Bits Bucket For August 25, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Court Orders Federal Reserve to Disclose Emergency Loan Details.
Aug. 25 (Bloomberg) — The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.
“The Federal Reserve has to be accountable for the decisions that it makes,” said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. “It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.”
The judge said the central bank “improperly withheld agency records” by “conducting an inadequate search” after Bloomberg News reporters filed a request under the information act. She gave the Fed five days to turn over documents it told the reporters it located, including 231 pages of reports, and said it must look for more at the Federal Reserve Bank of New York, which runs most of the loan programs.
This is a good thing. After all, if the US can go after the Swiss banks for disclosure of secret accounts, the least the Fed can do is pony up the scoop on what they’re up to.
This move may help BB achieve his oft-stated goal of increasing transparency of the Fed’s operations.
Whether he likes it or not.
What are the odds that this will happen? I would like to think that our system still has some honesty left in it but this is The Fed we are talking about. No other organization feels more high and mighty, and untouchable, in this nation. If the government intervenes somehow then we truly are living under a tyrannical regime.
“rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.”
Misplaced modifier! Is the Because clause part of the argument to keep the records secret, or is the clause part of the argument to make the records public?
I don’t know, but I guess it doesn’t matter. But I agree with the judge (I think). The US taxpayers have a right to know which companies their tax dollars are invested in.
“The US taxpayers have a right to know which companies their tax dollars are invested in.”
I thought the companies received freshly printed Fed dollars. You know, the type of dollars that cause inflation.
“She gave the Fed five days to turn over documents it told the reporters it located…”
Sounds like a FED-edited version will be seen.
Exactly. How is it we’re supposed to know that the report the Fed provides is even correct, if the Fed is never audited by a third party?
lol…even then you want know if they are correct…depends on how large the audit fee is.
i am a cpa. i was in college taking my auditing class. on the first day the teacher is talking about auditor independence and such. i rose my hand and asked, “how can you be independent from someone that is paying you a fee?”…blah..blah..blah and bs..bs later…no answer. i have 18 years experience now and still no good answer.
needless to say…i chose the tax path rather than the auditor path.
just another fun auditor independence anecdote for you.
i was talking to a senior manager that audits my company. we were talking about running and working out. i told her that she should stop by my company’s gym one day and work out with my co-workers and i. she said “ohhh noooo…i can’t do that…it would violate my independence.”
we pay her firm a couple million bucks a year in audit fees…but working out in our gym would violate her independence…it really sounds like something from the twilight zone doesn’t it?
…moral of the story…the emperor really has no clothes…and neither do his auditors.
michael,
I dunno’? ( Ask Arthur Anderson? ) “I” prefer the European Method where auditors rotate on a regular basis. But that would be too simple.
take a yard stick…the first inch is white…the last inch is black.
between is all grey.
andersen got into the black.
we pay her firm a couple million bucks a year in audit fees…but working out in our gym would violate her independence…it really sounds like something from the twilight zone doesn’t it?
The partners are very greedy, you can’t have mere staffers accepting gratuities from the company.
What are the odds that the Fed will just completely stonewall? I mean, what decisive action would the court or any government agency take, if the Fed were simply to call their bluff?
“What are the odds that the Fed will just completely stonewall? I mean, what decisive action would the court or any government agency take, if the Fed were simply to call their bluff”?
The odds are very good (100%) that the FED will do as they have always done. As they please, congress has the power to hold their feet to the fire, and or dissolve them.
Of course that will never happen, they (FED) run the show. We will be treated to a long dog & pony show, they’ll pound their chests and back to business as usual. Just a waste of time and money.
Count on it.
Even after a judge rules on a FOIA request, the custodian of the records has the option of redacting large sections with a black pen. Then the court has to be asked to unredact the redacted, obfuscation at its best.
Plus, even when threatened with a contempt ruling from a judge, there is no end to the games that government can play with hiding information. Sometimes officials make a request to bring the data into judge’s chambers and go over it very slowly to see that “exempted” info is suppressed. Then there is always the hide and seek game, it’s in Arlington or Atlanta or wherever, and the technology game, since the law doesn’t require the info to be produced in a particular form.
So a judge’s ruling to let the sun shine doesn’t necessarily mean the clouds will break any time soon.
Good of Bloomberg to carry the baton, though.
Well good morning everyone.
Hope everyone has a great day.
Be kind to each other
Bite it!
Sourpuss.
Didn’t get your daily drinks yet?
I’m afraid I laughed heartily when I read NYCityboy’s response. But then I was ashamed for laughing, so I hope that counts for something.
I was laughing too Olygal. Don’t feel ashamed.
First east coaster….where you at Palmy?
Right here! How’re ya doing, dime? Great to see ya!
Business bankruptcies up 64 percent from last year.
Nashville Business Journal
More than 30,000 businesses filed for bankruptcy protection in the first half of 2009, a 64 percent increase from the same period a year earlier.
The number of Chapter 11 business reorganizations increased by 113 percent, to 7,396, and Chapter 7 business liquidations jumped by 57 percent, to 20,375, according to the American Bankruptcy Institute.
It is unclear how many business owners were among the 681,217 Americans who filed personal bankruptcies in the first six months of 2009.
“The increase in filings through the first half of this year is a product of continued financial stresses weighing on both consumers and businesses,” said ABI Executive Director Samuel Gerdano. “In this challenging economic environment, we expect bankruptcies to surge past 1.4 million by year end.”
A total of 381,073 bankruptcy cases were filed in the quarter ended June 30 — the highest quarterly number since 2005, when filings surged in the weeks before tougher bankruptcy laws went into effect.
Fountain files Chapter 11
8-24-2009
North Carolina-based Fountain Powerboat Industries today filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in the Eastern District of North Carolina.
According to court documents, Fountain Powerboat Industries says it has $3 in assets, listed under personal property. It lists $1 each for Baja by Fountain, Fountain Dealers’ Factory Superstore and Fountain Powerboats.
It’s liabilities are listed as more than $19.6 million, which it owes to Regions Bank.
According to court documents, the company’s Board of Directors authorized the Chapter 11 filing on July 21.
The company, in its filing, also is asking the court for permission to sell “substantially all” of its tangible and intangible assets, including the real estate and tooling in North Carolina, as well as brand names and unsold inventory for the Fountain and Baja brands. The sale of these assets could bring in $6 million to $8 million or more, Fountain said.
In June, Fountain reported it had retained investment banker Jacobs Capital to help the boatbuilder find a partner to provide additional capital to get through the economic downturn and finance future growth.
Is that a typo - $3 or $3 million?
Really, just how many pleasure boat builders do we need? It’s almost become a commodity.
More “green shoots!’
Goooood morning to you all. Just got back from a week in Oregon (Eugene, Junction City, Sisters, Bend). Only special place was Sisters. Lots of road work and 55 mph speed limit drove me nuts as well as not being able to pump my own gas. Not to worry though, I didn’t tip. Just finishing cup of java and headed for the gym.
So you liked Sisters better than Bend ??
What?! That’s all you got to say about one of the neatest places on earth?!
And what about the Bend housing situation? Jeeze, man! Dish!
Olygal,
Didn’t really care for the Eugene area. I did like the area around Sisters. We were the guests of some business acquaintance of my wife and their spread was heaven on earth. Beautiful meadow and mountain view surrounded by pines, Friesian horses, alpacas, cattle, deer and coyotes. We hiked around two of the four days in that area. Small businesses were hurting as it was hard to get loans from banks. Housing still on the high side. Went into Bend but didn’t really care for it. The Mill district that everyone bragged about down this way was a disappointment. Not sure if I’d like to be in that area in the winter but did ride the life up Mt. Bachelor for the view.
Thanks. Now I’m satisfied.
55 mph speed limit drove me nuts
The whole frigging state of OR is one giant speed trap.
Driving north on Hwy 95, the limit is 70 in Nevada and 65 in Idaho. But they drop it down to 55 in Oregon - and have lots of cops out writing tickets. Same highway - same quality paving - but a speed drop to raise revenue.
I was in the greater Seattle area (Renton & Lacy, WA) for the weekend. I’d say that no one has informed them there is a full on recession happening. It was INSANE- maybe it was “back 2 school”? Anyway the speed limit could have been 25 mph and no one would get a ticket. I couldn’t wait to make tracks out of there. What a joke. I asked my wife why anyone would choose to live like this- I’d have a heart attack or kill someone. She said it was so they could make more money… I didn’t buy it as the cost of living eats up more than you can potentially make in most cases- bar CEO type income.
Barry Ritholtz stated 8/24/2009
“In the past, I have gone so far as to imply the Realtors group are spinmeisters. This month, I will be more blunt: Their actual data has become untrustworthy, their spokesmen lie for a living, and their “news releases” is little more than misleading junk.”
“Investors who rely on the NAR version of the news do so at their own great financial peril.”
Oh, that Barry!
Not the cool one.
Yeah, what a Negative Nellie. Why can’t he be more positive and stuff?
*starts to sing loudly and uglily: ‘The Sun’ll Come Out Tomorrow.’ But only the first verse because I’m not good with lyrics *
And still he was going easy on ‘em.
Hey Dude (to the Beatles tune)
Dude, i just saw your suggestion for a new currency backed by energy. Nice idea. But wouldn’t it have the same problem that the US$ had when it was backed by gold? You wake up one morning to find the government has changed the rate; instead of 1 Energy being backed by 1,000 joules it is now backed by 500 or 100 or none.
This is what happened to the gold standard $ and to every other currency which has been backed by gold.
(Back to an old argument …)
How about having a currency backed by anything it can be traded for, which is everything that is for sale?
The value of the dollar would be pegged to a dollar’s worth of goods and services.
Oh, wait, that’s the system we have now. Never mind.
(Off to work to earn some more worthless fiats.)
Yep, and don’t worry about the steady whirrrrr of the currency pump running in the background.
The problem with gold is that there is a finite amount of it, and it’s a physical thing which cannot be instantly transported to a buyer on demand. The joule is a little dicey too, since a joule derived a solar panel is more expensive than a joule derived from coal, for example. You need a yardstick that doesn’t stretch. (but that doesn’t solve the problem of the Fed cutting the yardstick in half.)
I’ve rather wanted to peg the dollar to a defined amount of human work. For example, a man digs a 1′ cubic hole in a defined soil with a defined shovel. Make that a dollar. Heck, it’s as reliable as anything else.
The
problem withgood thing about gold is that there is a finite amount of it,FTFY
The problem withgood thing about gold is that there is a finite amount of itThe problem withgood thing about… The good and bad thing about gold is that there is a finite amount of it.Cue William Jennings Bryan’s “cross of gold” speech.
Yes, but what will the ho’s of Nevada peg their valiant efforts too ? The amount sweat produced per square inch ? Think, man, think !
The joule is a little dicey too, since a joule derived a solar panel is more expensive than a joule derived from coal, for example. You need a yardstick that doesn’t stretch.
I would venture to say that the people who can produce energy more cheaply can trade it for more goods - i.e., they have more “dollars”.
But it’s not only the production that matters, it’s also shipping and the usual encumbrances by government in the form of taxes and tariffs.
So you might be able to produce a joule for a $1, but it might cost you $.50 to ship it to your customer - I can produce a joule for $1.10, but can ship it for $.30.
The beauty of the joule is that it encompasses everything we do - the clothes we wear, food we eat, buildings we build, toys we buy - all are created and transported using energy. It really is the most fundamental unit of human trade.
What good is gold if you can’t use it to run your car, grow some food, refine some gunpowder or mill some TP?
+1 Lavi.
Packman, of course the energy produced by solar panels would be more expensive because you also need to factor the work that went into producing them. Standard depreciation would apply as well, and the base unit would probably be equal to the current cost of energy from a fully depreciated hydro power unit run by volunteers in a co-op.
“1,000 joules”
God, I haven’t thought about that since “tech school”. Boolean anyone?
Boolean, hexidecimal, Octal, Binary, you name it DinOR… we probably went to the same school: Keesler Air Force Base. Had follow-up edumucation at a University in MN for my B.S. Engineering which I had to take a digital logic course, great referesher from my days at Keesler.
Have a good one today!
