The Housing Bubble

Pensions: Don’t worry. Keep the payouts constant and just inflate the currency into oblivion. You will still get your $2000/month but it will only buy a couple loaves of bread. Just ask the Russian 120 Ruble-month pensioners from 1985. When they collapsed the old people sold their medals in a huge flea market at Moscow’s football stadium and/or drank themselves to death. Average life expectancy in Russia dropped about 8 years. You can’t eat McMansions.

Goldman: Annuit Coeptis. They will continue to rule. Get over it. John Crudele has been documenting this well for a year. Golden Rolodex Effect.

Housing: Q3 was a record foreclosure period. Get ready for the second leg down. The banks can only hold supply back until the next quarter. I am seeing the condo market implode in nyc.

E Pluribus Unum: NYC is filling with Chinese speculators who want to buy properties and use them as a pretext to immigrate 50 of their friends. They dont want our T-bills anymore, especially when they can get $40k/person for US citizenship papers. Nice and polite until they take over the neighborhood. Local and global observation. Not much tolerance for slackers. Like it.

Weather: This will be a cold, dangerous winter. Asian speculators are already gearing up to jack up prices. Maybe we can finally change the ecology discussion from Global Warming to conservation. I love how Green politics did not take off until someone showed Goldman how they could profit from Cap and Trade.

Geopolitics: IDF will land and take out Iran’s Bushehr plant via suicide special forces. The sub-based infantry /air attack will hit in January will freak out global markets as Iran takes out a bunch of Kuwaiti tankers in retaliation.

TRIVIA: 1 Dollar bill- look at the shield frame around the top right corner of the “1″. A tiny owl sits on the top left side of the shield. Neat trick to show the kids.

Masonry: does anyone know when they are going to elevate Brother Obama to 33rd Degree?

Hello everyone,

Listening to “Mona Lisa” by Slick Rick…

Still looking at the housing market and it looks like me and DW are going to wait until at least this time next year before we even start trying to get into some land and a house. Has anyone had any experience with Navy Federal or USAA in buying a house? I hear Navy Federal doesnt sell the loan out and they keep it….

You guy’s know I bought a few gold coins here recently. But I also found an all gold fund on USAA that I invested about $5000 into two months ago. It has appreciated a good amount. I think I am going to sell the “phyical” gold and stay in this fund for the long term. I think I am going to continue to buy silver ounce dollars, I just like them.

Greenwich Jewelry Turns to Cash as Gold Reaches $1,000 an Ounce.

Oct. 16 (Bloomberg) — The people of Greenwich, Connecticut, the hedge-fund capital of the U.S., know a golden opportunity when they see one.

With the price of gold futures reaching a record $1,072 an ounce this week, they’re carting watches, bracelets, rings and necklaces to a Hyatt Regency hotel off Interstate 95. There, representatives of Cash for Gold are writing checks for the precious metal.

“Once the price of gold went over $1,000, I knew it was the time to do it,” said Joy Kruger, a real estate agent who sold her unwanted jewelry yesterday for $2,700.

Greenwich and other well-to-do towns are the best places for mining used gold, said Anthony Holdampf, president of Westport, Connecticut-based Cash for Gold. While the company has licenses to operate in 31 communities in Connecticut, California, New Jersey and Florida, it’s narrowing its focus to the wealthiest ones and has set up camp in Greenwich for more than a year.

“They show up dressed very fancy, maybe wearing their Rolexes,” Holdampf said. Affluent sellers have “twice as much gold as anyone else, and plenty of gold they could get rid of.”

State Revenue Falls Most Since 1963 on Incomes, Sales (Update2)

Oct. 15 (Bloomberg) — U.S. state tax collections tumbled the most in almost half a century in the second quarter as the economic recession curbed levies on incomes and sales.

The 16.6 percent plunge was the biggest since at least 1963, the Nelson A. Rockefeller Institute of Government said today. For the 12 months to June 30, the fiscal year for most states, revenue declined 8.2 percent, or $63 billion, about twice what states got from the $787 billion U.S. economic stimulus package, the institute said.

State revenue has dwindled for two straight quarters and continued to decline in July and August, the Albany-based research organization said. Budgets for the year that began July 1 already face $26 billion of deficits, the Washington, D.C.- based Center on Budget and Policy Priorities said Aug. 12, forcing state lawmakers to confront additional spending cuts.

“We’re looking at a multiyear problem hitting essentially every state,” Robert Ward, the institute’s deputy director, told reporters. “It has happened during recessions before, but the depth of this decline is unprecedented in modern times.”

http://washingtontimes.com/news/2009/oct/15/troop-funds-diverted-to-pet-projects/?page=1

Money for the Kennedy Institute was inserted by Mr. Inouye and Sen. John Kerry, Massachusetts Democrat. Sen. Mary L. Landrieu, Louisiana Democrat

Man, this sucks….

