Bits Bucket For October 19, 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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Hey, where is everyone? It’s my “off day ” from fitness swimming and gold is up again this morning.
Are you all busy buying upscale Boise lofts?
Hey Bill,
Naw, everyone is here. Let them get their coffee fixes from yesterday’s thread.
I went shopping for condos in phx, not!!!!!!!!!!!!!
Looks like another higher open for the ponzi scheme known as the stock market.Man this punchbowl must be spiked with some potent booze.
I would like a condo in Mammoth, CA. But they are still very expensive, especially compared to how cheap they were in the 90’s and the fact that it is build on a volcano. I miss the mountain lifestyle of fishing and skiing.
gold is up again this morning.
I am VERY close to selling these gold coins. I wonder what my trigger point should be?
I’d hang on to those coins. You’re gonna need them. I’ve had a little cache of physical gold for years, just in case. And “just in case” looks like a probability.
Stpn2me - it all depends why you bought them. I look at mine as an insurance policy.
I’ll get my money’s worth if, in 30 years when Mini-chile is looking at starting a family of his own, hold them up and explain the events of 2007-2010 and what his mom and dad did to make sure we’d be able to feed him, keep him warm, and find someplace safe to live.
If, on the other hand like the shares of SLV I picked up last fall, it was a pure gamble, putting some shares of green on silver and spinning the wheel….I’d consider quitting while ahead, buying the wife something nice with the profits and forgetting about the world for a white.
I would sell the SLV while you still can. It seems physically impossible to have enough physical silver to back all of the SLV.
JP Morgan Chase, the largest holder of the silver shorts, I believe they are the keeper of the SLV ETF. (nice conflict of interest)
It will eventually be revealed like a Madoff ponzi like scheme. Google the info yourself on whether there is enough real silver to back the ETF’s.
just in case of what? If anarchy is what you talk about, I want your pigs and guns, not your fools gold.
I want your pigs
So you have a farm then?
All I need is a leash, corn and scraps, then I eat bacon. I’m just saying, if it becomes survival of the fittest, who cares about gold.
All I’m saying is - if you really think about the logistics, you’ll find that even in a Mad Max scenario some form of currency will be needed. We can’t all be farmers *and* weavers *and* carpenters, etc. Even colonial America used currency significantly.
I wonder what happens to the value of gold when somebody finds a way to manufacture it in a lab.
They already can, the problem is it is then radioactive, and more expensive to make/ounce than regular gold.
Depends. What’s your purpose of having them - investment, or insurance? If investment - short-term or long-term?
If short-term investment, IMO sell them right now, as personally I think it’s overbought and due for a leg down.
If long-term investment, probably worth keeping, mainly due to long-term projections for the U.S. deficit not even approaching a crossover point.
If for insurance, keep them until you have to sell them to make ends meet.
Potawatomi tribe makes cuts in casino operations
The Potawatomi tribe believes a quick economic turnaround isn’t in the cards and has decided to cut pay raises and holiday bonuses.
By Cary Spivak of the Journal Sentinel
The Forest County Potawatomi tribe has been taking in more money than ever at its newly expanded casino in the Menomonee Valley - but not enough to meet expectations. So holiday bonuses and merit pay increases are being eliminated for the approximately 2,600 workers at the gambling hall.
The tribe also is lowering the dividend it pays to its approximately 1,500 members, according to two sources familiar with the payments. Each tribe member gets in the range of $70,000 per year.
“If you don’t have the revenue, you can’t spend it,” one tribal source said.
(Maybe people we’re too busy listening to Suzanne and rolled the dice on Real Estate.)
I always wondered howmuchamonth the Indian casinos took in. Though they are touted as sovereign entities distinct from the state and Uncle Sam, that seemingly allows them to be exempt from public records/tax laws.
Yeah, I know, their ancestors were mistreated.
Know what? Everyone has a story.
“Yeah, I know, their ancestors were mistreated.”
Uh… like Chris Rock said, “forget black people, who many Native Americans did you go to school with?”
Lived at the end of the Trail of Tears for a time so am aware of history first-hand. Point was it’s time to look ahead.
Gold is down the past 6 months against the Brazilian Real.
I know the US is in trouble when the BRL is kicking the USD’s butt…again.
I’m visiting the USA the first time in 18 months, both coasts and the Mid-West. 10 states. You guys were right. There is a recession here.
Some right-wing AND left-wing nutballs are starting to realize that the real problem is not their political opposites. The people who help bring about this realization to the polarized masses will be true patriots.
Rio - nutballs can never realize that. Thats why they are nutballs.
You’re right….but I was only referring to the kinder, gentler, nutballs.
Morning Swimmer! On my first cup this am and all
is well with our world..laughing.
Good morning! On my first cup here. Faux-granite bar counter nice and clean and so is my apartment, L.A. street three floors down coming alive with the hiss of cars and wail of sirens. Supposed to be 67 today. PB has a good report of oil prices, which will help my PGH and EVEP. German Dax up 1%, dollar down, and no, Step, I won’t give up my insurance policy of platinum, gold, and silver bullion. It allows me to invest in aggressive stock funds.
Not just gold is up. Oil is around $79 a barrel this morning as well, which makes me think the real story is the dollar is down some more…
My cocktail napkin tells me gold is in a major bubble.The late night infomercials and cash4gold commercials are just hilarious at this point.
i kinda a figured a bubble was beginning when i saw one of those commercials during last year’s supberbowl.
It’s common wisdom when the shoe shine man gives you stock advice or see Time proclaim it’s different this time.
But what if the fundamentals bode well for gold during these infomercials?
I am investing in a gold paper fund with USAA. I think that will be good enough to invest in.
Anyone want some one ounce double Eagles?
There are no “fundamentals” with respect to gold, especially with no currencies on the gold standard.
Seriously. It’s the ultimate in speculative investment. It’s insurance at this point, nothing more. It’s like trying to put a value on your life insurance by judging the possibility that you’ll die before it matures.
Gold is the dollar’s life insurance. If the dollar dies - then gold is worth a huge amount - far more than $1000 per ounce. If the dollar survives, then gold is worth practically nothing. That being the case - like life insurance, the only way to really gauge its value is to estimate how well it provides peace of mind.
And just like life insurance is more expensive if you have a very risky lifestyle - gold is more expensive as the dollar has a riskier lifestyle.
IMO it’s a perfect analogy.
If the dollar survives, then gold is worth practically nothing.
You have to have something to affix that diamond to.
You have to have something to affix that diamond to.
Yes, though gold demand for jewelry pales in comparison to demand for currency/insurance. It’s about 20-30% generally - less so lately due to the economy.
Taking away the insurance factor, gold as a commodity is probably worth about $100-200 an ounce.
“…If the dollar survives, then gold is worth practically nothing.”
(Hwy wonders, which of 191 global countries can best protect it’s people from themselves & …”others”)
Hey Packman, from Mining Weekly:
“The analysts estimate that, on average, tier one gold producers will have all-in costs of $582/oz in 2009, while tier two companies will be slightly worse off, at $634/oz.”
So pretty much if what you say about the intrinsic value of gold is true then pretty much every mine on the planet will close up shop once the bubble bursts?
Hey Packman, from Mining Weekly:
“The analysts estimate that, on average, tier one gold producers will have all-in costs of $582/oz in 2009, while tier two companies will be slightly worse off, at $634/oz.”
So pretty much if what you say about the intrinsic value of gold is true then pretty much every mine on the planet will close up shop once the bubble bursts?
A. Don’t assume your premise that gold is in a bubble is true.
B. Yes many probably would close up shop.
C. Not all would. Some would reduce their costs to a break-even point. Gold was still mined back in 2001 when it was $250 an ounce. If it goes back to $250 an ounce - it’ll still be mined.
D. Most gold is mined outside the U.S. - and thus the producers don’t give a rat’s patootie how many US $$ it costs to produce gold, because they pay their workers in Australian $, in South African Rands, etc. So gold may go down to $200 an ounce in US$ but still remain high in those other currencies (though not bloody likely).
E. My comment was “Taking away the insurance factor, gold as a commodity is probably worth about $100-200 an ounce.” Being the gold will always have insurance value, its price will never get down to its base commodity value, thus the point is moot.
IMHO - an absolute case scenario for gold would be to go down to $400-500 an ounce; it would get there if somehow the economy got booming again, while simultaneously reducing the level of debt significantly, e.g. like in the late 1990’s. I’ll leave to the reader the estimation of the chances of that happening.
A. I don’t actually believe gold to be in a bubble. It is being driven by QE.
B. No they wouldn’t, because gold is consumed and demanded and if there was no production prices would gain support and production would be renewed. Simple supply/demand.
C. What was the price of diesel fuel in 2001? Steel, coal, natural gas, etc?
D. Arguing for a strong dollar?
E. Moot point, I agree. It’s not going back to $200, unless it’s the new dollar when they take off a zero or two or three like Mexico did a couple decades back.
A local stripper bar closed and a Cash-4-Gold went up in its place. Talk about a bubble!
Having said that, Step, IMHO you have it backwards. I’d hold on to the physical and sell the paper:
1. You probably paid more of a premium to get hold of the physical than the commissions you paid to buy the paper.
2. If TSHTF, paper can become worthless, but you’ll still have the physical.
3. Gold is a collectable for tax purposes, so you pay less capital gains on the paper than on the physical.
A local stripper bar closed and a Cash-4-Gold went up in its place. Talk about a bubble!
wow. really. a stripper bar closed? never heard of such a thing. You know we really must be in trouble.
“wow. really. a stripper bar closed? never heard of such a thing. You know we really must be in trouble”
I guess the sweet little strippin’ gold diggers just weren’t mining enough gold.
KIm,
You need a new tax advisor. Check IRS publication 544, Sales and Dispositions of Assets, page 27:
Precious Metals and Stones, Stamps and Coins
Gold, silver, gems, stamps, coins, etc. are capital assets except when they are held for sale by a dealer. Any gain or loss from their sale or exchange generally is a capital gain or loss. If you are a dealer, the amount received from the sale is ordinary business income.
Research took about 30 seconds. Went to irs.gov. Typed “capital gains gold” in the search box. Clicked through to a general information page and to a link to the publication at the bottom of that one. Went to index. There is no entry for collectible or antique. There is for gold and coins.
Oops… I was going off of these:
groco dot com/readingroom/tax_saleofcollectible.aspx
coinlink dot com/News/general-collecting/capital-gains-tax-higher-on-sale-of-collectibles/
May be old info, though. Still, if it was me, I’d hold the physical and sell the paper.
You need a new tax advisor.
Perhaps, but not because of this “error”, which is in fact correct: there is a special 28% bracket for “collectibles”.
The instructions for Schedule D include a special worksheet for exactly this purpose; the instructions for this worksheet are on page D-8.
Also see this “tax tip” from bankrate.com:
“The Taxpayer Relief Act of 1997 excluded items like collectibles from favorable capital gains treatment. This tax tip discusses the tax treatment of collectibles gains or losses.”
http://www.bankrate.com/brm/itax/edit/tips/stories/collect_taxrelief.asp
I posted a message containing a link, so it won’t come through right away, but in fact there is a special tax bracket (28% for most taxpayers) for “collectibles”. See page D-8 of the instructions for Schedule D for a worksheet to calculate this.
Oh, and by the way, believe it or not, SLV and GLD are considered “collectibles” for this purpose, so you can’t get the 15% rate on those either. However, they can be held in IRA and other tax-deferred accounts, even though “collectibles” are specifically banned from those accounts. No one ever said tax law was logical!
To be a bit more precise, it is true that you get capital gains treatment on collectibles held more than one year, but the rate goes up to 28% rather than being capped at 15% as for most other capital gains.
3. Gold is a collectable for tax purposes, so you pay less capital gains on the paper than on the physical.
Pretty sure gold is considered a collectible only for numismatic coins though, and not jewelry or bullion, including bullion coins, is it not?
“Oh, and by the way, believe it or not, SLV and GLD are considered “collectibles” for this purpose, so you can’t get the 15% rate on those either.”
This is where I was mistaken. Just to make it more confusing, I truly have no idea how the OPTIONS on those ETFs get taxed.
Nope. As I mentioned, even GLD and SLV are considered “collectibles” for this purpose, and they aren’t very numismatic.
Damn. And to think I used to print out those IRS publications and bring them to open book exams with me on the assumption that they would include the most important information.
The list in the instructions to the form says metals including bullion, though it does not talk about ETFs. Looks like the list is mostly personal property that does not depreciate (loose value just because it is older) though, of course the market value can fluctuate). Also says “certain intangible assets,” but they are not specified.
Also looks like collectibles gain or loss is only when the gain or loss is long term. At least, that is how it is defined.
Nope. As I mentioned, even GLD and SLV are considered “collectibles” for this purpose, and they aren’t very numismatic.
I didn’t know that actually - thanks.
Another way the PTB discourages people from owning the hard stuff; or even paper representations of it.
I wonder how high gold and silver would be if this wasn’t the case.
According to the “tax tips” link, gains on collectibles sold in less than one year is taxed as ordinary income, as with other capital gains. Basically, the only difference between collectible capital gains and other capital gains is that the top rate on the former is 28% and on the latter is 15%. Otherwise, they are the same.
