Bits Bucket For November 10, 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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Name:Ben Jones
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Fannie Mae could need $5.2 billion in more aid after gov’t thwarts tax credit sale plan. November 9, 2009
WASHINGTON (AP) — Fannie Mae said Monday it may have to ask the government for more financial assistance because the company cannot sell $5.2 billion in tax credits.
The Treasury Department last week blocked the mortgage giant from selling about $2.6 billion in low-income housing tax credits to investors that included Goldman Sachs Group Inc. Because the investors could use the credits to reduce their own tax bills, Treasury said the sale would result in a loss of tax revenue greater than the savings to the government.
“We have said all along that we would make determinations based on what is in the taxpayers’ interests,” said Andrew Williams, a Treasury spokesman.
Fannie Mae requested $15 billion in financial aid last week after reporting a $19.8 billion quarterly loss, bringing the taxpayers’ bill for the mortgage company’s rescue to $60 billion.
“Because the investors could use the credits to reduce their own tax bills, Treasury said the sale would result in a loss of tax revenue greater than the savings to the government.”
Why else would someone want to buy tax credits if not to save on their taxes?
Obviously there is no rule of law. You could not buy my unused tax credits under any circumstances. For the banks though, it is a Mardi Gras.
Think of the tax credits as a balance sheet asset, and then the notion of trading them to the highest bidder on Wall Street will seem a bit more reasonable.
In the world of the bankers, EVERYTHING is an asset on the balance sheet and is worth lots of money… and always goes up!!
“…EVERYTHING is an asset on the balance sheet …”
I’ve got 10 special paper clips that are worth $1,000,000,000 each according to my intricate and technical models. The banks can buy them (and the modeling software) for a discount price of $1,000,000.
Bear,
This necessarily means the government would lose more revenue than it would gain by taxing the other party.
Banks got enough handouts.
Sorry — forgot to use sarcasm tags…
I read elsewhere, maybe it was between the lines (good name for a blog), that they were more concerned about being called cronies, since Buffet and Goldman were the tax credit buyers. It’s just a coincidence, of course.
Oh wait!! I get it now! It’s all about health care for banks!
Doh! How could I have missed it?! (and all this time I thought those were 2 separate issues)
Too-big-to-fail institutions never die. They just morph into government sponsored zombies that suck away the life blood of the Main Street economic prosperity.
Who gets to pay for Bawney Fwank’s serial doubling down of the GSE gamble?
YOU DO, SUCKER!!!
* The Wall Street Journal
* REVIEW & OUTLOOK
* NOVEMBER 11, 2009
The Fannie Mae Dice Roll Continues
Losses of $400 billion are increasingly possible.
“I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing.”
—Representative Barney Frank, September 25, 2003
It was six years ago that Mr. Frank announced his famous dice roll on Fannie Mae and Freddie Mac in the name of affordable housing. Mr. Frank got his wish, and the losses keep rolling in, with no end in sight as Washington finds new ways for the companies to serve political purposes.
Last week, Fannie Mae posted a quarterly loss of $19.8 billion—which believe it or not was an improvement on the $29.4 billion that it lost a year earlier. Last quarter’s results came with yet another request for government aid—$15 billion worth. That brings the total tab for Fannie and Freddie to $111 billion since they were put into conservatorship in September 2008.
It would be bad enough if Fannie and Freddie’s continuing losses were merely the product of bad bets made amid the housing bubble in 2006 and 2007. But the latest red ink is in large part the result of a deliberate choice to run their businesses at a loss over the past year to support White House housing policies.
…
Just think what their losses would be if they hadn’t received over $1T from the Fed in purchasing MBS.
So how much has the Fed lost? Wait… that’s right… they don’t lose money, they just create it anew.
MBIA loses $728 million as slowdown hits bond insurer
Bond insurer pays $638.4 mln in third-quarter net claims on mortgage securities. (Marketwatch)
MBIA shares fell 15% to $4.06 in after-hours trading. The stock had rallied more than 10% during regular market action on Monday.
That compares to a net loss of $806.5 million, or $3.42 a share, in the same period a year earlier.
The loss was driven by an $810.2 million pretax unrealized loss on insured credit derivatives, $238.8 million in pretax loss and loss-adjustment expenses mainly from the company’s insured exposures to second-lien mortgage loan securitizations, and $171.4 million in pre-tax realized losses and other-than-temporary impairments on investments, MBIA explained.
Now that we know many bonds and mortgages are government insured which previously were believed not to be insured, why is there even a demand for bond or mortgage insurance any more?
They are buying insurance because they know they will be filing claims?
In N.C., damage not easily mended
Globalization drives unemployment to 15% in one corner of state.
HICKORY, N.C. — The expansion of global trade may enrich the United States, as economists say, but it has overwhelmed this manufacturing area beside the Blue Ridge Mountains.
The region has lost more of its jobs to international competition than just about anywhere else in the nation, according to federal trade-assistance statistics, as textile mills have closed, furniture factories have dwindled and even the fiber-optic plants have undergone mass layoffs. The unemployment rate is one of the highest in the nation — about 15 percent.
“Our stitching was perfection,” said Geraldine Ritch, 62, whose $15 an hour job sewing leather in a furniture factory was cut last year. “So I never thought we’d lose our jobs to China. But we did. We did.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/09/AR2009110903705.html
How much did the furniture makers really save by offshoring their production? And did they really pass the savings on to their customers?
Having been to both a Roomstore and Rooms-to-Go this past weekend, I believe that furniture is now built to last only as long as the financing period.
Truer words were never spoken. The quality of Chinese produced “American” products is hopelessly poor. This business model of outsourcing production is a complete failure as far as the customer is concerned. The prices stay the same, but the quality is sacrificed, with the only winners being Chinese workers and fat cat CEO’s who pocket the savings and buy large yachts and talk about how smart they are. This will all end very, very badly.