So Oly, as a follow up to yesterday.

I got home from work, walked up behind the wife and gave a her smack on the bottom. Said “thanks honey” immediately after. She asked me “what for?” I didn’t answer but gave her a hug, and she didn’t ask again. She was in a good mood for the rest of the day, and the cat had the couch all to himself last night.

thanks for the tip.

BofA posts $1 billion loss amid consumer credit woes.

CHARLOTTE (Reuters) - Bank of America Corp posted a wider-than-expected quarterly loss as improvement in its Merrill Lynch investment banking unit failed to offset consumer credit woes.

The nation’s largest bank reported a net loss of $1 billion, or 26 cents per share, for the third quarter, compared with net income of $1.18 billion, or 15 cents per share, in the same period last year at the height of the financial crisis.

Analysts’ average forecast was a loss of 21 cents per share, according to 15 analysts polled by Thomson Reuters I/B/E/S.

Expenses grew at a faster rate than revenue during the quarter, the Charlotte, North Carolina-based bank said.

Revenue, net of interest expense, increased 32 percent to $26.4 billion, while noninterest expenses climbed 39 percent to $16.3 billion, due largely to higher personnel costs.

MGIC Posts Ninth Straight Loss as Defaults Hit Record (Update1)

Oct. 16 (Bloomberg) — MGIC Investment Corp., the largest U.S. mortgage insurer, reported its ninth straight quarterly loss after a record number of homeowners proved unable to meet mortgage payments.

MGIC’s third quarter net loss quadrupled to $517.8 million, or $4.17 a share, from $115.4 million, or 93 cents, in the same period a year earlier, the Milwaukee-based company said today in a statement. Excluding some investment gains, MGIC lost about $4.44 a share, missing the average loss estimate of a $1.74 by six analysts surveyed by Bloomberg.

MGIC’s run of losses, now totaling more than $3 billion, are mounting after U.S. unemployment hit a 26-year high and home foreclosures reached a record. The insurer twice deferred interest payments on a portion of its debt by 10 years this year to conserve cash and had its debt downgraded by Moody’s Investors Service and Fitch Ratings.

Prime delinquencies, or loans to the least-risky borrowers, “are really beginning to accelerate now if you look across the mortgage market,” said Matt Howlett, an analyst at Fox-Pitt Kelton Inc. in New York, in an interview before the results were released. “Unemployment continues to go up. That is what’s driving it.”

Spoke with a ‘raw’ land salesman early this AM. He said his business was down over 70% this year due to the fact practically no one is lending on non-developed property.
Don’t know if this holds true over most of the country, but apparently it’s true for S. Carolina.
However acre prices here in the mid-lands have dropped very little if at all. Guess they’re waiting on the big miracle turn around.

“In our opinion we have passed the bottom of the curve and business is slightly but unmistakingly better and in our opinion will continue to improve slowly.”
~ W. Procter, Pres. Procter & Gamble

< This was written a few months after the October, 1929, stock market crash. Mr. Procter was right. Improvement was slow. It would be 26 years before the Dow Jones industrial Average clawed it way back to where it was in 1929!

Buyers Suing Trump in Miami Condo Glut as Values Return to 1989.

Oct. 16 (Bloomberg) — Robert Cooper says he has found a way to make money in South Florida’s real estate bust.

Cooper, an attorney in Aventura, Florida, sues for refunds on deposits in the nation’s largest condominium market. In the last two years, he filed lawsuits for about 1,500 buyers against companies and individuals including the Related Group of Florida, Dezer Development LLC, Corus Bankshares Inc., Donald Trump.

More suits seeking refunds under a federal law regulating condo sales have been filed in South Florida than in the rest of the country combined, according to a search of federal court records. Fueling the litigation is a price crash that makes buyers unwilling to pour more money into bad investments — even if they can get financing. Condos on which they made deposits of up to $1,000 a square foot in 2006 are now selling for $125 to $350 a foot, said Jack McCabe, a real estate consultant in Deerfield Beach, Florida.

“If you’re thinking you can come here and buy and sell condos for a profit in less than five years, you’re sadly mistaken,” said McCabe, whose clients have included Credit Suisse Group AG and Pulte Homes Inc., the largest U.S. homebuilder. “You need a seven- to 10-year range.”

Prices could fall to $100 a foot, less than half the cost of construction, and a value not seen in 20 years, he said.

