October 27, 2009

The First Round Of This Recession

Although the stock market crashed in 1929, Great Depression 1.0 didn’t get fully underway until the early 1930’s, when the cumulative damage from massive unemployment, farm foreclosures, dead businesses, and overall national malaise joined up with an increasingly hostile Mother Nature to make American lives even more miserable than they already were.

Now that America has weathered the first round of Big Business and institutional failures of this recession, and emptied what’s left of our pockets on sly “giveaways” like Cash for Clunkers and an $8K inducement to take on massive mortgage debt, the cold winds of December reckoning loom large. How long will it take before GD 2.0 hits its stride and we all admit that the well-orchestrated booster-ism our media has been feeding us hasn’t worked out so well this time? As any reader here can testify, just because something is trumpeted over and over by those in “authority” doesn’t necessarily make it so.

Last week we saw a lot of rah-rahing from the real estate industry. All that pent up demand from realtors searching for something, anything to crow about has finally spewed forth like the petard we know it to be.

It seems that existing home sales rose 9.4% over August. True, and auto sales jumped in July! Seduce the naïve and the desperate with a meaningless tax credit and watch as a million of them jump into the shark tank. As always we’re assaulted by the NAR with anecdotal evidence of higher-than-asking-price bidding wars, helped along by the federal tax credits, state forgiveness grants, and local incentive programs. No one wants to talk about how many of those winning bids fell through because no one would finance them. Or the fact that even with all the grants and give-aways, a significant percentage of these aspiring homoaners will be financially unqualified and/or found to have fraudulently represented themselves on the applications.

It’s been hard for some of us to hold fast and wait for the real downturn in housing prices to hit when Alt A and CRE loans begin to reset next year. And in the back of our minds the old adage, “don’t bet against the fed” (or an administration under the gun,) has never been truer. But a lot of us have chosen to hang in there anyway and wait for the inevitable. Either housing prices fall significantly, or wage inflation rises. Under the current system of debt economics there is just no way that wages can reach parity with housing prices without some major adjustment to the equation—gimmicks and greenspanery to the contrary.

It’s not necessarily because we’re pessimistic by nature, or because we have some vested emotional interest in seeing our government and institutions all come tumbling down; it’s just reality. At some point, government price supports will run out of funding and the subsidies will stop.

As an unabashed supporter of the Obaman ideal, (if not their methodology,) I am in a personal quandary….my own ethical hedge fund if you will. While I want the guy to succeed in addressing the myriad calamities besetting our nation, I also want a lot of our markets and entrenched systems to fail and be reformed into something more closely resembling a level playing field. It’s hard to know which one to root for. What we have now is so skewered in favor of the few—and so badly administered– that there is no real sense of national cohesion or purpose anymore. Even support for the military, traditionally the last bastion of patriotic fervor, is badly eroded. So while I’m not certain I want an economic catastrophe, I’m also not entirely certain it might not be cleansing.

We may be about to find out.

When end-of-fiscal earnings reports have all been filed, and the press leaks begin in earnest, we’ll see just what sort of accounting scaffold has been propping up the Potemkin Village of our nation’s banking system. We’re old hands at this by now, having watched the pattern emerge over the last two years, and I’m sure no one on this board will be all that surprised when WF, BofA and Citi (and maybe a pension fund or two,) go down in a hail of weasely media releases.

But how will Wall Street, already roiling with the heat from an enraged and increasingly bankrupt citizenry, wrestle this latest round of bailouts onto the back of the American taxpayer? In addition to providing life support to our failing auto unions and housing industry, we’ve already been forced to save China’s state investment fund (CIC) with the AIG bailout. Then essentially compensate Israel for Bernie Madoff’s fund-funneling-gone-awry by anointing Goldman Sachs (this administration’s Haliburton,) as the de facto arm of the US Treasury.

And now we’re supposed to rectify the massive losses of the Saudi royals’ CitiGroup? Yikes. How are we going to do that? By giving it back in the form of $300/barrel oil prices? The dollar is dropping, China is divesting, and the Brazilian real is ascendant. That giant sucking sound we’re hearing isn’t just our jobs going abroad anymore, it’s the whoosh of the emergency stash flying out of our collective mattresses.

It’s Beginning to Look a Lot Like (a cruddy,) Christmas.

With American consumers defaulting on their debts, maxed out on their credit, and cutting discretionary spending to the bone in attempts to get solvent, one expects that retail sales figures for the so-called holiday shopping season will be even more dismal than they were last year. Are we really expected to dig deep to buy more redundant stuff so retailers can stay in business? How many wiis does one family need? How many cheap socket wrench sets? How many knock-off handbags? One suspects that a lot of the “move up” mentality in serial home buying over the last decade was motivated by a need for more closet space and empty square footage in which to store the family junk collection.

Early this summer, I noticed a precipitous drop in the amount of bulk mail reaching my big rural mailbox. Even the onslaught of glitzy holiday catalogs that normally hits in mid-August has been anemic. I generally save the things in piles out behind the woodshed and bind them into semi-geometrical bales every now and then. Then I cover them with plaster to form building blocks for my ongoing dog palace project. By this time of year, I usually have a knee-high stack of the things, but instead of the usual dozens, I’ve only received a handful so far, and of these, half have switched from glossy four-color to news stock. Even the models look bewildered. This most recent cover of “W” Magazine probably sums up the zeitgeist better than anything historians could ever write about this last year in American consumerism.

Neiman Marcus’ Christmas Book, always an abomination of consumerist excess, is notably restrained this year as well. The clothing is muted to the point of being drab. Gone are the extravagant furs and the “important” jewelry. Even the signature “his and hers” come-ons are a rehash of previous frippery. When Neimans goes spare you know the season is a lost cause.

(For those with strong stomachs, I simply must mention the one glaring exception to my above statement. Perhaps the most asinine serio-comic offering of the decade; a “tricked out” (their description,) cupcake car (!)—complete with matching hat— for $25,000. Somewhere on some exclusive shoreline or staid country klub greens-house, the uberWASP fantasia lives on…..)

In keeping with the New Austerity, I expect to see photo spreads of Michelle and the girls making recycled tree ornaments for the White House Christmas tree and clever little homemade gifts for Daddy–whose state gift of a boxed CD set to Queen Elizabeth 2 was, I suspect, only a symbolic beginning of things to come. Look for winter fashionistas to start touting black as the new black, and TV reality characters to start pointing at advertised “sales prices” while jeering into the camera. When the nightly business commentators start using the word “subdued” to describe our lack of enthusiasm for parting with our money come years’ end, we’ll know the shopping season is going to be a disaster.

The leaves are falling here on the mountain, but this year their burst of color has been muted. Long-term drought, atmospheric grunge from the LA fires, a less-than-abundant harvest in the Central Valley; everything just seems depleted somehow— as overdrawn as our beleaguered checking accounts.

But as winter approaches, there is yet cause for celebration and cheer. Though the days grow short and the shadows linger, our numbers increase and our hearts grow full.

Muggy has a new baby girl. And she is a Libra.

Let the celebrations begin!

by ahansen

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Comment by Ben Jones
2009-10-27 10:06:49

FYI, for reasons I mentioned last week, the by lines for guest posts are at the end.

Comment by pressboardbox
2009-10-27 10:19:09

Anyone who doesn’t see a rosy picture is a racist!

Comment by Hwy50ina49Dodge
2009-10-27 10:41:33

To some of these folks below, it’s ALL “rosy” ;-)

“The 2.7 million millionaires in the U.S. and Canada had $1.3 trillion in cash in 2008, based on a survey released in June by Capgemini SA and Merrill Lynch & Co. Investors put $19.2 billion into 55,480 companies last year, according to the Center for Venture Research at the University of New Hampshire in Durham.”
Cash-Distressed Business Offers Investors Way to Follow Buffett:
Oct. 22 (Bloomberg) By Alexis Leondis

(Hwy notes that was in 2008…so it might have changed for some folks above…)

Comment by Reuven
2009-10-27 11:50:00

For a while, official measurements of household net-worth included imagined value of one’s primary residence. (I argue that one’s primary residence should never be counted in a household net-worth calculation.) I’m wondering if these numbers included that vapor wealth.

Comment by Hwy50ina49Dodge
2009-10-27 12:24:04

Excellent point,…it does say cash… 1.3 Trillion…T as in “Terrific”

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Comment by Sammy Schadenfreude
2009-10-27 15:23:32

The 2.7 million millionaires in the U.S. and Canada had $1.3 trillion in cash in 2008

In Zimbabwe, everyone’s a millionaire thanks to the wonders of the printing press and public debt. When the Fed starts hyperinflating its way out of its financial obligations, we’ll all be millionaires too! Aren’t you excited?!

Comment by GH
2009-10-27 15:34:51

The time to be concerned about inflation was BEFORE the bubble. Now we face nothing good at all. Take deflation and wholesale debt collapse or inflation those are the choices we now face. The decision to avoid those choices should have been made before this all got out of control.

The bottom line… If we did not want this outcome in our lives, the debt should never have been allowed. Now it is time to pay up in cash or in kind.

