The Housing Bubble

“Blue Horseshoe loves Bluestar” -always wondered if it was real

http://finance.yahoo.com/news/Goldman-trading-huddles-offer-rb-419386184.html?x=0&sec=topStories&pos=3&asset=&ccode=

It looks like a lot of people are drinking serious kool aid in the stock market again today.Twill learn here shortly I believe.

Hey Prime,

Saw your post about my CD yesterday (btw I am a dude). Here is all the banks where I have my CDs and what has happened to them since last year:

IndyMac - Taken over by FDIC, CD rate honored at 5.25%.
WaMu - Taken over by JPM, CD rate honored at 5%.
National City - Taken over by PNC, CD rate honored at 5%.
Corus - On death’s door, but CD expires in Oct so even if CD rate of 5% not honored, no big deal.
KeyBank - Doing OK on 3-yr CD at 5%.
Capital One - Doing OK on 3-yr CD at 5%.
Alliant CU - Had some problem with CD withdrawl, but OK now. One more 2-yr CD left at 5%.
Mountain America CU - doing OK on 5-yr CD at 5%.
Park Ave. Bank of NYC - Doing OK on 2-yr CD at 5.15%.

I structured all the CDs to just under the FDIC limits so that with interest accumulating they would not go over the FDIC limit. I also tried to ladder the CDs from 1-5 years with average maturity between 2-3 years because I knew that 5% CDs would be hard to get in 2009-2010, but after that inflation may kick in and I wanted to prepare for that.

Latest in Stimulus: ‘Cash for Refrigerators’
http://news.yahoo.com/s/bw/20090824/bs_bw/aug2009db20090821304909

I think I am going to hold out until the “Cash for Jack Daniels” program.

I’m waiting for Cash for Cats.

The old girl’s getting tired

Its been a long time since I posted here. I’ve been too busy as of late. Anyhow, just from my perspective here in the east bay of the Bay Area, it seems that prices on houses in non-crime-ridden areas have been stubbornly hovering around the 500-550k mark. That’s not remarkable given that the same homes were 600-650k at the peak. These prices have been sitting at this level for some time now. Thus I can only guess that this is where they will remain. As such, that’s too high for me. Not that I can’t afford it, but I refuse to buy just on the lunacy alone.

Good Morning HBB!

Sipping nice dark roast - mm mmmmmmmmm.

WSJ reports Goldman’s trading tips rewards it biggest clients. The comments are interesting!

I also read the FBI arrested the guy GS accused of stealing code.

Oh, and housing is going up! That’s not a joke here in WI. I’ve watched a few listings for two plus years. High, then lower, lower and lower.

Something is in the water, because a month or so ago, these listings climbed higher!

Ya just can’t make this stuff up.
Leigh

( a reply to yesterday)

desertdweller
Boy, are you my kind of gal. I like to screw with the UHS at open houses too. I was on the intelligent side of the biz, commercial.

The cool thing about Redfin is that the buyer gets a cut of the agent’s commission (and the paperwork is their job). I like the business model that let’s a motivated buyer get paid for the effort. How often does the buyer win in a normal r e transaction.

I have posted previously on John Hussman’s weekly commentary as good readings, this week’s commentary is a must read:

�Our forecast is for moderate but positive growth going into next year. We think that by the spring, early next year, that as these credit problems resolve and, as we hope, the housing market begins to find a bottom, that the broader resiliency of the economy, which we are seeing in other areas outside of housing, will take control and will help the economy recover to a more reasonable growth pace.�

Ben Bernanke, Federal Reserve Chairman

On Friday, investors took great cheer in an optimistic statement by Ben Bernanke suggesting good prospects for economic growth ahead. We might be inclined to place a sliver of credibility in Chairman Bernanke’s assessment � if not for the fact that the quote above wasn’t from last week at all, but rather, hails back to November 8, 2007, just before the recent recession began. You might recall that the S&P 500 was pushing 1500 at the time. The implosion of the global credit markets was still just a slight rumble.

As it happens, that was also the week our recession warning composite shifted clearly into negative territory, prompting the weekly comment Expecting A Recession, where I wrote �On Saturday, the consensus of economists surveyed by Blue Chip Economic Indicators indicated expectations that growth will be sluggish into next year, but that there will be no recession. Unfortunately, the economic consensus has never accurately anticipated a recession. For my part, the outlook has changed. I expect that a U.S. economic recession is immediately ahead.� That was followed the next week with Critical Point, which opened with a saying of Rudiger Dornbusch: �The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.�

A good economist thoughtfully recognizes �general equilibrium� � resources moved to one place must be taken from somewhere else. Securities or monetary liabilities, once issued, must be held by someone in the economy until they are retired (the failure to recognize this is the basis for the �cash on the sidelines� fallacy). Instead, Bernanke’s economic research is a minefield of partial equilibrium analysis. Helicopter Ben is a lot like John Maynard Keynes, who wrote in his General Theory �If the Treasury were to fill old bottles with banknotes, bury them at suitable depths, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again, there need be no more unemployment.�

Solving economic problems, to our Fed Chairman, is as easy as throwing money out of helicopters. Not surprisingly, throwing money out of helicopters has been the basic core of his strategy during this crisis. This does not involve complex thought about debt restructuring, moral hazard, incentives, equitable distribution of resources, or other factors. All it requires is the three second tape playing in Bernanke’s head - “We let the banks fail in the Great Depression, and look what happened.” And then the tape repeats. Never mind that the cause of the upheaval was not the failure of banks per se, but the disorganized Lehman-style failure of banks. The tape isn’t long enough to encompass such nuances.

Ben Bernanke (like Tim Geithner and his predecessor Hank Paulson), shows no hesitation in diverting the real resources of the American public to defend and compensate the bondholders of mismanaged financial companies who made reckless loans and who should have (and equally important, could have) been expected to write down principal or swap debt for equity as an alternative to receivership. This is not decisiveness. It is timidity and poor stewardship. Worse, the underlying problems are not healed - only band-aided temporarily by a flood of public money.

