Bits Bucket For November 6, 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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Filed under: “New Money” Whippersnapper’s …ruining the neighborhood!
Prefab “green” house hoisted into place in Newport Beach, CA:
“It’s amazing,” said neighbor George Nevin, who has lived on the street for 40 years. “I’ve never seen anything like this.”
When the day began, the lot sandwiched between two homes in Newport Beach contained nothing but a foundation.
By mid-afternoon, the space was filled with a two-story, three-bedroom home and an ultra-green home at that.
http://greenoc.freedomblogging.com/2009/11/05/prefab-green-house-hoisted-into-place-in-newport/15505/
Question for anybody who knows about deed in lieu of foreclosure.
If someone quitclaims a property back to the lender by filing the deed at the county recorders office does the lender have to accept it?What if the lender doesnt want the property?How would the lender officially accept a deed in lieu of foreclosure?
Thanks
I am not sure if it is state by state but “acceptance” of the tendered deed is normally an essentially element of any transaction under contract law YMMV.
In PA you can transfer a deed to anyone. There is no deed for a buyer to sign anywhere or acknowledge receipt. If you do not want the land you can always transfer it back. In any situation where the land is worth more than the balance of the loan there should be no problem.
Where the loan is worth more than the land you may not be able to go after the difference in a recourse state. I have never had this situation come up.
I have had 2 cases where I have received a deed in leiu of foreclosure. In both cases the building was worth the amount of the balance due or more and in one case I actually paid $5k to get the deed and eliminate the need for the time consuming legal action and legal costs.
One building was a single family home which I sold and financed very quickly and the other was a mixed commercial and residential building which I kept and am operating.
So there were a lot of articles and discussion yesterday about Fannie’s “Deed for Lease” program for one year, where they can rent to someone instead of foreclosing on them.
One thing I didn’t see mentioned anywhere was - who then owns the house, and what happens after one year?
Presumably since the home isn’t foreclosed upon - then the house is still in the buyers’ name, and not Fannie’s - right? If so - then what the heck are the legal logistics for Fannie to rent a house to someone who legally owns the house?
Otherwise - if Fannie does legally take possession - how can they do this without it being considered a foreclosure?
And what happens after a year, if the renter then decides to not do it anymore? Are they foreclosed on then? Or is the whole foreclosure just somehow skirted around, and never happens? If so - does this mean the person avoids the big credit hit?
Weird stuff.
“To participate, a borrower must agree to convey all interest in a property to the lender.”
That’s from the L.A. Times article about the program. Sounds like the FB would have to sign a quit claim.
It was pretty interesting. It sounds like fannie has 500,000 loans that are not performing.
I would also expect that they will lack the willpower to properly enforce their lease agreements. i.e. it isn’t for just a year, it will go on forever.
Further picking winners amoung the people who got sucked into this mess at a late stage by giving them below market rental rates. I would expect they don’t have the will to be agressive about getting the right rent either.
Anyhow, we wonder about the shadow inventory. Probably simialr number of homes in limbo with FRE and FAN. Some smaller number with the FHA, possibly 100K. Not to mention all of the bank holdings.
My guess is there are 1M+ homes sitting just off the market. I would guess another huge amount in the hanging on by a thread. Unemployment is increasing still and it will be along while before jobs pick up. Probably until 2011-2012.
It’s three years of deflation and they have been completely powerless to stop this thing. Interesting data point.
“I would also expect that they will lack the willpower to properly enforce their lease agreements. i.e. it isn’t for just a year, it will go on forever.”
If you buy a house today with a Fannie Mae loan, then never make a payment, would you be eligible to lease the home indefinitely at the market rental rate? If so, I can see a nice arbitrage opportunity for someone to find suitable hedges against future inflation.
One would have to consider it. Price of your credit rating you get cheap rent for a while.
Again, I’ve considered buying a property with the intent to default and live rent free for a year or two.
Would probably have to pay for one year or so to season the loan and make sure it’s in the hands of GSEs.
Also note another bailout is in progress. FRE/FAN are going to sell their tax losses to everyone’s favorite bank. I don’t know how this is supposed to work but esentially since they don’t have any income they are getting special dispensation to sell the tax losses. Buffet and GS are in the running to buy the losses.
Boy things are going to get ugly soon. 2010-11 will be one hell of a situation.
Price of your credit rating you get cheap rent for a while.
Except (I think) your credit rating actually doesn’t get hit! See my question above. If indeed this is handled as a “quit claim” - then no foreclosure actually happens, and you don’t take the big credit hit. Maybe some for delinquent payments, but not the foreclosure whopper.
Not sure about that though.
“If indeed this is handled as a “quit claim” - then no foreclosure actually happens, and you don’t take the big credit hit.”
In a short sale situation there is no actual foreclosure, but your credit does take a big hit (though not as much as on a foreclosure). I can’t imagine this being any different.
Couldn’t the market rental rate rise in a time of inflation? I assume the rents wouldn’t be permanently set.
Couldn’t the market rental rate rise in a time of inflation?
Theoretically yes, but certainly not while vacancy rates are going through the roof.
Yeah, I’m not saying they -are- going to rise, just that they could, especially in a hyper-inflationary environment. So I wasn’t sure why it would be a good inflation hedge to be renting at market rates.
I mean, why not just rent. You’ll still be getting the market rate.
Meh. Alpha if we hit they hyperinflation scenario or the cascading default scenario, we will have a lot more to worry about than who is or isn’t paying their rent.
Meh. Alpha if we hit they hyperinflation scenario or the cascading default scenario, we will have a lot more to worry about than who is or isn’t paying their rent.
Not necessarily. Argentina for instance has actually been fairly stable all throughout its bouts with hyperinflation. There has been significant political turnover - coups and such, but relative economic stability (similar to GD in the U.S.) and no wars, at least since the early 1980’s and the Faulklands war.
I call BS on that one Packman. We had a poster in here from Argentina. It sounded pretty bad.
His/her remark was you’d be surprised by the people who robbed you. Like a nice little couple of old people.
That and people relying on foreign currency.
“Theoretically yes, but certainly not while vacancy rates are going through the roof.”
Even if the banks are able to collusively withhold inventory from the market for an indefinite period, thanks to the TARP?
What is the “Vacant - Other” category in the DOC vacant housing data (7,654,000 homes in this category as of Q3 2009)?
Fan and Fred would be the absentee landlords from hell. Sewer backed up? Furnace on the fritz? Imagine the renter (former FB) trying to reach someone in one of those organizations who would take ownership of the problem and see that it gets resolved.
Oh wait, I see another government program in the making: Selecting dozens or hundreds of politically-connected entities to become property managers in all the various localities around the country. All for a nice above-market-rate fee of course.
The end result: Government ownership of a significant portion of all residential properties in the U.S., as someone suggested here a few days ago.
Can you say property management company. If you can bribe your local loan officer or Fannie/Freddie rep or otherwise get the gig, I bet you could make a killing managing these properties for them.
Anyone know if there exist any publicly-traded property management companies? (Ones that do only that, and don’t actually own properties, that is).
If so - seems like a dang good investment. Though it’s probably too late.
Anyone know any publicly traded companies with GS, treasury officials or politicians as major investors…
The end result: Government ownership of a significant portion of all residential properties in the U.S., as someone suggested here a few days ago.
Yes.
(and that would be me; I originally prognosticated about it on HBB back in March, though have thought this would end up happening for a couple of years now)
Bill in Carolina,
We discuseed this a bit on the Portland Blog and while I slept someone ‘had’ to bring up the “banks and the Gov. will wind up owning ‘everything’!” angle.
Trust me, the -last- thing these people want is more used houses. This is simply a way to keep the properties from becoming trashed out/rip’d out and keep a tenant in what would become another abandoned and gang/crack/whore house.
The ‘other’ angle is ( and I’ll file this under ) “I just think we shouldn’t see each other for awhile?” Phonie/Fraudie are hoping while you’re under a lease, you’ll decide this really isn’t a bad place after all.., and who knows, you might even get the 8k credit as you go to repurchase it!?
Thank God we have ethical progressive Democrats in control, so that something like this can’t happen.
Imagine if those evil Repiglican Wall Street tools like Jim DeMint and Michelle Bachmann were at the helm.
Do you really want to see DeMint and Bachmann at the helm?
What would be so bad about government owning housing and people living in government-owned housing? The military and some Native Americans live in government housing all the time. These FB’s are flat broke. They would otherwise be either out on the street, or would have to move to a rental, at probably not much difference in payment. (even then they still have that “option.”) If the McShacks themselves suck, then that is the fault of the capitalist homebuilders. I also imagine that the FB could move out when he was finacially back on his feet.
I’m trying to ask this as a sincere question, not as political potshots. What, really, would be so bad? “Government takeover” is not a good answer, because compared to the theft from the banks, government takeover might be a better deal. And try not to answer with vagueries about Freedom, and please try not to invoke Godwin’s law.
I’d like to invoke the Chewbacca defense here.
I think we hinted at some of the problems. The one year in the house will slip into multiple years. The care of the property will slip.
Then what? We keep feeding the GSE’s treasury money to keep the FB subsidised living arangement?
What about the FB? Do they take the hit of forclosure on the loan or does it stay in a semi-impaired state and wait for the person to move?
How about the rest of us that have money but would consider buying? We sit and wait while the houses are off the market. I’m not jumping in while the GSEs are sitting on 200Billion (likely each) and growing dollars of bad loans. It’s a million homes plus waiting in the shadows. You realize that is something like a couple of YEARS of inventory vs 600k sales.
What effect would that have on prices if they break loose?
There are huge distortions and potential credit events in this market.
This will cause more and more deflation as most of us with cash sit things out. Two ways to deflate, fast and painful or slow and intensifying pain. For years.
A ha. Thank you James. In other words, government housing is bad because it essentially creates another half million or so Section 8 households, paid for by the responsible taxpayer.
But IMO, I’d much rather my tax money go toward subsidzing the FB (on some kind of temporary basis) rather than giving those same taxpayer billions to the likes of AIG just so they can balance their checkbook.
(if I am not too late to the conversation)
Why can’t Fannie or Freddie go out and sell the properties once they have installed the lessor. It would lock in the losses for the Govt, but at least the flood or rental properties on the market would *at last* be priced on the income stream the properties produce. Hurry up and finish deflating that bubble, please.
I don’t think the FHA has a shadow inventory. They are strictly mortgage insurers I think.
Not sure on that. I know they have homes for sale.
A lot changed when Barney Frank had them take over more of the market a couple years back.
In one year the recovery will be in full effect and the houses will be worth so much more than they are now that Fannie will be fush with cash and huge bonuses will be in order.
Press, please tell me what it is you put in your morning coffee. I could use a healthy dose.
combo, if you didn’t see pressboard’s sarcasm you need another dose of caffeine.
Uh, yeah I picked up on his sarcasm, but I’ll go for another dose of caffeine anyway.
It’s that double-reverse-sarcasm type thingie.
BTW, I like this sniglet (seems to apply a lot on HBB lately):
“Sarchasm”: The giant gulf between what is said and the person who doesn’t get it.
At first glance this looks like the renter pays a monthly rent which is smaller than the full amortization cost (of course, otherwise why would he/she avail of this offer). What would a fair rent be? I am guessing it will be in the vicinity of today’s interest rates (between 3-4% possibly) on the entire loan balance, or maybe a marked down value of the house. With an allowance for property taxes and maintenance, we are looking at something closer to 5%-5.5% all in.
So, a 600k house will rent for $2500 per month at a minimum. How many folks will be willing to shell out that kind of money?
Once again I must live in a different universe. $2500 is an average house.
http://atlanta.craigslist.org/wat/apa/1425688715.html
Rent for $3000. Same house is for sale $625K.
So renting a $600K for $2500 is a pretty good deal.
More news from “The O.C.”: (Hwy wonders if Rand would have been a “participant in the annual Chapman “undies run”?)
Next year Chapman might want to “erect” a “bust” of Sir Greenisspent, surrounded by dry ice “fog & mist” and a silent “bubble making machine” …hand out large green balloons with “expanded” $ printed on them…free.
Chapman dedicating statue of Ayn Rand today:
Her basic beliefs have recently enjoyed a resurgence of interest on many college campuses and among more Conservative and Libertarian thinkers. Some of that interest has been stoked by the Ayn Rand Institute, which is located in Irvine.
Note from the reporter:
“Rand was also intensely disliked by many people, including me. I very rarely inject personal opinion into this blog. But I had a run-in with Rand…
“For reasons she never clearly explained, Rand said that she would not allow herself to be photographed during the public talk. I was a reporter for the campus newspaper at the time and found this to be outrageous, especially because $2,000 in student fees were being used to cover her lecture fee. I walked into the auditorium during her speech and photographed her, at which point she yelled at me. I thought she was interfering with freedom of the press and ignored her protests.”
http://collegelife.freedomblogging.com/2009/11/05/chapman-dedicating-statue-of-ayn-rand-today/12315/
Rand the person was not likable.
The philosophy is all that is important. It is injustice to kill a philosophy based on the person behind it.
You did not know that Objectivism is based on Aristotle, obviously. Was Aristotle hated like Rand was? I doubt it.