I’d like to add that I was recently out looking for boots. I was interested in Danner because they have long been my favorite. They used to proudly proclaim “Made in Portland”. Not anymore. Much of their stuff is now made in China, and the quality has taken a drastic turn for the worse. The leather is terrible, the craftsmanship poor, and the whole experience was rather depressing. The prices were still, of course, in the stratosphere, with cheap Chinese crap running into the several hundred dollar range. I don’t think there is a good pair of boots to be had anymore.
Continuing my rant about boots, I decided to look at another American brand boot to see how their local production is coming along lately. Not so well. Chippewa, which used to produce great, handmade in the US boots has outsourced most of their production as well. Like Danner, they still offer a few token models which haven’t flown the coop.
Something interesting to note about Chippewa from the bottom of their website:
“© 2009 Chippewa Boots®, a division of Berkshire Hathaway.”
Oh, so Warren Buffet, the man who so strongly believes in the future of America, and who so many love to worship, is busy eliminating American jobs as well! Warren Buffet and his ilk aren’t part of the cure- they’re the disease.
Chippewa Boots®, a division of Berkshire Hathaway.”
Thanks for pointing us to this example that Warren Buffet is moving offshore away from his PRO American “philosophy” but China is the way to his pocket.
Sadly, many consumers probably don’t have a problem with that. It’s an excuse to buy more stuff once they’ve tired of it or have concluded that it’s out of style.
For example, look at all the planned obsolescence in computers and cell phones. Hardly anyone complains, they just line up in the cold to buy the newest model.
Consume, Consume, CONSUME!!!
Somehow, the business model of having no American workers and yet basing the economy on charging those same people 1st world prices for 3rd world junk just doesn’t seem like it’ll work in the long run. It’s been going on longer than I would have guessed, however. The market can remain crazy longer than we can put up with it, or something.
Pondering,
“The market can remain irrational longer than you can remain liquid”
( But we get your point )
Right, and… as “I” predicted, the ’savings’ didn’t really last all that long any way. Every time I look for so much as a pair of shoes I’m aghast at what they’re asking for 3rd world junk?
I once preferred ‘Rocky Boots,’ which were actually shoes, partly because they were comfortable & functional, and partly because they were made in Ohio. This was many years ago. Right after they started making them in China, the drop in quality was so pronounced I couldn’t stand to wear their product any more. I put the last pair of Rocky’s I ever bought in the closet, intending to wear them only for brief periods when I needed to wear shoes with a high polish. One Easter I put them on, and attempted to walk out the front door. By the time I got there, they felt so weird I looked down at the floor. The ultra-cheap, unstable, black material of the soles had peeled off itself, one step at a time, leaving a visible series of black plastic footprints across carpet. There was no sole left on the shoes after about a dozen steps, just the fiber/cardboard of the insole. The sole material had deteriorated just by the passage of time in the closet. I lost both my soles on Easter!
BTW, the price of the China-made shoes was the same as that of the domestically-produced shoes they replaced.
Classic Men’s shoe company, Johnson & Murphy used to be made in Tennessee, IIRC, and then probably 8 yrs ago+ they offshored and you can see/feel the difference. Well, I can’t but the H who taught me the difference in well made shoes, he knows the difference. It isn’t there. The ‘last’ has changed, the fit has changed, the soles are thinner and so forth.
Come one guys! What’s wrong with you people?! Just think if we still had unions making those products!
These are the sacrifices we’ve had to make in order to stop those damn socialeest/commie unions who ruined America!
And I don’t want to hear any complaining about smelly drywall and poisoned dogfood and candy and toothpaste and other dangerous products that maim and kill, ya hear?!
Why do unions have to be communist/marxist/socialist? I have no problems with unions until they become political. Another great idea gone bad.
Skip:
That is what Ikea is for….cheap use once and give it away Free in craigslist when you move out.
And boy is there a lot of free ikea stuff given away everyday in NYC
I grew up there. It’s sad. It was the core of the furniture industry in the U.S., now with most of the work shipped to China. One of my brief gigs at Manpower in school was doing odd work in a sofa assembly plant.
When we moved to NoVA a couple of years ago we went down to that area shopping for furniture. I was shocked to see how many core American brands - Thomasville etc. - did most of their manufacturing in China now.
I was also surprised, however, to find that that included most of the high end furniture - and also that it did indeed result in lower prices. Prices on things that were still made in America - e.g. Kincaid - were significantly higher for furniture of the same or even lesser quality.
“It was the core of the furniture industry in the U.S.”
After the industry left Upstate New York because North Carolina was anti-union (right to work state) and had lower wages.
ptptptptptph….
My wife is from High Point, the so called furniture capital of the world. When we were dating before I came into the military, I would go pick her up from her job at Hanes. She made about $12 an hour folding socks. It was good work, but of course it left and the company closed down. Nothing much left in that area, which is where I plan on retiring. Seems everyone in that area is either on pensions or some type of assistance. It has become a service based place (target, walmart, eating places, etc).
Hane’s biggest threat is having places like WalMart. Target and KMart sell their own private line of undergarments. My brother used to work for Hanes, at the Winston-Salem HQ and watched as the company was slowlt dismantled.
Target sells IIRC Ethan Allen Designed furnishings..but there is that lovely Chinese quality LACK of.
Wamsutta and many other big name bath towel, bed sheeting corps mills were there too.
“Norma Rae” just passed away. She was instrumental and got fired for trying to get safety issues passed for the workers.
$12 an hour is NOT “good work.”
$12/Hour was excellent when I was a young. I made 8K/year as a rookie programmer in 74.
Grand Rapids, MI, where I grew up, was at one time the furniture capitol of the U.S. Or so they teach schoolchildren there.
Certainly it was the hub of office furniture production, led by Steelcase and Herman Miller.
GR also had great furnishing companies like Widdicomb, arts and craft style furnishing by Charles Limbert.
Stuff goes for alot on ebay and antique shops.
http://www.historygrandrapids.org/publications.php?exId=1
1911 Strike in Grand Rapids, MI.
Workers failed in their efforts to get better working conditions and pay increase, they failed to get one single concession.