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Comment by Jim A.
2009-10-27 15:59:11

I agree. Broad measures of the money supply expanded greatly but had little effect on CPI because for the most part, the money went into RE, equities, and bonds. Now much of the money is disappearing.

Comment by Professor Bear
2009-10-27 18:41:27

I personally plan to feel a sense of pride and accomplishment once our household net worth exceeds $1m, regardless of the number of 2010 dollars it takes to equal one 1913 dollar.

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Comment by Diogenes (Tampa, Florida)
2009-10-27 13:13:58

I don’t see a rosy picture. I am a racist, but no more so than Jesse Jackson, Al Sharpton, Malcolm X, Louis Farrakahn?, and an assorted list of self-appointed “leaders” of the black community.
So, what’s your point?
Do I believe Obama is a useless idiot? Yes, i do. That is why he needs a teleprompter and EVERYTHING about him, including all grades, papers, credentials of sort is hidden and not disclosed.
I would reveal to the world what a sap they have fallen for.

Comment by exeter
2009-10-28 06:47:50

Daily doses of Drugster LintBall is more powerful than booze I see.

Comment by Professor Bear
2009-10-27 18:38:19

Anyone who doesn’t see a rosy picture is a racist! gloomster.

Comment by speedingpullet
2009-10-27 10:32:46

LOL, even as I’m reading this, the other eye is watching the CNN reporter crow about the fabulous news of rising housing sales.

No mention of any reasoning behind the uptick, just joy that things might just be returning to normal - whatever normal means any more….

Thanks for the well written and well thought out article.

Comment by pressboardbox
2009-10-27 10:41:41

No kidding. Ahansen, are you sending any of these to the NYT or any other papers hurting for well-written content? I would shotgun every editorial column in every rag imaginable if I could write my jumbled, rash, profanity-laden, straight-jacket invoking thoughts as eloquently as you.

Comment by Hwy50ina49Dodge
2009-10-27 10:47:13

+1 :-) (Hwy would like to give special mention for the articles ending tone of “Cheerfulness”!)

Comment by DebtinNation
2009-10-27 11:12:04

Uhh, yeah, I don’t think NYT or any so-called traditional media is going to be publishing anything that goes against the grain of their clueless, rah-rah reporting any time soon.

Comment by cobaltblue
2009-10-27 12:52:28

“Uhh, yeah, I don’t think NYT or any so-called traditional media is going to be publishing anything that goes against the grain of their clueless, rah-rah reporting any time soon.”

There is one clue: The NY Times has become an unabashed cheerleader for the Democratic National Committee, and nobody else.

NY Times = O-Bot Times = DNC propaganda

What you don’t find in the NY Times anymore is actually the real news.

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Comment by SanFranciscoBayAreaGal
2009-10-27 14:16:59

That can be said for any newspaper or news media that side with the democratic or republican party.

Comment by Eddie
2009-10-27 17:24:01

You can count on one hand the number of big-city newspapers that side with the GOP. And for every one of those there are 20 that side with the Dems. The NY Times, WashPo, LA Times…the 3 biggest in the country are 100% in the tank for Obama.

Comment by alpha-sloth
2009-10-27 18:48:26

Yeah, Murdoch’s pretty powerless. Can’t get his viewpoint out. (Say! Have you heard the latest from FOX news/Wall Street Journal? Obama’s a baby-killer!)

Comment by bink
2009-10-27 13:12:53

Well, the Washington Post did publish this today:


Congress and the administration seem likely to extend the first-time-home-buyer tax credit. Senate Majority Leader Harry M. Reid wants to extend it through December 2010 but phase out the amount over time; Republican Senator Johnny Isakson, a former real estate agent, wants to extend it through June but double the income limit and make it available to all home buyers.

This is a bad idea.

I think it’s been posted here already.

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Comment by Professor Bear
2009-10-27 14:39:16

Bad idea for whom? Certainly not for Congressmen anticipating campaign contribution rewards from the REIC upon voting for passing the $8K tax credit’s extension…

Comment by RI renter
2009-10-27 14:56:09

Have they indicated how this extension would be “deficit neutral”? Or is that just another broken democrat promise.

Comment by DD
2009-10-27 15:16:27

just another broken democrat republican promise.

Comment by GH
2009-10-27 15:36:39

It is pretty clear to me that once we lost our political process to lobbyists and special interest groups we lost our country.

Comment by Professor Bear
2009-10-27 18:44:02

‘Have they indicated how this extension would be “deficit neutral”? Or is that just another broken democrat promise.’

Just cut the bullsh!t. There is no way that yet another REIC subsidy can pencil out as ‘deficit neutral’, unless you consider the kickback into Congressional campaign coffers as part of the equation.

Comment by DD
2009-10-27 15:03:41

Remember to look at who owns the media sources
(clear channel, rupertmurdoch etc)
in that the NYT seems to be the only one that does show a bit of both sides, and the others..not so much. At all.

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Comment by Sammy Schadenfreude
2009-10-27 15:28:52

Ahansen, are you sending any of these to the NYT or any other papers hurting for well-written content?

You’re joking, right? Do you think the NYT - or any corporate-owned propaganda outlet - is going to print real news or real truth?

Today Pravda (The old Soviet propaganda mainstay that had the gall to call itself ‘Truth’) noted that the US has moved decisively toward socialism. The world has indeed turned upside down.

Comment by Professor Bear
2009-10-27 19:45:14

Good lawd — Pravda is starting to seem relatively more truthful than the truthy US MSM.

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Comment by ahansen
2009-10-27 11:00:30

Thanks pressboardbox. It’s been so long since I’ve done a regular column that all my literary contacts are either dead or in end-stage cirrhosis.

If anyone out there wishes to represent me, I’m certainly amenable. Recession and all, you know….

Comment by Kim
2009-10-27 12:06:45

I don’t have any literary contacts, but I sure enjoyed your post, Ahansen!

Comment by SanFranciscoBayAreaGal
2009-10-27 12:12:10

Have you posted anything on Open Salon?

Comment by ahansen
2009-10-27 12:21:32

Yep. Same moniker.
Got a lot of “editor’s picks” with the ursadent series, but pulled it on advice of my (ex) agent(!) I may reconsider.

Thanks so much for your support of late, incidentally. Most appreciated. Hugs to mum.

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Comment by SanFranciscoBayAreaGal
2009-10-27 12:35:12

Mom says thank you for the hugs. She will have her last treatment of chemo next week. Keeping our fingers crossed this will keep the cancer at bay for a few years.

Comment by Housing Wizard
2009-10-27 13:16:12

All the best to your Mom SFBAG , and always to you also .I don’t know if people have noticed what a wonderful person you are .

And ahansen ,what a great piece of writing you have done .

Comment by Olympiagal
2009-10-27 13:21:29

I don’t know if people have noticed what a wonderful person you are .

Well, of COURSE we have.

Comment by SanFranciscoBayAreaGal
2009-10-27 14:15:20

Thank you all for the kind words. A big hug and kiss :)

Comment by CarrieAnn
2009-10-27 14:20:41

I wish your Mom the best too, SFG, and glad she’s almost at the end of this experience. I’m hoping it’s smooth sailing from here on in.

Comment by alpha-sloth
2009-10-27 14:24:06

I noticed. And I hope your mom is well.

Comment by wolfgirl
2009-10-27 15:11:09

Same here

Comment by SanFranciscoBayAreaGal
2009-10-27 15:47:24

All of you thank you so much for your kind words.

Comment by Olympiagal
2009-10-27 15:53:18

Hey, where’s 8-up? He’s been MIA for more almost 2 weeks. SanFran, tell him to come back. And to meanwhile not snuff anyone.

Comment by alpha-sloth
2009-10-27 17:46:19

‘Where’s ATE-UP?’

Wondered the same thing myself. I missed a week, thought he’d gone on vacation or something. You out there ATE?

Comment by WT Economist
2009-10-27 10:34:11

If not the Great Depression, we may be in for a period of extended economic weakness and serial crisis similar to 1973 to 1983, the formative years of many of us.

Then again, one could argue that this period actually began in 2000, and might end up lasting 20 years rather than ten before it is over.

Rather than a GD-like collapse, how about Great Britain from 1945 to 1980? Japan post-1994?

Comment by ahansen
2009-10-27 11:14:03

I’ve long held that this downturn will end only when the bulk of the baby boom gets trundled off to assisted living facilities and our real estate sold back into the general economy.

I’m guessing 2020 or so, barring some global catastrophe.

Comment by WT Economist
2009-10-27 11:30:48

It will take later than that. I’m near the back end, and I’ll be less than 60 in 2020. Perhaps 2040?

Comment by ahansen
2009-10-27 12:02:19

I’d like to think that we’d have come up with some compensatory technology in the next decade to offset the economic resets. And I’m guessing a fair number of boomers will not have the financial wherewithal to stay in their own homes post-retirement, thus freeing up the bulk of that real estate.

But who knows how we’ll manage to screw things up by then?

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Comment by Cassandra
2009-10-27 12:12:35

Naw, the Chinese will buy it, remember?