Objectivism is promoted in two basic camps: The Ayn Rand Institute, which deifies Ayn Rand, and The Objectivist Center, which points out weaknesses of Rand the person, but promotes her brilliant philosophy.
Look, the promotion of cigarrette smoking, the diatribes against libertarians and anarchists, the Romantic Manifesto book should all be overlooked and the good of the philosophy - the metaphysics (which is aligned with Aristotle), the ethics, the epistemology and the economics should be seriously considered.
“Objectivism is promoted in two basic camps: The Ayn Rand Institute, which deifies Ayn Rand, and The Objectivist Center, which points out weaknesses of Rand the person, but promotes her brilliant philosophy.”
Ayn Rand’s ‘brilliant philosophy’ can be summed up thusly: “I got mine, so screw you Jack”.
“Ayn Rand’s ‘brilliant philosophy’ can be summed up thusly: “I got mine, so screw you Jack”.
Wow, you must be “brilliant” yourself!
The only aspect “I” have ever taken from her thinking is to.., basically “grow the pie”. Instead of spending your life worrying about “where’s MY slice of the pie” ( consider what kind of world we could have if more people were actually attempting to make ‘more’ pie? )
And this is really all AG and other well-intentioned policy advisers have tried to do. I’ll have to check w/ the millions of formerly unemployed people in India that now have decent paying jobs, how’s THAT workin’ out for ya’?
Before anyone gets their knickers in a twist, no, I have never heard anyone say they want to work in a Call Center when they grow up?
So AG was well-intentioned and overall did good? Wow.
“Wow”
Well..? Rampant out of control U.S-based MEW Consumption allowed for a million Chinese to leave the farm and seek actual wage-payin’ jobs in China’s bustling cities.
They’ve seen capitalism and I don’t imagine a whole lot want to go back to the farm? India has a growing… middle class. Granted a lot of this has come at ‘our’ expense, but AFAIK, ( we’re not “trading missles” w/ China )? But since you misconstrued it as a blanket apology for Allan Greenspan?
Ayn Rand’s ‘brilliant philosophy’ can be summed up thusly: “I got mine, so screw you Jack”.
Wrong.
I’ll leave it at that - you can perhaps study up some more.
Wrong? That is JoJo’s opinion of Rands philosophy. So, if someone’s opinion is different than yours, they’re automatically “wrong”? Wow.
Wrong? That is JoJo’s opinion of Rands philosophy. So, if someone’s opinion is different than yours, they’re automatically “wrong”? Wow.
So you’re saying that if I held the opinion that the Detroit Lions were the best team in the NFL, that I wouldn’t be wrong, just because it’s an opinion?
In other words - you might think that opinions can’t be wrong. But that’s your opinion. And you’re wrong.
P.S. I’m more or less just jerking yours and JoJo’s chain. I’m not normally such a bull-headed person. However one of my pet peeves is when someone holds a philosophy that for every winner there must be a loser, which I believe is incorrect. A corollary pet peeve then is when someone (in my opinion) falsely projects that philosophy on others.
In Rand’s case, her view was one of mutual benefit, not that one person’s benefit equals another’s loss.
I enjoyed my mind being led around by her ideas but couldn’t necessarily embrace the entire philosophy. I do wonder however how many hbber’s would get behind this Randian concept:
(from wiki)
Sanction of the victim
The concept “Sanction of the victim” is defined by Leonard Peikoff as “the willingness of the good to suffer at the hands of the evil, to accept the role of sacrificial victim for the ’sin’ of creating values.”[25] This concept may be original in the thinking of Ayn Rand and is foundational to her moral theory: she holds that evil is a parasite on the good and can only exist if the good tolerates it. Atlas Shrugged can be seen as an answer to the question of what would happen if this sanction were revoked. When Atlas shrugs, relieving himself of the burden of carrying the world, he is revoking his sanction.
The redistribution of wealth goes on (to the too big to fail bankers) as we understand what’s going on but feel/act helpless to stop it?
It’s really not SO original: The only thing necessary for the triumph of evil is for good men to do nothing. Sometimes attributed to Edmund Burke.
“So you’re saying that if I held the opinion that the Detroit Lions were the best team in the NFL, that I wouldn’t be wrong, just because it’s an opinion?…In other words - you might think that opinions can’t be wrong. But that’s your opinion. And you’re wrong.”
Two people don’t have to share the same opinion, but there’s a difference between saying ‘I don’t agree with you’ and arguing points as to why vs. blurting out “you’re wrong”. What you said to JoJo- “Wrong…I’ll leave it at that - you can perhaps study up some more.”- sounded pompous and rude.
I don’t think your example of arguing the Lions are the best team in football is a good comparison to JoJo’s point about Rand. While I may or may not agree with JoJo’s opinion, philosophy is not an exact science, and much is left for interpretation when it comes to the writings of philosophers, IMO- especially when the material is wordy and flamboyant. Arguing the best NFL team comes down to somewhat more strict and concrete criteria like wins and losses. There is room for argument however, as two people can have difference interpretations of “best”.
You said “In Rand’s case, her view was one of mutual benefit, not that one person’s benefit equals another’s loss”, and I don’t see where JoJo said anything to that effect. His/her point was about selfishness. I’ll leave it at that.
I think of Rand as a writer of philosophical romances. Sort of like historical romances, but based on explicating a philosophy rather than a time period. Unfortunately her philosophy was a mediocre mishmash of Aristotle, Nietzsche, etc that is not very well thought out, and not the subject of study by many academics.
I don’t think her fiction is very good reading either, but to each his own. I do think she was an early influence on John D. MacDonald, whose books I love.
I don’t think her fiction is very good reading either, but to each his own.
Whether or not you embrace the philosophical underpinnings of her novels — I don’t — her fiction writing is turgid, self-possessed, overblown, and worst of all, boring.
I do think fiction’s an interesting way to disseminate a philosophy. Rand was fairly successful in that regard, I suppose.
All too successful. She was Greenspan’s guiding light. Just goes to show the power of even mediocre philosophy.
I don’t get it. I guess I must be wrong given all of the adulation she’s received over the years, but to me Atlas Shrugged seemed to be partly science fiction philosophy, partly an outlet for an obviously ( used the nice phraseology ) sexually frustrated author. Her book ( I skipped the rest ) didn’t seem to be anything worth staking an entire philosophy on. I found her conclusions to be puerile, to say the least. Certainly not worth starting up not one, but two, institutions for. Of course, a bunch of people got a very profitable religion from L. Ron Hubbard’s puerile books, so I am definitely in error of my non-comprehension of Ann’s greatness.
Silverback,
I don’t get the worship of Ayn Rand either. When I read her books I thought I was reading sci-fi philosophy also.
Of course, a bunch of people got a very profitable religion from L. Ron Hubbard’s puerile books, so I am definitely in error of my non-comprehension of Ann’s greatness.
I’m bemused by the comparison to L. Ron Hubbard, both in terms of the quality of their respective writings and in the cultural persistence of their respective visions.
To be fair to Rand, though, she actually believed in her philosophy — and her philosophy makes sense. I can’t say the same for Mr. Hubbard.
“I’m bemused by the comparison to L. Ron Hubbard, both in terms of the quality of their respective writings and in the cultural persistence of their respective visions.”
I can understand the corn-fusion…because after Ronnie L did’nt get his science-fiction award, he stated: “I can start a religion and make more money” (which he did)
That’s so good, alpha. I loved her stuff…when I was in high school. Sort of a starter philosophy
The sex parts were pretty exciting to high-school girls also, at least in the repressed little town I grew up in. They kept Atlas Shrugged BEHIND the librarian’s check-out desk in the late 1960’s in Belleville, MIchigan, to make sure that no one too young could get their hot little paws on it. Now, that’s repressed.
I read only the Fountainhead, which was entertaining enough though I skipped Roark’s long speech at the end. Whoever thought that was a way to end an novel?
Anyway, the individualism is inspiring to a young person who is insecure, not sure where he’s going etc. Kinda helps you pull yourself up by the bootstraps. But an enduring philosophy, no.
She got nutty at the end, too.
You know, maybe it was Fountainhead that I read, now that I think about it. It was the one with the architect, anyhow. And I remember something about tunnels, and, of course, the rumors about the book that was kept behind the librarian’s counter. Whichever one it was, it was kind of disappointing compared to the rumors that we discussed. Yeah, there wasn’t much to do in that town. Probably still isn’t.
“and not the subject of study by many academics.”
http://www.dailyprincetonian.com/2008/01/21/19886/
92% of donations from professors at Princeton went to Dems in 2008. Hmmm, and you say academics don’t study Rand much??? Shocker I tells ya, absolutely shocking!
Ann Rand? Juvenile.
Next.
I sit just me, or is it odd that the dow shot up 200 points yesterday on no real news, just in time for that to act as a cushion for the horrible jobs report?
Higher unemployment is good for productivity and corporate profits. Higher productivity means, roughly, that companies’ workers are producing more with no increase in production costs, or conversely, are producing the same as before at a lower cost of production inputs.
Why is this happening in the middle of a brutal recession?
1) The least productive workers (even before the effect of the above-mentioned “incentive program”) are naturally the first to be let go.
2) All those who received pink slips serve as a warning to anyone fortunate enough to still be employed that they had better work their tails off if they don’t want to be next to get shown the door.
above-mentionedbelow-mentioned(Sorry — I switched the order of my two points…)
I’m not convinced that companies can effectively identify the “least productive” workers in an economic sense. And the bigger the company, the harder it gets. I do think #2 is a very strong incentive to increase productivity, but it does not last forever.
I agree with companies not being able to effectively identify the “least productive” - at least that’s been my experience in both the public and private sector.
As far as #2, my employer just announced that we’ll be laying off some folks in the next few weeks, and while that news gets some people to be more productive, most are just as lazy as ever, rolling the dice that they are flying under the radar.
rudekarl,
Sorry to hear that’s going down. In truth, no one has been harder on the American Worker here than ‘me’. ( Just ask around? )
But I think most people are smart enough to realize, mgmt. has probably already drawn their line in the sand and those that are slated to go have been “inspected, detected and rejected!” I know this is going to sound conflicted but going all the way back to HS Football “try-outs” the coaches have usually made up their mind who is and isn’t going to make the team.
Oh… they’ll tell you it’s all “merit/hustle-based” but even HS’ers realize they’re up against tremendous odds getting “management” to change their perceptions. Who needs the extra heartache?
#1 and #2 are closely related.
If #1 isn’t true, and it seems like getting your pink slip is random, then why bother work hard to save your job?
Al,
Agreed, and I think, if you’ve been “flying under the radar” ( for ever and a day ) picking up the pace and putting some spring in your step is only going to accentuate the fact you’ve been slacking a long, long time!
Why risk it! Again I just see the AW as being so preoccupied w/ their personal lives ( which spill over into their ‘work’ lives ) with such unending intrusions/distractions, I doubt many could change ( or recognize the need for change ) if they wanted?
Just for a mind experiment, consider for a m-o-m-e-n-t, joining the French Foreign Legion? Yes, ‘that’ would be the polar opposite of the avg. AW. Sorry.
Incidentally, it looks as though the French Foreign Legion is hiring.
“Whatever your origins, nationality or religion might be, whatever qualifications you may or may not have, whatever your social or professional status might be, whether you are married or single, the French Foreign Legion offers you a chance to start a new life…”
http://3Ws.legion-recrute.com/en/
“least productive”
In every shop I’ve ever worked in, the junior employees went out the door, whether they were productive or not. (aka, the “eating your young” concept).
This typically happened immediately after you had spent 2-3 years training them, and were just becoming guys you could assign projects to, without looking over their shoulders all the time.
If you are a salaried exempt (assuming the plan is not eliminating your department entirely), the amount of brown stuff on your nose had as much to do with the layoff call as your “productivity” did.
That, or who you happened to pi$$ off.
Often the least productive are the ones that make the decisions on who to cut.
DING DING DING DING! We have a winner.
This has been pretty much my experience. The upper level slackers let the lower level most productive go because to keep them would eventually make themselves look bad and jeopardize their own jobs.
Also, the lower level slackers are easier to browbeat and threaten then the performers.
Jim, are you implying that the stock market might be somehow… manipulated?!
(just kidding. it is and no, it’s not just you)
Surprise! Surprise! Surprise! Mr. Carter…Gomer Pyle
Banks Thwarting Feinberg Pay Model by Changing Bonus Formulas:
By Ian Katz, Nov. 6 (Bloomberg)
“…Goldman isn’t shy about paying for performance, says Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. “They’re taking the lead as far as, ‘We believe in our people; we’ve done well; we’re going to stay the way we’ve always been and not change,’”
“A cynic is a man who, when he smells flowers, looks around for a coffin.”
Double digit unemployment finally being reported. But no worries, the recession is over. All is well. Nothing to see…move along.
Already being sold by the media as a ‘lagging inicator’ and having nothing to do with the raging recovery/rally. Party on.
Not to be a complete nudge but it is and has always been a lagging indicator. However, that doesn’t help you determine if you’re at the inflection point yet.
I’m starting to think the MSM has rehearsed talking points for anticipated bad news. I turned on a few channels this afternoon, and they were all parroting “productivity is up, so hiring new workers is right around the corner”. Then, I heard a guy mention that, typically, Manpower is a leading indicator of jobs creation, and they’re not hiring anyone. That’s absolutely terrible news- unless it’s “different” this time around.