3 Factors assured the city would continue to be ruled by its factory owners and financiers. Wage earners made it easy with their large families, COSTLY MORTGAGEs(1911) and heavy responsibilities, they were tied to a conservative, propertied, church-oriented existence that all but extinguished union activity in the Furniture City.
“If the need for mortgage payments and home improvements lurked behind every paycheck?”
THe editorial’s author saw home ownership as a chief cause of the “conservative and timid” nature of the working man, and …
Great link.
How the Furniture Workers Strike of 1911 Changed Grand Rapids (paper) … At the beginning of the 20th century, furniture factories dominated the … country after the fall of Saigon in 1975 and how they made new homes in West Michigan. …
http://www.historygrandrapids.org/publications.php
Grand Rapids: Made by Design
File Format: PDF/Adobe Acrobat - Quick View
Once known as “The Furniture City,” Grand Rapids has always had a firm foundation … pieces from the 1860’s to the office furniture of modern 20th century …
Arts and Craft style furniture by LIMBERT.
I seem to remember that China/Vietnam and a couple other places always had a niche for high end furniture and some tradition to go with it.
Hate to see people losing their jobs.
What one has to wonder about is this reversing a lot of the gains most of us enjoyed from the labor movement. Now, some are hostile to unions but if you look back through history conditions were deplorable.
My guess is that we are close to a breaking point where we have to, for political reasons, cut off trade to force jobs back into the US. It will make a mess but I don’t think there will be a choice.
Again a lot of things in the article are about pricing phenomena. Currently labor is still expensive here. The people have trouble affording their mortgages and health care. Again a pricing phenomena.
I wonder what price point would it have made sense to keep the factory in the US? 12$ per hour or at minimum wage? Below that?
I believe that these kind of economic moves just further serve to concentrate wealth. Long term bad for the country.
BINGO
Almost everything done by our gov serves to concentrate wealth in the long run.
Trade policy
Printing money to save Wall Street and Banks
Tax policy - Total effective tax rate for top 0.5% is similar to a person making 60k and the burden on the middle class is rising w inflation due to AMT, possible tax on health care, rising state taxes (sales property etc) rising state fees.
It will take riots before they throw the shrinking middle class a bone.
LET THEM EAT CAKE!
“I believe that these kind of economic moves just further serve to concentrate wealth. Long term bad for the country.”
Exactly. Pretty much every policy for years now - and certainly during this manufactured crisis - has been about getting more money into the hands of the crooks at the top. They will not be happy until EVERYTHING is theirs - until the rest of us live in dung huts begging for 1 bowl of rice a day… and then they’ll deny us that much. Because the suffering of others is the greatest joy in their wretched lives.
“Because the suffering of others is the greatest joy in their wretched lives.”
I think you’re giving more credit than is due for their awareness of the middle class’ situation. Apathy is my suspicion.
It’s not apathy, trust me, but outright disgust, disdain and arrogance.
“It’s not apathy, trust me,”
I take you’ve had some personal experience/observations, so I will defer. If there’s a great reconing involving pitch forks and such, it will make it that much easier.
Yes. I’ve been not only on the receiving end, but taken into confidence when they thought I was “one of them.” This is their real attitude.
But then who wants to be around anyone who only likes you for your money?
“Noblesse oblige” is dead. Oh, there are still a few out there who practice it, but they, like everyone else both rich and poor who are trying to do the right thing, are overwhelmed by the marching morons.
But that’s the history of civilization in a nutshell.
It’s hard because recently I’ve come across American made products that are of such poor quality versus foreign made stuff. When in doubt, blame management.
Blame management?! What are you, some kinda damn socialeest/commie?!
Everybody knows it was them damn unions!
“Thomas Stinnett, 43, was laid off from a truck factory earlier this year after the company started production in Saltillo, Mexico. He looked around for another job but was unwilling to work for half his old wages.
“At my age, I didn’t want to go back to school,” he said. “But I looked around and everything was $8, $9, $10 an hour. I said, ‘Hell, I’m worth more than that.’ ”
Not IN the new and improved “Cheap Labor America” Tom…not here !
I said, ‘Hell, I’m worth more than that.’
Evidently not. One by product of the unions, making people think their skill is worth more. Dont get mad at me, I’m just the messenger…
At my age, I didn’t want to go back to school
We have a saying in the military, “Preparation prevents poor performance”. If you dont want to go to back to school, welcome to $10 an hour wages….
Even if you do want to go back to school and do a good job you may not make much money, there are many getting no job offers, people with good grades in law engineering, science, business.
I guess they can always go get a gov job in the military.
“One by product of the unions, making people think their skill is worth more. ”
I guess all the CEO’s on Wall Street must have formed a union.
“I guess all the CEO’s on Wall Street must have formed a union.”
They did on 1972. It’s called the Business Roundtable and it’s made up of the top 200 US corporations.
School is very expensive. Now a days even the liberal arts colleges I have never heard of ( ie don’t have a football team ) are $40k/year.
I’ve never understood this phenomenon … people willingly forking over 40K to go to a nice little private college when you can go to a decent State U for 20% of the cost and get essentially the same education and end up with very similar prospects in life, assuming you make some effort, and perhaps go into the honors program.
And you end up with a team to cheer for on Saturday when you’re middle-aged and silly!
Stpn2me,
Oh… you’re preaching to the choir my man. My Guard Unit ( just yesterday ) informed me they will -not- be giving me a “waiver” for my EP ( Electronic Prin. ) course.
I was so damn miffed it’s not real. 2 months in Biloxi, MS discussing electron flow, transistor logic and Boolean Algebra. With a bunch of Boot Camps no less!
My shop sup. was pretty much trembling when he made the call ( funny how the COC makes ‘calls’ and then dumps that on the guy w/ one stripe ‘more’ than you ) He was -sure- I’d be mad as hell ( and I ‘am’ ) but I told him “Roger that” and that was the end of it! Biloxi here I come!