Of course, that is a pretty big difference for those of us who invest in such things.
“Diamonds and Gold.
Diamonds and Gold.”
It sounds like the National Pawnbrokers Association Convention in here today.
I thought most FB’s were being allowed to stay in their foreclosed home, guess not, in all cases.
Foreclosures Force Ex-Homeowners to Turn to Shelters.
NYT 9-18-09
CLEVELAND — The first night after she surrendered her house to foreclosure, Sheri West endured the darkness in her Hyundai sedan. She parked in her old driveway, with her flower-print dresses and hats piled in boxes on the back seat, and three cherished houseplants on the floor. She used her backyard as a restroom.
The second night, she stayed with a friend, and so it continued for more than a year: Ms. West — mother of three grown children, grandmother to six and great-grandmother to one — passed months on the couches of friends and relatives, and in the front seat of her car.
But this fall, she exhausted all options. She had once owned and overseen a group home for homeless people. Now, she succumbed to that status herself, checking in to a shelter.
“No one could have told me that in a million years: I’d wake up in a homeless shelter,” she said. “I had a house for homeless people. Now, I’m homeless.”
Growing numbers of Americans who have lost houses to foreclosure are landing in homeless shelters, according to social service groups and a recent report by a coalition of housing advocates.
Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to “Foreclosure to Homelessness 2009,” a survey produced by the National Coalition for the Homeless and six other advocacy groups.
In the Midwest, foreclosure played a role for 15 percent of newly homeless people, according to the survey, reflecting soaring rates of unemployment — Ohio’s reached 10.8 percent in August — and aggressive lending to people with damaged credit.
“three grown children”
===
I know this is unpopular in certain circles, but her children should be ashamed of themselves.
Too bad she had those three useless kids. Maybe if she had remained childless she could have saved up a little more.
+1million. Three freakin kids, and she was sleeping in her car? I would send my mother a plane-ticket in a heart-beat, and she could stay with me as long as necessary.
My mother is a “difficult” person. However, I would sent her a ticket to stay with my sister, on the west coast.
What an excellent idea!
Interesting. What do you think your west coast sister would bid to have her stay with you?
Be careful what you volunteer for. I just checked what my flight to Vermont for Thanksgiving would cost if I booked it today. $626 bucks from DC to Burlington. Yikes. I held my nose and paid back when it was $380 since my mother informed me that I couldn’t fly to their place and drive with them as their car was full.
Now, admittedly, I’m flying the busiest day (Wednesday before) but yikes. If you want the early evening flight, the round trip is over $800.
No wonder the 13 hour trip on Amtrak is sold out ($103 each way for the nicer seating).
I’d crawl across Nevada, Utah, the Great Divide and into the Ohio River Valley if my mom needed help.
If I had to, natch.
One of my sisters married into an extraordinarily wealthy family. The top 1%. She does little for my mother aside from paying for her to come visit, where my mom ends up babysitting half the time. She had an opportunity to help my mother through a rough stretch, recently, and did nothing. She rarely even calls. When she does, it’s to complain about how difficult her life of shopping and parenting is.
I’ve come to the realization that most everything will fall on my shoulders as my mother ages. It doesn’t bother me, but I’m not wealthy and cannot do what I’d like to, and to see that a sibling has the means to make a difference but has no care in the world to do so is angering. Perhaps things will change for the better in my life (financially speaking), but time is not on my side, and she is already past retirement age and still working. I do worry about her.
She was a stay at home mom most of our childhood, as my father owned his own brokerage, and did quite well- that is until he died young and she was forced to find low paying work and has but a pittance for retirement (my father’s business was dissolved and he did not have life insurance because of his progressive disease, my mom got a small amount of cash). At any rate, my sister, in my mind, is an evil narcissist. I’ll leave it at that.
Despite her being an evil narcissist, I’d keep an open line of communications, if you can. Evil narcissits will often prefer to pony up some cash rather than have a permanent house guest. Though my dad’s sister is an evil narcissist and she took in Grandma in order to get the social security money. But she didn’t have much money so the SS was enough to tempt her. And Grandma preferred her to my dad because she was prettier and lived in Las Vegas (warmer than MA), so I guess they managed.
Griz, That is a shame.
Besides your sister not helping financially, it sounds like she is too self-centered to help when the time comes for the kids to take over mom’s affairs, oversee her living situation / care, etc.
I really appreciate that my brother and I discuss and share decisions, alternate visits, divide responsibility. Mom is fine financially (Dad lived long and prospered and they lived a comfortable but simple life) but for the last five years there has been A LOT for us to look after and take care of.
We’ve also been able to help Cousin Bill with his mom, since he’s an only child.
And what is it with the wives of the wealthy? My nephews manage to travel now and then to visit my mom, despite work and family obligations. She is thrilled to see them and they enjoy visiting with her (she’s a neat lady and she and dad did a lot for those kids).
But my niece married to a guy that makes multiple millions a year hasn’t bothered to take her now six-year old to meet mom (the only one of the great-grandkids mom hasn’t seen), even though she could bring the nanny along in their shared private jet.
LOL. I remained childless, and now my parents have become the children I never wanted.
You left out the part where she refi’d for $65k to pay some bills.
they have “deadbeat dad” laws on the books…they should have laws for “deadbeat kids”.
And none of them have a pot to pisssssin….or an extra bedroom for mom….what a family
————————————————————
mother of three grown children,
This is far more prevalent than you think and often, though not always, nobody’s fault.
Times are tough and have been for decades.
I think the article said one child lived in a boarding house, so taking in mom might actually double his housing costs. I don’t think most boarding houses will let you add an extra person.
They do…. in Singapore (which I think was the first)
http://www.globalaging.org/elderrights/world/childrenobliged.htm
…in some states in India
http://www.sikhnet.com/news/look-after-your-parents-and-senior-citizens-punjab-or-go-jail
I’m sure there are others
Anyway whatever happened to Social Security? Was she not collecting? Unless great grandma wasn’t of retirement age.
My mom, who worked part-time for decades, gets $900 a month from Social Security. That won’t pay for rent, food and insurance.
My mom, who worked part-time for decades, gets $900 a month from Social Security. That won’t pay for rent, food and insurance.
well, finally. I knew my mom wasn’t the only one. Just 2 of us here on hbb. Women who raised families, H’s who died or disappeared, leaves women not earning full lifetime of Ss and maybe pensions. Women always spend on kids, very little on themselves/retirement.
She’s in her 50’s. What social security?
50’s.
oh. I guessed all moms were in their late 70s90s. That is who I am thinking of.
I know a couple of 34-35 year old Grandmas………
Yeah. I just read the whole article. I hope she gets on her feet. If she gets a CMA, she could get paid more for the work she does.
I wonder if she could become a health educator and do presentations in schools on avoiding early parenthood / birth control.
DD, yeah, I think of 50s and 60s as grandma territory, great-grandma more like mid-late 70s. But we’re a different demographic from the story.
(BTW, I find it very weird that I look so much like my grandma did when I was little. I warned my Cousin Bill never to mention it, but he can’t see it - I guess because I don’t dote over him and ply him with cookies and milk.)
50s and 60s as grandma territory, great-grandma more like mid-late 70s.
‘Cousin Bill’? my Uncle bill? nah, (shaking head) different demo!
“My mom, who worked part-time for decades, gets $900 a month from Social Security. That won’t pay for rent, food and insurance.”
If she owned (paid-off) a small home would that change things?
“I know a couple of 34-35 year old Grandmas………”
Yup. Ditto.
You live in Florida.
I knew 2 that were under 30 in Charleston sc, …i left 4 months before hugo hit…..my GF worked in foster care & adoptions so she saw a lot of stripper grandmas well under 40 …not taking care of their kids/grandkids properly
I know a couple of 34-35 year old Grandmas………
Wierd. My grandma was 101 before her first great grandchild was born. My mother was 60 when her first grandchild was born, is 85 now, and still waiting for her first great grandchild.
What if she abused her kids when they were young? Does being a blood relative mean you are obligated to support someone who did you wrong?
The Singapore link in Yensoy’s post addresses that, and their answer is no.
By golly, you’re right.
“In 2001, Ms. West and her husband took out a $67,000 mortgage on the Union Street house — which had increased considerably in value — to refinance high-interest debts, assuming payments of nearly $700 a month.
“Two years later, her husband left her.”
I thought that article was one of the best I have read in explaining that the victim in the story had brought a substantial amount of her suffering on herself by spending more than her income. It specified that part of the debt that was eliminated in the refi was due to restaurant meals and luxury purchases. It also pointed out that the original house they bought with a regular loan had affordable payments of about $400 a month.
High housing prices are just great, aren’t they? We have a government which is promoting homelessness. By staying the f*** out of the housing market, prices would fall to where ordinary people could afford shelter, and have enough money to spend on other goods and services. Instead, they want to bleed the citizens dry with high housing prices, which includes rents. They are exacerbating this depression.
That reminds me of nhz’s description of Dutch RE, where the prices of houses are insane and supported by a collusion between the developers, RE agents, government and Mafia. (if I remember correctly)
Armageddon in Alabama Proves Parable for Local U.S. Governments.
Oct. 19 (Bloomberg) — In its 190-year history, Jefferson County, Alabama, has endured a cholera epidemic, a pounding in the Civil War, gunslingers, labor riots and terrorism by the Ku Klux Klan. Now this namesake of Thomas Jefferson, anchored by Birmingham, is staring at what one local politician calls financial “Armageddon.”
The spectacle — a tax struck down, about 1,000 county employees furloughed, a politician indicted over $3 billion in sewer debt that may lead to the largest municipal bankruptcy in history — has elbowed its way up the ladder of county lore.
“People want to kill somebody, but they don’t know who to shoot at,” says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
One target of their anger is Larry P. Langford, who was the county commission’s president in 2003 and 2004 and is now mayor of Birmingham. The 61-year-old Democrat goes on trial today, charged in a November 2008 federal indictment with taking cash, Rolex watches and designer clothes in exchange for helping to steer $7.1 million in fees to an Alabama investment banker as the county refinanced its sewer debt.
“November 2008 federal indictment with taking cash, Rolex watches and designer clothes in exchange for helping to steer $7.1 million in fees to an Alabama investment banker as the county refinanced its sewer debt”.
Aw man, he just wanted to be a playa, gots to have the bling.
Money and sex are the two biggest things that can bring down a man’s reputation.
Especially when money is used to buy sex, and the celebrity who made the purchase gets caught in the glare of the MSM spotlight with his pants down.
Especially after you’ve been demagoguing, demonizing and castigating everyone else for it.
Especially after you’ve been demagoguing, demonizing and castigating everyone else for it.
Especially.
“Money and sex are the two biggest things that can bring down a man’s reputation”
Lying, or breaking one’s word or a promise to others, may sound simple and old fashioned, but they are still major killers of a man’s reputation in my book too.
“They lie to everybody; they lie to the fish!”
Sergeant Prendergast — (Falling Down, 1993)
I’m sure Wall*Street will be able to refinance the sewer deal after bankruptcy and garner more fees. So its all good.
mikey
That DFENS plate is still out there.
“mikey
That DFENS plate is still out there”
True, now all they have to do is catch me, nail my foot to the floor, give me a flattop and make me a believer again
$3 billion in sewer debt that may lead to the largest municipal bankruptcy in history ??
Thats a lot of crap pipe..Build it and they will come eh ?
Or, “Build it, and they will go.”
Where’s that fecaltime guy when you need him? Maybe he knows something.
Well with only 34% of October remaining, I’d say the odds are against a stock index crash in the U.S. this month!
Recently I saw the following on the back of a septic tank truck: “Spells Like Money.”
Gotta love those ‘Honey wagons’.
This field and mortuary bidness. Always in bidness. Never ever a decline in crap or death.
There is plenty of trouble in the mortuary business. People still die, but their survivors can choose much less costly rituals to dispose of the remains - like cremation in a minimal receptical (I think most states require the receptical) returned to the family in a simple container. It is part of the ecological trend too.
And I’m not sure how the funeral homes handle it, but they have been encouraging people to “pre-pay” their funeral costs for a long while now. If they banked the money and did something to make sure that their costs for doing the burial didn’t go up, they might be OK. If they spent the money, put it in risky investments, or failed to hedge the cost of the casket, they might be in big trouble when it comes time to provide the services for which they were pre-paid.
Yes. I see. Septic tanks always need attention.
Get em back in a choc-o-nuts can, but don’t want a problem with backup.
Well my grandma’s in a plastic lined cardboard box, so…pretty minimal indeed.
Hi to gma!
“And I’m not sure how the funeral homes handle it,…”
Put me into a large Hefty Trash Bag, throw me off the balcony and drag me to the curb for the city to haul away. Just make SURE that I’m dead.
Who cares, when you’re dead, you’re DEAD.
Important notation for my current doctor:
(Please poke me with a sharp, pointy stick or something this time.)
Trust me THAT one because some I had an MD declared me dead when I was a kid.
Fooled YOU doc, didn’t I..didn’t I !!!