Yep…Its less worse so all is well…And what about that little nugget inside the data…Government jobs were flat…
Government jobs were flat…
What? I thought they were expanding and taking over…
I thought they were expanding ??
They will..Just give it a little time for the storm clouds to go away…
Net Net is flat. Local and State govts down, Fed govt up - my guestimate.
Not my local…Not my State either unless you count 1 furlough day a month a cut…
Fannie’s Draws From Emergency Treasury Fund Reach $60 Billion.
Nov. 6 (Bloomberg) — Fannie Mae, the mortgage buyer seized by regulators, plans to tap emergency U.S. capital for a fourth time this year, bringing its draws of taxpayer money to $60 billion as the company sees no immediate end to its losses.
Fannie Mae will seek $15 billion in Treasury Department financing after posting an $18.9 billion third-quarter net loss, according to a Securities and Exchange Commission filing late yesterday. The Washington-based company, which posted $101.6 billion in losses over the previous eight quarters, has already tapped $44.9 billion from the $200 billion emergency lifeline.
“They’re going to need that $200 billion in capital, if not more, when this thing’s all said and done,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
The Treasury Department is also holding up an agreement Fannie Mae reached in the third quarter to sell about $2.6 billion in low-income housing tax credits, the company said. The company may have to write down the value of the credits and take a charge if it can’t find a use for the credits.
Losses will continue and the company remains “dependent on the continued support of Treasury to continue operating,” Fannie Mae said in the filing. The company said any profit it does make would be eaten up by $6.1 billion in annual dividend payments owed on the Treasury borrowings, a cost that exceeded its annual net income for five of the past seven years.
Does it seem to anyone else as though Fannie Mae’s unaffordable housing program is working well, despite the company’s difficulties?
I am wondering something. Looking at Ben’s next post… One of the things Japan did is force their savers to invest in low yeild government bonds.
I guess I am expecting that we will be forced to put retirement money into low yeild government bonds at some point. Probably limit 401K and tax deductable status to those kind of items. Perhaps the GSEs as well.
I’m guessing that will be another bullet to fire against deflation. Govt will take the money and build bridges to nowhere. Which reminds me of a hike I’m going to take this weekend.
So, I’d guess we are going to go even further in the war on savers and deflation.
Dow Hits 10,000!
Jobs Data Boosts Mood!
Much excitement in the stock market yesterday as the Dow Jones Industrial Average climbed back over 10,000 - but, as usual, reports failed to mention it’s way off the high mark set nearly ten years ago. Adjusting for inflation Thursday’s market close was 7,814 compared to the Dow’s January, ‘00 high of 11,722.
Financial reporters are generally cheerleaders. They’re in the promotion and entertainment business, not the news business.
Go PMSNBC!
Go PMSNBC!
This women must be a kook! The general voting population are to stooopid to get it, but they are getting “it”, good and hard.
“I encourage everyone to leave your disappointing alliances with Tweedle-Dem and Tweedle-Pub, and join an honorable third party. Get involved; run for offices at every level; campaign with Tea Party vigor, intent, and confidence. Third parties can only offer strong and viable candidates when good people join them and work together to achieve goals. If saving America and reinstating its fine constitution are not worthy goals, then nothing much matters anymore.”
~Linda Shrock Taylor
< “It’ll never happen in our lifetime,” scoff our friends when we suggest an alternative to the Democrat and Republican parties must be pushed forward. Yet they agree that the dominant political clubs have led the nation to the brink of ruin and laid an impossibly burdensome debt upon our posterity.
The Democrats and Republicans are opposed to operating central government under the restrictions of the Constitution, and look where this policy has led us.
Watch for opposition to the “same-old same-old” in 2010. Big-time!
How’d it work out for Ross Perot?
Montana:
You have no clue ….He was not allowed in the 96 debates…..to me that is when the 3rd party, and the American democracy ended.
http://www.fec.gov/pres96/presgen1.htm
What about 1992? He sure hosed that race. By 1996 he was strictly a sideshow.
You’re the one with no clue.
Thats why public financing is a must…and there will always be 3 candidates minimum at all debates…..
we have no other choice in America
in 96 he was NOT allowed in the debates cant you read…….he didnt have the money the other 2 did so he held back to spend it all after the debates and America gave him the middle finger
we blew it….And My network Court TV was such wussies they wouldnt even debate the legal issue.
Not 1 network even had a video crew assigned to Perot. Ir was like the Fed Election commission was God and they listened.
To me that signaled a radical change that the constitution, equal opportunity and fair play was hosed.
Compared to the other guys, he is/was a billionaire- didn’t owe his allegiance to corporate usa, and because he was/is himself a corporation, he called it like it was. And that was, we are heading for a major fall.
Too bad he took a tumble. His employees really like working for him and his corp seems to work well.
Filed under: “You’re a Genius!” …or… “I live in “The O.C.” & I use Craigslist…see how smart that is!”
O.C. man fathers (about) 20 kids, many by sperm bank:
“…In all, Kaiser guesses he has about 20 biological children, though, at this time, he’s not a caregiver to any of them.”
Kaiser donated outside of the sperm bank as well. Over the years, using equipment he kept at home and advertising vehicles such as Craigslist, he offered his genetic material – delivered without sex – to would-be mothers. He believes he fathered seven children this way.
“I like to be appreciated… I wanted to satisfy my urge for procreation.”
(Hwy: but vvvvvvvvvvvvvait there’s more):
Kaiser also theorizes that he could live forever.
“People think of death as the natural order of things,” he said. “We have intelligence, which animals don’t have, to reverse that.”
If immortality isn’t achieved, the man who is father to an estimated 20 children believes he might live on through cloning.
“I don’t mind to have a few clones myself. Maybe I will make some of my own clones when I’m in Mexico,” Kaiser said. “I would love to have 10 clones of myself to play tennis with.”
(Hwy wishes that the reporter ended the article with this quote):
“I no longer really feel that anybody’s … genetic material is superior,” says Kaiser, who lives in Westminster and works in real estate.
http://www.ocregister.com/articles/kaiser-children-sperm-2637640-says-bank
PostScript:
“…One of Graham’s first recruits for the repository, based in Escondido, was a Nobel Prize winner, which led it to be known as the Nobel Prize Sperm Bank. But that donor, Nobel physicist William Shockley, also brought the repository a reputation for participating in the darker side of eugenics, or selective breeding, because of his racist views that African-Americans are innately less intelligent than whites.”
Also, FYI…Westminster is bordered by Stanton (sub-prime income) & Garbage Grove…only 7 miles from Oct-O-Mom’s residence!
Ten clones sounds like a basketball game, not tennis.
Geez, what if he & his clones caught this disease: Narcissusitis
The Birchers TOLD them not to fluoride the water….
Unemployment rate hits 10.2% in October.
WASHINGTON (MarketWatch) - The U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years, the Labor Department reported Friday. Nonfarm payrolls dropped by 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million. Economists surveyed by MarketWatch were forecasting a rise in the unemployment rate to 10%, with 150,000 lost payroll jobs. The unemployment rate of 10.2% was the highest since April 1983. An alternative gauge of unemployment, which includes discouraged workers and those forced to work part-time, rose to 17.5%, the highest on record dating to 1995.
“An alternative gauge of unemployment, which includes discouraged workers and those forced to work part-time, rose to 17.5%, the highest on record dating to 1995.”
There is the real news. Converting this into a rough whole number approximation, over one out of six (= 16.7%) American workers is unemployed or severely underemployed.
And would you wager to guess that even that number may be lower than actual?
over one out of six (= 16.7%) American workers is unemployed or severely underemployed ??
And seeking work where ?? What is the percentage of unemployed/underemployed per available job ?? one out of twenty maybe ??
Well bear next week I start as a Nursing home DJ to make some money…I would call that severely underemployed
you may think I’m a little off for saying this -
that’s great!
You’ll have a fantastic opportunity to bring some sunshine into the lives of some old folks - and also a chance to network with their kids/grandkids when they come to visit.
I agree. This is good for you. I guess you’d still have time to do night gigs if you have to. Seniors generally don’t do clubbing.
I gotta ask. What kind of music?
Thanks…..Music Sinatra, elvis, a little benny goodman and even older stuff Andrew sisters…then some R&B Blueberry hill stuff… and doo wop form the 50’s…..
They usually have a birthday cake ….once a month…then maybe hokey pokey….
The hardest part of these is to start on time. Most homes have very limited parking and lots of them are located very close to a subway
One thing I can tell you, aNYCdj, since I used to be the biller for a n.h. while my mother was still alive and was slated to go into said n.h. ( I wanted to be with her every day to make sure she was okay, but she died suddenly before she was going to enter it due to a hemorrhage ), we had various d.j.’s and little bands and such that would come in monthly. Once the word got out that the residents liked the music provided, the music makers got more gigs on the n.g. circuit. The pay was fairly modest, but the jobs lined up. I knew of a woman who was a country singer who got a job for a n.h. supplier that had to make monthly rounds on the accounts to make sure that everything was okay with the shipments. She would arrange to do a concert at the n.h. after her business call ws over, and would get double pay for her day’s efforts. I thought it was cool. The seniors liked her. She would take requests and sing patriotic songs, etc. She also sang some of her own compositions, which were pretty good.
dj, that sounds kind of cool to me too. R & B, doo-wop - fun! Try Manhattan Transfer and Bryan Ferry’s standards on them, maybe some Blossom Dearie? - in addition to the usual.
Figure out if there’s some way to franchise the gig. Could you produce some kind of package, guide, DVD (the latter would need attention to copyright) that could be used by the activities directors or by their volunteer entertainers at assisted living and nursing homes all over to create a “professional dj”-like dance party for the residents?
These facilities are increasingly corporate-owned, so you wouldn’t have to distribute them to individual facilities.
Thanks hip and Silver.
Oh i will make it fun for them, and the pay is modest but there is volume… LOL
Alternative gauge = U6
U6 has been double digit since the dot com bomb.
Vermont State Rep. Fred Maslack has read the Second Amendment to the U.S. Constitution, as well as Vermont ’s own Constitution very carefully, and his strict interpretation of these documents is popping some eyeballs in New England and elsewhere.
Maslack recently proposed a bill to register “non-gun-owners” and require them to pay a $500 fee to the state. Thus Vermont would become the first state to require a permit for the luxury of going about unarmed and assess a fee of $500 for the privilege of not owning a gun.
Maslack read the “militia” phrase of the Second Amendment as not only the right of the individual citizen to bear arms, but as a clear mandate to do so. He believes that universal gun ownership was advocated by the Framers of the Constitution as an antidote to a “monopoly of force” by the government as well as criminals. Vermont ’s constitution states explicitly that “the people have a right to bear arms for the defense of themselves and the State” and those persons who are “conscientiously scrupulous of bearing arms” shall be required to “pay such equivalent..”
Clearly, says Maslack, Vermonters have a constitutional obligation to arm themselves, so that they are capable of responding to “any situation that may arise.”
Under the bill, adults who choose not to own a firearm would be required to register their name, address, Social Security Number, and driver’s license number with the state. “There is a legitimate government interest in knowing who is not prepared to defend the state should they be asked to do so,” Maslack says
Vermont already boasts a high rate of gun ownership along with the least restrictive laws of any state … it’s currently the only state that allows a citizen to carry a concealed firearm without a permit. This combination of plenty of guns and few laws regulating them has resulted in a crime rate that is the third lowest in the nation.
” America is at that awkward stage. It’s too late to work within the
system, but too early to shoot the bastards.”
” I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. ”
~ James Madison
+1. I may have to move to Vermont!
Guns in the classroom sounds like a winner to me. I bet the Senior pranks are going to be really funny.
It was a winner for me. My middle school had a class “Outdoors” something or rather. We were taught all the cool things like tying flies and reloading ammo. We all brought our shotguns to school on one day, taking them on the bus and we went to the local trap range for an outing. Ah yes, the good ol’ days when a middle schooler could take a shotgun to school. Oddly enough us farm boys never caused any trouble with them…
We were taught how to build a fire at a campsite, how to pitch all kinds of simple to super duper tents, how to tie knots, how to get found if lost. How to find water/ eat what kinds of bugs/plants to survive. The really important things.
I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. ”
~ James Madison
Amen…Just look at the gun restrictions…If you have “any” felony conviction (it does not take much to get one you know) you can never be in possession of any gun, even if you where hunting birds, for food, on your own property..Where is the rational for that other than another way to restrict gun ownership ??
Where is the rational for that other than another way to restrict gun ownership ??
Is that a serious question?
Is that a serious question?
Why sure it is…All felons should lose their right to protect themselves and their family…Is that the way you see it ?? If so, you just take a good hard look at how low the bar has been set to get a felony…
Guns were made with one purpose in mind, killing living things. Just so long as we’re cool with people killing each other, then party on with the guns.
Gun nut friends are all mad over the muslim dude shooting up a fort killing people. I don’t see the big deal. IT’S WHAT THE GUNS ARE FOR. GET OVER IT.
You can never own one, or just not until your probation/parole was up? Rather strange, considering not every felony is a violent offense.