Gotta keep enough stupid orders in the mix, so when the “take that gun emplacement” order comes we’ll “Roger that” too. Odd but sensible.
I think that only works on some personality types. Part of the reason I had to get out of the army is that my personality types is much more likely to go along with a strange order if I *haven’t* been abused with a bunch of BS in the past. Rather than being beaten into submission with stupidity, I need to be able to trust my COC. Made me incompatible with Army leadership philosophy.
Al, Carl Morris,
The ‘context’ was snotty bankers that felt there wasn’t any need to upgrade skills or -ever- have to go back to school.
Truth is, I’ve -already- taken this course! It’s about having a willingness to do what it is required under the circumstances. Now I can understand a guy not wanting to relocate his family to WY, but he turned -several- jobs before things came to that. Paint yourself into a corner much fella’?
“Paint yourself into a corner much fella’?”
It’s been my observation that it is much easier to find a job when you already have one. Take the low paying local job and use it as a platform for the bigger gig. Or just stay put if nothing else turns up. As you said, you gotta do what you gotta do. That fools SA was not up to par.
I saw a story on the news about this. Some companies are hiring again. But instead of sending out general job listings, they actively recruit and poach people who are already employed. They figure that the employed ones are the best workers, and that the unemployed are slackers.
oxide,
Didn’t catch that but… no reason to doubt you. What makes it sad, just looking at my wife’s company, is that a whole lot of talent walked out that door during this schlock affair. You’d think employers ( as much as they’ve complained “where’s MY bailout..?” ) would know this was no ordinary downturn. Not.
And it cuts both ways! They’ve had co-workers drop casual hints to former associates they ‘might’ be re-hired and the overwhelming response has been, go-pound-sand.
Preparation is the key. In the mid-1990s a colleague showed me a newspaper clipping of CMM level 5 software engineering labs in India. Okay that was about fourteen or fifteen years ago. Back at that time it put a scare in me.
Rather than sit on my hands and fret and wail for protectionism, I decided to raise anchor, sell my real estate, and save, save, save.
Now a big part of my net worth is in international stocks, and I’m especially proud to be an investor in emerging international stocks.
Instead of complaining about foreign companies threatening to take my job, I buy the foreign companies.
2 months in Biloxi
Ahh, Biloxi…
When I was enlisted, I attended a Unix engineering course there with the Air Force at Keesler. I almost ran up my Amex Govt card to the max in the Casino Grand and that ship they had sitting there!
Man, those were the days!
“When I was enlisted”
Oh… one of ‘those’ kinds of officers! Yeah, like I said, this isn’t by any means “fresh” material for me, but, my wife has a lot of family down there and we were stationed there for about a year in the late 80’s.
It just seems any times there’s a slowdown, all of a sudden everyone becomes basically what I’ll call “De-Certified” and has to go to school all over again. Also happens any time there’s a number of aircraft mishaps occur etc.
Hey, instructors gotta’ eat too ya’ know!
Bill in Los Angeles,
Oh agreed. True… you have to have reached a certain age for that strategy to work out, and what EVER you do, don’t mention how well your India holdings are doing!
( Not around ‘here’? )
Stpn it isn’t the Unions.
Yep, preparation is a good thing. But all youse guys here who bash unions, Just stop it. You are living a much better life because and only because unions-men and women fought to have safer conditions and limits on time worked ie: not every damn day with doors locked, no ventilation,lighting,child labor etc.
Yes, but how long ago was that? 35 years at least? Nowadays, unions are known for demanding cushy pensions, high pay for little education, and job security for the lazy (I mean the truly lazy, not just being laid off or stuck in a bad situation). And what are they gonna do? Strike? If it’s anything but a service job, going on strike means going to China. Or, if the service people go on strike, the company will just hire illegals and desperate unemployed. Plenty of them around.
Nowadays, unions are known for demanding cushy pensions, high pay for little education, and job security for the lazy (I mean the truly lazy, not just being laid off or stuck in a bad situation).
NO Buzzardbreath. Unions are not all the same. And my corp “threatened bk” then knocked our pay down -35% 6 yrs ago.
CEO’s, VPS, mgmnt are all getting bonuses/pay raises and unions aren’t getting squat because most judges, most of gov, most of america is pro corporate or WS earnings, NOT what is best for the entire US. Some union stuff, as in ALL biz a la WS went to the dark side, but as I said before, not all unions are alike, or as big as the big ones.
The furniture business is another over-priced scam. Our place is still furnished with non-matching hand-me-down items.
As is mine, but some of the older furniture items I’ve got are well made and built to last.
Before North Carolina, Grand Rapids, Michigan was the furniture capital of the US and when you run across older furniture that was made there back in the day, it’s a joy to behold. Great design, manufacture, etc. Especially the mid-century modern stuff.
I’m all for less stuff of higher quality. Current stuff is very disposable not worth reupholstering.
I’m all for less stuff of higher quality.
+50 Yep.
The only furniture we bought new were a kitchen table, couch, and chair 35 years ago. Everything else was either handmedowns or thrift store purchases.
We’re gonna be scooping up “This End Up” and “Cargo” stuff off craigslist for our hacker space. Ugly cushions? Cover it in black bedsheets. Heh.
While the subject is furniture made in the USA…
My current household project is refinishing a hutch that belonged to my paternal grandmother, who died long before I was born. It was stored in the basement of my parents’ house for decades and then in a garage at their retirement apt. complex. When we moved them to be closer to us, in August, I ‘inherited’ it. Spurred by the need to get it out of my own garage, last week I started stripping off the two layers of paint, who-knows-how-many coats of orange-brown varnish, and dark stain. Underneath it all is beautiful cherry hardwood. The cabinet and shelves are solidly built, too–heck, they have to be, to have withstood the abuse and neglect they’ve endured over the years. It is worth all the hard work to restore a nice piece of furniture with a history to it.
