Bits Bucket For June 10, 2009
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The Housing Bubble
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Oh, no, not the Slim Jims!
http://www.google.com/hostednews/ap/article/ALeqM5gBj6FQpRXrxsKovHU6JL9I0MUveQD98NP0681
I dunno about you, but something about an exploding meat plant gives me the willies. After all, we EAT that stuff. OK, maybe not Slim Jims, but still, I get disturbed about exploding fertilizer and stuff like that. Seems like we shouldn’t oughta eat things made in a volatile environment.
“Oh, no, not the Slim Jims”!
A Slim Jim, followed by a pickled egg, washed down with a cold beer can also have an ‘explosive’ effect!
Don’t forget the garlic and jalepenos.
White Castle hamburgers accomplish that all by themselves.
White Castle! I used to go there with my friends. They cost fourteen cents each. The meat was white and had a few onions scattered on it. We called them sliders. Thanks for the memory, Blano.
Meat is often cooked by flame. Flame is often provided by natural gas.
Has terrorism been ruled out? A disruption in cash-register-counter food supply at conveinience stores could really lay this country low.
No way man. It’s a conspiracy of the state governments. Less money for Slim Jims means more money for lottery tickets!
I stopped at a convenience store in a not great area, and there was a display with fake roses in a glass tube. I thought, what a silly product, would anyone buy such a thing? Then I read in the news there was a crack down on stores and that was one of the items that are contraband. Really they are for smoking crack.
And now the shooting at the Holocaust museum. I really need to get out of the city. This country is seriously coming unglued.
Seems like we shouldn’t oughta eat things made in a volatile environment. Grain elevators are prone to exploding also, due to sinister ingredients like, um, wheat.
Well, if you have Celiac Disease (and I don’t–I’m just sayin’), then QED.
Mostly lurk, but this ‘conversation’ made me laugh today, and I really needed a good chortle.
I like your name, Mrs. Wheezer. Source?
Grain dust explosions can be pretty bad. Was in ICT when the big elevator down there exploded. We were four miles away, and it shook the house.
Slim Jims are meat? I thought they were one of those “foods” with no natural ingredients.
Haha, you’re funny, Cassandra!
It’s true, though. Slim Jims exist in their very own and special category of ‘things you can theoretically eat, but maybe shouldn’t’.
Oh, you know what, this reminds me—I once witnessed someone beat someone else up with an unwrapped Slim Jim. And then, after the fight, the Slim Jim was basically undamaged*. That ought to give anyone pause, right there.
*Until I picked it up and bit it. I only bit it for the style of the thing, though, I didn’t finish it. Well, maybe I did. I can’t remember. This was in college, and there was some blurriness. I didn’t start the fight, I was just there.
You know, I should sell my story to the manufacturers of Sl*im J*ims, huh!
So many goods we produce or manufacture as human beings are just unnecessary. Fast food could be wiped off the face of the planet and no one would notice. What about the drink industry….doesn’t the human body need water and that’s it? Give me high fructose corn syrup or give me death! Then what if we re-allocated resources used to produce those items?
But we’re keeping diet Coke, right?
only to use as a mixer with the Cap’n Morgans.
Oh yeah….forgot about my JD and coke. DAMN! Oh well, just going to have to drink it neat.
What? People mix things with JD? On the rocks!
mo betta buzz
I’d notice.
I would love to see something come of this, however I doubt it will, dog and pony show most likely. Bernanke , Paulson, TTT and their entire gang should be hauled up.
Washington D.C. (June 8, 2009) — House Oversight and Government Reform Committee Chairman Edolphus Towns (D-NY) and Ranking Member Darrell Issa (R-CA) today served a subpoena on the Federal Reserve (the Fed) to compel it to turn over documents related to Bank of America’s acquisition of Merrill Lynch.
The full committee and Domestic Policy Subcommittee, under the leadership of Chairman Dennis Kucinich (D-OH), have been investigating the circumstances surrounding the federal government’s bailout of the Bank of America-Merrill Lynch transaction. Specific documents subpoenaed include emails, notes of conversations and other documents.
New York Attorney-General Andrew Cuomo has claimed that, in 2008, then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke strong-armed BofA into buying Merrill — a move that, if true, could expose Paulson and Bernanke to prosecution.
Last week, news services reported that the House had asked Bank of America CEO Kenneth Lewis to testify before the House Committee on Oversight and Government Reform. That hearing takes place on Thursday (June 11).
– Daniel Tencer
Nothing will happen.
The Fed answers to no one. The incumbent crooks almost always win reelection. Maybe when people are starving in their hovels without jobs somebody will realize how we’ve been robbed in plain sight for years, but I doubt it.
Sadly I agree that likely nothing will happen to these crooks. This is what’s so troubling about the entire situation. There has been ZERO accountability in the public or private sector for an avoidable disaster which has had devastating effects for tens of millions of people.
Fontainebleau Las Vegas Files for Chapter 11…
By THE ASSOCIATED PRESS
Published: June 9, 2009
Filed at 11:55 p.m. ET
MIAMI (AP) — Casino-resort developer Fontainebleau Las Vegas LLC said Tuesday it has filed for Chapter 11 bankruptcy protection after failing to get certain lenders to provide about $800 million in construction funding to complete the company’s $2.9 billion property on the Las Vegas Strip.
Fontainebleau Las Vegas had filed a $3 billion lawsuit in April against Bank of America, JPMorgan Chase Bank, Deutsche Bank Trust Company Americas and eight other lenders in an effort to access the prearranged financing to pay its 3,000 construction workers and finish the project, which is 70 percent complete and had eyed an October opening.
The complaint alleged that the lenders terminated their agreement to provide an $800 million revolver loan due to one or more unspecified ”events of default” by Fontainebleau. But the developers said they didn’t default on any part of their agreement. Bank of America spokeswoman Shirley Norton told The Associated Press in April that the bank was discussing ”restructured financing” with the company.
The lawsuit was amended last month to charge that one of the lenders, Deutsche Bank, purposely interfered with contracts because the bank owns a rival resort also being built on the Strip, which is projected to open in 2010. The company is demanding additional damages from the bank.
”It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work,” said Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas. ”Our goal now is to secure funding to complete this world-class project and restructure our existing debt.”
”It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work,” said Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas. ”Our goal now is to secure funding to complete this world-class project and restructure our existing debt.”
World-class. Now THERE’S a buzzword, a real cliche. Feh. Anyway, this is just so much posturing. This project was doomed to failure from the start and the lenders woke up and realized it.
Fontainebleau in bankruptcy?
I suppose the only appropriate comment here is “Apres moi la deluge”.
“tout ce que vous pouvez manger…$4.99″
Prélude à l’après-midi d’un fraud?
que c’est drôle
Ah! ça ira, ça ira, ça ira
les aristocrates on les pendra!
Fontainebleau in bankruptcy?
Can you say FB?
merde!
Vegas seems to have lots of world-class projects for a third-tier city. They were about to open at the same time as the City Center world-class project in which MGM had a big role, whose last project, MGM Signature, 5 blocks away, has dozens of hotelcondos in foreclosure at prices 70% off peak. The real tragedy is that it is 70% complete. That is somewhat telling as lenders usually don’t want to push a developer borrower into bankruptcy at that point because a completed project is worth more than a 70% completed project even after factoring in the completion costs.
The project may have been doomed to failure, but depending on the care that went into drafting the lending documents, the banks could still be obliged to provide the credit.
If I had to guess, I’d guess that the banks’ lawyers were better than the developer’s lawyers and that it was their “standard agreement” that was used for the basis of the documents so the banks are probably more protected, but that is only a guess. The developer might as well try to get this agreement back in place. It’s not like they are going to get anyone else to fund them.
By the way, was visiting with my friend who has done this sort of work in the past. She said that default events can be as small as modifying a contract without getting the bank’s approval ahead of time. They try to control as much as possible. She also noted that there was a rumor around the city that at least one of the big banks had put out word to get really aggressive on default events. Not to let them slide with small fines or renegotiating a few terms, but just use them to get out of things. I don’t think that developer loans was the context she meant, but if they are doing it in one area there is no reason to think they aren’t doing it in other ones.
polly,
Thank you. I’m the -last- person to rush to the defense of developers but we’re seeing altogether too much of this. Everyone loves… to jump up and down about “moral hazards” where borrowers and businesses are concerned but when a bank pulls the rug out from under a developer ( it’s to be expected )
You’ve got 11 lenders there, ALL acting in concert and arriving at the same conclusion at the same time. I’d be hacked off too.
Don’t get too sympathetic to the developer. If he didn’t want to get the rug pulled out from under him, he shouldn’t have signed a loan agreement that put the edge of the rug firmly into the hand of the banks and specified that the floor underneath had to be kept highly waxed and with no rug pad in use.
I’ve listened to NYC law firm partners scream into their phones about how the terms are standard, I’ve been doing this for 20 years and I’ve never seen a deal without them, etc. If you let this guys intimidate you, you get what you deserve. Sure, it was the only one stop place to get the funding, but he could have funding his project by putting together a whole bunch of equity investors as well. Much harder to put together, but you at least have a chance that their lawyers aren’t way better than yours. And if you get equity investment, they care about the project working the same way you do. In the bubble, people forgot that debt and equity investors don’t actually have the exact same interests. They are similar, but not the same.
polly,
Duly noted, and I don’t want to leave you w/ the wrong impression. I don’t know much about this particular project other than it’s on the Strip ( and as others have noted, doomed from the start )
I just don’t care much for the way banks are playing both sides on this one. They stood to make a lot of money had it panned out. It really is more a reflection of ‘their’ balance sheets than the builder’s. You’ll recall there ‘was’ a time when being a “lender” meant being there for people through thick and thin.
There is no question that they are not in line for any client service awards. But I have to admit my sympathy for a big developer is limited. You can argue that any adult who signs a mortgage should know better than to believe the bank had their best interests at heart, but in reality, the only knowledge a lot of individuals had was that it was really hard to get a loan because banks won’t give you one unless they are sure you can repay it. Maybe they should have known the game had changed, but they didn’t.
These developers have no excuse. None at all. Zero. Zip. Nada. The rules of the game are in the contract. They signed the contract, so they can live with the rules. It was their choice to play a game that was stacked against them.
“You’ll recall there ‘was’ a time when being a “lender” meant being there for people through thick and thin.”
Is there anyone with a brain (human type issue) out there that EVER believed this? Not at all; they were playing the “I can alwways unload it on the next greatest fool an make a whole lot of money” contemporary theme.
Polly:
Why did they stop this at 70%? A complete casino, even empty would bring in a lot more money to the banks
I saw this in my hometown in the early 90’s 1/2 finished housing and commercial properties left to deteriorate and torn down a few years later….such a waste…
Because they thought the amount of money that would come in from the finished casino wouldn’t be enough to offset their risk in going forward with additional lending? Because their accountants already wrote down this loan so finishing it off isn’t going to hurt their balance sheet anymore unless they lend it more money?
When I am being very cynical, I say that you are exactly right. The bank would come out better eventually if they went ahead and funded the rest of construction and the casino was finished and operational even if it wasn’t at full capacity. BUT the banks involved are controlled by executives who are more interested in paying off their TARP money so they don’t have to live with capped salaries so they are using capital for that purpose rather than doing what would acutally be better for the shareholders. If that is the case, the shareholders should boot out the board that allows them do it and vote in one that will fire all the executives.
But only when I am being cynical.
polly/NYC,
Good points both. I would assume any casino that comes on line at this point would be only minimally staffed? Let’s assume the operators have this down to the number of blueberries in a muffin.
One factor perhaps is that at the rate Vegas “re-invents” itself, by the time it is at 100% capacity ( it’ll be dated )
+1 on da’ TARP $.
Polly, I realllly like it when you’re being cynical!
A ‘world class’ project would be paid in cash.
+1
Like the St. Regis in Monarch Beach, Dana Point, CA?? - “)
LA Times has great story.
President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration’s emerging health care overhaul.
So much for “pay as you go”.
The problem is, most people listen to the rhetoric and never actually LOOK at the actions being taken. Only difference between Bammy and his predecessor is a jar of vaseline.
“pay as you go” must be a shortened version of “your grandchildren pay as go live in Florida on a fat pension”.
I laugh at the notion that our children and grandchildren will be paying off our debt-at least in worthless paper money. You hear that constantly. It may be true that they will need to pay in terms of war, poverty, and starvation, though. One dumb*ss at work keeps asking me why I care. The answer is simple. I have children.
Well as a general rule we don’t “pay-off” our federal debt. THAT would imply that we’re paying principal. No, the federal government debt an option ARM or a serial HELOCer. We just roll the interest payments into our current loan.
We were just about to begin doing that when Clinton left office.
… and then that annoying dot-com crash hit.
… and then that annoying dot-com crash hit.
Followed by those pesky wars.
Dang the luck.
crash 1,
Right, and that’s why I’m often left scratching my head when many BB’s -still- haven’t seen enough blood? It’s almost to the degree of a “looter mentality” hoping the chaos lasts long enough to grab a few more TV’s and 12 packs.
Almost?
my money is on war. how else could this possibly play out? we voluntarily accept poverty to pay of our debts as other nations flourish? not likely.
This is the usual historical result.
war … is the usual result
well it is, the clock is ticking on N. Korea, Iran
God bless America!
print as you go
I hope it passes. This country needs health care more than anything. If we get it, people and businesses might feel more secure, and this could help the recovery.
To pay for it, tax the living shit out of anyone making more than $250k. No exceptions.
Here’s a Slim prediction: Some of the people who had been hanging on to crummy jobs for the sake of having health insurance will drop ‘em like a hot rock. Why? Because they’ve been having this entrepreneurial itch that they’ve been wanting to scratch, and what better time than now.
As well they should. Most folks don’t realize how badly they are being screwed by health insurance: that barring a catastrophic illness, it’s cheaper to pay cash.
But “selling the fear” has proven to be an all too effective sales tool.
So you are saying these people have a death wish? lol
WOW…WOW…WOW
I love the strength of your words - hope, if, might and could.
If you get what you “HOPE” will happen, based on what you “with no exceptions” think should happen, then I will give you an ironclad guarantee - your moniker will then be accurate.
“To pay for it, tax the living shit out of anyone making more than $250k. No exceptions.:
And exactly where do you fall in this precise world of paying the piper? I seriously doubt you fall in to the “more than $250k” camp. If not, why are you so vocal about spending OPM on your pet peeves?
“I hope it passes.”
I’m shocked.
Asian markets up, Europe up, looks like another up day for the Dow.
Maybe the huge and seemingly unjustified rise in the markets recently is not driven by expectations that the recession is over, but by expectations that hyper-inflation is almost upon us?
Impending inflation actually is a good reason to buy stocks and stocks tend to do well in inflationary environments. If so then the Dow will soon be back above 10,000.
Zimbabwe had the World’s best performing stock market in 2008.
The Zimbabwe Industrials Index was up 595% since the beginning of the year and 12,000% over twelve months.
There’s something you can bank on!
As messes up as Zimbabwe is, it is not the worst African country by far.
Zimbabwe is a world-class african nation.
Ya gotta point, skroodle. Somalia’s got the “worst” title pretty well locked up. Oops. Wait a minute. There’s Sudan. It’s making a strong case for the “worst” title.
I could go on, but…
Don’t leave me hangin’, Chad
Somalia isn’t even a real country. More like a collection of tribes, all wanting to occupy the same Godforsaken land. There is no central government, no order, just chaos.
How did it do in inflation-adjusted terms?
Officially, there is no inflation in Zimbabwe.
Seriously, Skip is right. Mugabe outlawed inflation a few years ago.
I hope it keeps going up…got some great stocks like Rite Aid at 30 cents a share….
Nice chart on Rite Aid (RAD), Ann. Planning on buying 600 this AM due to you. Got any more tips?
Anything under 2 bucks a share is playing with fire.Why not invest in solid companies with earnings?You are really gambleing with the penny stocks.Good chance you will lose it all.The stocks are cheap for a reason.I used to get faxes from crooks telling me about great penny stocks.Classic pump and dump.Gm is on the pink sheets as gmgmq.Caveat emptor!!!!!!!!!!
People shop in pharmacies in hard economic times. I don’t know why, because they seem to have the worst of everything - nasty food, limited stationary supplies, low quality seasonal items (like lawn chairs) etc. And you can get better deals in personal care items at the supermarket nearly every time if you shop the sales and use coupons.
What ever happened to those pump and dump spams? I used to get them all the time and I loved watching the charts wiggle. The SEC must have really cracked down on them. Too bad the FDA can’t do the same for the pills spams.
bink,
Do you really think the SEC could have controlled that? With the spams coming out of servers in Eastern Europe, etc.? I’m more inclined to think that anyone savy enough to set up a trading account knows better than to take a tip off spam and they just didn’t work. Evidently, some portion of the viagra users are not as sophisitcated….
But you could be right. There one can assume that if the spam went out that the people at the company had something to do with it even if the e-mail itself isn’t traceable to them.
polly,
Actually much of ‘that’ particular brand of fraud ‘has’ moved offshore. There are any number of shadow exchanges that claim to “mimic” the price movements of NYSE-traded issues “With as much as 400 to 1 leverage”!
( Just wire those funds to Belize and we’ll get your account opened up straight away! )
polly,
I only mentioned the SEC because I work in the “biz” and remember hearing something years ago about them starting to crack down by tracing the money. I laughed it off at the time, like I do most enforcement actions against Internet crimes.. but it does seem to have worked. (or something has)
Polly,
“Some Portion” ???? try all of them cause we know what brain they are using.
…….”Evidently, some portion of the viagra users are not as sophisitcated….”
Sorry guys, JK (justkidding)!
“Too bad the FDA can’t do the same for the pills spams.”
Those are specifically targeted at the impotent. I’ve never seen one.
agree with you arizonadude… but I checked out Rite Aid..,their problem was not a money issue but instead a too much expansion issue..they had spread themselves thin with aquisitions over the past couple of years..now they seem to be paying off..besides..you can’t go wrong with a corporation that is mainly “drugs” for the next few years..I already see how much money my Grandma/Mother has to dish out each month..and the amount is getting higher every 6 months..baby boomers will keep these companies happy for a few years..plus..many of them have been smart enough to “detach” themselves from shopping centers that have competition. Today’s Seniors don’t like to drive around and waste gas. Even with the coupons.
There is a new Rite Aid in my hometown that is not doing very well, empty parking lot all the time. New construction, stand alone commercial building. The pharmacists at the Walgreens and Walmart say they have not felt any reduction in their business.
If most of their new stores perform like this, then without a bailout they go TU, because they don’t have the balance sheet or income to continue: shareholder’s equity = -$1.1 billion and last quarter loss of -$2.3 billion on sales of $6.7 billion.
Combo, I need a few month’s to reload my slush fund since I paid off the car/student loan with it. I also have some June deadlines for my grad program and won’t be able to read those books until July. Am I running out of time?
My outlook is that the fall will be another leg down. CRE has to go bust soon.
WHOA! Combo, what happened to the steady hand!? RAD has a ton of debt coming due in Sep.
Somebody call the cops, we have to find out what this poster did with Combo’s body!
You never run out of time Muggy. There’s always another trade.
WHOA! Combo, what happened to the steady hand!?
He’s just trying to prove that cash is king….and taking one for the team to do it
“You never run out of time Muggy. There’s always another trade.”
I know, but I wanna buy when there’s blood in the streets… Grim Reaper, Legion of Doom, all that.
Buying in after a quintuple or more is too much for me.
I hope it keeps going up…got some great stocks like Rite Aid at 30 cents a share….
Rite Aid closed all their locations in Nevada about six months ago…
NEW YORK (AP) — A weak auction of Treasury notes is putting the pressure on both stocks and bonds.
The Dow Jones industrial average fell about 65 points Wednesday after the government sold $19 billion in 10-year Treasury notes. The government had to lure buyers with a higher yield than the market anticipated.
The 10-year note’s yield, which is closely tied to interest rates on mortgages and other consumer loans, jumped to 3.99 percent, a new high for the year.