I just love the smell of REO’s in the morning…
tgun,
Yep, Class of ‘89. But I don’t think the notion of basing a currency on energy should be dismissed quite so easliy. I think the problem then becomes, under-developed nations that produce little to none ( or actually import energy ) wouldn’t have any means to pull themselves ‘up’?
Yes, it would certainly increase the net value of the currency (to actually have it backed by something of value) vs. the faith of the U.S. Gubmint.
“wouldn’t have any means to pull themselves ‘up’?”
Human capital produces work. It’s what the third world currently does to survive.
One side benefit would be an intense search for better ways to create cheap durable sources of energy, as that would mean wealth as well. It might help avoid Olduvai’s gorge.
You wake up one morning to find the government has changed the rate; instead of 1 Energy being backed by 1,000 joules it is now backed by 500 or 100 or none.
I’m going to step in here because I love this idea, and I think I know what dude means and I haven’t seen him post in a while.
Think of a joule as being a gallon of gas. Then ask, “How many gallons of gas can I buy for a dollar?” Not, “How many dollars does a gallon of gas cost?”
The government cannot directly affect the trade value of a gallon of gas (other than by taxing it more or less).
Because a joule is a finite measure of energy, it can be applied to all fuels and energy systems - gas, wind, solar, hydro, etc.
The question becomes then, not “How many dollars does the govt say a joule is worth?”, but “How many joules will someone sell me for a dollar?”
(As usual, my specialties are smart-assery and snarkery, so if anyone wants to point out any obvious flaws in my explanation, to quote New York City Boy, “bite it”)
It’s a neat concept - but sorry you just can’t get past the problem of measurement logistics, nor the problem of a nearly infinite supply. Those make it non-starters.
It’s a neat concept - but sorry you just can’t get past the problem of measurement logistics, nor the problem of a nearly infinite supply. Those make it non-starters.
I’m just BSing here (Brain Storming, you know), not trying to argue, just trying to understand the holes in what might be my weak theory.
“measurement logistics” Would that mean something like how much it costs in energy expenditure to grow an ear of corn?
“problem of nearly infinite supply”
I guess when we get to the point where limitless energy is free, we’re going to be in a completely different economy, anyway.
Yep, some joker last time we talked about it wanted to point out that harnessing the sun would mean infinite wealth. Really? Harnessing a sun WOULD mean infinite wealth.
In the first world our standard of living is almost entirely based on energy.
That gallon of gas would most assuredly be more stable in value under this system that the current one.
I’ll tell you why this would never work. It would eliminate the possibility of the stealth inflation tax.
Good idea, but the fed would probably just tamper with the meters.
In 1983, the metre was redefined as the distance travelled by light in free space in 1⁄299,792,458 of a second.
Good point, it’s been done before.
Would the country that mass produced the cheapest nuclear reactors not become the next Saudi Arabia? That’d be a ‘no fun’ race to the bottom–for the whole planet. We’d have an energy bubble, and if energy equals money, we’d be right back where we started from. A world with no easy answers.
Would the country that mass produced the cheapest nuclear reactors not become the next Saudi Arabia?
If power ever gets cheap enough then, yes, a joule would be useless as a base for currency and it would have to be replaced with something more valuable - a gallon of clean water?
Uranium is not infinite, however, so that would be the limiting factor there. I think the people that bet on biomass or solar would end up outperforming nuclear. Not to mention cleanup and containment costs for nuclear.
Clean up and containment? That’s the other guy’s problem. You can always use the excess as a source of nuclear bombs. You wouldn’t deny a third-world country a source of money/energy would you?
Yep, cheap abundant energy would really be horrible.
Fire up that cheap reactor! North Korea becomes new world power. Cheap fuel for your McMansion and SUV! What could go wrong?
I never said nothing could go wrong, and I also don’t think cheap abundant energy is our planet’s future. Energy will increasingly be less available in ratio to population on the planet.
It’s just an idea, we hear all the time about those who complain but don’t ever give alternatives. This is a scalable fixed alternative to the dollar. Everyman could benefit. It will never be used because it would cause great harm to TPTB.
adding 10% ethanol changes the trade value IMO…
…of that specific commodity yes, because it is made up of different component parts that require different inputs but the true base value of it would still be it’s energy content. Any premium it receives is due to value added through delivery, processing etc.
Yep, trust is an issue as it is with any currency. History has shown, as certainly was the case with the gold standard, that when times get tough and money is needed, the government debases the currency and problem solved.
A gold backed currency would likely just see history repeat itself, in this respect. Gold or silver or oil or whatever AS currency, that’s something you can’t cheat. But as it is today, these things are illegal. As the sign on Ron Paul’s desk says: “Don’t Steal. The Government Hates Competition.”
just found this:
“If the classical gold standard worked so well, why did it break down? It broke down because governments were entrusted with the task of keeping their monetary promises, of seeing to it that pounds, dollars, francs, etc., were always redeemable in gold as they and their controlled banking system had pledged. It was not gold that failed; it was the folly of trusting government to keep its promises.”
- Murray Rothbard
Yay! My point all along, made much better by a smart guy! If you’re carrying paper, you’ve got paper. No matter what it’s (de)based on.
And as combo-techie points out, if you don’t like/trust your paper, exchange it for gold, silver, coal, beer, cookies, etc.
Lucy,
According to Alpha Sloth the government could and would change the value of the newton meter. I don’t think this likely, but I suppose it’s possible. However, I’m also a guy who thinks engineers should rule the world.
I can tell Lavi has been thinking this through, and I haven’t backed away from the idea. Energy is work is production through conversion. That means that the value of a man digging a hole could indeed be measured and valued because the work done moving the earth could be valued and measured.
I haven’t posted for a few days because I got behind. I’ll read this thread tonight and respond some more.
If engineers ruled the world what would happen to all the comedians?
The jester is always welcome in court.
I’ve got a piece of paper with a million joules written on it. Is it worth that much? It must be, it’s written by the same gov we don’t trust now! See if you can think your way through that. (Oh, I know! We’ll put engineers in charge! That’ll solve everything.)
How does one collect one’s joules, if one were so inclined? Back up a truck and fill it up with coal? You can do that now.
Ooops. And before you clear your shelf for your nobel prize, google ‘joules as monetary unit’. Alas, once again your idea isn’t original, dude! Of course, that’s never stopped you before. Bathe us in your brilliance. Some are impressed.
I never said it was original, go back and look at my original post naysayer. I only said, “it is new to me”.
BTW, your post proves the value of the system, my million joules on deposit with XYZ bank are good for a million joules of coal. The variance in how many tons of coal get delivered doesn’t come from government fiat, but from the cost of producing and transporting and storing the coal.
Year to year, decade to decade, wages remain stable, cost of goods remain stable. I can understand why you would despise living in this reasoned hell hole.
Additionally, thanks for the criticisms, you are doing a heck of a job Alphy, a heck of a job.
* 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
“If “too big to fail” is the problem, don’t leave it to private negotiations between banks and the Federal Reserve. Restore anti-monopoly laws and make big banks get smaller. If the financial system’s risky innovations are too complicated for bank examiners to understand, then those innovations should probably be illegal.”
“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).”
A firm policy against bailouts creates one problem - companies fail.
A policy in favor of bailouts creates more problems than anyone can keep track of, over an indefinite length of time.
I’m forever blowing bubbles,
Pretty bubbles in the air,
They fly so high,
Nearly reach the sky,
Then like my dreams
They fade and die.
Fortune’s always hiding,
I’ve looked everywhere,
I’m forever blowing bubbles,
Pretty bubbles in the air.
When shadows creep,
When I’m asleep,
To lands of hope I stray!
Tuesday, August 25, 2009
Dismantle Bernanke’s ‘Happy Conspiracy’ Now
Paul B. Farrell
MarketWatch
ARROYO GRANDE, Calif. — At last week’s annual Jackson Hole meeting of Fed execs, Boss Ben Bernanke’s braggadocio about saving the world from another Great Depression had the feel of an egomaniacal dictator trying to cement his legacy in history.
Any good behaviorist would tell you Bernanke’s got some dangerous biases isolating him from reality (remember two years ago when he was denying the meltdown). His brash claims and radical, secretive policies present a grave danger to American capitalism and democracy.
In fact, Bernanke now appears to be America’s (and the world’s) most dangerous man, far more dangerous than Hank Paulson and the “Goldman Conspiracy” ever was. He’s now acting like the supreme dictator of that larger conspiracy Jack Bogle called the “Happy Conspiracy” in “The Battle for the Soul of Capitalism: How the Financial System Undermined Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions — And What to Do About It.”
…
“happy horsesh!t” is more like it
watch your f#ckin’ language!
ooh oohh where is the language police when U need em?
They’re all choking to death on all the people who spell “lose” as “loose”, “loser” and “looser” and “loses” as “looses”.
testy aren’t you?
yeah, losen up!
Well, he got his second term. Just like we couldn’t change horses in midstream during the dreaded War on Terror - so can’t we change them during the scourge of The Great Recession.
Paul B. Farrell wasn’t ‘there’ AFAIK? ( Don’t think he was invited? ) But in typical omniscient fashion he’ll assign motives as he sees fit.
This guy has officially lost it. Sorry.
I love this chart. So far, the decline is going exactly as Smith predicted and here we are, sort of toward the end of the sucker bottom. The real fun comes after New Years. Those of you who have held out, waiting for more of a decline to buy, your patience will be rewarded.
http://www.oftwominds.com/blognov08/real-bottom11-08.html
Tried to post this yesterday, twice, never came through. Hope it makes it today. It’s a little gift for the blog.
Wow. With the way my life is going, I’m on track to buy almost at the very bottom. By the way, when they say “capitulation,” does that refer only to housing, or is that the scary 1933 version of overall economic capitulation?
We are clearly in Phase 2 right now. The interesting question regards the extent to which the PTB will strive to somehow artificially turn the clock back to Phase 1, and whether such measures will work.
He’s off though with several things.
- There was no pause in 2002/2003 as he shows.
- There was no pause halfway down in price declines. Prices are pausing now, but are already down about 80% off-peak
See?
I think we’re definitely seeing a pause now, and will see another leg before reaching bottom. I should come up with my own guess…
Point 1: While the graph is of the Bay Area, there was still a very brief pause in prices in the wider national market around 2003 - so the man is awfully close on that part.
Point 2: Some prices are off 80% true, but lots are not. It’ll be years before we have a truly accurate reading of exactly where prices were in the summer of 2009.
Ah - I missed the fact that that was of the bay area - thanks for the correction. The bay area indeed saw quite a pause in the 2001/2002 timeframe due to the tech bubble pop.
Anyhow - I created my own guess at the nationwide chart’s future - here it is.
I put in the current pause, and figure Smith’s probably right about there being a second pause in 2-3 more years, before finally hitting a bottom (my guess is around 2015), and then trickling back up to historic norms over the next few years.
The “pauses” on the way down are what’s tripping me up. I must admit to completely unerestimating the ferocity of these bouncing dead cats. His rationale behind the current pause now makes complete sense to me - only given that it’s already happened! Ugh!
The “pauses” on the way down are what’s tripping me up. I must admit to completely unerestimating the ferocity of these bouncing dead cats.
I’ve been having the same problem. But it certainly helps me to look at a longer-term graph again — the pauses and stutters are quickly put into a more understandable context than the month-to-month or year-over-year views provide.
edge,
Lost a post but Charles Hugh Smith “coat tailed” off of the crowd at Patrick.net for years… If there’s any credit to be doled it, in my mind, it has to go through ‘them’ first.
edgewaterjohn,
Charles Hugh Smith “coat tailed” off the Bubble Bloggers at Patrick.net for years. Anything ‘we’ were discussing in 04′/’05 became a topic on his blog after a short period.
It’s all in the archives. And uh.., why does he just so happen to focus on the Bay Area one wonders?
he lives in Berkeley
Ben Bernanke’s version of history is incomplete
Ben Bernanke has been nominated to a second term as chairman of the US Federal Reserve in January. But he already seems to be drafting his own version of economic history.
By Edward Hadas
Published: 11:53AM BST 24 Aug 2009
In a speech to the global conference of central bankers at Jackson Hole, Wyoming, the leading member of the profession blamed investors for the crisis and praised - would you believe it? - central bankers for their response.