I have my g grandma/pa’s Pie safe handmade in 1880. SOLID.
I love it despite dad having “helped it by stripping it”. omg.
Will he ever learn. On another lovely piece, he took out some wood screws and handmade nails to put in 1990’s nails/screws to bring it up to date.
BTW the object he “helped by stripping” was in no way wobbly.
He is the same guy who told me during my 1st marriage, “someday you two will be able to afford to carpet this hardwood floor”.
The situation with the loss of American manufacturing jobs is
unnerving . Again I go back to the concept that the highest good isn’t
just producing the product the cheapest . Not only do you lose the job ,but you lose all the other jobs those manufacturing jobs created .
The highest good for a Nation would be a low unemployment rate and of course you end up getting more taxes that way . It’s really getting absurd that the issue of manufacturing and job loss seems to be the last
item on the agenda for the current Politicians . On top of everything else
the quality of the slave labor produced products is low for most part ,and those toxic smells start coming out eventually .
Globalism was good for Wall Street ,the Corporations and the Banks .
Giving these entities a unfair advantage is not Capitalism ,but rather it’s the byproduct of Powers being bribed . They are all nuts I tell you .
Traitors would be a better word .
Here Here
Greedy bastards might be better.
I recall the nonsense a couple of years ago, when the dollar first started to plummet, and pundits were predicting the resurgence of American manufacturing, even listing a few token examples such as a lumber mill in Maine and a garment factory in the southeast. I guess even the weak dollar isn’t enough to prop up these industries.
Now I’m going to agree w/Geraldine here. The furniture being offered now is junk. I need to replace a set but it’ll be refinished by the locals instead. No need to spend $6-8k on junk that won’t last more than 5 years and that will look tired in 3 if you’ve got teenagers. Plus manual labor is higher quality than the assembly line.
The good news for this fellow is he’ll be going straight into real estate.
Zoë to Close After Almost 18 Years in SoHo.
Stephen and Thalia Loffredo will be closing Zoë in SoHo at the end of the week after almost 18 years in business.
“Our lease was almost up and we decided to make an arrangement with the landlord and close,” Mr. Loffredo said. He cited changes in the neighborhood as one reason.
“It’s no longer a bastion of the art world the way it was,” he said. “We can only tweak the concept so far.”
Mr. Loffredo will do some consulting work and his wife will work in her family’s real estate business in Brooklyn. The Loffredos had two other unsuccessful restaurant projects, Cena on East 22nd Street, and Jovia, later Zoë Townhouse, on the Upper East Side.
Things that make ya go hmmmmm…
Morning HBB!
online wsj
BRUSSELS (Dow Jones)–The European Commission Tuesday opened an antitrust investigation into news and financial data company Thomson Reuters Corp. (TRI) on suspicion that the company abuses its dominant market position.
The commission is concerned that Thomson Reuters is locking in customers using its real-time market data feed services, by preventing customers and competitors from translating Thomson Reuters specific codes to be used elsewhere.
Data feeds are used for distribution of real-time market data, feeding software applications developed by banks and financial institutions.
The codes in question, called the Reuters Instrument Codes, are used to identify securities and their trading locations for real time stock price information and other market data, the commission said.
The commission is in particular probing whether Thomson Reuters is preventing companies from translating these codes to be used by other data feed suppliers. Without the possibility of using the Reuters codes, potential competitors are prevented from entering the market which leaves customers with no alternative but to continue working with Thomson Reuters, the commission said.
Wonder which mega corp(s) has it’s gutchies in a bunch?
Leigh
Didn’t they use to call this proprietary or am I missing something?
Leighsong,
In essence, Morningstar is attempting to do the same thing. Well, rather they already are. Unlike online traders, people in the industry have to pay for RT info, so actually it’s a pretty huge deal.
Thanks DinOr,
But I am missing something.
Are they (RT) somehow cheating?
Chime in all - open this ignorant mind.
Thanks,
Leigh
Leigh,
At bull mkt. peaks upwards of 600,000 are employed in the industry. If they are all using ‘your’ services to extract data ( and you don’t “play nice w/ others” ) it really has become a monopoly.
Sadly what’s happened is a LOT of people have begun to skirt the issue by opening up a $500 acct. at ETrade ( and calling it good )
N.J. Gov.-elect Chris Christie considers declaring financial state of emergency ~ Star-Ledger 09, 2009
As he seeks concessions from state workers to balance his first budget, Gov.-elect Chris Christie is examining the possibility of declaring a financial emergency in the state, according to an official familiar with his plans.
Such a declaration — invoking the same law as if New Jersey were hit by a natural disaster — could give Christie broad powers, such as suspending rules governing state worker layoffs. With many state workers due to receive two raises in the next fiscal year and a no-layoff pledge in place through December 2010, Christie’s transition team expects to tackle the issue before he takes office Jan. 19, two of his advisers said today.
The advisers, who requested anonymity because the discussions are preliminary, said it is too early to determine whether a state of emergency would be an attractive proposition or a last resort in the face of a continuing recession.
Christie, a Republican who defeated Democratic Gov. Jon Corzine last week, will face an estimated $8 billion shortfall for the budget he must present by March.
His budget balancing options are limited because he has ruled out raising taxes or cutting state aid to K-12 education.
I think california will be declaring a state of emergency for their budget soon.
All out of accounting tricks?
There is a new stadium being built in LA, they can’t really be out of money.
One thing about LA and the rest of California, they seem to have never had a concrete recession.
If they can pour a few more acres of cement, they can rename it the “Great Parking Lot State”
How about a commitment to teach our kids how to read, write and speak English with out swearing?
And good penmanship..too
Too controversial i guess.
Useless skills in the ‘new economy’, unless combined with the appropriate connections.
Haven’t you heard? Public schools are commie.
Literacy, numeracy and reasoning would only make folks uppity. The next thing you know they would start demanding “rights” and higher wages and even worse!.. voting for smarter politicians!