…………

A second part of Friday’s enthusiasm, of course, was the sharp jump in the rate at which lenders are realizing losses on failing mortgages. That, as it happens, is what was behind the sharp jump in the rate of existing home sales. As John Mauldin recently pointed out, a June survey of 1500 real-estate agents by Mortgage Finance found that only 36% of all existing home sales involved �non-distressed� properties, and of those, only 31% were described as unforced or optional, the remainder being sales prompted by personal financial difficulty such as unemployment or changes in family circumstances, but without a delinquent or foreclosed mortgage. As John wrote, �Think about that for a minute. Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage. And only a third of the remaining one-third � roughly 10% of overall sales � comes from something we could call a normal selling process.�

Rest easy though. Bernanke sees a recovery.

Okay, I’m almost done with my second cup…of coffee. But I’d like to hear from the folks who start their day sipping wine! Where are the bloggers with those brown crinkly paper bags? Should have wi-fi and bootleg some AC/DC in some alley somewhere in some inner city…

Been awhile since I saw anyone start their day (10:00 a.m) with a beer. But that was a decade or two ago at San Felipe (Baja) with a group of friends.

52-week T-bills get auctioned this week. 0.45% is a warm fuzzy feeling when you think of the S&P 500 index gaining over 50% since the lowest point (so far) of the year.

Good things do not last forever.

I’m seeing fewer good jobs in software engineering posted on dice. I’m not unemployed…yet but I’m anticipating it. I wish I had four times the amount I currently have in T-bills. It will be difficult (emotionally) to sell off savings bonds to live off of. But I’ll do it if I must. I have enough in “gubment” securities to live off of for several years with no job.

New word: Stagdeflation

Economist Nouriel Roubini says government and central bank officials may undermine the recovery and tip their economies back into “stagdeflation” if they raise taxes, cut spending and mop up excess liquidity in their systems to reduce fiscal deficits. He defines “stagdeflation” as recession and deflation.

< This fellow has had a pretty good batting average in the prediction department.

The present financial crisis is different from what almost everybody alive today has experienced. A very good reason to be aware…and cautious.

Just hope that this gubmint is still in the bond business when those come due.

The social mood has changed. Did anyone think they would live to see people abandoning their homes and moving away? Do you think we’ll see it again in our lifetime? Five years ago people were buying homes with both hands. Today, they are happy to walk-away. These are interesting times.

Convicted Ponzi schemer Bernie Madoff is dying of cancer, sources told the New York Post.

Madoff, who is serving 150 years at a North Carolina federal prison after pleading guilty to swindling more than $65 billion, has been telling fellow inmate he doesn’t have much longer to live.

“He’s been taking about 20 pills a day for his cancer,” one inmate told the newspaper. “He talks about it all the time. He’s not doing very well.”

Speculation has swirled as to why Madoff, 71, took sole responsibility for the scheme and rumors of his suffering from pancreatic cancer surfaced months before he arrived at the Butner, N.C., complex in June.

Friday on Fast Money, Karen Finerman reported that Cerberus Capital had over $4 billion in redemption requests. I can’t find a (current) link to get more info. That Cerberus suspended redemptions is old news, but that was the first time I heard a dollar amount on them.

Fitting, no? Cerberus’s job was to keep souls in Hades.

Sounds like Mercury is going to close up shop in Wis.

Mercury Marine union in Wis. rejects concessions (AP)

FOND DU LAC, Wis. — Union workers at Mercury Marine put their jobs at risk Sunday when they rejected a package of wage and benefit concessions the boat engine maker said it needed or it would move their work to a nonunion plant in Oklahoma.

Union leaders did not immediately release Sunday’s tally but said the vote was “overwhelming” to reject what the company called its final offer.

The International Association of Machinists and Aerospace Workers, Local 1947, represents 850 workers at Mercury Marine, the largest employer in the eastern Wisconsin city of Fond du Lac and the world’s largest manufacturer of boat and recreational marine engines.

Mercury Marine had asked for changes to a four-year contract it signed a year ago. The company had said workers would see no pay cuts under its proposal, but the union said workers were asked give up 2 percent pay raises in each of the last two years of the contract. The average hourly wage now is about $20, the union said. The proposal also called for lower wages for new hires and workers called back from layoffs, and changes in pension benefits that workers said would have made retirement unaffordable.

Mercury Marine issued a statement after the vote saying it will move many of its Fond du Lac manufacturing operations to its facility in Stillwater, Okla., over the next two to three years. The company said it will continue to operate the Fond du Lac facility for now under the terms and conditions of the existing contract, which expires in 2012.

Analyst Bove sees 150-200 more U.S. bank failures.

NEW YORK (Reuters) - A prominent banking analyst said on Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry’s payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.

Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.

“The difficulty at the moment is finding enough healthy banks to buy the failing banks,” Bove wrote.

The FDIC is expected on August 26 to vote on relaxed guidelines for private equity firms to invest in failed banks, after critics said previously proposed rules were too harsh and would actually dissuade firms from making investments.

Bove said “perhaps another 150 to 200 banks will fail,” on top of 81 so far in 2009, adding stress to the FDIC’s deposit insurance fund.

Three large failures this year — BankUnited Financial Corp in May, and Colonial BancGroup Inc, Guaranty Financial Group Inc in August — collectively cost the fund roughly $10.7 billion.

The fund had $13 billion at the end of March.

Regulators closed Guaranty’s banking unit on Friday and sold assets of the Texas-based lender to Banco Bilbao Vizcaya Argentaria SA. The FDIC agreed to share in losses with the Spanish bank.