Vacant Condos

In Dade, Broward and Palm Beach counties, there are more than 43,000 condos and townhouses on the market, almost 1-1/2 times the number of single-family homes, according to Condo Vultures LLC, a Bal Harbour real estate brokerage. In downtown Miami, more than 8,000 condos stand vacant and unsold, relics of a building binge that added 23,000 condos from 2003 to 2008, said Peter Zalewski, principal of Condo Vultures.

Over the past 12 months, condo prices fell 15 percent in the West Palm Beach-Boca Raton area to a median of $112,200, 36 percent in Fort Lauderdale to $85,100 and 31 percent in Miami to $144,700, according to Florida Association of Realtors data.

Mikey and Leigh,

More madness in Janesville (Rock Co, Wisconsin)

http://gazettextra.com/news/2009/oct/14/condos-take-residence-downtown-janesville/

The housing market is so hot in Rock County that more condo’s are needed. The great quote “It’s a heckuva opportunity for young professionals who want to live downtown, build up some equity and not piddle money away on rent.” This in an area that is one of the highest areas of unemployment in the state because of GM and other companies closing.

I guess there will be competition for those condo’s in Darlington or Edgerton.

—–

Last week there was discussion as to what was happening to all the rail cars:

http://www.vrbo.com/52476#photos

NASCAR races to cut costs.
NASCAR teams trim everything from travel to benefits.

NASCAR teams spent much of the past decade spending money. On more employees, on private planes, on sprawling headquarters and on making more of their own engines and parts.

Then sponsors and car companies turned out the lights on the long-running party, leaving a nasty hangover for a sport born of moonshine runners. That hangover has left teams grappling with concerns any business owner can appreciate: reducing travel expenses, steering inventory, shedding labor, controlling benefits costs and finding more outside vendors at lower prices.

Two years of intense consolidation among teams allowed for large-scale labor cuts. Teams have now turned their attention in recent months to (literally) nuts-and-bolts costs.

“We don’t think this is a blip on the radar,” says Marshall Carlson, general manager at Hendrick Motorsports. “This is a reset of the business. We’re preparing for much less growth in revenue in the years ahead.”

If that’s the case at Hendrick, the most successful and valuable team in NASCAR, it’s the case for everyone in the sport. The reasons for the financial meltdown in stock-car racing are obvious enough: Sponsors are cutting back, auto manufacturers are reeling and everyday fans are unable or reluctant to spend in the face of a tepid job market.

What began with mass layoffs for many teams last year has mutated to every aspect of the business.

GE Profit Falls 45% as Revenue Trails Estimates (Update4)

Oct. 16 (Bloomberg) — General Electric Co.’s third-quarter profit declined 45 percent as the company scaled back real estate and consumer lending and sold fewer medical machines, leading to a steeper drop in sales than analysts projected.

Chief Executive Officer Jeffrey Immelt is shrinking the finance unit and weighing a reduced stake in NBC Universal as he builds energy, transportation and health-care businesses to help emerge from the recession. The GE Capital plan is ahead of schedule, Immelt said on a conference call after today’s earnings report. Higher losses in consumer finance and fewer real estate transactions reduced the unit’s profit and sales.

“The quarter looks mixed, with revenues disappointing,” said Joel Levington, the director who tracks GE for Brookfield Investment Management Inc. in New York.

Profit from continuing operations declined to $2.45 billion, or 22 cents a share, from $4.48 billion, or 45 cents, a year earlier, the company said in a statement. The average profit estimate of 13 analysts in a Bloomberg survey, excluding some items, was 20 cents a share. Results include 5 cents a share of restructuring costs, GE said.

Revenue fell 20 percent to $37.8 billion, trailing the average estimate of $39.7 billion. The figure was “in-line with our expectations,” GE said in the statement.

Tying It Together: Massive, Pernicious Fraud

Let’s not mince words here:

The entire finance and real-estate “industry” is filled with massive, pernicious fraud, and we now have only one question remaining - will The Government do its lawful and mandated job, that of prosecuting the bad actors, or has it joined with the fraudsters, become one with them, and thus, declare itself as a gang of mobsters rather than a legitimate government? The latter, of course will beg only the question of what should be an ordinary American’s response.

Let’s start with what may be one of the most outrageous yet least-actionable examples: Alan Greenspan.

Alan Greenspan, the former Federal Reserve chairman, said Thursday that banking regulators should consider breaking up large financial institutions considered “too big to fail.”

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always back them up. That squeezes out competition and creates a danger to the financial system, Mr. Greenspan told the Council on Foreign Relations in New York, according to Bloomberg News.
This is the “former Fed President” who winked and nodded at what he knew was an unlawful merger of Citibank and Travelers, then personally advocated and lobbied for the passage of Gramm-Leach-Bliley - the law that not only tore down Glass-Steagall but retroactively made that merger legal.