The crazy thing is that these states are receiving billions in “stimulus” money. They are simply redirecting funds to make up shortfalls in other areas.
Without the “stimulus” the budgets for these states would be far, far worse.
Thanks for making that point. The real fun starts in FY11.
Maybe… it all depends upon when StimPack 2, 3, etc. show up. Now that they’ve chosen the StimPack route, there’s no turning back until the crash, IMHO.
He’s borrowing a page from Arnie baby.
Dodd Said to Propose Removing Fed, FDIC Bank-Supervision Roles.
Nov. 10 (Bloomberg) — Senator Christopher Dodd will propose creating a single U.S. regulator that would strip the Federal Reserve and Federal Deposit Insurance Corp. of bank- supervision authority, said a person familiar with the matter.
Dodd, chairman of the Senate Banking Committee, would eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision and fold the Treasury Department units into the new bank regulator, according to the person, who spoke on condition of anonymity because the plan isn’t public. The Connecticut Democrat is scheduled to release a draft of his financial-regulation overhaul plan today in Washington.
“It makes sense to have one regulator that deals with supervision,” Gilbert Schwartz, a former Fed attorney and a partner at Washington law firm Schwartz & Ballen LLP, said in an interview. “You’ll see a real battle by the Fed and the FDIC to retain their supervisory authority.”
Dodd has criticized the U.S. system of four bank regulators, saying the structure encourages charter shopping and a “race to the bottom” by regulators to win over bank and thrift clients. His proposal goes further than proposals by President Barack Obama and House Financial Services Committee Chairman Barney Frank to merge the OTS and OCC.
Dodd should run the whole oversight program himself. He could get Angelo Mozillo to be his advisor. Thank god we have such great leadership/representation in our government.
A more vile Senator than Dodd will be hard to find in the future.
A more vile Senator than Dodd will be hard to find in the future. You optimist, you. Every Senator wants to make his mark on history.
Dodd’s idea would at least improve the efficiency of our system. Influence payments wouldn’t have to be spread around so much, they could be focused.
It might not be a bad thing to put all the lobbyists in one room, where they can be watched.
yeah…er…watched.
Watched - that’s it - I’m not thinking anything else. No Siree.
Leigh
IDEA alert for a documentary.
Get someone with a secret video cam go around the lobbyists walking the halls researching who is who/what /where and so forth. Have their faces on the MOST WANTED at the post office, or the internet!
It might not be a bad thing to put all the lobbyists in one room, where they can be watched.
Lobbyists assert that their profession is protected by the First Amendment (the right to petition the gov’t for redress of grievances). But this right should be exercised in public, not behind closed doors. All communications between lobbyists and legislators/staffers should be streamed live on the Internet, and recorded on YouTube for posterity.
Exactly. They have their 1st amendment right, but as Corporations they use it as a Personhood, which they are not, but the Supremes won’t fix that corporate collusion.
“It might not be a bad thing to put all the lobbyists in one room,
where they can be watchedand then set it on fire.Fixed.
Thank you Socrates. ;~>
Dodd’s idea would at least improve the efficiency of our system. Influence payments wouldn’t have to be spread around so much, they could be focused.
It’s amazing how this irony is lost on these people.
So in order to prevent the financial pitfalls of too-big-to-fail entities, they’re…. consolidating all the oversight into one giant too-big-to-fail government entity.
(packman shakes head)
At least it’s better than having the FED run the program.
The press as weak as it is still can get info on our gov but not even our gov can get info from the FED.
“Senator Christopher Dodd will propose creating a single U.S. regulator…”
How about appointing Angelo Mozilo?
Having a sole fox-in-the-chicken-coop regulator should make abuses far easier to overlook (with Congress’s implicit blessing, of course…).
Again, the race to the bottom was won by the agencies with the most control from Congress, and thus the most subject to political interference.
Will someone ask Mr. Dodd in which direction all the “charter flips” went over the past 20 years? They away from the semi-independent Fed, which didn’t do enough but at least did something, to the other agencies.
WT,
In light of how smashing everything’s gone so far, I’m going to get on board w/ this one. If that means holding your nose b/c Dodd is involved, then so be it.
Actually, this is kind of what I’ve been waiting for. We’ve been belly-aching about reform, then it when it arrives, we don’t like the structuring? Look at how when the NASD came crashing down on open-ended mutual fund companies in the wake of the late trading/market timing scandal, all of a sudden, everyone wants to be a hedge fund mgr?
Sadly, the OCC was among the few straight shooters in the bunch. Bankers actually fear these guys and if you’re having issues w/ your bank, just mention the OCC and watch them scurry to get in line!
Well there was so much “regulator shopping,” under the old system, I’m willing to listen to explanations of how this one will be better.
Jim A,
And that’s ‘all’ I’m saying! What more is starting a HF than saying “stick it!”? Look, I don’t like Dodd ( or his cronies ) any more than anyone else, but this is as close as he’ll likely come to making amends?
Stop me if you’ve heard this one before:
Young salesman has had a really rough day. On the way home after having sold nothing all day.., he has a flat tire. As he goes to get the spare he realizes there’s no jack!
Then he notices a light off in the distance. A farm house. It’s late so he knocks on the door and then steps back. Just then a nice older gentlemen opens the bedroom window on the second floor and says: “Yes young man, is there something I can do for you?”
Then the kid says, “Yeah, take the jack and stick it in your @SS!” ( Is this what we really want to do right now? ) How is ‘that’ helping?
But DinOr ,the thing is that by hook or crook they just want to set up a toothless agency without changing the laws that brought about the meltdowns . What good is a agency if the structure of the system is corrupt and basically remains a self-regulation system
without transparency or true law enforcement . Until they tackle
the basic flaws in the ability of these Entities to do what they damn well please ,having a figurehead agency isn’t going to change
behavior . What about the faulty ratings on paper for instance ?