Is anybody snapping up AIG at the bargain basement price of $35 per share?

Social Security recipients will have to tighten up on their spending. They’ll be getting less money to spend in 2010 and 2011!

The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

Without Prospects, They’re Prospectors
Metal’s High Price, Economy’s Low Ebb Create New Gold Rush

WaPo
Monday, August 24, 2009

COLUMBIA, Calif. — Maybe it was the nail in Ray’s head. Maybe it was the economy. His wife said one as much as the other drove the decision to auction off everything that wouldn’t fit in the trailer and leave Vermont for the mother lode.

“Thought we’d try to make a living at it,” Kim Lague said, standing in a mining camp that was busier during the Great Depression than it was in the Gold Rush of 1849, and is busy once again.

And so, 18 months after a co-worker’s pneumatic hammer drove a 2 1/2 -inch stainless-steel nail into Ray Lague’s skull — “the plunger of the gun brushed my hat and discharged” — the once-thriving contractor took his place among the prospectors lining the steep banks of the South Fork of the Stanislaus River, 40 miles west of Yosemite National Park. The bearded man helping him drag the mining gear into the water was a jobless logger who lost his home to foreclosure.

Fifty feet downstream, an unemployed concrete-truck driver scoured the river bottom beside a laid-off furniture mover, back to prospecting after a day spent wrestling with the unemployment office.

“You have to consider the economy,” said Gary Rhinevault, caretaker of the Lost Dutchman’s Mining Association campground, where 45 prospectors pay as little as 30 cents a day to pitch their tents. “In 1932 there were more prospectors out trying to make a living than in the 1850s.”

Fitch: Delinquency Cure Rates Worsening for U.S. Prime RMBS

www dot businesswire dot com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090824005549&newsLang=en

“Delinquency cure rates refer to the percentage of delinquent loans returning to a current payment status each month. Cure rates have declined from an average of 45% during 2000-2006 to the currently level of 6.6%. It is important not only to observe total roll rates, but delinquency cure rates as well, according to Managing Director Roelof Slump.”

As one would expect, cure rates are even lower for Alt-A and subprime. More proof that this ain’t over, folks.

Whenever they say they are from the Government and are here to help, head for the hills:

BOSTON (TheStreet) — Americans with 401(k) retirement plans lost about $1 trillion in the stock-market crash. There was no hiding — few mutual funds were spared.

The latest bear market, following a tumultuous three-year decline earlier in the decade, has hobbled investors, setting back many to where they were more than 10 years ago. As a result, 401(k) plans’ inherent deficiencies were exposed, prompting lawsuits, government reviews and proposals for a new way to save for retirement. The 50% rise in the S&P 500 Index over the past few months has hardly helped.

Since they were established in 1978, 401(k)’s have grown in popularity and prominence. But the three-decade honeymoon seems to be over. On top of investment declines, there was plenty of insult to add to the injury.

Companies began slashing matching contributions, which once soothed the sting of lost pensions. Participants realized that, on paper, they had control over investment options, but were handcuffed by what was available and their own lack of financial literacy. Exorbitant fees mopped up tens of thousands of dollars of a lifetime of saving.

What gets lost in all of this is that 401(k)’s were never intended to be a primary retirement vehicle. So what now?

In Washington, the Obama administration is proposing to improve retirement plans by making sure more people participate. The president is calling for automatic enrollments for companies with 401(k) plans. Any business with 10 or more employees that doesn’t offer a plan would be required to automatically deduct contributions into an IRA account.

Like most people I’ve slowed down my spending. Over the past year I have gone from renting a Blockbuster movie from about once a week to once a month. Especially since about the price went up about $1 per rental. Every time I have been in there in the past few months you get the hard sell - 10 movies for $10 good for a week. Except no good because you can only take out one at a time. The store is always empty compared to what it used be. BUT yesterday they gave me a coupon for a $1.99 rental. Even for new releases.

Here’s a review regarding a new book about Bernie Madoff that I think ya’lll will enjoy:

Madoff’s Other Secret: Love, Money, Bernie, and Me
Sheryl Weinstein. St. Martin’s, $23.99 (205p) ISBN 978-0-312-61837-7
Based on Sheryl Weinstein’s experience, any woman lusting after her broker should consider the cable guy. Bernie Madoff, Ponzi schemer, swindler extraordinaire (according to Weinstein, in 1995, “about 10% of the volume on the New York Stock Exchange was apparently going through Bernie’s firm”), doesn’t have a lot to say for himself in this memoir by the woman with whom he had a 20-year relationship. To call her a mistress is generous: their eventual coupling took a long time to happen, did not happen very often and aside from his facial and body tics, we’re told that Madoff had a penis so small that “it would fit easily inside the opening of a single-serving honey jar” that sits on a hotel room service breakfast tray. Weinstein and Madoff met in 1988 when Weinstein was 39, and an anonomyous French donor had given Hadassah, where Weinstein was CFO, $7 million with the stipulation that Madoff handle the investments. The fact that Madoff would not be available for questioning by the financial advisory board was easily pushed aside, and Hadassah went on to give Madoff more of its money when the “magical returns” began to pour in. In 1992, Weinstein asked Madoff to take over her personal portfolio, noting, “He’d been earning consistent returns of between 18 and 20 percent for Haddash since 1988.” Weinstein’s account of their ‘friendship” is simply told and contradictory in places (despite his tiny penis, sex with Bernie was “surprisingly exciting”; she was uncomfortable that Bernie would not speak to Hadassah’s financial advisory board, but says earlier that she wasn’t overly concerned; she claims she was trying to end the relationship while Bernie wanted it to work yet at their last tryst, he rebuffs her; she thought a boyfriend would be a first step in getting out of her emotionally abusive marriage, but claims neither she nor Bernie were ever planning to leave their spouses. We learn Bernie was a stingy tipper, a narcissist, a name-dropper, that Weinstein set fires and shoplifted as a young girl and was molested by an uncle when she was 10. Ultimately, though, Weinstein comes across as romantically naive, sincere, honest and yes, greedy, eventually mortgaging her apartment to give Madoff more of her own money to invest. Weinstein does not come across as vindictive or vengeful, though she calls Madoff a monster when she delivers a victim impact statement at his sentencing in 2009. The book reads like a fascinating conversation one might have with a stranger at a shared table in a cafe. It’s a quick read and sadly, will sound familiar, which is where its value lies. Change the characters and the numbers, and it happens every day. (Aug. 25)