Locally, we have:
Earp and Sons Mortuary
and
Earp Meat Company (wholesale supplier to McDonalds)
Coincidence? Me thinks not…….
Coincidence? Me thinks not…….
LOL
meow… here kitty kitty kitty.
A meat “filler” of human origin would not surprise me in the least. Greed knows no bounds.
I’m glad y’all have made a commitment to recycling.
Wyatt Earp is buried in the Little Hills of Eternity up here in Colma, CA.
I’m glad y’all have made a commitment to recycling.
Green-machine!
On the back of a septic tank truck in Wisconsin: Purveyors in used food.
HAHAHA
Alabama investment banker
There ya go. Ready AIm Fire.
Damn Federal investigators are gonna screw things up, we are in the middle of a moon shot, don’t they know that. DOW 14,000 here we come.
U.S. Said to Target Wave of Insider-Trading Cases After Galleon.
Oct. 19 (Bloomberg) — Federal investigators are gearing up to file charges against a wider array of insider-trading networks, some linked to the criminal case against billionaire hedge-fund manager Raj Rajaratnam that shook Wall Street last week, people familiar with the matter said.
The pending crackdown, based on at least two years of investigation, targets securities professionals including hedge- fund managers, lawyers and other Wall Street players, the people said, declining to be identified because the cases aren’t public. Some probes, like the one that focused on Rajaratnam, rely on wiretaps. Others stem from a secret Securities and Exchange Commission data-mining project set up to pinpoint clusters of people who make similar well-timed stock investments.
Investigators have struggled for years to build cases against large institutional investors such as hedge fund managers, who often deflect regulatory queries about suspiciously timed bets, arguing they’re statistical flukes amid their millions of trades. The case against Rajaratnam, built on recorded conversations within a web of alleged conspirators, offers a glimpse of how U.S. investigators are using more aggressive tactics to cut through the blizzard of trading and trace the flow of information.
Oh come on! I thought insider trading was a venerated institution on Wall Street. Now, here they are arresting a billionaire for participating in stealing money.
The next thing you know the “Trading Huddles” and “Flash Trades” will be banned, and the super rich will suffer.
Don’t you know that the super rich provide jobs for J6P and the rest of us? We owe them!
I want to have a special tax on everyone so that we can give the money to the super rich on Wall Street. That way, they won’t have to steal all that money as often as they do.
Idiots.
Roidy
You just know he made the wrong person mad and they dropped a dime on him.
…which was the case in this instance.
KBW downgrades Fannie & Freddie this morening with a price of ( 0 )….Yes…Thats zero….nada…Zip…
Seems odd to me that they’re even still trading, given that they’re now a wholly-owned subsidiary of the US gov - are they not?
Cramer said to buy them because they are too big to fail.
Yes, but he also hedged them with an equal investment in Powerball tickets.
How does the stock price of a government-owned zombie corporation even have any meaning? Isn’t it all about the government’s willingness to maintain life support systems from here on out, and if so, how could one begin to predict that? This valuation falls into the realm of Donald Rumsfeld’s “unknown unknowns.”
PB,
I’ve enjoyed your postings for a long time here on HBB. It’s definitely not Donald Rumsfeld’s “unknown unknowns.” Instead, think in terms of “known unknowns unknowns knowns unknowns and unknowns”.
Does this make sense?
Roidy
Let me try……
It’s known to be completely unknown, unknown and unknown if it’s unknown, unknown and known to be unknown, and thought to be known but is actually unknown.
There…….that’ll clear things up……….
Yes, you are right. That is clearer.
Tx,
Roidy
Donald Rumsfeld didn’t know that he didn’t know. Clear enough?
Roidy and X-GS, I don’t project out my coffee through my nose very often. Darn waste of good coffee. But your exchange had me doin’ it. Also clutching at my ribs and bending over trying to contain myself. I think my neighbors became alarmed. You guys were priceless in that exchange, and I have cut and pasted it onto an index card for when I need a lift. Thanks.
Well it’s about the government’s likelyhood of zeroing out the remaining “investors.” Would the government rather shaft Fannie and Freddies stockholders or taxpayers? Does GS own any F&F in their portfolios?
I’m sure GS owned some in the recent past. Remember when they spiked up like 30% in one day? I thought seriously about shorting them near the EOD, but figured they might it up quite a bit further. It looks so much like manipulation that I didn’t trust them not to manipulate it to even more absurd levels.
I’m sure GS is short them at this point, though; they’re down about 40% from that peak.
Lather; rinse; repeat.
Mark-to-fantasy isn’t just for Megabank!
Wondering if Geithner and Obama are part of the same administration.
Sun Oct 18, 11:03 am ET
Reuters — The administration has to be careful not to withdraw economic stimulus too fast though, Geithner added. But he denied that the administration was ready to consider a second economic stimulus program.
Sunday October 18, 2009 8:18 pm EDT WASHINGTON (AP) — President Barack Obama is considering all options to create jobs, including another stimulus package, while trying to pull the economy out of a deep recession and deal with a record deficit, White House advisers said Sunday.
Why are they even talking about this? The recession is over.
They are getting a start on the next recession starting next year.
Yeah, the recession is over. I read it on the Austin Downtown Condo website blog!
White House senior adviser Valerie Jarrett was adamant on Sunday, when asked if President Obama was considering a so-called second stimulus to deal with the rising unemployment rate. “I think it’s too soon. It’s premature to say, ‘Is a second stimulus needed?’ ” she told David Gregory, the host of NBC’s Meet the Press.
But a moment later she said the White House was already looking at tax credits and other measures to further stimulate the economy. “There are a range of suggestions that are being considered right now by his economic team, and we’ll see what we come forward with,” she added.
On its face, the two comments sounded like a contradiction. But at the White House, there is no confusion. More stimulus is coming, but it just won’t be called stimulus. Economic advisers, in concert with senior Democrats in the House and Senate, are planning additional piecemeal benefit extensions, tax breaks and other spending that could eventually add up to as much as $100 billion, say some outside experts. “The fact is that this is a word game. It isn’t a discussion of the ’second stimulus,’ ” says Jennifer Psaki, a White House spokeswoman. “This needs to be an ongoing discussion between the President and his economic team about new ideas and ways to get people back to work
In other words, the new stimulus efforts, which are still under discussion, are unlikely to be packaged into a single bill, which would be politically unpopular. An August Gallup poll, for instance, found that 65% of Americans opposed a “second stimulus” and 51% thought that the Federal Government “should spend less” than it is currently spending on stimulus. And that opposition is likely to grow after the announcement on Oct. 16 that the federal deficit for the fiscal year that just ended hit $1.4 trillion, which, at almost 10% of the total economy, represents the largest share since the end of World War
The exact content of this piecemeal, second effort is not yet known. The White House has so far declined to spell out its wishes. On Oct. 14, Obama announced his desire to give seniors onetime checks for $250 in lieu of any cost-of-living increase in Social Security checks this year. The checks, costing about $14 billion, would be paid for with an increase in payroll taxes for people with incomes over $250,000.
House and Senate leaders have also been discussing extending unemployment benefits another month or longer and a program, known as COBRA, that helps the newly unemployed pay to keep their employer-provided health insurance. Other measures on the table include an extension of the first-time-home-buyer tax credit, which is set to expire on Dec. 1 and has helped stabilize the housing market this year. The White House has said Obama supports extending all three programs, though it remains unclear whether they would be offset with other tax increases.
measton
I don’t scan the national news much, since I once breathed it for a living. But it doesn’t seem that farfetched that one of the next stimulus deals could be cash4ColdWeatherbills. By extension, if geopolitical strife in the Middle East ruptures the relative peace (quite likely in 2010 IMHO), gas prices skyrocket… and then we could have cash4Fillup coupons to keep America driving.
Doesn’t seem like any new info here for us HBBers, but a new article nonetheless….
Easy-money mortgages still provided, by the feds
So you thought easy-money mortgages with little or no down payment for people with bad credit was a thing of the past? Think again.
You can get just such a loan today - and it’s guaranteed by the federal government.
Loans insured by the Federal Housing Administration (FHA) have become “the new subprime,” and these loans are exposing taxpayers to the same kinds of soaring default rates and losses that brought down Fannie Mae and Freddie Mac as well as destroyed many banks and the private market for mortgage loans.
While private lenders learned a lesson from the mortgage crisis and are shying away from easy-money loans, the FHA has stepped into the breach. The agency has provided backing for 37 percent of all mortgages used to buy homes this year.
…
Meh, you see the downpayment fraud everywhere. Looked at a house on the market for 300+ days. Suddenly they raise the price and mysteriously it sells a few weeks later.
Clear not an arms length transaction; the is seller “gifting” the downpayment to the buyer to create the appearence of a downpayment.
Anyhow, expect some EPDs to produce some astounding losses at the FHA in short order. They are already dead but just waiting for people to realize its another zombie.
Anything to nudge the masses over the edge from their near-debt experience.
Not many folks took a crack at the lending discrimination scenario question I posed in yesterday’s Bits Bucket, so I will try again today:
Suppose the head of some low-income minority household has lost their job, and hence the household is facing foreclosure. They could be rescued with the help of, say, $100,000 in the form of a zero-interest-rate loan from the Fed; in fact, they could pay off their entire mortgage balance with such a loan. Is there a way for this household to apply for a zero-interest-rate loan to pay off their mortgage loan, with a promise to repay the loan when they get back on their feet?
Please explain the difference between this household’s eligibility for zero-interest Fed-funded financing and Megabank, Inc’s eligibility. Is it the fact that this low-income household is not “too-big-to-fail” that makes them not qualify?
The megabank has friends like dodd and frank that they give thousands of dollars to every year.
Please explain the difference between this household’s eligibility for zero-interest Fed-funded financing and Megabank, Inc’s eligibility.
Well - seems like a rhetorical question, so I’ll give my rhetorical answer -
The difference is that this household didn’t create (and therefore isn’t the master of) the entity that creates legally-binding legal tender; the same legal tender used to pay paychecks, bonuses, and campaign funding for the lawmakers that decide who gets to get these zero-interest loans and who doesn’t.
“…lawmakers that decide who gets to get these zero-interest loans and who doesn’t.”
Is it really the lawmakers who make the underwriting decision? I would like to see that in writing; please post a link if you have one.
The lawmakers don’t *directly* decide - they just created the Fed, and allow the Fed to decide.
I don’t really have access to direct documentation of a list of entities that have access to Fed lending - not sure that’s public information even. It’s pretty well known though that it’s just the banks.
E.g.
en dot wikipedia.org/wiki/Federal_reserve
Central bank
In its role as the central bank of the United States, the Fed serves as a banker’s bank and as the government’s bank. …
en dot wikipedia.org/wiki/Discount_window
In the United States, there are actually several different rates charged to institutions borrowing at the Discount Window. In 2006, these were: the primary credit rate (the most common), the secondary credit rate (for banks that are less financially sound), and the seasonal credit rate. The Federal Reserve does not publish information regarding institutions’ eligibility for primary or secondary credit.[2] Primary and secondary credit is normally offered on a secured overnight basis, while seasonal credit is extended up to nine months. The primary credit is normally set 100 basis points (or bp) above the federal funds target and the secondary credit rate is set 50 bp above the primary rate. The seasonal credit rate is set from an averaging of the effective fed funds rate and 90-day certificate of deposit rates.
I’m certainly not an expert the logistics. Generally it’s pretty well known that you have to be a bank to borrow from the Fed, of course.
“…they just created the Fed, and allow the Fed to decide.”
I see — they outsourced their lending discrimination to a government-sponsored entity which operates above the rule of law?
Are you asking for an “Amen!” from the choir?
In the example, the Low Income Minority household (LIMH) does not use the loan proceeds to pay off existing debt. LIMH leverages the money 30:1 in a bold play to corner the Garbonzo Bean market. With the profits, LIMH purchases a move up house (cash) where they entertain officials of the lending institution. The head of LIMH retires to live off of extravagant speaking fees.
When said gamble goes poorly, institution declares bankruptcy and asks for bailout money to close down. Takes large golden parachute on way out to have an orderly shutdown.
Bankerorist- using soft weapons of mass destruction to gain control of a country through means other than political.
Give me a bailout of the system dies! Your GDP number will crash* and you will never be happy again.
Gotta love the no lose situation for the bankers.
*(unless you do something crazy like subtract out inflation and or look at what this does to wealth distribution. In that case things actually would probably recover quickly and improve)
This could save the whole housing industry. With zero percent, the principle would stay the same even if no payments were made, so just suspend payments until the home owner can afford to pay on the loan.
But direct, zero-percent loans to the peasants would deprive banks and Wall Street for getting their “cut”
You could see a year and a half ago that this was one of the ways they were going to bail out the banks. Can’t give them money directly, that would pi$$ off the peasants……..so they “loan” the banks money at 0%, and they straighten up their balance sheets by pocketing the difference between zero and 10-20-30% interest rates.
“Sir, the peasants are revolting!!”
“Yeah, they stink on ice………”
Ding ding ding! It gives the bank something to do.
Obama is starting to cut the middleman in the student loan scam, where the government made the loan and private banks “serviced” them, taking a hefty cut. Then when the gov said, No More, we can handle it ourselves, Rush called it a “takeover” of the student loan system.