What about the claim of Wall Street and Banks that they shouldn’t have to disclose their activities ,yet they have the right to use other peoples money . American made great process for many years in developing laws that would protect the public from unfair business practice, but those principals seemed to go by the way side when Wall Street felt it could do anything .What about the fact that the business models that Wall Street came up with during the boom were simply fraudulent and not tested .
Housing Wizard,
All true. I can’t debate a lick of it. Un…tested you say?
But the reality is, the OCC doesn’t mess around. I ( as a consumer… ) have nothing but good things to say about them. I’m confident, given -half- a chance, the regulatory cream will rise to the top. Especially given the track records of the balance.
Act…ually, this is the 1st thing that should have happened ‘along’ w/ the bailout/TARP/free money. Her’s your check and here’s your new reg. agency. Play nice now!
“What good is a agency if the structure of the system is corrupt and basically remains a self-regulation system
without transparency or true law enforcement.”
In the spirit of hopefullness, maybe a new regulatory body will have both an intelligent mandate and the will and competence to do a decent job. Let Dodd get the ball rolling, and encourage other legislatures to put some teeth in it.
The only other option is fixing the current organizations, which seems even less likely to succeed.
Al,
Right, and at this point, if it helps to think of Dodd as nothing more than a useful idiot, hey, whatever.
I find just the fact there’s even so much as a peep about it encouraging. Again, we whine about how these @ssclown bankers have run a damned circus but when someone finally… wants to reign them in, we want to kill the messenger?
As is the case with pretty much any legislation, there are major flaws in Dodd’s proposal:
1) Banks over $10B pay into a fund to prevent a “Too big to fail” bank from failing. Problem is a $10B bank is not too big to fail - so, they have the burden of these additional fees vs. a $9B bank, competitive disadvantage yet they will never be the beneficiary of the fund.
2) Multiple bank regulators is not the problem, the level of regulating they do (or in this case failed to do) . . . is the problem. EVERY single bank failure that has occurred in 2008-9 could have been prevented if regulators used the hammer that they have been given. The problems did not arise overnight, they were just conveniently ignored over a period of years by incompetent or lazy regulators. Now it is costing us dearly.
I don’t think a $10M small town, well capitalized and conservative bank should be regulated by the same agency as MEGABANK. We don’t need to overhaul the entire regulatory system, we just need to ensure that accountability exists.
Exactly. Al the federal watchdog agencies were systemically stripped of their powers (resources, funding and teeth) over the last 30 years.
Part of that “smaller government” philosophy ballyhooed by one of those political parties. Let me see if I can remember which one…
Billionaire Fisher Sees S&P 500 Above 1,300 as Economy Recovers.
Nov. 10 (Bloomberg) — The Standard & Poor’s 500 Index will probably exceed 1,300 as early as February because the economy continues to rebound from the worst recession since the 1930s, billionaire Kenneth Fisher said.
The benchmark index for U.S. stocks has surged 62 percent to 1,093.08 after sinking to a 12-year low in March. It will add up to 25 percent from last week’s close in the next three months, said Fisher, 58, who oversees $35 billion as chairman of Woodside, California-based Fisher Investments Inc.
“It’s just a reversal of excessive pessimism,” Fisher, ranked by Forbes magazine as the 289th-richest person in the U.S., said in an interview yesterday. “We still have a lot more bull market to go because we had such a huge bear market.”
get the last suckers in just in time to sell all his stock and then short the market….great advice and timing…
Green shoots!
I love how this guy expects a decade or more of greed and Bubbles to be wiped out in a year or so and then back to the races with more Bubbles because “Bubbles are good for the eCONomy!”
Morning all
I just came across a handy dandy interactive graph breaking down on who exactly getting or got TARP money.
If it posts correctly, you should be able to just click the TARP bar and it will display the recipient banks and companies alphabetically with the amount.
Bailout Breakdown.
http://tinyurl.com/ylyb3hu
Good morning!
Anyone having problems with posts going through?
Leigh - on third cup of java
Maybe I need a fourth cup - all is well
You got a head start, I’m just sipping my 2nd.
A place to enjoy with coffee:
http://www.darkroastedblend.com/
NEW YORK (Reuters) - Beazer Homes USA Inc (BZH.N) on Tuesday posted a profit in the fiscal fourth quarter and said the sluggish market conditions moderated during the quarter.
The Atlanta-based builder reported a profit from continuing operations of $35.3 million, or 87 cents per share, compared with a year-earlier loss of $453.8 million, or $11.77 per share.
Wait a minute. Wait a freaking minute.
Am I to believe that a homebuilder - like a builder of homes, as in a company involved in real estate - made a profit last quarter?
I better get back to bed. It’s obvious I am sleepwalking and this is some weird dream I’m having. After all it is impossible for this to have happened since nobody is buying homes anymore and we are in the midst of the greatest great depression since the invention of great depressions.
Auto sales in October vs. October 2008
MB up 7%
Nissan up 5.6%
BMW up 2%
GM up 4% (?? this must be a typo)
Ford up 3%
Porsche up 15%
Subaru up 41%
Honda down 4.4%
Toyota down 1.3%
Chrysler (is that joke of a company still in business)?
Overall not a bad picture, especially since everyone was expecting October to be dead after the end of C4C.
I’m actually pissed about this as I am in the market for a new car and was hoping to be met by desperate salesmen. Damn it.
Patience, Grasshopper.
Duration duration duration…
Weird eh? I think the fleet turn over rate had dropped to something like 28 years. Bound to correct itself.
The housing data isn’t surprising either. I think large swaths of the country didn’t have as big of a bubble and over build as Florida, Nevada, Phoenix and California.
Would guess in a total dump like suburban Atlanta that you might see a turn around. Lots of open space.
I don’t think you get to nice areas till you hit the foothills around the mountains. Then its pretty but long way from anything.
We will see what happens as the REO, CRE continue to bleed onto the market though.
I’d guess you are long financial, auto and real estate?