Not to drift too far into politics but yesterday Sen Joe Liberman said hold the horse on massive health care reform - not during a recession. Not quite let’s fix the economy first before spending more money. But the closest thing to it I have heard. Gee someone in DC might actually recognize the country is flat broke and in debt to its eyeballs.

NYCityBoy yesterday you said you like Pilsner Urquell. Yep it’s great. My elderly neighbor thought he was odering 6 bottles ( he oders groceries on the internet) but ended up with 6 sixpacks. So we’ve been enjoying them all summer.

Angry riders protest Detroit bus cuts.
The Detroit News, August 24, 2009

Detroit — About 250 residents at a public hearing this morning protested plans to end bus service in the city on Sundays, halt it after 6 p.m. on Saturdays and drastically modify more than a dozen other routes to save money.

“Cutting service like that, a lot of us are going to lose our jobs,” said Sara Coleman, who lives in the city and works in Harper Woods.

“I work Saturday. I work Sundays,” she said.

City officials spent 20 minutes outlining the changes, but were interrupted by hecklers at Wayne County Community College’s campus on Conner who shouted, “How am I going to get to work?” and “You can’t do that.” The city’s chief administration officer, Charlie Beckham, said there is no choice. The city has an accumulated budget deficit of about $300 million and is proposing numerous cuts, wage reductions and layoffs. Department of Transportation officials noted that fares pay just 17 percent of operating costs for the $80 million department. The system served 116,511 riders on weekdays in July, nearly 68,000 on Saturdays and nearly 43,000 on Sundays.

“We find ourselves in an extremely unprecedented financial environment,” Beckham said. “That is what is driving this.”

Lavette Williams, interim director of transportation and a 29-year city employee, said “this is the worst I’ve ever seen the financial condition here. Something is going to have to change.”

This week, 113 drivers are set to lose their jobs. Beckham said those will be the least senior drivers and are the ones who are assigned to the weekend routes slated for elimination.

“My choices in life were either to be a piano player in a whore house or a
politician. And to tell the truth, there’s hardly any difference”

- Harry Truman

joeyinCalif wrote something last week that I thought was worth of a re-post; he posted it after midnight, so very few probably saw it. It struck me as insightful:

Comment by joeyinCalif
2009-08-18 02:04:52
Why don’t people learn? It’s been said before.

I’ll always believe the bubble was a mania.. a communicable sickness.. a psychological infirmity that germinated under peculiar circumstances, developed quickly, mutated and spread across the globe. It was not a conscious effort.

I believe we witnessed an exhibit of some less admirable traits of human nature, disconnected from human reasoning. Things like jealousy, anger, greed, love and fear..

Innate qualities we, as a species, have no control over were (and continue to be) responsible for our seemingly senseless, destructive patterns of economic behavior. These base qualities are programmed in our genetic makeup and will not be altered by experience or knowledge.

I do believe people are basically good, and if the things that define human nature could “learn” from experience we’d never have another war.. never experience another bubble.. After a million years there would probably be no hunger in the world… no crime.. But it ain’t gonna happen… because we are little more than clever animals.

We have, broadly speaking, “domesticated” ourselves that we might live in harmony while within killing range of each other, but only for the sake of our survival. And although clothed in this relatively peaceful, cooperative veneer, at the core we remain dangerous, unpredictable, primitive wild animals none the less.
—–
In short.. one shouldn’t overestimate the power of intelligence.

Exterran begins layoff of 274 workers
Houston Business Journal

Exterran Holdings Inc. has informed the Texas Workforce Commission that it will lay off 274 employees, or 3 percent of its work force, from four of its facilities — two of which the company plans to close.

In a letter to the TWC, the Houston natural gas compression company wrote that its Exterran Energy Solutions LP unit would close its Schulenburg and Columbus, Texas, manufacturing facilities and, as a result, lay off 73 employees.

In Houston, the company will lay off 79 employees from its Brittmore facility and 122 employees from its North Houston Rosslyn facility.

“Regrettably, the layoffs will be permanent,” Chris Michel, senior vice president of global human resources, wrote in the letter to the TWC. “The layoffs have been necessitated by the current market slowdown and the consequent negative impact on the demand for Exterran’s products and services.”

Earlier this month, Exterran reported a net loss of $530.8 million, or $8.66 per share, for the second-quarter ended June 30, 2009. That compared with a net loss of $59.4 million, or 97 cents per share, for the same quarter in 2008.

Results included a $343.3 million charge related to the company’s surrender of its wholly-owned assets and operations in Venezuela.

The New York Times, in a 1909 editorial opposing the very first income tax, predicted:

“When men get in the habit of helping themselves to the property of others, they cannot easily be cured of it.”

The White House revealed that it hired a private communications firm to distribute mass e-mails, including unsolicited spam to help sell President Obama’s health care plan.

The White House hired a private communications company based in Minnesota to distribute mass e-mails, helping to shed light on how some recipients received e-mails in support of President Obama’s health care plan without signing up for them.

The company, Govdelivery, describes itself as the world’s leading provider of government-to-citizen communication solutions and says its e-mail service provides a fully-automated on-demand public communication system.

It is still unknown how much taxpayer money the White House provides to Govdelivery for its services.