Citibank, may I remind everyone, has been the largest of the “too big to fail” banks, and has received what is arguably somewhere around $2 trillion in “support”, both formal and informal, over the last 20 years. Today, Citibank has outstanding hundreds of billions of dollars in formal government backstops.

Let us next progress to the mess in our Real Estate markets. And here I will take a page from history:

…Florida, 1920’s… By 1925 they were buying anything, anywhere, so long as it was in Florida. One had only to announce a new development, be it honest or fraudulent, be it on the Atlantic Ocean or deep in the wasteland of the interior, to set people scrambling for house lots. “Manhattan Estates” was advertised as being “not more than three fourths of a mile from the prosperous and fast-growing city of Nettie”; there was no such city as Nettie, the name being that of an abandoned turpentine camp, yet people bought.

Uh huh. And what did they buy with?

During the 1920s and into the early 30s, many of the citizenry of this country chose to live above their means. They chose the interest only loan because it allowed them to purchase a larger home for less money. What happened when the stock market crashed and jobs were scarce, and there was no income? Many of these people were left without homes; as they had chosen to simply pay the interest on their mortgage there was no equity built into their homeownership. When no equity builds, and the income ceases, the bank forecloses and residents are forced from their homes.

Of course in the 1920s there were no computers, and therefore whatever you wanted to sell you had to be able to record in a ledger book and work on a piece of paper or adding machine. This made the concept of 100,000-page “offering documents” impossible, but it sure didn’t stop people from “inventing” interest-only loans that would never have their principal paid off.

Uh huh.

And what do we have banks demanding today?

Oct. 13 (Bloomberg) — Banks will push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults, according to JPMorgan Chase & Co.

You mean “seeking to rip off more homeowners and steal their house”, right?
(From K. Denninger)
full article: http://market-ticker.denninger.net/

Dow 10,000, we hardly knew ye.

Grr. Inquired about renting this 2600 sqft dumpy office next to my apartment for a “hacker space.” Told them what I was looking to pay, Realtor showed it but owner wants $1750/mo versus $750/mo we are offering. It really is a dump, but I thought we finally had a space. It would have worked, and been nice. Going to be bummed all weekend. Guy who owns it is a local judge. Got it for $30K in the 80s. Wants $2500/mo now. It’s seriously pretty hurting inside. Been empty for a long time.

Wages tumble toward 18-year low USA TODAY

A bad economy and low inflation are starting to drag down wages for millions of everyday workers and freeze benefits for millions of retirees.

Average weekly wages have fallen 1.4% this year for private-sector workers through September, after adjusting for inflation, to $616.11, a USA TODAY analysis of Bureau of Labor Statistics data found. If that trend holds, it will mark the biggest annual decline in real wages since 1991.

The bureau’s data cover 82% of private-sector workers but exclude managers and some higher-paid professionals.

“Wages are usually the last thing to deteriorate in a recession,” says economist Heidi Shierholz of the liberal Economic Policy Institute. “But it’s happening now, and wages are probably going to be held down for a long time.”

Colorado announced this week it will become the first state to lower its minimum wage since the federal minimum wage law was passed in 1938. The state will cut its rate by 4 cents to $7.24 an hour Jan. 1, to reflect a drop in the consumer price index.

I call BS on this guy’s math. It is totally simple to modify an unemployed homeowner’s mortgage to 31% of income:

31% X $0 = $0.

Oct. 15, 2009, 7:50 p.m. EDT

Mountain of modifications
Industry tries to keep up with avalanche of troubled mortgages

By Steve Kerch, MarketWatch

SAN DIEGO (MarketWatch) — Millions of homeowners are struggling to make their monthly mortgage payments and the continued deterioration in the job market guarantees millions more will be at risk in the coming months.

That is putting a huge burden on mortgage-modification programs, both those run by the government and an increasing number operated by private industry, which are in a struggle of their own to stay ahead of the tide of potential foreclosures.

A housing counselor helps a homeowner facing foreclosure assess payment options, at a Housing Rescue Fair in Dallas, Texas. (Reuters)

“The subprime problem, by and large, has been dealt with,” said John Courson, chief executive of the Mortgage Bankers Association. “It’s a different kind of borrower now that we are trying to assist. And a lot of programs we have won’t work now. You can’t modify someone’s mortgage to 31% of income if they have no income.”
…

Park developer files for bankruptcy.
Housing, retail, concerts proposed for historic Brandywine site.

The Brandywine company that is trying to redevelop a historic concert venue has filed for bankruptcy protection, but its CEO says its efforts will continue.

The Arthur W. Wilmer Foundation filed Friday for Chapter 11 protection in U.S. Bankruptcy Court in Maryland.