The Bernanke narrative starts by glossing over a big mistake. Last year’s meeting occurred weeks before the collapse of Lehman Brothers, which precipitated the biggest financial collapse in close to a century. Bernanke casually excuses this blindness, saying “we could not fully appreciate” what was coming a few weeks later.
As far as he is concerned, the reason things got so bad so fast was that investors freaked out. The crisis showed “some features of a classic panic”. This characterisation of the crisis conveniently lets forecasters off the hook. Mood swings, after all, are unpredictable.
For Bernanke, central bankers were the heroes. In the face of irrational hordes, they offered liquidity and a host of innovative policies, ensuring that financial panic did not lead to a new Great Depression. In Bernanke’s word, “the outcome could have been decidedly worse”.
His assessment isn’t exactly wrong. But as a historical record it is incomplete and far too generous to central bankers.
…
Looks like Bernanke is going to be nominated for another term, boo-YAH! Well, as bad as he is, better him than Summers.
Always a silver lining, no?
Yes, it seems this is what we’re reduced to, in banking and politics, the “least worst”.
At least since the time of Machiavelli, and probably long before…
The Divine Right of Kings rarely produced better than the least worst, either.
Perhaps mediocracy in governance is a vital part of the human condition. It certainly provides a lot of the everyday turmoil.
Most unsettling aspect of BB’s reappointment:
- The plan to make the Fed the fox-in-the-chicken-coop financial regulation Super Cop is likely to go forward.
- The impetus for meaningful financial regulatory reform will now most likely get swept under the rug.
- Rather than figuring out what went wrong and overhauling the financial system accordingly, the factors that made the financial system ripe for last fall’s crisis are likely to be reinstated as quickly as possible, increasing the chances that the next generation will have the opportunity to relive the experience.
A banking panic is a waste of hardship and human suffering if nothing is learned from it and no improvements to the status quo result.
Let’s see somebody support this decision. Please tell me how the alternatives are worse. Please tell me about the devil we know. Partisanship is so dishonest and lazy but I’ve never seen that stop anybody from defending what cannot be defended.
I love all of this change coming from Martha’s Vineyard. Why didn’t we just elect Joseph Kennedy to be president? Maybe we did.
What’s difficult to support?
A change would introduce enough uncertainty to have chopped about 2K or 3K off the DJIA within hours as well as similar fallout in other markets.. foreign countries would wonder wtF! kinda idiots were running the show..
“Please tell me how the alternatives are worse.”
Larry Summers is waiting in the wings for his turn. Maybe he will have his chance around the time Hitlary takes over at the WH.
Won’t happen. Summers will tell Hillary that as a girl she lacks quantitative intelligence.
Excellent and hopeful point!
Wonder if she’ll tell him to bite it?
She won’t.
She should.
“Let’s see somebody support this decision. Please tell me how the alternatives are worse.”
Worse for who?
It’s a good point. The alternatives could have been worse. Summers? Yellen? Pick your poison I guess.
It’s alllllllll housing…
“Hey, you need to get the econonmy going again Mr. Bernanke ” (really means) = “Hey Ben, you need to stop housing prices from falling further so we can start trading and flipping houses again and get those rehab contractors working.”
“Hey, you need to stimulate job creation again Mr. Bernanke ” (really means) = “Hey Ben, you need to stop housing prices from falling further so we can start to fill those Wall Street banker’s pockets again so they can begin rehiring those 2nd and 3rd tier thugs.”
“Hey, you need to do something about the automotive and manufacturing industries in this country Mr. Bernanke ” (really means) = “Hey Ben, you need to stop housing prices from falling further so people can feel wealthy again and go back to their old ways of increasing personal debt to buy large consumer products again.”
I could go on… I have yet to hear a single thing in the last ~2 years touted by anyone in Congress or the Fed or any of the hucksters there on Wall Street that really (really) did not have step 1 of their plan being to stop housing prices from falling to their normal levels… that would be disasterous for these little plans… Of course, most won’t come out and say that, but it’s a fact… It’s all housing….. all of it… and will remain so until they can figure of way of keeping prices from falling futher and reducing our “wealth”…
After all, the model that has been created for us is to borrow and spend as much as we can… just like Congress… in that model, it doesn’t get any bigger or better for the pupet masters than to have us all borrow and spend up to your eyebrows on a house… debt slaves to the masters… of course, we don’t mind being debt slaves if we think that monster investment in a house will appreciate and we can stick it to the next guy down the line…
+1 and I’d like to add
“Hey, we need to unfreeze the credit markets again” (really means) = “Hey Ben, it’s getting hard for banks to hang onto their shadow inventory, waiting for house prices to stabilize. And the big boyz can’t kick the can much further until they have to finally value those “toxic” assets. You better get house prices back up so banks can dump their REO, and so the big boyz can polish the toxic goo off the assets and definitively value them. We don’t want to launch into another near-depression.”
[of course, the two are mutually exclusive. The minute banks try to sell their shadow inventory, house prices will plummet and the assets will go toxic on the big boyz once again.]
matthew,
+2, oh and can you get that to us by lunch?
Exactly, the entire debate was framed the standpoint that “What’s good for the REIC is good for the country!” when in fact, nothing could be further from the truth!
( How is affordable housing “bad” again? )
Without some sort of bubble, Americans will realize that the real American dream of get a decent education, a good job and you can have a good life, is gone. Then the revolt happens. Everybody wants to avoid that.
t the real American dream of get a decent education, a good job and you can have a good life, is gone.
What more do people need than:
-Clean water
-Clean, nutritious food
-Clean air
-Safe structures
-Protection from crime
-Medical care
I mean, if our standard of living comes down a bit and others goes up and most of us (the world) have access to the above, maybe we could have decent jobs and “good” lives again.
“…I’m not the only one”
good looking girlfriends, decent golf clubs, and good whiskey? I’m putting that down in the “need” column, not the “want”.
The stock market should have a great little pop ahead. The stock market always goes up, in the long run. Buy stocks now, or get priced out forever!
Indications
Aug 25, 2009, 7:47 a.m. EST
U.S. stock futures edge higher after Bernanke reports
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) — U.S. stock futures on Tuesday edged higher, with markets taking in stride news of the reappointment of Federal Reserve Chairman Ben Bernanke, the architect of ultra-low interest rates and an unprecedented program of buying government bonds.
S&P 500 futures rose 2.7 points to 1,027.20 and Nasdaq 100 futures added 3.75 points to 1,637.70. Futures on the Dow Jones Industrial Average rose 31 points.
U.S. stocks finished mostly lower on Monday, with the S&P 500 retreating a fraction of a point and the Nasdaq Composite down 2 points while the blue chip Dow Jones Industrial Average rose 3 points.
08/24/09: Oil Returns to New Highs
Stocks ran out of steam on Monday, with financial and consumer stocks under pressure. The fizzle was due in part to crude futures, which posted a fifth-straight gain and rose to new 2009 highs. Peter McKay reports after the closing bell.
Tuesday’s session is expected to feature the reappointment of Bernanke as chairman of the Federal Reserve. President Obama will hail the former professor for helping the world economy avoid a depression, according to a report in The Wall Street Journal.
“I don’t think the market is at all surprised. Why would you switch horses midstream with the expert of the Great Depression and the Japanese lost decade?” said Robert Howe, founder of Hong Kong-based Geomatrix.
…
“lost decade”… hmmmm ? anyone wanna bet on this that we won’t experience a similar fate ? … every balance sheet I can think of, from the average individual’s personal balance sheet right up to the Congressional and Federal Reserve’s balance sheets are way out of whack … some unbelievably so… is that the making of a robust economy ? … BS…
I find myself feeling much the same today as when I heard W won reelection. It does strike me as most interesting when a Democratic president appoints a Republican to the Fed chairmanship.
C’mon Bear - party tags are for the little people. BB operates wayyyyyy above that level. Party tags merely keep little noses to little grindstones.
…and while you giants walk the earth, my party rank and file tries to find & support decent candidates. It ain’t easy.
tries to find & support decent candidates. It ain’t easy.
Good men typically don’t go into politics.
Good morning everyone!
I had forgotten about the VA loan program. It looks real good to use to buy a house. Most of the houses I am looking at are 350K+, I dont know if the VA can be used for this….anyone know?
Hi, Stpn, hope you are well. I think you can use the VA loan, but if I were you, I’d wait on that house. I’ve posted a link to a chart done by Charles Hugh Smith back in 2006. So far, the post bubble decline is going exactly as he predicted in the chart and the false bottom should end some time after New Year’s. Then it’s a steep decline to the real bottom over four years. If you can handle it, I’d wait a couple of years to buy and see where this goes.
But Mousie, thou art no thy lane,
In proving foresight may be vain:
The best laid schemes o’ mice an’ men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!
Still thou are blest, compared wi’ me!
The present only toucheth thee:
But och! I backward cast my e’e,
On prospects drear!
An’ forward, tho’ I canna see,
I guess an’ fear!
–Robert Burns–
I sort of can wait, but I will have to see proof of the falling prices about April of next year. I think it’s seasonal. We probably will have a spike next summer just like this summer with drops every winter..
We probably will have a spike next summer just like this summer with drops every winter..
I know you said you like Kool-Aid but geez. “A spike”? That spike is so small it looks more like Bernie Madoff’s wang (allegedly) than what I would call a spike. Will the stock market be up 60% at this time next year to support that 2% “spike” in house prices?
A + 2% is a spike when the expectation is -15%.
Who expected prices to go down another 15% just over the summer? Prices always firm over the summer. It is that whole supply and demand thing. There is much more demand on July 1st than there is on December 24th.
“A spike”? That spike is so small it looks more like Bernie Madoff’s wang (allegedly) than what I would call a spike.
You’re right it looks more like a prick than a spike.
Stepn2me-
check out the chart palmetto posted above, it did show up. The chart was published before the $8k credit was in effect, however attempts to keep the market alive will only slow the decline, not stop it.
Hold your powder boy.
I wasn’t being literal with 15%. The expectation was a continued downward trend in prices. Instead prices went up 2%. That was a big surprise and reported as a “spike” in the media. 2% is a spike, just like when Dow drops 2% it’s a plummet. They have to sell newspapers somehow right?
YOY prices are down over 15%. What is your point?
Here, Eddie, everything’s fixed. It’s time to buy.
NEW YORK (AP) — A closely watched index shows home prices posted their first quarterly increase in three years, signaling the housing market has turned a corner.
The Standard & Poor’s/Case-Shiller’s U.S. National Home Price Index released Tuesday rose nearly 3 percent from the first quarter, though was still down almost 15 percent from the second quarter last year.
So if I understand this correctly:
Case-Shiller goes down = proof you should not buy
Case-Shiller goes up, also = proof you should not buy
The best thing about this nonsense is that it might make it hard for them to renew that stupid tax credit. The market is fixed. It doesn’t need all of that stimulus any more.
There are a lot of people being setup for a kick to the windpipe.
So if I understand this correctly:
Case-Shiller goes down = proof you should not buy
Case-Shiller goes up, also = proof you should not buy
Eddie, you are already on troll probation. Go buy and be done with it. Tell your real estate customers to buy. It doesn’t matter to me. As long as inventory is hidden and the taxpayer is continually looted everything should be fine.
It will be renewed and probably increased. I’ve heard something about a $15,000 credit being thrown around and not limited to 1st time buyers like the $8000 credit is now. The justification will be “look how well the $8K worked, if we double it it will work twice as well”.
Good for you, Eddie. You and your customers should love that. Now, go do an open house or something.
Fine. Tell me why I am wrong. When CS numbers show a decline, that is justification for not buying, right? So why is it not the reverse? It’s like no matter what the data say, the answer is always don’t buy.
My customers? Oh right because I am a real estate agent. Of course. And as I stated before, my brilliant marketing strategy is to post here and try to sell my inventory to the one group of people who would rather have a root canal than buy real estate. Makes sense.
You’ve got it all figured out, Eddie. Good for you. Just go buy your house. Live happily ever after.