You can never own one ??
NEVER…And not just own, but have it in your possession….So, if your married with children and your wife buys the gun but you use it to protect your family, its Bye Bye Pappa no matter what the perpetrator was doing…
Sounds like Switzerland except that the weapon is government issue there.
The small town of La Verkin, Utah (near Zion Natl Park) enacted a similar law a few years ago. You had to own a firearm or you were breaking the law. They also made it illegal for the United Nations to have any jurisdiction over them (which it never did anyway). Guess they were just playing it safe.
This combination of plenty of guns and few laws regulating them has resulted in a crime rate that is the third lowest in the nation.
Really? I thought it was the rural and small-town nature of the state, lack of any large urban centers with low-income neighborhoods and relative homogeneity of the population that accounted primarily for the low crime rate.
Yes, but the guns have kept the city slickers out.
Now what makes you think low income neighborhoods have anything to do with high crime?
(I mean besides all the evidence that it does?)
” I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. ” ~ James Madison
Might stopping an elementary school bus and having the police with K-9 units searching & sniffing through their school backpacks & persons to detect drugs be considered a gradual and silent encroachments…or….simply a needed legal authoritative “tool” to maintain & assist the compliance of a free people’s behavior?
Run Hwy…RUN!
“Under the bill, adults who choose not to own a firearm would be required to register their name, address, Social Security Number, and driver’s license number with the state. “There is a legitimate government interest in knowing who is not prepared to defend the state should they be asked to do so,” Maslack says”
This is too ‘big brother’ for my tastes. Besides, who says having a gun means you’ll use it to defend the state? Who says not having a gun means you won’t take one up if called to do so? Maslack is making a bit of a leap with his logic.
Guns are so lame.
IR and UV lasers are so more cruel and silent, and everybody loves chemical weapons.
And here I thought the health insurance mandate was bad…
Good morning,
Been a while since I’ve posted. I have been lurking though. I finally gave in and bought a home. I know I know please spare me the berating. I paid 420 for a foreclosure in an upscale 3 year old neighborhood where the average home sold for 775K. An independant CMA came in at 520 as well as the appraisal.
I need some help. The place is assessed for 630K. I’ve already emailed the assessor and he seemed pretty adamant about holding his ground. There were 2 comparable homes in the same neighborhood that sold for 520 earlier this year. They were also distressed.
It is my understanding that I need to establish “what the house would sell for in today’s market” regardless of foreclosure or whatever. The state is Mass. Can anyone offer advice as to what exactly I need to prove to win the hearing and get my taxes lowered? I have the appraisal, the CMA, the assessment details for the comparatives, and the records from Registry of Deeds.
Thanks in advance.
I will spare you any berating others may have in store; I always tell people to go ahead and buy a home if there is something that works for them personally.
However, I believe you may have discovered one of the hidden pitfalls of buying a home at what may actually be quite representative of current market values, at a time when governments are frantically working to reflate the housing bubble, and MSM reports are repeating the mantra that foreclosure homes sell at “below market” prices. I have personally never bought into the idea that foreclosure homes are somehow tainted, and hence will sell for less than a comparable non-foreclosure home, but good luck at convincing your tax authorities that this is the case.
Buy a gun.
Load it.
Put it in your mouth.
Pull trigger.
Repeat if necessary.
I hope you didn’t buy a great white elephant. Those great big houses are going to lose their appeal as tax rates skyrocket.
I wonder if all the socialists up there know if they are a leading indicator tax wise.
Get a lawyer to help with your appeal.
I have been thinking about all those folks who are currently responding to the $8K tax credit incentive to purchase a home priced above $N00,000, for N > 3. Will they feel like the government betrayed them later on if (1) current housing price supports prove unsustainable in a rising rates environment; (2) tax rates go up to levels which create a substantial drain on households who bought expensive homes?
I am a MA lawyer. You have 30 days from when you get your tax bill to file for an Abatement. The form is available from you local assessor’s office or online at the MA DOR site. You must file within 30 days. Nov 1st is often the first bill, so keep you eyes peeled for it, especially if it goes to the old owner first. If you miss or missed the deadline, you have to wait for next FY.
Apply, submit your Deed and the Appraisal, they are “proof” of the true market value. Don’t take the Assessor’s word for it. File and if you don’t get it knocked down to at least the appraisal amount, take the appeal to the ATB in Boston. Your info is current and much better then their 1-3 year old assessments.
It is a lot different telling you this stuff over the phone then actually acting on your Abatement Application which they will have to justify.
add the extra w’s. Form is here.
w.mass.gov/Ador/docs/dls/publ/forms/abatement.PDF
Off to an actual real estate closing!!!!
Selling for $1.0m out of an estate. Decendant died in 2007, date of death value was $1.6M. Cash deal…..
Wants Out,
Congrats! Hope you love the place. The only thing “I” would say is, resist the temptation to throw money at it just cause you got a deal.
I know it’s hard but for now, I’d just live in it! ( Unless of course you want to rub it in to your neighbors that paid $750? ) Oh and do something about that screen name will you? Enjoy, just in time for the holidays!
Hi DinOR
Screen name is representative of how long I’ve been on here. Was trying to sell in early 06. Sold 980 sq ft condex for 350 PSF. Bought this home for 127 SF. Like lots of others have daughter and father moving in and consolidating.
Interesting. Congratulations and all the best to all of you.
The assessor must have a appeal process…Get the requirements and follow them “to the letter”…
At least you have good evidence in the actual purchase price. Mine just went up 10% but I’m afraid if I appealed it might come to light that it’s worth more due to comps and significant improvements we made, though I have no real idea what I could get for it in this market.
Guess I just leave sleeping dogs lie.
Thanks to those for the positive input. I’ll let you know how I make out. Apparently next slot is January.
Mass has a 2-3 year delay on these things. Your 2009 tax assessments are based on what the value was in 2007, maybe even 2006.
What is to be done? Nothing. You bought yourself a tax bill. It will go down next year, and the year after that. And when prices go up, there will be a couple years’ delay until it resets.
Bummer. In California prop taxes are based on the sales price, foreclosure or not.
Is credit tightening or isn’t it? Me confused.
This morning a coworker told me that the pending sale of his daughter’s condo fell through. Apparently the young gentleman who was buying it made the mistake of going to a bank for the loan. When the bank saw his occupation was listed as “contractor” - they nixed the deal. Cited “unstable income” as the reason.
If you have good credit and a stable check there is pleunty of credit from what I have seen.
- Loose as ever for Wall Street’s Megabank, Inc
- Tight at the Main Street household level
PB,
+1/LOL
Perhaps a better description would be “tight at the Main Street sphincter level”
Is credit tightening or isn’t it? Me confused ??
Oh its tightening alright…I just had lunch with a friend yesterday to discuss some business…He is a fairly wealthy individual…For a very long time he has had a line of credit for 1 mil…He was contacted by the bank, they apologized to him out of fear of losing his business but told him that his line of credit was being reduced to $211,000….We both laughed at the $11,000. part…How did they come up with that..?? The net effect ?? He has totally shut down doing any new business…He will just manage what he has and keep his cash in reserve…
Where is the condo? In Florida, for example, it seems very difficult to get financing on a condo, period. I suppose if the LTV is 50% that would help, but lenders are very worried about getting hosed over lending for a condo when the complex could go belly-up. An educated guess is that it should be easier to get a loan in a well-established complex where a large percentage of owners bought at pre-1998 prices or own their units outright. But for condos built in the last five years, I bet all lenders are very skittish about funding loans.
It’s a vintage conversion in Chicago’s Lake View neighborhood. Somewhat desriable area, but with a lot of turnover and a lot of low equity younger “owners”.
Would a bank do that, though? Cop out over the income stream when it’s really the condo that scares them? It would be interesting to know.
When I search RealtyTrac for Chicago, IL and “condos,” it shows 3,822 properties under the category of “pre-foreclosure,” 2,162 as “bank-owned”and only 1,646 as “for sale/MLS.”
I know zero about Chicago, so can’t extrapolate much from that. But if I were a mortgage lender here in Orlando, I suppose I’d be concerned. If you have a zip code, I can give you a count specific to it.
Correction: didn’t notice the fields for inclusive dates searched. When I made it 8/15/09 to 11/6/09, these are the numbers: 1302 properties under the category of “pre-foreclosure,” 496 as “bank-owned.”and only 833 as “for sale/MLS.” (I don’t normally use the service for these numbers so never paid attention to the beginning-date field).
The household survey (including the self employed) has a different view of the seasonally adjusted job loss last month — 589,000. Perhaps when the get the phone call, more real estate brokers are calling themselves unemployed or out of the labor force rather than employed with no sales.
Labor Force Statistics from the Current Population Survey
1-Month Net Change
Series Id: LNS12000000
Seasonally Adjusted Series title: (Seas) Employment Level Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2008 23(1) -242(1) -52 234 -283 -236 -142 -323 -244 -372 -513
2009 -1239(1) -351(1) -861 120 -437 -374 -155 -392 -785 -589
1 : Data affected by changes in population controls.
The household survey (including the self employed) ?
And therein lies the real picture of whats going on..
GE To Close Its Solar-Panel Manufacturing Plant In Delaware
Dow Jones
November 06, 2009: 09:15 AM ET
NEW YORK -(Dow Jones)- General Electric Co. (GE) plans to shut down its only solar-panel manufacturing facility, as it found that prices for panels fell below production costs, Clean Technology Insight has learned.
“On October 23 we announced the restructuring of our solar business to employees and our intent to close the Newark [Del.] facility,” said Milissa Rocker, spokeswoman for the company, in an interview.
GE’s production facility is a victim of a rapidly evolving solar market, where older U.S. plants are shutting down, reducing production, or outsourcing abroad, even as some foreign manufacturers, like those from China, plan to open new manufacturing in the U.S.
The decision to shut down production was “mainly due to the challenges in the solar industry, including overcapacity levels that are twice demand and industry pricing that’s below the cost of producing the panels,” said Rocker.
GE plans to stop manufacturing crystalline silicon panels on Jan. 1, 2010. It will close the plant by the end of June of next year, she said.
The plant currently employs 82 people. All will be laid off, receiving severance and benefits packages, she said.
Let’s just burn some OPEC oil instead. To be replaced, someday, by Chinese solar panels — if we can afford them.
This country is at war with its own future. “I want for me now!”
WT,
The solar bubble was a scheme to use more oil, not less.
“The solar bubble was a scheme to use more oil, not less.”
???
Can you please explain what you mean by that?
How about let’s pay a government (taxpayer) subsidy to GE to keep the plant open and continue to make solar panels, pricing them low enough so that they WILL sell.
Or get straight to the point. Expropriate the GE plant, turn it over to a union, and have the taxpayer cover the losses forever. Like GM.
Prime,
Almost all of the solar cells being produced use the same technology as we had back in 1970. The manufacture is energy intensive all down the materials chain. The inputs are larger than the energy the cell will produce in its life. And that assumes a life of 30 years, wich is dubious.
Like Real Estate, the investment only makes sense if you assume constantly ramping price. Buy now or be priced out forever.
There are less energy intensive processes in the pipeline, so maybe there is something to look forward to. Based on my short life experience the next big thing is likely to be the next big scam.
What he said……
Until and unless alternative energy sources are competitive with current sources WITHOUT big government subsidies, nobody is going to switch over and pay a premium for being “green”.
And why spend the money to develop anything here, when the engineering can be shipped overseas with just a mouse click.
You’ve got to wonder why we are having such a debate about health care and keep people alive longer, when we aren’t going to have any jobs for them anyway.
That GE plants was using old tech. Crystalline substrate with glass (or plastic) overlay.
New solar tech is film. Film substrate with film optic magnifiers overlayed. And huge new plants are being opened here using this tech.
WT Economist,
I’ll respectfully disagree. That should read:
“I want for me yesterday!”
Or “I wanted it for me yesterday, and got it, but now I still want it, and can’t have it!”
More and more people I talk to in this industry are saying outright that none of this alt energy stuff ever made economic sense without government support at every level. They are loosing heart now because they aren’t seeing any Obama $.
China still expects US stimulis to boost the solar industry, so they continue to invest. They are way behind the curve.
I’m putting 130 watts on my 17 foot trailer. Is it cost effective at about 2k? Probably not. A portion of that cost is so I can run my laptop and camera gear (pure sine converters aren’t cheap).
I’m paying for the ability to stay out in the outback for as long as my food/water hold out and not freeze to death, it will also run a small heater as much as needed. Cloudy days? When my batteries become depleted, I put on the down. I could do that anyway and save 2k, but I’m too soft.
I don’t think solar is really going to become cost effective until we run out of oil…but then how do we make the components?
I’m beginning to think more like my geologist friends. Given a few million years, what diff does it make? The earth once had no polar ice caps and was 10 degrees warmer. The reptiles ruled. They may rule again, but in the meantime, I can log onto Ben’s Blog thanks to my solar system.
Congrats, Lostie!
Maybe while you’re holed up this winter you can figure out how to make an efficient battery out of doggie waste? You’ll make a fortune!
“I’m paying for the ability to stay out in the outback for as long as my food/water hold out and not freeze to death, it will also run a small heater as much as needed. Cloudy days? When my batteries become depleted, I put on the down. I could do that anyway and save 2k, but I’m too soft.”