Since September 2002, the for-profit company has worked to build a $200 million housing-retail-entertainment complex on the 80-acre site known as Wilmer’s Park, which once hosted musical legends such as B.B. King, Gladys Knight and the Pips, James Brown and Stevie Wonder. Wilmer’s daughter, Leslie, started the company after the Brandywine park’s entertainment operation shut down in 2001. The park opened in 1951.

Bruce D. Chatman, president and CEO of the company and owner of the site, intends to create a 384-unit gated community for residents 55 years and older, featuring recreational facilities, a shopping center, a full-service dialysis center and a hotel. To continue the park’s entertainment tradition, Chatman’s proposal also includes a 5,000-seat, open-air amphitheater.

The Prince George’s County Council approved a special zoning exemption for the park in 2007, creating a definition for a rural entertainment park as part of the county zoning code.

Chatman said the bankruptcy filing has not changed its plans for the development and that the project remains in its engineering and architectural states. He declined to comment on reasons for the filing.

Elizabeth Warren, chair of the Congressional Oversight Panel, is the rare public official who doesn’t mince words.
But Warren admits to being “speechless” at reports of record bonuses on Wall Street.

“I do not understand how financial institutions could think they could take taxpayer money and turn around and act like it’s business as usual,” Warren says. “I don’t understand how they can’t see that the world has changed in a fundamental way - it’s not business as usual. All I can say right now is they seem to be winning this argument.”

In the accompanying video, taped at The Economist’s Buttonwood Gathering at Pace University, I asked Warren about Treasury Secretary’s claim at the same event that the government has been “remarkably effective” in combating the financial crisis.

“It is not the case people go to bed wondering if there will be an economy in the morning,” she quips, but “we still have lot of serious problems.”

Comparing the situation today vs. a year ago, Warren observes:

Even Too Bigger to Fail: A year ago the big concern was systemic risk and how to deal with ‘too big to fail’ firms, she recalls. Now “the big are bigger, we wiped out a lot of small folks and there’s more concentration” in the banking system.
Still Toxic: TARP was created explicitly to remove toxic assets from bank balance sheets. “They’re still there by and large.”
Stress Test Failure: Unemployment has “blown through” the worst-case scenario in the stress test from February, Warren notes. But “we haven’t repeated the stress test, or revealed any more information about what’s going on inside these financial institutions.”
In sum, “all the things going on [a year ago] that were serious, serious problems for the financial institutions seem to me are still serious, serious problems,” she says.

Finally, Warren pulls no punches when it comes to her criticism of former Treasury Secretary Hank Paulson for his failure to put any restrictions on or monitoring of the initial TARP funds, and for using the money for something other than “toxic asset relief,” as originally intended.

Paulson needs a one way trip to jail.

“College education is a costly proposition with tuition, room and board at some colleges topping $50,000 a year. Is it worth it? Increasing evidence suggests that it’s not.”

“Today’s college students are generally dumber than their predecessors.”

~ Professor Walter Williams

An animated map of the job gains and losses from 2004 to 2009. Quite shocking to see the destruction nation wide.

The Geography of jobs

http://tipstrategies.com/archive/geography-of-jobs/?fark

Six people charged in insider trading case
Billionaire hedge fund boss, 5 others charged in $20 million insider trading case. Friday October 16, 2009

NEW YORK (AP) — A billionaire hedge fund boss was among five men and a woman arrested by federal authorities Friday in a hedge fund insider trading case that prosecutors say reaped $20 million in illegal profits.

Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to cause trades based on insider information about three publicly traded companies.

Those companies were identified in court papers as Polycom, Hilton Hotels Corp. and Google Inc.

According to the court papers, Rajaratnam obtained insider information and then caused the Galleon Technology Funds to execute trades that earned a profit of more than $12.7 million between January 2006 and July 2007. Other schemes garnered millions more, authorities said.

Five others charged in the scheme included Rajiv Goel, a director of strategic investments at Intel Capital, the investment arm of Intel Corp., Anil Kumar, a director at McKinsey & Co. Inc., a global management consulting firm and Robert Moffat, senior vice president and group executive at International Business Machines Corp.’s Systems and Technology Group.

The other two people charged in the case were identified as Danielle Chiesi and Mark Kurland. According to court papers, Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc. that had assets worth about $1 billion under management. Kurland is a top executive at New Castle.

A criminal complaint filed in the case shows that an unidentified person involved in the insider trading scheme began cooperating and authorities obtained wiretaps of conversations between the defendants.

In one conversation about a pending deal that was described in a criminal complaint, Chiesi is quoted as saying: “I’m dead if this leaks. I really am. … and my career is over. I’ll be like Martha (expletive) Stewart.”