Imagine if the gov cut out the banks altogether and No More, we can handle it ourselves. Would that be Soviet or something?
Better yet, the homeowner could borrow from the Fed whatever the outstanding balance was on his loan and pay off the bank, then pay back the Fed after he is back on his feet.
Isn’t this pretty much the deal Megabank, Inc has going for it at the moment? You know — the TARP, TALF, etc — which were all supposed to get banks lending again? Instead, they have taken the opportunity to keep the bonuses flowing at about the same rate as before the 2008 financial panic, while cutting off private sector lending to a trickle.
Well, I’m no lawyer, but has anyone applied for such a loan? Seems to me that until such a loan is denied, there can be no damages. Now, if say, a dozen HHBers were to apply, and be declined, then there might be grounds for a class action suit.
I’m still waking up, and just thinking aloud, so cut me some slack…
Now, if say, a dozen HHBers were to apply, and be declined, then there might be grounds for a class action suit.
Now we have our marching orders. Revolt. Lets do it.
Only if the Fed charter requires it to lend to individuals. Banks that hold themselves open as lenders to the general public may not discriminate for certain reasons that are considered illegal grounds for discrimination, but being a person (not a bank) is not a protected class, and the antidiscrimination laws do not apply. I bet the Fed’s charter not only doesn’t require it to lend to individuals, it probably forbids it from lending to anyone other than banks.
If you required the Fed to lend to individuals at the same rate as the best rate that it lends to banks (ignoring the fact that individuals are not “members”), then you would basically replace the private lending system with the Federal Reserve Bank. None of the other banks could compete in lending because they would have to give out loans at the same rate that they borrowed the money. They would have nothing to do with their depositors money other than buy securities. Well, that would send some money into people’s mattresses.
Of course, no lending would actually happen because the Fed has no infrastructure in place to evaluate loans, so maybe the real banks could do a little lending until the Fed decides what its lending policies will be, hires people to implement them, train them in their lending standards and open branches to fulfill your little fantasy. 10 years minimum - maybe 20. And you had better give them a boat load of money to set up such a nationalized banking system cause they are going to need employees, computers, leases, ATMs, etc.
Does even Cuba have only national banks? Or Venezuela?
Ok, here’s a better idea. Let’s form the Bank of HBB. Each investor/share holder (HBB posters) will invest $100 in start up capital. That should raise what? a couple thousand dollars? Sounds like enough to start.
Then the bank immediately goes to the discount window and borrows, say, one trillion dollars at 0%. Being the conservative types that we are, we will be conservative and risk adverse in our lending practices, and lend it only to the most credit worthy borrowers. We’ll loan it back the US Gov at 3% for 30 years.
Then we’ll pay generous dividends, and of course, our CEO, Mr. Jones, would be entitled to a generous year end bonus like all of his banker peers.
Thanks for your comments, and sorry if I said anything offensive over the weekend…
I was attending to social events over the weekend, so I read things fairly early and made a comment or two but did not come back and read the comments during the day or in the evening?
Why, did you try to offend me over the weekend?
I have to say you really don’t offend me PBear. But as an attorney, it does frustrate me when otherwise very intelligent people equate actions that are “bad” with actions that are “crimes.” We lose something because of our system of securities regulation which is based on voluminous hyper-specific rules. It provides lots of opportunities for people to find loopholes. Which have to be discovered and then plugged up which makes for more voluminous, more hyper-specific rules.
My understanding is that the Europeans have much more general rules with respect to securities rules and let their enforcement agencies interpret them to prevent “bad stuff.” I don’t think American corporations would ever put up with that. They would freak out to think that a government employee had that much discretion. And they like to push the edge of the law - if the edge is not really well-defined it is way harder to push it without falling over. Oh, and they like the crimes to be defined in a way that means the lower level workers are much more likely to violate them than the higher ups. Just the American way of doing business.
Then we’ll pay generous dividends, and of course, our CEO, Mr. Jones, would be entitled to a generous year end bonus like all of his banker peers
I’m in.
‘…it does frustrate me when otherwise very intelligent people equate actions that are “bad” with actions that are “crimes.”’
Fair enough. I will try to be more Socratically disciplined in my naive approach to the law from now on (e.g. “would it be a violation of the Sherman Antitrust Act if banks got together and decided to withhold supply from the housing market in order to prop up sale prices?”).
“And they like to push the edge of the law - if the edge is not really well-defined it is way harder to push it without falling over. Oh, and they like the crimes to be defined in a way that means the lower level workers are much more likely to violate them than the higher ups.”
We see eye-to-eye on these points!
While this is a potential option here, the moral hazzard is pretty bad.
Next thing you know, everyone is taking a few years off from payments, eh?
But doesn’t this pretty much explain why lenders took off a few years from mortgage underwriting standards? Knowing you are going to be made whole, because you are deemed “too-big-to-fail”, certainly makes it much easier to throw away money in obviously stupid ways.
Yeah. I posted some thoughts on Bankorists above.
I don’t what you want me to do here. We’ve railed about the darn Fed for a long time.
The EASY thing for everyone to do is CUT SPENDING TO THE BONE. All in all that would tank the velocity of money and just crush the banks. We can also do things like avoid participating in government programs.
That would be a good, in your face way of being defiant.
“Please explain the difference between this household’s eligibility for zero-interest Fed-funded financing and Megabank, Inc’s eligibility. Is it the fact that this low-income household is not “too-big-to-fail” that makes them not qualify?”
There is the aristocracy who own the wealth making assets, and the serfs who work for them. If the serfs had access to the things of the aristocracy, why would they continue to work for the aristocracy?
Hasn’t this been well understood for centuries?
Hasn’t this been well understood for centuries?
Until a couple days ago.
I thought the American Revolution served to overthrow the old ways of the nobility exploiting the serfs, but I am beginning to suspect that my understanding of the difference between what is written down on paper and what is carried out in practice is seriously deluded by the American ideals I was taught as a child.
Read “Gangs of America” by Ted Nace.
Free pdf on-line at the website.
The American Revolution was a revolt by the colonial investors against the (English) East India Company, which pretty much owned the English government.
Thanks for that. Looks interesting.
Take a look at who lead the American Revolution. Sure wasn’t your common person. It was Rich, aristocratic land owners.
* OCTOBER 18, 2009
Eighty Years After the Great Crash — ‘Is It the ’30s Again?’
By BRETT ARENDS and DAVE KANSAS
[Sunday Journal WSJ dot com]
Editor’s Note: It was the worst thing to happen to the U.S. since Fort Sumter. October, 1929. Wall Street crashed and helped drive the country into the Great Depression—a deep economic and spiritual wound that has afflicted three generations of Americans. Eighty years later, as the country struggles through the harsh aftermath of another crash, two Sunday Journal contributors mark a grim anniversary and weigh the question that haunts everyone: “Is this the 1930s all over again?”
I thought we were in a new bull market?Companies are beating analysts expectations and goldman is handing out record bonuses.
I read this over the weekend and will have to read it again, to REALLY get the gist of what happened. Wall Street’s near death experience. These turds should have been let go under, it would have been bloody (maybe) but we might be on the way to recovery right now if the vampires had silver stakes driven through their hearts. Try not to shed a tear for Hank Paulson as he confronts the vampire financial system crumbling.
http://www.vanityfair.com/business/features/2009/11/too-big-to-fail-excerpt-200911
An ironic quote coming from any American CEO during the past 20 years.
“Nobody gives a shit about loyalty,” Mack complained.
really good article.
I think my bp in its own bull market.
Just a reminder:
PBS Frontline “The Warning” Oct 20th
Brooksey Born, the Derivatives & Security Attorney is featured in this documentary. Remarkable woman, whom I respect, along with Polly, of HBB fame.
http://www.pbs.org/wgbh/pages/frontline/warning/
Its 1930 again on Main St., but not on Wall St. And we know which street matters to the Masters of the Universe.
Of course the Czar also thought he could ignore Main St. in St. Petersburg.
So did some other famous rich people, but they lost their heads.
Interestingly enough, no Union soldiers died in the battle for Fort Sumter in 1861.
I believe one did die but not fighting. A cannon exploded as the Union troops fired the 47th round of a 100 gun salute, lowered the flag and prepared to marched out of the fort in surrender. Another was mortally wounded by the blast. A confederate soldier also died of a seperate cannon mishap.
When you lose more men surrendering than fighting the battle you are doing it wrong.
Here’s a good analysis by the FT.
http://www.ft.com/cms/s/0/b82d2b96-bc02-11de-9426-00144feab49a.html?nclick_check=1
“Once perceptions of rising inflation return, central banks might be forced to switch towards a much more aggressive monetary policy relatively quickly – much quicker than during the previous cycle. A short inflationary boom could be followed by another recession, another banking crisis, and perhaps deflation. We should not see inflation and deflation as opposite scenarios, but as sequential ones. We could be in for a period of extreme price instability, in both directions, as central banks lose control.”
“Our present situation can give rise to two scenarios – or some combination of the two. The first is that central banks start exiting at some point in 2010, triggering another fall in the prices of risky assets. In the UK, for example, any return to a normal monetary policy will almost inevitably imply another fall in the housing market, which is currently propped up by ultra-cheap mortgages.”
“Alternatively, central banks might prioritise financial stability over price stability and keep the monetary floodgates open for as long as possible. This, I believe, would cause the mother of all financial market crises – a bond market crash – to be followed by depression and deflation.”
In other words, there is danger no matter how the central banks react. Successful monetary policy could be like walking along a perilous ridge, on either side of which lies a precipice of instability.
They will try to stay on that edge as long as possible, because once they leave it their credibility will be gone and they won’t be able to influence things. When someone is well balanced on a wire their arms are steady, but as they loose balance their arms swing in progressively wild manner.
The other day there was a comment made - I think here in HBB - to the effect that many of the U.S. treasuries are purchased not only by private investors and foreign countries - but also by U.S. corporations, including the banks, I believe such that many banks can just borrow money from the Fed, at zero percent now, and turn around and loan it to the government at whatever rate, e.g. 10-year is at 3.4% or so.
Nothing surprises me anymore these days - but this is something to be honest I hadn’t thought happened. If this does happen - would this not be hugely perverse - an almost-direct inflation of the money supply, with banks skimming of the very-thick top layer?
Anyone know details on this - got any more in-depth links?
This is a common strategy to allow banks to recover. It’s what allowed them to recover from the prior real estate bust in the early 1990s. But that was before American values completely collapsed. Now all the money is going for bonuses.
This is a common strategy to allow banks to recover.
Are we talking strictly temporary discount window operations then perhaps? If so got a link?
Part of what I’m getting to is - are treasury rates yields being held low right now not only by artificial demand from the Fed’s $300 billion purchase program, but also by some other $XXX billion indirect lending by the Fed, just using the various banks as proxy?
The possible implication being, in the end, that the treasuries purchases being made ($1.4 T last year) are funded less by actual market capital and more by “created” capital than we thought; thus for instance explaining why treasury rates are still very low despite money flowing back into the stock market. It seems like the Fed and foreign investments aren’t enough to explain why treasury yields remain so low.
My guess is there is a wink wink nod nod going on between central banks as well. You get your banks to buy our treasuries and our banks will buy your treasuries.
Yep absolutely - the biggest single buyer of U.S. treasuries the past 8 months in fact has been not China but the UK - by far. Not sure the breakdown but probably the bulk of that has been the Bank of England.
Isn’t it a case of the Fed buying Bank of England debt, which in turn buys US Treasury debt?
“But that was before American values completely collapsed. Now all the money is going for bonuses.”
I’ve never been an advocate of violence. But, the thumbing of noses by the greedy corporate execs and politicians at the average American citizen leaves me with a very poor taste in my mouth, and I’ve come to the realization that if, one day, I turned on the news to see an angry mob of low wage workers chopping up wall street execs with very sharp implements, I’d not only condone it, I might celebrate it.
I wouldn’t called massive unemployment and wage cuts, nose thumbing. I’d call that a sharp jab in the… er, eye.
I would call it a blow to the stomach.
PBS TUES 20th 8pm
Butte, MT Copper mine 1917-1920.
This goes directly to angry mob of low wage workers ONLY trying to get extra exits out of mines that might catch on fire again.
They wanted to be able to escape another fire.
Military brought in and workers were forced into the mines at bayonet point.
was talking to some folks this weekend who were belly aching about the bankster bonuses.
i told them that was a drop in the bucket compared to the ton of money they are making borrowing money from the u.s. taxpayer at 0% and lending it to the government for 3.4%.
in the end…we bail out the fed and we bail out the government.
i had had a few by the time i told this to them so….not sure if it makes sense to even me…it was a notion that just popped into my head all of sudden like.
was at a dinner party this weekend.
married couple friends of mine with two kids and one on the way moved in with the wife’s mother. they bought a house at the height of the market and cannot afford it. they are renting it out but at negative cash flow. they were saying they would put it on the market when in “turns around” after a year or so.
a real estate lawyer at the table told them they should just walk away. the lawyer seemed to be the only one that had any real knowledge of the severity. the husband said he was thinking about walking away but his clearence is up for renewal. he is an engineer for the navy i think and i am sure needs at least a top secret clearence for his job. i am pretty sure that foreclosures and bankruptcy will impact government clearence.
anyway…i wished there was something i could do for them. there was an engineer, two lawyers and a school principal at the party and my wife and i were the only one’s that rent.
