit over the last year, the near doubling of wealth levels over the past 10 years will provide a buffer for many Australians,” Mr Sebastian said.
The total debt held by private firms and households also increased during 2008. This was largely because the fall in the dollar drove up debts denominated in other currencies.
The figures are used by the Treasury when it runs economic model, for example, in preparing for next month’s budget. The release shows that Treasury puts the rental vacancy rate - or the percentage of unoccupied rental properties - at 1.37 per cent, close to its lowest level in 30 years.
It also shows Treasury’s estimate of the lowest level to which unemployment can fall without driving up inflation, the non-accelerating inflation rate, rose from 4.77 per cent to 4.98 per cent in the three months to the end of December.
Also yesterday, a “leading index”, which attempts to estimate the pace of economic activity three to nine months into the future, dropped sharply in February.
Bill Evans, the chief economist at Westpac, which compiles the index with the Melbourne Institute, said the rate of deterioration was “remarkable”.
Mr Evans said it would be a mistake for the Government or the Reserve Bank to think they had done enough work to prop up the economy.
With a shrinking economy, the money that goes into paying bankers’ high salaries has to come out of someone else’s pocket.
I noticed you posted an article late yesterday on the shrinking Aus economy. Everyone here (well, those 12 of us who read economic news) is still in shock.
It looks like the rest of the world may be on to us. Or at least you are.
Luckily, we have China to come to the rescue, which it will b/c everyone knows the Chinese are ROCKIN’ this downturn.
Quick question for Ben:
I posted an article about how people in Aus are on average $25,000 poorer than last year (yes, we’ve lost an average of 12% in one year), and a bunch of comments to some other posts. The comments came up, the article didn’t. I didn’t put a link though b/c I know that slows things down.
Is there a rule or filter or something on articles that isn’t there on comments, that makes them a lot slower? (Asking b/c I also wasn’t sure if I missed something in the rules.) Or is it a copyright issue?
Damn, sorry Ben. I lost faith!
test
Im flying, in a frame of my mind; that time can not erase.
Im seeing, the future, the past…as I lay the present to waste.
Im scoping, all these feelings I have, and hoping for them to come true.
and Im holding
something more precious
than fine ore, Baby.
Im holding you.
Im breathing, the fumes of the grid; that rid my lobe of oxygen.
Im climbing, the walls to where good and evil, make ammends.
Im trippin, Wrything and Squealing, Puking; looking for someone like you.
and Im holding
something more precious
than fine ore baby.
Im holding you.
Ween
-Im just a good ol country boy at heart…
Decade of Losses Forces Investors in Their 30s to Start All Over A median- income worker who put 9 percent of salary into an all-stock plan would have finished the decade ended March 31 with almost $10,000 less than he or she invested, a loss of 26 percent. “I would have done as well holding cash,” said Sale, a financial planner in Bloomington, Minnesota. “You can’t deny the truth.” It’s no surprise that investors are sticking with their 401(k) plans, Boston College’s Munnell said. “What is the alternative?” she asked. “Are you going to not save at all and rely on Social Security? People don’t really have a choice.”
Well I have been talking to loan brokers in Arizona to see what the market looks like. I knew it was bad, but wasn’t sure HOW bad. Here is the deal.
Getting a loan above the conforming limit of $417,000 is going to take at least 20% down, but more likely 30% will do it. Very hard to find money above the conforming limit unless you give them lots of downside protection.
For conforming loans, expect 10% down, and have 6 months of reserves, FICO above 620 (mine is 769), and be able to document your assets, income, tax returns, etc.
The loan broker I spoke to said they were very concerned about debt to income ratios, so they probably won’t be able to go over 50%.
LOL
So bottom line, anything the government is actually backing is still pretty wide open, but if the lender has no downside protection, it is a different market. Good luck.
April 15 (Bloomberg) — It’s easy to dismiss protesters wreaking havoc in Thailand as misinformed anarchists.
They don’t understand the wonders of globalization, you may be thinking. If only they had more reverence for the splendor of capitalism. If only true democracy were able to work its magic in Asia’s eighth-biggest economy.
If only any of these assumptions got at the crux of Thailand’s crisis. The problem is the “Cult of GDP.” An obsession with high growth rates and failure to use them to narrow the gap between rich and poor are graphically playing out on Thailand’s streets. People are angry, and rightfully so.
It’s a far bigger risk than governments and investors realize, and it may be with Asia for a long time. The region didn’t use the fat years of the early-to-mid 2000s to spread the benefits of 6 percent or 8 percent growth. Now, the global financial crisis, political tensions and widespread discontent are fusing together.
This dangerous dynamic has come up in this column before, and Thailand’s woes demonstrate why it deserves more attention.
Now replace Thialand with US.