For all those hopping for some of the elite to go to jail you can forget about it.

WASHINGTON – A Goldman Sachs executive has been named the first chief operating officer of the Securities and Exchange Commission’s enforcement division.

The market watchdog says Adam Storch, vice president in Goldman Sachs’ Business Intelligence Group, is assuming the new position of managing executive of the SEC division.

The move comes as the SEC revamps its enforcement efforts following the agency’s failure to uncover Bernard Madoff’s massive fraud scheme for nearly two decades despite numerous red flags.

Storch, who will be responsible for project management and operations, will report to SEC Enforcement Director Robert Khuzami.

It seems SEC workers should have to be promoted up through the system. No hiring the wolf to guard the hen house. They should also be barred from taking jobs in financial services for 10-20 years after they leave the SEC.

Excerpt ~ From The Daily Reckoning…

Associated Press:

“The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.

“The foreclosure crisis affected nearly 938,000 properties in the July- September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.”

What an economy!

The Dow is now back over the 10,000 mark…just where it was in March 1999 - 10 years ago. Is that progress…or what?

During that time, the dollar has lost about a quarter of its purchasing power. That means stock market investors have lost only about 25% or their money over the decade. Not too bad, huh?

And, oh yes…they’ve lost their jobs too…

AP continues:

“Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate - now at a 26-year high of 9.8 percent - isn’t expected to peak until the middle of next year.”

But hey…we’re not going to complain. We’ve got a job - trying to figure out what is going on. And that is a job that is recession-proof. Everyone wants to know what will happen next. When times turn tough they want to know even more.

So, will someone please tell us what is going on…we want to know too!

“What do you think?” asked a friend at dinner last night. “The way I see it, Obama’s goose is cooked. He’s stuck. He can’t go forward and he can’t back up. He can’t back away from all those promises - including his promise to rescue the US economy. If he does, the voters and his own party will revolt. On the other hand, he doesn’t have the money to go forward. He has to borrow it. And if tries to borrow much more, the Chinese will revolt.

“His only hope is that the economy revives…so he doesn’t have to do anything. And that’s not going to happen.”

Why not? Wait a minute…you already know the answer to that question. Because it’s a depression. It’s the end of the road for the consumer credit economy. Consumers did their best. They borrowed as much as they could. They spent like there was no tomorrow.

But now, it IS tomorrow. And now, they’ve got to settle up. So, boo hoo…no more wild parties. Daddy took the T-bird away. Get over it.

What should Obama have done? Nothing. But the last chief of state to do that in a time of financial crisis was Warren G. Harding - one of America’s best presidents. That’s what he did in the panic of 1920. How come we don’t hear much about the crisis of 1920?

Because Harding didn’t do anything; it went away.

But that was a long time ago. Now, presidents are expected to do something. They have too many people around them who stand to make a buck out of it.

U.S. Michigan Sentiment Index Decreased to 69.4 (Update1)

Oct. 16 (Bloomberg) — Confidence among U.S. consumers fell more than forecast in October, a reminder that households remain nervous about the strength of the emerging economic recovery.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 69.4 from 73.5 in September, which was the highest in more than a year. Measures of expectations for six months ahead and current conditions both fell. The index averaged 87.3 in 12 months leading to December 2007, when the recession began.

The highest unemployment rate in 26 years threatens to restrain consumer spending as the U.S. enters the Christmas- holiday shopping period. Minutes from last month’s Federal Reserve meeting show policy makers are still concerned that rising unemployment will curb consumer spending and lead to an anemic recovery.

“This is probably giving us a more accurate reading of what consumers are feeling,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who had the lowest forecast in the Bloomberg News survey. “They’re very concerned about how long unemployment is going to stay high, and they’ve very concerned about their own personal finances.”

The index was forecast to dip to 73.3 this month, according to a Bloomberg survey of 64 economists. Estimates ranged from 70 to 77.1.

WOO-HOO! 100 jobs, saved or created!

Feds say stimulus saved 100 Albany metro jobs
The Business Review (Albany)

Almost 100 jobs have been saved or created in New York’s Capital Region through companies that received stimulus contracts directly from the federal government.

The federal government released the jobs data on Oct. 15, the same day the state Department of Labor reported the Albany metro area had lost 10,500 private-sector jobs during the past 12 months.

The saved-jobs figure is the first time actual head counts, and not estimates, have been used to gauge the $787 billion stimulus’ response on the national economy.

In all, 30,383 jobs have been saved or created throughout the country so far. In New York, 656 jobs have been saved or created, involving 369 federal contracts that total $776.5 million.