Investors are concerned the government’s debt load will become untenable, leading to higher inflation and soaring interest rates. Rising rates could hamper the economy’s recovery
College in Need Closes a Door to Needy Students…
Leah Nash for The New York Times
Published: June 9, 2009
PORTLAND, Ore. — The admissions team at Reed College, known for its free-spirited students, learned in March that the prospective freshman class it had so carefully composed after weeks of reviewing essays, scores and recommendations was unworkable.
Money was the problem. Too many of the students needed financial aid, and the college did not have enough. So the director of financial aid gave the team another task: drop more than 100 needy students before sending out acceptances, and substitute those who could pay full freight.
The whole idea of excluding a student simply because of money clashed with the college’s ideals, Leslie Limper, the aid director, acknowledged. “None of us are very happy,” she said, adding that Reed did not strike anyone from its list last year and that never before had it needed to weed out so many worthy students. “Sometimes I wonder why I’m still doing this.”
That decision was one of several agonizing ones for this small private college, celebrated for its combination of academic rigor and a laid-back approach to education that once attracted Steven P. Jobs, the chief executive of Apple, to study on its leafy campus minutes from downtown.
With their endowments ravaged by the financial markets and more students clamoring for assistance, private colleges like Reed are making numerous changes this year in staff, students, tuition and classes that they hope will tide them over without harming their reputations or their educational goals.
Reed and others have admitted more students to bolster revenue with larger classes. Many are cutting costs by freezing or reducing salaries, suspending hiring and postponing building maintenance and construction. And the cost of attendance is rising; in Reed’s case, by 3.8 percent, to nearly $50,000 a year for its 1,300 students.
But Reed has put off drastic measures like spending more of its endowment, closing some departments or selling some real estate near campus. Instead, college officials are counting on the economy to turn around quickly, as became apparent when they allowed a New York Times reporter to sit in on budget discussions this spring.
Charlie Daniels
A poor girl wants to marry, And a rich girl wants to flirt.
A rich man goes to college, And a poor man goes to work.
A drunkard wants another drink of wine, And a politician wants a vote.
I don’t want much of nothin’ at all, But I will take another toke.
‘Cos I ain’t askin’ nobody for nothin’, If I can’t get it on my own.
If you don’t like the way I’m livin’,
You just leave this long-haired country boy alone.
Ahahahaha
Oh thats great. I would love to see more colleges deal with true market forces in the coming years
They should spin it as a ‘real world’ education for the kids who might have gotten in if they could afford it.
Reed College is where Steve Jobs went to a couple classes at.
And it spite of it’s ultra-liberal label, virtually everyone “I” have ever worked w/ that came up through Reed was not only extremely intelligent, I also found them to be highly ethical.
It’s sad to see this but as max4me notes, this was a long time coming.
When we were looking at colleges in high school, my buddy nicknamed it “Weed College”
Never really called it Weed College (it was more a of psychedelic drug place, ’shrooms,etc.) . I always referred to it as Greed College. Got my undergrad there years ago.
After the “small-town” school paved over the tennis courts and running track to create parking for the larger number of students they were letting in to support all the new buildings and dorms they built, etc. (years after I graduated) I quit giving them any donations and told them to quit calling me. I picked up the “Greed” nickname while there though, not afterward. The following years just sealed the deal. Ponzi to the max, like everything else in this country. More people in our cities, more businesses, more students…
Great education though! It’s definitely not a glorified high school.
“Now his life is full of wonder but his heart still knows some fear
Of a simple thing he cannot comprehend
Why they try to tear the mountains down to bring in a couple more
More people, more scars upon the land”
“…I’ve seen it rainin’fire in the sky
Friends around the campfire and everybody’s high…”
*giggle *
Hey, speakin’ of, where’s my exciting botanical got to? I swear I had it a minute ago!…
( I took a few days off, see. )
“…academic rigor and a laid-back approach to education that once attracted Steven P. Jobs, the chief executive of Apple”
Time to send out that “special” alumni letter…
A nearby neighbor did part of her undergraduate work at Reed. While she is a very bright young lady, how to say this, she has problems. Of the in-the-head variety.
The rigor/laid-back approach was exactly the wrong thing for her. She needed detailed feedback on how she was doing, and Reed just wasn’t into that.
After a period of getting her head back together, she finished her bachelor’s degree at the University of Maryland.
yep, a friend’s son nearly flamed out there. Depression is a big issue on many campuses, but esp. w/Reed.
OTOH, longtime family friends sent their middle child to Reed. He loved it. So did his parents.
Can’t depression be linked to excessive drug use?
Wonder if a liberal school where drugs are more prevalent has higher incidents of depression among the student population?
I can point to the University of Michigan as an example, robiscrazy.
‘Can’t depression be linked to excessive drug use?
Wonder if a liberal school where drugs are more prevalent has higher incidents of depression among the student population?’
Couldn’t this be one of those confusion of causality/concurrency situations?
I don’t know much about it, and I admit this right away, so don’t all you doctors jump on me with criticism, but I have observed that depressed or anxious or troubled people are most always really eager to dose themselves up with whatever is handy.
Already told my daughter…stick close to home with the getting your degree..we can easily pay for it and you won’t be in debt when you finish..unless its the top 5 colleges in the country..a 4 year degree is a 4 year degree..it what you do with it that counts!!
One change I love regarding the credit cards..is that “kids” under the age of 21 will not be able to get a credit card unless they have a co-signer! Smartest thing they could do..most 18 year olds don’t have enough reponsibility to tie their own shoe much less deal with the understanding of the “future” chaos of bad credit decisions..
“But Mom (whine) why can’t I have a credit card? My best friend Snotleigh has one….”
All kidding aside, I wonder if they’ll start marketing credit cards like the coolest new vid game or cell phone. Creating want so the kids can bug their parents. And how many parents will give in?
When I wuz a pup, my mom gave me a credit card that operated off her credit, but had my name on it. I’m ashamed to say I did use it during college more than I should have and she only complained once. Then one day, I don’t know what happened, but I got religion and cut the damn thing up and sent her the pieces with a note thanking her for being so decent to me.
Palm,
I would like to buy you a beer and shake your hand. You’re a rare tree.
Dang, Rancher, you brung a tear to my eye. My mom deserves the beer, she was indeed a rare tree herself, something it took me years to appreciate.
Folks, if you still have parents living and overall they done you good, please try to make your peace with them now and set the bad memories aside and praise them to the highest all that you can. Try to bring up the good stuff, the good memories, etc. Try to ignore their foibles and Lord knows, it’s not always easy. But well worth it. Try to say to them now those things you won’t be able to say when they’re gone.
I second Rancher’s sentiments, except that Palmetto is a rare bug. And Palmetto describes my interactions with my aging mom beautifully - she’s annoying, but she’s all we have left, so we glory in her craziness!
“…cut the damn thing up and sent her the pieces with a note thanking her for being so decent to me.”
Sounds like you “maximized” your education!
Best thing I ever did was move my teenager out of SFL/ or “Snotleigh” ville.
Use to go to the mall with her only to find the little Snotleigh, during the housing boom, drag out 4 credit cards and ask the cashier to “pick one!” Little Snotleigh hadn’t even hit puberty yet!!
Drinking age 21. Credit card age 21. Why is the voting age still 18?
Not responsible enough to drink or use credit, but responsible enough to vote? We should change the voting age back to 21 and make 21 the official end of childhood.
I think it was from back when we had a draft there was an argument that if our leaders can take and you send you to serve and die in war, you might have an interest in voting for said leaders.
Personally I would like it to be all or everything.
That was it exactly, the draft.
I doubt that we’ll stop allowing 18-year-olds to volunteer for military service, but how about the idea of giving the vote to ONLY those 18-year-olds who do volunteer? On the other hand, I’m one of those right-wing nuts who usually wants to TAKE AWAY the vote from public employees! (Conflict of interest department.) I guess that disenfranchisement would have to include military personnel, maybe even Social Security payees.
So we don’t think our kids are bright enough to use credit or drink, but we do think its perfectly fine to let them make the decision to charge a machine gun nest. Nice.
I had a buddy who was ex-Army. Back in the day he told me there was a reason they liked 18 year olds in the Army. Cause 35 year olds don’t charge machine gun nests.
I think you’re on to something with not allowing people on SS to vote. No one on the govt dole should get a vote, period end of story. SS? No vote for you. Medicare? No vote for you. Medicaid? No vote for you. EITC? No vote for you.
If instead of being a responsible citizen and doing your duty to provide for yourself you live on the largesse of the state, you shouldn’t have a vote. Only productive citizens should be able to vote.
No one on the govt dole should get a vote, period end of story.
I floated an idea like this to friends..tho I think those on the dole should get a fractional vote..say 1/2. (I’d say 2/3, but that leads into interesting historical territory).
I would disagree with you that SS is “on the dole” though. It’s supposedly something we pay into with the expectation of receiving in the future. Very different from food stamps, etc.
I love that, rearden. Why don’t you post here more often?
The Army and Marines have it all wrong. They need to stop drafting 18 year olds, and start drafting 40-50 year old divorcees. Or just make it easier for us to volunteer.
-Send us overseas…..anything to get away from the ex and the pain in the a$$ family would be worth it. Just get us out of the house.
-We’re already pi$$ed off at the world….no need to brainwash us into becoming mindless killers……we’re halfway there already. Just have the ex leave us bitchy voice mails once a week
-18 year olds have all kinds of things to life for……..us old guys not so much.
The Air Force is the smartest bunch……..they send (mostly) their officers out to be shot at.
One of my old Sgt’s used to swear that both he and the US Army would prefer it if all it’s draftees were all ORPHANS.
That would have resulted in less letters from worried parents and nosy congressmen plus nobody would miss us when we got zapped.
He was actually a marshmellow once you got to know him and really quite reasonable once the shooting started.
He was actually a marshmellow once you got to know him and really quite reasonable once the shooting started.
Goody. That really cheers me up.
*falls off chair giggling *
Sorry.
Actually young people 18-21 haven’t shown much interest in voting. It’s old crotchety grumps like me that always get down to the polls to vote for other old crotchety grumps - or maybe even an Alaska governor.
Why stop with repealing the XXVI Amd.? How about repealing the remaining “Progressive Era” amendments XVI, XVII, and XIX?
one time on that “man show” on the comedy channel they had a petition to end women s suffrage…Amazing quite a few women singed it.
AZ_lender is right thought the youth vote aint that powerful a force
the local version of ACORN does a good job of rounding them up on election day and busing them to the courthouse where they can register and vote at the last minute. All it takes is a little pizza and other freebies.
Amazing quite a few women singed it.
Freudian slip there?
“the local version of ACORN does a good job of rounding them up on election day and busing them to the courthouse where they can register and vote at the last minute. All it takes is a little pizza and other freebies.”
the local version of the christian church does a good job of rounding them up on election day and busing them to the courthouse where they can register and vote at the last minute. All it takes is a little bible thumping, and other freebies.
the local version of the christian church does a good job of rounding them up on election day and busing them to the courthouse where they can register and vote at the last minute. All it takes is a little bible thumping, and other freebies.
Do they taxpayer money to do that? Didn’t think so.
I’m there. Both my daughters are now of legal drinking age ( but under my ‘expert’ supervision ) have been drinking, responsibly, for years.
Talk w/ anyone in that age group and they will quickly tell you it’s much easier to score dope than buy beer. Say what you want but I’m all for going back to 19 for beer and wine, and 21 for hard liquor.
Oh and make WI 18 for everything!
Nonesense. Given what’s happened in this country, the retired are the ones who shouldn’t be allowed to vote.
And a high-ho-hardy +1 to YOU sir! LOL.
Todays economic problems, are not the result of old people voting. They are the result of the younger generations voting for a personality, rather than experience The democrats have been in power since 2004. It was the democrats, who raided social security, it was the democrats who balked at reighing in sub-prime lending, it was Clinton, who had Bin Laden in his sights and didn’t shoot. It was the democrats who passed NAFTA, the prefered trade status with China and the tax laws making it easier to ship American jobs off shore. It was the democrats that gve us the dot com bomb.
If you think Bush was a do nothing president, your right. Everything that is happening to our economy today was voted for or caused by the democrats. Reap what you sow. Vote democratic!
Gee, and I thought is was all St. Reagans fault.
Oh dear.
2004 - Democrats barely achieved parity in Congress.
1979-1989 - USA helps fund Al Quaeda. Who were the presidents back then?
Bush Jr also knew where Bin Ladin was and didn’t “pull the trigger.”
“Following diplomatic negotiations dating back to 1991 between the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H.W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it.” - Wikipedia
The dot com bomb was due to insane speculation. I was there. I was one of the players.
It was the Bush administration that wanted to invest SS in the stock market!
So thanks for playing. Care to try for best of 100?
“Vote democratic!”
You mean Vote Democrat. There is nothing democratic about the Democrat party.
RE: make 21 the official end of childhood.
Yeah, and while you’re at it, all state’s should shit-can the acquisition of a driver’s license until kids have graduated from an accredited high school and can pony up a W2 .
Benefits-
Reduction in insurance costs.
Reduction in high school drop-out rates.
Reduction in PITA traffic congestion.
hd74man,
Sorry but I see the 20-somethings ( IN… a lot of cases ) to be infinitely more annoying than the teens. In years past people in the work force kept their vigor and dedication until around 35-40.
NOW the first time they don’t get the full 3-day weekend, they’re “disillusioned”. IMHO.
Perhaps we should simply stop pointing guns at people and let them live their life how they want? Hold them accountable for their mistakes, but don’t deny them freedom categorically.
Who are we to judge an individual’s maturity. There are some 13 year olds that are far more mature, hardworking, and responsible than many people over 30! To deny them their God-given liberties because others born the same year as them abuse their liberties is WRONG.
It’s an honor to return your “+1″ from the other day, VTD.
One nice think about living in the middle of nowhere…..there aren’t as many busybodies trying to enforce dumba$$ rules.
My cousins were both farm boys….got motorcycles at 11, and their first cars at 13. Technically, the age limit was 14 for driving to/from the fields, but back then the local cops were a lot more “flexible” (Hey……if you looked 14, you must be 14………)
Same with “concealed carry”. Just about everyone had some kind of “concealed weapon”……just don’t keep it somewhere easily accesible from the driver’s seat, or keep it unloaded.
And I remember riding into town in my grandma’s Ford Torino………80mph the whole way. But everyone knew that if you crashed out there, it might be a couple of hours before someone came down the same road and found the accident.
I personally don’t believe the current nanny-state is an improvement.
State of CA is moving towards or has already adopted a legal driving age of 18. I think if you are 14 or younger you fall under the new law.
For an undergraduate degree, with few exceptions, there is no reason for kids not to go to their own state’s state college or university.
dude you really are out of touch, the whole idea of college is not “learning” its about the “experience” exploring your gay side, watching your girlfriend explore hers….I really dont miss it that much
lol…true
Back in the day you had to go to art school for that kind of learning experience, seems it’s gone mainstream.
I’ll say it has. I am so sick and tired of the self-proclaimed artistes flattering themselves for their “shocking,” “cutting edge,” “pushing the envelope,” etc. “pieces” of drama, sculpture, poetry, or any other art with a gay theme. This is no homophobic screed; some of my best friends really are. But come on. We get it; you’re gay; big deal. Your life’s not a “piece”; or at least no more a “piece” than mine.
I usually get a laugh out of my more intelligent students when I do my shtick about once a semester on performance artists. I always wind it up by saying, “If they (the performance artists) really knew what it would take to shock me, it would curl their hair.”
Man I so went to the wrong college!
I think I went to the wrong decade!
In state tuition is sometimes more expensive than out of state.
Ummm…where? You are going to have to give us a citation for that one.
My daughter got scholarships from U of Ill C/U that brought the costs to below instate U of Maryland. So she went there…and it was good.
My daughter got scholarships from U of Ill C/U
UIUC hands out scholarships? She must have been a competitive athlete or a minority, because they sure don’t hand them out for academic prowess….
Very white chick…not competitive athletic….but very bright. I think that they wanted to increase out of state students with high SAT…both are national ranking criteria.
Schools in Texas are pretty cheap for out of staters.
Stephen F Austin located in Nacogdoches, Texas is less than $4,000/semester for students from Arkansas, Louisiana, New Mexico and Oklahoma.
http://www.sfasu.edu/controller/businessoffice/students/tuition_calc.asp
To qualify for in state tuition in Texas you only have to live in the state for 1 year(note you don’t have to actually live in Texas to be a resident, Bush Sr rented a hotel room in Houston while he was President in order to keep his Texas residency) so the smart students only pay out of state for the 1st year.
“there is no reason for kids not to go to their own state’s state college or university.”
I went to a community college for one year. Some of the best professors I’ve had were during at that community college. I took Econ 101 from a traffic engineer for Monroe County; he was amazing.
I have some issues with ivory tower types. At HBB we all know about “economists.” If your “research” doesn’t align with reality, what exactly is the point?
“were during at that”
Self pwned!
Lol, you win some, you lose some.
A few months ago, I was working on a volunteer project with a Pima Community College faculty member. As we were huffing and puffing and shoveling several tons of gravel for a community landscaping effort, we got to talking about community colleges vs. universities.
He mentioned a study about the success rates of kids who started out at community colleges vs. those who went straight to university. Turned out that the community college starters had much higher retention rates (meaning that they completed their university degrees) than did the straight-to-university crowd.
Probably has something to do with usually spending freshman and maybe sophomore year still living at home. The undergrads showing up drunk to class at 9a.m. were invariably freshmen. The ones showing up hungover on wed were sophomores. Those types didn’t make it to the third or fourth year.
I would say the ones showing up to class drunk at 9am might have been the ones to make it through. The kids who didn’t make it through didn’t go to class hungover.
A lot of Community College profs teach as a sideline to their regular jobs. They have a lot of practical experience, know what to teach, and can demonstrate why what they are teaching is important to retain.
Took a “Intro to Law Enforcement” course a long time ago. Instructor was a Lt. in the local Sherriff’s department. Was excellent in illustrating how the foundations of law and law enforcement affected current practice.
I was talking to a guy the other day who would like to send his kids to Adventist U here in socal. He said members only get about a 10% discount.
I told him he should convert, at BYU we get 50% off. ($2040/sem.)
I’m not sure I agree with the CC thing. If somebody is dumb enough to give ‘em a card… Bankruptcy laws are there to prevent this sort of stupidity on the part of lenders. Since the penalty is only bad credit…. What does a 20 something need good credit for anyway? I didn’t get a CC until I was in my 30s.
What does a 20 something need good credit for anyway?
Someone has to live/work/play in those uber modern new “lofts” in our downtown areas, stumbling distance from the city’s hottest bars and nightlife. Mom’s guaranty aint what it used to be.
That CC law that passed last month includes a provision that those under 21 will need an “adult” to co-sign and be responsible for the debts incurred.
There have been a couple cases where the kids are given credit cards via college then the kids run up huge debt. Then the kids kill themselves because of their debt (supposedly that is the reason). This is a good way to get paid even after they self-terminate.
You have to be pretty depressed to think that suicide is a better alternative than bankruptcy. Back when I was in school there was a near zero percent chance that any lender would give a CC to a college student without their parents signing for it. This wasn’t due to government regulation, just banks wanting to get their principal back.
College kids were the growth market. After they used up the college kids, senior citizens became the next growth market. Gotta keep growing for wall street.
When I was in college 1971-1975 at UCSC, I got a BofA CC - but they gave me the lordly limit of $50.
Sort of like training wheels on a bike.
Exactly VaBeyatch. Same thing that created NINJA loans and “zero down.”
this says it all…
http://www.nytimes.com/2009/06/08/nyregion/08trustafarians.html?_r=1&ref=patrick.net
Our own Ben Jones posted an abbreviated version of that article on this very blog a few days back.
Raising a debt adverse child is one of the best things a parent can do.
The “price of money” is often too high.
Taipan Daily
-Justice Litle
The Rise of the Far Right.
A surprising new trend has arisen from the EU-wide elections held in the past few days.
“Conservatives raced toward victory in some of Europe’s largest economies Sunday,” the Associated Press reports, “as initial results and exit polls showed voters punishing left-leaning parties in European parliament elections in France, Germany and elsewhere.”
The rise includes not just the right, but the far right. In Britain, the British National Party – an openly racist party that only admits whites – gained a seat for the first time. In various other countries, openly nationalist parties gained fresh power either for the first time also, or for the first time in quite a long while.