Losty, better keep your Amish Pedal Powered Generator as a backup for your computer. We need updates and also have to be sure your still alive and kicking this winter.
They can run messages to town when everything crashes.
My motto: Simplicity in all things, including personal effort.
Thanks, Maikey…
Maikey = Mikey
Flippin’ keyborad…keyboard…
The German solar industry shut down their plants
last month as being unprofitable and low demand.
They need to figure out how to make the panels cheaper. Then they sell more. They aren’t cost effective.
There is a show on TV called how it’s made. They show complex items being made by machine very rapidly. Then the one on solar panels has some guy making it by hand, he builds two panels a day or something very weak.
I can attest to that. A colleague and I visited a solar panel plant once to watch them being made. Once we got out, I said, “This will never work.” People are soldering wires by hand, and the assembly line itself was not automated. Anytime a half-constructed panel had to turn a corner, it was physcially done by workers.
I wonder what’s going on at Nanosolar…
I posted this in yesterday’s bits…
AP
Thu Nov 5, 1:15 pm ET
MARLBOROUGH, Mass. – A solar panel company is moving some jobs overseas after receiving $58 million in state aid and being touted by Massachusetts Gov. Deval Patrick as a symbol of the state’s economic future.
Evergreen Solar Inc. said Wednesday it is moving panel assembly jobs currently done at a plant in Devens to China next year.
So…let’s be clear here. Are these solar/green jobs coming here or are they going there? There appears to be a slight discrepancy between actions and words at this point on the matter.
IIRC there is (or was) a big Saturn plant in Newark right near a strip mall. Other than the insurance companies, drug companies and the university of Del., Newark is losing manufacturing jobs that may never come back.
Newark? You can substitute the name of almost any city or town and still be correct.
Yes, the Saturn plant closed, many jobs were lost.
But Uncle Joe came through for his home state:
“Oct. 27–Delaware appears to be an early winner in the nation’s green-car movement as Vice President Biden, the state’s former U.S. senator, is expected to announce today that a two-year-old California luxury-car company will reopen the shuttered General Motors plant on Boxwood Road near Wilmington “
I Binged wilmington luxury car and found more info…
WILMINGTON, DEL. — Luxury automaker Fisker Automotive is buying a shuttered General Motors assembly plant in Delaware to produce plug-in hybrid Electric Cars, officials said Tuesday. The California-based company has signed a letter of intent with Motors Liquidation Co. (MLC), formerly known as General Motors Corp., to purchase the Wilmington plant for $18 million after a four-month evaluation period. Fisker, which recently won approval for $528.7 million in government loans to develop…
Whoh. That’s a big government loan…to build a plug-in hybrid…in an old GM plant…which the gov took over.
Didn’t Obama say — several times — that he agreed to bailout GM because he wanted to use GM to build greener cars? Looks like the admin is doing just that…right under the radar. And rewarding El Gaffe-o in the process? This has “Obama aikido” written all over it.
I think moving plants to China as a slow moving trade war escalates will turn out to be a major bad move.
Obama is visiting China and they are planning on having a “happy visit and don’t want to spoil the mood”. At least that was some of China’s press release.
So.
Solar business is in lots of ways a semiconductor business.
Things can change pretty fast. Fabs become obsolete. Technology becomes obsolete.
I hear the thin film guys have made a lot of strides on cost. I expect there to be some market for those kind of things. A lot of remote areas could use those types of systems for power and it would be cheaper/simpler than hauling a massive gas generator out there.
Still, it was at 4$/kWhr a few years ago. If they made an order of magnitude improvement it would be a 0.4$/kWh. Solarbuzz has them at 0.2$ to 0.4$.
Where does it need to be?
Current technology… 0.5-.12$/kWh retail price. Actual costs are about 1/2 of that.
So, it is still in the realm of high tech fantasy and investment other than research and development is a mistake. Or the business should be about servicing a niche market. Like sailors or hikers.
And this has nothing to do with the price of oil. This is all based on coal/uranium/nat gas. Of which we have plenty.
Kind of funny. The only irreplaceable import for the US is oil. Everything else. Who gives a sh7t. We could just make it here and eventually we will.
This is what drives me to talk about more light rail/electric trains/EVs.
“after receiving $58 million in state aid”
Clawback, please?
Battery and solar tech are improving rapidly.
What is currently common knowledge both here and in general is actually 10 years behind production reality, let alone what is currently coming out of R&D.
And the stuff out of R&D is being implemented as fast as they can ramp it up.
Uh. I dunno about that. Basically seeing some improvements in solar cells BUT…
1) The new higher efficiency cells use a lot of rare dopants and are very expensive
2) The higher efficiency only happens at certain levels of light exposure so needs a collector mirror type system
3) The lower efficiency thin films are getting in the cost ball park but reliability and efficiency are not real good.
I’m not in the solar cell business but we are a high end user. Still seems to be a ways off.
Like I said though, things change pretty fast in semiconductor technology and its a lot closer than it used to be.
Solar tech is ramping quickly. Batteries, not so much.
I got so disgusted with the batteries that I got out of the off grid installation business, after I realized it was a dead end, for that and a number of other reasons.
http://www.cnbc.com/id/33700371
Wells Fargo says we aren’t saving enough for retirement what a joke, I love the comments left by readers.
Unfortunately, it’s going to get worse before it gets better.
“Dancing with the Stars” is on right now, you know?
Those were some pretty Pithy ( or Pissy ) comments all right. I can’t say as I disagree with them too much. I know that my life is well over half over. Although I save quite a bit each month toward my retirement, I make sure that I ( and of course my beloved husband ) have some fun each and every week. We go to W.D.W. once a year. It’s expensive, but we have our time share points and we pay the freight and go down there to get out of our Michigan winters and enjoy some life and Mickey. We like D.W. Whether it’s W.D.W, the corner pub, a motorcycle, a house ( ! ), Las Vegas, or a special book or trip, make sure you have had some pleasure as well as nose-to-the-grindstone time in your life. You never, never know when you’ll check out. Get the H1N1, and if you’re amongst the rather large group that has to be hospitalized, 11 % will be dead in a few weeks. Per WWJ news radio news broadcast this week, so sorry, I can’t provide a link. But I can say that from the charts that I have to read every day, do the Snoopy dance over something that makes you happy, because really, you could be G-O-N-E rather suddenly. Spending the last few weeks on a ventilator with my limbs going necrotic is not a pleasant way to go, but luckily, you’re unconscious.
“…Spending the last few weeks on a ventilator with my limbs going necrotic is not a pleasant way to go, but luckily, you’re unconscious.”
PRECISELY the reason we need to have an honest national discussion about end-of-life Medicare. At 20K a day, three weeks of vegetation X 52 million baby boomers adds up pretty quickly— whereas a shotgun shell costs a buck three-eighty.
We agree …Why cant I have the right to choose when to end it without anyone getting sued or arrested?
Or to put it another way I don’t want anyone wiping my butt for $8 hour……let me end it now.
No recovery is in sight so long as economic reports persistently keep on coming in “worse than expected.”
The real (unreported) bad news: As the recovery eventually takes shape, an army of so-called “discouraged workers” will return to the labor market, spontaneously increasing the numerator of the unemployment rate (the part of the calculation which makes unemployment go up), and keeping headline unemployment at double-digit levels for the foreseeable future. A more interesting statistic to watch might be the spread between headline unemployment and the unofficial number which reflects underemployment and discouraged workers (currently measured at 17.5%, according to another post on this thread).
Economic Report
Nov. 6, 2009, 9:48 a.m. EST
Unemployment rate hits 10.2% in October
Payrolls fall by 190,000, 22nd straight decline
* Can Congress do anything to spur job growth? (9:40a)
* Jobless claims fall 20,000 to 512,000 (Nov. 5)
* Unemployment rate expected to hit 9.9% (Nov. 5)
* Dollar edges lower ahead of jobs data (6:57a)
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - The U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years, the Labor Department reported Friday.
Nonfarm payrolls dropped by a seasonally adjusted 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million. It was the 22nd straight decline in payrolls. Large losses were seen in manufacturing, construction and retail. Health care and temporary-help agencies added jobs. Read the full government report.
The October jobs report shows a growing disconnect between a recovery in economic output and continued job losses. The economy grew at a 3.2% annual rate in the third quarter, with productivity rising at a 9.5% rate.
“The grinding pace of progress in labor markets likely flags a tepid economic recovery,” wrote Sal Guatieri, an economist for BMO Capital Markets.
The report was worse than expected. Economists surveyed by MarketWatch were forecasting a rise in the unemployment rate to 10%, with 150,000 lost payroll jobs. An upward revision to August and September payrolls cushioned some of the disappointment, however.
…
10.2%, 10.4%, 12.5%…why all the hair splitting? We’re only highly trained economists. What the hell do we know? Go away, you’re drivin’ us meshugganah.
A key leading inflation indicator is up by over 10 percent within the past month. Got stagflation?
market pulse
Nov. 6, 2009, 9:57 a.m. EST
Gold hits $1,100 an ounce as unemployment worsens
By Moming Zhou
NEW YORK (MarketWatch) — Gold futures rose to a new record high of $1,100 an ounce Friday after data showed the U.S. unemployment rate topped 10% in October, raising the metal’s appeal as a safe asset. Gold for November delivery gained 1% to $1,100 an ounce on the Comex division of the New York Mercantile Exchange, the highest level for a front-month contract. The more actively traded December contract rose to $1,101.90 an ounce.
…
A key leading inflation indicator is up by over 10 percent within the past month. Got stagflation?
Meanwhile, other asset prices are pitching and swooning like the waves on an angry sea. Got volatility?
market pulse
Nov. 6, 2009, 9:57 a.m. EST
Gold hits $1,100 an ounce as unemployment worsens
By Moming Zhou
NEW YORK (MarketWatch) — Gold futures rose to a new record high of $1,100 an ounce Friday after data showed the U.S. unemployment rate topped 10% in October, raising the metal’s appeal as a safe asset. Gold for November delivery gained 1% to $1,100 an ounce on the Comex division of the New York Mercantile Exchange, the highest level for a front-month contract. The more actively traded December contract rose to $1,101.90 an ounce.
…
Sorry for the double post — the one-minute waiting rule occasionally snags me…
Conway plant to stop bus making; up to 477 jobs affected
Associated Press (2009-11-05)
(UALR Public Radio) - The owner of a plant that has made school buses in Conway for decades says that will end soon, affecting up to 477 jobs at the facility.
IC Corp.’s parent company, Warrenville, Ill.-based Navistar, told employees Thursday it would cease bus-production operations at its Conway plant.
“We have to consolidate our bus-assembly operations into one facility,” Navistar spokesman Roy Wiley said. “Unfortunately for Conway, Tulsa is a much newer facility.”
Navistar opened the Tulsa plant in 2000, moving into a former aircraft manufacturing facility. Wiley said a smaller operation would continue at Conway, making parts for buses.
Wiley said the economy has reduced bus orders from school districts.
According to Wiley, as many as 477 jobs could be involved, either through layoffs or dismissals. He said layoffs will not start until Jan. 4.
Conway Area Chamber of Commerce President and CEO Brad Lacy said the loss of that many jobs was horrible news for the community. But the impact is more than economic, he said.
This is awesome!!! I hope more Senators see the light on the real problem, and ignore the central bankers at the top of the Fed and Treausry who are fully captured by Wall Street interests!!!!
BUST THE TRUSTS!!!!!
I personally plan to send a campaign contribution to Senator Sanders, and I hope other readers here will consider doing the same. We should support any and all politicians who are willing to take a stand on the real issues.
Published on Friday, November 6, 2009
by The Huffington Post
Sanders Tackles Too Big to Fail in Two Pages
by Sam Stein
Senator Bernie Sanders (I-VT) introduced new legislation on Friday that should, he claims, solve the phenomenon of massive and failing financial institutions holding the nation’s economy captive.
It’s all of two pages long.
The Vermont Democrat-Socialist unveiled the “Too Big to Fail, Too Big to Exist Act” — which he billed as a succinct remedy for tackling financial risk and avoiding a repeat of the taxpayer-funded bailouts that occurred just one year ago.
The act is straightforward. It would require that 90 days after its passage, Treasury Secretary Tim Geithner “submit to Congress a list of all commercial banks, investment banks, hedge funds and insurance companies that the Secretary believes are too big to fail.”
Subsequently, one year after the law is enacted, the Treasury Secretary would be required to “break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.”
…
“It’s all of two pages long.”
Not only is this legislation a great idea, but it also will clearly meet the objectives of the Paperwork Reduction Act.
FWIW - while a 1900-page act is insaneness, a 2-page act is a merely a publicity stunt, IMO.
Interesting to see, and not necessarily inappropriate - but I’m sure it won’t be (and probably can’t be) taken seriously as pending legislation.
Let’s think of it as the germ of an idea, and build from there.
Small acorns grow into mighty oak trees. I think of this little two-pager from Senator Bernie Sanders as planting a seed of faith that the rapacious, illegal, government-sponsored cartel known here as Wall Street’s Megabank, Inc will eventually be busted up like previous illegal monopolists in America’s storied history. It is just a matter of time, and it will help expedite the process if we all keep the faith. Our country can rise again from the ashes of this financial meltdown the same as it rose from the Revolutionary War, the War of 1812 and the Civil War.