Come down from your swell co-ops, you general partners and merger lawyers! It’s the Third World down there! Puerto Ricans, West Indians, Haitians, Dominicans, Cubans, Colombians, Hondurans, Koreans, Chinese…and Afro-Americans! Go visit the frontiers, you gutless wonders! Morningside Heights, St. Nicholas Park, Washington Heights, Fort Tryon…The Bronx - the Bronix is finished for you!…Brooklyn - *your* Brooklyn is no more!…whose is it? Do you know?…And Staten Island! Do you Saturday do-it-yourselfers really think you’re snug in your little rug? You don’t think the future knows how to cross a *bridge*? And you, you Wasp charity-ballers sitting on your mounds of inherited money up in your co-ops with the twelve-foot ceilings and the two wings, one for you and one for the help, do you really think you’re impregnable? And you German-Jewish financiers who have finally made it into the same buildings, the better to insulate yourselves from the *shtetl* hordes, do you really think you’re insulated from the *Third World*?
- Tom Wolfe, Bonfire of the Vanities
Can anyone (besides me) remember when Hank Paulson tried to suppress the use of the term “bailout” to describe the policy response to the popped housing bubble, and even Ben discouraged its use on this blog? We’ve come a long way, babeeeeeeee!!!!!!
In ‘toxic’ times, Americans take refuge in words
By John Wilkens
Union-Tribune Staff Writer
2:00 a.m. April 15, 2009
…
Consensus is what helps land a word or term in the dictionary, the ultimate barometer of impact.
“Bailout” was already in the dictionary, and current usage has only bolstered its standing. It was chosen as the word of the year for 2008 by Merriam-Webster and by the American Dialect Society, an association dedicated to the study of the English language.
It was also on Payack’s Top 10 list, along with three other financial terms (“derivative,” “subprime” and “foreclosure”).
To Payack, “bailout” already feels dated, but Barnette believes it has legs. “It carries associations of bailing people out of jail, bailing out a sinking boat,” she said. “I think people are so outraged by what’s been going on that it will be around for a while.”
She traced the word’s origins to the 1920s, to the early days of aviation, when airplanes crashed more often and pilots had to “bail out.” The word spread to the financial sector during the Great Depression.
Seen parading around outside Borders Books (Carmel Mountain Plaza) this evening: Protesters carrying signs enscribed with various political messages.
My favorite by far: “HONK IF I’M PAYING YOUR MORTGAGE.”
Now I get the guy’s sign. The more bad loans a bank made, the more Treasury largess they get to help them offer workouts to FBs.
I am wondering if the firms that “get” this money ever have to repay it, or is this just another corporate welfare payment to reward bad banking practices?
Wall Street Journal
* APRIL 16, 2009
Firms to Get Up to $9.9 Billion to Modify Mortgages
By MEENA THIRUVENGADAM
WASHINGTON — The Treasury Department said it will pay the mortgage-servicing arms of Citigroup Inc., J.P. Morgan Chase & Co. and four others a combined maximum of $9.9 billion to modify home loans and avoid foreclosures.
The payments, announced Wednesday, are part of a $75 billion incentive plan aimed at stemming the foreclosure crisis.
The department said it has finalized arrangements with six mortgage servicers to participate in the effort: Chase Home Finance LLC, Wells Fargo Bank NA, CitiMortgage Inc., GMAC Mortgage Inc., Saxon Mortgage Services Inc. and Select Portfolio Servicing.
Under the plan unveiled by the Obama administration last month, Chase could get more than one-third of the $9.9 billion. It has been allotted up to $3.6 billion for loan-modification incentives. Wells Fargo has been allotted $2.87 billion and CitiMortgage was allotted $2.07 billion. GMAC has been allotted $633 million, Saxon $407 million and Select Portfolio $376 million. The figures are based on each companies’ volume of business, a senior Treasury official said.
Holy Toledo — 341,180 filings for one month?!?!?!?! This housing bubble is so-o-o-o-o popped. Who wants to buy hundreds of thousands of foreclosure homes during a nasty recession?
I suggest the Fed loan Megabank, Inc lots of dough at zero interest rates to snap up these unwanted empty homes at fire sale prices, courtesy of an implicit subsidy from the rest of us who don’t automatically qualify for zero interest loans, as the rest of us are not too big to fail. Then when the economy comes back, Megabank, Inc can make brazillions in profits by selling them back to the rest of us at an inflated markup.
Washington Post
Foreclosure Filings Climbed in March
By Renae Merle
Washington Post Staff Writer
Thursday, April 16, 2009; 12:00 AM
Foreclosure filings spiked in March despite industry and government efforts to keep people in their homes, according to data from RealtyTrac released today.
The firm counted 341,180 filings nationally, which can range from default notices to bank repossessions. That was up 17 percent from April and 46 percent from March 2008. That is the highest monthly total since RealtyTrac began collecting this data in 2005. RealtyTrac, a private firm, says its data include more than 90 percent of U.S. households.
The spike in filings probably was related to the expiration of several foreclosure moratoriums across the country, said Daren Blomquist, a RealtyTrac spokesman. Many of the latest filings represented lenders starting the foreclosure process on delinquent homeowners, he said.
For the first quarter, foreclosure filings increased 9 percent compared with the previous quarter and were up 24 percent from the first quarter of 2008.
You know what that means don’t you. The stock market will go up.
The stock market always goes up, no matter what.