Michael, yes, that is the cunundrum with security clearances is that you have to keep a good credit rating. I know one person who got stuck with a losing house value in southern California. However most of the ones I work with are smart enough to be very careful about taking on loans they cannot handle. People with security clearances are also not supposed to be gamblers. Everything in moderation.
Funny that they don’t care if we put all our money on penny stocks. In my case I hedge on stocks with gold and government securities.
Oh, NO! Please, NOT the big screen TVs!
http://www.latimes.com/business/la-fi-bigtvs14-2009oct14,0,4908205.story
Silver Creek to close flagship, 2 others
October 19, 2009
Silver Creek Capital Management LLC is restructuring its three hedge funds of funds before closing them and starting over with two new funds that separate liquid and illiquid assets.
Executives of the Seattle-based firm said they are taking the measure to protect client investments in funds of funds that combined liquid and illiquid investments, a model that worked spectacularly well for many years but was crushed by last year’s extreme liquidity crisis.
The closing of the flagship Silver Creek Low Volatility Strategy Ltd. Fund, which peaked at $6 billion in February 2008 and totaled $4.8 billion as of Sept. 30, likely will take about four years as the firm’s investment team unwinds the portfolio’s illiquid private investments and waits for the managers of some of its underlying hedge funds to lift redemption gates, said Bryan J. Weeks, president and chief operating officer.
Silver Creek has restructured the Low Volatility fund to offer investors two options and has given investors until Oct. 26 to make a choice, Mr. Weeks said.
Investors who want to redeem completely from the fund will receive between 20% and 25% of their assets back in each of the next two years, beginning Jan. 1. The remaining assets then will be liquidated as quickly as Silver Creek’s team can do so while preserving the portfolio’s value, said Mr. Weeks.
Investors may also elect to have their assets locked up in the fund for two years, through the end of 2011, with redemptions requests met as soon as Silver Creek’s portfolio managers can provide it.
Here in Central Arizona there are next to no signs of recovery in housing/economy for the working class. In recent past small investors of GM, Lehman, etc equities have seen their value evaporate. Plenty of people here working several menial jobs just to keep their heads above water, and I know more than a few doing this with their undergraduate/graduate degrees little more than wall art. For those with fingers crossed for better days ahead in 2010 via signs of the bump in the Dow and suggestions by real estate prognosticators, banking and Wall Street talking heads that things are improving in housing - stop and think how many more foreclosures are headed our way. I have read that each foreclosure within ones neighborhood devalues their property by $5000. How many mortgage payers are just praying to get back to break even?
Anyone else noticing that more neighbors are rising and leaving their houses earlier to work that second, third job? I have. You just know tax increases are coming to the shrinking middle class - and they’ll be coming from many directions. Gas prices increasing too? Do birds fly?
“…we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude. If we run into such debt as that, we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds…we (will) have no time to think, no means of calling our mis-managers to account but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow sufferers. And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent…’til the bulk of society is reduced to be mere automatons of misery. And the forehorse of this frightful team is public debt. Taxation follows that, and, in its train, wrechedness and oppression.” Thomas Jefferson
Here in Central Arizona there are next to no signs of recovery in housing/economy for the working class.
Here in the DC area things are looking quite rosy.
Seriously. Unemployment rate in Loudoun and Fairfax counties in 4.5% and falling, for instance. It’s the obvious and inevitably by-product of government growth.
Sorry.
Blame Bush, Obama, Frank, Dodd, Pelosi, Paulson, Geithner, etc. etc.
Personally - having moved from CA three years ago - I feel very lucky - guiltily so, and I honestly feel bad for the rest of the country.
Yep, DC is rosey (depends on where…!)
I did notice a 759K house got to Short Sale for 639K OVERNIGHT in fabulous Loudoun Co VA (Aldie if you care..)
That was quite a spank - YEOACH!!!
I have been watching the house & actually went to an Open House that was held there a Month back or so
Pretty blond Realtard tried to tell me they were selling it to be near their College aged daughter
Hmmm…
Who can afford to move to be near their College kid ??
Look like no one !!!!!
What a line of crap - oh well, I may lowball it….
“Who can afford to move to be near their College kid?”
Who would WANT to move to be near their college kid?????
(But I’m insensitive………I’ve never understood this “My kid is my best friend” way of thinking………)
Its the Millennial generation. The helicopter parents have hovered over their kids since birth, they are not going to stop now.
I see that a lot around here……combination of Millenial “My baby is just so special”, combined with a Bible-Thumpers “Ive got to keep the kid tied up in the basement, so they don’t associate with the godless rabble” point of view.
Most of these kids are great kids, they just want to start getting out there a little…..on of my daughter’s friends is 18, and her parents won’t let her date, go out with her friends, or watch any movies that aren’t rated “PG”
Invariably, they go off to college, go ape$hit-crazy, and make it home one or twice a year, if the parents are lucky.
Yes, but why is it falling? Isn’t that a rather expensive place to live? I’m thinking that if I lived there, and lost my job, I’d move to a cheaper place.
Are you gaining more jobs? Or are the unemployed leaving?
Are you gaining more jobs? Or are the unemployed leaving?
Gaining jobs. Well - at this point not so much “gaining”, as “not losing”, vs. the rest of the country which is very much losing jobs at a fast clip.
We’re GAINING jobs here in the DC/NoVA area
(think of all that bailout money - where is it running thru?? HERE!!)
Every 3rd license plate in from Florida or Texas..
Everyone moving here as we have jobs & a pretty low unemployeed numbers so far..
Yes, our area is expensive to live, only behind NYC or San Fran is pricing
(and it’s no Cali or NYC living, believe me!)
The outer ‘burbs are getting the spank down to a degree depending on area (20-30% down from peak -) but areas closer into DC hold their value better.
P.S. When I say “falling” - it’s relative. The general trend has still been up over the past 18 months - however it’s fallen slightly the last 2-3 months vs. the rest of the country which is still rising slowly. Key though is just how low it is vs. the rest of the country - 4.5% vs. 9.8% general.
My point here is that a drop in the unemployment rate may not always represent a positive. For example, there could be a failing economy, and a net loss of jobs, but if every unemployed person in the area was forced to move, the unemployment rate would be zero.
I can assure everyone that my parents were quite happy to be in PA while I was in college in MI.
And probably visa-versa……….
i saw a rambler in vienna va listed for 309K…it sold for 537K in 2007….that’s gonna be sore in the morning.
the northern va, southern md, and DC area was some of the most overpriced real estate in the country yet never seems to get included with CA, AZ and FL. the prices will drop much more…it just will take a bit longer. the DC metro area was a little late to the party but they partied hard.
Confirms what I’ve heard about DC. It’s a hard-partying kind of town.
“…we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude…”
Maybe Olygal is right and we need “Pumpkins for Overlords”
They’re golden-orange, round, majestic, wise, can shoot burning lasers out of their merry triangular eyes, and are delicious in pies with whipped cream squirted on top…heckfire yeah, we should have Pumpkins for Overlords!
I’m glad you’ve seen the light, mikey. I’ll put in a good word for you once the war begins. You shall be mercifully spared.
Will the rest of us get squashed?
Gourd?
Har har har… funeeeeeee.
Inside is where you will find the seediness of it all.
SPARE me ?
Sheesh… you ARE in a nice mood today soggy Mistress of the Mud.
I am in a nice mood, as it happens. I said you’d ‘be spared’, didn’t I, and not made into a tasty man-pie.
It’s a pretty day here, and there’s nothing too big and serious going on. I believe I’ll go eat a huge burger with tater tots over at The Spar on 4th ave, to give myself strength and nourishment for an afternoon of gossip, speculation, and important-paper-losing, as well as the brief but mandatory stop by the Pumpkin Shrine, from whence all blessings, and delicious pie, flow…
That sounds like a good plan Oly, have a great day
Thomas Jefferson would have hated Ronald Reagan.
Jefferson would have despised our Republicrat duopoly and their Wall Street wire-pullers. But his greatest contempt would be reserved for the sheeple who continue to vote for the same GOP and DNC political whores and swindlers election after election.
DITTO!
A few of our honorable representatives:
Charles “how many vacation homes?” Rangel, John “I serve at the pleasure of the voters” Ensign, Maxine “unmarked 50’s & 100’s please” Waters, Jerry “I’m the other joker” Lewis, William “the fridge” Jefferson, Ted “to old for jail” Stevens, & the illustrious Rick “grab all you can get” Renzi.
You’re a little out of date. William “the fridge” Jefferson was voted out of office. There is a Republican in his district now. It is expected to go back to Dem in 2010 as soon as the Dems find a good candidate.
The Dems would rather give up the seat for a couple years than give Rush & Glen & Co. any more ammo.
Delightful. Goldman Sachs will pay bonus’s averaging 300K per employee. Goldman t-h-e investment house of Washington insiders and the uber rich near & far care not what John Q public thinks. Thanks GS for helping short struggling financial institutions into bankruptcy and then thanks again for swooping in and striping away any valuable assets for pennies on the dollar. Pick a D.C. politician and/or high roller anywhere in the world, and chances are they have Goldman and their D.C. “friend” on their speed dial.
again for swooping in and striping away any valuable assets for pennies on the dollar
I think this is what this manufactured crisis was all about.
Averages have a great way of clouding an issue although even 300k is sickening. My guess is many will be getting a few thousand while those at the top will be pulling in 10’s of millions each.
It’s like when articles lump the top 10% together and call them the elite. BS the top 0.5% are the elite. Making 70k vs 150k vs 250k isn’t that big of a difference in terms of life style. You might live in a bigger house or drive a slightly nicer car, but most people in this range go to work for a living. Now the top 1% make 1.5mill and up now we are starting to get into a different strata. Those making 10’s of millions should be analyzed on their own. It’s not until you brake out the top 1% to 0.5% that you see what’s going on. How they pay a total effective tax rate similar to those making 70k. If you lump them together with the top 10% the numbers don’t look so bad.
Saw something this weekend that illustrated that the just the BONUS Pool that GS is shelling out is bigger than EVERY expenditure by State, county, and Local governments of something like 20 states.
Pick a D.C. politician and/or high roller anywhere in the world, and chances are they have Goldman and their D.C. “friend” on their speed dial.
Yes, and if you are among the dupes who voted for one of these GS-owned creatures, you lose the right to complain about said politicos and their policies.
All the Republitards up for election in my district have to say is “tax cuts” “Obama is after your guns”, and “I’m not touching your Social Security Benefits”, and they get 75% of the vote.
The politicians around here are as badly inbred as most of the locals.
The politicians around here are as badly inbred as most of the locals.
LOL. sadly shaking my head. Ain’t that the truth.
Libertarianism has not had much luck recruiting a significant mass of voters. Why? Karl Hess explained it in 1969:
“Libertarianism is rejected by the modern Left – which preaches individualism but practices collectivism. Capitalism is rejected by the modern Right – which preaches enterprise but practices protectionism. The libertarian faith in the mind of men is rejected by religionists who have faith only in the sins of man. The libertarian insistence that men be free to spin cables of steel, as well as dreams of smoke, is rejected by hippies who adore nature but spurn creation. The libertarian insistence that each man is a sovereign land of liberty, with his primary allegiance to himself, is rejected by patriots who sing of freedom but also shout of banners and boundaries. There is no operating movement in the world today that is based upon a libertarian philosophy. If there were, it would be in the anomalous position of using political power to abolish political power.”
Ru Paul?
This philosophy is called anarcho-capitalism, in case anyone is interested - http://en.wikipedia.org/wiki/Anarcho-capitalist
No. Libertarianism does not believe in the elimination of state, just the minimilization of state.
There are many facets of libertarianism.
“The libertarian insistence that each man is a sovereign land of liberty, with his primary allegiance to himself, is rejected by …”
It is also simply untrue. Libertarianism is like Marxism, well meaning but fundamentally misunderstands human nature; idealogically lovely, but has no utility in practice.
What is untrue? Sounds like you’re agreeing with Hess’s statement, while claiming it to be wrong.
“that each man is a sovereign land of liberty”
In reality, each man is utterly dependant upon family, friends, co-workers, plumbers, airline pilots and all others. Liberty, like life, isn’t a right, but something that is granted to you by your neighbors. It is wholly subject to their level of tolerance and whims of the moment.
“that each man is a sovereign land of liberty”
Actually, that statement is neither true nor false, but an idealogical ideal, similar to “from each according to his ability, to each according to his need”.
Wow.
Sorry man, there’s just no point in arguing with that. You’re too far gone.
Marxism works great on a submarine.
Example - Tea Party activists creating problems for Republicans.
The problem is that Libertarianism’s central tenet is decentralization of power - but in a power-based political system this in itself precludes the philosophy from gaining or holding critical political mass; even if it is the predominant philosophy of the people. The U.S. founders understood this, which is why they attempted to create a political system right off the bat that was decentralized, and enforce it by law - the “chains of the constitution” and all that. Unfortunately the chains are rusting, and once they’re gone, they’re most likely gone forever.