28 Now, we will compare the word unto a a seed. Now, if ye give place, that a seed may be planted in your heart, behold, if it be a true seed, or a good seed, if ye do not cast it out by your unbelief, that ye will resist the Spirit of the Lord, behold, it will begin to swell within your breasts; and when you feel these swelling motions, ye will begin to say within yourselves—It must needs be that this is a good seed, or that the word is good, for it beginneth to enlarge my soul; yea, it beginneth to enlighten my understanding, yea, it beginneth to be delicious to me.
29 Now behold, would not this increase your faith? I say unto you, Yea; nevertheless it hath not grown up to a perfect knowledge.
30 But behold, as the seed swelleth, and sprouteth, and beginneth to grow, then you must needs say that the seed is good; for behold it swelleth, and sprouteth, and beginneth to grow. And now, behold, will not this strengthen your faith? Yea, it will strengthen your faith: for ye will say I know that this is a good seed; for behold it sprouteth and beginneth to grow.
31 And now, behold, are ye sure that this is a good seed? I say unto you, Yea; for every seed bringeth forth unto its own alikeness.
32 Therefore, if a seed groweth it is good, but if it groweth not, behold it is not good, therefore it is cast away.
33 And now, behold, because ye have tried the experiment, and planted the seed, and it swelleth and sprouteth, and beginneth to grow, ye must needs know that the seed is good.
34 And now, behold, is your knowledge perfect? Yea, your knowledge is perfect in that thing, and your faith is dormant; and this because you know, for ye know that the word hath swelled your souls, and ye also know that it hath sprouted up, that your understanding doth begin to be enlightened, and your mind doth begin to expand.
35 O then, is not this real? I say unto you, Yea, because it is alight; and whatsoever is light, is good, because it is discernible, therefore ye must know that it is good; and now behold, after ye have tasted this light is your knowledge perfect?
36 Behold I say unto you, Nay; neither must ye lay aside your faith, for ye have only exercised your faith to plant the seed that ye might try the experiment to know if the seed was good.
37 And behold, as the tree beginneth to grow, ye will say: Let us nourish it with great care, that it may get root, that it may grow up, and bring forth fruit unto us. And now behold, if ye nourish it with much care it will get root, and grow up, and bring forth fruit.
38 But if ye neglect the tree, and take no thought for its nourishment, behold it will not get any root; and when the heat of the sun cometh and scorcheth it, because it hath no root it withers away, and ye pluck it up and cast it out.
Amos 5:24 But let judgment run down as waters, and righteousness as a mighty stream.
Common sense legislation? Traitor!!
Next item: The 20,000+ page Internal Revenue code books!
Good idea. May be we need more of the socialists in US congress.
Other TBTF organizations?
1. US Military
2. Social Security
3. Medicare
4. Home land department?
5. What else?
Uncle Sam
US Consumers?
China
Megabank, Inc USA should be scared — very scared… BOOOOOOOOO!!!!
My nine-year-old son just asked me about robbing banks. I told him that some times, the banks rob the people. When banks are robbing America blind, it is time to break them up. Let’s get on with it — it’s bound to happen sooner or later. BUST THE TRUSTS!!!
Finance and Economics
Europe’s troubled banks
The muscles from Brussels
Nov 5th 2009
From The Economist print edition
Decisive action on zombie banks from…the European Commission
Illustration by S. Kambayashi
NEELIE KROES has, according to one analyst in London, “cut through all the bullshit”. Europe’s competition commissioner has trod where national regulators dare not, by imposing harsh penalties on the banks that received the biggest bail-outs in Europe. On November 3rd Britain’s two monsters, Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG), got the treatment. In the preceding week ING, a Dutch insurance and banking conglomerate, surprised investors by announcing a break-up and a capital raising. Over the summer Germany’s Commerzbank and WestLB both agreed to tough penalties. Several more banks, including Dexia and KBC, both based in Belgium, and Germany’s Hypo Real Estate, are next in the commission’s line of fire.
…
by compoundcaptive on Nov.05, 2009, under Politics
Still too big to fail?
James C. Sandefer
If you’re on board with the “too big to fail” scam run on the taxpayers, then you’ll go wild over the latest financial reform proposal making the rounds in Congress. It’s another brainchild of none other than Barney Frank, chairman of the House finance committee. As with many of his initiatives, this one also does virtually nothing to change the present arrangement of the financial system.
First of all, don’t worry; the “too big to fail” financial institutions won’t be diddled with. In all probability, they may grow even bigger and less accountable than they are today, which is hard to comprehend. The behemoth firms such as Goldman Sachs won’t notice any tighter oversight and will continue to gamble on loans using money guaranteed by the Federal Deposit Insurance Corporation (FDIC). The good news for the Feds is that the Federal Reserve Board will be given a more powerful role than what’s in place today. Gosh, that’ll all but guarantee that none of the same dim-witted decisions that got us into the current economic sinkhole are replicated.
Seriously, nobody in their right mind wants the Feds to fail because we, the taxpayers, are always on the hook for the bailout scheme. But the legislation being pushed by Mr. Frank will open the door a bit wider allowing additional government control to come through. If he gets his way, the new and improved Fed will be allowed to decide which financial firms are run through a bankruptcy-like resolution process. And guess who foots the bill for that cumbersome, lawyer-heavy process.
…
Indeed, who?
The office vacancy rate in Abu Dhabi right now is a pretty healthy 5%. In Dubai, however, the vacancy figure is closer to 25%. And those rates will probably go up between now and 2011 when those buildings that are going up around us finally are completed. In fact, some brokers think half of the office space in Dubai might be empty in two years’ time.
A similar phenomenon is in evidence in Dubai’s residential-property sector. The reason apartments and houses are easier to find right now is that there are more of them — and fewer people to take them. With foreign investors packing up because of the financial crisis, the construction boom of the past six years has found itself alone in the room. There’s a lot less demand for apartments, a situation that can only get worse when tens of thousands of additional units come on to the market. Colliers International, a property consultant, figures there’ll be 34,000 additional new homes in Dubai alone in two years, an oversupply that means whatever recovery one might have expected in property prices is that much farther away.
…
A similar phenomenon is in evidence in Dubai’s ??
A friend that owns a restaurant where I occasional eat just got back from Dubai…She said that the massive malls were like ghost towns..She said at times she could look any direction and not see one single human being….
Is Dubai’s humidity levels in a range good enough to support “property perservation” ?
A few years ago on this blog there were a few posters who thought “investing” in Dubai property, and working there, was a good idea. I posted that I have worked in Dubai (and Abu Dhabi) in the past.
Ever spend much time in 120-130 degree heat? All you think about when you are outside is getting inside. The sandstorms can be awful and that dust finds its way into and onto everything in your house no matter how hard you try to keep it out.
The Emirati are polite and the UAE is a strong ally of this and other Western countries, but Emirati view foreigners much the way many of us in Orlando view tourists, a necessary inconvenience not worth interacting with other than for business.
Some of the most beautiful contemporary architecture in the world is in Dubai. Well before the bubble peaked, there were scores of jaw-droppingly beautiful office buildings in the city - each owned by a prince who wanted to out-do the others and each reputedly about 20% occupied.
The real estate bubble in Dubai, IMO, was nothing more nor less than the type of bubble we experienced in the most bubble-icious US cities - wild speculation based on assumptions that we all were in some great new paradigm of ever-increasing wealth and RE prices. They were just so rich that they were able to take it to an exceptionally high degree of speculation and now they have to deal with the wreckage, like the designer islands they created in the water that likely will become just part of the seabed over time.
If I had a good reason to live and work in the Gulf, then Dubai probably would be at the top of my list, because it is the most accommodating of cities in the region relative to Western lifestyles (pork, alcohol, dress, etc.). But I don’t, and apparently a lot of other people who did no longer do, compounding the error of the RE speculators who thought expats would flock there just because it’s got a lot of beautiful buildings and luxury that is owned by someone else.
There was a link to a story a while back, about some 40-ish American/British woman living in a car in the Dubai airport parking lot. Husband got into some kind of money trouble, put in debtor’s prison, then got sick; neither were allowed to leave until their accounts were settled.
It would be nice to see that happen to the guys running Halliburton.
Hey Chip, welcome back…I had not seen you post in quite some time…. I was going to mention this the other day…but I noticed you posting right after one of Hwy’s “A Fourth Day” and I was thinking I had a “lost memory” type of next day…
Hi, Hwy - thanks very much - we had several months of very heavy family commitments and visitors. It was difficult to get enough quiet time to read Ben’s blog and to post comments. Doubtful I’ll ever be as blabby as I once was, but will try to stay in the mix as much as possible.
Hwy - thanks very much. The blog filter might be acting up. I posted a reply to you and another one and they didn’t show up, but a shorter subsequent one above just did.
Chip, I’m also glad to see you back, and thanks for your comment. Oily sandy places…
Ditto, Hwy.
Good to see ye again, Chip!
I’m trying to understand these comments. Do they mean that if other nations are breaking up too-big-to-fail financial institutions, the US must follow suit?
UPDATE 2-Global view key to US role on failing banks-official
Wed Nov 4, 2009 12:49pm EST
* US Treasury’s general counsel urges level playing field
* US authority shouldn’t treat U.S. firms differently (Adds comments from JPMorgan official, background)
By Emily Chasan
NEW YORK, Nov 4 (Reuters) - The proposed U.S. financial resolution authority, which would empower the government to deal with large, failing financial firms, must take care not to alter international competitive balance, a key U.S. Treasury Department official said on Wednesday.
There must be “a recognition that we have to level the playing field as much as possible, as much as we can, in the international sphere,” George Madison, who has been general counsel at Treasury since September, said in comments to a Practising Law Institute conference in New York.
While proposals related to the proposed authority are still “in flux,” Madison said, regulators should be “making sure U.S. institutions aren’t treated too differently than foreign firms.”
…
Did anyone else notice how when you cut and paste articles from Reuters, there are some times extras which appear in the pasted version of the story which do not appear on the web interface to the original?
Like this one, for instance:
“Adds comments from JPMorgan official, background”
That only showed up when I posted it here…
“Adds comments from JPMorgan official, background”
Did you cut and paste from the Reuters site itself?
Because those comments are visible on the page above the byline in Update 2, explaining the changes in the updated version …
OK, next question: Is it odd to anyone else that an article quoting a “key Treasury Dept official” is also laced with comments from a JPMorgan official? Does the US government have an independent voice from Megabank, Inc, or do the Fed and Treasury serve as the proverbial Megabank megaphone (snark!)?
Does the US government have an independent voice from Megabank, Inc …?
That is an excellent question, and the answer seems increasingly apparent.
So I saw a live puppet show at a Halloween festival this past weekend. It was interesting.
“That is an excellent question, and the answer seems increasingly apparent.”
I think what Mr. Bear is alluding to is more akin to: “self-evident”
Those are two of Hwy’s favorite phrase/concepts:
1. self-evident
2. categorical imperative language
For example RE: #2: Congress shall make NO LAW respecting an establishment of religion…
Of course, the “Founding Fathers” could not possibly anticipate the creation of a “Corporation” …such as is found in “modern times” i.e., “GOLDENman Sucks”
Those are two of Hwy’s favorite phrase/concepts:
1. self-evident
2. categorical imperative language
Interesting; I actually typed “self-evident” then re-worded the sentence, because my immediate question was self-evident to whom? The citizenry? The government? Megabank, Inc.? Or does it matter?
“categorical imperative language”
Let’s be sure to sing this the next time we go drinking with Ben:
Philosopher’s Drinking Song
Immanuel Kant was a real piss-ant who was very rarely stable.
Heideggar, Heideggar was a boozy beggar who could think you under the table.
David Hume could out-consume Wilhelm Freidrich Hegel.
And Whittgenstein was a beery swine who was just as sloshed as Schlegel.
There’s nothing Nieizsche couldn’t teach ‘ya ’bout the raising of the wrist.
Socrates, himself, was permanently pissed.
John Stewart Mill, of his own free will, after half a pint of shanty was particularly ill.
Plato, they say, could stick it away, half a crate of whiskey every day!
Aristotle, Aristotle was a bugger for the bottle,
And Hobbes was fond of his Dram.
And Rene Descartes was a drunken fart:
“I drink, therefore I am.”
Yes, Socrates himself is particularly missed;
A lovely little thinker, but a bugger when he’s pissed.
Love it. Thanks!
I have noticed in comments posted (possibly yours) from AP that editorial advice conveys - things like “local opinion here.”
If our stance on the use of land mines, white phosporous, and chemical weapons is any indication, then NO.
Precisely!
I suspect insiders in the banking regulation business will endlessly study the too-big-to-fail problem without ever arriving at the obvious solution: Bust up the too-big-to-fail trusts, and the threat of taxpayer bailouts goes away over night.
Swiss commission to tackle “too-big-to-fail” issue
Wed Nov 4, 2009 10:51am EST
* Experts to make proposals to fix “too-big-to-fail” issue
* High-ranking regulators, bankers on panel
ZURICH, Nov 4 (Reuters) - The Swiss government has asked experts to come up with solutions that would prevent big banks and insurers from sinking the whole economy if they fail.