Comment by VegasBob
2009-10-28 02:21:36

We won’t see true economic recovery until we write off all the toxic bad debt sloshing around in the financial system. That ain’t happening anytime soon. Instead, we are repeating all the mistakes the Japanese made. So I think 20 years of economic malaise is baked in the cake.

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Comment by oxide
2009-10-28 04:51:02

How late depends entirely on the DOW and health care. One of the causes behind the unemployment rate is that all those baby boomers are supposed to be retiring, opening up jobs for the younger generation. Instead, boomers are hanging on, waiting for the DOW to recover. Presumably, once most of the boomers do retire, a younger worker will pay more in taxes than the old boomer will use in Social Security and Medicare (maybe).

Of course, by then, the Millenials will all be looking for jobs too, and they are more net-savvy. The X and Y’s better hope they have skillz that can’t be upstaged by some Facebook whiz.

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Comment by CarrieAnn
2009-10-27 14:33:26

I was thinking problems will accelerate as the bulk of boomers retire or are forced to retire and they start pulling investments out of the markets en masse.

Comment by ahansen
2009-10-27 13:02:22

We tend to forget that Japan isn’t out of the woods yet—even after 15+ years of recession. If the US is on the same path, it doesn’t bode well.

David Einhorn had this to say in yesterday’s excellent guest post published on Mauldin’s blog.

“..Japan appears even more vulnerable, because it is even more indebted and its poor demographics are a decade ahead of ours. Japan may already be past the point of no return. When a country cannot reduce its ratio of debt to GDP over any time horizon, it means it can only refinance, but can never repay its debts. Japan has about 190% debt-to-GDP financed at an average cost of less than 2%. Even with the benefit of cheap financing the Japanese deficit is expected to be 10% of GDP this year. At some point, as American homeowners with teaser interest rates have learned, when the market refuses to refinance at cheap rates, problems quickly emerge. Imagine the fiscal impact of the market resetting Japanese borrowing costs to 5%.

Over the last few years, Japanese savers have been willing to finance their government deficit. However, with Japan’s population aging, it’s likely that the domestic savers will begin using those savings to fund their retirements. The newly elected DPJ party that favors domestic consumption might speed up this development. Should the market re-price Japanese credit risk, it is hard to see how Japan could avoid a government default or hyperinflationary currency death spiral….”

Comment by DD
2009-10-27 15:06:44

One of the situations in Japan is that the birthrate is way down, and the country has never been a big one for immigration. So, as they are good businesspeople/technologically advanced etc, they have those two aspects to deal with vs the US- rampant immigration for centuries.

Comment by polly
2009-10-27 10:41:52

My catalogs never really followed me from Jersey City, so I don’t expect to get that many. The museum ones always arrive (Met, MOMA, Art Institute of Chicago, etc.) and a very few others (Think Geek, The Learning Company), but not much. The rest come in endless e-mails that arrive nearly daily (Levenger, Harry and David I am looking at you).

Holiday shopping? I’m about half way done at this point. Some will get books, others some small toys. A few adults will get “forced” to indulge themselves in their favorite restaurant and others will get a family museum membership that they use several times a week. So, some useful stuff, some less useful but none of it all that expensive, and to the extent I can, very little of it made in China.

But what I am really looking at these days is rents. They are plummeting in my area. Yes, even the much vaunted DC economy is seeing lower rents. In some cases, much lower. I share your ambivalence on economic issues - I have no desire to see the suffering that real collapse will bring, but there is a little piece of me that wants to know where things would actually end up if the artificial props were kicked away all at once. All in all, I think that what we want to see, or hope to see matters very little. Things will completely collapse or they will not. It will happen quickly or slowly. Very few people have any ability to affect the timing or the speed, and we are not among them.

I never really thought I would end up in the fatalistic camp, but here it is and here I am. C’est la guerre.

Comment by wolfgirl
2009-10-27 11:12:32

Haven’t started Christmas shopping yet, but it won’t be a big deal. No one really needs much of anything, so I’ll just get small silly stuff.

Comment by Kim
2009-10-27 11:58:34

Almost done here, maybe 90%. I traded in credit card points for gift cards early this year, just in case the issuer follows BOA’s lead and tries to charge me an annual fee and I have to cancel the card in a hurry. I guess now I just have to worry about these places staying in business through December 26.

Comment by shelby
2009-10-27 12:31:09

Now Polly, you quit painting a not-so-rosy picture for DC !!!

Don’t you know everything here is perfect & uneffected by the “recession” that is everywhere else??

Don’t forget that DC has ALL the jobs now, everyone is moving HERE & the RE Market here never goes down!!!


Comment by Bill in Carolina
2009-10-27 13:07:20

And Barney says for all the world to hear that the Dems will continue to do all they can to make government bigger. Washington will thrive.

Comment by Sammy Schadenfreude
2009-10-27 15:31:43

And the sheeple say ‘Amen!’

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Comment by DD
2009-10-27 15:42:12

And the reps say but but clinton…

Mission Accomplished.

Comment by Don't Know Nothin About Buyin No House
2009-10-27 11:03:07

Despite crummy yields, US Treasuries continue record sales. Foreigners and locals alike cannot get enough of them, driven by their strategic, long term perspectives that reflect concern about unemployment, long term economic growth and the resulting flight to safety.

Just kidding.

It is a grab bag for US cheap money to buy higher yielding assets to create new bubbles.


Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.

“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”

Comment by arizonadude
2009-10-27 16:38:55

Arent the kinds of goldman and jp morgan borrowing from the fed and buying treasuries which they called trading revenue?They can even use their existing treasuries as collateral to buy other treasuries.This sure seems like funny economics to me.

Comment by Olympiagal
2009-10-27 11:09:49

Well, I have to say it, and criticism be dam*ned, but when I first saw the cupcake cars I was entirely enchanted. Except I want it to be a REAL gigantic cupcake, with large festive sprinkles—not some stupid pretend giant cupcake. This one doesn’t even have a rocket launcher disguised as a huge candle! What’s the use of that?!
Another thing that convinced me not to get one was that I bet they would navigate wetlands and streams mighty poorly.
…Although one could wear those awesome matching hats anywhere.
Jeeze, Christmas shopping can be hard!

And, as per ahansens last words of cheeriness, I would like to point out that Libras are, in fact, best.

Comment by Jim A.
2009-10-27 11:14:35

Ahh yes, the Delta Deathmobile.

Comment by Olympiagal
2009-10-27 11:59:28

Except delicious and adorable.

….Although this one might be nice, too:


Comment by Sammy Schadenfreude
2009-10-27 15:34:35

Ah yes, the Delta Deathmobile, terror of small-town parades. Just what I was thinking. Let’s see ‘em build a better one of those in Japan.

Always thought we at the HBB should covertly build our own HBB-themed deathmobile, then start noisily shadowing realtor “parade of homes” tours. Until they pay Ben enough to make us go away.

Comment by Olympiagal
2009-10-27 15:56:45

…the Delta Deathmobile, terror of small-town parades…

You say ‘terror’: I say ‘joy’…
….when you think about it, aren’t these just two sides of the same delicious golden-foil-covered-chocolate-coin?

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Comment by Kim
2009-10-27 12:00:51

What, you don’t think those cupcakes could float??? Why, surely for $25K those wheels are retractable for water travel!

Comment by Olympiagal
2009-10-27 12:38:36

They don’t look very floaty. They look more sinky. And I know alllllll about ’sinky’ experimental craft, from experience.
But that is a story for another day.

Anyway, for 25K they should da*mn well come with pontoons. Or else a mid*get with a paddle strapped to the back.

Comment by DD
2009-10-27 15:13:57

Or else a mid*get with a paddle strapped to the back.

How did you find my old boyfriend?

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Comment by Olympiagal
2009-10-27 15:57:49

Your old boyfriend can paddle a giant experimental cupcake?!
Sign him up, woman!

Comment by Olympiagal
2009-10-27 12:43:49

Kim, I suspect that you, too, secretly want a giant cupcake to zip around in. Can this be?

Comment by alpha-sloth
2009-10-27 15:04:18

Wouldn’t America be a happier place if we all drove cupcake cars? Traffic jams would be cheerful. Even traffic accidents would be humorous. If our reality is going to suck for the next decade or three, let’s opt for surreality.

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Comment by Olympiagal
2009-10-27 16:11:12

Slothy, you’re a freakin’ genious. I’ve already remarked on it.
And now I shall address your thoughts in good order:

Wouldn’t America be a happier place if we all drove cupcake cars?

Totally! It’s hard to see how it could be otherwise, really. I mean, they’re sweet and delightful cupcakes. Who could hate a cupcake? Only commies.

Traffic jams would be cheerful. Even traffic accidents would be humorous.

Like a comical, low-speed exchange of frosting and sprinkles!

If our reality is going to suck for the next decade or three, let’s opt for surreality.

How sucky do you mean? Beans into peas? Cats with dogs? I’m not convinced it’s going to totally suck. Minor suckage, sure, with scrap-booking and pirate-gear stores failing all across the land. But that could be good. Because scrap-books bug me, and I already have all the pirate gear I will ever need.