“It is not clear why a chunk of the blue-collar working base has swung almost overnight from Left to Right,” says Ambrose Pritchard of the U.K. Telegraph. “But clearly we are seeing the delayed detonation of two political time-bombs: rising unemployment and the growth of immigrant enclaves that resist assimilation.”
A Poisonous Stew
There are still other problems in Europe we haven’t really touched on, like the Spanish real estate markets headed for freefall, the dire state of the Irish economy (joke du jour on the Emerald Isle: What’s the difference between Ireland and Iceland? The letter ‘C’) and the toxic leverage still lurking in European banks.
Put all this together, and what you get is a truly poisonous stew. Half of Europe is still committed to fiscal stimulus and economic coordination… while the other half has swung inward and hard right, towards a nationalist and isolationist stance, at a time when exports are weak and the whole continent is in trouble.
If Pritchard is right in his gloomy assessments, we could be witnessing a scenario where steely fiscal discipline, though a virtue early on, becomes a terrible vice this late in the game. “The irony is that those fretting loudest about inflation may themselves tip us into outright deflation, with all the perils of a debt compound trap,” Pritchard opines. “It is Angela Merkel who plays with fire.”
By now the trading takeaway should be fairly obvious. The dollar is not the only paper currency with crash and burn potential.
This article hints at a trend that’s still in evidence in America. While it appears that much of the country has moved on from the illegal immigration/lack of assimilation issue, it’s alive and kicking.
Matter of fact, here’s a headline from today’s Arizona Daily Star:
Bills make immigration laws harder to ignore
GOP-led efforts prohibit local policies that prevent enforcement by police
It’s nice to see AZ getting serious about the issue. Perhaps CA, and other states with similar problems can follow suit (which is almost all states, now). The willful lack of enforcement of laws against illegal immigration is criminal in an of itself. This problem needs to be addressed as it is destroying jobs, salaries, and overall quality of life for everyone in this country.
Joe Arpaio for President.
Good Lord, that thug? You seem like a pretty reasonable person az_lender; I’m going to assume you were being sarcastic.
How come there are NEVER any articles with the political titles to parties of “the left” and “the far left” - never have seen it…
That’s a good point. Here’s another. Whenever you hear about crazy ass people blowing up buildings, or committing hate crimes, why are they ALMOST ALWAYS right wing groups?
South American had the leftist guerrillas, but the other side had right-wing death squads. In fact, I cannot remember even one time reading about a left wing death squad. Nope, the crazies always appear to be on one side - the far right.
It is the same in any country.
If you think about it, what characterizes these far right hate groups? It is a complete lack of tolerance for any other views. It is basically hatred. Take Flush Limpdick, for example. He spends all day spewing hatred toward other people. And people that listen to this idiot become haters themselves. And this leads to skinheads, Timothy McVeigh, and groups like the KKK taking out their hatred on other people. All these groups are right-wing hate groups.
I don’t know of anything like this on the left. It is a right-wing problem, regardless of country.
Don’t get me wrong. I have nothing against conservatives, and other sane people. But the far right is dangerous. These people resort to violence way too often.
Pray to God they don’t get the same brand of right wing bullshit we got. Otherwise they are going straight back to the stone age. But I seriously doubt it. Their far right is closer to our center. Only the USA is crazy enough to allow right-wing politics to run the show. Hopefully this debacle will warn the rest of the planet off.
Europe’s movement farther right has been ongoing for years.
“Conservatives raced toward victory in some of Europe’s largest economies”
About time…but could be too late to save some of those places.
Elle Macpherson’s home hit by slump
June 10, 2009 02:30pm
A PROPERTY slump has forced supermodel and businesswoman Elle Macpherson to cut $4 million from the asking price for her London home.
British reports say she has been trying to sell her Notting Hill mansion for more than a year as she considers a move back to Australia.
Pictures: The amazing Elle Macpherson
Pictures: Elle gets intimate on the net
The seven-storey, six-bedroom home was originally put on the market for 9.5 million ($19.3 million) in the middle of last year.
It failed to sell as the prestige property market was hit hard by the global economic crisis.
Estate agents Bective Leslie Marsh recommended an initial $1 million price cut in January, but the property still could not be shifted.
Same for Mel, dropped the price 10mil. no takers…
If you ever fancied snapping up a luxury property worthy of a movie star, now might be a good time.
Mel Gibson has reportedly dropped the asking price of his Tudor-style mansion in Greenwich, Connecticut, by just under $10million over two years as the credit crunch bites.
The soon-to-be-divorced star first put the home on the market in the summer of 2007 for $39.5million.
I hadn’t thought about Elle in a long time…
I didn’t know this about her:
“She speaks French fluently, and is conversational in Italian and Spanish” …magnifique!
I believe Dan Marino also threw in some bones to sweeten his home sale.
Celebrities are one of our major exports. The treasury should really be doing something to help these guys out.
There should be a new fed program:
The CLAP: Celebrity Liquidity Assistance Program.
HERPES: Help Elle Regain Principal Equity and Stability
CRABS: Celebrity Recovery Assistance for Big-time Stars
Really, what’s worth more, GM or Elle McPherson?
Seriously, these days, the answer to your question ain’t as clear as it used to be…
Asparagus,
You are really spot on today. In fact, one could assert that celebrities are our -only- export.
I’ve always felt that their salaries ( as oft reported ) were greatly exaggerated.
I would also venture to say that if stupidity, apathy and irresponsibility were commodities, we would be one of the world’s leading exporters.
Then again “celebrities” pretty much sums it up.
cobaltblue shoots…. HE SCORES!
Good one CB!
But we already have AIDS: Assistance for Dumb Son-of-a-b*tches.
For which, I qualify. Forgot the ‘I’…
That’s rich, asparagus. One may cast aspersions on politicians, but when it comes to celebrities, one need only throw a little asparagus.
Russia Switch
Russia’s central bank may switch some of its reserves from U.S. Treasuries to International Monetary Fund bonds, the bank’s first deputy chairman, Alexei Ulyukayev, said in Moscow today. His comments were confirmed by a bank official who declined to be named, citing bank policy.
Finance Minister Alexei Kudrin said last month that Russia planned to buy $10 billion of IMF bonds using money from its foreign reserves.
Russia holds $138.4 billion of U.S. debt. China is the largest U.S. creditor, with $767.9 billion. The U.S. government must rely on foreign investors to sustain record borrowing.
Treasuries have fallen 6.2 percent this year, according to Merrill Lynch’s U.S. Treasury Master Index, as President Barack Obama borrows record amounts to stimulate the economy. The securities haven’t posted an annual decline since 1998, according to the index.
The government may borrow $3.25 trillion in the fiscal year ending Sept. 30, almost four times the $892 billion in 2008, according to primary dealer Goldman Sachs Group Inc. The budget deficit is projected to increase to $1.85 trillion in the year ending Sept. 30, equivalent to 13 percent of the nation’s economy, according to the nonpartisan Congressional Budget Office.
Inflation Outlook
Obama signed a $787 billion, two-year economic stimulus plan in February. The Fed pledged to buy up to $300 billion in Treasuries and $1.25 trillion of bonds back by home loans. All told, the government and the central bank have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
Longer maturities are leading losses in the Treasury market in 2009, indicating investors are demanding more yield because of the threat inflation will quicken in coming years.
Thirty-year bonds handed investors a 28 percent loss this year, versus 11 percent for 10-year notes and 0.4 percent for two-year securities, according to indexes compiled by Merrill Lynch & Co.
The difference between rates on 10-year notes and Treasury Inflation Protected Securities, which reflects the outlook among traders for consumer prices, was 2.02 percentage points, a nine- month high.
Shorter maturities, which are more sensitive to what the Federal Reserve does with interest rates, are outperforming as the central bank keeps its benchmark near zero. Policy makers cut their target for overnight loans between banks to a range of zero to 0.25 percent in December.
To contact the reporter on this story: Dakin Campbell in New York at dcampbell27@bloombger.net
“Russia’s central bank may switch some of its reserves from U.S. Treasuries to International Monetary Fund bonds”
Oh, that’s a big improvement. ::stifled snicker::
If that trend gets moving the dollar goes the way of the krona.
Has anyone else noticed the yield on the 10 year Treasury bond approaching four percent? Rising interest rates will make this housing market even worse.
Put a fork in the green shoots!
How high will the yield go?
Dunno, but I vaguely recall the 30-yr T-bond yield reaching 14 pct or so in the early 1980s before the bond market (and inflation concerns) finally settled down.
Yes, I vividly recall the 8% long bond trading down to 50 cents on the dollar before Volcker and gang successfully intervened.
Being short bond futures was the fastest way to make money (without a gun) in those days.
It’s always faster to make money by pushing paper rather than with a gun.
“Being short bond futures was the fastest way to make money (without a gun) in those days.”
TBT
TBT: the only thing in my so-called “portfolio” that’s doing well.
“…the 30-yr T-bond yield reaching 14 pct or so in the early 1980s:
My hero! 14+% = Kill the beast!
“14%”
Remind me again, where is the Fed getting to funds to buy down the bond rates?
Wait I just found the answer, they are just doing ledger entries electronically, no worries.
Dollar devaluation, it’s what’s for dinner.
I’ve mentioned before, people who bought when mtg rates were at 14% really did well. Not only were home prices pushed down at purchase, but when rates started going down, they had the benefit of rising home prices and the ability to refinance all the way down, until their monthly payments became a fraction of what they had been.
IMHO, getting a mortage at 10% is really getting a mortgage and an option (at some point you may have the option of refinancing). Getting a mortgage at 4.5% is only a mortgage at 4.5%, I don’t think you’ll get the chance to refi.
My personal belief is that it while it will establish lower equilibrium prices based on historic ratios (which we will gravitate to over the years), rates rising this year will drive up demand for housing this year. As more and more ppl realize that we are heading into hyper-inflation it creates that sense of urgency that Realtors love (i.e., the tax credit is expiring, rates are going up, sales are up, you better jump in now before this window of opportunity shuts). There is not a question in my mind that these factors will create higher sales this year than would otherwise exist.
is that it while it will = is that while it will
I should add that it will, however, make this market worse in terms of shortening days between existing mortgage rate resets and payment default.
“There is not a question in my mind that these factors will create higher sales this year than would otherwise exist.”
Have you been hanging out at the doublespeak-easy saloon?
Reuters: “President Barack Obama said on Monday accelerated stimulus spending would create or save 600000 jobs over the next …”
Where is the double speak? I know several ppl that purchased this year simply because of the tax credit and the uptick in interest rates, and the sales statistics coming in confirm this is a national trend. Many ppl dont believe prices will fall much more and want to lock in because they think that, even if prices remain the same (we are setting aside those that think there will be real declines as they are not looking now in any event), higher rates and loss of the tax credit will result in them not being able to afford tomorrow what they can afford today. In addition, none of this conflicts with my view that because of higher interest rates the price at which housing should sell for should be lower in a higher interest rate environment. That is why ppl can make or lose so much money in the housing market, or the stock market for that matter, taking advantage of, and understanding deviations from, current pricing and equilibrium pricing based on fundamentals. Never assume that the reality will match optimal equilibrium at any given time. Although optimal equilibrium is often useful in forecasting long term trends it can kill you in the short term.
If inflation kicks in, this is the best time to get in debt. I’ve never done things that way, nor will I, but my Argentine inflation anthenae are going bananas. I wouldn’t be surprise if many people thought “now or never”. It’s a natural reaction. In inflationary times, tangible things tend to keep their value.
Qualification.
Qual-i-fi-ca-a-tion.
It’s making them wait. They’ll keep on wa-aiting.
Tim, you need to balance your beliefs with the fact that record numbers are unemployed, and we are not seeing wage inflation anytime soon.
When and if hyperinflation hits, it will land in all the “wrong” places.
The pinch is already on, nothing turns up the heat like higher gas prices.
Wait, what’s that the pols say? At least gas prices aren’t as high as last summer?
Ah, the “less worse” mantra. Yeah, I’m sure that’s why for centuries people left everything to come to America - becuase it was “less worse” than their homelands.
I’ve heard “less worse” and my other favorite, “could be worse”, all my life.
I knew the first time I heard it this country was in trouble.
Sell the fear!
I was merely stating that an uptick in rates from a clear bottom is more likely to spur demand for housing in the short term rather than curtail it. The comment had to do with the impact of rate increases alone. Yes, there are other variables at play, but those were not raised in the initial post.
Tim,
( FWIW, “I” get it )
+1. Tim, you have a good point. Fear of missing the bottom will spur some knife-catchers to move now.
You weren’t unclear, Tim. I agree that the frantic shoveling (tax credit and low rates) has managed to move some sh!t (over priced housing). I think we all agree housing prices are like a giant unbalanced manure pile collapsing. The frantic shoveling only forestalls it briefly and it’s chief achievement will be providing amusement for any watchers as the shovelers get buried.
A sense of urgency is the key element in desperation sales technique. I can’t imagine it working on anyone here but I’m sure there are marginal buyers who will respond, sadly enough.
exeter,
Again, just connecting the dots, and I don’t know what specific area Tim is referring to, but at certain entry points, things simply sell themselves.
DennisN’s article linked below on Palmcaster shows prices -below- 1989 levels. ( Loved the Milli Vanilli ref. btw ) and now the engineer’s 29 y.o daughter has a window to purchase a home for less than what her father paid in 1989, when I still had a full head of hair.
If the mort. spigot gets turned off entirely, what good will the lower prices do her?
“Has anyone else noticed the yield on the 10 year Treasury bond approaching four percent? Rising interest rates will make this housing market even worse.”
Correction: Rising rates will make this housing market even better
30yr.fixed w/ 20% dwn at 5% is $859.00 P/I payment on $200,000 house
30yr.fixed w/ 20% dwn at 6% is $863.00 P/I payment on $180,000 house
There goes the eight grand for first time buyers, +12
Oh… I don’t think that is actually incenting anyone to buy that wasn’t -already- considering it?
For such a direct correlation to apply you would have to assume there is fixed demand and supply for housing, both sides are in a must close immediately mindset, and that every buyer has a max and will pay their max. Otherwise, the result is far less clear. A general trend in that direction is to be expected. The deviations, however, could be large.
The subject correlation being that the house in your examples would have a market value of $200k in scenario 1 and a market value of $180k in scenario 2 because of the change in rates. Also, note, however, that the person is better off in scenario 2 because he pays the same debt service, but owes $20k less to his lender when he sells, not to mention he has a better expection of being able to refi later into a lower monthly payment.
So maybe a rational buyer would spend a little more for the “option” to refi later. But I think the general point is valid. The increase in rates shifts the _entire_ demand curve for the set of FBs who are buying at their margin of affordability.
Now we could argue about how many FBs are buying as much house as they can afford these days. But for those who are, their aggregate demand-curve definitely shifts with rates.
You are a true purist.
Seriously, though: it’s hard to imagine that if rates move up significantly, that the affordability change will not have an affect on sales. Even if it does not affect total sales volume, it should affect the price points at which the sales occur. In other words, it should cause the higher-end of the market to get pummeled.
Yes. It was a compliment.
The 10 year yield has been rallying from 300bips for weeks now.
Approaching 4 percent, no I hadn’t noticed. I’m sure the Fed will take care of it.
We often conjecture here about what will become of all the vacant, overvalued houses that dot the U.S. landscape. Apparently Phoenix gangs have found one money maker: Using them as “drop houses” to imprison illegal aliens in an effort to extract ransom money.
Wall Street Journal
* U.S. NEWS
* JUNE 10, 2009
Immigrants Become Hostages as Gangs Prey on Mexicans
By JOEL MILLMAN
EL MIRAGE, Ariz. — A whispered 911 call from a cellphone early one January morning brought police to a home on West Columbine Drive in this Phoenix suburb. Inside, they found more than 30 half-naked and shivering men — prisoners, police say, of a gang that had smuggled them in from Mexico.
Beaten and threatened with a 9-mm Beretta pistol, a local detective’s report said, the men were being shaken down for as much as $5,000 apiece, a ransom above the $1,000 that each had agreed to pay before being spirited across the border.
Such cases are increasingly common in Phoenix, which is gaining notoriety as the kidnapping capital of America. Authorities blame forces ranging from Mexico’s rising drug violence to a gang takeover of the immigrant-smuggling business.
Another factor: the volatile housing market in the city, which has left it strewn with thousands of rental houses on sometimes sparsely populated suburban blocks, handy places for smugglers to store either drugs or people. The police call these “drop houses.” They say federal, state and local authorities discovered 194 such houses in 2007, then 169 last year and dozens more so far in 2009.
While most of Phoenix’s abduction cases relate to the drug trade, as dealers snatch rivals to demand ransom or settle debts, increasing numbers involve undocumented migrants. “Of 368 kidnap cases last year, 78 were drop-house cases involving illegal aliens,” says Sgt. Tommy Thompson of the Phoenix Police Department. Officials say that in 68 alleged drop houses identified in the first five months of 2009, authorities found 1,069 illegal immigrants.
PB,
Just sad. Who’d have thought there was so much money in kidnapping people who’s entire worldly possessions could fit in a backpack?
Prior to the Lindburgh baby and Patty Hearst can anyone think of any other kidnappings?
They just got in the country! They haven’t started building houses yet. The gangs need to give them some time.
There was quite the money to be made in kidnapping Africans and selling them into slavery in the 1700s-1800s.
Exactly. Kidnappers value victims not based on their current possessions, but on the NPV of their future labor.
Helen of Troy?
Trafficking in people is quite the business here in Arizona. A few years ago, there was a shootout on Interstate 10. In traffic. Between Phoenix and Tucson. The ruckus was caused by rival human trafficking organizations.
And we in Tucson and Phoenix are well aware of those one-van shuttle companies that have sprung up in recent years. They ply the Nogales-Tucson-Phoenix route, and this info is displayed quite prominently on the vans.
But if you look closely at them, you’ll notice the lack of a Sky Harbor Airport sticker on the front windshield. Which means that they’re not taking the Nogales shopping spree crowd to our state’s largest airport.
That’s what chaps me the most about this crap. It’s not like a lot of this stuff is being conducted in the shadows. Every J6P KNOWS what is going on in their ‘hood, even call it in, but nobody in government wants to know squat.
“it’s a Free for All……..”
This is absolutely outrageous, and another consequence of the US policy of importing cheap, illegal alien labor in favor of paying living wages to legal citizens. This is not sustainable, and no good outcome can or will result. Whoever willfully uses illegal alien labor, be they a homeowner looking for cheap landscaping work or a corporation looking to pay pitiful wages, is directly responsible for these situations. Disgusting.
“…another consequence of the US policy in favor of importing cheap, illegal alien labor
in favor ofrather than paying living wages to legal citizens.”Never forget: illegal immigrants benefit one and only ONE group… employers. Yes, “coyotes” can be considered agents of employers.
And everyone else pays for it.
It seems that an increased need to finance rising government expenditures is causing bond investors to demand a higher risk premium. This eventually will force the Fed to chase the rate upwards and raise rates, choking off any recovery.
D’oh! That should’ve been a reply to PB’s reply.
I guess you don’t believe QE can be used to indefinitely prop down l-t T-bond rates?
I would argue that no, QE won’t be able to suppress bond rates.
Bond purchases by the Fed will expand its balance sheet, having inflationary consequences. Nervous foreign central banks will look to diversify, selling their dollar-denominated bonds, causing the supply of bonds to rise and bond prices to fall, keeping yields (and interest rates) high.
Eh?
“Nervous foreign central banks will look to diversify”
You assume that nervous foreign central banks will respond rationally. Why should we not believe instead that they are all in a cabal together?
Yes, I know FPSS would chime in that beggar-thy-neighbor is far more likely according to history, and he’s probably right. Sigh.
Wall Street Journal
* OPINION
* JUNE 10, 2009
Get Ready for Inflation and Higher Interest Rates
The unprecedented expansion of the money supply could make the ’70s look benign.
By ARTHUR B. LAFFER
Rahm Emanuel was only giving voice to widespread political wisdom when he said that a crisis should never be “wasted.” Crises enable vastly accelerated political agendas and initiatives scarcely conceivable under calmer circumstances. So it goes now.
Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.
With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.
But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.
This may be a dumb question, but if interest rates rise along with inflation, why would cash=trash? Wouldn’t savers benefit from those same higher interest rates?
Is it that inflation will be sooooo much higher than any interest offered on a CD or bond?
Its all about the timing. Inflation is what happened last month, interest is what you will earn next month.
There was a time in the early 80s when inflation was 18% and credit card interest was 15%.
“why would cash=trash”
Is there a difference between inflation and fiat devaluation?
The Fed is adding zeros to the money supply. J6P earns less each month.
The struggle in the bond market is epic. It’s the dollar printers against the vigilantes and it’s anyone’s guess who will win out.
My guess? The guys with guns.
Can the Fed successfully inflate when almost everyone (except for them) openly suggests this is the plan?
Forecaster of the Month
Jun 10, 2009, 1:13 a.m. EST
Fed will dawdle, top forecaster fears
RBS’s Stephen Stanley wins his sixth title
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve will be “late to the game” when it comes time to raise interest rates, said Stephen Stanley, chief U.S. economist for RBS Securities.
“I hope they learned their lesson” from 2004, when the Fed raised rates at a very casual pace, Stanley said in an interview with MarketWatch. Stanley says the Fed will be unpleasantly surprised by how quickly inflation gains momentum once the economy starts growing again.
This time, the Fed should tighten monetary policy “much more forcefully” when the economy regains its footing, he said.
New top box office pick:
Bond Vigilantes II, Revenge of the Herd
“Badges? We don’t need no stinking badges!”
Median home prices drop below 1989 levels in some parts of So. California
In parts of Southern California, the housing crash has upended a basic tenet of the American dream: that home values always increase over the long term. Properties in several areas are selling for less than they did 20 years ago, and that’s not even counting the effects of inflation.
Losing two decades’ worth of gains in a single downturn “has never happened,” said UCLA economist Edward Leamer, who has studied local areas during booms and busts. “You’re seeing something that’s abnormal.”
In the 1990s housing bust, “you had a foreclosure here, a foreclosure there. You did not have almost entire neighborhoods being foreclosed,” UCLA’s Leamer said.
The April median price in Lancaster ZIP Code of 93535, for example, was $87,000. That’s down 74% from a $334,500 peak price in 2007. Even worse was the 92410 ZIP Code in the city of San Bernardino, which covers several older neighborhoods. Its $61,000 April median represents an 84% drop from the peak of $370,000 in 2007.
“Median home prices drop below 1989 levels…”
Wow — only six years to go for FPSS’ prediction to come to pass.
I was going to post a link to this story, as well. In the anecdotal examples cited in the feature article, prices have decreased to below 1981 levels, e.g. $66K for 2000 ft house in an established part of Lancaster.
Look for even worse things to come in newer neighborhoods with Mello Roos assessments.
$66K for 2000 ft house in an established part of Lancaster.
Yes, but then you’d be… living in Lancaster.
Wasn’t Lancaster great in “Bride of Frankenstein”?
Just remember, 1989 was the peak of the last bubble. Still a long way to go–the low point will be 1996 prices.
But I do think this is the first time I’ve seen an LAT reporter call this a “housing crash”…
bulwark,
True, I ‘almost’ bought into an apt. conversion in Imperial Beach, CA that very year. Just curious, but w/ prices ‘that’ low, even in the face of higher commuting costs, will ’some’ of these communities become viable again?
It’s hard to imagine Palmdale/Lancaster ever attracting anyone who can afford to live somewhere else. Once an entire region has “gone ghetto,” it’s hard to come back from that, especially when there are no mitigating factors such as clement weather or clean air.
j,
Point taken, but to a rain-soaked Oregonian, well let’s just say I’m willing to consider places others simply wouldn’t? I’ve been through “Palmcaster” and didn’t find it to be more “ghetto” than a lot of other places.
I’m under the impression there are 2 Palmcasters. The nicer areas and everywhere else.
I suppose if I was going to live up in that area I might hold out to get something closer to the Santa Clarita Valley (Valencia, Canyon Country….)
DinOr, no need to argue about those points with LA metro snobs, they don’t get it.
They are absolutely right, the weather is terrible, it is one constant gang fight, the air is soupy with chemical pollutants. This is no place to raise a family or retire.
Everyone stay away, this exurb needs to get back to it’s basics, section 8 and the AF.
Here’s the link.
http://www.latimes.com/business/la-fi-cheaphomes10-2009jun10,0,4802553.story
DennisN,
Thanks. I wouldn’t mind being neighbors w/ a nurse and an aerospace engineer? That’s ‘my’ kind of ghetto! No, I suppose when compared to the beach, Tinseltown and all the glitz of L.A, pretty much everything compares unfavorably.
Good neighbors are a terrific asset! Especially when they don’t live toooooo close, but only close enough.
My preciousest neighbors are:
–A vet who loves birds and who supplies me with delicious fresh duck and hen eggs and who, in a pinch, could treat and/or set the bones of a blonde primate if she didn’t feel like driving to the hospital after falling out of a tree or something.
–An elderly Japanese woman who knows how to prepare delicious warabi, fuki, ogo-nori (that’d be braken, coltsfoot and a tubey-lookin’ red seaweed only found at minus tides hereabouts) and a couple other things I forget the names of but which I’m learning about anyway with enthusiasm.
–a big bearded hairy man in overalls who raises darling goats and makes SUPER goat cheeses.
–A bunch of adorable frogs.
I have a couple of other neighbors within a mile or so, but they’s state govt. workers, and pretty much entirely and completely useless, so I pretend they don’t exist, unless they dart out in the road when I zoom by, and then I mostly try to miss them. Mostly.
A vet who loves birds and who supplies me with delicious fresh duck
You gotta wonder about that…
A vet who loves birds and who supplies me with delicious fresh duck.
You gotta wonder about that…
THAT’S what claimed your attention?! Man, dinchoo read the part about the ‘big, hairy, bearded guy with lots of goats’?
….Because, now’s time to admit, when I decide I need some fresh and delicious goat-milk cheese I first always studiously call my sister Rachel up and chat for a bit and then tell her I’m going to go visit the goat-guy (she met him once, when she visited, and she generally gets alarmed about my plans but IIII always say, ‘Really superior goat-cheese is worth the 50/50% risk of being imprisoned in an underground cellar in manacles and molested for weeks.’
Look, it’s really good cheese!
Anyway, I’ll probably get rescued after a day or so, worse case scenario, because I wisely take the precaution of calling up Rachel and telling her where I’m going, so she can call SWAT when I don’t contact her back later.)
I forgot my point. I’m sure there was one, but I can’t recall it, because now my mind is full of visions of wondrous fresh goat cheese.
Olygal, I note with interest that all of your examples of _useful_ neighbors included some food reference… Hmmmm…
‘Really superior goat-cheese is worth the 50/50% risk of being imprisoned in an underground cellar in manacles and molested for weeks.’
LOL! OMG, that must be some cheese!
Either that, or you have some twisted underground-cellar fantasy!
LOL! OMG, that must be some cheese! Either that, or you have some twisted underground-cellar fantasy!
IIIII say, why can’t we have both?
Olygal, I note with interest that all of your examples of _useful_ neighbors included some food reference… Hmmmm…
Ahhh…? Well…
Dang…you are right, Primey! How did I not perceive that my ownself?
My gosh, I’m freakin’ totally shallow! I’m a shallow little greedy sunburned piglet!
Boooo HoooOOOOOOOOO!!
….Oooh, and speakin’ of piglets, I stopped at Safeways over on Mud Bay on the way home the other day and they had a big sale on pork ribs, so I got 18 pounds! Only $1.29 a pound! Can you imagine?! Me neither!
I woulda got more, but there was no room in my freezer or fridge, alas. So, since I’ve taken these few days off I was thinking this evening I would tinker with marinating ingredients and see how it goes. I was thinking. This time I’m going to record my process though, because sometimes I am flabbergasted with joy over what I’ve produced but then I can’t remember what I put in it.
LOL… You crack me up, Oly!
LOL…She scares me…. a LOT !!
Some dissenting opinions:
http://www.city-data.com/forum/california/7740-lancaster-ca-area.html
You tell ‘em JB. The AV is the worst. Stay away.
Please… it’s misleading…. In greater Los Angeles prices have only dipped to 2004, perhaps 2003 prices.
Very misleading article. You do not pick a place in the middle of nowhere and hold it up as an average example.
This is an outlier. Prices across the nation are nowhere near this… yet.
Houses Still Not Priced to Sell
6/5/2009
One out of every four homes on the market has experienced a price reduction, but when you look at the discounts, sellers still are loath to lower their asking prices, a Trulia.com study says. Jonathan Burton reports.
Whenever I bicycle past a “for sale” sign with a “price reduced” rider, I say, “Yeah, by five bucks.”
There’s a guy in my neighborhood who is trying to sell his home. It has come to the point where he is advertising this as “Final Week For Sale”. He has reduced his price. He originally was asking for 212K.
It’s a decent house built in ‘65 on a level 1 acre lot. The two most recent sales in my neighborhood were a newer (70’s) 3BR on a level ~1 acre lot. That one was 150K. There was a 3BR with a total of about 2 level acres that sold for ~180K.
So what did he reduce to? 205K.
Hope he doesn’t torch the place.
The price reductions are used to spur interest. When you reduce the price, real estate sites will send out emails to anyone who has expressed interest in the property, letting them know that the price is reduced.
It’s more of a marketing thing than actually thinking the house is worth any less. That’s why you see 0.03% price drops all the time. It just reminds people, this house is still on the market.
It’s definitely NOT a sign that the seller is willing to come down.
Yep, even in this market we still largely encounter shock and anger when making low-ball offers on houses… even those that have had several price reductions and been vacant on the market for a year or more.
+rates = +risk = -declining value
NEW YORK (Reuters) - Spiking U.S. mortgage rates drove down total home loan applications last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said on Wednesday.
The swift rate rise crimps affordability, likely cutting offer prices on home sales and prolonging a housing turnaround.
Borrowing costs have soared as bond yields have risen, even as the Federal Reserve has sopped up hundreds of billions of dollars in bonds to keep rates low and stimulate the housing market.
The average 30-year fixed mortgage rate jumped 0.32 percentage point in the June 5 week to 5.57 percent. That was nearly a full point, about 100 basis points, above the record low rate of 4.61 percent in March, the trade group said.
“Clearly, 50 or 100 basis points more on mortgage rates is enough to matter. It effects what people can afford to buy,” said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
The vast majority of mortgage activity this year has been from homeowners cutting costs with new loans at rock-bottom rates.
The Mortgage Bankers Association’s seasonally adjusted index of total applications dropped 7.2 percent to a four-month low of 611.0 in the latest week.
The refinancing index slumped 11.8 percent to a nearly seven-month low of 2,605.7 last week, and refinancing accounted for about 59 percent of all applications, the lowest share since November. As recently as April, refinancings accounted for almost 80 percent of all home loan applications.
Purchasers have been slower to act in the current housing market, with some waiting in hopes that prices will fall further and others paralyzed by unemployment or wage cuts.
“The more you get people making low-ball offers because they can’t afford to offer any more, the less willing conventional sellers are to sell at all,” Cheney said. “It tends to freeze the housing market for a bit longer.”
Time for Heli-ben to start buying more Fannie and Freddie crapola!
Mr Bernanke, would you like some sugar with your stinking, rotten, maggot-infested turds?
Treasuries Decline as Russia May Pare Holdings of U.S. Debt
By Dakin Campbell and Dan Kruger
June 10 (Bloomberg) — Treasuries fell, pushing 10-year yields to the highest level since November, as the government prepared to sell $19 billion in the securities and Russia said it may switch some of its reserves from U.S. debt.
Thirty-year bond yields reached the most in a year after a Russian central bank official said the nation may buy International Monetary Fund bonds. The Federal Reserve bought $3.5 billion in debt maturing in 2019 through 2026. Today’s auction is the second of three sales this week that will raise $65 billion, part of the U.S.’s record borrowing program.
“We’ve got $19 billion to bid on at 1 o’clock, and then we’ve got bonds following tomorrow,” said Brian Edmonds, head of interest rates at Cantor Fitzgerald LP in New York, one of 16 primary dealers that trade with the Fed. “I think we’ll probably be under a lot of pressure.”
“the less willing conventional sellers are to sell at all”
As if we need to buy from a conventional seller! In my zip the REOs outnumber the conventional about 4:1.
It seems like many banks are still holding out hope for some kind of a bailout, whether through green-shoots-driven inflation or through adding taxpayer-funded premiums to the price of their their toxic mortgage asset holdings. One would think that summarily guaranteeing so many mortgages would have got’er done, but apparently these guys think they can hold out for top dollar. They may eventually learn the hard way that they were actually ‘Waiting for Godot.’
Wall Street Journal
* REAL ESTATE
* JUNE 10, 2009
Playing Mortgage Market Proves Tricky
By RUTH SIMON
As mortgage delinquencies have climbed, hundreds of investors have sought to profit by buying troubled loans from banks and other institutions, restructuring the mortgages to keep borrowers in their homes and quickly moving loans that can’t be saved to foreclosure.
But as hedge-fund manager Ralph DellaCamera has learned, it has been a difficult strategy to pull off. Banks have been reluctant to sell loans at the price investors will pay for them. Meanwhile, the time it takes for investors to get their cash back has lengthened.
Still, interest remains high. “You may not like the price, but there is plenty of buying power out there,” says William David Tobin, a principal with loan-sale adviser Mission Capital Advisors.
Banks’ unwillingness to sell loans at steep discounts has also been an obstacle for the government’s Public Private Investment Program, which was designed to help rid banks of troubled loans and securities.
Banks generally would rather hold on to assets they believe have more inherent value, rather than sell them at a low point in the market.
…
“Initially, we thought there would be a plethora of opportunities” to buy loans, says Mr. DellaCamera, 55 years old, who headed trading at hedge fund Elliott Associates for more than a decade. “But we pulled back from buying these loans because the pricing isn’t there and we were having trouble hedging.” He calls servicing troubled loans a “tremendous opportunity.”
Because most mortgage-loan sales are private, statistics are difficult to come by. Prices currently vary from 20 cents per dollar of unpaid principal for some of the riskiest subprime mortgages to nearly 90 cents on the dollar for current loans to borrowers in strong housing markets, says Kingsley Greenland, chief executive of DebtX, an online marketplace for loans.
Those types of prices would produce losses far greater than most have reserved for, says Keefe, Bruyette & Woods analyst Frederick Cannon. “Banks are essentially holding loans in the system at a value of 97.5 cents on the dollar,” he says.
“Banks are essentially holding loans in the system at a value of 97.5 cents on the dollar,”
Bankers: “Money!…Hey, keep your hands off of my stack!”
Banks generally would rather hold on to assets they believe have more inherent value, rather than sell them at a low point in the market.
Doesn’t this just mean that they’re back in the business of lending their OWN money? Won’t that tend to bring back sane lending practices?
No, it means that money from the Treasury has filled in their balance sheet such that they can mark the bad loans to fantasy ad ifinitum.
…and have done so.
Not to take away the punchline of the story, but Godot never showed up.
What?! Really?!
Jeeze, Az! Spoiler alert!
This sounds like bankers envision inflation making these investments work out for them eventually. Good luck with that, I guess.
I haven’t seen the episode, but apparently Peter Schiff was on the Daily Show? An excerpt:
Q. Are you running for office? something?
A. Well I am considering potentially running for Senate in my home state of Connecticut.
Q. The nutmeg state! Well, you’d be be up against Dodd. Are you going against Dodd?
A. That’d be the most attractive part about running.
Q. To go up against Dodd?
A. To send him home. He’s been living in the Senate his whole life. He thinks he’s in the House of Lords.
Q. Listen he’s got a a very nice house. I happen to know he got a good deal on his mortgage as well.
A. I think the guy who gave him that deal was just indicted.
Q. That’s Connecticut!
Come and listen to my story bout a man named Dodd
Refied his house but it seemed kinda odd
Saved eighty grand but he said he didn`t know
Law makers get a break cause they`re friends of Angelo
Mozilo that is, orange gold. Bubbling greed.
You just made those four or five times I suffered through most of “Beverly Hillbillies” worth it.
Well then, I`ve posted this 3 times but what the Heck
Come and listen to my story bout a man named Dodd
Refied his house but it seemed kinda odd
Saved eighty grand but he said he didn`t know
Law makers get a break cause they`re friends of Angelo
Mozillo that is, Countrywide, bad loans
Well the first thing ya know Angelo is in some trouble
He said HEY DODD now they say I caused a bubble
Dodd said fine I`ll just sponsor us a bill
Tell em that they need it and I`ll sell it on the Hill
Well the moral of the story that you all should know
Better vote em out if they`re friends of Angelo
Or one day soon we`ll be shootin at our food
Printin all that money is a drivin up the crude
Oil that is, black gold, Saudi tea
And now it`s time to sat goodbye to you and all your kin
And Dodd would like to thank you all for kindly chippin in
Your all invited back next week to this localitee
To spend another trillion on their bogus LTV
Loan to value, kick your shoes off
Ya`ll come back now, Ya hear
I can hear the banjo strumming!
bink,
Made my day! Thanks, Peter ( for all the hellish environments he confronts ) still has a pretty good sense of humor. I hope he wins.
I’d love to see that d-bag Dodd sent packing. Of course I’d like to see about 98% of the D.C. cesspool flushed out. Hard to beat incumbents though.
I wish Schiff luck, if he runs.
wmbz,
You’re aware his father ( Irwin ) was a legendary tax protestor, right? I think he even went to prison over it. Go Peter!
Schiff is a bit of a one-note johnny and a publicity hound, but he’d certainly stir up the joint big time. R or D (don’t know which he is), I wish him well.
If you can’t beat ‘em at the polls, beat ‘em with a stick.
Adolf Hitler
Do rising crude prices, rising mortgage interest rates, and continuing-to-rise unemployment rates constitute green shoots? Or are they more like Roundup?
Actually, rising crude prices do reflect a bet that the economy is about to improve.
Rising crude prices present an identification problem (as do many other “green shoots” indicators), as one cannot tell without other evidence whether they represent optimism about an incipient recovery or pessimism about nascent inflation.
Plunge protecting the stock market helps create the facade that the higher yields reflect green shoots optimism rather than inflation fears.
“Plunge protecting the stock market helps create the facade that the higher yields reflect green shoots optimism rather than inflation fears.”
Ha that won’t work I know you’re being sarcastic and its funny but these higher yeilds in the face of QE say to me the SWHTF good luck with that mortgage payment at 8-12%
I think I read America is headed towards 100% debt to GDP and at a higher interest rate? won’t work can’t even sevice the interest and if GDP does not get to 4% by 2010 ?
green shoots uh huh
And other people believe (rightly or wrongly) that current crude prices are related to future supply problems. And then there are people who have seen how far oil went up last time and are buying it hoping for a repeat performance. So much affects the price of something as politically charged as oil that it’s difficult to say much about its movements. It does look like it’s flirting with another speculative feedback loop, however.
(Trying to predict things with oil prices is useless! Here’s a prediction!
)
Really? I thought it was the anticpation of inflation that was more the cause of rising oil prices.
No matter, rising gas prices are putting the squeeze on the very people the pols claim to be spending all this money for. Those little increases to their paychecks last April - wiped out.
“Really? I thought it was the anticpation of inflation that was more the cause of rising oil prices.”
Bingo
edgewaterjohn,
My wife calculates it to-the-penny. Thanks though!
Crude should not be rising.
Demand is down. Inventory is up. (Google News)
The only thing this indicates is the system being gamed… as usual.
We were recently discussing reverse mortgages. It sounds like for the moment, only the FHA is doing them. My hunch is that this reflects the FHA guarantee, which is backed by the full faith and credit of Uncle Sam. Banks like these because taxpayers are left holding the bag if the home ends up selling for less than the amount loaned.
Taxpayer-funded guarantees are a good way for Uncle Sam to put money into bankers’ (and seniors’) pockets without arousing voter ire. By contrast, directly making payments to banks (without the smoke screen of insurance) might be upsetting to households facing unemployment and foreclosure.