The commission of experts should consider solutions to the “too-big-to-fail” problem and present a report by autumn 2010, the Swiss Finance Ministry said in a statement.
While the commission’s analysis would not be limited to banks’ role, the issue was particularly clear with financial institutions, the ministry said.
Last year, the government bailout of Swiss bank giant UBS (UBSN.VX)(UBS.N) triggered discussions about how to limit the risks from large financial institutions for the Swiss economy.
UBS and Credit Suisse (CSGN.VX) still have combined liabilities of almost six times Swiss gross domestic product (GDP) of around 540 billion Swiss francs ($526.8 billion).
The head of the Swiss Federal Finance Administration, Peter Siegenthaler, would lead the panel, made up of high-ranking regulators, bankers and government officials as well as scientists.
The commission includes Swiss National Bank board member and vice-chairman designate Thomas Jordan, the head of bank watchdog FINMA, Patrick Raaflaub, as well as Credit Suisse vice-chairman Urs Rohner and UBS’ chief operating officer, Ulrich Koerner.
…
Arizona Slim,
I just wanted to thank you for sharing the whole concept of “Control Fraud”. I’ll look up William K. Black over the weekend. With all the end-of-year compliance and continuing education BS ( I’ll be in the office anyway )
It’s really helped me get a better understanding and the ability to come to grips w/ what’s transpired here. For the longest time I just pigeon holed it under yer’ garden variety “Affinity Fraud” but it never felt quite right? Black leans heavily on the S & L debacle for ref’s but local bankers this go ’round must have found that playbook?
William Black is the man
There are a few videos on the internet of talks he’s given.
The discussion they should be having: What were the distributional impacts of the TARP? I know it worked out great for Goldman Sachs bonus payments, but what about the rest of the Nation? I suppose one can always make the argument that things would have turned out much worse without the TARP, as there is no evidence to refute the claim. This is the politician’s principle advantage, no matter what policy measure is enacted.
Nov. 6, 2009, 12:01 a.m. EST
Mixed review for $4.3 trillion in Treasury guarantees
Oversight panel says program helped calm markets, but also carried huge risks
Related stories
* Treasury urged to scale up mortgage modifications (Oct. 9)
* Can Congress do anything to spur job growth? (9:40a)
* U.S. backed $4.3 trillion in assets, report says (6:30a)
* MEMS technologies are the next big thing (9:27a)
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — A key Congressional watchdog group offered a mixed review Friday for the trillions of dollars in government guarantees provided as part of the financial-crisis bank bailout program.
“The enormous scale of these guarantees played a significant role in calming the financial markets last year,” wrote the Congressional Oversight Panel, which is charged with monitoring the Troubled Asset Relief Program, or TARP.
However, the panel also said that the guarantees came with no upfront price tag for taxpayers.
“It was possible that, if the guaranteed assets had radically declined in value, taxpayers could have suffered enormous losses,” it said.
In addition to purchasing assets and buying large stakes in financial companies, the TARP gave the U.S. Treasury the authority to support the value of assets indirectly through government guarantees.
…
“The discussion they should be having: What were the distributional impacts of…”:
“…having the FOMC make the funds target rate that is a 75-100 basis point cut from 1.0% to a range of zero to 0.25% coupled with… 0% down payments.”
O.K., O.K….it’s me… I can’t resist: “distributional impacts” is kinda sexy!
(Whacked, truly…Whacked!)
Has the Plunge Protection Team ever before attempted asset price manipulation on this scale?
US Guaranteed $4.5 Trillion In Financial Assets Creating Huge Taxpayer Risk
Posted: November 6, 2009 at 6:13 am
Well. Here is the thing. We can’t afford it.
So, we will probably have to back away from these deals at some point. Hopefully sooner rather than later.
These guarantees are just as worhtless and unenforcable as anything else. What do the investors think is going to happen? Either we devalue the currency. Or pay the deals but then tax the money back from the investor.
It’s Friday and I’m at the frustrated point where you just want these buggers to get it over with. Write down the bad investments and move on.
I’d guess the foreign investors will get the devalued dollars and the domestic investor will get his buttocks taxed off.
“I’d guess the foreign investors will get the devalued dollars and the domestic investor will get his buttocks taxed off.”
Fun times ahead! And still priced out of the housing market, to boot…
Is it me or did the news about Fannie Mae’s $19B loss just disappear?
Don’t know if anyone posted this yet, but they are more important than you.
Goldman Sachs, Citigroup got swine flu vaccine
That won’t happen under Obamacare!
You dilute the real issue, that of class, with more partisan claptrap. Yawn.
Hey, you left out: The Feral Reserve Corporation
You know, when someone goes postal on these guys, it isn’t going to be much of a shock.
My neice has swine flu. She is home from school for two weeks and having an absolute blast. Playing around on facebook, Wii and reading. Possibly she might have received a toxic overdose of “Twilight”.
Anyhow, we have a bunch of people with the flu. I suspect my turn is comming. Haven’t been sick all year.
Best wishes & good luck…sincerely, Hwy
The Wallstreet vaccines were mentioned on MSNBC yesterday, but mysteriously this news in no longer a hot topic. I know many people were furious because I read the comments. Why isn’t this getting more exposure??? All the expectant mothers I know are still trying to track down the vaccine and Wallstreet employees were given the vaccine? Money does talk…
Don’t worry too much. I believe my whole family had it last spring (when it first hit San Diego), as we had the flu shot but still all got the flu late in the season. It was nasty, but I didn’t miss a day of work (I don’t even recall if I had much of a fever), and nobody got nearly as sick as I have on occasion with the regular seasonal flu.
The upshot: With few exceptions, almost everyone who dies from swine flu has a preexisting condition. Further, I don’t believe it is any worse than the regular seasonal flu.
So you had the flu but went to work…nice. I’m sure your co-workers appreciated that. What is it with people? If you’re sick, stay the hell home for a few days, the world will go on just fine without you at the office.
I sit alone in an office where I don’t have to interact with my fellow workers unless I choose to. And we don’t have a central air system.
But feel free to take the opportunity to make all kinds of dumbass assumptions and conclude that I was endangering my coworkers if it somehow gives you a sense of pleasure to act like an idiot.
Don Stott’s rant today nails it. “Hasn’t anyone in big corporate America, enough brains to realize that broke people can’t buy? Are CEO’s so stupid, that they cannot fathom a basic economics 101situation? Unemployed people can’t buy. Sending jobs overseas solves nothing, because the lost jobs, are also lost purchasing power by the out of work. Lowering prices, as Walmart is now doing, doesn’t give jobs which have been sent overseas.”
Stott quotes James Dines whose predictions from 1961 eerily sound like today. ~ 48 Years Ago
Well this would work out just fine if those dang Asian governments would get its populace to buy mega size multinational product!
Oh you mean when Americans couldn’t buy stuff Asian workers got laid off too. Dang, we didn’t plan for that. Didn’t we offer them a visa card or something?
; )
Drive-by shooting epic fail: Forgetting to roll down your car window before you start shooting from the driver’s seat. Whoops.
Andrew J. Burwitz, 20, of Appleton, Wis., tried to do a drive-by shooting at the home of his ex-girlfriend’s family and another random house. Police found him because he failed to roll down his car window and shattered it when he made the first shot.
He was charged Wednesday with four counts of first-degree reckless endangerment, four counts of endangering safety by reckless use of a firearm, disorderly conduct and criminal damage to property.
It’s cold in Wisconsin by now right? So he was tryin’ to stay warm while he did the deed. Why you hatin’ yo?
Muggy
It’s sunny and 48 degrees here in Wisconsin.
Gonna be 60 degrees Saturday and Sunday.
The leaves are still falling and it’s Indian Summer in November.
“Muggy” is in Florida. I’m “Mugsy” and I’m in Cyprus. (Where it’s currently 75 degrees and partly cloudy).
My car windows are never that clean.
That first shot before the window got blown out would have been extremely loud inside the vehicle. Bet the guy couldn’t even hear the cops yelling at him when he got arrested.
What about attempted murder?
Lead in our local fish wrap here in S.Carolina…
Columbia housing market gets new spark!
Tax credits extended and include more buyers…
An extension and expansion of the popular home buyer tax credit that has bolstered sales in South Carolina and across the nation is waiting for the president’s signature. Here are highlights of the $10.8 billion proposal:
Deadline: Home buyers would be required to have a house under contract by April 30 and would have to close on the house by June 30 to get the credit. The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
Qualification: First-time home buyers, defined as anyone who has not owned a home in three years, would continue to qualify for a credit of 10 percent of the purchase price up to $8,000. Those who have owned their home for at least five years would qualify for a credit of 10 percent of the purchase price up to $6,500.
Income limits: The measure also would increase income limits to $125,000 for individuals and $225,000 for couples for those benefiting from the credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
Area real estate experts say the help already on the books from Washington - an $8,000 tax credit for first-time buyers -spurred a 21 percent jump in October home sales, compared to a year earlier.
This was after a 2.4 percent sales increase in September, according to industry data. Now the Midlands has had back-to-back home sales increases after 25 consecutive months of decline.
The first-time buyers credit was set to end Nov. 30. Now Congress has extended that offer and tacked on a $6,500 credit for folks who have owned their homes for at least five years. The bill was sent to President Barack Obama after the House approved it Thursday.
In the past 24 hours, I have been astounded by the idiocy of the so-called economic experts touted by the MSM. The choicest quotes:
On NPR, yesterday, driving home, interview with, I believe, Marc Faber on expected unemployment figures: “If the government would just start printing money and literally hand it out, that would solve a lot of problems.”
Today, Christina Romer, one of the economic advisors at the White House (I hate her stereotypical-bureaucrat bloated, gouty face) said this in response to a question about a second stimulus: “We’re not talking about that, but we are implementing smaller programs like the $250 for senior citizens to help out the man on the street.”
This morning, commentator on CNBC: “The consumer will not be helping in this recovery… It will be up to business to lead the recovery.”
Pardon me for asking this clearly infantile question, but WHO is going to BUY the stuff the businesses are SELLING if not consumers?
I suppose it could go hand in hand with the first quote in that they seem to expect the gov to just print money and hand it to business.
Who ARE these people? Are they blind, stupid or just plain evil?
At this point, my frustration level with the amount of STUPID coming out of the MSM (and our government) is so high that I am concerned for the well-being of my unborn child, not to mention his ability to make a living in our country going forward.
“On NPR, yesterday, driving home, interview with, I believe, Marc Faber on expected unemployment figures: “If the government would just start printing money and literally hand it out, that would solve a lot of problems.”
If Faber said that, it was most surely tongue&cheek.
But isn’t that what they doing? Ex. Today’s bill signing.
Actually, hlln, Christine Romer is rather new at the bureaucrat game. She and her husband are respected economics professors at Berkeley. But despite her brilliance, she does act like a dumb cheerleader on CNBC.
This office did a great job, sadly she didn’t get a head shot!
The heroic policewoman who shot an army psychiatrist during a murderous gun rampage at an army base was today named as Sergeant Kimberly Munley.
She had been on routine traffic patrol when Major Nidal Malik Hasan entered a medical centre at Ford Hood, Texas, shouted ‘Allahu Akbar’ (God is greatest) and opened fire.
It took just three minutes for the slightly built mother-of-one to get to the scene, engaging the killer in a ferocious gun battle.
Witnesses said a bullet from Hasan’s gun passed through both Sgt Munley’s legs.
But despite her injuries, she continued firing at the soldier, hitting him four times before he was disabled.
The death toll sands at 13 with 30 others wounded. But senior officers believe the tragedy would have been much worse without Sgt Munley’s actions.
Lt. Gen. Bob Cone described her actions as ‘amazing and aggressive’.
She should have accidentally shot him 5 or 6 more times and saved us all a lot of grief and a trial.
Psychiatrist have one of the highest rates of suicide of any occupation.
He needed a “warning shot”
(thru the liver).
Is it just my imagination, or is there a sudden uptick in the number of US shooting rampages?
market pulse
Nov. 6, 2009, 1:13 p.m. EST
Eight shot at Orlando office building: reports
Related stories
* Ft. Hood death toll up to 12; shooter was soldier (Nov. 5)
* Seven dead in Fort Hood base shooting: reports (Nov. 5)
* At least 11 dead in shooting at Texas Army base (Nov. 5)
* Obama Comments on Fort Hood Shootings (Nov. 5)
By Wallace Witkowski
SAN FRANCISCO (MarketWatch) — At least eight people have been shot at a high-rise Orlando office building, according to media reports Friday. The suspect is reportedly still at large. It marks the second U.S. mass shooting in less than 24 hours following the rampage that killed 13 people at Fort Hood Army Base in Texas on Thursday.
…
Maybe they ought to change the city’s name…
KILLEEN, Texas, Nov 6 (Reuters)
Fort Hood is halfway between Austin and Waco, about 60 miles (97 km) from each city. Nearby Killeen was the site of one of the worst U.S. shooting rampages when a gunman drove his truck into a Luby’s cafeteria in 1991 and shot 23 people to death and wounded 20 others before killing himself
Is it just my imagination, or is there a sudden uptick in the number of US shooting rampages?