Comment by Doghouse Riley
2009-10-27 16:20:38

“scrap-books bug me, and I already have all the pirate gear I will ever need.”

Do you have enough colorful covers for your cellphone? There are -three- kiosks in our local mall where these necessities can be acquired.

Comment by Olympiagal
2009-10-27 17:34:13

Do you have enough colorful covers for your cellphone? There are -three- kiosks in our local mall where these necessities can be acquired.

What?! No. My cellphone cover is all grubby looking.
Jeeze! You must think I’m sort of Japanese school-girl!
…And those are good, for sure, but I’m not one. Alas.

Comment by DD
2009-10-27 19:53:15

Like a comical, low-speed exchange of frosting and sprinkles!

It would be difficult to come home with your side swiped with different colored sprinkles.HOW would you explain that?
Or with a bite outa somewhere, um, ‘questionable’?LOL
No, honey, I was just driving along minding my OWN business and, no, I didn’t ‘collide’ with someone else. OH THIS? must have happened in the parking lot.

Comment by wolfgirl
2009-10-27 15:15:38

I’d like a carrot cake cupcake car with cream cheese icing.

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Comment by wolfgirl
2009-10-27 15:14:25

And a real cupcake car would be fun. And you would have a snack with you.

Comment by DD
2009-10-27 15:23:57


A few cars for you to enjoy.

Comment by alpha-sloth
2009-10-27 15:29:19

Car wrecks would be even ‘funner’. Cake for everybody!

Comment by pressboardbox
2009-10-27 11:10:05

When a ship sinks, people make do and find the lifeboats.
When an ‘unsinkable’ (rigged) ship sinks there are no lifeboats.

-why would an unsinkable ship ever need lifeboats?

-look out.

Comment by Sammy Schadenfreude
2009-10-27 15:35:57

The Titanic was too big to fail.

Comment by GH
2009-10-27 15:40:46

What happened to the Titanic was “unforeseeable”. No one could have known there were ice bergs in the North Atlantic. :-)

Comment by DD
2009-10-27 15:44:27

The walls weren’t built all the way to the tops of the boat, portending the forthcoming shoddy workmanship to cut costs ala china, many yrs later- 2000-2009.
It might have survived but lets cut costs to put in the wealthy pockets of the owners of corp.

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Comment by Jim A.
2009-10-27 16:06:35

Not so much cost, as the fact that automaticly closing watertight doors are “ugly” and they didn’t want them to intrude into the corridors of first class.

Comment by Olympiagal
2009-10-27 17:37:14

Not so much cost, as the fact that automaticly closing watertight doors are “ugly” and they didn’t want them to intrude into the corridors of first class.

Really? For truly, Jim A?
The quest for beauty doomed everyone?!
As a fan of aesthetics and nice doors, I don’t want to believe you.
I better research this matter.

Comment by DD
2009-10-27 19:55:42

I better research this matter.

Hurry I can’t wait. I have caught all the PBS, History stuff, but always caught it was “hurry, get it done earlier, and cheaper”
I can see the First class portion, but the entire ship? Doesn’t float with me.yuck yuck.

Comment by Professor Bear
2009-10-27 11:16:38

Congratulations to the MarketWatch folks for finally noticing the inverse correlation in US dollar-stock price movements many moons since they were pointed out on the HBB!

MarketWatch dot com

Street stalking U.S. dollar

Greenback’s newfound status as a funding currency leaves its moves highly
correlated to equities and other riskier assets.

Pimco’s Gross calls top of rally in risky assets

Comment by Doug in Boone, NC
2009-10-27 11:20:42

I read yesterday in the WSJ (don’t remember who wrote the article) that not paying your mortgage is good for the economy. Supposedly, the article said, people who don’t pay their mortgages will free up some money that they will spend on other things, thus boasting economic spending. Talk about desperation!

Comment by VaBeyatch in Virginia Beach
2009-10-27 12:04:26

Plus the bank gets to book extra profits from the interest that will be made (supposedly) as the loan takes longer to pay off?

Comment by Sammy Schadenfreude
2009-10-27 15:37:01

Plus some sap like me, who rents, saves, and lives within his means, will be taxed to pay your mortgage.

Comment by 3rd Generation
2009-10-27 11:22:45

Very Nicely done. One more thing (or “issue” as the MSM likes to say (instead of ‘huge fuc*ing problem’). When the winter winds blow and the snow drifts are freezing and tall and the elderly are deciding whether to freeze to death (heat bill) or starve (the lucky ones deciding on which brand of cat food to eat (Omamanomics), and the autoworkers’ free MaObama cheese runs dry and the kids are hungry and need changing and the Wall Street white shoe boys and girls trumpet their record earning and obscene taxpayer-sponsored bonuses, where will the first violence occur? Detroit, Wall Street, the Hamptoms? Cleveland. Who will Go First? More importantly, when the first window glass gets shattered by destitute and optionless former middle-class American Citizens (aka “consumers”) and the momentum builds for retribution Who will stop the Violence?

Are you personally prepared? Think about it. Or Not and watch some more Idol and NASCAR reruns (maybe if you play the same NASCAR race over again there will be a new ‘Winner’?).

Americans are idiots and the Nation is Finished. Kaput. Finito.

Debt Slavery or worse awaits.

Comment by Olympiagal
2009-10-27 11:43:45

I like your anger!
And also your gloomy plans.
…Say, do you happen to have a rocket launcher disguised as a cute giant pink candle? Because I need one.

Comment by 3rd Generation
2009-10-27 11:52:56

OLYgal: First of all, You’re Welcome. My Pleasure. FYI, my personal plans are Reagent Grade clear and doom, death and debt slavery is not included in the mix for me. The bunker is well stocked and the pitchforks are all tuned up, metaphorically speaking, of course…

As for the giant pink candles, let me guide you to: http://www.peopleofwalmart.com. They surely can assist you or show you The Way. All the Best in the Die Off. Good Luck.
Carpe Diem.

Comment by Bill in Carolina
2009-10-27 13:11:22

3rd, posters here were predicting “blood in the streets” as far back as 2006, when I discovered this blog. They’ll be predicting the same ’til kingdom come.

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Comment by snake charmer
2009-10-27 18:43:11

I am one of those people and I have not changed my tune.

Comment by rms
2009-10-27 23:37:05

“They’ll be predicting the same ’til kingdom come.”

Don’t laugh so fast. The Kingdom’s original borders are slowly expanding, bought with our blood and money. Plans are underway to import Palestinians to the U.S.A., and setup ‘em up on generous welfare plans; you see, it’ll make the occupation easier. Enjoy!

Comment by Olympiagal
2009-10-27 11:47:33

Here, let me add to your Weltschmerz, while continuing on with the starvation/riot theme.

“Iceland’s economy freezes out McDonald’s”


‘Icelanders will be saying “vertu blessaður” to any future cravings for a Big Mac or Chicken McNuggets.

The three McDonald’s (MCD) restaurants in Iceland will close at midnight on Oct. 31 because of surging costs as a result of the country’s economic collapse over the past year. All three stores are in the country’s capital, Reykjavik.

The horror! The horror…!

Comment by mikey
2009-10-27 13:15:17

One of the best lines.

“What are the charges ?”

You had to be there to enjoy it.

173d Airborne

Comment by SanFranciscoBayAreaGal
2009-10-27 14:19:01

I want to be an Airborne Ranger, I want to live a life of danger… ;)

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Comment by Cassandra
2009-10-27 20:38:22

Move to Oakland.

Comment by Jim A.
2009-10-27 16:11:08

From “the 213 things skipy is no longer allowed to do in the U.S. Army”

35. Not allowed to sing “High Speed Dirt” by Megadeth during airborne operations. (“See the earth below/Soon to make a crater/Blue sky, black death, I’m off to meet my maker”)


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Comment by Blue Skye
2009-10-27 13:42:40

I’m ready for the snow drifts. Just polished up the finest batch of applejack EVER.

Catfood? I think Albacore is cheaper.

Comment by ahansen
2009-10-27 14:10:13

I’m envious!

My apple harvest was nonexistent this year, and the birds got everything else. Was looking forward to a toasty and well-lubricated winter. Maybe the potatoes will come through for me…?

You um, still building?

Comment by Blue Skye
2009-10-27 14:12:06

Yes, I think that one cannot be too well lubricated.

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Comment by CarrieAnn
2009-10-27 14:29:53

Blue Skye–

Not sure how far you drive for apple picking but Beak and Skiff apple orchards in Tully is offering apple vodka. Heard it from Marshall Skiff himself. It was his summer project.

Hey! How’d the rest of your sailing adventure go? Anything else you didn’t get to report?

Comment by MV Renter
2009-10-27 16:03:28

Beak and Skiff! I really do miss Central New York sometimes. Haven’t been there in years. I would always eat too many apples and give myself a stomach ache.

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Comment by CarrieAnn
2009-10-27 17:38:52

and it’s been beautious weather most of October. You must come back for a visit!