Maybe Uncle Sam should have thought to make those zero interest loan deals available to US households, instead of taking all the country’s money and sinking it into the black hole of Megabank, Inc’s imploded supernova balance sheet.
Wall Street Journal
* APRIL 16, 2009
TARP Cash Isn’t Moving Forward
Treasury Says Lending Has Fallen Among Banks Getting Government Aid
By MICHAEL R. CRITTENDEN and DAVID ENRICH
The largest bank recipients of U.S. government aid are offering less credit to businesses and consumers, the Treasury Department said Wednesday, reflecting and exacerbating the tenuous state of the current economic environment.
In a monthly snapshot of lending by the 21 largest banks receiving Troubled Asset Relief Program funds, the Treasury said credit being offered fell 2.2% across all commercial-lending and consumer-lending categories in February, compared with the prior month.
Particularly problematic: continued deterioration in commercial real estate and general business lending, as well as the credit being made available for student and auto loans.
The lone bright spot remained home loans, with consumers eager to take advantage of record-low interest rates to refinance their mortgages.
The Treasury said 16 of the 18 banks surveyed increased mortgage originations in February, resulting in a 35% increase in mortgage lending from January levels.
The February decline in lending adds to pressure on the Obama administration’s efforts to restart the still-fragile credit markets.
The Treasury has committed $95 billion in TARP funds for new programs to boost consumer and business lending, though they are either just getting started or are still in the development phase.
The report suggests that jawboning by federal officials for banks to use TARP funds to boost lending is having a limited effect.
The Treasury blamed the decrease on the broader economic weakness, including low consumer confidence, high unemployment and a decrease in U.S. exports.
Wall Street Journal
* APRIL 16, 2009, 8:45 A.M. ET
U.S. Housing Starts Fall Sharply; Initial Jobless Claims Sink
By JEFF BATER
WASHINGTON — Home construction took a bigger-than-expected drop in March, and an indicator of future building resumed falling, according to a report that soured hopes of a turnaround in the housing sector.
Housing starts fell 10.8% to a seasonally adjusted 510,000 annual rate compared to the prior month, the Commerce Department said Thursday. The drop was driven by lower apartment construction. Single-family starts were flat, after a slight increase the month before.
Starts climbed 17.2% in February to 572,000; originally, Commerce reported February starts rose 22.2% to 583,000. Mild weather and apartment construction ignited a surprise surge that, while taken with a grain of salt, had been welcomed as a sign the recession wasn’t deepening and the housing market might be nearing a bottom.
Because of the size of the February increase, Wall Street expected a large drop in March construction. Economists surveyed by Dow Jones Newswires forecast a 7.4% decrease to an annual rate of 540,000.
Year over year, housing starts were 48.4% below the pace of construction in March 2008.
Banker’s Axis of Evil Declares War on America.
LOLOLOLOLOLOL!!!
Robert S. McElvaine
Author, historian, political activist
Posted April 16, 2009 | 07:32 AM (EST)
Banks Declare War on America
Read More: Amex, Bank Of America, Banking Crisis, Bankruptcy, Banks, Capitol One, Citibank, Class Warfare, Credit Card Rate Increases, Credit Cards, Economic Crisis, Financial Crisis, Great Depression, Greed, J.P. Morgan Chase, New Depression, Populism, Recession, Business News
“F.U., USA!”
New Coalition of Bankrupters Launched:
F U, U & U & F the USA
Where is the fury now? The populists with pitchforks who screamed bloody murder at the A.I.G. bonuses are not saying nearly enough, or screaming loudly enough, about an even more outrageous action by the recently bankrupt banks that have now had the impudence to hike credit card interest rates sharply, even on customers who have always been current in their payments.
The banks have joined together to form an offensive alliance that has, in effect, declared war on the United States, its people, and its economy. An accurate name for this coalition of bankers would be “F U, U & U & F the USA.”
Or, more simply, this Bankers Axis of Evil, which includes Citibank, Amex, J.P. Morgan Chase, and Capitol One, could be called by a variant of the name of another of its members, not The Bank of America, but The Banks Against America.
We, through the government aid they received, gave them a helping hand; now they give us The Finger.
I called Citibank when I saw the increase in my rate. The customer representative said to me, “Oh, that was nothing aimed at you personally; we did it to everyone, because of the bad economy.” I burst out laughing.
These rate increases–some to as high as 29 percent–are exactly the opposite of what the bad economy needs for recovery. They mean that much larger shares of the income of many people will have to go into interest payments, rather than the new purchases that would help bring the economy back.
Weapons of Mass Depression
These obscene interest rates are the latest in a series of the banks’ launches of their Weapons of Mass Depression at the American people and our economy.
By these actions, the perpetrators reveal themselves once again to be not bankers, but bankrupters. Through their greed in the past, they brought their banks to the edge of bankruptcy; through their greed in the present, they are pushing many middle-class Americans to the edge of bankruptcy.
This is class warfare with a twist. It’s not a war between the rich and the poor so much as it is a war by the rich against the middle class.
…
Bankers are predators. That is nothing new.
Debtors are slaves. That is nothing new.
So, the predators feed upon the cattle. That is not class warefare. It’s voluntary servitude.