It was all manufactured. Out of thin air by major corporations that have their own private agenda. If it were a true grass roots movement, ‘you’ would probably not be able to stop the juggernaut of humankind pushing through. But it was a game of smoke/mirrors these major players were puppeteers using people to do their bidding. They are laughing all the way to the bank at their contrived manipulations.
Silly sheeple.
say that 3 x fast.
Care to expound with specifics, or are you just blathering, trying to invalidate a movement with whose views you obviously disagree?
While the tea party movements certainly were organized by *somebody*, presumably including some corporate sponsorships - I see it as a heck of a lot more grass roots than you certainly believe. The people I knew that went at least feel very strongly about their views of small government - including corporate involvement in government, and no they are very much not sheeple.
Do you honestly believe there are very few people in the U.S. that believe in limited government?
And does a “grass roots” movement in your eyes have to be started by some guy walking down the street calling out to his neighbors “Hey everyone - I’m marching down to DC to do some protesting - want to join me?”
just blathering, trying to invalidate a movement with whose views you obviously disagree?
Says who?
I believe people are being misled. The ones that were vocal definitely had their opinions but they were funded, corraled, and strongly encouraged to show up at all kinds of places they normally would not have gone to.
I believe that many want responsible gov and we aren’t getting it. I believe that gov has allowed the financiers to rape and steal our monies and ’safety nets’ away, by “borrowing” and not paying it back by launching laws that take away deregulation and allow those who can, to steal further without ramifications. I believe that the laws have been changed over the past 30 years to benefit the few,the corps, and not the republic of the US. Making us weaker, not stronger. The laws have been changed to allow corps to let immigrants take the low paying jobs, no protection, and thereby offshoring the rest of the jobs/business and taking away from citizens further. I believe there is a kernel in your “argument” but it doesnt’ hold water when researched who were the backers.
Nope, the Pied Piper is a myth. Check out the last post on yesterdays Bits. Link to Butte MT. It isn’t now, it has always been thus. But someone is still trying to wedge us against each other so we can’t really Fight the good fight.
Touched a nerve? Again a kernel of truth. Not the whole bowl of popcorn.
What happened to, we are a capitalistic society. Okay, I go into business, I don’t make it, I go bankrupt. They’re not going to bail me out. I’ve been on food stamps and welfare. Anybody help me out? No.
– Craig T. Nelson
Craig T. Nelson
he is an ass. Friends tell me.
Capitalism is not monopolism.
Karl Hess explained it in 1969:
wmbz, I assume you’re quoting from
mises dot org/story/3768
I’ve been working my way through this piece since it was posted a few days ago. It’s an excellent read. To think it was first published in Playboy– I guess I can now say I really do read it for the articles …
To think it was first published in Playboy– I guess I can now say I really do read it for the articles …
Again, BS.
Pull the other leg.
I thought people read playboy for the pictures
Yep, Playboy ‘69
http://www.lewrockwell.com/orig10/hess-k1.html
Believe it or not, Playboy had some real and hard hitting journalism back in the day. Think “Frontline.” Or today’s Rolling Stone.
Many famous writers and journalists got their start writing feature articles for Playboy.
Seriously.
But you guys didn’t read, unless you are trying to say you know braille.
“Large Wash. planned community files for Chapter 11″
http://tinyurl.com/yklxaco
What was expected to be the largest planned development in Pierce County has filed for Chapter 11 bankruptcy protection.
…HomeStreet says Cascadia Project LLC has defaulted on two loans totaling $72.9 million including interest and fees. One was due in February and the other in July…
“We’re not bankrupt,” said John Ladenburg, Cascadia’s chief operating officer and former Pierce County executive. “The assets are worth far more than the loans outstanding to HomeStreet.”…
Plans for Cascadia would make it the largest planned development in Washington. The development would have nearly 6,500 homes, 626 acres of commercial space, a hotel, three golf courses and seven schools.
Corporate lawyer Patrick Kuo, the leader of the project, bought the land from the Weyerhaeuser Co. in 1991 and broke ground in 2005. At the time, he estimated the first residents and businesses would arrive in 2007.
Now, the only building is an unnamed elementary school being used by neighboring students from another school that is under renovation. There are roads, curbs and trails, but no houses or commercial structures…
AHAHAHAAHAHAHAAH! *gasp, gasp * HAHAHAHAHAHAAHAH!
You know, I’ve laughed the Laugh of Schadenfreude so many, many times lately and yet I’m just not getting tired of it, somehow. I feel that I could easily and merrily laugh for many years more.
Anyway, back to the article: I remember when this giant freakin’ mess was being touted and flourished around in glowing and effusive terms…maybe I’ll go look up some of the old articles for my reading pleasure.
I especially enjoyed Mr. Brainiac Ladenburg’s dogged words. ‘We’re not bankrupt. Nu-uh! Nosireeee! $72.0 million? Pooey! Didn’t you hear me!? WE’RE NOT BANKRUPT! I INSIST YOU BELIEVE ME!’
Maybe this could be a new paradigm for the logging industry. Grow trees on all the lots. You’d have paved roads for access, and water, sewage and electric for the break room. No more sack lunches and water bottles on the jobsite. And you could take a shower before driving home.
Being a lumberjack would never be the same.
Grow trees on all the lots.
There WERE trees on the lots. Great big trees, which got cut down and sold for lumber, and then the land was sold for the future installation of ‘nearly 6,500′ pastel-sided and faux-river-rocked McSh*iteShacks.
Sigh. That’s the end of all my merriment…
There WERE trees on the lots
Yes, I know. But what’s done is done.
I’m trying to put a positive spin on a bad situation.
Would you rather have a next generation tree farm, or an abandoned subdivision?
next generation tree farm … with a freshly showered lumberjack at the end of the day
huh Oly?
… with a freshly showered lumberjack at the end of the day
When I was a wee lass growing up in the remote wilderness of Utarr I was completely enamored of Paul Bumyan. I thought lumberjacks were neat-o, because they had adventures in the woods and stuff.
Then I noticed what it was that lumberjacks did, and my fondness flew away like a…like a spotted owl.
Now I realize that I just liked Paul’s accoutrements—the axe, the beanie hat, the giant blue ox—and that lumberjacks are the minions of Satan, or Weyerhauser. (Well, same thing, really…)
Anyway, lumberjacks, freshly showered or not, should be chased around and around with bulldozers on the site of a fresh ‘Class IV Forest Conversion*’, until they promise to quit being lumberjacks and go and become stevedores, or veterinarians, or someone else useful and less evil.
*A ‘Class IV Forest Conversion’ sounds better on a project proposal than: ‘We’re going to take this lovely little forest and cut down every single thing in it, right down to the dirt, and then haul out even the stumps, and when we’re done it will be a f**cked-up moonscape of churned mud and barren emptiness.’
I’m trying to put a positive spin on a bad situation.
Would you rather have a next generation tree farm, or an abandoned subdivision?
There IS no positive to be found here! None!
And I don’t want either one!
I WANT MY FOREST! I WANT MY TREES!…I’m gonna hold my breath until I get my trees back!
*starts to hold breath. Goes blue and a’splodes *
Oly, at least it’s better that they didn’t build houses on that land. Nature will reclaim it, just wait 30 years or so and you’ll see. Besides, if Weyerhauser owned the land previously, those poor trees were goners anyway.
I WANT MY FOREST! I WANT MY TREES!
Hey Oly, do you realize that there are also people who PLANT trees and raise forests? People such as– MOI ?
* holds out arms expecting big hug and kiss *
I’m doing it for two purposes: 1) scenery, beauty, recreation, and all that lovey-dovey tree-hugging stuff, and also 2) for eventual harvesting for timber…
… oh no, I blew it … *dejected slump *
Hey Oly, do you realize that there are also people who PLANT trees and raise forests? People such as– MOI ?
* holds out arms expecting big hug and kiss *
….also 2) for eventual harvesting for timber…
*Delivers a big tater-tot flavored kiss, followed by a brisk admonitory slap. *
That’s to indicate my spiritual conflict at your words.
I’m not agin’ lumber, leighhighy. I live in a house—well, more of a shack, really— that is MADE of dead trees. I light bonfires with dead trees. Last weekend I made a cute little bench from a dead tree.
You can, in fact, manage forests properly. I fully acknowledge this. I saw a bunch of well-managed working forests over on the Olympic peninsula a month or so ago. Hopefully you do the same thing?
What I’m specifically objecting to is how Weyerhauser does it, and does it again and again, which is to turn lovely forests into acres of pastel McShi*teShacks.
Furthermore, Weyerhauser was basically given vast acres of forestland by the gobermint. Those forests ought to be OURS. That is to say, we the people. You know—the taxpaying public! Damm*it!
It’s just wrong all over the place, on so freakin’ many levels.
You can, in fact, manage forests properly. I fully acknowledge this. I saw a bunch of well-managed working forests over on the Olympic peninsula a month or so ago. Hopefully you do the same thing?
Hopefully. I do consult with a forester from time to time, but this is strictly a sideline for me, and I do not pretend to really know what I am doing.
And I am not Weyerhaeuser, and I don’t have a corporate charter, nor get any free land from the gov’t, so why don’t we can shake hands on that… let’s not get too smushy, we are in public here…
Olygal,
Ever been to the “Trees of Mystery” in Northern California. Paul Bunyan and Babe the Blue Ox guard the entrance?
Here’s a link:
http://www.treesofmystery.net/
Click on “The Trees” then click on Paul or Babe to get a great picture of the two.
BTW I read stories of Paul, Babe and Pecos Bill when I was a youngun.
so why don’t we can shake hands on that… let’s not get too smushy, we are in public here…
NO PDAs please. Get a room.
sheesh.
Been to see Babe a few times!
It’s a shame that they got to the point of putting in roads and curbs. Eventually, though, the concrete will be broken up by tree roots and grasses, and no one will even know there was ever a subdivision laid out there.
“I feel that I could easily and merrily laugh for many years more.”
Oh, something tells me that you will.
And yes, I feel the same way, and will be laughing right along with you…
“Averages have a great way of clouding an issue although even 300k is sickening. My guess is many will be getting a few thousand while those at the top will be pulling in 10’s of millions each.” Goes w/o saying but you did anyway.
First thought from the top looking down:
“The masses are asses”
Second thought: how can we take advantage of it
2 Amazine investigative articles on how lenders are (not) foreclosing on houses in Dayton Ohio, by the local newspaper (Dayton Daily News).
http://www.daytondailynews.com/news/dayton-news/drop-in-foreclosures-called-very-scary-352689.html
(from the article…)
Nobody is sure exactly how many bank walkaways are occurring. For various reasons, they can’t be identified in searches of public real estate and court data without individually pulling case files, experts say.
But nobody questions that they are on the increase.
David Rothstein, a researcher with Policy Matters Ohio, summarized the way they occur like this:
• The lender files a foreclosure, gets the foreclosure judgment in court, takes the property to sheriff’s auction but doesn’t bid on it if no one else does.
• The lender files as above, gets the judgment, sets the sheriff’s auction, then cancels the sale at the last minute.
• The lender files as above but then never requests a sheriff’s auction.
• The lender doesn’t even bother to file foreclosure.
All of these actions leave the foreclosed property in the hands of the original owner who, in many cases, has moved out and is unaware the lender hasn’t taken it.
And here is a followup-story of the practices in play…
http://www.daytondailynews.com/news/dayton-news/owners-of-abandoned-properties-are-hard-to-track-down-352641.html?showComments=true&page=1&more_comments=false
Both of these articles proved good insight into the details of how lenders are evaluating which homes to take back, and how to deal with the ones they don’t want (right now).
I like the case where the banks decide an abandoned house would not be worth the cost to pay the back taxes, fines, and repairs, so dismisses the foreclosure. However, they refuse to relinquish their lien and reserve the right to foreclose at a later date.
(just in case the value of house increases after another 2 years of sitting vacant!)
Excellent articles! Thanks.
(from the second one)
… even though Hennessey thought the house had gone back to the bank, he still owned the vacant and abandoned property — and was on the hook for the growing property taxes and zoning fines from the city.
Carter tracked the Hennesseys down in Pennsylvania and was told the couple had purchased 17 properties in what they described as a housing scam. A number of such scams have been prosecuted in federal court in recent years. They denied they still owned the house and even hired a lawyer to tell the city they no longer own the property.
“I said I was sorry to inform them that the bank stopped the foreclosure, discharged the loan and never took title to the property, so it’s still theirs,” Carter said.
The couple had purchased SEVENTEEN properties. Wow. Just…wow.
And I betcha allllll 17 of them are in the same state as this particular example, inside and out.
Glad someone liked the articles.
I was afraid it was posted so far down in the bits buckets that It would be missed by everyone.
“I like the case where the banks decide an abandoned house would not be worth the cost to pay the back taxes, fines, and repairs, so dismisses the foreclosure. However, they refuse to relinquish their lien and reserve the right to foreclose at a later date.”