* The Wall Street Journal
* REAL ESTATE
* JUNE 10, 2009
Seniors Drawn to Mortgages That Give Back
By NICK TIMIRAOS
Here’s one segment of the mortgage market that’s still hot: federally insured reverse mortgages, which enable senior citizens to take money out of their homes.
In March and April, the number of reverse mortgages backed by the government jumped nearly 20% from the same period last year. In April alone, the government insured 11,660 reverse mortgages, the highest monthly total since the government-backed program began in 1990. By contrast, the number of new home-equity loans, which similarly allow homeowners to tap the equity in their homes, fell around 70% in the first quarter from the prior-year period, according to Inside Mortgage Finance.
More seniors are turning to reverse mortgages to supplement their retirement savings, which in some cases have been decimated by stock-market losses. At the same time, more seniors now qualify for a reverse mortgage since Congress in February raised the maximum home value that seniors can borrow against to $625,500 from $417,000. The bill also capped reverse-mortgage origination fees at 2% on the first $200,000 and 1% on any amount over that, with fees not to exceed $6,000. Other upfront costs include an insurance premium and closing costs.
In a reverse mortgage, the bank makes payments to the homeowner instead of the homeowner making payments to a bank. To qualify for such a mortgage, a senior must be at least 62 years old and have a lot of equity in the home.
The way it works is this: Say a senior owns a house worth $500,000 that has a $50,000 mortgage. The senior might get a $250,000 reverse mortgage to pay off the existing loan and then have $200,000 left over. The homeowner could get that as a lump sum or a line of credit, and wouldn’t have to pay it back until he moved or died and the house was sold. The bank is repaid, including interest, from proceeds of the sale.
For lenders, the risk is that when it is time to sell the home, it will be worth less than the amount lent. As housing prices have plummeted, concern has grown that losses from these loans have mounted. Nearly all private offerings of reverse mortgages have disappeared, leaving the Federal Housing Administration as the only game in town. The FHA doesn’t make any loans, but it insures lenders against any losses on federally-insured loans, called Home Equity Conversion Mortgages.
Does this mean we should invest in QVC?
For lenders, the risk is that when it is time to sell the home, it will be worth less than the amount lent. As housing prices have plummeted, concern has grown that losses from these loans have mounted. Nearly all private offerings of reverse mortgages have disappeared, leaving the Federal Housing Administration as the only game in town. The FHA doesn’t make any loans, but it insures lenders against any losses on federally-insured loans, called Home Equity Conversion Mortgages.
I know I’ve mentioned this before, but here’s a timeline from my own neighborhood:
1. Elderly lady takes out reverse mortgage.
2. Proceeds to go on a truly baffling spending spree, confirming neighborly suspicions that she was no longer of sound mind.
3. Breaks leg in two places. At age 87, such an injury is truly life-altering. In her case, it meant that she could no longer live alone.
4. Family has the house fixed up for sale and lists it in June 2008.
5. “For Sale” sign is removed in February 2009.
6. In May 2009, Slim hears through neighborhood grapevine that house has been foreclosed on.
I don’t know about you, but this isn’t the sort of scenario that I want my federal tax dollars involved in.
worked out for her okay, though. At her age, why not? The heirs are screwed. It’s someone 20 years younger that would be SOL in that scenario.
“6. In May 2009, Slim hears through neighborhood grapevine that house has been foreclosed on.”
This doesn’t sound like a reverse mortgage at all. I thought reverse mortgatges make payments TO the recipient, with eventual repayment at time of sale/death
How can you get foreclosed on if you are not liable to make a payment? She must have had other mortgage debt as well (HELOC?).
“wouldn’t have to pay it back until (s)he moved or died”
Slim’s subject moved because of her injury. That might trigger a requirement to repay.
Filed under: “Why Bankers like their greed bacon…thick!”
Bankers: “Hey guys, our salaries are under attack…let’s just give ‘em back their stinkin’ federal reserve toilet paper money…”
“…Feinberg is retained by corporations, insurers, government agencies and courts to help settle cases. He’s best known for being named the special master of the September 11th Victim Compensation Fund, which made payments to the victims of the terrorist attack.”
U.S. Said to Seek New Powers for SEC Over Banks’ Executive Pay:
June 10 (Bloomberg) By Jesse Westbrook, Robert Schmidt and Rebecca Christie
“I’m Opie ™ Obama…and I approve this of this financial attack.”
The banks that gave back the money didn’t need it in the first place. It is a testament to the politico’s typical urge to control all things that it took this long to be allowed to pay it back.
Having said that, they allowed themselves to be strong armed into taking it in the first place, so I guess they got what they deserved.
When this kook fires off another round, one can only hope the U.N. will issue a strong warning…
MOSCOW (Reuters) - A Russian Foreign Ministry source on Tuesday said there were signs that North Korea was preparing new missile launches, Interfax news agency reported.
After a nuclear test in May, Pyongyang conducted missile launches. South Korea said the North was preparing to test a long-range missile capable of reaching U.S. territory and mid-range missiles that could strike South Korea or Japan.
“Information is coming to us that there are signs of preparations for the launch of missiles,” the unnamed Russian source was quoted as saying.
The diplomat said North Korea’s temporary ban on navigation in certain areas of the Yellow and Japan Seas was an indication it was preparing to conduct a missile test, Interfax reported.
The source did not clarify what type of launch was anticipated.
“We have not received any formal information about this from the North Korean side,” the source was quoted as saying.
Head for the hills!!!!! Fear something, fear anything! Fear Fear!
Remember, the Cylons look like us now.
Oh, if only…
*lapses into a mild reverie regarding series #3 *
Maybe Eastwood’s Gran Torino was an omen…besides the war ain’t over…just on pause. This might help get peoples mind off housing & the economy…
Maybe Eastwood’s Gran Torino …
No way! That’s in my Netflix queue at #2! How was it?
Ooops, sorry, I got excited and spilled italics everywhere. What I meant to say was:
Maybe Eastwood’s Gran Torino …
No way! That’s in my Netflix queue at #2! How was it?
We will crush North Korea. Sad for them. Their mad dictator is putting people in his own nation on death row when most of them did nothing violent be live as a slave to him.
I meant “nothing violent, but…”
Its our troops on the other side of the border you know…
I don’t think we have the will, Bill.
25K dead GIs will not make for a popular president, and anyone that thinks the north doesn’t already have a deliverable nuke doesn’t know much about the history of proliferation.
BTW, it won’t require nukes to kill the 25K GI.
Hello out there Bananarepublic,
My comments take a long while to get posted. I made some accusations about Krugman being wrong about the size and extent of the bubble.
You can do a search and a lot of his stuff from 05-06-07 is out there. Look at no bubble trouble and a few others. My other remark about his take on the shadow or commercial lending and securitization comes from a video he did. I’m trying to find that video but there is a big pile of his stuff.
He got the bubble somewhat correct but after it was late. He also didn’t understand how large the impact would be on banks.
Also disagree with the Keynesian stimuli will lead us viewpoint.
Here I’ll post a few links
You said search for No bubble trouble. It was actually “No Bubble Trouble?” Found it printed in January 2006
economistsview.typepad.com/economistsview/2006/01/paul_krugman_no.html
Here is the final conclusion
So here’s the bottom line: yes, northern Virginia, there is a housing bubble. … Part of the rise in housing values since 2000 was justified given the fall in interest rates, but at this point the overall market value of housing has lost touch with economic reality. And there’s a nasty correction ahead.
Sounds to me like he called it correctly. He seemed to suggest that more rural areas would be less affected even that they weren’t in extreme bubbles. The main issue is that once one bubble pops it can create a chain reaction. I suspect some of the affordability data he had didn’t take into account resets and fraud.
Of course Krugman called it correctly. James, you need to take issue with the people that really didn’t see this coming. Krugman should be near the bottom of your list. He was calling BS to this a lot sooner than most. I also like Fleckenstein. But to single out Krugman of all people is just wrong.
I was just saying don’t get all worship like around him.
Just like Peter Schiff is getting a lot of praise around the web. He got plenty of his clients cooked worse than Cramer ever did.
He gambled on Gold and foreign currencies in a big way. And lost too. Almost won and then the TARP plan seemed to backfire badly. Could also say he was right early. Same with a lot of the other big commodity traders.
I like both guys but you really have to keep your eyes wide open.
I’m not worshiping him, James. I also disagree with a lot of Paul’s views. For example, he was calling for even more stimulus spending. I totally disagree with that. But in a country with possibly the lousiest news media on the planet, Krugman is a breath of fresh air. He speaks honestly, doesn’t have corporate masters that pull his strings, and he speaks truth to power - regardless of their political party.
I won’t deny it, I like Paul Krugman. But I don’t worship him, or anyone else. Same goes for Obama. I just don’t expect perfection from either, and I appreciate the truth.
Right but early, been there far too many times myself.
Fleckenstein, MAN, I wish I was just half as cool as that guy! Yeah, Bill is good people, he had the courage to buck the trend. Always a fun read too.
Someone mentioned that Schiff is something of a one-hit-wonder but you have to remember, early on, unless the MSM was going to interview our own Ben Jones, there… really weren’t a lot of people ‘to’ interview on the matter?
I’m sure if you bought Peter a few drinks you’d quickly learn he probably has an opinion on just about everything! If his performance has been less than stellar, trust me I understand. His heart was in the right place.
Yeah, Fleck is a keeper. Basically him (and Krugman) got me through this debacle. Two sane people in a sea of morons and corrupt assholes. And on TV there’s Bill Maher, Stephen Colbert and Jon Stewart.
The best of the best IMO. They call bullshit on anyone, right, left or in the middle.
w00t! Today is a good day.
1. I will be renewed at my job
2. I am 100% out of my medical billing black hole
3. Transferred the last bit to my wife’s student loan (100% debt free)
4. Tomorrow my wife and I will find out the sex of #2
I think I need to get my hands on some vodka and fireworks.
Way to go, man! That’s great news.
You might want to reverse the order of those two party items though. Hate to see to you fall right back into that black hole that you mention…
Congratulations. Muggy! That is great.
Muggy,
Congrats! Days like this don’t come often. Savor them.
Usually ( as you are well aware ) they’re more like, my tax return was bigger than I expected ( but my transmission just fell out! )
IMHO vodka + fireworks… no so good, BUT it’s ‘your’ day!
I am going to savor it by grabbing lunch with the family at one of my fav joints, which will be going out of business this month.
Lol, I won’t be buying fireworks, but it’s so tempting, and they sell them at the grocery store!
Good for you!
It’s nice being debt free, isn’t it?
Congratulations! On everything, especially #4. Nothing like a lil babe to make you forget all the nonsense in the world.
I think I need to get my hands on some vodka and fireworks.
Congrats, Muggy! That’s all super-dooper!
If only you was handy I’d give you a whole shopping bag jammed full of illegal ‘Pale-face Finger Blasters’, straight from the res. (I was saving them for my dear brothers when I visit Utarr next, but I can always get more.)
…Say, don’t you have any Indian reservations there in Florida?
“…Say, don’t you have any Indian reservations there in Florida?”
There’s a few, haven’t been to any of them though, but when I drive to Key West, Alligator Alley goes through Miccosukee(mick uh soo kee). I like that word + one of the few tribes with their own force, plus most of their jurisdiction is swampland.
I see where you’re going with this: I need to day trade, so I can gamble, so I can day trade more, so I can gamble more, and then eventually I have a lot of fireworks.
As long as you are going to pour the vodka on a UHS and shoot fireworks at them I’m good with your plan.
Citigroup said it would convert the balance of preferred securities and the balance of the preferred shares that the government owns into trust preferred securities. The company also will begin previously announced tender offers for publicly held convertible and non-convertible preferred and trust securities.
Citi said the moves would create about $58 billion of new common shares, and that July 30 is the expected date for distribution of the new shares.
After the exchange, the government will own about a 36% ownership stake in Citi.
“Following completion of the exchange offers, Citi will be among the best capitalized banks in the world,” Chief Executive Vikram Pandit said in a written statement.
Yeah…….just in time to screw the credit card holders with increased fees and rates.
Martin County hospital defends sending brain-damaged patient native Guatemala
June 10th, 2009 by TCPalm.com
MARTIN COUNTY — When Martin Memorial Medical Center hired a jet in 2003 to repatriate a brain-damaged patient to his native Guatemala, hospital officials “never took the law into their own hands,” according to documents filed ahead of a June 23 trial.
“They never stuffed Mr. (Luis Alberto) Jimenez in the back of a van under the cover of darkness and drove him out of town,” Martin Memorial attorney Scott Michaud stated in papers detailing Jimenez’s predawn flight to Guatemala City on July 10, 2003.
“When Martin Memorial discharged Jimenez to the facility in Guatemala,” Michaud noted, “Martin Memorial did so with the honest belief based on the evidence it uncovered, that the hospital in Guatemala was properly equipped to care for him.”
That may be a key issue for a jury during a false imprisonment trial with accusations that Martin Memorial kidnapped a wheelchair-bound Jimenez and forced his return to Guatemala against his will, and against the direction of his legal guardian and cousin by marriage, Montejo Gaspar Montejo of Indiantown.
Jimenez, then 31, lived at the hospital for two years after suffering severe brain damage in a 2000 car collision. Treating the undocumented alien cost the hospital nearly $2 million, officials said.
Michaud defended the hospital’s actions in papers seeking to stop Jimenez’s lawyers from trying to collect punitive damages, generally awarded to punish an offending party.
Two million dollars. Yow. Our country is doomed. My neighbor is a nurse and he gets assigned to different hospitals. He was telling me how he was assigned to a local one. “I ain’t see a patient in two weeks that will pay their own bill, but my paycheck comes from somewhere.” “Yea, me paying insurance heh.” “The wild ones are the ones that come in and directly threaten you before you work. “You mess up and I be owning this entire place when I sue you. I be your boss. Now you best fix me up and hope you do it right.”"
Black is white, up is down, in is out.
Martin Memorial. My life’s most mysterious ailment was diagnosed in their ER by a neurologist named Bill Malzone. ER because I’d been to 3 docs w/ no luck. I just had MONO for Chrissake. But I was 34, so it took a bright person to suspect that. I should send MMH a contribution, but it won’t be 2 mil.
Washington Post
The Rundown
Obama’s Recovery Plans Hit Hurdles
By Ben Pershing
Two key tenets of President Obama’s economic recovery plan have hit obstacles in recent days, as the Supreme Court temporarily blocked the sale of Chrysler to Fiat and high unemployment numbers cast doubt on the effectiveness so far of the administration’s much-touted stimulus package.
Obama’s continued promotion of the stimulus measure carries with it risk, as yesterday’s events provided another opportunity for the media to cast a skeptical eye on the administration’s claims. The Los Angeles Times writes that “so far the promised federal money has been slow in coming” and that the job creation numbers cited by the White House “appear to be elastic.” More bluntly, some critics are calling the statistics “pure fiction.” And others are pointing out that Obama seems to be recycling his material: Yesterday’s Associated Press dispatch called the president’s latest spending promises “summer reruns.”
Amid all the bickering over statistics, here are two numbers that are not in dispute — 9.4 and 42. The first is the unemployment rate as of May, which prompted Obama to say yesterday he was “not satisfied” with the pace of recovery so far, and forced the White House to defend “the overly optimistic economic models it used to justify the historic stimulus plan.” The second is the percentage of respondents in the latest Gallup poll who disapprove of Obama’s handling of the economy, up 12 points since February. Now, “Obama is under political pressure to show more immediate results,” the Wall Street Journal writes, but a faster economic turnaround probably isn’t within his power to create.
Foreclosure on a $50 tax billl? Guess it happened!
http://www.google.com/hostednews/ap/article/ALeqM5jZ3K8fRbXqu63mgsSntqS_4N9_tAD98N7D800
Looks like its the mortgage company’s bad. This guy will have grounds for a nice lawsuit.
It’s been happening around here in Boise. One of the irrigation districts is known for foreclosing on small liens. Annual irrigation levys may be only about $50 but they aggressively put liens on property and then foreclose.
Forbes dot com
Economy
The Best And Worst Cities For Recession Recovery
Joshua Zumbrun, 06.10.09, 10:00 AM EDT
Ten cities poised for a rebound–and 10 cities with a long slog ahead.
WASHINGTON — The three most important things in real estate: location, location, location.
It’s true for recovery from a real estate bubble too. Overall, many economists expect the national economy to return to growth later in 2009, perhaps as soon as this summer. But that won’t be the case everywhere. While some cities are poised for a quick rebound, others face a slog to recovery that could take years.
Poised for swift recovery are many Texas cities, such as Austin, San Antonio, Dallas and McAllen. These areas did not see the massive real estate bubble that formed in states like California, Nevada and Florida. The economy is diverse, with heavy growth coming from education and health care in recent years.
In Pictures: The 10 Best And 10 Worst U.S. Cities For Economic Recovery
Many of the cities with the longest road to recovery are California cities, where home prices rocketed out of control, and entire economies were supported largely by a real estate bubble. Fresno, Modesto, Salinas, Bakersfield, Stockton and Los Angeles all saw home prices soar to unsustainable levels and then begin their inevitable plunge. The collapse of the housing markets pushed unemployment rates in these cities above 10%.
Even as a flood of foreclosures makes home prices look affordable again, a sign that some of the worst real estate markets may be finding their bottom, it will still take years for unemployment rates as high as 16.8% in Modesto or 15.5% in Fresno to return to healthy levels.
To find the 10 cities that look best poised for recovery (and the 10 cities likely looking at the longest climb back), we examined estimates from data provider Moody’s Economy dot com of the projected gross domestic product of metropolitan areas across the U.S., as well as unemployment figures from the Bureau of Labor Statistics and home prices, incomes and affordability data from the National Association of Home Builders. Because, in general, healthy cities were not victims of as severe a housing collapse, home prices were not used in ranking the cities poised for recovery.
The analysis also shows the importance of a city’s economic make-up. Manufacturing has been battered by the recession, leaving cities like Detroit and Flint, Mich., or Youngstown, Ohio, with bad unemployment and a changing economy that’s unlikely to replace the lost jobs. Moody’s projects the economy in Flint, for example, will decrease by 16% from the start of recession to the end of 2010. (One commonly cited rule of thumb for depression is a decline of 10%.) Flint might never return to its original size.
New York City, too, once the capital of finance, is now saddled with Wall Street-induced unemployment and homes that are completely unaffordable for most of the region’s residents. The NAHB’s Housing Opportunity Index reports that only 14% of homes in the New York-White Plains-Wayne area are affordable on the area’s median income–by far the least affordable region measured by NAHB.
It seems to me that Forbes is constantly pushing Austin, on one list of 10 best or another - which of course gets echoed mightily in the local media “it’s different here” echo chamber.
Forbes are just another in the “find a nice place, buy low, hype the hell out of it, develop it cookie cutter style while destroying anything interesting and local (or replacing with faux funky), sell high (luxury, baby, and it’s so hip) and then move on to the next place” crowd.
I think Forbes must have a stake in Austin downtown high-rise condo towers and the new “urban lifestyle” VMU “luxury” loft / luxury retail / restaurant / overpriced coffee-shop complexes - in the last bust they probably bought up parking lots and CRE leased to mom-and-pop businesses and in the last few years paid for the campaigns of our last mayor - Will Winn, aka “Austin is the new Manhattan” Winn.
Saying that Austin didn’t see the massive RE bubble in other states I think just means that the deflating is taking place on a different timeline, thereby still deniable, so GO GO GO, BABY and Texas will be the new California!
Next time anyone mentions Forbes and Austin in the same post, please send me a “grab and fold tinfoil hat” notification first.
If you hang out in the Domain you might think that Austin is already quite a bit like California…
(culture, of course..not housing price declines)
I freaking can’t stand Steve Forbes. Another one of those pukes born on third base, and thinks he hit a home run.
Forbes mag isn’t all bad: they provided a forum for Gary Schilling to outline the coming housing bust in very truthful terms several times in 2003-2004.
There are plenty of $500k condos and townhomes in downtown Dallas that FBs will not be able to unload.
Completely OT, but really funny…
A colleague just got back from Vegas after celebrating his 30th birthday. Yes, he did say it was dead, but this cracked me up — he said, “I promised my group I’d get 30 girls to flash us… I got to 17 before I blacked out.”