Comment by Blue Skye
2009-10-27 19:02:36

Carrie, I only drive to Penn Yan and fill the jugs at the cider mill. There is a discount for those “making a run”.

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Comment by scdave
2009-10-27 14:40:44

deciding whether to freeze to death (heat bill) or starve (the lucky ones deciding on which brand of cat food to eat (Omamanomics) ??

Yeah while Bush eats free range steak and chokes on more chips watching his Cowboys…

Comment by alpha-sloth
2009-10-27 18:08:43

Don’t you realize ‘Omama’ has destoyed America’s economy in less ten months? Everything was hunky-dory until his socialist ways messed up the party. (Oh, that’s right- ‘Bwarney’ set the stage. The repubs were manning the battle stations, repelling the Hun. Whatevah…)

Comment by Blue Skye
2009-10-27 19:06:30

Crazy talk. It isn’t about idealogies at this stage. It’s about the machine.

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Comment by DD
2009-10-27 20:00:17

It’s about the machine.

That is the bottom line. The MACHINE is broken. Both sides, the dem blue dogs who are not conservative but Corporate Dems, and the reps who are hogtied by their far right side, they are all hog tied by the Corporate Lobby Machine and it owns our votes. Some folks are good, but many -both sides have nowhere to go to get out from under the bus they ‘waved on’.

Comment by exeter
2009-10-28 06:53:22

Cmon now DD… Everyone knows that patriotic God fearing republicans aren’t corporate apologists.

Comment by Sammy Schadenfreude
2009-10-27 15:40:26

where will the first violence occur? Detroit, Wall Street, the Hamptoms? Cleveland. Who will Go First?

That’s all we need, thugs and lowlifes using a grim economy as an excuse to rob, rampage, and loot. Better not try it my ‘hood.

Comment by Lisa
2009-10-27 11:35:32

“How long will it take before GD 2.0 hits its stride and we all admit that the well-orchestrated booster-ism our media has been feeding us hasn’t worked out so well this time? As any reader here can testify, just because something is trumpeted over and over by those in “authority” doesn’t necessarily make it so.”

What an amazing post. I’ve had a couple of folks say to me “I hear the economy is getting better”, to which I reply…do you see anything getter better? Is your business picking up? Is your neighbor employed again? Is your company hiring or giving raises? Do you actually know anyone whose economic situation is improving??

I’m all for optimism and positive energy in life, but the gov’t and MSM saying “green shoots” over and over again won’t bring about a recovery.

Comment by Professor Bear
2009-10-27 11:43:41

‘As any reader here can testify, just because something is trumpeted over and over by those in “authority” doesn’t necessarily make it so.’

Case in point: Remember way back around August 2007, when subprime was going to be ‘contained’ to a loss of $200 bn? Did anyone keep score on how well that ‘prediction’ panned out?

Comment by Lisa
2009-10-27 13:03:21

“Case in point: Remember way back around August 2007, when subprime was going to be ‘contained’ to a loss of $200 bn? Did anyone keep score on how well that ‘prediction’ panned out?”

I remember, too, the Iraq War was supposed to pay for itself with the country’s oil revenues.

Comment by scdave
2009-10-27 14:44:04

to pay for itself with the country’s oil revenues ?

I remember that one also…

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Comment by Sammy Schadenfreude
2009-10-27 15:43:12

And they would be dancing in the streets to welcome us. Neo-con shills like Judith Miller of the New York Times worked closely with Cheney and his neo-con cabal to sell the Iraq invasion to the US public. The NYT is still peddling agendas and propaganda.

Comment by DD
2009-10-27 15:50:31

Thank goodness she was finally fired. But the evil man incarnate is still alive. How does that happen?

Comment by Wine Country Dude
2009-10-27 18:21:23

Well, perhaps because he was not the “evil man incarnate” in the first place.

(What? Did you hear what that man said? Cheney was not Beelzebub! He did not appear in Saw IV! He was not present at My Lai!

(Tell me again about the coarsening of our national rhetorical life by the right wing)

Comment by DD
2009-10-27 20:03:26

He was not present at My Lai!

yup he got 4 or 5 deferments and has no real compassion for the military men/women past or present..or gays, except HIS daughter and so on. What is good for the goose, doesn’t apply to that gander.

Comment by 3rd Generation
2009-10-27 12:00:22

Isn’t it a Great Time to Buy? I keep hearing this…. bwa ha ha ha

The Story Of 21 Year Old With The Underwater FHA Loan Is Even Worse Than You Think
John Carney|Oct. 21, 2009, 8:45 AM | 8,228 | 81

A few days ago we told the story of Denise Tejada, the 21 year old California woman who bought a house with an FHA backed loan with almost no money down.
Readers were outraged.
And rightfully so. It’s our money on the line and it is simply outrageous that our government is still encouraging these kind of loans to be made. Even if Tejada pays off her loan in full, it was an insane gamble on our behalf to have the government back her loan.
But as it turns out, the gamble was even more insane that we originally reported.
Scott Jagow, who writes the Scratch Pad blog for American Public Radio’s Market Place, explains:
Denise got an FHA loan to buy her home for $155,000. She took out a second loan (called a 203-K loan) to refurbish the place. The total loan amount is about $183,000. She says, “In total, I gave the bank $5,087 + $1,500 which were all deposit and closing costs.”
So her “down payment” was no more than 4% of the value of the home when she bought it. She will get all of that back and then some with the first-time home buyer tax credit.
In other words, thanks to the various government tax breaks, Denise put absolutely no money down on her home. If she has to default on her mortgage, she’ll lose nothing except her credit rating. Of course, since she’s only 21 years old, there’s plenty of time to recover from that.
How is the FHA still engaged in promoting this kind of lending? Barney Frank has explained that expanding home ownership is the policy of the United States. Now, more than ever, the government wants to promote home buying to prop up the great American home ownership scheme. If people like Tejada can’t buy a home with no money down, then the recession wins.

Don’t you feel awesome for helping Tejada achieve the American dream?

Comment by ahansen
2009-10-27 12:28:58

“…Don’t you feel awesome….”

Nope. I just feel nauseated because she and her ilk will probably be running the country when I’m too decrepit to screed about it.

Comment by CarrieAnn
2009-10-27 14:43:10

I do feel good about the backlash, however. That’s something!

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Comment by Hwy50ina49Dodge
2009-10-27 15:21:54

“…Barney Frank has explained that expanding home ownership is the policy of the United States”

3rd Generation, what were you attending a “TrueBeliever’s™ & TrueDeceiver’s™” meeting this day and miss it?


May 2002

Listen to all the applause from this “non-public” speech! :-)

Comment by DD
2009-10-27 15:47:47


How did he get this far?..

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Comment by 3rd Generation
2009-10-27 16:15:48

I really cannot listen to that formed Idiot-in-Chief, The decider, remember him? for more than a few seconds without feeling the waves of naseau wash over me. As far a Butt-Buddy Barney and his asinine (no pun intended) view of the world, well, let’s just say its not MY view and leave it at that. Feel Free to quote Barney though, he’s a real patriotic american and should be held up as a role model whenever possible. Have any sons?

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Comment by Paul Mayson
2009-10-27 22:08:36

Wow, this is exactly what I have been seeing here in Florida. Scores of young people using FHA and 203K to get the foreclosure house up to par. In debt to their eyeballs. The same old game. It isn’t that it is seems wrong…it is all the gov. could come up with in order to buy more time. And as I have been saying and I am certain of….we shall see a tidal wave of FHA defaults become HUD homes. This will take some time to manifest…but it is coming. Home prices will be in the gutter when this is all done. They are giving out loans to anyone that can breathe. No need to have good credit. They are giving these loans to the ignorant who when one thing goes wrong in their life…like a break up….they will just say F it and abandon the house and loan. I have been looking for a house. Made an offer on one. The loan agent worked her butt off to get me to take an FHA with 203K. When I said NO, I’m going conventional and will fix the house up as I get the money…she didn’t like that. She wanted me to take the more costly loan and be in debt up to my eyeballs. BrotherInLaw says to take the FHA and keep my downpayment. Inflation is coming. The FHA loan is cheap and I can use my cash to get a higher yield when the inflation kicks in. I like the idea of paying off the house fast, minimizing my insurance, taking the tax exeption for wounds in battle…and telling the system to F off.

Comment by Professor Bear
2009-10-27 11:41:41

How come Gross suddenly developed a severe case of cold feet on mortgage-related securities? Should this be interpreted as a sign that higher mortgage interest rates are “in the bag”?

“Almost all assets appear to be overvalued on a long-term basis,” Gross wrote. “Policymakers need to maintain artificially low interest rates and supportive easing measures in order to keep economies ‘on the right side of the grass.’”

Gross, manager of the Pimco Total Return Fund , the world’s largest bond fund, has been busy unwinding exposure to mortgage-related securities. He dumped roughly $30 billion of such assets in September, leaving his fund with its smallest portion of mortgage holdings in more than four and a half years.

Comment by snake charmer
2009-10-27 12:27:35

I hope Gross is drawing the connection between artificially low interest rates and overvalued assets.