The revelation comes after the White House acknowledged this week that people were receiving unsolicited e-mails from the administration about health care reform and suggested the problem was with third-party groups that placed the recipients’ names on the distribution list.

Republicans quickly pounced on the news.

“This is yet another ominous chapter in the administration’s rabid campaign to jam its radical health care scheme onto an unwilling public by any means necessary,” Rep. Thaddeus McCotter of Michigan said in a statement.

Govdelivery sent hundreds of e-mails from senior adviser David Axelrod asking supporters to help rebut criticism of Obama’s health care plan circulating on the Internet. It also sent e-mails highlighting Obama’s speech to the Muslim world in Cairo and the announcement of Sonia Sotomayor as a Supreme Court nominee.

Several FOX News viewers complained they received these e-mails even though they had never requested any communication from the White House.

On Monday, the White House implemented several new changes to its Web site, apparently aimed at reducing the number of people who receive unsolicited e-mails and at fighting charges that it’s collecting personal information on critics.

Report: Goldman providing tips to certain clients

http://news.yahoo.com/s/ap/us_goldman_sachs_tips

As Recession Eases, No Escape for Hong Kong’s Cage Dwellers

http://news.yahoo.com/s/time/20090824/wl_time/08599191789700

Remember guys, this is a Bits Bucket, so a little open season here.

I am kind of half-a** fighting to get my job back. I miss the people I work with, and it seems like they miss me. The economy is bad, ( I am a lawyer and fight with BOSS is get rid of crqp of cases. He is one tough SOB, but hasn’t replace me, yet. Maybe I was wrong.

Funny, how when bad times happen different people go to different places. So, I went to my friends, and the Beatles. The Beatles, (in my humble opinion, and I saw them, age 5) are the best musical group in history. Sir Paul McCartney released an outstanding at age 67 song, Sing The Changes, and here is George, dying of cancer. Both very worthy of listening. Thanks Sir Paul, and Than You to George.

Never slept so little
Never smoked so much
Lost my concentration I could even lose my touch
Talking to myself
Crying out loud
Only I can hear me
I’m stuck inside a cloud

I made some exhibition
I lost my will to eat
The only thing that matters to me is to touch your lotus feet
Talking to myself
Crying out loud

Only I can hear me
I’m stuck inside a cloud
Talking to myself
Crying out loud
Only I can hear me
And I’m stuck inside a cloud

Talking to myself
Crying out loud
Only I can hear me
I’m stuck inside a cloud

Never been so crazy
But I’ve never felt so sure
I wish I had the answer to give
Don’t even have the cure

Just talking to myself crying as we part
Knowing as you leave me
I also lose my heart
Talking to myself crying as we part
Knowing as you leave me
I also lose my heart

crqp= crap and to=too

Fannie Mae, Freddie Mac Shares Rise As Financial Sector Rallies
Dow Jones News

Shares of Freddie Mac and Fannie Mae rose sharply Monday, headlining another rally in financial shares but puzzling at least one analyst, who says the firms are insolvent and maintains a zero price target on their shares.
Fannie Mae (FNM) shares rose 45% Monday, and Freddie Mac (FRE) rose almost 30%.

“When buying Freddie and Fannie, people are speculating the government will leave the companies in their current form long enough so they can earn their way out of these losses,” Morningstar analyst Matthew Warren said on Monday. “I wouldn’t view this activity in Freddie and Fannie as investing. I would call it high-risk speculation.”

Woman sues zoo over splashing dolphins.

CHICAGO (Reuters) - A woman is suing a Chicago-area zoo for a 2008 fall near a dolphin exhibit, accusing zookeepers of encouraging the mammals to splash water and then failing to protect spectators from wet surfaces, local media reported on Thursday.

In her suit filed earlier this week, Allecyn Edwards said she was injured while walking near an exhibit at Brookfield Zoo, where a group of Atlantic bottlenose dolphins were performing, media said.

Officials “recklessly and willfully trained and encouraged the dolphins to throw water at the spectators in the stands, making the floor wet and slippery,” but failed to post warning signs or lay down protective mats or strips, the suit said, according to the reports.

Edwards is demanding more than $50,000 for lost wages, medical expenses and emotional trauma from the Chicago Zoological Society and the Forest Preserve District of Cook County, which operate the zoo in Chicago’s southwest suburbs.

Taylor, Bean & Whitaker Files Chapter 11 Bankruptcy.

Aug. 24 (Bloomberg) — Taylor, Bean & Whitaker Mortgage Corp. said it has filed for relief under Chapter 11 of the U.S. Bankruptcy Code.

Report: 47 states lose construction jobs in July.
AGC SmartBrief | 08/24/2009

The number of construction jobs declined in 47 states in July, according to a report by the Associated General Contractors of America. “There aren’t a lot of places construction workers can turn to avoid the steep layoffs sweeping the construction industry right now,” AGC Chief Executive Stephen E. Sandherr said.

“Sadly, construction workers are feeling the full impact of declining state spending, a near halt in office and retail construction and stimulus spending that — with too many programs — has yet to materialize.” Arizona suffered the worst decline, with a 28% drop in construction employment.

H1N1 flu “serious health threat” to U.S.: White House
Mon Aug 24, 2009

OAK BLUFFS, Massachusetts (Reuters) - The H1N1 flu poses a serious health threat to the United States, the President’s Council of Advisors on Science and Technology said in a report released on Monday.

“The report says the current strain ‘poses a serious health threat’ to the nation. The issue is not that the virus is more deadly than other flu strains, but rather that it is likely to infect more people than usual because it is a new strain against which few people have immunity,” the White House said.

I read today in a case involving some software theft allegations against an ex Goldman programmer that they are buying shares on one market and instantly selling on another to take advantage of the tiny time lags between systems. This sounds like an outrageous fraud to me in that they know they can buy a stock for $1.00 and instantly get $1.01 - guaranteed!