I’ll be going to Vegas soon for a friend’s 30th…I’ll see if I can get him to make the same promise. I’ll report back.
The former manager of BayWalk (dining entertainment complex), accused of stealing $171,000 from the commercial real estate company where he previously worked, shoots himself in the head in a park, lives…
http://www.tampabay.com/news/publicsafety/crime/article1008848.ece
BTW, can any Floridians fill me in on Safety Harbor? It was on my short list for foreclosures because of the idyllic, walkable downtown (adjacent to the bay), but there seems to be a lot of bizarre news from there lately.
Nah he croaked in the hospital.
Why would anyone use a .22 to commit suicide?
Actually, my understanding of .22 wounds is that they can be pretty nasty because they often richochet off bone.
Wassup with that story? They just changed it without notation.
Why would anyone use a .22 to commit suicide?
Yar, that makes NO sense. You’d have to pepper the cra*p out of yourself before you even started noticing you were bleeding out.
Why not pick an easier way? Like sawing your head off with a butter knife.
A .22 is the weapon of choice for Mafia hit men (at least back in the old days). One/two behind the ear. .22 rounds will ricochet around inside you.
My choice is a 1966 Walther PPK (made in West Germany) in .380 Auto. It’s the gun James Bond carried.
Not sure what .380 would do at close range to the head, but the hope is that it won’t blow the other side out and leave a hideous corpse. Hollow point ammo might keep the projectile from passing thru.
Actually, I was thinking of selling this one. It’s in superb condition and in the original box. Very collectible. Maybe trade for a Mossberg 930 SPX.
Oly, you could shoot .380 Auto. It’s a smaller caliber compared to your black thing, but bigger than the Raven 25 Auto. Not trying to sell you, just FYI.
Good luck finding .380 ammo! 380 is just a short 9mm round and a fmj round would exit the other side of your skull during suicide (probably in hp also). It’s a fairly powerful round. I’d hang on to that PPK, I’ve got a Sig 230 which shoots 380 and also made in W. Germany and it’s the finest shooting pistol in my collection.
If I decide to do myself in, my “weapon” of choice will be a Suzuki Hayabusa.
Late……..
On Saturday night. Down the street from the local drinking district.
Yup Muddy,
AKA 9mm short or 9mm Kurz. Ammo prices are insane. You could almost invest in cartridges like they were gold.
Also, have you seen gun prices lately? Sig Sauer pistols are thru the roof. Nice semi-auto pistols, but my 1970’s CZ 75 in 9mm with a trigger job shoots better than a P226 in the same caliber.
I’ll still take my SA 1911 A1 over any pistol. American made, not the ones they make in Brazil now (or whatever country Springfield has outsourced to).
“Also, have you seen gun prices lately? Sig Sauer pistols are thru the roof.”
I’ve noticed. I was going to add a handgun to my collection, but decided against paying sheeple prices. I’ll wait until those desperate for cash start selling at fire sale prices.
but the hope is that it won’t blow the other side out and leave a hideous corpse. Hollow point ammo might keep the projectile from passing thru.
A hideous corpse!? Heavens bitsy, no! We only want to leave pretty corpses scattered around.
*chortle *
Anyway, why would a hollow-point not go right through, when it’s that close? IIIII think it’d go through, but that’s just my theory.
Or if it didn’t pop out the other side I betcha it would make a serious mess, like a robust hamburger-casserole type of mess, right there spang on top of the neck tube.
Oly, you could shoot .380 Auto. It’s a smaller caliber compared to your black thing, but bigger than the Raven 25 Auto
I’m making a note of it. Thanks.
Hollow point go splat when they hit something and spread the energy over a wider area, decreasing velocity.
Hollow point go splat when they hit something and spread the energy over a wider area, decreasing velocity.
Sure, but I’m saying that a skull is not that substantial so I think it might go through one first— depending on the skull— IF you shot the bullet from immediate range.
It would go through and leave a hole the size of a softball.
This is the whole point of hollowpoints. Little hole in, big hole out.
It would go OUT, is my point! It would exit! You know; go somewhere else!
It would not make a hamburger patty event on top of a neck!
*grouchy face! *
I thought we were talking about .22, there just isn’t the momentum in a .22 round to get through anything substantial, including a skull. I’ve read more than one account over the years of a .22 bullet bouncing off a skull.
“and nearly $700 in hotel movie charges”
Outrageous! What ‘kind’ of movies is it that you can run up that kind of… ( never mind )
Yeah, and as pointed out a few days ago, ten ( count ‘em TEN ) law enforcement units show up for (1) guy slumped over a park bench! He should have known the “stir” he would cause?
Must be a competitor for “Upper Class Twit of the Year”.
Hope he did better on the “Take the bra off the debutaunte” contest.
Not upper class. Strictly nouveau. Not invited to deb parties. That’s the real reason he killed himself.
Bobcat touts new products before plant shuttersJune 10, 2009 11:26 AM ET
All Associated Press news BISMARCK, N.D. (AP) - Trade media representatives got a first look at Bobcat Co.’s newest machinery and toured the company’s Bismarck manufacturing plant one day before the facility was to temporarily shut down due to slow sales.
The West Fargo-based maker of skid-steer loaders and light construction equipment unveiled eight new machines, ranging from loaders to excavators, on Tuesday to about 20 industry media representatives from the U.S. and Canada.
What a great neighbor!
“The Africanized bees lived in front of Robert Porter’s tiny one-bedroom house. Forty thousand of them, in an 8-foot-tall hive that stretched 30 inches wide. Sixty pounds of honeycomb.”
http://www.tampabay.com/news/publicsafety/fire/article1008491.ece
Man, that story has to be seen to be believed.
The kitty cat tried to warn him but he didn’t listen.
I love bees. But not African bees. Thanks a ton, Warwick Kerr, ya frickin’ mo*ron.
This reminds me of something I wondered about years ago: around my childhood home in the remote lands of Utarr there were many apple orchards, old gnarled trees, and in the spring the orchard owners would have the big diesel semi-trucks come by with their huge loads of bees for pollination.
I used to love to wait for dusk and then walk quietly up to the ranked rows of square white boxes, and approach the Home of Bees, and crouch down and put my ear against the warm box sides. Man, the somnolent hum of golden honey-bees…it was indescribably lovely, busy and sleepy all at once, and sometimes soldier bees would walk along you, but seeing you hold still, would not sting, or anyway, only onr or two.
If you’ve never heard a bee-hive sing itself to sleep, then you are lacking something, is what I think.
This was when I was a wee lass.
Then—this is the important part—about 13-15 years ago? I noticed that walking up to the hives was not possible anymore, not at ALL. Even 200 feet away you’d get dive-bombing soldier bees.
This is before I ever even heard about ‘Africanized honey-bees’. Later on I wondered if Africanization had happened years before it was acknowledged by bee studiers?
So. I dunno. I’m not a bee-studier. This just reminded me, is all.
Created in South America in 1957. Wikipedia “Africanized honey bees”
Idiots.
What happens when the Feds run out of dogs?
Two Ways to Deleverage an Economy.
Bill Bonner
Agora Publishing & The Daily Reckoning
Jun 10, 2009
Betting against deleveraging is probably not a smart thing to do. Not until it’s over, which is not until the leverage built up in the bubble era has been removed. And with total debt levels at 370% of GDP, and the government adding even more debt, we’re a long way from there.
But what do you do, dear reader? Buy Treasuries in anticipation of another crash in stocks? Or mortgage your house, long-term fixed-rate, in anticipation of fed-caused inflation?
Ah, there’s the tough question. We know where the dumb money is, but where’s the smart money? Jeff Clark says it’s short stocks. But there’s some very smart money that is betting that the government will turn this around. They’re putting their money on inflation, or even hyperinflation. Our old friend, Marc Faber, for example, says he is sure the United States is headed for hyperinflation. If so, shorting stocks may not be such a shrewd move. Stocks could soar too - as investors try to buy anything and everything that didn’t have dollar signs on it.
You see, there are two ways to deleverage an economy.
The obvious way is the traditional, honest way - in which people actually try to pay their debts. This causes the problems we see as falling asset prices, bankruptcies, joblessness and the other hallmarks of a Great Depression.
But the feds have their hearts set on preventing a depression. And they’re doing it the only way they can, by the old ‘hair of the dog’ technique. The economy suffers from too much debt - so they’re going to give it more! Much more. The whole pooch! The whole kennel! Then, they round up every stray mongrel in town. What happens when they run out of dogs? Well, that’s a discussion for another day.
We have had many laughs following the feds and their war against capitalism. They’re gambling an amount nearly equal to the entire U.S. GDP to try to prevent people from getting what they have coming. In the process, they’re almost certain to make a mess of things.
The smart money is betting that they fail to stop deleveraging. But the very smart money is betting that they create a new, worse problem - inflation, maybe hyper-inflation. Inflation reduces the real value of debt, but in a perverse and unpredictable way. Debtors don’t pay their bills; savers pay them. Inflation - like bailouts - rewards the least responsible players, those who have gotten themselves heavily in debt, and punishes those who have done the ‘right’ thing. As Germany saw in the ’20s, it de-stabilizes the whole society, leading to extremely unwelcome outcomes.
“The smart money is betting that they fail to stop deleveraging. But the very smart money is betting that they create a new, worse problem - inflation, maybe hyper-inflation. Inflation reduces the real value of debt, but in a perverse and unpredictable way. Debtors don’t pay their bills; savers pay them.”
What if you aren’t interested in joining either the ’smart money’ or the ‘very smart money’ camps, but are merely interested in keeping your household financially afloat? Is there any option available to those not interested in gambling?
The author really stuck his neck out on that one.
Dumb Money stocks
Smart money deflation
Smart ? Smarter money inflation
“Sometimes, there just aren’t enough dogs.”
Hello everyone,
I just bought my first gold eagle coin and platinum eagle coin. They are nice. I think I might start getting the bullion bricks before gas goes up and screws the economy even more…
Don’t look now, but the 30-yr T-bond yield is clawing its way up towards 5 pct:
http://www.bloomberg.com/markets/rates/index.html
If this T-bill goes to 5%, what implications does it have for the individual investor? Why do we care how high this rate goes?
This rate is about 99 pct correlated with the conventional mortgage interest rates. Higher l-t T-bond rates are likely to be accompanied by higher mortgage lending rates, which reduces the price prospective buyers can afford to pay for housing (assuming that liar loans and other lax lending practices don’t return).
P.S. T-bills = 4wks-52wks
T-notes = 2yr-10yrs
T-bonds = 30yrs
P.S. A big selloff in the l-t T-bond during spring 1987 was followed by a record crash on Black Monday (10-19-87). Not sure this is a likely prospect this time around, given PPT interventions and that the stock market is already down by 50 pct or so…
But that’s the real question, isn’t it?
Not, “what’s the likely market response moving forward”, but “what will they try this time as the intervention du jour”?
This Chrysler deal is a total sham.
“Consumer groups and individuals with product-related lawsuits also contested a condition of the Chrysler sale that would release the company from product liability claims related to vehicles it sold before the asset sale to Fiat. Compensation for such claims would have to come from the parts of the company not being sold to Fiat. But those assets have limited value and it’s unlikely there will be anything to pay out.”
How do you get to break a company up into the good assets and the bad assets, then sell the good assets off, while sticking others with the bad ones?
I need to change my alias. This country isn’t even good enough to warrant “banana republic” status.
“How do you get to break a company up into the good assets and the bad assets, then sell the good assets off, while sticking others with the bad ones”?
Fiat loved the deal, they don’t have to come up with one thin dime, for the ‘good’ assets! They will however share their technology with the new Chrysler.
While bond holders get the finger.
Man! These are the lengths these companies have to go to just to build a halfway decent small car? That’s sad.
They’ll be back in BK before his first term is up.
Fiat has technology we want? Says a lot about the shape Chrysler was in.
“I need to change my alias.”
greenshootsrepublic
These f—ing idiots just won’t stop with this ‘pump’ up the housing market crap…
Senate Renews Push to Expand Homebuyer Tax Credit to $15,000
By Dawn Kopecki
June 10 (Bloomberg) — Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time homebuyers and expand the program to all borrowers.
Senator Johnny Isakson, a Georgia Republican, plans to introduce a bill today that increases the tax credit to $15,000 and removes income and other restrictions on who can qualify for the credit, according to his spokesman, Sheridan Watson.
The legislation, which is co-sponsored by Senate Banking Committee Chairman Christopher Dodd of Connecticut and other Democrats, would extend the homebuyer credit to multi-family properties that are used as the borrower’s primary residence. It would also eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit.
“The housing market continues to be a drag on the economy, said John Castellani, president of the Washington-based Business Roundtable, which represents the interests of more than 100 CEOs including General Electric Co.’s Jeffrey Immelt and Exxon Mobil Corp.’s Rex Tillerson. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”
The Business Roundtable and the National Association of Realtors are both pushing to expand the tax credit and to lower mortgage rates to revive the U.S. housing market.
This doesnt seem to be a good idea to me. Where would the extra money come from?
I suggest you look in the mirror for your answer.
Bear, I predicted this exact legislative response in a reply to you, either a day or two ago.
You were posing questions about whether the stimulus would be extended or not, and I mentioned that these were far from the only two choices. I wouldn’t have guessed that it would appear so soon, though.
Perhaps we inadvertently offered a useful suggestion?
That crew doesn’t seem to need any help from us.
Of course, it’s a “bi-partisan” effort, so it’s all good. Funny, when you look at the things they fight over, vs. what they agree on…
“Funny, when you look at the things they fight over, vs. what they agree on”…
We basically have one party, with few exceptions, and now the poor old repubs are tripping all over themselves to go along with any swill that comes along.
plus infinity.
“Perhaps we inadvertently offered a useful suggestion?”
Just in case they’re still lurking, here is another useful suggestion:
LOWER THE PRICES!!!!
At least everyone will be able to come up with a $15k down payment now.
Somebody ought to point out the reverse-Robin-Hood nature of this regressive wealth transfer from renters into the coffers of lenders and the bank accounts of those wealthy enough to buy homes when many are sidelined by job loss or other recession-related financial hardship. I find it quite interesting to see that D-ratic pols support regressive taxation of the renter class to subsidize members of the Ownership Society.
Perhaps it is unfair for me to suggest that homebuyer tax credits rob Peter the renter to pay Paul the buyer. I tend to forget that money grows on trees in Congress’s parallel universe, and hence there is no wealth transfer involved here.
Don’t you mean Paul the seller?
OK… don’t post without thinking!!!
It is here you see that politicians love their power more than their principles. It is only out-of-power politicians that have principles.
Another example - Maryland has a monolithically Democrat state government. What was their solution to budget deficits? Raise the sales tax - a regressive tax.
But it wasn’t enough - and slots were pushed heavily by the Democrat government. Gambling again preys on the poor, those with shabbier jobs who are more easily sold a dream than those with more comfortable existences.
The Democrat line about being the party of the little guy only holds until their power is threatened by that principle.
This one will fly through, and it will create an uptick in sales.
It will also help prop up prices (by roughly the amount of the tax credit), creating evidence that green shoots have sprouted in the housing market.
Has anyone pondered how many of the myriad market interventions underway by the Fed, Congress and other government entities can easily be construed artificial measures to prove that the economy is rebounding?
It seems to be a Potemkin village. I wonder if the facade will become a reality, or will it blow away.
What a surprise… Not, Past and probably present realturd!
Senator Johnny Isakson, a Georgia Republican
Chief Executive Officer, Fairgreen Capital, Limited Partnership, 1996-1999
President, Northside Realty, 1967-1987
How scummy…
If they eliminate the income caps and vastly increase the tax credit and make the tax credit a permanent credit rather than a loan, then I personally will buy a house.
Getting ahead these days and achieving the American Dream is largely based on the ability to multi-task. Can you drive and pay bills on your Blackberry at the same time? Can you prepare for a work presentation, answer your emails, and close the deal while picking up/dropping off your child at day care? How much can you do at once and how fast can you do it? It is our new mantra and drug of choice at work, home and play. We get a thrill, a rolling momentum and a mental high from the ever increasing speed and frenzy of these endless task accomplishments.
Neighbors say this young couple, husband a banker, who just bought their first home in an upscale SF bay area neighborhood adored and were thrilled with their first new born.
Infant in El Cerrito BART station death identified
By Karl Fischer and Shelly Meron
Bay Area News Group
Authorities continued to investigate the death of 4-month-old Everett Carey, one day after his mother found him dead inside the family car at the El Cerrito BART station, but made no decision Tuesday about whether to pursue criminal charges.
The father, Alan Carey, apparently forgot to drop off his son at day care Monday morning. He left Everett in his car seat when he parked at BART to commute to his banking job in San Francisco, BART police Lt. Frank Lucarelli said.
The mother, Anne Carey, found Everett unconscious inside her husband’s silver Chrysler about 5:30 p.m.
“Anything the criminal justice system could do to this couple pales in comparison to what they are doing to themselves,” Lucarelli said. “It’s hard to imagine how tortured they must be right now.”
It hurts to read that.
you’d think people would have heard that baby screaming!
The baby probably only screamed for a little bit, and then got too hot to make any more noise.
Child safety experts have recommended some very low tech solutions to this problem. The easiest of them is to put a large stuffed animal in the child’s car seat when it is not occupied and transfer it to the front passenger seat when you put a child in the car seat. Evidently, while it is possible for a busy adult to forget about a quiet child in a car seat in the back, a large stuffed animal in the front is not missed.
The Washington Post had an Sunday Magazine article about similar inscidents a few months ago.
That Washington Post article was compelling, frightening, and absolutely brutal to read. I couldn’t read it in one sitting; it was too disturbing.
We have a similar solution to the stuffed animal, but we put our diaper bag on the front seat when driving solo — with the cellphone in the bag.
Here’s a link to the article:
Fatal Distraction: Forgetting a child in the back seat of a hot, parked car is a horrifying, inexcusable mistake. But is it a crime?
By Gene Weingarten
Washington Post Staff Writer
Sunday, March 8, 2009
Warning: this article is quite graphic at times, and shockingly hard to read.
OMG, I stopped at the car alarm guy in TN.
Well, Muggy, you got a precious little mini-muggy and another on the way, so I can imagine.
The ’skin slippage’ part did it for me. (quoted in the autopsy report for symptoms of what death- by- heat does to kiddie bodies). I was all done reading, right then and there.
I mean, that’s what happens when I dig up some nice fresh gooeys and go home and turn the stove-top on ‘high’ and then pop them in the colander and slap them down on the boiling water. Boils them to death just as quick as you please. The skin comes off easily—it just peels right off, like a little pink glove.
Merciful Lord, please see us now.
…Well, I would not be alive after I did that, is all IIIII know, let alone yakkering around to some reporter and going to the grocery store and assorted c*rap. How do you live any part of your life after THAT?! I cannot even imagine.
“We get a thrill, a rolling momentum and a mental high from the ever increasing speed and frenzy of these endless task accomplishments.”
“We”?
Now is the time for the slackers to shine.
I don’t have children, but has anyone on here with kids ever come anywhere close to making a mistake like that? It’s unfathomable even to me.
I used to park my car at that BART station when I lived in the Bay Area, and our kids were very little at the time. We never did day care when our kids were under 2-years of age, so that scenario was outside the realm of possibility for us. But I have to wonder what could have so preoccupied the guy’s mind that could have led him to forget he had a child with him in the car, as I always experienced a palpable burden of responsibility when traveling with infants in the car.
I drive like a grandparent when my dogs are in the back seat and those SUV’s give me the finger.
Well Mr. Bear, Shasta happens…
Infant Son Left in Car by UCI Professor Dies:
By David Haldane, Times Staff Writers and Christine Hanley, Times Staff Writers
August 09, 2003
“A 10-month-old boy died Friday after his father, a UC Irvine professor, left him unattended for more than three hours in a locked car on a campus parking lot in 80-degree heat.
Authorities did not release the father’s name, but several law enforcement officials, speaking on condition of anonymity, and neighbors identified him as Mark J. Warschauer, 49, vice chair of the university’s Department of Education and an associate professor of information and computer technology.