Comment by Professor Bear
2009-10-27 14:43:20

I think he’s drawing the connection between artificially manipulated super-low current interest rates and a reversion to higher future interest rates when squashing them down is no longer a viable option for the Fed.

Comment by scdave
2009-10-27 14:46:58

a viable option for the Fed ??

Question is; When ?? Maybe sooner than we think ?? Maybe all the happy talk and Happy numbers are “cover” for the Fed to do just that…

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Comment by Professor Bear
2009-10-27 19:40:46

I am still waiting for someone to provide a cogent explanation for why they cannot keep pushing down l-t T-bond yields forever. Nobody has stepped up to the plate yet on this one…

Comment by 3rd Generation
2009-10-27 12:04:09

Do you Love/Hate Realtors (used-house peddlers, I mean)? :

This is a classic. A Must See. Trust Me.

Ask yourself, after viewing the short clip above, IF you saw these two in a crosswalk, and you were heading straight for them, would you step on the gas or the brake?

Thought so.

Comment by Reuven
2009-10-27 13:20:09

Wow! What contempt they have for their clients!

Comment by alpha-sloth
2009-10-27 19:05:53

Don’t know many salespeople?

Comment by ahansen
2009-10-27 14:43:08

OMFG! Keel them!

I’m sorry, 3rd. I tried to watch it though, really I did. But midway through the third verse I had to rush downstairs and stick forks in my ears. Pardon mi typing, but my fists are still involuntarily clenching and unclenching.

Why is everything I’m seeing right now red…?

Comment by Doug in Boone, NC
2009-10-27 12:04:18

“…you actually know anyone whose economic situation is improving??”

About the only improvement that I’ve noticed is that it’s getting easier to cross the street, because people can’t afford to drive anymore!

Comment by ahansen
2009-10-27 12:15:43

“…only improvement I’ve noticed….”

And a huge decline in the amount of junk mail I have to tote up from the mailbox.
And no long lines at Lowes.
And our local mechanic says he’s having to turn away business because he is so busy. (Which is good because local mechanics tend to come and go up here– which makes things difficult when you need a local mechanic.)

Comment by Lane from s.c.
2009-10-27 12:21:42

Doug, do notice less people up there now? I have a aunt that bought a place in Chtotcha? in Blowing Rock…it was from a Madoff invester. Did see a couple of lots on seven devils that were very cheap…I want to buy something up there. Love that place.


Comment by Doug in Boone, NC
2009-10-27 13:59:25

I’d wait until about next summer. The RE sellers up here are still acting like it’s 2005. Houses up here are still way overpriced. Most of the second-home owners up here are convinced that the housing downturn is just temporary. I think that by next summer they are going to be in for one helluva rude awakening!

Comment by wolfgirl
2009-10-27 15:19:42

The downturn is probably just temporary.But it’s a LONG temporary.

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Comment by Olympiagal
2009-10-27 12:35:33

“…you actually know anyone whose economic situation is improving??”

Hmmm. Not many.
I do notice that some of my hippie pals are doing a lot more bartering for services/goods, to avoid taxes and get off the grid more. Some aren’t even hippies.
I’ve been participating myself. Screwing The Man, even a little screw, is fun.

Most people are too busy living their lives to really pay attention, but most people are aware that they’re being lied to, and tricked somehow or other.
Distrust of the guvmint has really, really ramped up, it is clear to me.
If I knew anyone who sold tinfoil hats I betcha they’d be doing freakin’ great.

…Hey! I just had a good idea for Christmas presents!

Comment by CarrieAnn
2009-10-27 13:41:18

“If I knew anyone who sold tinfoil hats I betcha they’d be doing freakin’ great.”

and here they are:


see photo at bottom

Comment by wolfgirl
2009-10-27 15:25:22

We haven’t done much bartering except for husband trading off with his sister when he fixes her computers. Fairly often actually because about half the time she doesn’t have a clue what she’s doing. But she’s nice and is trying to learn. And I think she gets tired of having most of her life taken up with babysitting grandkids. She has a computer controlled embroidery machine and does lovely work on it.

Comment by WT Economist
2009-10-27 12:24:57

So what is going to kill the green shoots? Currency crisis and inflation spike? More losses putting the big banks back into insolvency? Long term interest rate spike?

Comment by snake charmer
2009-10-27 12:25:13

I confront your exact quandary: I voted for Obama and want him to succeed. On the other hand, this country is long overdue for major change, particularly in all things related to housing, and some institutions and practices associated the status quo are going to have to fail for that to happen. I’ve been bubble-sitting for years and I find this administration’s efforts to prop up residential real estate values totally infuriating.

I’ve really been grooving to your writing lately. Good work.

Comment by alpha-sloth
2009-10-27 19:24:27

I thought it was another great post, too. And I too share your quandary. I want Obama to succeed, but I loathe many of the beneficiaries of the status quo. I think many join me (us) in this estimation.

I wonder if we had a major shake up ,though, if we’d be better off? Few other countries have undergone revolutions recently and come out with anything better than what we already have. Given the power that the super-rich wield today, and the many ways the media can be manipulated by the same malefactors, I’m not so sure that stoic maintenance and upgrading (regulating!) of the current system isn’t what would be best. It sucks, but the best thing to do is often the least desirable. Our wheels may turn slowly, but let them grind exceedingly small.

Comment by Marefynn, NY, NY
2009-10-27 12:25:17

Thank you for stating what all of us abused taxpayers think. I know that I provisionally supported the bank bail-out schemes in much the same way I would support the kidnapper who tells me to pay him cash or see my baby dead.

It seems however, that the “ransom” we paid so that every little old lady in America doesn’t see her savings vaporize, has transmuted into the party money for the big-wigs hors d’ Oeuves.

Why are people still getting million-dollar bonuses when the capital bases of their institutions have vaporized? Capital should be conserved or lent out conservatively to generate cash. It should not be hemoraged away in the paychecks of those responsible for this mess.

Comment by SanFranciscoBayAreaGal
2009-10-27 12:32:33

“A question. Since before your sun burned hot in space, and before your race was born, I have awaited … a question.”

I have a question or questions?

When was the Great Depression called the Great Depression? Did people at the time know it was a depression or just another bad economic phase the U.S. was going through?

Who decides the definition of a Depression? Are we in a depression right now?

Comment by lavi d
2009-10-27 12:47:39

When was the Great Depression called the Great Depression?

Right after they discarded “Exaggerated Dimple” and “Impressive Convexity” as being too wordy for normal folk.

Comment by Olympiagal
2009-10-27 15:01:59

“Exaggerated Dimple” and “Impressive Convexity”

These would be good band names! I’m gonna make a note.

*studiously makes a note *

One of my minor bad habits is making up good (but fake) band names and then bragging to people about the time I saw the band play live, ‘at an underground and very exclusive venue’.

So far I’ve got rumors of two awesome underground and up-and-coming bands* circulating. I will not reveal the names, though, in case there are secretly lurking HBBers from Olympia who are serious, and also humorless, music fans who own knives.
I don’t want to get killed earlier than necessary.

*Which unfortunately don’t exist. But they should, because they’re good names. All we need now is someone who can play guitars and kazoos and sing and cra*p like that.

Comment by JDinCT
2009-10-27 16:32:26

Now that’s funny!

Comment by ROBIN
2009-10-27 22:51:42


Comment by Doug in Boone, NC
2009-10-27 13:13:03

I’m not sure what the definition of a depression is, but in doing some research for a book I’m writing about some local events that took place during that era (not about the Depression), I noticed that from microfilms of some local newspapers it was referred to as a depression while it was going on.

Comment by Poshboy
2009-10-27 13:58:32

Here’s the geek’s answer:


“The phrase, “the great depression,” in reference to the 1930s, did not appear till after Hoover left office. Some historians argue that the true inventor of the phrase, the Great Depression, is Lionel Robbins, a British economist who lived during the Depression. In 1934, after Hoover’s tenure in office, Robbins wrote the book, “The Great Depression,” which contains what some historians, notably David F. Burg, consider to be the fist usage of the phrase we now use to to describe the economic meltdown on the 1930s.”

Hoover used it a couple of times, but not as a noun. So the country endured its economic malaise from about 1930 to 1934 before it was unofficially officially labeled the “Great Depression.”

Personally, I like “Great Depression 2.0″ for our current mess. It’s historic, accurate–and 21st century.

Comment by SanFranciscoBayAreaGal
2009-10-27 14:23:53

Trivia question.

Where did this quote come from?

“A question. Since before your sun burned hot in space, and before your race was born, I have awaited … a question.”

Come on I know some of you know this. :grin:

Comment by Skip
2009-10-27 15:30:36

SFBAGal - If you haven’t seen the movie Fanbois definitely check it out some time.

Comment by Cassandra
2009-10-27 22:00:16

Could this be the original source?


If you are impatient, fast forward to t=7:00 min

Comment by diogenesone
2009-10-27 17:27:53

Actually, a book was just published featuring the diary of a Depression-era attorney and his impression of events *as they happened* rather than in hindsight. This NYT column by Joe Nocera gives a nice overview.