This behavior makes perfect sense from the bank’s POV. If they cannot foreclose and sell for enough to cover the back-taxes and fines, then sell for something that puts them in the black, why would they finish foreclosing? The value of the property is essentally negative at that point, and it would make no economic sense for them to take ownership. And they also have zero incentive to extinguish their lien, since it is essentially an option with no expiration date, and zero carrying-costs.
The thing that blows my mind, though, is that the cities already have all the tools that they need to fight this process and prevent the blight that having home vacant/abandoned for years causes in a community: they can levy fees for code violations, some of which they can repair (e.g. mowing), and then they can get a lien for the fines, and they can move to foreclose and auction the property based on their own liens. What that occurs, the banks have two choice: either step up and take ownership, or allow the city to take ownership. In either case, things improve for the city and community.
The question in my mind is what are the cities are doing this more aggressively???
I agree stalling the foreclosure and not relinquishing the right or future foreclosure makes since for the banks.
Except, the article talks of investors who have approached the banks to acquire the property, but the banks have refused (multiple occassions) to relinquish their liens. As a result, the investors decline to persue the property. This becomes an issue of the banks sidetracking efforts to put these houses back in usable condition.
The cities may have the tools to file fines for lack of upkeep, followed by liens, and then foreclose in their own. But how long does that take?
There is a bill being preparred in the Ohio legislature that would require lenders to take possession of a house within 60 days of a foreclosure filing, so the cities can then go after the lenders in a timely manor. The bill has not been formally introduced yet.
“There is a bill being prepared in the Ohio legislature that would require lenders to take possession of a house within 60 days of a foreclosure filing”
This makes sense. Some legal framework is in place already in that a judge ORDERED the property sold at auction. If the lender doesn’t obey the judge within a reasonable period of time, they should be held in contempt of court. By default it falls upon the city/town to enforce that, since - in these unusual times - no one else will.
Thanks for posting those articles.
In this age of Government sponsored accounting fraud at banks, is it worth more to the bank to keep the house on the books at full value than to liquidate it for what it is really worth?
Will the “wink-wink” game keep millions of houses off the market for years?
And, as we all know, those millions of houses will be worth a lot more. Especially after they’ve just been sitting there unoccupied for a few years.
As good as gold? Well at least as good as dollars -
CME To Allow Gold As Margin Requirement Collateral
Is JPMorgan in urgent need of gold replenishment? If one reads between the lines of today’s surprising announcement out of the CME, that the Chicago exchange will allow the use of gold as collateral for margin requirements (for up to $200 million), with the actual physical gold to be stored at JPM’s bank in London, that is one possible explanation. From a Nasdaq press release:
U.S.-based clearing house CME Group Inc. (CME) will allow physical gold to be used as collateral for margin requirements on all exchange products, a spokesman said Monday.
The new global policy is effective Oct. 19 in accordance with a member’s notice issued late Friday, said spokesman Jeremy Hughes in London.
Clearing member firms will be allowed to post up to a maximum of $200 million worth of gold as collateral to cover performance bond, or margin, requirements, Hughes said.
The gold will be held at J.P. Morgan Chase & Co.’s (JPM) bank in London.
Orlando hotel occupancy at 54.7%
Orlando Business Journal 10-19-09
Orlando’s hotel occupancy rate was 54.7 percent for the week of Oct. 4 -10, a 14.3 percent drop from the prior-year period, according to Smith Travel Research.
In addition, revenue per available room — a key measure of financial health for hotels — was $51.21, a 27.3 percent drop from the year prior.
The average daily rate for a room was $93.67, a 15.2 percent decline from the same period in 2008.
Owwwhhh! Wee!
Looks like it’s time to get a CHEAP trip to the Keys!
Glad I don’t own a house!
Whittaker Builders files for bankruptcy.
St. Louis Business Journal
Homebuilder Whittaker Builders has filed for bankruptcy. The company, led by President Greg Whittaker, filed Chapter 11 bankruptcy Oct. 15 in the U.S. Bankruptcy Court for the Eastern District of Missouri.
Whittaker Builders was the fifth-largest homebuilder in the St. Louis metro area in 2008, but the down real estate market hit the St. Charles, Mo.-based homebuilder hard. Whittaker Builders’ revenue declined from $93.3 million in 2006, to $82.7 million in 2007 and $29.2 million in 2008. The company shed nearly half its work force, from 288 employees in 2007 to 150 employees in 2008.
Whittaker could not immediately be reached for comment. In a release on the company’s Web site, Whittaker Builders cites the changes in the credit market as a driving force in a reorganization of the company.
http://money.cnn.com/2009/10/14/news/companies/fdic_deposit_fund/?postversion=2009101415
the FDIC must follow the Mayan calendar…because short of the world ending in 2012…i see red ink way past then.
THIS is an amazing thing. Maybe someone posted about it before, but here is the link.
Investors(you, me and j6p) can invest and mirror actual ws managers in real time.
http://www.nytimes.com/2009/10/19/technology/start-ups/19kaching.html?_r=1&em
Hope the monster doesn’t eat the link.
Nice find. Bookmarked.
Employees face ’shockingly higher’ health costs
It’s open enrollment time. As employees nationwide peruse their benefit options, experts say prepare for ’shockingly’ higher costs.
NEW YORK (CNNMoney.com) — It’s open enrollment time at work. Prepare yourself. Starting in 2010, your employer is making sure that when it comes to paying for your health care, you’re going to be sharing much more of the burden.
“The headline is greater cost sharing,” said Tom Billet, senior consultant with human resources consultancy Watson Wyatt. “That means higher [employee] contributions, higher deductibles, or both,” he said.
In 2010, employers are “putting everything on the table,” implementing benefit changes aimed at making workers more aware of the actual cost of services,” said Paul Fronstin, director of the health research program at the Employee Benefit Research Institute (EBRI), a public policy research group.
Barry Schilmeister, health care consultant with Mercer, a global firm specializing in employee benefits, agrees.
“Most people are shielded from the true cost of care because all they pay when they go to the doctor is a $15 to $20 co-pay,” he said. “To me the catch phrase in 2010 will be ‘Taking responsibility.’ ”
Consumer advocates, however, aren’t thrilled with these declarations.
“We recognize that this is a hard economy,” said Cheryl Fish-Parcham, deputy director of health policy with Families USA, a health care consumer advocacy group.
Except, of course, government employees at all levels. We just had teachers go on strike because the school board wanted them to pay a $5 copay. And they gave in to the union thugs after 2 weeks. When you get to increases taxes instead of making a hard decision, that is what you end up with.
More than doubled.
I can’t help but think that a lot of employers will be getting out of the health insurance biz in the next few years.
Thank god the government isn’t involved and the free market is running things as efficiently as always.
Declining donations drive MADD to trim staff
Associated Press - October 19, 2009
CHARLESTON, W.Va. (AP) - Citing a nearly 20% drop in donations, Mothers Against Drunk Driving is cutting staff at its national office and in 11 states, including West Virginia.
MADD National Chief Operating Officer Debbie Weir (pronounced Ware) said dwindling financial support has forced the nonprofit to make some difficult decisions.
Cuts will vary from state to state. In West Virginia, 2 of the three paid positions were eliminated.
Weir said private donations, government grants and corporate sponsorships to MADD National dropped to $47 million last year.
Notifications to employees in Arkansas, California, Delaware, Michigan, Minnesota, Ohio, Oregon, Oklahoma, Virginia, Washington and West Virginia should conclude this week.
Little known fact: many years ago (I’d have to look it up) the original founders of MADD were ousted in a corporate coup d’etat by investment lawyers.
That is to say, lawyers took over the organization as it was turning out to be a very profitable “non-profit.”
I always had a major problem with MADD.
We as a nation should have been able to impounded the car for 6 or more months….that would have put a real hurtin on the driver and his family.
Even after a dwi or driving with a suspended license you could still get your car out of the pound and let your friend parent drive you home.
In most rural areas it really didn’t do much, except made people drive without insurance or registration or a valid license.
Homebuyers forced to reveal how much they spend on alcohol in tough new mortgage tests. Daily Mail Reporter(UK) 19th October 2009
Borrowers will be forced to reveal how much they spend on alcohol and tobacco as part of tough new tests before they can get a mortgage.
Would-be homeowners could even be asked what they spend on clothes and shoes as well as childcare as part of a standard ‘affordability’ test.
They will have to disclose their income and hand over bank statements before getting a loan under the radical shake-up by the Financial Services Authority.
Banks will have to ask for the information under a new obligation to make sure customers can afford the mortgages they take out.
An estate agents window display is pictured in Epping in Essex
Would-be homeowners could even be asked what they spend on clothes and shoes as well as childcare as part of a standard ‘affordability’ test
If firms fail to verify that borrowers can repay the loan, they will face tough penalties in a shift from the current, lax system.
This is despite them being blamed for plunging tens of thousands of families into negative equity and repossession, and underpinning the credit crunch.
The FSA said banning these controversial deals would be a ‘blunt instrument’ because there was no evidence they were more likely to lead to defaulted payments.
But it warned it would take more steps and introduce a cap if its first round of changes did not have enough effect.
So-called ‘liar loans’, where borrowers declare their income without checks and which have become common in the last ten years, will also be banned under the new plans.
And ‘toxic’ deals where homeowners at higher risk - for example those with bad credit histories allowed to borrow a large proportion of a house’s value - will be axed.
The shake-up will also see buy-to-let mortgages and any other lending secured against a home brought under the FSA’s regulatory powers.
Borrowers will be forced to reveal how much they spend on alcohol and tobacco as part of tough new tests before they can get a mortgage.
WHAT?
The Brits have a major alcohol problem. Lots of stories on the news there about pubs/taverns, brawls, you name it. They do have serious issues with the young persons alcohol, drinking binges etc.So. ‘twould be interesting to see them even try to buy flats etc.
Gold at $2,000 Becomes Inflation-Adjusted Bullseye for ‘80 High
By Pham-Duy Nguyen
Oct. 19 (Bloomberg) — Gold’s rally to a record means prices are still 53 percent below the 1980 inflation-adjusted peak.
While gold rose 19 percent this year to $1,072 an ounce on Oct. 14, consumer prices almost tripled in the past three decades, eroding the metal’s value. Bullion hasn’t kept pace with the cost of bread, fuel or medical care. In 1980, gold hit a then-record $873 an ounce. In today’s dollars, that would be $2,287, according to the U.S. Labor Department’s inflation calculator.
Record government debt and interest rates close to zero percent are pushing gold higher for a ninth straight year, and options show investors expect the rally to continue. When prices reached all-time highs, the contract with the most open interest was the December call to buy the metal at $1,200. The contract to purchase at $1,500 an ounce was the third biggest.
“Gold is not at any peak,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages $58.5 billion in mutual funds and brokerage accounts. “The world’s money supply has increased and gold hasn’t kept pace,” he said. “We’re now in a period where gold is catching up.”
The U.S. Dollar Index, which measures the currency against those of six major trading partners, fell on Oct. 15 to the lowest level in 14 months, and has dropped about 7 percent this year. President Barack Obama has increased the nation’s marketable debt 22 percent to $7.01 trillion to revive growth.
Preserving Value
Gold bulls say today’s record borrowing and low interest rates mean the government will have to accept faster inflation as the economy recovers. Investors buy bullion to preserve value during times of turmoil and economic stress.
Here is a man after my own heart:
Oct. 19, 2009, 1:26 p.m. EDT
Einhorn bets on major currency ‘death spiral’
Major institutions should be broken up if necessary, Greenlight manager says
By Alistair Barr, MarketWatch
NEW YORK (MarketWatch) — Greenlight Capital manager David Einhorn said Monday that his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world’s most developed countries.
The hedge-fund manager, who warned about Lehman Brothers’ frailty before it collapsed last year, also said financial institutions that are deemed as “too big to fail,” such as Citigroup Inc. (C 4.58, -0.02, -0.33%) , should be broken up.
…
“When the market refuses to refinance at cheap rates, problems emerge,” he said, adding that this could trigger a “currency death spiral.”
…
“No institution should be too big to fail, Einhorn contended. “The real solution is to break up anything that fails that test. Lehman shouldn’t have existed in any size to threaten the financial system.”
He is 100% correct of course, however the long prevailing opinion of the PTB is to the contrary. The props are everywhere, and it’s causing constipation, the system needs to be and wants to be flushed. This will only cause more distortions and larger problems down the road, and it’s fast approaching.
Let those that should fail, fail, that is how it works in the real world.
If expansion of credit is the cause of our currency decline, just exactly how is contraction of credit going to result in a “currency death spiral”?
A wealth death spiral, that would make sense.
‘…just exactly how is contraction of credit going to result in a “currency death spiral”?’
There seems to be an implicit assumption behind Einhorn’s logic that the Fed will try to print away its difficulties, and will only tighten at the point when it is necessary to push interest rates to crushingly high levels to save the currency (refer to the 1979-1982 period for a recent historic example).
If expansion of credit is the cause of our currency decline, just exactly how is contraction of credit going to result in a “currency death spiral”?
Simple - it’s we’re talking about credit flowing in separate directions.