My new neighbor just returned from a couple years working in China. Before he left China he went to Vietnam and Bali for a holiday. He showed me pictures he took inside the airplane that had just landed in China. People in full contamination suits were checking each passenger’s temperature. If anyone on the plane had had a fever, all the passengers would have gone into quarantine.

Busy summer, today the first day of school, so some quiet has returned. Have been browsing Ben’s bits, though, and have enjoyed much of the chatter and insight.
Last spring, I was bleating like a goat about the REO shenanigans. I hope to pass along info I can obtain from comparing RealtyTrac info (I subscribe) to the MLS (not the Internet version, but the ‘proprietery’ version the UHS trade uses).
We’ve been going to some open houses, where sticky prices have not adjusted. The wide bid-ask gap, FPSS might call it.
“Are you looking to buy,” the UHS asks me, “or are you just looking?”
She has sized me up by my jeans and Subaru, she thinks.
“We’ve been looking off and on for 18 months,” I tell her, pausing. “We’ve saved a lot of money by not buying.”

Anyone see that story floating around today about shoppers putting back-to-school notebooks, pens, pencils, and calculators on lay-a-way?

Whoa! That doesn’t bode well for the holidays if the peeps are having problems with basic school supplies!

U.S. Stocks Fluctuate as SunTrust CEO Predicts More Bank Losses

Aug. 24 (Bloomberg) — U.S. stocks swung between gains and declines as financial institutions slumped after SunTrust Banks Inc. said lenders face more credit losses and commercial real estate may falter through 2010. Rallies in commodity prices had sent the Standard & Poor’s 500 Index higher earlier.

Banks in the S&P 500 fell 1.3 percent as SunTrust Chairman and Chief Executive Officer James Wells III said “the industry is a long way from declaring any sort of victory.” Ford Motor Co. declined 4.3 percent before the “cash for clunkers” program for cars expires today. Commodities and equities rallied globally as leaders of the biggest central banks buttressed confidence in the economic recovery.

The S&P 500 fell 0.3 percent to 1,023.11 at 3:11 p.m. in New York after earlier climbing as much as 0.9 percent. The Dow Jones Industrial Average declined 13.98 points, or 0.2 percent, to 9,491.98. The MSCI World Index of 23 developed nations advanced 0.5 percent. The UBS Bloomberg Constant Maturity Commodity Index increased 1.1 percent.

“Maybe we’re not completely out of the financial crisis,” said E. William Stone, who oversees $101 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “We’ve had almost no economic data, plus light trading and a good week last week, so that may give people an itchy trigger finger to take profits if they sniff trouble.”

Hey, the smartest guys in the room are back.

“Remember me? Wall Street Repackages Toxic Debt.”

Financial gurus call it a “resecuritization of real estate mortgage investment conduits.” On Wall Street, it goes by the acronym Re-Remic (it rhymes with epidemic).

“It actually makes a lot of fundamental sense,” said Brian Bowes, the head of mortgage trading at Hexagon Securities in New York. “It’s taking a bond that doesn’t necessarily have a natural buyer and creating two bonds that might have a natural buyer for each.”

The risk is, if the housing market slips even more, even the AAA-rated investments may not prove safe. The deal also relies on the rating agencies, which misread the risk at the heart of the subprime mortgage crisis, to get it right.

news.yahoo.com/s/ap/20090824/ap_on_bi_ge/us_meltdown_deja_vu

Now that the bonus controversy has died down, time to try and “slip it in the back door” again…

If you were the judge, would you agree that $33 million covers the damages?

BofA defends Merrill bonus settlement

Two weeks after a judge rejected an agreement with the SEC, Bank of America argues that the $33 million fine is appropriate.

By David Ellis, CNNMoney com staff writer
August 24, 2009: 4:19 PM ET

(Bailout tracker

Follow the money: Bailout tracker

The government is engaged in a far-reaching - and expensive - effort to rescue the economy. Here’s how you can keep tabs on the bailouts. )

NEW YORK (CNNMoney.com) — Bank of America defended the fairness of a proposed $33 million settlement it struck with federal regulators over the Merrill Lynch bonus scandal, according to a federal court filing submitted Monday.

The Charlotte, N.C.-based bank, which has been under intense scrutiny for the $3.6 billion in bonus payments made to Merrill executives earlier this year, maintained that the penalty it struck with the Securities and Exchange Commission this month represented a “constructive conclusion” to the situation.

Regulators claimed that Bank of America (BAC, Fortune 500) had said in its proxy statement that it would not pay out bonuses to Merrill employees in fiscal year 2008, when, in fact, the bank authorized bonus payments of as much as $5.8 billion.

Of that allowance, $3.6 billion was paid out to more than 39,000 Merrill employees last year, averaging $91,000 per bonus. Merrill lost billions of dollars in 2008.
…

Each day I read of more and more lay offs. Going to get harder to talk about “green shoots” by the gubmint.

3 companies to idle more than 100 workers each in Tenn. August 24, 2009
NASHVILLE, Tenn. (AP) — A state report on layoffs shows three companies plan to idle more than 100 workers each.

The report from the Department of Labor and Workforce Development for the week of Aug. 17 through Aug. 24 shows Nestaway Wire Company is ending 116 jobs at its plant in McKenzie, in Carroll County. The company makes coated wire products, such a dishwasher racks.

The department also says elevator maker ThyssenKrupp (THIS’-ehn-krup) will idle 110 employees at its Hardeman County plant in Middleton, cutting a shift.

Both of those plants in West Tennessee began their layoffs last week.

In northeast Tennessee, the state said Alemite (A’-leh-myt), which makes grease guns and lubricant handling systems, will lay off 119 workers beginning in November.

And, Dhani Harrison. George’s son. What a good young man. I guess, that is what life is all about isn’t?