Federal agencies are awarding $16 billion of stimulus contracts themselves. However, the overwhelming majority of stimulus contracts are being disbursed through the states, which have not yet reported jobs data.

Two-thirds of the saved or created jobs in the Capital Region to date are involved with remediating radioactive soil at the Knolls Atomic Power Laboratory in Niskayuna. Stimulus funding will also be used to speed up demolition of two contaminated buildings and six underground waste storage tanks.

Overall, the Obama administration has said the stimulus will save or create 3.5 million jobs throughout its lifespan, which ends in early 2011.

Judge temporarily halts mandatory flu shots for health care workers
Oct 16, 2009

ALBANY, N.Y. — A judge has put a temporary stop to mandatory flu vaccinations for health care workers.

Dozens of health care workers have been protesting the requirement that forced certain workers to be vaccinated by November 30th or face possible disciplinary action, including termination.

The judge’s decision means the requirement will now be suspended pending a hearing later this month.

“Astonishing” That Big Banks Are Taking Taxpayer Money, Writing the Rules, Warren Says.
Posted Oct 16, 2009

Elizabeth Warren may be the American consumer’s new best friend.

Warren, charged with overseeing the U.S. banking bailout (formally known as TARP), is pushing an agency that’s devoted to looking out for individual Americans.

The proposed Consumer Financial Protection Agency would set more transparent rules for financial institutions to ensure consumers get help in understanding terms of their loans and agreements. Banks, however, are opposing another regulator.

“The banks, big banks, always get what they want,” says Warren, in the third part of her sitdown interview with Aaron Task at The Economist’s Buttonwood gathering. “They have all the money, all the lobbyists. And boy is that’s true on this one. There’s just not a lobby on the other side.”

Featured in the new Michael Moore film, “Capitalism: A Love Story,” it has been an incredible ride for Warren, a Harvard University law professor, who was tapped in November of last year to keep track of the bank bailout money. While she has no judicial or legislative power as chair of the Congressional Oversight Panel, it hasn’t prevented Warren from talking tough. And banks including Goldman and JPMorgan are listening.

“This is a moment when all around the country people are saying we’ve had it about up to here with these large financial institutions that want to write the rule then take our money. I find it astonishing that they have the nerve to show up and say, ‘I’m a big financial institution. I took your money. And now I’m going to lobby against anything that might offer some protection to ordinary families in this marketplace,’ ” Warren says.

“This might be the time that the rules change,” she says. The proposal for the Consumer Financial Protection Agency heads to the House Financial Services Committee next week.

“The issuing power of money should be taken away from the banks and restored to the people to whom it properly belongs. The modern theory of the perpetuation of debt has drenched the earth with blood and crushed its inhabitants under burdens ever accumulating.”

~Thos. Jefferson

Sweeping insider-trading case rocks Galleon
Founder Rajaratnam, 5 others arrested

SAN FRANCISCO (MarketWatch) — Galleon Group’s billionaire founder, Raj Rajaratnam, was charged Friday in a sweeping, $17 million insider-trading case, according to court documents filed in Manhattan by federal prosecutors and the Federal Bureau of Investigation.

Rajaratnam and five others allegedly involved in the scheme have been arrested.

Galleon it was “shocked” by the arrest but stressed that it continues to operate and is “highly liquid.”

“We had no knowledge of the investigation before it was made public and we intend to cooperate fully with the relevant authorities,” the hedge-fund firm added in a statement.

The other defendants are:

Rajiv Goel, an employee at Intel Corp.

Robert Moffat, a senior vice president at IBM Corp.

Anil Kumar, a director at the consulting firm McKinsey & Co.

Danielle Chiesi, portfolio manager at $1 billion hedge-fund firm New Castle Partners

“This is not a garden-variety insider trading case,” Preet Bharara, U.S. attorney for the Southern District of New York, said during a press conference, adding that it was the largest hedge-fund insider trading case ever charged.

All the defendants were “caught” using wiretaps, according to Bharara, “powerful investigative techniques that have worked so successfully against the mob and drug cartels”

Galleon is a leading technology-focused hedge-fund company that had more than $4 billion in assets under management earlier this year. Sri Lanka-born Rajaratnam founded the firm in 1997 and is a big philanthropist in the country, helping it recover from the tsunami that hit in late 2004.

These are not the first insider-trading allegations to hit the $1.4 trillion hedge-fund industry. Arthur Samberg’s Pequot Capital decided to shut down in May after the government reopened an investigation into alleged insider trading. See story on Pequot Capital shutting.

The Galleon charges may be another blow to the industry, less than a year after Bernard Madoff’s $50 billion Ponzi scheme and the global financial crisis triggered an unprecedented wave of investor redemptions.