Comment by Professor Bear
2009-10-27 18:54:12

Oh, goody — I just love connect-the-dots :-)

Talking Business
The View From Inside a Depression

Published: October 16, 2009

“Dow at 10,000 as Crisis Ebbs”

— Wall Street Journal headline on Thursday


Benjamin Roth, the diarist who watched the economy, and his family on Thanksgiving in 1937.

And after seven lean years, he was still wearing his tie to the Thanksgiving dinner table :-)

Comment by lavi d
2009-10-27 12:44:31

I heard on radio that China was buying up oil.

I think the oil industry is about to spring a trap - they’re trying to get rid of as much oil at today’s prices as possible in advance of some gigantic energy breakthrough.

OK, it’s wishful thinking, but what the hell…

Comment by Bill in Carolina
2009-10-27 13:15:35

Olympiagal will be glad to send you a tinfoil hat. :-)

Comment by Olympiagal
2009-10-27 15:03:28

With sparkles, even. Just for you. :)

Comment by aNYCdj
2009-10-27 15:08:46

Like the elephant oil field in the Mekong delta in ‘Nam they’ve kept under wraps for 40 years?

Those vets are gettin old……
some gigantic energy breakthrough

Comment by Hwy50ina49Dodge
2009-10-27 15:39:31

“OK, it’s wishful thinking, but what the hell…”

See Mr. Bear’s “Hopeful” response down below. ;-)

Comment by Muggy
2009-10-27 12:47:59

“Muggy has a new baby girl. And she is a Libra.”

Aww, thanks for the shout out. Life is good.

Comment by ahansen
2009-10-27 13:06:26

Pix, Son. Pix!

Comment by Muggy
2009-10-27 17:09:02

“Pix, Son. Pix!”

Soon, I promise — this is an insanely busy week with all the relatives in town.

Comment by SanFranciscoBayAreaGal
2009-10-27 14:26:35

Congratulations to you and your wife.

Comment by Cassandra
2009-10-27 22:59:29

Congrats Muggy! All life is sacred, regardless the sign.

God Bless.

Comment by Doug in Boone, NC
2009-10-27 12:53:39

Muggy has a new baby girl. And she is a Libra.

Good sign to be born under!

Congratulations Muggy, from one Libra to another.

Comment by WT Economist
2009-10-27 13:08:09

I just heard on the radio that the three McDonalds in Iceland are closing.

It seems that there aren’t enough of them for local producers to conform to McDonald’s standards, and thanks to the currency collapse, they can no longer afford to import. So back to eating walrus, or whatever.

The obvious question is what similarly negative trends will hit the U.S. once the Chinese crack and allow the dollar to collapse? Instead of no McDonald’s, we’ll have no gasoline.

Comment by Professor Bear
2009-10-27 14:41:13

“Instead of no McDonald’s, we’ll have no gasoline.”

Drill, baby, drill.

I can see increased future oil drilling

- in coastal zones where greenies currently stand in the way;
- in ANWAR;
- in the LA basin…

The price just isn’t right yet…

Comment by Hwy50ina49Dodge
2009-10-27 15:33:11

Geez Mr. Bear, you’ve won this weeks “Eeyore Award” already. ;-)

“I can see increased future oil drilling”

“Some men see things as they are and ask, ‘why’ … I dream things that never were and ask, ‘why not’”…Robert Kennedy

This quote is a paraphrase from a similar quote by G. B. Shaw.

Comment by Professor Bear
2009-10-27 18:46:57

Geez, Hwy, I was trying to be optimistic here ;-)

We’re not about to run out of oil, because we can soon start drilling like crazy in some of the most beautiful and/or heavily populated parts of the USA :-)

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Comment by Wickedheart
2009-10-27 13:19:13

“In keeping with the New Austerity, I expect to see photo spreads of Michelle and the girls making recycled tree ornaments for the White House Christmas tree and clever little homemade gifts for Daddy”

You say homemade and recycled like it’s a bad thing. I make beautiful ornaments from used lightbulbs. I take something that normal goes in the trash and make something awesome. I’ve made Santas, Reindeers, Penguins, Snowmen, Dogs and even Jack and Sally from The Nightmare Before Christmas. A homemade gift is one made with love.

Comment by ahansen
2009-10-27 14:33:17

Not at all. I don’t think I ever got (or gave,) a “store bought” gift in the entire time I was growing up. And I have a lifetime collection of handmade (by friends, family, and myself,) tree ornaments and holiday decorations that I cherish for the all memories they hold. Most everything in my home (including the house itself,) is either recycled or handcrafted. I only buy “new” when necessity, (or good hygiene,) dictates.

Efforts like Michelle’s vegetable garden make my heart glad. It’s a huge relief to see a national example of authenticity being put forth after a generation’s worth of wretched excess. I was serious about the photo ops. I’d really like to think she’s that kind of mum.

Then again there is always the paradoxical attempt. Check out this very cool (but $12,000!?) bit of recycling.


Comment by wolfgirl
2009-10-27 16:01:32

Pretty in the picture, but I wonder if it actually looks as good in person. Of course I have no use for a chandelier or a high enough ceiling for this one.

Comment by JDinCT
2009-10-27 16:39:56


Check out the definitive recycler (profile of Texas man who has built 80 houses of recycled materials. fantastic pictures.)

Comment by southwest guy
2009-10-27 13:32:21

Today’s society is very different then the thinking of the 1930’s. First of all it is not good business in this country to report just how bad things are, after all did we ever get on the spot reports about the Iraq war or just bits and pieces then on to if Paris Hilton was treated fairly in jail etc.
Basically the gov’t and the press have suppress demonstrations and even if it is a rather large one very little time is now devoted to it.
Just open your eyes, drive around any town and see empty stores and houses. Look at the help wanted in the paper one or two pages and the jobs pay considerable less pay.
This problem is so huge that even a USA can’t cope with it because the powers to be realize that they let this go on for so long that dollars thrown at the problem can’t solve it.
The core of a person’s phys icy is now involved and that worries the gov’t, because when the population starts to think the whole game was rigged from the get go then like the American auto industry people just shut down and years later they still don’t trust GM and that is what the gov’t is really worried about, can they get the people back to keep their mouth shot and just walk goose step with them again.
I think the public has had it and thus the economy may not recover for many many a year. Will houses be in demand again in a country this size yes, but how they are bought, appraised and people qualify for them will change the landscape of the real estate business.
Buying expensive cars and leasing them will again fall upon the people who really can afford them, the rest will settle for good solid cars and a payment they can live with decent gas mileage.
Basically this country has to return to basics of living in ones means and being healthy and living longer, the idea that ones life is based on how many homes they own and cars they can’t afford will go by the wayside if it doesn’t, then the great depression will be replaced by the great collapse of the once greatest country and democracy the world had ever known and we will be a footnote in history along the Roman Empire.

Comment by Skip
2009-10-27 15:39:57

The media was the same back in the 30’s. Read some of the Forbes or Wall Street journals from back then. And don’t forget Roosevelt’s fireside chats.

The Roaring 20’s was called that because everyone lived in excess, just like the 2000’s.

Comment by snake charmer
2009-10-27 18:53:14

Earlier this fall I was in an older Chicago north suburb, associated with middle-class wealth, and was stunned at the number of vacant storefronts. It looked worse than Ft. Myers. In my mind, we are going to have to find a sustainable new source of jobs, and in a hurry.

Comment by CarrieAnn
2009-10-27 14:07:59

Congrats on your new little girl Muggy. Such a fascinating time!

Creating a world and planning for our children’s future really keeps me hopeful and positive despite what will probably be a crazy background. When all is said and done they can’t take away your family. They can’t take away what you know and do well. My in laws who grew up in the GD I are some of the nicest people I know. Generous w/their time and their love. They’re also less easily discouraged in the face of an issue and come up w/creative answers. I’m thinking our children growing up in a time where we’re forced to rely on each other more, where they’ll be tested more will end up with similar strengths. It’s the Fourth Turning and our kids are the next hero generation!

Comment by Muggy
2009-10-27 17:07:57

“Creating a world and planning for our children’s future really keeps me hopeful and positive”

I went to some pretty dark places after 9/11, but a few years later, and a few babies, and I couldn’t agree more. I’m not judging those who choose to skip having babies, but most of my single friends are very selfish and are into drugs, excessive alcohol, risky sex, etc. I mean, don’t you ever get tired of being the dude that needs to be put in a cab at weddings?

My favorite thing to do is birdwatch with my littleman (don’t worry, we’ll take the littlegal when she’s ready). There was a guy on another board talking about watching his kids emerge from swimming int the Finger Lakes and thinking how thousands of years of mankind had the same pleasure. Of course I hated anything intergenerational as a teen (punk rock!), but I’ve come around…

This has been said a few times in the past few weeks on this board, but I really enjoy the diversity here that combines with personal responsibility and common sense.

Comment by CarrieAnn
2009-10-27 18:10:07

“There was a guy on another board talking about watching his kids emerge from swimming int the Finger Lakes and thinking how thousands of years of mankind had the same pleasure.”