Eddie,
Given that you impress posters here as sounding like a closet real estate agent trying to drum up interest in buying homes, perhaps you should consider a career in Realty™.
I still have yet to get an answer to my original question. If Case-Shiller drops indicate a falling market, why does a Case-Shiller increase not indicate the opposite? It’s a simple question really.
(crazy)Eddie….
It’s March 2000 and pets.com has fallen 70% but it rallied 2% today. You better get your buy order in….. right away…. do it….. DO IT BOI!
Who gives a $hit about Case-Shiller. I don’t and I never have. The market is being artificially pumped now by a tax credit, bad lending by FHA and the hiding of massive amounts of shadow inventory. The Fed is trying to monetize the debt of Fannie and Freddie to the tune of $1.25 trillion.
The price jump, if it is even real, is only being done by spending billions upon billions of dollars that we don’t have. It is only being done by hiding hundreds of billions of losses on assets tucked in dark corners of banks’ balance sheets. It is like the stock market being artificially pumped to make the people feel that recovery is here.
If you think that anybody here ever stated that the decision to buy should be based upon the Case-Shiller index then you are an even bigger fool than I already think you are.
Realturd Eddy still hasn’t gotten the concept that there is price action in both directions, always in a state of flux….. aside from the fact that we’re early in the correction cycle that are many years in duration.
like Bernie Madoff’s wang
LOL….
When I say increase, I was speaking of sales, not prices…
Sorry…
I for one do care about Case/Shiller, as I think it’s the most accurate portrayal. However as you say you have to take all factors into account - not the least of which is the current price pause being very stimulus and backstop-driven. That being the case - I think that even though C/S is showing a pause, that prices will continue right back down for some time still, especially in inflation-adjusted terms. (I’ve posted a link above to my prediction; it’ll show up at some point).
$8k…$15k…what’s the difference given the wider employment and wage situation.
I think the problem, eddie, is the perception that prices should be rising or falling. If you followed what we have been saying, and CH Smith has been saying, is that price growth in housing can not be a real driver for economic growth. Historically, housing prices have always followed inflation or wages. There have been deviations in the prices normally in bubbles along with an occasional undershoot. The data suggests that we are in for a major overshoot in the future.
The banks are insolvent so are being handed money hand over fist to stop this. Unfortunately it only makes the wealth distribution in the country worse. It is at the point where real production and consumption are falling and we are in real danger of a collapse of our currency system.
The economic distortion is introduced by the tax credits; All that does is further slow the decline in prices till they align with wages. Potentially the tax credit goes directly to the bank making you a loan on a house, unless you are a rich person buying cash. When the tax credit goes away, poof the value of the asset drops by the amount of the credit. Basically a neutral effect.
Further looking at the case shiller numbers in isolation is lunacy at this point. There has been a typical seasonality to the numbers, and it appears we might be closer to the bottom because there was some recovery this year. Most of us don’t believe it because of the large amount of Alt-A loan recasts in the near future and the large amount of shadow inventory.
My own belief is that there is so much potential upheaval that many places will drop in value far more than people expect. San Francisco might get crushed. Basically a nice place to live but like Michigan or Rochester NY; the social programs favored by the liberal population will force business from the area. Not arguing for or against these policies but unless enacted on a national level, at a regional level they tend toward depopulation of the productive classes. An accelerating downward trend.
Now, some regions are already so depressed the prices are in line with wages. However, expect that many areas will eventually be completely economically worthless. Like the Grand Canyon or Appalachian mountain areas. Too remote and too hard to reach. So, housing in those areas will be a complete luxury and potentially off the grid. This is if oil prices continue to increase and our current policies on currency continue. Potentially a lot of risk there as large swatch of the country depopulate.
Now, if our friend from Argentina was here to describe the joys of the hyperinflationary spiral….mmmm. 100% unemployment, massive crime waves, societal collapse.
Anyhow, I’m not expecting the ultimate bottom for a few more years. The numbers of excess inventory, the bad loans, foolish incentives robbing buyers from the future. You want to shill and buy or what ever, go ahead. Its your funeral.
Ever heard of a bear market (aka sucker’s) rally, Eddie?
Prices don’t go straight up or down, but slight aberrations don’t negate a trend.
Eddie,
Your conundrum is that everyone who reads and posts here tends to believe that Realtor™s are a pack of lying scum bags. If you deny you are a Realtor™ but claim to be otherwise, we will have to assume you are lying.
Troll alert.
“Crazy Eddie” LOL! You need to get a Bennie cap with little whirligig on top for your RE outfit.
Fellow down in Ft.Lauderdale called “Crazy” Eddie used to wear one on his charter boat.
Yeah….. It’s called propellerHead.
http://tinyurl.com/5fdqj7
“I for one do care about Case/Shiller, as I think it’s the most accurate portrayal.”
Yes, but as NYCityBoy suggests, it will also accurately register the impact of government interventions to prop up home prices. Whether the effects of such interventions are transient or sustainable is the big question.
PB,
Well ‘that’ and the fact that in spite of a LOT of work that went into it, it’s a fairly new index. Nearly all of the ‘data’ is backward looking.
Someone had to do it and I’m glad people are talking about it! But I don’t believe I would base a buy or sell decision on it and it alone.
I have said numerous times I am not a real estate agent. I don’t know how many more times I can say it. If you want to think I am, fine go ahead and think what you will.
I have been reading this blog on and off for years. And Case-Shiller was always proof positive that housing prices were falling. Now for the first time in 3 years C/S shows an increase - albeit a small one - in prices and all of a sudden C/S doesn’t matter. You can’t have it both ways.
“Nearly all of the ‘data’ is backward looking.”
Isn’t that true of any index ever invented?
>Isn’t that true of any index ever invented?
What about LEI index (Leading Economic Indicator)? It is supposedly forward looking.
Professor Bear,
True, but when you look at say the DJIA, it’s use ‘as’ an index is nearly as old as the exchange itself. Supposedly Robert Shiller’s data goes back to 1790 ( very… impressive ) whereas Housing Futures themsleves have only been “trading” for about 2 years.
Back in the early days of football there were no “game films” to look back on so there was only what happened ON the field. How differently would we dress say for instance ( if there were no mirrors? )
Prior to their invention Bears Need Not Apply where Real Estate was concerned. Only Bulls participated, that’s all I was getting at.
…is that everyone who reads and posts here tends to believe that Realtor™s are a pack of lying scum bags.
Well, PB, that’s what IIIII always assumed: 1.) Realtors™ are lying scum bags, and 2.) Gravity works most of the time. These were my only two reliable constants. It gave steadiness to a Universe fraught with annoying unpredictability. I depended upon these soothing certainties.
But then yesterday I learned that awaiting wipeout sold/sells commercial RE, and several posters mentioned that they know decent Realtors™.
My head a’sploded. Twice. It was an upsetting day.
“It is supposedly forward looking.”
Good point. However, the LEI is prone to manipulation. For instance, to my recollection, stock prices are blended in there, as the efficient market hypothesis states that stock prices rationally incorporate all presently available information about future conditions. Knowing this, a financial entity with tremendous fire power could potentially manipulate stock prices in a direction which leads the LEI to paint the future as they see fit.
Supposedly long-term temperature measurements provide support for the theory that we are experiencing global warming. But over the past month, temperatures have actually fallen across the northern hemisphere.
So which is it? If temperature measurements are evidence of global warming, then falling temperatures are surely evidence of global cooling, right?
Now, let’s see if Eddie understands the metaphor.
Shiller himself today cautioned about interpreting these data as indicating a bottom. He said that there have been false bottoms in the past and, with all the other problems with the economy, this could certainly be the case here. He’s no fool.
Wow, this little sub-thread went on for a while.
Eddie: Simply put, a small month over month increase amongst some home price brackets in some regions in the midst of artificially restricted inventory, massive government subsidies and countless “investors” should surprise nobody.
If all you’re interested in knowing is whether or not this is the bottom, no. It’s a dead cat bounce.
I should also mention, such dead cat bounces have been anticipated amongst readers here for years.
It wasn’t month over month. The measure was quarter over quarter.
Shiller also said:
On the positive side, the rise in home prices in May and June is a “sudden break in momentum” from years of nearly steady, punishing declines that may signal a turning point. “The roller coaster is now going up,” Shiller said.
Hmmm. May signal a turning point. That TROLL!!
And measured quarter over quarter it’s down 15%. Some turn around huh lying realturd?
I believe $417K is the lower limit while $1,094,000 is the upper.. depends on the particular county.
Current limits ’til the end of the year are here:
www dot homeloans.va.gov/docs/2009_county_loan_limits.pdf <– PDF file..
——-
links to more and various info at the the VA’s Home Loan Guaranty Services page:
www dot homeloans.va.gov/lgyfaq.htm
“…$1,094,000…”
Is that how the VA defines ‘affordable housing’ for vets?
I don’t view vets as being any different than anyone else, except maybe that they’ve earned a little extra credit.
The VA doesn’t make loans.. it’s up to the lender to decide what’s affordable and what’s not..
” its up to the lender to decide what’s affordable and what’s not..”
That was a joke..right?
Joey —
You are definitely a master of the non sequitur…
Yes, well, I like blueberry pancakes more than I like buttermilk pancakes.
OG
The Real Master of the Non Sequitur.
“OG”
Some non sequiturs are far more enjoyable than others
Hi Step-
VA has a limit of $417k I believe.
I used the VA to purchase my first pad in 1989. $118k (new 4br 2.5 bath two-story). Sold in 96 for $140k, built a new pad (much larger) for $210k, sold in 02 for $345k. Recently, a house 3-doors down from my move-up sold as a REO for $284k. I would hazard a bet that it is probably “worth” less now. My old hood’ is probably over 30% off from peak and has another 20% to go before returning to historic norms.
This is in flyover country (Minnesota).
Best of luck to you and your family.
The VA loan program can be a great one, but only if you are putting down less than 20%. IF you are putting down more than 20% you are better off going conventional in order to avoid the VA funding fee. The good thing about the VA program if you are putting down less than 20% is that you are not required to pay a monthly mortgage insurance premium, you just have the upfront funding fee, which you can request the sellers pay as part of negotiated sales concessions.
And yes, you should be ok at 350k+. WIth VA, you can borrow up to the FNMA county limits with zero down. FOr most places this is 417k, however in high cost areas it is higher. FOr instance in Los Angeles County it is 729,750. Also, if you would like to borrow more than your county limit, you can do so with a small down payment. Lets say you want to buy something at 500k and your county limit is 417k. You would need to put down 25% of the amount over 417k, so about $20,500
Case Shiller is out with the June data:
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_082562.pdf
from the release:
As of the 2nd quarter of 2009, average home prices across the United States are at similar levels to what they were in early 2003. From the peak in the second quarter of 2006, average home prices are down 30.2%. The 10-City and 20-City Composites posted their second consecutive monthly increases. Both indices were up 1.4% in June over May, and up 0.5% in May over April. Eighteen of the 20 metro areas saw improvement in their annual returns compared to those of May. Looking at the monthly data, the same 18 metro areas reported positive returns in June. In spite of the recent positive data, the overall numbers remain weak, with all metro areas and the two composites posting negative annual returns, and 15 out of the 20 metro areas reporting double digit annual declines. While not alone, Las Vegas and Detroit continue to be two markets that are struggling severely. These are the only two markets that fell in June and saw deterioration in their annual rates of return. Since their relative peaks they have fallen 54.3% and 45.3%, respectively. More upbeat news is seen in the monthly data across other markets; Dallas and Denver have reported four consecutive months of positive returns. In addition to the two composites, 13 of the MSAs reported positive monthly returns for June that were greater than +1.0%.
New York is still 71% over its 2000 level, which was already expensive.
Prices are flat. I beleive this is because sellers, who are less likely to be forced to sell here, are holding out, so sales are down. How long can this go on? There isn’t any inflation to cut the real price this time.
Norfolk/ Virginia Beach hasn’t changed much. Maybe all the Navy people are buying homes. They aren’t the best when it comes to finances, judging by all of these scam stores that are for “E1 and up, and gov’t employees only.”
Case Shiller is out with the June data:
Good lord, don’t let Eddie see it.
He already got his ears pinned back.