If so, another cornerstone of AladinSane’s dystopian vision has come to pass …
A lot of anger out there.
Just wait until the anger cascade finds a consolidated voice. I am thinking the anger tsunami may put eventually put the foreclosure tsunami to shame.
And some of that “anger” is being “magnified” & “directed” by a Billionaire former Australian… with help from his “radiohead” brethern.
By the way, has Sir Greenisspent ever apologized for anything? ever?
Oh, blah. Yeah Murdoch’s behind the allahu akbar nut..and JFK was killed by a right-winger, right. We heard.
I won’t bother with the emoticon.
“Oh, blah. Yeah Murdoch’s behind the allahu akbar nut”
Ha, not behind…ahead…as in ratings! Cha-Ching $$$$$$$$$$
I want to see these on Wall Street! Not Disney World!
They’ve “….managed to kill everyone else, but like a poor marksman, they keep MISSING THE TARGET.”
Just punch this into your Garmin….
40 degress, 42 min, 53 sec North, 74 degress, 00 minutes, 52 West
Is it just my imagination, or is there a sudden uptick in the number of US shooting rampages?
Where’s your usual extrapolation?
43 shot in Texas 1 day
8 in Orlando the next day
How many does that work out to be per year?
Shooting rampages are a Poisson (rare event) process. However, the fact that two occurred on successive days could be a significant indicator of either
1) strong serial correlation in the Poisson rate, or
2) lots of p!ssed off people out there…
LONDON (Dow Jones)–U.K. carrier British Airways PLC (BAY.LN) Friday posted its worst first-half results in history amid continued weak revenue and now is targeting almost 5,000 job cuts by the end of the fiscal year.
The airline aims to ax 4,900 positions as it widens its savings plan beyond the U.K. It shed 1,900 workers in the first half and now intends to cut a further 3,000 personnel world-wide by March 31. Of that total, 3,700 job losses will be in the U.K. BA currently employs 38,704 workers.
my company will get a $ 4 million tax refund from a law in the bill obama signed today that suspends the 90% AMT NOL deduction limitation for NOL carryback years after 2002.
Geez michael, wait about 20 seconds, it’ll be illustrated how lil’ Opie™ can’t do anything “right”…and to make matters worse, he wasn’t even born in America.
…and to make matters worse, he wasn’t even born in America.
I knew there was something fishy about that guy.
Well Bye Bye I had so much fun and made the most money in my life all during the OJ trial….
———————————————————
truTV’s ‘In Session’ Ready To Sign Off in New York
By Chris Ariens on Nov 02, 2009 11:33 AM
truTV_ formerly known as CourtTV when it specialized in gavel-to-gavel trial coverage, is shutting down the New York offices for its daytime “In Session” programming. The move to Atlanta, first reported by TVNewser in June, will take place next week with the final day of “In Session” coverage from New York airing Friday, Nov. 13. On Monday, Nov. 16 “In Session” will originate from Atlanta’s CNN Center.
TVNewser hears there will be a wrap party for employees tonight near truTV’s headquarters on Manhattan’s east side.
The number of positions eliminated in New York is around 100, with up to 70 jobs created in Atlanta. Ten field staffers will be kept on for trial coverage including four reporter/lawyers and six producers.
Time Warner bought the 50% of CourtTV it didn’t own in 2006. The network was renamed truTV on Jan. 1, 2008.
Why can’t I find any articles on Fannie Mae’s $19B loss that was posted late yesterday? Was that an error of reporting.? Surely that is newsworthy!
Answering my own question — I did but only on newspapers I had never heard of when I googled it. ummmm. Now I’m putting on my tin foil hat and I really, really don’t look good in it!
“Surely that is newsworthy!”
Really? Is a $19B loss somehow unusual for them?
No, but amazed the news disappeared as quickly as it did. No mainstream paper is commenting on it.
“Why can’t I find any articles on Fannie Mae’s $19B loss that was posted late yesterday? Was that an error of reporting.? Surely that is newsworthy!”
http://washington.bizjournals.com/washington/stories/2009/11/02/daily96.html?surround=lfn
It was in dailyjobcutsdotcom
Francisco Blanch, head of global commodities research with Bank of America-Merill Lynch,…:
“What we know is at $150 (a barrel last year), the world economy blew up.”
Wow, that ought to get Sir Greenisspent off the “blame” hook.
Mike Papantonio
Senior partner of Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor
Posted: October 28, 2009 09:41 AM
Wall Street’s Designer-Dressed Thieves
Greedy
Typical
Scary
Outrageous
Amazing
Innovative
Infuriating
It brought tears to my eyes when I heard the bitter story about how Obama wants to slash the bonuses of the CEOs running TARP-funded companies. That Grey Poupon crowd has hired lobbyists to rally Americans around the idea that an evil socialist president is limiting their right to live the American “scheme.”
The American “scheme,” for most of those TARP CEOs and their staffs, was to steal trillions of dollars from America’s pension programs. Organizations like CitiGroup, for example, used illusory financial instruments like derivatives and synthetics to move pension program money from your pocket to theirs.
To at least get a chuckle out of what probably happened to the value of your retirement plan during the “W” years, do this: Open the phonebook and randomly pick the name of a stockbroker or a bank president. Call that person and ask them to explain to you how a synthetic or a derivative actually works. Pin them down about details. Where does the instrument originate? How does it generate money? If you get the impression that they don’t understand the intricacies of those financial instruments, it’s not because they don’t know their trade.
Even Alan Greenspan and the government deregulation fanatics he employed for eight years had no idea how those toxic instruments generated money for anyone besides the Wall Street bankers, and the investment houses that sold them. While Wall Street hustlers at places like CitiGroup, Bank of America, AIG, and JP Morgan were making more money than Bernie Madoff, America’s pension programs and stock accounts were looted for 8 trillion dollars.
Along with all that looting, America lost 7 million jobs as a result of Greenspan’s insistence on no regulations for Wall Street. And at the end of the banker and stockbroker greed frenzy, after America was broke, Greenspan testified in front of Congress. He had the appearance of damaged goods. He had helped his president lead America to the brink of an economic cataclysm. Greenspan had to admit in those hearings that his free market loony mentor Ayn Rand and he were finally exposed as fools. Greenspan admitted that we can’t trust the Wall Street financial sector to police themselves in an unregulated market.
…
Thanks Mr. Bear…Hwy
(…”has hired lobbyists to rally Americans around the idea that an evil socialist president is limiting their right to live the American “scheme.”)
Rash Limpbaughs: “I want him to FAIL!”
United Security Bank is bank number one to be closed on Bank Closure Friday.
$1.5 bn a week would add up to $76 bn a year, assuming a 52-week year. I guess this is pocket change compared to the $700 bn TARP, though.
At a constant rate of five banks a week, total bank failures would be something like 260 per year. Of course, this assumes there is not a sudden acceleration due to a run on the banks.
Five more banks fail - 120 for the year
Banks in California, Georgia, Michigan, Minnesota and Missouri were shuttered, costing the FDIC a total of $1.5 billion.
By Julianne Pepitone, CNNMoney dot com staff reporter
Last Updated: November 6, 2009: 10:43 PM ET
NEW YORK (CNNMoney.com) — Five banks failed late Friday, bringing the 2009 tally to 120.
The biggest to fall was United Commercial Bank of San Francisco, which had 63 U.S. branches as well as operations in Hong Kong and Shanghai. The bank held deposits totaling $7.5 billion.
…
Beautiful quote from Charlie Gasparino being interviewed about his book:
RCM: What are your thoughts on President Obama’s approach to the economy and his administration’s handling of the financial crisis?
Gasparino: What the book says pretty emphatically is that the banking crisis is far from over; that for all the billions handed to Wall Street and the banking system, the crisis has merely abated. The prime reason for this is pretty simple–the Obama administration has done nothing more than maintain the status quo that began under Bush. The banks and Wall Street are being bailed out through subsidies, but Main Street gets no relief, other than stimulus money that does very little to stimulate the part of the economy that creates jobs outside of Wall Street.
http://www.realclearmarkets.com/articles/2009/11/02/an_interview_with_charlie_gasparino_97480.html
The details are getting closer to the surface of MSM coverage.
Home Federal Savings Bank is bank #2
2 more; we’re up to 4 tonight.
Low interest rates suck! I can’t believe I just asked if .85 is the best they could do.
(This also doubles as my first official post from a mobile device)
Welcome to the 21st century sleepless!
If the “Foreclosure Crisis” was caused by house prices being too high, why is government trying to keep home prices high?
A real estate insider was commenting on the Fannie Mae program to allow foreclosees to lease their houses for a year. Fannie won’t charge more than 31% of pre-tax income (what used to be around the maximum amount banks would allow debtors to spend on mortgages). He was happy that this would redice the drop in home prices. And then the dissonance hit me - Home prices were too high, so people took out suicide loans which they couldn’t pay back. So a government mortgage lender will allow foreclosees to rent a house for a year or more at a traditional maximum payment level? So the government is going to do all they can to prop up home prices?
It’s insanity. The government is completely in the thrall of the FIRE industries. It’s too bad no one of signficance can lobby for the fiscally prudent.
The amazing and most insulting and injurious aspect is that while Fannie Mae and Freddie Mac claim to be in the business of providing affordable housing, they are in fact part of the government’s scam operation to keep home prices unaffordably high. And what’s worse, they are charging taxpayers (including renters who do not own homes and even those with no interest in ever owning a home) for the massive losses they are generating in this exercise in futility.
All these hedge funds are getting targeted in insider trading probes.
Is there any chance one of the surviving Megabanks will surface as a participant in these rings? Would too-close an alignment with the Fed and the Treasury raise a cloud of suspicion in anyone besides my own cynical self?
* NOVEMBER 7, 2009
Hedge-Fund Giant Surfaces in Trading Probe
BY SUSAN PULLIAM
The widening investigation of insider trading on Wall Street is expected to examine transactions at Steven A. Cohen’s SAC Capital Advisors, one of America’s largest and most successful hedge funds, according to people familiar with the matter.
A plea agreement between the government and a cooperating witness in the investigation, Richard Choo Beng Lee, indicates that Mr. Lee has agreed to provide information to prosecutors about a hedge fund where he worked between 1999 and 2004. That firm is SAC, according to people familiar with the matter.
…
How does the cost of these measly Fannie tax credits compare to the cost of the ($700 bn) TARP?
* The Wall Street Journal
* BUSINESS
* NOVEMBER 7, 2009
Treasury Blocks the Sale of Tax Credits by Fannie
BY NICK TIMIRAOS
The U.S. Treasury blocked Fannie Mae’s proposed sale of nearly $3 billion in low-income housing tax credits to Goldman Sachs Group Inc. and Berkshire Hathaway Inc. on Friday after concluding that the deal was too costly for taxpayers.
The extraordinary move was the latest sign of tensions within the Obama administration over how to balance political and financial pressures resulting from the housing crisis.
…
* The Wall Street Journal
* BUSINESS
* NOVEMBER 7, 2009
Freddie to Request Further Handouts
By NICK TIMIRAOS
Freddie Mac said it didn’t need any additional federal aid for the second straight quarter as it reported a loss of $6.3 billion for the third quarter on Friday.
But the company said it expected to ask for more handouts from the U.S. Treasury in the future as rising unemployment and falling home prices continue to drive higher credit-related losses for both Freddie and its larger rival, Fannie Mae.
Together with Fannie Mae, which said on Thursday it would need a $15 billion capital injection, the tab for the U.S. government’s bailout of both mortgage-finance giants has climbed over the past year to $112 billion, making it one of the costliest government interventions ever to stabilize housing and financial markets.
…
* The Wall Street Journal
* OPINION
* NOVEMBER 6, 2009, 9:58 P.M. ET
The Man Who Predicted the Depression
Ludwig von Mises explained how government-induced credit expansions led to imbalances in the economy.
By MARK SPITZNAGEL
Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today.
Mises’s ideas on business cycles were spelled out in his 1912 tome “Theorie des Geldes und der Umlaufsmittel” (”The Theory of Money and Credit”). Not surprisingly few people noticed, as it was published only in German and wasn’t exactly a beach read at that.
Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money supply, and how this was magnified by government intervention. Left alone, interest rates would adjust such that only the amount of credit would be used as is voluntarily supplied and demanded. But when credit is force-fed beyond that (call it a credit gavage), grotesque things start to happen.
Government-imposed expansion of bank credit distorts our “time preferences,” or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.
Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.
…
“But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.”
Isn’t that pretty much a description of the Fed’s business plan, or am I missing something?
Ah, the perils of being a visionary…
“Theorie des Geldes” did not become the playbook for policy makers. The 1920s were marked by the brave new era of the Federal Reserve system promoting inflationary credit expansion and with it permanent prosperity. The nerve of this Doubting-Thomas, perma-bear, crazy Kraut! Sadly, poor Ludwig was very nearly alone in warning of the collapse to come from this credit expansion. In mid-1929, he stubbornly turned down a lucrative job offer from the Viennese bank Kreditanstalt, much to the annoyance of his fiancée, proclaiming “A great crash is coming, and I don’t want my name in any way connected with it.”