“He arrived on campus about 8:30 a.m., parked, locked the car and went in,” said Lt. Jeff Love, a spokesman for the Irvine Police Department. “About noon he saw a commotion around the car, came out and learned that he’d left the child in there. Apparently he didn’t realize it.”
In the Washington Post article that Polly mentioned, parents who lost their children in this manner included a pediatrician, a professor, and a woman who had been a combat medic in Iraq.
From the article:
Two decades ago, this was relatively rare. But in the early 1990s, car-safety experts declared that passenger-side front airbags could kill children, and they recommended that child seats be moved to the back of the car; then, for even more safety for the very young, that the baby seats be pivoted to face the rear. If few foresaw the tragic consequence of the lessened visibility of the child . . . well, who can blame them? What kind of person forgets a baby?
The wealthy do, it turns out. And the poor, and the middle class. Parents of all ages and ethnicities do it. Mothers are just as likely to do it as fathers. It happens to the chronically absent-minded and to the fanatically organized, to the college-educated and to the marginally literate.0
Actually the professor in the WaPo article IS Warschauer.
I’ve never come close to making a mistake like that, but I’ve definitely found myself making more mistakes around work and home since starting a family. It’s the sleep deprivation that comes with raising very young children.
“…sleep deprivation…”
That could explain it…
When we had just one small child, I was scared to death we would do this. She did not sleep at night much, and the sleep deprivation was horrible. I forgot/redid/screwed up more things than I can remember. It’s only by the grace of God none of those screwups harmed her. These stories still give me cold chills and an urge to vomit.
Yes. Sleep deprivation.
Sleep deprivation is VERY serious.
I have never come close to making a mistake like that. Ever. I have always been fully aware of when my child is in the car. Also, I have a routine of taking him to daycare before I go to work that has become as natural as getting dressed in the morning.
I’ve heard the argument in other cases like this that it happens when the parent who doesn’t normally take the child to daycare is doing so. I don’t get that, though. I would think if you’re doing something you normally don’t do, that you’d be even more aware.
Very sad.
It takes a particularly rare brand of slaptard to do this.
Which is why you don’t hear about this sort of thing happening that frequently, and the offenders are an utterly miniscule percentage of the population.
It takes a particularly rare brand of slaptard to do this.
You know what? I think you are right. The article quoted went on and on about ‘holes in the brain’s cognition’ and offered many excuses about stress and being busy and all of that, but you’re right, neuromancy
—if we humans were in the habit of regularly forgetting and baking our offspring, we wouldn’t be around nowadays, would we? So that would qualify as ‘rare brand of slap-tard’.
That cheers me up. I mean, it doesn’t cheer me up at all, but I mean, thanks for pointing out that it doesn’t really happen that often. Not relative to the mass of people who have access to little kids + hot climates + sealed cars.
They can`t control rates anymore so they need a bigger shovel.
“Senate Renews Push to Expand Homebuyer Tax Credit to $15,000″
30yr.fixed w/ 20% dwn at 5% is $859.00 P/I payment on $200,000 house
30yr.fixed w/ 20% dwn at 6% is $863.00 P/I payment on $180,000 house
There goes the eight grand for first time buyers, +12
Fed Would Be Shut Down If It Were Audited, Expert Says
http://www.cnbc.com/id/31204170
How ’bout the shooting in DC?
Must be those right to lifers.
How ’bout the fact that the Daily Kos, NY Times, or Democrats in general, never want to mention certain statistics:
June 10, 2009
Obama-first mayors lead 14 of 15 most dangerous cities
Ben-Peter Terpstra
When Mayor Giuliani, the feisty Italian-American Republican took charge of New York, he meant business. Crime went down, down, down.
Alas, today’s big city mayor is more likely to be a soft-on-crime Democrat.
What do I mean? When Forbes magazine listed the 15 most dangerous cities in America - the political class ignored one embarrassingly obvious fact. Yes: 14 of the 15 mayors leading America’s most dangerous cities are Obama-first leaders. The 15th (Manny Diaz of Miami) classifies himself as “independent”, but was in fact a speaker at the 2008 DNC convention and declared himself an Obama voter.
Think green, hope and change, and don’t go out after dark in Dem-led cities ?
Here’s the beef:
No. 15 Philadelphia, Pa. Mayor Michael Anthony “Mike” Nutter (Democrat)
No. 14 Charlotte, N.C. Mayor Patrick “Pat” McCrory (Republican)
No. 13 West Palm Beach, Fla. Mayor Lois J. Lois J. Frankel (Democrat)
No. 12 Baton Rouge, La. Mayor-President Melvin “Kip” Holden (Democrat)
No. 11 New Orleans, La. Mayor Clarence Ray Nagin, Jr. (Democrat)
No. 10 Baltimore, Md. Mayor Sheila Ann Dixon (Democrat)
No. 9 Nashville, Tenn. Mayor Karl Foster Dean (Democrat)
No. 8 Charleston, S.C. Mayor Joseph P. Riley, Jr. (Democrat)
No. 7 Little Rock, Ark. Mayor Mark Stodola (Democrat)
No. 6 Orlando, Fla. Mayor John Hugh “Buddy” Dyer (Democrat)
No. 5 Stockton, Calif. Mayor Ann Johnston (Democrat)
No. 4 Las Vegas, Nev. Mayor Oscar Baylin Goodman (Democrat)
No. 3 Miami, Fla. Mayor Manny Diaz (”Independent,”Obama-first voter and 2008 DNC speaker)
No. 2 Memphis, Tenn. Mayor Willie W. Herenton (Democrat)
No. 1 Detroit, Mich. Mayor David Bing (Democrat)
Maybe it’s because they all thought Obama would be more sympathetic to their problems vs. McCain/Republicans.
We all know how well the Feds did helping out New Orleans.
“Think green, hope and change”
Think green, Hope you don`t get shot and Change your name to protect the innocent.
‘…Think green, hope and change, and don’t go out after dark in…”
Jasper, Texas
Dallas would probably be on the list, but the Dallas Police have a different way of tabulating crimes.
Los Angeles would probably be on that list, but the voters passed 3 strikes many years ago, and the most dangerous and chronic criminals now go away for life.
They can’t commit armed robbery in Hollywood from Folsom.
LA and SF are sanctuary cities: Illegal Aliens, not questioned, not arrested,not deported.Four million of them sucking on the teat to the tune of $15billion tax payer money. Boy, isn’t that great. Go to a TEA Party in your neighborhood July4. (San Luis Obispo’s Santa Rosa Park).
Barney Frank just said: “It was the fault of the Wepublicans”. We Democwats twied to ewminate the wisk…
“…ewminate…”
Is the proper spelling ‘ewomenate’?
I would love to hear more about how the likes of Dudd and Fwank tried to rein in the risk at the GSEs. Can you furnish a link to this story?
‘Ol Slobbering Barney, is good for a half-assed laugh now and then. Funny how he has no recollection of the facts regarding his deep involvement in all things wrong.
I wish he go back to pimping his boy friend! Made for better reading and listening, the old queen can really get wound up. Needs to start wearing a lobster bib.
I don’t know what “Needs to start wearing a lobster bib” means, but it sure made me laugh!
Think slobbery!
Needs to start wearing a lobster bib.
LOL. Thanks wmbz
I think Fwank put on a manatee suit. See story below.
American Barack Channel and “The New Normal”. Are we going to have a New Normal Czar?
ABC News devotes newscasts to `The New Normal’
Email this Story
Jun 10, 1:13 PM (ET)
By DAVID BAUDER
NEW YORK (AP) - The economic crisis isn’t over yet, but ABC News is concentrating some reporting on what life will be like when it is.
A network-wide series of reports next week on “The New Normal” will look at how businesses and personal habits have changed in the wake of the recession. “World News,”"Nightline” and “Good Morning America” will all do stories, culminating in a “20/20″ special on June 19.
ABC News President David Westin said the network has held a series of off-the-record meetings with economists, business leaders and regulators over the past year and he was struck by how they all agreed on one point: When the recession is over, things won’t go back to the way they were before.
“I was concerned that people in the media hadn’t done enough to prepare people for that and we had to start thinking about it,” Westin said.
One of ABC’s reports, for example, will examine how the real estate downturn has reversed trends toward more Americans owning homes, and homes becoming larger. “Good Morning America” will follow a couple with its income dramatically reduced to give advice on how to cope.
“Are we going to have a New Normal Czar”?
Probably, ‘they’ are going to introduce a SRM (state run media) czar, I read a few days ago. The intent is to make sure the ‘correct’ message is getting out. They are going to have a tough go with the internet.
I am now waiting for a czar-czar, who else could watch over all these new czars?
Back in the Victorian Era, big houses were all the rage. You can see a few of ‘em still. They’re real utility eaters for their current owners.
The Victorian houses were succeeded by the more compact houses of the Arts and Crafts era.
I’m really looking forward to McMansions being turned into halfway houses, and sanitoriums. Recycle the granite for headstones.
Stocks add to losses after bond auctionJune 10, 2009 1:14 PM ET
All Thomson Reuters news NEW YORK (Reuters) - Stocks extended losses on Wednesday as results of a Treasury auction raised the specter of higher borrowing costs.
The rate worries presented another headwind for the market, after surging oil prices earlier triggered fears of a slump in consumer and business spending.
Things are improving in Fantasyland!
“WASHINGTON (AP) — The economy’s sharp downhill slide eased in the late spring and hopes for future business activity improved, suggesting that the worst of the recession has passed.
A Federal Reserve snapshot of economic conditions issued Wednesday found that five of the Fed’s 12 regions said the “downward trend is showing signs of moderating.”
In addition, “several” regions said their expectations of future business activity have improved, although they don’t see a “substantial increase” through the end of the year. In the last survey, several regions simply noted signs of some stability at low levels.
Altogether the assessments of businesses on the front lines of the economy appeared to be slightly better than those they provided in the previous report issued in mid-April.”
Brought to you by the same lame egghead rear-view mirror-looking idiots who have been 100% WRONG about every major economic trend for the past two years. Only THIS time they have a pretty good handle on it because the PPT has been driving all the shorts out of the equity markets; the banks can hide all their REO losses forever under the current regime; the government is hell-bent to nationalize everything under the sun; and unemployment is about to go to GD1 levels as interest rates climb to the sky.
No wonder things look so promising to them.
Idiots are still idiots even when the MSM holds them up as “experts”.
* JUNE 10, 2009, 2:19 P.M. ET
Wall Street Journal
* JUNE 10, 2009, 2:19 P.M. ET
US Stocks Slide; Rates Up After 10-Year Treasury Action
By Peter A. McKay and Rob Curran
U.S. stocks slid Wednesday and government debt yields rose after a weak 10-year Treasury auction.
Major indexes were more or less flat for much of the session, but fears about creeping interest rates choking off the incipient economic recovery heightened when yields rose in the wake of an auction around 1 p.m. EDT.
Long-dated Treasurys bore the brunt of the selling, pushing the yield on the 10-year note to as high as 3.996%, the strongest level since mid-October and approaching the psychologically important 4% level. The last time the 10-year note’s yield rose above 4% was in October. A 30-year Treasury sale is scheduled for Friday.
“Higher interest rates are not good for anyone; it’s going to kill the refinancing boom and slow the housing market,” said Joseph Saluzzi, a co-founder of brokerage Themis Trading. The recent rally propped up the market on “stilts,” said Saluzzi, who believes a significant dip is overdue.
At 2 p.m. EDT, the Federal Reserve’s regional review showed that economic conditions remained weak and even deteriorated in many regions of the country as recently as last month.
The Dow Jones Industrial Average was recently down 110 points, or 1.3%, at 8653.
The Russell 2000, the small cap index that has risen more than 50% since its March low in anticipation of an economic recovery, was off 2.2%, while the S&P 500 was down 0.9% and the Nasdaq Composite Index was off 1.1%.
Industrial and consumer-discretionary stocks were leading the market’s move downward. These economically sensitive sectors had a strong start to June.
The prices of aluminum, copper, grains and other commodities were up in recent action, extending a recent bull run that has raised concerns of inflation among some investors. Oil futures were up 75 cents to $70.79 a barrel in New York following the release of government data showing a bigger drawdown in U.S. stockpiles of crude last week than analysts expected.
The tug of war between bulls, who believe the worst of the recession and financial crisis is over, and bears, who believe the recent rally was yet another false dawn, continues.
The US Fed is front and center in setting short term rates and holds the cards. Long term rates are a competely different story though. This will certainly be interesting.
They have a tiger by the tail*, but the tiger** is struggling mightily to escape, despite the incessant tugs on the choker collar^ the circus master^^ has placed around its neck.
Metaphorical translations:
*short term rates
**long-term rates
^QE purchases of l-t T-bonds
^^BB
I have a silly question.
If the Fed is just doing ledger entries to bring money into existence in order to buy down the treasury debt rates, what stops them from buying ALL the debt?
I remember once being told that the most accurate things on TV were the commercials. It took we a long time to realize that was true. Our news media is rotten. They aren’t worthless. They are extremely damaging to the country.
If Obama ever decides to revoke some licenses, I will be all for it. The newspapers are going bust but the bullshit news we get on TV is totally outrageous.
The whole news industry went National Enquirer.
If that’s true, there sure are a lot of dudes with E.D.
The average American woman is 5′4″ tall and weighs 140 pounds.
Revulsion will do that to you.
Fed Would Be Shut Down If It Were Audited, Expert Says…
On Wednesday June 10, 2009, 2:41 pm EDT
The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.
With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.
“If the Fed examiners were set upon the Fed’s own documents-unlabeled documents-to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”
Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed.
Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank’s target rate should not be around zero.
“I think zero is the wrong rate for almost any economy,” Grant said, adding the Fed has “embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything’s green. … You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”
Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture.
Fed funds futures have fully priced in as much as a half-point rise in the target rate from its current range of zero to 0.25 percent.
“If the hairs on the back of your neck stand up when there’s too much unanimity of opinion, then one begins to worry about this,” he said. “The Fed proverbially has been late.”
How do you conduct a ‘conventional audit’ of a bank with a virtual printing press in the basement?
“You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”
If they were the ‘right clearing rate’, would private lenders be sitting on the sidelines while the lender of last resort hands out (interest-)free money to banks in the too-big-to-fail club while state- and local- governments, savers, investors, households and small firms, bear the full brunt of the credit crunch?
From the American Association of railroads
Lower electricity demand and higher coal stockpiles result in double-digit declines in rail traffic
WASHINGTON, June 4, 2009 — Freight railroad traffic was down sharply in May in comparison with the same month last year, the Association of American Railroads reported today.
U.S. rail carload traffic in May 2009 fell 24.7 percent (325,267 carloads) compared to May 2008 to 989,306 carloads. U.S. rail intermodal traffic (which is not included in carloads) fell 19.7 percent (177,482 trailers and containers) to 723,898 units in May 2009.
I believe the prior report for April reported a total of 1.2 million carloads vs 989,306 in May.
Green shoots?
Moonlit manatee beach orgy attracts peeping toms to Lauderdale-by-the-Sea
By ROBERT SAMUELS
Miami Herald Staff Writer
Tuesday, June 09, 2009
A leading candidate for Florida’s sexiest female found herself surrounded by an adoring throng when she made a surprise nighttime visit to the beach in Lauderdale-by-the-Sea.
As she lay on the sand under a full moon, cameras flashed, the media swooped in, and someone called police and the fire department, hoping they could restore order.
The belle of the night Sunday was a 1,000-plus-pound manatee. And she was so attractive, officials said, that she was surrounded by nine virile manatee males.
“This was quite the sight,” said Jerry McIntee, deputy chief of the town’s volunteer fire department.
“There are what, 1,000 manatees in Florida? We have a hundredth of them right on the beach.”
The manatees appeared around high tide at 9 p.m. Thinking the volunteer firefighters would have to shepherd the sea cows back to the water, McIntee started assembling lights and nets.
“We had our hearts in our stomachs,” McIntee said. “We thought we might lose 10 manatees on our beach.”
He called a marine biologist and the Florida Fish and Wildlife Conservation Commission.
They advised him to let sea cows be sea cows, and let nature take its course.
It turned out this lady sea cow had been peacefully swimming north.
As she swam, one male manatee started to holler at her. She kept going. More male manatees followed. By 9 o’clock, the persistence of the nine won out.
In the moonlight, near crashing waves, they made love to her as dozens of people watched. And after the tide went out, so did the manatees.
Why did so many males choose this manatee? First of all, there aren’t that many manatees left - with estimates between 1,000 and 3,000 in the entire state.
Second, McIntee said, males chose her because she was larger and had wider hips than most females.
Manatee males, it seems, like ‘em voluptuous.
Manatees are polygamists — with many males per female no less!
Can’t a girl get any privacy?
Not if she decides to have her fun on the beach when there is a full moon!
Not if she decides to have her fun on the beach when there is a full moon!
Really?
Well, that s*u*cks!
*makes studious note to self regarding situation, on a pink post-it note *
Federal Reserve System Monthly Report on
Credit and Liquidity Programs and the
Balance Sheet
http://www.federalreserve.gov/newsevents/press/monetary/monthlyclbsreport200906.pdf
Out of the blue, it is no longer Obama’s plans and strategies, but all Bernake’s? Amazing not one reporter is calling out the outrageous act of placing all blame on Bernake for these broadly crafted and supported policies. Maybe we are seeing the first sign Bernake is on his way out and they are using a lame duck while they can. Unbelieveable.
Rising defaults and interest rates hamper Bernanke’s rescue plans
Lita Epstein
May 29th 2009 at 9:30AM
The mini boom in refinances fizzled quickly as interest rates crept back over five percent. At the same time, rising unemployment helped push homeowners into delinquency or foreclosure, setting a record for the number of homes in some stage of foreclosure during the first quarter of 2009. About 12.07 percent of mortgages were delinquent or in the foreclosures process in the first quarter.
All this bad news means Federal Reserve Chairman Ben Bernanke’s efforts to lower the costs of mortgages and revive the housing market are stalling. Now that mortgage rates are over five percent, refinancings have stalled. “Housing is not going to be the engine to get us out of this recession,” Robert Eisenbels, Chief monetary economist for Cumberland Advisers, told Bloomberg. “They’ve squeezed a lemon and now they’re trying to squeeze some more, but you can only get so much juice out of a lemon.”
Above is an older article, but Bloomberg had something similar earlier today that is no longer there and I could not locate.
“Amazing not one reporter is calling out the outrageous act of placing all blame on Bernake for these broadly crafted and supported policies.”
Can we say “FAILED AND FAILING” policies?
I just told someone I know that obama’s policies are starting to fail and they hung up on me. Was I terribly incorrect?
Only politically incorrect, possibly.
Was it Obama’s wife or brother???
Unfair, because Obama’s economic policies are really just a reflection of advice he gets from his economics brain trust. He has to take their advice for what it is, as he is not an economist himself, and hence not qualified to make independent judgments on the likely effects of economic policy measures.
Thanks PB. I admire everything you write. Can someone teach me how to be a far left liberal?
I really feel so left out as I am centrist.
Can someone teach me how to be a far left liberal?
You betcha! I can! But you will have to fondle and caress some big wooden tree thingies, and also meet some homaseckshuls without wincing or casting aspersions.
But if you can do that, I can teach you all you everrrrrr want or will need to know about libruls.
All it will cost you is your kids and grandkids future.
…Oh, wait. You were gonna pay that anyway.
I love trees and I spent time in jacuzzis.
does that count?
I love trees and I spent time in jacuzzis.
does that count?
Hmmm…
Well, I’m thinking about it.
*lofty sniff *
Probably not, though, because I suspect that your heart is impure.
* falls off splintery wooden chair with all the cheery giggling *
cracking me up. I’ve tried everything once and approve of everything under the sun.
ROTFLMAO
…cracking me up. I’ve tried everything once and approve of everything under the sun.
Shoots, man. Then you’re already a librul! Admit it.
Come on…come on…!
* assumes a sinister and coaxing lefty sort of tone *
Yes, zombie…it’ll be easier the second time…we’ll go easy on you, seeing as you’re among pals and all…
**slips and falls headlong into hot jacuzzi and emits a stream of laughy bubbles, before floundering out **
Hahahahaah!
test
“…and also meet some homaseckshuls without wincing or casting aspersions.”