I’m glad I’m just an idiot and not a troll or a Realtor™
Republicans oppose an reduction in the ongoing increase in federal spending on health care for senior citizens, according to the WSJ.
http://online.wsj.com/article/SB125112553661853921.html
“The Republican Party issued a new salvo in the health debate Monday with a ’seniors’ health care bill of rights’ that opposed any moves to trim Medicare spending .”
Of course according to a recent CBO report on the future of the deficit, they cannot possibly mean all seniors. They only mean those who are seniors today. And they are asserting the rights of those seniors as a reason to say the government cannot afford to do anything for anyone else. Just charge them taxes.
Of course they know the Democrats won’t have the balls to raise the generational equity issue. They’ve been pandering to the same group — to themselves by age really — for 25 years too, just not as succesfully.
Under 50? You will not get Social Security. You will not get Medicare. Unless you are a public employee, you will not get a pension. And your grandchildren will not get a public education, while your children struggle with vastly higher taxes.
Starve the beast works!
And of couse, where will have to be reductions in entitlements “long term” — which is to say once Generation Greed has had theirs and borrowed to pay for it.
http://www.nytimes.com/2009/08/26/business/economy/26deficit.html?_r=1&hp
“Without offering any details, the White House budget director said that President Obama will soon unveil plans to reduce long-term deficits tied to soaring costs of Medicare, Social Security and other entitlement programs.”
Because all the money will be going to pay for the debt.
“Mr. Orszag estimated that, by 2019, interest expenses will account for more than 80 percent of the projected deficit of $917 billion.”
If it plays out as you suggest, and I’m afraid it will, there will be a horrible backlash against tomorrow’s seniors. This is especially the case considering the future demographic makeup of the U.S. ~2030 to 2050 and beyond.
That’s not exactly the social climate that lends itself to those who desire to be part of the landed gentry (read: homeowna).
Subject of debate: do those now under 55 deserve what is coming, because they focused on their own affairs and couldn’t be bothered with the future of their community, country, or planet?
As I’ve said, Generation Greed was followed by Generation Apathy (mine). To be followed by Generation Argentina.
Yes and no. While that’s a cop out - I’m reluctant to ascribe blame to any particular generation. If anything, it was the inability of those that knew better - from all generations - to stand up to those who sought to impose their will on others.
Now, whether that inability was the result of ignorance, apathy, cynicsm, or simply distraction depends on the individual.
And what exactly could those of us after the Baby Boomers (”Generation Greed”) actually do? Yeah, I vote - in a state controlled completely by 1 party. Yeah, I tell people about the Bubble - an I am completely ignored as even to this day the clowns around here think that 5x household income and up is “affordable” for housing. What’s the point? The majority of the population has chosen willful stupidity in the hope that it will let them screw-over somebody else for a quick buck.
The majority of the population has chosen willful stupidity in the hope that it will let them screw-over somebody else for a quick buck.
Unfortunately so.
Now we’re getting somewhere! This really cuts to the chase. I’ve never believed you have to go down and collect canned foods to show you care about your community!
In many cases ( those people are -already- lost… causes ) There, I said it! Rather we should focus on kicking young people dead in the @zz and make sure they don’t wind up on some “program” ( Yeah, I know, more neo-con “patriotic” bs )
If you care about your “community” put your foot up some kid’s @ss! Now… that ‘can’ be at the library or whatever, but chrissakes people, let’s do it w/ some attitude!
Got to agree with Pondering on this one. What choices did we have? I’m 48, and, in general, bitter towards my parents generation. Now hang on here, because I’m going to paint with a broad brush and color outside the lines. There are many, many, individual exceptions to what I am about to say. And those exceptions have my gratitude.
/rant on
I’ve always felt stifled by what I consider to be the “older generation”. I always felt sort of crapped on. They were going to get theirs, no matter how stupid or obviously unsustainable it was. It was equally clear, that I was going to get the bill. I’m not going to get medicare/social security. I’m not going to get a pension. I’m going to have to look after myself. I knew that, and planned accordingly.
No boat for me. No Mercedes for me. No granite no stainless. I’m ok with that. But what pisses me off, is that I’m going to get the bill for their toys. As a group, they can just eat cat food. They had their fun.
/rant off
Thank you for indulging me. I feel much better. Next time I’ll tell you how I really feel
I was talking to some well-heeled seniors who urged me to keep on working, since they wanted to enjoy their filet mignon. SS was obviously mad money for them. In retrospect, they were yanking my chain, but it really burned me up. I don’t mind paying the kitty, but don’t appreciate being made to feel the fool.
Unless you are a public employee, you will not get a pension.
I’m not convinced that is necessarily going to be true in the future.
Pensions are for Euro-trash. I can’t wait until we get rid of vacations and holidays. That’ll show ‘em. USA! USA!
Hahaah! Especially good posts today, Jon.
Was the Bernanke news late yesterday the reason Fannie/Freddie were going through the roof yesterday? Anyone got any other theories?
The bump in Case-Shiller was obviously known. They will pump that as somehow cleansing Fannie and Freddie.
I think it is day traders looking for quick returns.why would someone invest in an insolvent company.Mom and pops are in the market bidding up anything.Look at bac, from 2.53 to 17.00 on what?Citi is basically owned by the govt and the morons are getting excited about it.Another pump and dump by the crooks on wall street.Hopefully you have stop loss orders on all your stocks.
why would someone invest in an insolvent company
Because many insolvent companies are getting tens of billions of $$ worth of help from the government these days?
To elaborate on that thought, the government has sent a clear signal of resolve to prop up companies that would have otherwise gone bankrupt under a laissez faire regime. Such a commitment creates a sense of obligation to maintain life support until said companies can get “back on their feet.” Only if life support were removed would any of these companies fail, and the Fed and Treasury learned their lesson about the dire consequences of cutting the rope from the mother ship to the life preserver during the aftermath of Lehman Brothers’ demise last fall. When and if this crisis finally ends, what are currently penny stocks in some of these zombie companies could increase in value by large multiples.
Conclusion: Bottom fishing in companies on government life support might prove a very profitable strategy for those with gambling money available.
Late response to GH’s post in yesterday’s BB:
—————————
Comment by GH
2009-08-24 12:19:57
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!
—————————
This is totally normal market behavior, GH. It is called “arbitrage”. Arbitrageur’s exploiting differences between markets generates pressures that keep them in sync. There is nothing wrong with this, assuming they are doing it with publicly-available book information.
Where I have a problem with it is when it comes to the “flash orders”, where they are essentially paying to receive inside information, and trading on this to the detriment of all other market participants. That practice flat out should be illegal, and those who invented it and participated in it should be prosecuted.
Anyone can buy flash orders. If your computer isn’t fast enough to take advantage of it, shell out some money for a spiffy new one.
That trading should be artificially slowed to suit the weaker players is ludicrous.
Anyone can buy flash orders. If your computer isn’t fast enough to take advantage of it, shell out some money for a spiffy new one.
That trading should be artificially slowed to suit the weaker players is ludicrous.
Say what?
A. Prime isn’t proposing to slow trading, that I can see.
B. I’m sure that it’s not just the computers, but also network equipment (very high-bandwidth, high-priority - i.e. low latency) access pipes that are also an advantage. These cost megabucks - like GS probably pays tens of millions of $$ for them every year. Not too many smaller traders can afford that.
C. It’s still inside information. Even giving equal access to inside information (if that could somehow be managed) doesn’t make it right.
Wrong. Read zerohedge.com if your mega-trading servers are just a few blocks outside the “sweet spot” you can’t keep up. And isn’t GS responsible for something like 70% of these flash trades? Sounds like a level playing field to me.
“540,000 Americans will “exhaust” their unemployment benefits by the end of September. That number is projected to swell to 1.5 million by the end of 2009″.
For reference:
U3, U3, Unemployment duration, and Exhaustion Rate
Note that while U3 is a fair amount below the 1982 peak - the exhaustion rate has gone far above it.
(Second ‘U’ was supposed to be “U6″)
That’s great news as our official unemployment will go down!
Let the stock rally begin!
Congressman Charles A. Lindbergh Sr. had this to say after the passage of the bill which created the Federal Reserve System in December of 1913:
“This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill. The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money. From now on, depressions will be scientifically created.”
“From now on, depressions will be scientifically created.”
We’ve come a long way since 1913, no?
He was certainly on the right track with his line of thinking. Inflation, employment - they’re deliberate policies now.
With the recent stock run-up friends think they are geniuses and stuff. It will be interesting to see if they loose tons if the market drops rapidly. Times like this have everybody giddy over getting rich quick in stocks (not houses anymore).
Yep… with CS data confirming that the prices are on an upward trajectory, all the deluded dopes who are convinced they’re sitting on a million dollar lottery ticket will hang a new realturd for sale sign on their shack.
Watch for another step up in inventory. schweeet.
Investors take note: The housing market has bottomed out. Go out and purchase yourself 10 or 20 foreclosure homes to celebrate!
Economic Report
Aug 25, 2009, 10:26 a.m. EST
Home prices rise for second month in a row, up 1.4%
Case-Shiller index down 15.4% in the 12 months through June
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The prices of single-family homes in 20 major cities rose a seasonally adjusted 1.4% in June, the second increase in a row after falling every month for three years, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s.
Prices rose in 18 of the 20 cities in June. Only Detroit and Las Vegas saw prices falling in June from May. In the past year, prices are down in all 20 cities.
Recent data from the U.S. suggest the U.S. housing market has bottomed out. It looks to be the result of the U.S. government taking up the lending slack, now that Wall Street has left this market.
Prices rose 0.5% in May from April, the previous monthly Case-Schiller data showed.
Home prices are down 15.4% in the past year, an improvement from the 19% year-over-year drop in January. Prices are down 31% from the peak in mid-2006.
For the second quarter, the national Case-Shiller index rose 2.9%, the first quarterly increase in three years. The quarterly index is down 14.9% in the past year.
“This is an impressive turnaround,” said Robert Shiller, creator of the index, in an interview on CNBC.
…
Hopefully this will put the kibosh on any extension of the $8k credit.
Good point! Now that housing has bottomed out, there is clearly no reason to extend the $8K credit any further.
Doubtful, the Reatlors’ Association will just ask the politicians to boost it up to $15K because it has worked so well and “we can’t afford to let RE go back down again”.
The gov’t has shown it is willing just to do about anything to prop up the market, deficits be damned (that’s for the next generation to figure it out).
Maybe - but supposedly now the housing market is showing itself to be propped up OK, so at some point political expedience points to removing the credit to let housing stand on its own - and upping the deficit estimate next year by $210B or so makes a big case for that.
(one can dream anyhow).
At any rate - it’ll be *really* interesting to see what the next 2 data points show. July and August numbers are the only left to come out before the November sunset of the $8k credit.
Of course they can always reinstate it a couple of months later. I’ll bet that’s what ends up happening - say in January after the fall housing numbers start coming in, and start to turn downward again.
(P.S. - speaking to most folks on the HBB - Y’all didn’t believe me back in March when I said we were on the cusp of a flattening did you? Well, here we are. Told you so.
)
They don’t want to reinstate now because they want everyone who is thinking of buying to make that purchase before the credit expires. If they are going to increase it I agree that they may wait a few months when it will be seen as a great new idea.
Agreed, and also expect Cash for Clunkers to reappear in a bit too. After all, a mere $3B had people falling all over themselves to take on more debt. Meanwhile, you can give a bank $300B and get nary a thank you!
That’s gratitude for ya!
“Y’all didn’t believe me back in March when I said we were on the cusp of a flattening did you? Well, here we are. Told you so.”
Speaking only for myself, I have been reporting on this for months on end now. It shows up clearly (and mysteriously) in the Radar Logic data for San Diego. Since last fall, the Radar Logic measure of average price per square foot of housing in San Diego has oscillated around the magic level of $200 per square foot. Every time it dips below that level, it mysteriously bobs right back up, just as if you took your kid’s rubber ducky down to the bottom of the swimming pool and let go of it. I find the coincidental timing of this sudden leveling off of San Diego residential real estate price declines with the Wall Street collapse and TARP rescue from GD2 particularly intriguing.