What imagery!

Last summer I watched my kids playing in the surf of the same NH beach I rode my bike to as a child, the same my Mom enjoyed as a child. Talk about a million memories rushing back. The three of us laughed together while we body surfed the waves. I think the state parks will help me keep my sanity through the changes we’ll face. When I look out at that ocean it looks the same as the day Dad brought me to the beach many years ago.

Comment by ahansen
2009-10-27 22:57:43

Thanks for this, CarrieAnn.

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Comment by edward
2009-10-27 15:10:00

Just say something interesting. An upcoming series of articles by McClatchy Newspapers titled: How Goldman Sachs secretly bet on the housing crash. Starts Sunday.

Don’t know where to find it. Maybe the Miami Herald? or other McClatchy papers.

Comment by aNYCdj
2009-10-27 19:47:49

heck we all would have liked to buy long term puts on Fannie and Freddy AIG when 70-80 bucks a share….and bet the farm

……… and then You could give ben a million just for being ben!

Comment by Sammy Schadenfreude
2009-10-27 15:19:58

Another excellent guest post by the esteemed ahanson.

As an unabashed supporter of the Obaman ideal, (if not their methodology,) I am in a personal quandary…

I assume the root of your quandry is: “Do I leave town under cover of darkness out of shame for being so misled, or alternatively, should I pay for an advertisement on the Goodyear blimp acknowledging the error of my voting habits, while seeking Sammy’s wise, unerring, yet freely-offered advice on correct voting from this day forward.” Decisions, decisions.

Muggy has a new baby girl. And she is a Libra.

With all due respect for those who remain childless for whatever reason, I would hope an image of Muggy’s newborn stays affixed in our consciousness, and consciences, as we consider our responses to the problems and challenges facing this nation - most troublingly, to the gross fiscal irresponsibility displayed by our current political leadership, and the crippling debts and other deferred and compounding crises being cravenly foisted onto Muggy’s new baby and her generation.

Comment by Rancher
2009-10-27 16:12:27

+100 and more if I could afford it. Smash on SS

Comment by Sammy Schadenfreude
2009-10-27 18:58:42

Thanks, Rancher.

Comment by ahansen
2009-10-27 18:30:49

A lovely sentiment SS. It’s oddly reassuring to see you’ve a tender heart in there underneath the gruff.

Re: Obama.
I don’t think anyone with even a pretense of political awareness would imagine that thirty years worth of insane economic and social policy could be rectified in one term. So no, I don’t feel duped or disappointed in the slightest. In fact I find his chessmanship fiendishly nuanced. I’ll wait for the endgame with the 112th Congress before I pass judgment.

My support was (and is,) based upon the expectation that his unique background, personal charisma, and extraordinary self-awareness would give him the perspective needed to be a true diplomat president. Specifically one who could begin to undo some of the terrible damage done America’s international reputation by George W. Bush, Inc., and this country’s long-standing arrogant and self-righteous foreign policies.

So far he has performed admirably. I might not be quite ready to hit Marseilles with an American flag backpack, but I’m no longer ashamed to tell people I’m from… California.

Comment by Sammy Schadenfreude
2009-10-27 18:44:46


My comments about your support to Obama were tongue-in-cheek. My comments about Muggy’s daughter, on the other hand, were deadly serious.

The hubris of the Bush/Cheney years, not to mention their epic incompetence and pandering to the military-industrial complex, did this country and its image incalculable harm. Obama may be a pawn of Soros and Wall Street, but at least he shows some much-needed humility in his dealings with the rest of the world.

Comment by Professor Bear
2009-10-27 19:37:59

Obama has his heart in the right place. There is no way to hide the fact.

W, on the other hand — ahem!

And Darth Cheney? Machiavelli himself would have been afraid of him. Stalin and Hitler would have felt a bond of camaraderie with him.

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Comment by DD
2009-10-27 20:13:53

would have felt a bond of camaraderie with him.

Then shot him for being a competitor. I surmise.

Comment by ahansen
2009-10-27 20:27:29

I know this, SweetS. No sarcasm intended. No offense taken.

Sometimes you just have to take what I say at face value.

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Comment by 3rd Generation
2009-10-27 16:08:44

I apologize, I should have placed a warning on the video. I despize used-house peddlers so much that I just got carried away. Again, sorry all. The first time I watched it I was eating breakfast and vomited in my mouth so as not to kill the laptop…
Realtors reading this? Why not go run your car off a high cliff right Now or do a Hemigway? You are hated and despized.

Oh yeah. looks like Honest Dodd and MaObama will give the imbeciles their free mortgage cheese tonight… America: Turd World Nation of Nothing and Serial NoBodies.

Comment by Bill in Carolina
2009-10-27 18:32:07

Wow. 3rd, why don’t you tell us how you really feel. No need to hold back on this blog.

Comment by DennisN
2009-10-28 01:06:52

Keep Idaho clean. Don’t do a Hemingway.

Comment by Professor Bear
2009-10-27 19:55:06

Some people don’t know how to read the handwriting on the Wall Street.

Pay Up! Why Wall Street bonuses won’t go away.
By Daniel GrossPosted Friday, Oct. 23, 2009, at 11:29 AM ET

Excessive executive compensation at financial services companies is dead!

Long live excessive compensation at financial services companies!

Companies that liberated themselves from the shackles of the TARP are feasting on low-interest rates and other government efforts to prop up markets—and they’re partying like its 2007. Goldman Sachs is setting aside nearly $20 billion in compensation for employees this year—most of it for bonuses. Morgan Stanley set aside $5 billion for bonuses in the third quarter alone. Elizabeth Warren, who chairs the congressional panel overseeing the TARP, is aghast. “I don’t understand that they don’t think the world has changed in fundamental ways,” she says. Asked earlier this year about the prospect of megabonuses at bailed-out Wall Street firms, President Obama said: “I’d like to think that people would feel a little remorse and feel embarrassed and would not get million-dollar or multimillion-dollar bonuses.”

Comment by Professor Bear
2009-10-27 20:00:13

Megabank, Inc is going to be shocked and awed when the Fed clamps down “harder than expected” on their Wild Wild West bonus culture in order to ensure its own political survival.

Wall Street “living will” = self-liquidation plan :-)

Draft law would extend Fed powers

By Tom Braithwaite in Washington and Saskia Scholtes, Aline van Duyn and Francesco Guerrera in New York

Published: October 28 2009 00:00 | Last updated: October 28 2009 00:00

The Federal Reserve could order a financial institution to sell a risky division or stop dangerous trading activity if the central bank determined there was a threat to the US financial system, under a draft law released on Tuesday.

The landmark bill drawn up by the Treasury and the House financial services committee sets up a council of regulators charged with snuffing out systemic risks and gives the government and the Fed sweeping powers over financial companies at home and overseas.

The Fed would require systemically significant companies – including foreign groups that own a large or risky US subsidiary – to abide by “heightened prudential standards”. These include leverage limits, liquidity rules and the drafting of a resolution plan, or “living will”.

SEC head urges fresh securities laws - Oct-27
US pay tsar targets 525 more executives - Oct-27
JPMorgan’s Dimon backs bank mechanism - Oct-27
Bankers must resist temptation to think bigger - Oct-27
Martin Wolf: How mistaken ideas helped to bring the economy down - Oct-27
Interactive feature: Financial regulation reform - Jul-30

Comment by DD
2009-10-27 22:11:15

Frontline- Close to Home.

Really disturbing documentary about job losses, home losses etc.
One major disturbing fact was that the majority of people who were without jobs and for long long periods of time, were people over 50.
There are so many aspects of this that are going to change the face of America forever.
We talk about it, read articles and such, but to see some faces up close and personal, the woman who was the hair dresser to so many was the pivot point on everyone who was, or had been her client.

You can watch the entire episode on pbs Dot Org.

Tomorrows uplifting documentary is Medicated Children.

Comment by Professor Bear
2009-10-28 05:31:59

This post is a day late, but this article seems to fit quite well on this uplifting thread :-)

Death Cometh for the Greenback
by Joseph E. Stiglitz


From the November/December issue of The National Interest.

THE DOLLAR is in trouble. That’s clear, and it’s been true for a while.

The cornerstone of the global economic system has long been the greenback. In the aftermath of the Vietnam War and the oil shocks that brought on inflation, the value of the dollar relative to other currencies could not be maintained, so countries moved away from pegging their currencies to America’s. But still, the almighty dollar was used by countries all over the world for their reserves. The reserves provided backing for the currency and the country. They were a bank account that could be drawn upon in times of need. If oil prices shot up, a crop failed or lenders demanded their money back, there was a stockpile of money that could be used.

There was a longtime confidence in the dollar, even more when then–Chairman of the Federal Reserve Paul Volcker brought down inflation in the early ’80s. The dollar was a good “store of value.” And the fact that others were willing to hold American dollars was a big advantage to the United States—it could borrow cheaply abroad.

Comment by Gangly
2009-10-31 08:54:43

Good stuff. But please beware of the “grocerer’s apostrophe.” Its 1930s, not 1930’s.

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