The last three lines say it all… Hopey, changey…

Viking lays off 30 more workers October 16, 2009

Viking Range Corp. has laid off 30 more employees as the maker of upscale kitchen appliances continues to feel the impact of the nationwide economic downturn.

“We’re just trying to hold on and keep going until hopefully things do improve,” said Bill Crump, Viking’s director of governmental affairs.

The layoffs, implemented Thursday, involved a mixture of salaried and hourly workers, Crump said. The job cuts were spread throughout the company’s four manufacturing facilities in Leflore County as well as its corporate offices in downtown Greenwood.

Since April 2008, Viking has shed 327 jobs, or about 23 percent of its total work force. It presently employs 1,090 workers, 910 in Leflore County.

Crump said the manufacturer has been hurt especially by the severe drop-off in new housing construction. Housing starts in August, the latest month reported, were down almost 30 percent from their 2008 pace. September figures are due to be released Tuesday.

The new housing segment has accounted for about 20 percent of Viking’s business.

“We are seeing some uptick in certain sections of the country, but it’s not enough yet to improve everything across the board,” said Crump. “Hopefully as the economy improves, news about the recession ends, credit loosens up some and the housing backlog gets bought, we’ll move into another construction cycle, and that will help our market.”

Tricked people into buying LD boats!

Funny… Having lived in Ft. Lauderdale, I can say without doubt, it doesn’t take much to convince a playa that he’s da man.

Pompano Beach marina files Chapter 11
October 16, 2009 bizjournals.

Pierre Gaudreau, a Pompano Beach marina owner who was arrested late last year on fraud charges, has filed a bankruptcy petition to put his marina company, the Hideaway Marina Limited Partnership, into Chapter 11.

The marina, at 599 S. Federal Highway, is still operating. The bankruptcy petition states the operation has been in the hands of a receiver since June. The company listed $11.5 million in assets and $6.9 million in liabilities.

Among claims listed are Fort Lauderdale-based Landmark Bank’s claim of $3 million on the property, which is valued at $6.5 million; a $1.6 million judgment to Tom Gonzales of Fort Lauderdale-based TG Inv. LLC; and $1.2 million in promissory notes owed to John and Sabrina Divine of Tennessee.

According to the marina’s website, Gaudreau was a former owner of the U.S. distributor for Sunseeker Yachts.

The Sun-Sentinel reported last year that authorities alleged Gaudreau tricked people trying to buy or sell pricey speedboats and refused to return large deposits on some transactions that fell through.

ROTFLMAO!!! You go little Turbo Tax Timmy, your words carry great weight!

Geithner Says U.S. Must Instill Confidence in Fiscal Management

Oct. 16 (Bloomberg) — Treasury Secretary Timothy Geithner said the U.S. must reduce its record budget deficit as soon as the economy returns to a sustainable growth rate without relying on government assistance.

“Americans understand that we have to go back to living within our means as a country,” he said in an interview broadcast today on CNBC. “When we have an economy that’s growing again and we get unemployment down, we’re going to have to bring those deficits down.”

The U.S.’s 2009 budget gap widened to $1.42 trillion as the deepest recession since the 1930s crippled tax revenue and the administration increased spending to rescue the economy. The shortfall for the 12 months ended Sept. 30 was more than triple the $455 billion record set a year earlier, the Treasury Department said today in Washington.

Geithner cautioned that a lack of confidence that the U.S. will return to fiscal sustainability may lead to a weaker economic recovery, higher interest rates and constrained investment.

“That’s why deficits matter. That’s why deficits in the end can be very damaging to growth,” he said. “That’s why you cannot live with future deficits as large as ours are likely to be.”

The Treasury chief said he hasn’t decided yet whether to extend the $700 billion Troubled Asset Relief Program, adding that it’ll be important to businesses and the housing market that the government has the ability to “continue to put in place programs to help make sure they get credit.”

Asked whether tax cuts enacted during the Bush administration should be allowed to expire next year, he said, “it does not make sense to raise taxes in a recession” and that “getting growth on track led by the private sector is still our most important priority.”

Geithner also said he sees a “good case” for Congress to pass legislation extending unemployment benefits.

Alpha, I can’t find again where you posted ” do I have any links” or something to that effect.

starting around 3 minutes you will see the DOW YTD chart and the Dollar chart YTD.
http://www.thedailyshow.com/full-episodes/252488/thu-october-15-2009-jennifer-burns
But I dont’ have the link to the actual charts.

and for you ayn fanatics, you will appreciate the interview.

Alpha the charts are
YTD DOW and YTD Dollar flipped upside down merged together.
Jon Stewart 10.15 show about 3 minutes in.

Posted the link but machine just et it all up!