A. Expansion of credit from the U.S., including within the U.S. (from one entity to another - e.g. from the Federal Reserve to the U.S. government) = weaker dollar
B. Contraction of credit to the U.S. (foreign purchases of U.S. treasuries) = weaker dollar, because it causes more of A.
“…are tied to interest rates four to five years out,”
Geez, what could possibly happen in 48-60 months “looking forward”
Retail Sales Rebound Into Xmas as Shares Show Consumer Not Dead.
Oct. 19 (Bloomberg) — From Intel Corp. to TJX Cos., it’s beginning to look a lot like the retail holiday season will be happier than forecast.
Intel, the world’s biggest chipmaker, cited stronger consumer demand in projecting Oct. 13 that its sales in the fourth quarter would be $9.7 billion to $10.5 billion, compared with a $9.5 billion average prediction in a Bloomberg News survey. TJX, the Framingham, Massachusetts-based operator of clothing-store chains T.J. Maxx and Marshalls, raised its fourth-quarter comparable-sales estimate Oct. 8 to a gain of 3 percent to 5 percent from an increase of 2 percent to 4 percent.
“Consumers’ bunker mentality is gradually giving way to more-familiar spending patterns,” says Michael Feroli, a former Federal Reserve official who is now an economist at JPMorgan Chase & Co. in New York.
Rising sales would be good news for the economy as well as retailers. Consumption accounts for about 70 percent of gross domestic product, and more spending would help the recovery.
UBS Securities in New York improved its outlook for third- quarter growth to 3.5 percent from 2.5 percent after last week’s report of September retail sales was higher than it had expected. GDP fell 0.7 percent in the second quarter; it was the fourth consecutive decline, which would be the longest since such records began in 1947.
“Retail sales offer the most encouraging sign of a more- lasting turn in activity,” Robert DiClemente, chief U.S. economist at Citigroup Global Markets in New York, said in an Oct. 16 note to clients.
So here’s a question:
Economy bad -> Government must bail out -> Government debt weakens dollar -> Dollar down, gold up, etc.
Economy good -> XXXXXX -> Dollar down, gold up, etc.
WTF is XXXXX??
Given that a strengthening economy should cause the government debt picture to look better, and therefore should strengthen the dollar, why the heck is the dollar still going down, and dollar hedges like gold going up?
Scratching my head on this one.
Or maybe - the economy isn’t really getting better?
(I think I may have hit on something…)
Packman:
Maybe people realize an up to date computer and nice clothes is necessary to keep their job.
You would not believe how many jobs today want you to have a laptop and wireless access just to be an intern.. This was unheard of last year…but i see 10-20 a day here on CL.
Does the stock market keep going up at 10% unemployment, 11%, 12%, 13%? Where does it end? Cake for the top 10%, crumbs for most others.
Yes… In a ‘jobless’ recovery, all that’s important is the DOW and wall street.
Big Nanny is on the job and at some point we will all be out on a road crew somewhere paving over the country side for prosperity’s sake, and also to the smooth the path for all the new Bentley’s rolling out from w.street.
I don’t think I would want to be in that Bently rolling out on to the streets, would you?
When are the banks going to:
a) start releasing homes onto the market?
b) stop letting people go 12+ months without paying their mortgage?
There is now a housing shortage in CA again and prices are going up??!!
“There is now a housing shortage in CA again and prices are going up??!!”
Are you talking about a real shortage, or the virtual one created by banks colluding to withhold supply and prop up prices? (Actually, I have no hard evidence on the collusion question, but there certainly appears to be a smoking gun…)
“…or the virtual one created by banks colluding to withhold supply and prop up prices?”
Previously:
“…Of course it is always possible to artificially inflate prices by regulating the supply”
FRONTLINE INVESTIGATES THE ROOTS OF THE FINANCIAL CRISIS
FRONTLINE Presents
The Warning
Tuesday, October 20, 2009, at 9 P.M. ET on PBS
http://www.pbs.org/frontline/warning
“We didn’t truly know the dangers of the market, because it was a dark market,” says Brooksley Born, the head of an obscure federal regulatory agency — the Commodity Futures Trading Commission (CFTC) — who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country’s key economic powerbrokers to take actions that could have helped avert the crisis. “They were totally opposed to it,” Born says. “That puzzled me. What was it that was in this market that had to be hidden?”
In The Warning, airing Tuesday, Oct. 20, 2009, at 9 P.M. ET on PBS (check local listings), veteran FRONTLINE producer Michael Kirk (Inside the Meltdown, Breaking the Bank) unearths the hidden history of the nation’s worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
“I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”
Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.
“I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.’”
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
“It’ll happen again if we don’t take the appropriate steps,” Born warns. “There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.”
a must-see
“She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.’”
Cough!
That’s just crazy talk! Multi-TRILLION dollar, secretive, UN-regulated derivatives and AAA rated CDOs filled with hidden sub-prime paper?
NO WAY!
We all know it was them po’ people with they’s liar loans what caused the problem!
And not those “dark pools” either!
Uh UH! No way!
Or front loading and insider trading, and, and… it wobbles the mind!
“…Alan Greenspan was the maestro,”
Hello, …that’s SIR Greenisspent…”maestro” is a sub-title.
I saw that Special ….so……what was this about nobody saw this meltdown coming . Muzzle the truth sayers .
It’s so tough, even the thrift stores are having problems. Pay attention to the numbers in this little article.
Linky:
http://www.dailyherald.com/story/?id=330089
Nothing can be done about the rape and pillage of the taxpayers coffers in order to insure the big guns get their ‘hard earned” rewards. Funny how that works isn’t it? Not really, of course, that’s the way the banksters set it up. The D.C. cesspool swims merrily along for their pay off.
What happened to Barry’s pay czar? Oh that’s right he’s on the bankster pay roll also.
Report: Major U.S. Firms on Route to Award Record Pay in ‘09
Reuters
Major U.S. banks and securities firms are on track to pay employees about $140 billion in total compensation and benefits this year, the Wall Street Journal said, citing an analysis of securities filings for the first half of 2009 and revenue estimates through the end of the year.
The paper said employees at 23 top U.S. investment banks, hedge funds, asset managers and stock and commodities exchanges were likely to earn about 20% more than they did last year.
The firms paid $117 billion in compensation and benefits last year, down from the $130 billion paid in 2007, the paper said.
Massive losses inflicted by risky subprime mortgage bets destroyed some of the oldest names in U.S. finance and intensified a recession that has cost millions of jobs, putting both the banks and the regulators under scrutiny.
“…that’s the way the banksters set it up.”
Cue… aladinsane & Jas Jain
BLS: Maricopa County lost 134,000 jobs for 12 months ended March ’09
Phoenix Business Journal
Maricopa County lost almost of one-third of its construction jobs and 11.5 percent of its business services positions between March 2008 and March 2009, according to first-quarter jobs data from the U.S. Bureau of Labor Statistics.
BLS released the county-level jobs data on Friday. It shows Maricopa County lost 7.4 percent of its jobs between March 2008 and March 2009. That includes 31 percent of the Valley’s construction jobs, 11.5 percent of professional and business services positions and 11.2 percent of manufacturing jobs.
The county lost a total of 134,000 positions — second only to Los Angeles County, Calif. (which lost 207,000) and more than San Diego and Miami-Dade counties combined, according to BLS.
Maricopa County has the fourth-largest U.S. employment base at the county level: 1.67 million positions. That puts Maricopa behind only LA County; Cook County, Ill.; and New York County in terms of employment.
Job losses, March 2008 to March 2009:
* Los Angeles County: 207K
* Maricopa County: 134K
* Cook County, Ill.: 108K
* Orange County: 103K
* New York County: 85K
* Clark County, Nev.: 83K
* Miami-Dade County, Fla.: 63K
* San Diego County: 62K
Maricopa County lost almost of one-third of its construction jobs and 11.5 percent of its business services positions between March 2008 and March 2009, according to first-quarter jobs data from the U.S. Bureau of Labor Statistics.
Here’s a Baja Arizonan who’s betting that a lot of those business services positions were in the REIC. Just like down here in Baja.
The Finito Bandito has smashed the construction industry and related services like a bloated and cheap pinata; up here in the Valley of the Sun, for sure, for sure.
Banking on the Fed
As Subprime Lending Crisis Unfolded, Watchdog Fed Didn’t Bother Barking
The Fed may lose its consumer protection duties to a proposed new agency.
By Binyamin Appelbaum
Washington Post Staff Writer
Sunday, September 27, 2009
…during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders’ compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies.
The hands-off policy, which the Fed reversed earlier this month, created a double standard. Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates.
“In the prime market, where we need supervision less, we have lots of it. In the subprime market, where we badly need supervision, a majority of loans are made with very little supervision,” former Fed Governor Edward M. Gramlich, a critic of the hands-off policy, wrote in 2007. “It is like a city with a murder law, but no cops on the beat.”
…
But… but… the Fed is Protecting Our Economy!
(warning pdf)
But Apple reports after hours today…profits up 47% in earnings report on the iPhone and Macs. Apple up over 6% after hours.
Is this the pivotal earnings report to kill my prediction of Black October?
Lesse: KTCAX? check. VFINX? Check. RGAEX? Check. Oh yes, I have Apple and Google and stuff in my stock mutual funds so no worry.
Bill. Methinks the black october is getting close to be a bust.No?
ces.
Washington Post this evening.
Banks losing battle. We should only hope so!
The move would roll back a doctrine called preemption that has allowed big banks to answer solely to federal regulators. The banks argue that operating under a single set of rules is more efficient and results in lower prices for customers. But the Obama administration, which is pushing for the change, regards preemption as a cause of the crisis because it prevented state regulators from quashing obvious abuses.
The change essentially would unleash 50 additional regulators on the largest banks.
Large banks have fought bitterly against the proposal, which they regard as one of the most problematic components of the administration’s financial reform plan, but they have been unable to sway House Democrats.
one mo time
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/18/AR2009101802156.html
This sounds promising. I guess Ostrom’s Nobel Prize might be construed as a shot across the bow for Megabank, Inc? How about the hypothesis that without the advantage of free too-big-to-fail insurance, Megabank, Inc would prove to be far less effective at banking than regionals? Please experimentally test that hypothesis, Dr Bernanke!
I’ll be doing a rain dance for this one.
That would be awesome thing, as long as the federal government also promises to never ever bail out a bank again. Unless that is done, this is meaningless.
Otherwise - if the banks run roughshod over the federal government - do you honestly thing that doing the same to state governments won’t be like swatting a fly with a Buick?
The Financial Times
Countdown to the next crisis is already under way
By Wolfgang Münchau
Published: October 18 2009 18:42 | Last updated: October 18 2009 18:42
We did not need to wait until the Dow Jones Industrial Average hit 10,000. It has been clear for some time that global equity markets are bubbling again. On the surface, this looks like 2003 and 2004 when the previous housing, credit, commodity and equity bubbles started to inflate, helped by low nominal interest rates and a lack of inflation. There is one big difference, though. This bubble will burst sooner.
So how do we know this is a bubble? My two favourite metrics of stock market valuation are Cape, which stands for the cyclically adjusted price/earnings ratio, and Q. Cape was invented by Robert Shiller, professor of economics and finance at Yale University. It measures the 10-year moving average of the inflation-adjusted p/e ratio. Q is a metric of market capitalisation divided by net worth. Andrew Smithers* has collected the data on Q, a concept invented by the economist James Tobin.
Cape and Q measure different things. Yet they both tend to agree on relative market mispricing most of the time. In mid-September both measures concluded that the US stock market was overvalued by some 35 to 40 per cent. The markets have since gone up a lot more than the moving average of earnings. You can do the maths.
The single reason for this renewed bubble is the extremely low level of nominal interest rates, which has induced people to move into all kinds of risky assets. Even house prices are rising again. They never fell to the levels consistent with long-term price-to-rent and price-to-income ratios, which are reliable metrics of the property markets’ relative under- or over-valuation.
But unlike five years ago, central banks now have the dual role of targeting monetary and financial stability. As has been pointed out time and again, those two objectives can easily come into conflict. In Europe, for example, the European Central Bank would under normal circumstances already have started to raise interest rates. The reason it sits tight is to prevent damage to Europe’s chronically under-capitalised banking system, which still depends on the ECB for life support. The same is true, more or less, elsewhere.
Now, I agree there is no prospect of a significant rise in inflation over the next 12 months, but the chances rise significantly after 2010.
Once perceptions of rising inflation return, central banks might be forced to switch towards a much more aggressive monetary policy relatively quickly – much quicker than during the previous cycle. A short inflationary boom could be followed by another recession, another banking crisis, and perhaps deflation. We should not see inflation and deflation as opposite scenarios, but as sequential ones. We could be in for a period of extreme price instability, in both directions, as central banks lose control.
This is exactly what the economist Hyman Minsky predicted in his financial instability hypothesis.** He postulated that a world with a large financial sector and an excessive emphasis on the production of investment goods creates instability both in terms of output and prices.
…
Yes.
This should be posted on today’s BB, if it isn’t already (haven’t meandered over there yet).
Crude breaks above 80.
Dollar almost breaks below 75.
The beat goes on.