Mom and Pops here, response indicated!

“The most expensive housing in the world is now in China. Yes, that is correct. The ratio of property prices to income is now SEVEN TIMES HIGHER in China than in the U.S. It looks like the Japanese land bubble in the ’80s, but with one billion people involved this time around”.

–Richard Young

NEW YORK (CNNMoney.com) — Cash for Clunkers is just about at the end of the road.

The government-funded rebate program, popular with consumers, comes to its official completion on Monday.

Dealers still have only until 8 p.m. Monday ET to write deals deals under the program.

The government has extended the deadline for filing Clulnker voucher claims to noon Tuesday following technical problems with the Web site dealers use to submit claims, the Department of Transportation announced Tuesday afternoon.

The U.S. Department of Transportation had received 625,000 applications from dealers for Cash for Clunkers vouchers totaling $2.58 billion as of Monday morning, the DOT said.

In a statement released late Friday, the National Automobile Dealers Association called on the government to accept dealer rebate requests until Aug. 31. The group cited computer slowdowns that could result from “overwhelming demand” on Monday.

Some dealers said they were participating in the Clunker program right up to the end. Others said they had stopped because they didn’t want to risk giving a $4,500 discount on a car and not be reimbursed by the government.

AutoNation (AN, Fortune 500), the country’s largest dealership chain, stopped doing Cash for Clunker transactions after Friday. AutoNation had completed over 12,000 deals, according to spokesman Mark Cannon.

“It’s been a great run,” Cannon said.

- David Goldmam- Inner Workings

Something ominous is at work here. Typically, a stronger dollar goes together with a stronger stock market. That is what we observe prior to the bank bailout last fall. Starting in the third quarter of 2008 and going to the present, the correlation turns sharply and persistently negative. A cheaper dollar means higher stock prices, as US assets are marked down for global investors.

What we have is not a stock market rally but an adjustment to global market prices. Fully 80% of the movement in the S&P can be explained by the movement in the dollar index.

That is a profile well known to emerging market investors. Whenever the Brazilians would pull another currency devaluation, stock prices rose to compensate, as tradeable assets floated up to world market prices. The bank bailout has made Americans poorer relative to the rest of the world and created the illusion of a stock market recovery.

That does not necessarily mean that inflation will return to the US, as some analysts believe. Foreign investors are not likely to buy homes in Cleveland (although the dollar devaluation certainly should help real estate prices in New York or San Francisco). And the combination of high unemployment and deferred retirement (greeter jobs at Wal-Mart will be in great demand) will keep wages down. The price of international tradeables, though, will affect US inflation, which is why I continue to recommend classic commodity hedges (including gold and oil) rather than TIPS.

Feud Between Two Alabama Families Turns Into Full-Scale Riot
Monday, August 24, 2009

MARION, Ala. — Two Alabama families that had been fighting for years turned their feud into a full-scale riot Monday outside a small-town city hall, with up to 150 screaming people hurling tire irons and wielding baseball bats.

Eight people were arrested, and at least four were hurt, Trooper John Reese said. Two were taken to hospitals. The town’s police chief was hit in the head with a crowbar but was OK.

The two- or three-year-old feud apparently prompted a fight earlier in the day at a high school, after a window was shot out of a home Sunday night. Then, “all hell broke loose” later in the day, said Sgt. Carlton Hogue of the Perry County Sheriff’s Department.

“It was a full-scale riot is what it was,” said Tony Long, mayor of the town of 3,300 about 85 miles west of Montgomery.

Hogue said the rioters were “throwing jack irons, throwing tire irons, anything they could get their hands on.” Some people carried baseball bats and brooms.

Reese said two people were arrested at the high school during the initial disturbance. Relatives of the people who were arrested followed officers to police headquarters at city hall, and then the melee erupted.

Six more people were arrested at city hall, Reese said, and police called in reinforcements from surrounding cities. Some officers wore riot gear, and many planned to stay overnight to help maintain order.

The mayor said he wasn’t sure what sparked the fracas.

“Everybody’s trying to point the finger at everybody,” he said.

Judson College, a church-affiliated women’s school with about 300 students in downtown Marion, issued an alert asking students to stay out of the downtown area for 24 hours as a precaution.

Study: Multitaskers ‘lousy at what they’re doing’

Stanford University researchers have challenged a prevailing myth that multitaskers are processing and performing on a higher mesa than their uni-task counterparts.

“The prevailing wisdom among people who multitask is that they’re skilled and adept and they handle it really well,” Clifford Nass, a 51-year-old communications professor and one of the study’s authors, told Bloomberg “We thought maybe these multitaskers are gods, information processing geniuses. Instead they’re lousy at what they’re doing a whole lot of.

“I was jealous. I embarked on this thinking, ‘What is it they do that I can’t do?’ And it turns out — nothing.”

The study, published today in the Proceedings of the National Academy of Sciences, evaluated students’ “media consumption” and gave them computer-based exercises that tested their ability to recall details presented rapidly and with distractions. Heavy multitaskers did the worst in filtering out distractions and remembering key information.

An author of a 2005 study said the new findings raise “serious red flags.”

“Young people are multitasking all the time and as new media platforms emerge, multitasking is going up and up and up,” said Vicky Rideout, a co-author of a 2005 Kaiser Foundation study. “Understanding whether it’s something that helps kids function in a multitasking world or that hinders their ability to concentrate and focus when they need to is really important.”

Google “squalene” and look for its history and side effects, and you may discover why many do not want to be injected with it, as a medium for a swine flu shot:

Exclusive: Most GPs may reject swine flu vaccine
24-Aug-09 Healthcare Republic

Up to 60% of GPs may choose not to be vaccinated against swine flu, with many concerned about the safety of the vaccine, a GP newspaper survey suggests.