I have to admire my wife for her internal contradictions. She voted maybe 2-3 thousand times for Adam “Guyliner” Lambert to be the American Idol, then called me with a tone of resignation in her voice when word came out that he is gay. As a free lance musician, she has carpooled and worked along side ‘homaseckshuls’ throughout her career, yet when the Momans asked her to stand on street corners in the pouring rain holding Prop 8 signs, she was first in line…
“as he is not an economist himself, and hence not qualified to make independent judgments”
Should be:
“as he is not an economist himself, and hence not qualified to be wrong about every thing, repeatedly, and shamelessly”
The guy who shot up the Holocaust Museum had a prior conviction that may be of interest here….
D.C. Superior Court Judge Harriett R. Taylor sentenced a 62-year-old New Hampshire man to a minimum term of more than four years in prison yesterday for trying to kidnap members of the Federal Reserve Board in 1981.
James Von Brunn of Lebanon, N.H., was sentenced to various terms on charges of attempted kidnaping while armed, second-degree burglary while armed, assault with a dangerous weapon, carrying a pistol without a license and possession of a prohibited weapon.
Von Brunn was arrested at board headquarters and told police that he wanted to take board members hostage because of their role in the nation’s economic difficulties.
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/10/AR2009061002321.html
Here’s an excerpt from the most recent WP article. Classic.
“On Dec. 7, 1981, he walked into the Federal Reserve headquarters on Constitution Avenue NW with a handgun and threatened to take members of the Board of Governors, including then-Chairman Paul A. Volcker, hostage.
Police said he had an 11-page document, which he characterized as an exposé of an “international bankers’ conspiracy to rule all nations from one central seat of government.” Court records said he intended to place them under citizens arrest and charge them with treason.”
Are they going to figure out how much in bonus money the managers of Megabank, Inc drew out of the financial system in the years leading up to the collapse?
Published June 09 2009
Financial commission needs to be named soon
Economists today can tell us when our nation’s financial system started to collapse — the fall of 2007. Market experts can tell us some approximation of how much value was wiped out — as much as $10.2 trillion last year in housing and stock values, including pension funds and 401(k)-retirement accounts.
By: Senator Kent Conrad and Senator Johnny Isakson, The Jamestown Sun
…
Economists today can tell us when our nation’s financial system started to collapse — the fall of 2007. Market experts can tell us some approximation of how much value was wiped out — as much as $10.2 trillion last year in housing and stock values, including pension funds and 401(k)-retirement accounts.
But who is accountable for the nearly unstoppable slide in our nation’s economy that has affected the lives of every American? Small business owners closed their doors. Home values plummeted. Hundreds of thousands of Americans lost jobs. The financial crisis set off the most severe downturn since the Great Depression.
As lawmakers, we need to know where mistakes were made. We believe that the weight of accountability must be brought to bear. We must know what went wrong and what we can do to prevent another financial disaster in the future. There was failure all around. Were the regulators caught napping — or did the regulations fail to keep pace with the developing marketplace? Everyone’s actions need to be scrutinized, even those by Congress.
Looking for guidance, we turned to the only other time this past decade our nation has experienced such a shock: the terrorist attacks of Sept. 11. The federal government was left asking how terrorists could have operated on our own soil in a coordinated attack that killed thousands. In an effort to insulate the answers from partisan politics or influence, Congress appointed an independent, blue-ribbon commission to investigate, evaluate and write an objective conclusion.
Congress has passed and the president signed into law our legislation to create a similar panel to launch an independent, bipartisan inquiry into the near collapse of the global financial markets and the loss of trillions of dollars. It is imperative we gather all the facts available as we move to repair our economy and hold those who caused the collapse to account.
Who is responsible? These guys need to look in a mirror.
Numb sculled conjectures of the day:
1) Buying a house in most part of the country used to be a low-risk proposition. Young couple got married, bought a house at an affordable price compared to future earnings potential, and gradually paid off the mortgage.
2) My subjective impression (after looking at lots of data) is that buying a house in California has always been a high-risk proposition, thanks to the boom-bust cycle of their economy.
3) This cycle is different, as the bust is kicking the living daylights out of home equity wealth across the country.
4) The policy response is to use all manners of interventions to try to prop up prices. So far, no good, as prices were recently reported dropping across the country at the fastest rate in U.S. financial history, and to make matters worse, interest rates are rising in the face of efforts to tamp them down.
Hey PB, what are you smoking? Who in their right mind would pay off their mortgage, when they can rack up massive debts and then just walk away? Paying shit off is for chumps! There is no risk buying property in Cali. Heads I win, tails you lose. You got me on 3. And…of course we need to prop up prices! What kind of ponzi scheme do you think we are running here?
Dude, you are seriously out of touch with society today.
Society is losing touch with its own self image, even as my “out of touch” perspective is reflected ever more closely by the MSM.
RE: #1
This leads to one of those correlation vs. cause arguments, no? Traditionally people bought houses, stayed put, and paid off the place in 30 years. This is how their houses become their largest source of “wealth.”
Over the years housing became correlated with wealth, such that the mere act of buying a house - at any price - would cause wealth while ignoring the actual cause (the path and sacrifice described above).
Banks also traditionally did not loan money to people who were unlikely to be able to repay it. The flood of securitized debt into the mortgage market coupled with abandonment of traditional lending standards decoupled home prices from incomes during the recent episode. And now that prices and incomes are decoupled, efforts from on high are underway to keep them there, while the perpetrators continue to spew propaganda about affordable housing policy.
Visitors from mainland China — who spend more on average than those from other nations — fell 9.9% in May, the newspaper said. Tourists from the rest of Asia fell 14%, while those from outside the region fell 10%, the newspaper reported. The Hong Kong Tourism Board is forecasting another bad month for June, the report said.
They attributed the drop to swine flu which seem sodd given the small number of cases there so far. Could it be another sign that things aren’t quite as nice in China as the gov wants us to think.?
I love Diana Olick. She is sooo good at putting her foot in her mouth! Here is one example. Read this article:
http://www.cnbc.com/id/30603534/
Please note the parting shot of the article - “I did, however, get a call today from a real estate investor who claims the housing crisis in California is over. He says a house listed under $200,000 got 20 (!) offers and wound up selling for over $200,000.”
Well Diana, I also got a call from a realtor friend who informs me that that there have been multiple offers on newer homes listed around $ 200K and that they were originally sold for more than twice that price.
And by the way, this realtor friend of mine is busy once again working on arranging Short Sales for his ex clients (some of then are his friends and my friends) whom he had helped buy those same houses at inflated prices during the boom!
I guess I would be labeled an “Investor” because I was too timid to buy during the boom and as a result I have good credit and cash lying in my bank. He sent me over some REO and Short Sale listings (which are at a 50% discount from their original sale prices) in the Sacramento area and I did the math to see if it passes the Rent vs Buy smell test and still could not be convinced that I could get a Monthly Rent on the properties that would cover my Mortgage (with a 25% down payment!), Property Taxes and Insurance, HOA etc. So, I told him I am still not biting!!
Another thing he told me was that the higher end homes were just not selling and that banks were overloaded with REO’s in the 300K - 700K listed price range because very few qualified buyers were interested in them.
So, my thought is that once the good homes in the less than 300K price range get cleared, there is going to be a long drought in home sales with the “affordability” criteria playing a key role in the decision to buy a home!!
Neil
Reading about how much money lawmakers lost on AIG stock puts the urgency to bail that firm out into perspective. I further note that it would probably be hard to find a Congresscritter who is not a home owner, which explains their vested interest in measures to prop up housing prices.
Fair disclosure: I own no shares in AIG, nor do I own a home.
* The Wall Street Journal
* JUNE 11, 2009
Market Downturn Hit Lawmakers
House Disclosure Forms Show Several Lost Money on Stocks, Held Bailed-Out Firms
By BRODY MULLINS and T.W. FARNAM
WASHINGTON — House Speaker Nancy Pelosi and her husband sustained losses of between $100,000 and $1 million on American International Group Inc. stock last year. The California couple also spent more than $250,000 to increase their ownership of a luxury spa in Napa Valley.
Rep. Dave Camp, the top Republican on the House tax-writing committee, bought shares in Citigroup Inc. in the middle of the September market meltdown, and ended up selling them for a 30% loss just over a month later.
Rep. Nita Lowey (D., N.Y.) and her spouse sold between $15,001 and $50,000 worth of AIG stock in June 2008, when its price was down to about $35. In November, the couple sold their interest in J.P. Morgan Chase & Co. and Wells Fargo & Co., each valued in the same $15,000 to $50,000 range, amid the market collapse.
The investments were among hundreds of financial transactions in 2008 by U.S. lawmakers that were disclosed in personal financial statements released Wednesday.
…
I find it ironic and Stalinesque that a “pay czar” will override market forces that are supposed to set executive pay. It seems like the system would work much better if banks that went bankrupt were allowed to fail, and the executives who ran those banks were drummed out of management. Instead, a czar will decide on how much to pay bankers who threw away money.
To make this story all the richer, I just heard a Wall Street executive comp spokesman on BBC World Service lecturing the interviewer on how important it is to let the free market set pay, somehow overlooking the fact that the same executives who threw away money are still at the reins of their firms, thanks to bailouts. I guess Mr Market is smart enough to figure out how much to pay bankers, but not smart enough to know when a bankrupt bank should go out of business? It’s still “heads we win, tails taxpayers lose” for Wall Street executives and the politicians whose campaigns they finance.
* The Wall Street Journal
* JUNE 11, 2009
Pay Czar Gets Broad Authority Over Executive Compensation
By DEBORAH SOLOMON
The Obama administration scrapped the $500,000 salary cap it proposed for executives at firms receiving large amounts of federal assistance but appointed a pay czar to review, reject and even set pay levels — with no appeal.
Kenneth Feinberg, the administration’s new “special master for compensation,” will have broad authority over compensation for senior executives and the top 100 earners at American International Group Inc., Bank of America Corp., Citigroup Inc., General Motors Corp., GMAC LLC, Chrysler LLC, and Chrysler Financial. All seven companies got what the government calls “exceptional assistance” from the Troubled Asset Relief Program.
Mr. Feinberg’s decisions will not be subject to appeal, and the Treasury Department said he will follow certain principles in making his decisions, including whether it rewards risk, allows a firm to remain competitive, is comparable to peers, tied to long-term performance and contributes to the value of the firm. Mr. Feinberg won’t receive any government compensation himself.
“We felt that in cases where we’re offering exceptional government assistance that we had a duty to the taxpayer to ensure that, even if the letter of the law had no restriction on overall salary, that there needed to be a review process to ensure that it was neither excessive, inappropriate or oriented to short term risk taking,” said Gene Sperling, a senior counselor to Mr. Geithner.
What if the czars push our president around and change out his advisors?
“Mr. Feinberg won’t receive any government compensation himself.”
Who is paying him?
Wall Street Journal
* JUNE 11, 2009
Rate Rise Clouds Recovery
By NICK TIMIRAOS and RUTH SIMON
Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration’s economic-stimulus efforts.
On Wednesday, rates on 30-year fixed-rate mortgages climbed to 5.79%, up from 5% two weeks ago, according to HSH Associates. That jump will cut roughly in half the number of borrowers with an incentive to refinance, according to FTN Financial.
Refinance activity at J.P. Morgan Chase & Co. is already “really down” since rates began rising, a spokesman says. A rate of 4.75% “seemed to be the switch” that turned on refinance activity, he says. Now, rates are a full percentage point higher.
Mike and Joy Gallante have been unable to refinance their mortgage.
Brandon Sullivan
Mike and Joy Gallante have been unable to refinance their mortgage.
Mike and Joy Gallante have been unable to refinance their mortgage.
Mike and Joy Gallante have been unable to refinance their mortgage.
“Mortgage rates at these levels will hobble the [housing] recovery, and it was just the beginning of the recovery,” says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.
More from the WSJ on the effect of rising T-bond yields on lending rates:
…
The rise in rates represents a setback for the Obama administration’s program to help borrowers refinance their mortgages. In March, the government rolled out the Home Affordable Refinance Program, or HARP, to allow certain homeowners who owe between 80% and 105% of their home’s current value to take advantage of the low rates. The administration estimated that the program could help four million to five million borrowers refinance.
Underwhelming Response
But Wall Street analysts say refinancing activity under the program was underwhelming, even before rates began to rise. Payoffs were flat last month on loans that would have seen the biggest benefit from the program, including loans originated in 2006 and 2007 with high loan-to-value ratios and high rates, according to Barclays Capital.
The HARP program is limited to loans owned or guaranteed by Fannie Mae or Freddie Mac, the housing-finance giants now controlled by the federal government. So far, some 12,710 refinancings have been completed through the program, according to the Treasury Department. Those figures don’t include refinancings that have been completed by banks but not yet delivered to Fannie or Freddie. Bank of America Corp., for instance, says that it has completed 17,000 refinancings. By refinancing, borrowers on average have been able to reduce their mortgage rates by 1.3 to 1.5 percentage points, saving around $2,500 annually on a $200,000 loan, according to Freddie Mac.
The program was designed to help borrowers like Mike Gallante who weren’t late on their payments but couldn’t benefit from lower rates because they didn’t have enough equity to refinance. Mr. Gallante, a 45-year-old who works in law enforcement, has a 6.5% rate on his $400,000 mortgage, which is owned by Fannie Mae. But his five-bedroom home in Glendale, Ariz., was appraised at $325,000, putting him above the 105% loan-to-value limit. He paid $530,000 for the home in August 2007.
“It’s horrible,” he says. “They have a paying customer, and they’re not going to do anything to help unless I stop paying.” Mr. Gallante, who says he’s never missed a payment, says he’s so frustrated he’s considering buying a new home and walking away from his current one.
I note that the Fed is now pushing on a QE string.
Many policy makers see the rise in Treasury yields as a sign that investors are optimistic that the economy is on the mend. But many market participants say higher long-term bond yields indicate investors are increasingly worried about inflation.
The Federal Reserve stepped into the market Wednesday to buy Treasurys and announced it will make another round of purchases in a week or so. But the moves seemed to have little effect on rates.
The reason 10YR rates are going up is because there is less money floating around in the pockets of traditional creditors. Russia’s new found “realization” that they will buy less treasury debt is more to do with having less money to buy than a change of heart. Likewise for China.
This has nothing to do with the economy being on the mend.
* The Wall Street Journal
* JUNE 11, 2009
Brazil, Russia Trade T-Bills for IMF Clout
By JOHN LYONS
SÃO PAULO — Brazil and Russia are set to unload U.S. Treasury bonds as they acquire $10 billion each of new International Monetary Fund securities designed to bolster the institution’s aid programs, officials in the countries said Wednesday.
The moves are part of a bid by the so-called BRIC nations — Brazil, Russia, India and China — to play a bigger role at the IMF and other international institutions. The announcements helped push Treasury yields to their highest level this year on concern that rising U.S. debt has hurt T-bill demand among big holders of U.S. dollar reserves.
Leaders from the BRIC countries, who gather next week in Russia, are seeking to forge a bigger global voice on economic issues for the group. A big part of that is getting more of a say in IMF lending decisions; providing more funding to the institution is a first step toward that.
Strapped for cash, the IMF has been designing a bond that would meet the demands of Brazilian and other central banks since January. In addition to pledges by Russia and Brazil, China is considering the purchase of up to $50 billion. India is expected to announce a purchase in the range of the Brazilian and Russian pledges.
“This is an investment that Brazil is doing with part of its reserves and making available financing so that the IMF may help emerging countries, especially developing countries which face today a shortage of capital because of the global financial crisis,” Brazilian Finance Minister Guido Mantega said at a news conference.
Question: Is the Fed already starting to chase up l-t T-bond yields, and just doesn’t know it yet? Or will near-term withering of green shoots give them one more free pass on financing treasury debt at “lower than expected” interest rates?
Financial Times
US long-term interest rates hit high
By Michael Mackenzie and Alan Rappeport in New York and David Oakley in London
Published: June 10 2009 20:23 | Last updated: June 10 2009 21:45
US long-term interest rates rose to the highest level of the year on Wednesday, threatening the “green shoots” of recovery, after the latest sale of 10-year government debt met with a tepid response from inflation-wary investors.
Concerns about the growth of government borrowing forced the US Treasury to give investors in an auction of $19bn in 10-year notes a yield of 3.99 per cent – 4 basis points higher than the yield available before the auction. That constituted the biggest yield markup since a 10-year auction in May 2003, said Morgan Stanley. Yields on the 10-year note, the benchmark rate for US mortgages, hit a high of 4 per cent during the day, up from 3.6 per cent a week ago.
Any 5-year CD holders are gonna get plastered!
Anyone who bought 5yr CDs in the past 6 months is gonna get plastered.
Those who bought prior to November are probably ok. Also, many credit unions (and probably some banks) offer the holder early termination at a penalty, so in case of runaway inflation/interest rates that is something to consider.
Is it legal for regulators to make this kind of back-room threat?
Financial Times
Bernanke e-mail claim in Merrill sale saga
By Greg Farrell in New York and Tom Braithwaite in Washington
Published: June 11 2009 00:41 | Last updated: June 11 2009 00:41
Ken Lewis, chief executive of Bank of America, used the threat of invoking a “material adverse change” clause to break off his agreement to buy Merrill Lynch last December because he wanted to negotiate a lower price, Federal Reserve chairman Ben Bernanke claimed in an e-mail.
Mr Lewis, who is scheduled to testify about the matter on Thursday at a congressional hearing, only dropped his threat after being told by former US Treasury secretary Hank Paulson that regulators, including Mr Bernanke, would remove him and his board if BofA tried to invoke the “MAC” clause.
The House committee on oversight and government reform has been investigating whether federal regulators put undue pressure on Mr Lewis to complete an agreed deal last year to buy Merrill Lynch.
After the Fed initially refused to comply with the committee’s request for documents and e-mails in the matter, the committee took the extraordinary step of issuing a subpoena on Tuesday to obtain material from the Fed that concerned the deal.
One person familiar with the Fed’s history could remember only one previous occasion when it had been served with a subpoena.
The Financial Times has learned that Mr Bernanke, in an e-mail, described Mr Lewis’s threat to invoke the “MAC” clause as a “bargaining chip”, and a “foolish move”, before concluding that “the regulators will not condone it”.
PB, promise me you’ll watch the proceedings on cnbc?
* The Wall Street Journal
* JUNE 11, 2009
Fed Emails Bash BofA Chief in Tussle Over Merrill Deal
By MICHAEL R. CRITTENDEN
WASHINGTON — Federal Reserve officials harshly criticized Bank of America Corp. and its chief executive in emails after the bank tried to pull out of its deal to buy Merrill Lynch, according to documents unearthed by congressional investigators.
During the December standoff between the big bank and top government officials, Federal Reserve Chairman Ben Bernanke dismissed the pullout threat as a “bargaining chip.” Fed attorneys called the bank’s arguments “not credible.” And a top examiner said Chief Executive Kenneth Lewis’s own claim that the bank was surprised by Merrill’s mounting losses “seems somewhat suspect.”
From the Archives
The emails and other documents, subpoenaed from the Fed as part of a congressional investigation led by Rep. Edolphus Towns (D., N.Y.), get inside one of the most controversial moments of the financial crisis.
They provide a rare insight into the thinking of top Fed officials, who have been criticized by Congress and others for their lack of public disclosure in the crisis.
In particular, they show how Mr. Bernanke himself played a central role in the Bank of America saga.
A transcript of the documents, assembled by congressional investigators and reviewed by Dow Jones Newswires, indicates Mr. Bernanke was willing to threaten Mr. Lewis’s removal.
A Dec. 21 email from Federal Reserve Bank of Richmond President Jeffrey Lacker to Fed employees said Mr. Bernanke “intends to make it even more clear” that if Bank of America kills the Merrill deal, and later needs government assistance, “management is gone.” Mr. Lacker added he had had a “long talk with Ben” about the matter, referring to Mr. Bernanke.
“These were extremely difficult times in which all parties were working nights and weekends in an effort to prevent a severe financial collapse,” said Bank of America spokesman James Mahoney. “We believe it involved good people working with good intentions.”
The Fed declined to comment.
Difference between AG and BB: AG was a delphic oracle, but BB is scary!
PB, watch it live!