“…just as if you took your kid’s rubber ducky down to the bottom of the swimming pool and let go of it.”
Amazingly, it will do this… even if… the pool is only half full!
The thing about rubber duckies is that I fully understand why they rise back to the surface after you drag them to the bottom of the pool — it’s because they are inflated full of air, sort of like a bubble!
By contrast, I cannot for the life of me figure out why those San Diego home prices keep bobbing up from the bottom back up to levels above $200/sq ft, on scant local end user fundamental support…
PROVIDENCE, R.I. (AP) - Rhode Island will shut down its state government for 12 days and hopes to trim millions of dollars in funding for local governments under a plan Gov. Don Carcieri outlined Monday to balance a budget hammered by surging unemployment and plummeting tax revenue.
The shutdown will force 81 percent of the roughly 13,550-member state work force, excluding its college system, to stay home a dozen days without pay before the start of the new fiscal year in July.
The closures come as the worst recession in decades has eliminated hundreds of millions of dollars in tax collections and pushed unemployment to 12.7 percent, the second-highest jobless rate in the nation behind Michigan.
Carcieri predicted the state’s fiscal future could grow even bleaker.
“There are going to be inconveniences for the public, and there are going to be sacrifices, as I said, for state employees,” Carcieri said at a Statehouse news conference. “These steps right now are unavoidable if the state is to live within its budget, live within its means.”
The governor ordered the shutdown in an executive order but said he’s willing to negotiate a different deal with state employee unions so long as it saves the same amount of money, roughly $22 million. But time is short: the first shutdown day has been scheduled for Sept. 4. Additional shutdown days have been scheduled every month through June.
Critical workers such as state police, prison guards and child abuse investigators still will report to work during the shutdown, Carcieri said. He ruled out raising taxes to balance the budget and said the state cannot lay off more workers since it deeply trimmed its work force last year.
Oh snap!
Just when Business Week was humping Providence as a great place to buy a cheap house
Workers are being asked to do the same amount of work in fewer days for less money = Underemployment.
Wi state employees have to take 8 days off/yr without pay for 2 years.
The reality is that unemployment would be much worse if they were cutting jobs.
Not to worry consumer confidence is up, they have no money no job and no access to credit but they are confident.
The question I’m dying to ask is: where does all that confidence come from?
Is it confidence is individual abilities? Confidence in family? Confidence in education/training?
Or is it confidence in government programs? Confidence in the actions of powerful strangers? Or just confidence because the alternative is too much to bear?
Wrong Answer Meatson…..
The Right answer:
State Workers are being forced to quit screwing around and to have some of them actually work during their normal lunch hour to provide better customer service in hopes they will all still have a job next year.
————————————————-
Workers are being asked to do the same amount of work in fewer days for less money = Underemployment.
Obama Increases 2010 Deficit Forecast 19% to $1.50 Trillion
Aug. 25 (Bloomberg) — U.S. unemployment will surge to 10 percent this year and the budget deficit will widen to $1.5 trillion next year, reflecting a “deeper recession” than previously expected, White House budget chief Peter Orszag said.
The Office of Management and Budget also forecasts that the U.S. economy will shrink 2.8 percent this year, worse than the 1.2 percent contraction the OMB projected in May. For next year, the budget office said the gross domestic product will grow 2.0 percent, less than the 3.2 percent expected in May. By 2011, the economy would be well on its way to recovery, growing at a 3.8 percent annual rate, according to the administration’s mid-year economic review, released this morning.
The budget shortfall for 2010 will mark the second straight year of trillion-dollar deficits. The projected deficit for the fiscal year that begins Oct. 1 is higher than the $1.26 trillion forecast in May and reflects expectations economic growth will be slower this year and next because of “the severity of the crisis in the U.S. and in our trading partners,” said Christina Romer, White House chief economist, who along with Orszag briefed reporters on the report.
The deficit and unemployment numbers may weigh down President Barack Obama’s drive for his top domestic priority, overhauling the U.S. health care system.
‘Bad, Bad Shape’
“It throws a wrench in health-care reforms,” Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview before the report was released. “No matter the specific numbers, they’re a constant reminder that we’re in bad, bad shape.”
A year ago I posted that I thought we would have to double our national debt to fix the housing bubble. It was a ridiculous thought. However, it looks like we are firmly on the path to ridiculous.
Problem is that we’re trying to fix:
- Our housing bubble problem
- Our health care problem
- Our retirement funding problem
- Our terrorism problem
- Our global warming problem
all simultaneously. Each of those 5 is a multi-trillion-dollar problem in and of itself.
I seriously doubt that we’ll see a surplus federal budget again in any of our lifetimes. And if we do - I don’t think most of us will like the method(s) used to achieve it.
In a related announcement, Obama declared his support for government stimulus packages, bailouts, subsidies, give aways, credits, free money, etc., etc. No connection.
Update on the house I saw yesterday with the stainless steel backsplash…
Here’s the house: http://www.everyhomerealty.com/pa/mg/ul/t5582862.htm.
I am completely uninterested in it. Windows all need replaced (and they are those funky side-slide windows so more costly to replace than standard ones), kitchen and bath pretty much do, too (both very old and run down). Basement gets water (didn’t say it “floods”, but it was disclosed that it gets “wet” and the house is sitting in a known flood area). House is really tiny - smaller than I actually had thought based on room sizes. There were other things here and there that needed to be fixed.
My realtor said, “You won’t find anything else like this for $215,000! And don’t forget - you only have until November for that $8000 PLUS…rates will not be this low much longer.” I think I’ll take the chance that prices will keep dropping (this house is worth about $150K in my opinion) and don’t really care about the $8K rebate - that’d just be a bonus if I found something at the right time. As for rates? Perhaps true, but rising interest rates will only force home prices down, I believe.
It’s a no for now.
That’s an old RE trick. Show the prospect a dog of a house then show them something half way decent and many prosepcts jump at it. Eastcoaster do your own leg work via the internet and newspaper Deal only with listing agent. They will get twice the commission. And then are much more likely to persuade the seller that your offer is good. I think so called buyer agents just gum up the deal and was all part of the hype during the height of the bubble.
My response to this trick has always been to ask for the nicer house at 25% off the dog’s asking price.
Show the prospect a dog of a house then show them something half way decent
Good cop bad cop.
Basement gets water (didn’t say it “floods”, but it was disclosed that it gets “wet” and the house is sitting in a known flood area).
HAhahahahaHAHAH! It gets ‘wet’? Hahahaahah! Like, THIS ‘wet’?
http://tinyurl.com/n3uz8p
(Centralia’s just down the road from me here in Thurston County, WA.
It gets kinda ‘wet’ sometimes, too. )
And don’t forget - you only have until November for that $8000 PLUS…rates will not be this low much longer.”
Gotta create that sense of urgency!
“But wait - there’s more!”
I’m curious - the 11 x 33 family room - was that a converted basement, or was the FR part of the floor plan?
Converted basement. The FR was actually the nicest part of the house. Though it probably gets “wet”.
Stainless back splash and black appliances??
OK you made me look.
that kitchen is fuh-GLAY
unacceptable
Hi. I read this blog because I am a pessimist. But not unhappy rather to the contrary I really enjoy life but expect the worse (Maybe that’s why I am content ? Things work out better than anticipated ? ) But do you think pessimism is some deep seated evolutionary survival skill ? Some people / animals would look at a field or pasture they’re walking through and enjoy the beauty of it. While I would be looking for the hidden snake about to strike or some other threat ?
Hmmmm. It seems to me I read in Scientific American or some other fairly credible news source about anxiety probably being a survival trait. See, if yer hanging out in the cave at night and hear a noise and react anxiously— by grabbing a club and a torch and stoking up your adrenals— then you might survive the wolf attack, whereas if you sit there relaxedly and holler ‘Whoever you are, come on in and enjoy the mastodon shish-kebab!’, well then, in short order you might no longer be around to pass on your relaxed-prone genes. Elevated anxiousness ensures genetic continuation, although your distant descendants might get more ulcers and experience more road-rage.
Anxiety is not the same as pessimism, but maybe it’s the same theory?
Anyway, IIIII would be walking through the pasture and enjoying the beauty of the pretty snakes about to strike. So what does that make me…
Anyway, IIIII would be walking through the pasture and enjoying the beauty of the pretty snakes about to strike. So what does that make me…
Contrarian, silly.
I’M not contrarian! You are!
Hmm guess that makes you sensible. There is beauty to behold right in front of your eyes. Why worry about the some imaginary snake ?
Back to School Daze?
Who’s got $$ to spend when the house as ATM is broken?
But we were told that the consumer was turning around!
NEW YORK, Aug 25 (Reuters) - Redbook Research on Tuesday released the following seasonally adjusted weekly data on U.S. chain store sales:
Year-over-year: Week (w/e 8/22/09 vs year ago) -4.4 pct
Year-over-year:Month (August 2009 vs August 2008) -4.4 pct
Month-over-month: (August 2009 vs July 2009) -0.7 pct
Uh, what back-to-school shopping?
August 09 over July 09 (first three weeks) is never supposed to be negative, since that’s when parents equip kids for school.
Well, this year it was.
Despite the claims of “green shoots” the fact remains that every indication I’ve got “on the ground” in high-frequency (and high-reliability!) economic statistics says that the consumer’s wallet has in fact snapped shut.
This is not about a consumer “lack of desire” to shop, it is about a lack of ability to pay.
Christmas is going to be “interesting”; one wonders whether the stock market will figure it out before or after the Christmas Sales statistics show up on the street.
(From K. Denninger)
cobalt:
Thanks for the link yesterday to the piece about squalene.
Last year a friend called me in a panic about bird flu. I referred her to Mercola’s site.
Do you recall the first swine flu scare, back in 1976? That immunization program resulted in an unintended consequence:
Guillain-Barré syndrome.
From wiki:
“There were reports of GBS affecting some people who had received swine flu immunizations in the 1976 U.S. outbreak of swine flu. Overall, there were about 500 cases of GBS—25 of which resulted in death from severe pulmonary complications—which, according to Dr. P. Haber, were probably caused by an immunopathological reaction to the 1976 swine flu vaccine.”
From the L.A. Times - Swine Flu Debacle of 1976 is recalled:
http://articles.latimes.com/2009/apr/27/science/sci-swine-history27
Here’s a rap (on YouTube and also on naturalnews.com)
Don’t inject me
Don’t infect me
Don’t stick that needle in my arm and chemically wreck me
Don’t inject me
Don’t infect me
Don’t stick that needle in my veins and medically wreck me
Don’t use me
Don’t abuse me
Don’t push your medical lies and try to confuse me
Don’t trick me
Don’t you d!ck me
With that needle in ya hand don’t you dare try to prick me
August 09 over July 09 (first three weeks) is never supposed to be negative, since that’s when parents equip kids for school.
=====================================================
Where I live school started August 3rd this year. Which means most back to school shopping was done in July.
Where do you live edddie?
For us in southern CT the teachers started with orientation the day after Labor day and the students 1-2 days later
NYCityBoy,
Yesterday you made me laugh hard and out loud* about being ashamed of being on the same blog with me because of my neighbor and I taking most of the summer to work through 6 sixpacks of Urguell Pilsner.
I have not stopped by the neighbor’s house but maybe every couple of weeks. He drinks one beer at a time. He’s about 90 years old. I generally limit myself to 2 drinks max. When a bit younger I could raise a lot hell and managed to live through it without injuring / killing others or myself. Am older (46) and wiser.
At 20 the will reigns, at 30 the wit, at 40 the judgement - Poor Richard’s Almanac, Ben Franklin
*not as hard as when you describe educating the RE fools with the cold hard facts.
At 20 the will reigns, at 30 the wit, at 40 the judgement - Poor Richard’s Almanac, Ben Franklin
“If you’re not a liberal when you’re 20, you have no heart.
“If you’re not a conservative when you’re 40, you have no brain”
-PJ O’Rourke
I’m still ashamed.
“Slums of Suburbia:
Sorting through the rubble of California’s foreclosure tsunami.”
http://www.newsweek.com/id/211382
They were drawn by the thousands of acres of cheaper suburban homes offering the promise of the good life for people willing to commute two or three hours.