Of 216 GPs who responded to the survey, 29% said they would not opt to receive the swine flu vaccine and a further 29% said they were not sure whether they would or not.

Of those who would refuse vaccination, 71% said they were concerned that the vaccine had not been through sufficient trials to guarantee its safety.

Others disagree on priciple:

Professor David Salisbury, DoH director of immunisation, told Healthcare Republic, the website for GP newspaper, that frontline health workers have a duty to themselves regarding vaccination.

‘They have a duty to their patients not to infect their patients and they have a duty to their families,’ he said.

‘I think you solve those responsibilities by being vaccinated.’

Why some are opposed to mandatory swine flu vaccination injections as currently formulated:

http://www.whale.to/vaccine/squalene2.html

Everyone and his dog is bought in to the story that BB saved the planet from GD2. I have two comments:

4) If BB is reappointed, the pressure for financial regulatory reform may be alleviated by handing more power than ever before over to the Fed and letting them do whatever they decide. I expect them to decide to do very little by way of significant reform.

The New York Times
Obama to Nominate Bernanke to 2nd Term as Fed Chief

Article Tools Sponsored By
By EDMUND L. ANDREWS and JEFF ZELENY
Published: August 24, 2009

President Obama plans to nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said Monday night.

The nomination, while expected, comes after Mr. Bernanke has had perhaps the most tumultuous term of any Fed chairman, helping to steer the economy through its greatest downturn since the 1930’s. Mr. Bernanke is a Republican who was appointed by President George W. Bush. Mr. Obama’s plan was confirmed by Robert Gibbs, the White House press secretary.

A top White House official said Mr. Obama had decided to keep Mr. Bernanke at the helm of the Fed because he had been bold and brilliant in his attempts to combat the financial crisis and the current deep economic recession.

“The president thinks that Ben’s done a great job as Fed chairman, that he has helped the economy through one of the worst experiences since the Great Depression and that he has essentially been pulling the economy back from the brink of what would have been the second Great Depression,” an administration official said on Monday night.
…
Wouldn’t you love to know who that official was?

From William Greider’s recent piece on “Dismantling the Temple”:

Six reasons why granting the Fed even more power is a really bad idea:

1. It would reward failure. Like the largest banks that have been bailed out, the Fed was a co-author of the destruction. During the past twenty-five years, it failed to protect the country against reckless banking and finance adventures. It also failed in its most basic function–moderating the expansion of credit to keep it in balance with economic growth. The Fed instead allowed, even encouraged, the explosion of debt and inflation of financial assets that have now collapsed. The central bank was derelict in enforcing regulations and led cheers for dismantling them. Above all, the Fed did not see this disaster coming, or so it claims. It certainly did nothing to warn people.

2. Cumulatively, Fed policy was a central force in destabilizing the US economy. Its extreme swings in monetary policy, combined with utter disregard for timely regulatory enforcement, steadily shifted economic rewards away from the real economy of production, work and wages and toward the financial realm, where profits and incomes were wildly inflated by false valuations. Abandoning its role as neutral arbitrator, the Fed tilted in favor of capital over labor. The institution was remolded to conform with the right-wing market doctrine of chairman Alan Greenspan, and it was blinded to reality by his ideology (see my Nation article “The One-Eyed Chairman,” September 19, 2005).

3. The Fed cannot possibly examine “systemic risk” objectively because it helped to create the very structural flaws that led to breakdown. The Fed served as midwife to Citigroup, the failed conglomerate now on government life support. Greenspan unilaterally authorized this new financial/banking combine in the 1990s–even before Congress had repealed the Glass-Steagall Act, which prohibited such mergers. Now the Fed keeps Citigroup alive with a $300 billion loan guarantee. The central bank, in other words, is deeply invested in protecting the banking behemoths that it promoted, if only to cover its own mistakes.

4. The Fed can’t be trusted to defend the public in its private deal-making with bank executives. The numerous revelations of collusion have shocked the public, and more scandals are certain if Congress conducts a thorough investigation. When Treasury Secretary Timothy Geithner was president of the New York Fed, he supervised the demise of Bear Stearns with a sweet deal for JPMorgan Chase, which took over the failed brokerage–$30 billion to cover any losses. Geithner was negotiating with Morgan Chase CEO and New York Fed board member Jamie Dimon. Goldman Sachs CEO Lloyd Blankfein got similar solicitude when the Fed bailed out insurance giant AIG, a Goldman counterparty: a side-door payout of $13 billion. The new president at the New York Fed, William Dudley, is another Goldman man.

5. Instead of disowning the notorious policy of “too big to fail,” the Fed will be bound to embrace the doctrine more explicitly as “systemic risk” regulator. A new superclass of forty or fifty financial giants will emerge as the born-again “money trust” that citizens railed against 100 years ago. But this time, it will be armed with a permanent line of credit from Washington. The Fed, having restored and consolidated the battered Wall Street club, will doubtless also shield a few of the largest industrial-financial corporations, like General Electric (whose CEO also sits on the New York Fed board). Whatever officials may claim, financial-market investors will understand that these mammoth institutions are insured against failure. Everyone else gets to experience capitalism in the raw.

6. This road leads to the corporate state–a fusion of private and public power, a privileged club that dominates everything else from the top down. This will likely foster even greater concentration of financial power, since any large company left out of the protected class will want to join by growing larger and acquiring the banking elements needed to qualify. Most enterprises in banking and commerce will compete with the big boys at greater disadvantage, vulnerable to predatory power plays the Fed has implicitly blessed.

Biggest concern about “Dismantling the Temple”:

Whatever comes next might be worse than the status quo!

Must read (but first throw away all bottles of alcohol around your home):

* The Nation
* Economics
* Economic Policy

Dismantling the Temple
By William Greider

This article appeared in the August 3, 2009 edition of The Nation.
July 15, 2009