A two or three hour commute?! That ain’t a ‘good life’! I’d rather be shot.
In Merced County, where a new state university brought a building frenzy with it, home prices plummeted by nearly three quarters, leaving the average home worth less today than it was in 2000—that is, if it existed in 2000.
Ooopsie.
While the pace of foreclosures has slowed this summer, valley officials worry that it will spike back up once a government-imposed moratorium on repossessions is lifted.
Ya think?
A gem laden article. And now I must wipe the blackberry crisp and coffee slobber off my keyboard. I got kinda exercised as I read, especially the part about covering all that good soil/ag land with McCr*apShacks.
The entire concept of “UC Merced” is crazy. The UC system is going broke - why do they need to create an entire new campus out of wholecloth? There’s plenty of room to expand the UC Davis and UC Riverside campuses.
Although I would be in favor of UC coming up with funding to buy out cheap foreclosures near campus to use as student housing - why use taxpayers’ dollars to build more new dorms these days?
Here’s an interesting thought about Ben Bernanke…
Obama has nominated him for a second term as Fed chairman. But he still needs to be confirmed by a Senate vote.
Do you think the Senators will rake him over the coals? Would some Republicans and Blue Dogs try a filibuster?
1. There will be the usual politician’s game of confirmation charades.
2. He will be reappointed.
Yep, Chris “D-Bag” Dodd said today that they will ask BB very tough questions, however BB is the right man for the job.
Example of Senator Dodd asking BB a “very tough question”:”Mr.Bernanke, how do you spell your last name?”
Example of Senator Dodd asking BB a “very tough question”:”Mr.Bernanke, would you know of any special deals to finance a new purchase, my old line of special deal financing seems of have disappeared.
Is DJIA = 10,000 pretty much “in the bag,” thanks to the Bernanke reappointment rocket ride to infinity and beyond?
Stock market always goes up
Yes.
FWIW - I think we have found our next replacement bubble. Everyone has it in their heads that stocks are super-cheap because they’re still at the same level they were 10 years ago.
(Not stopping to think that maybe they were a super-bubble then).
At this point I seriously wouldn’t be surprised to see the DJI pass 14,000 next year.
(FWIW I also wouldn’t be surprised to see it down to 5,000. I don’t think it’ll happen - but it ain’t askin’ me. It’s like that.
)
Packman has issued a “strong buy” for ETF DIA!
Stock ‘guru’ on the radio yesterday said, the dow will hit 11,000 may take a little time, and if it can break11,000 then 13,000 is in da bag!
No worries, it’s all good!
At this point I seriously wouldn’t be surprised to see the DJI pass 14,000 next year.
Sigh.
That’s a depressing thought.
Why not alleviate your depression by stocking up on stocks, if this is what you rationally expect?
See Packmans post 14,000 or 5000.
I’ve got tunnel vision and just can’t see that happening without improving employment and wage increases.
See the USA (tax system)
In your Chevrolet! (After trade-in)
This is hilarious:
… many of those cashing in on the clunkers program are surprised when they get to the treasurer’s office windows. That’s because the government’s rebate of up to $4500 dollars for every clunker is taxable.
“They didn’t realize that would be taxable. A lot of people don’t realize that. So they’re not happy and kind of surprised when they find that out,” Nelson said.
The amusement here is how most (if not all) states compute sales tax (charged when you register the vehicle.)
When you buy a new car you pay tax on the difference between the new car’s purchase price and the trade-in you present to the dealer. This is an intentional distortion in the law that is intended to favor dealers over private-party used car sales; if you sell your used car privately the new buyer pays sales tax but you do not get the offset on the purchase of your replacement vehicle - the only way to get that is to trade the car.
Dealers use this, of course, in negotiations, effectively pocketing the sales tax - and why not? It’s a real difference to you!
But the “cash for clunkers” is not a trade-in. That’s a $4,500 check from the government, basically.
So you get nailed at least once and possibly twice. Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!) and what’s worse those states that tax income (that would be most of them!) might wind up counting this as income for state income tax purposes too, effectively taxing you twice.
I should have probably done a Ticker on this originally, but I (naively) believed that most people understood how the tax system works when it comes to new and used car transactions. Apparently, from the referenced news article, this is not the case, and I bet the car dealers, incredibly ethical people that they are, were fully informing their suckers, er, clients of this little “feature” of that government handout too.
PS: I have also received several emails informing me that dealers had customers so giddy over the “free cash” that they were selling cars at full sticker price besides - effectively, in many cases, turning the entire “cash for clunkers” money into pure dealership profit and managing to charge you tax (twice) on it as well. Ain’t car dealers grand (several grand out of your pocket, that is!)
(From K. Denninger)
Ahhh beware Greeks bearing oh I mean government bearing gifts. I was taught long ago about if it’s too good to be true…
I wasn’t surprised by the car dealers jacking up their prices.
I have to admit I didn’t know about how the tax system works with the new and used car transactions. Thank you for the information.
Most of the cars I’ve bought have been through a private party.
I did buy one car from a dealer with no trade in. That car a brand new 1980 Pontiac Sunbird. The car lasted for 250,000 + miles before I donated it to charity.
“Beware of geeks bearing grifts.”
I Googled this meme to confirm that it’s mine, all mine
“Beware of geeks bearing grifts.” = Gates MS dos & Internet Explorer
Bingo!!!!
Stupid question time.
What happens to bondholders of a bank when the FDIC takes it over?
Don’t tas me bro… I might flame out!
Homeless man bursts into flames after being Tasered by U.S. police
25th August 2009
Daniel Wood burst into flames after police tried to subdue him with a taser gun. He had been sniffing from an aerosol can
A homeless man caught fire after U.S. police shocked him with a Taser gun, it has been revealed.
Daniel Wood, 31, was allegedly sniffing gas from an aerosol can as he ran through traffic when he was chased by two officers in Lancaster, Ohio.
One officer caught Wood and got him on the ground, where Wood continued to resist, according to the police report.
Another officer shouted a warning, then zapped Wood with the Taser, the report said.
Wood immediately burst into flames that covered his torso.
The officers were forced to drop their weapons and beat out the flames.
Wood said: ‘My complete right half of my upper body is burned.
‘I have bandages from my wrist all the way up my arm and across my chest.’
He admitted he had been inhaling vapours from a chemical cleaner in an attempt to get ‘high’.
Wood, who has been arrested more than 50 times, has been charged with resisting arrest, assaulting a police officer and abusing harmful intoxicants.
Wow!
I would pay at least 10 bucks for a video of this spectacle. Maybe even 20 bucks.
I could play it at my dinner parties. First as a comical warning, and then later on in the evening as a primer on how to do it right.
When you’re so pickled that you’re flamable, it’s time to check in to detox.
I’m sniffing aerosol, you turn on the Taser gun
You tell me stop, but I just run
I say I don’t like it, but you know I’m a liar
‘Cause when you tase, ooh, fire
Well, Romeo and Juliet, Babe Ruth and Willy Mays
Baby you can bet, that they never got tased
My words say split, but my words they lie
‘Cause when you tase, ooh, fire
Fun Fact
Hey everyone today is the 400th aniversary of Galileo’s telescope.
Check Google home page
Hey Bunning, the out of control spending didn’t just start when HBIC moved in! These lying bastards have been at a loooong time. I do agree however that BB should have been given a swift kick in the azz out the door. Problem is the next crook would have been as bad or worse.
Senate’s Bunning Says Obama Has ‘No Clue’ in Naming Bernanke
Aug. 25 (Bloomberg) — Senate Banking Committee member Jim Bunning said President Barack Obama’s nomination of Ben S. Bernanke for a second term as Federal Reserve chairman shows his administration has no plan for solving the U.S. economic crisis.
“This is just more evidence that the president has no clue what he is doing when it comes to the economy and solving America’s fiscal problems,” Bunning, a Kentucky Republican, said today in a statement. “I am very disappointed.”
Bunning, 77, a two-term senator who will retire next year, has faulted the Fed and Bernanke for opposing plans to have the Government Accountability Office audit the central bank’s monetary-policy decisions. Bunning on July 22 suggested stripping the Fed of consumer protection and bank regulation authority.
Bernanke must be confirmed by the Senate after a hearing before the Banking Committee. The Fed chief may face tough questions from lawmakers who say he was slow to recognize the severity of the mortgage crisis and didn’t do enough to protect consumers while leading bailouts of firms including Bear Stearns Cos. and American International Group Inc.
“He’s been acting as an arm of the Treasury Department,” Bunning said. “He cranked up the printing presses to support President Obama’s out-of-control spending policies that have led to America’s mounting debt and will put the taxpayers trillions of dollars more in the red.”
You’ve gotta love it when a 77 year old senator with no political strings attached to his tongue speaks his mind.
Yeah it’s too bad he was speaking with a forked tongue while in office.
Isn’t that a job qualification for a seat in the Senate?
I told you he was gonna go out with a bang. He’s a crusty old bastard, and his own tribe just pulled the rug out from under him. He’s not holding anything back. Sit back and enjoy, I suspect the best is yet to come.
Home Market Shows Signs of Life as Declines Slow (Update2)
By Kathleen M. Howley and Shobhana Chandra
Aug. 25 (Bloomberg) — The worst may be over for the U.S. real estate market, according to two gauges of home prices.
The S&P/Case-Shiller home-price index, which tracks 20 metropolitan areas, declined 15.4 percent in June from a year earlier, the smallest drop since April 2008, the group said today in New York. Nationally, prices fell 6.1 percent in the second quarter from a year earlier, the best performance in a year, according to the Federal Housing Finance Agency.
“It is real and it looks like a turn,” said Karl Case, an economics professor at Wellesley College and co-creator of the S&P/Case-Shiller indexes, said in an interview on Bloomberg Radio. “It’s not going down any more and it’s beginning to come up. That’s very good for the future of this financial problem.”
…
Thanks for bestowing this penetrating analysis on all the untutored masses, Professor Case.
The case against Bernanke
By Stephen Roach
Published: August 25 2009 16:02 | Last updated: August 25 2009 16:02
Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. This is a very shortsighted decision. While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.
…
link
Question for Mr. Roach:
What is the superior alternative he has in mind, but fails to mention in this diatribe?
Any guesses on who ghost wrote this piece? (I will divulge my guess later…)
Financial Times
US must reappoint chairman Ben
Published: August 9 2009 22:15 | Last updated: August 9 2009 22:15
A central banker must combine the technocrat’s virtues with those of the politician. Ben Bernanke, chairman of the US Federal Reserve board, possesses both. He should be reappointed when his current term expires in January.
…
Confirmation hearings should be used to probe Mr Bernanke’s views on these issues, which will influence how central banking is being recast. But uncertainty about his tenure will harm the economy. President Barack Obama should renominate him soon; the Senate must confirm his nomination swiftly.
Any guesses on who ghost wrote this piece? (I will divulge my guess later…)
Oh, oh pick me, I know, I know, Ben Bernanke right?
Great guess, though it does not match mine. (I would love to know the true author of this piece if anyone can provide a reference.)
Well, given that it was an editorial in the Financial Times, with no attribution given, should we deduce is was collective wisdom from across the pond?
-or-
Give it to General Ed Itorial,O.B.E.
I was thinking it might have been ghost written by Lawrence Summers (who often pens FT editorials published under his name). I have no way to confirm or refute this — just seemed like a plausible guess. A related plausible guess (whimsical fantasy?) is that BB could pen a similar ghostwritten defense whenever it is Summer’s turn to take the henceforth-politically-charged Fed chairmanship.
Financial Crisis Called Off
By James Howard Kunstler
on August 24, 2009 7:49 AM
Whew, what a relief! Everybody from Ben Bernanke and a Who’s Who of banking poobahs schmoozing it up in the heady vapors of Jackson Hole, Wyoming, to the dull scribes at The New York Times, toiling in their MC Escher hall of mirrors, to poor dim James Surowiecki over at The New Yorker, to - wonder of wonders! - the Green Shoots claque at the cable networks, to the assorted quants, grinds, nerds, pimps, factotums, catamites, and cretins in every office from the Bureau of Labor Statistics to the International Monetary Fund - every man-Jack and woman-Jill around the levers of power and opinion weighed in last week with glad tidings that the world’s capital finance system survived what turned out to be a mere protracted bout of heartburn and has been reborn as the Miracle Bull economy. Our worries over. If you believe their bullshit. Which I don’t.
All this goes to show is how completely the people in charge of things in the USA have lost their minds. They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park “capacity” and Big Box “power centers,” restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world - all this while turning Afghanistan into a neighborhood that Beaver Cleaver would be proud to call home.
By the way - and please pardon the rather sharp digression - but does anybody know if they buried Michael Jackson yet? It’s only been a couple of months. And, if not, is that the stench now wafting across the purple mountains’ majesty from sea-to-shining sea? Isn’t it a little indecent to keep the poor fellow waiting? Or is a really surprising comeback secretly planned, with product tie-ins and all?
America loves the word “recovery” as only a catastrophically sick society can. “In recovery” is the new universal mantra of loser individuals and loser nations. Everybody in the USA is in recovery. Even Michael Jackson (he may have given up on somatic activity but, on the plus side, as the Rotarians love to say, he’s quit using drugs for once and for all…).
’salad shooter buying” lol -holy crap that is funny!
I liked:
the assorted quants, grinds, nerds, pimps, factotums, catamites, and cretins in every office from the Bureau of Labor Statistics to the International Monetary Fund
Postal Service Offers Employees Buyouts to Quit…30,000
Updated 3:36 p.m. ET
The Postal Service is offering up to $450 million to employees if they will agree to quit their jobs, it announced Tuesday, the latest effort by the financially struggling agency to reduce its costs amid a sharp decline in mail volume.
Up to 30,000 employees can take the $15,000 bonus, which the Postal Service describes as a way to save up to $500 million during the next fiscal year, which begins in October.
The offer is available to Post Office retail clerks, distribution center mail handlers and clerks, and motor vehicle technicians. Letter carriers are not eligible, since the Postal Service is targeting only areas where it has an excess of workers, and the number of addresses grows on average by 1.5 million each year, according to the agency.
Eligible employees would receive $10,000 this October and $5,000 in October 2010. The offer extends to employees already eligible for retirement that have not chosen to do so, those already eligible for an early retirement program that began last year and any full-time, part-time regular or part-time flexible employees willing to voluntarily resign.
Employees have until Sept. 25 to make their decision. Departures will be staggered depending on need, with the first wave of employees leaving Oct. 31.
“The ongoing declining mail volume has left us with difficulties with keeping work resources in step with the declining mail volume,” spokesman Yvonne Yoerger said, since less mail means less of a need for workers. Mail volume has dropped 12.6 percent so far this year, meaning that it now delivers an average of 4.1 pieces of mail to each address, down from 5.9 pieces in 2000. Advances in automation technology have also reduced the need for employees, Yoerger said.
The Postal Service negotiated the deal with the American Postal Workers Union and the National Postal Mail Handlers Union.
Kicking the bailout habit
The FDIC wants banks to stand on their own two feet, but withdrawing insurance on big checking accounts won’t be popular.
August 25, 2009: 2:50 PM ET
NEW YORK (Fortune) — Washington gets another chance to kick the bailout habit this week, when regulators consider the fate of a subsidy that has been good to smaller banks.
The board of the Federal Deposit Insurance Corp. is scheduled to meet Wednesday. On the agenda is the status of the Transaction Account Guarantee Program, which provides unlimited federal insurance for noninterest-bearing checking accounts — those used by businesses and governments for meeting payroll, for instance.
The so-called TAG program covers some $700 billion in deposits that would otherwise be uninsured. For small banks, it’s been a big boost, giving them access to cheap funding via low-cost deposits.
The FDIC has proposed either to wind the program down on schedule at year-end, or to extend it for six months while more than doubling the fees levied on subscribing banks.
The decision comes as policymakers face pressure to pare back costly programs they put in place after the collapse of Lehman Brothers.
A decision to allow TAG to expire on schedule would send another signal the banks are strong enough to stand on their own two feet. Last month, regulators scored a modest victory on this front when CIT (CIT, Fortune 500) — a struggling lender to small businesses — got a private loan after a bid for federal aid was rejected.
Still, many smaller banks are urging the agency to extend the TAG program into next year or beyond. They say the economy is still weak and the financial system wobbly. Without TAG, they say they will have trouble competing against big institutions, including teetering titans Citi (C, Fortune 500) and Bank of America (BAC, Fortune 500).
“The TAG program ensures that community banks are not at a competitive disadvantage in this fragile economy,” the Independent Community Bankers Association wrote in a July 30 letter to the FDIC.
When the Party’s over, turn out the lights. Permanently:
Lenin’s Statue Kills Young Man Amid School Party Source: Pravda.Ru
A national of Belarus died as he fell off the monument to Vladimir Lenin, the leader of the Great October Revolution, in the town of Uvarovichi, the Gomel region of Belarus. The man climbed up the monument in a state of alcoholic intoxication, the local police said.
The 21-year-old man was having fun in a company of his friends near a local school. The man decided to climb up the five-meter-high (16 feet) statue of the revolutionary leader, the founder of the Soviet Union. The statue was erected in the town in 1939, Itar-Tass reports.
The young man hung from the statue’s arm and started swinging. The plaster-made statue cracked and fell into pieces because of the man’s weight. The man fell on the ground and pieces of the statue landed on him.
The young man died on the way to hospital.
A similar incident took place in Russia in 2003, in the settlement of Shushenskoye, the Krasnoyarsk region of Russia, where Lenin was living in exile from 1897 to 1900. A local student climbed on the four-meter-high plaster statue of Lenin and hung from its arm. The monument cracked, and pieces of it killed the man as he fell on the ground.
Most likely, the two men were unaware of the fact that the monuments were made of plaster. The statues looked as if they were made of metal, but it was only the paint that covered the plaster.
Potemkin statues…
was you ever crushed by…
“…Bunning on July 22 suggested stripping the Fed of consumer protection and bank regulation authority…”
Ha, I don’t see a date…was that:
2001
2002
2003
2004
2005
2006
2007
2008
or is that maybe referencing 2009?
There’s that word again: Kentucky!
Ate-up:
Here’s an idea of what you could do with your free time if your state has an equivalent statute. Think Robin Hood…
California’s Unfair Competition Law, Business and Professions Code Sec. 17200
The law allows private attorneys to act on behalf of the public to sue businesses that engage in price-fixing, false advertising or other unfair business practices.
Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’
Thursday, July 16, 2009
Most red ink ever: $9 trillion over next decadeAugust 25, 2009 9:17 PM ET
All Associated Press newsWASHINGTON (AP) - In a chilling forecast, the White House is predicting a 10-year federal deficit of $9 trillion — more than the sum of all previous deficits since America’s founding. And it says by the next decade’s end the national debt will equal three-quarters of the entire U.S. economy.
But before President Barack Obama can do much about it, he’ll have to weather recession aftershocks including unemployment that his advisers said Tuesday is still heading for 10 percent.
Overall, White House and congressional budget analysts said in a brace of new estimates that the economy will shrink by 2.5 to 2.8 percent this year even as it begins to climb out of the recession. Those estimates reflect this year’s deeper-than-expected economic plunge.
The grim deficit news presents Obama with both immediate and longer-term challenges. The still fragile economy cannot afford deficit-fighting cures such as spending cuts or tax increases. But nervous holders of U.S. debt, particularly foreign bondholders, could demand interest rate increases that would quickly be felt in the pocketbooks of American consumers.
‘We Have to Go Spend Money to Keep From Going Bankrupt’
Uh-huh. Suppose I had $200,000 to my name — my life savings, invested in stocks, bonds and cash. Reading the VP’s warning, I go out tomorrow and spend all $200,000 on a new boat. For good measure, I buy $15,000 worth of new fishing gear, clothing, a new deck for my house, a new barbecue grill, and a new stereo system (all financed on several different credit cards). I also purchase a new car for $30,000 (on credit).
Since I just left my job for retirement, I have no income. How am I doing about now? Have I kept myself from going bankrupt?
Soon-to-be-tested hypothesis:
It is possible for an economy to spend its way to prosperity.
It’s better to be just Biden our time…
test me once - and hold your tongue
test me once shame on you
test me twice shame on me.
Don’t hate me, couldn’t resist the ribbing road warrior.
I disdain sycophants. Especially the dumb ones.
The Man Who Saved the World
Why Ben Bernanke was President Obama’s only real choice.
By Robert J. Samuelson | Newsweek Web Exclusive
Aug 25, 2009
It would have been insane (not to be too subtle) for President Obama not to nominate Ben Bernanke to a second term as chairman of the Federal Reserve Board. The economics dictated it, and so did the politics.
Imagine the fallout if Obama had instead selected one of the rumored successors, White House economic counselor Lawrence Summers. The next-day stories would have been predictably critical. Was Obama trying to compromise the Fed’s “independence”? Given Summers’s reputation for abrasiveness, could he craft a consensus in the key 12-member Federal Open Market Committee? How would the economy respond, considering the strong support for Bernanke among economists, business executives, and bankers?
…
Stupid question time….is Robert Samuelson related to economist Paul Samuelson?
This writer doesn’t know green shoots when he sees ‘em. Buy stocks now and stay confident and happy, or get priced out forever…
Challenges loom for Fed chief Bernanke in second term
By Paul Davidson, USA TODAY
Ben Bernanke dodged months of rumors Tuesday when President Obama renominated him as chairman of the Federal Reserve. But that doesn’t mean the former Princeton professor will be coasting for the next four years.
Economists say Bernanke faces an array of challenges nearly as imposing as last fall’s economic crisis. They include ensuring a smooth recovery without igniting inflation, and contending with calls from a newly emboldened, less deferential Congress for a more open Fed that some say should be subject to government audits. Lawmakers are also skeptical toward Obama’s proposal to expand the Fed’s powers to head off threats to the financial system.
…
How many roller coasters have you folks ever ridden which go up only to never go down a big, scary hill?
Aug 25, 2009, 11:56 a.m. EST
Housing recovery or another false start?
Home prices rise, but experts reluctant to give all-clear sign
By John Spence, MarketWatch
BOSTON (MarketWatch) — Stocks got a lift Tuesday from data showing the first quarter-over-quarter rise in home prices in about three years, but economists warned the housing market still likely faces a long road to a sustained recovery.
“The animal spirits seem to be coming back,” said Robert Shiller, Yale economics professor and developer of the Standard & Poor’s/Case Shiller Home Price indexes. “The psychology does seem to be changing.”
The national home-price index released on Tuesday rose for the second straight month in June, fueling hopes the housing downturn, which is in its third year, is waning. Still, the index was off roughly 15% in the second quarter from the year-ago period. See Economic Report.
What’s ahead for housing
The housing market has been showing some signs of life, but could the worst really be behind us? Robert Shiller, co-creator of the Case-Shiller home-price index, talks to Kelsey Hubbard about the market’s landscape. (Aug. 25)
In a teleconference Tuesday, Shiller was reluctant to call a definitive bottom in home prices, saying he’s seeing “conflicting signals” in the housing market.
On the positive side, the rise in home prices in May and June is a “sudden break in momentum” from years of nearly steady, punishing declines that may signal a turning point. “The roller coaster is now going up,” Shiller said.
Yet he noted what appeared to be a housing recovery in early 2008 “fizzled” when prices resumed their decline. And a long-term chart of home prices makes it look like “we are still in the process of a bursting bubble.” Shiller expressed “great reluctance” to forecast where prices will go from here with the U.S. economy in the midst of the most severe recession since the Great Depression.
“Unemployment looks like a bad indicator for the housing market,” Shiller said.
…
Ted Kennedy died.
So did Mary Jo Kopechne, 40 years ago.
Sometime around midnight, on July 18, 1969 Kennedy drove his Oldsmobile 88 off of a small bridge on Chappaquiddick island, into eight feet of chilly water. The vehicle landed upside-down. While Kennedy managed to free himself from the wreck and swim to safety, his passenger, 28-year-old Mary Jo Kopechne was left in the car to drown.
RIP Ted Kennedy.
A flawed human being who spent his life reaching for redemption on behalf of the common man. He didn’t have to, but he did.