Wait until Dough-4-Dumps expires before you get too irrationally exuberant over increased home builder profits. (Then on the other hand, it is unlikely Dough-4-Dumps would be phased out without another still-larger subsidy to replace it…)
Dough4dumps the sequel at 15K is cooked in the books. We know it. It is a matter of time.
I guess they aren’t going to pursue any of the fraud. My plan, not sure if this is legal, will be sell my mom’s house to me. I’ll make “payments” on the I/O loan too.
Hopefully can shuffle the money around enough as mom is in a lower tax bracket to me and the wife. Then I’ll rent the home back to her. Take the write off on depreciation.
Suburban Atlanta is a dump? No nice areas until the mountains?
Have you actually been to the area?
Johns Creek, Alpharetta, East Cobb and about 1/2 of West Cobb are great suburbs. If you don’t like suburbs, that’s a different story. But as far as suburban areas go, N and NW Atlanta are some of the best out there. The area between Alpharetta and Canton has some incredible houses.
Southside suburbs are a no-go zone for the most part with a couple of exceptions like Peachtree City which is a world onto itself that thousands of people love. Not my cup of tea, but I can see the attraction to it. Lots of Delta pilots live there.
Foothills of the mountains by the way means meth labs galore with a nice cabin here and there. Go to Elijay on a Friday night to see what I mean.
I repeat. Suburban Atlanta is a dump. It is the same as any other flat agricultural spot in the US. Hot, humid and non-remarkable. Culturally a big zero.
Its the midwest but not as far from the ocean.
Not the worst winters but pays you back in the Summer. I’ve been there plenty.
Dang James. Care to educate us as to the few areas in the US that aren’t a ‘dump’, so those of us with a more verbose vocabulary for the continuum involving liveable areas can stay away from the likes of you?
Gee Dawg,
Sensitive about the hometown, eh? I’ve been around and I’m calling them like I see them.
Amoung the major metros…
MAJOR DUMPS: Atlanta, Detroit, Las Vegas, Dallas, Jacksonville… blah. Dallas is probably the worst of them. One giant long drawn out dusty hot trailer park. You could also file East LA and the IE in the dump category. Detroit is just a fallen city. Dead.
Nicer cities…San Fran, NYC, the OC and parts of West LA, Miami, Portland, Seattle, Chicago, Austin, Baltimore has a lot of nice sections. Plenty of nice towns all over the North East. Thought Tampa was OK but got a lot of crime problems and drawn out bad sections. Liked Mobile and several towns in Alabama. I liked DC and that area. Cleveland had a pretty good revival going… haven’t been there since the 90s.
Don’t know much about Boston area. I hear that Houston is getting to be a mess with the subburbs.
Grid lock around Atlanta is getting on to legendary status. I can’t imagine why anyone would want to live in that area. In fact I have a hard time understanding why the city even exists. Very dispersped area with poor road systems. Fairly poor school system. I think General Sherman had the right idea with Atlanta. Burn it.
If you and Eddie care to avoid all these places we’d all be much happier.
It depends on ones definition of “dump”. If by that one means a sea of cookie cutter McMansions, then yes, its probably a “dump”.
I happen to like dumps. It means the progressive-planning-control-freak elite haven’t taken over yet.
Baltimore? OK now I know you’re high.
LoL Baltimorge! Hah. Atlanta and Baltimore both have large black populations, so wouldn’t they both be the same in your definition?
What about Norfolk/Virginia Beach ? Flat, humid, nothing but gubbmint jobs.
I’ve been to OC, the wife’s parents live there. I know you’re high too.
And I don’t live in Atlanta or anywhere near it.
Jamie,
You need a geography lesson son. Atlanta may lots of things. Flat, is not one of them.
San Francisco is not that pretty. You need to get out to the western addition, mission district, bayview district. All cities have their good and bad.
BTW, even with those gains the numbers are way way off 2007/2006/2005 and all those go go bubble years.
I’d guess high end vehicles like Expeditions/Navigators are way off too.
Might be able to find a good deal on a large family vehicle.
Troll on dude.
“Troll on dude.”
BwaHaHaHAHAHAHAHAAAAA!!!
So you measure the direction of things when compared to 5 years ago. Pretty poor investment strategy, but it’s your money. Go ahead and keep believing we’re in the worstest depression ever while the world passes you by once again.
Oh and what’s this now? Home prices up for the second quarter in a row. Bbbbut prices are down from 2006 so it doesnt mean anything. The tax credit has been extended for a year, it is now available to everyone. Bbbbbbut that won’t do anything for sales. If you want to believe that, be my guest.
I do have to ask at what point do you put the kool-aid down? 3 quarters? 4, 5?
“Home prices up for the second quarter in a row. Bbbbut prices are down from 2006 so it doesnt mean anything.”
It could mean that US real estate price increases (not to mention US share price increases) are supported by a falling dollar.
I’ve played in volatile markets before dude and made plenty of good moves. This rally has been impressive and strong. However the fundamentals are still very poor.
My hedges against the dollar plummeting have done quite well and I’m not hurting.
I’d like for you, sans prediction of the past, to state what positions you are holding. Or what you broad strategy is.
Eddie’s broad strategy seems to be betting on endless Bubbles, such as “real estate always going up!” while ignoring fundamentals and mocking anyone who doesn’t buy into the Green Shoots.
Hey, it’s his money, but not all of us are in a rush to buy an overpriced dump just because there’s some collection of scams and toxic loans to make it look “affordable.”
Median home prices fell nationwide in 3Q
Median home prices fell in 80 percent of US metropolitan areas in third quarter of 2009 * AP Tuesday November 10, 2009
A real estate group says home prices fell in eight out of every 10 U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals.
“Eddie’s broad strategy seems to be betting on endless Bubbles, such as “real estate always going up!” while ignoring fundamentals and mocking anyone who doesn’t buy into the Green Shoots.”
That’s not too far from the truth actually. I’ve said this repeatedly but I will say it again….
If it were up to me I would have no bailouts. But the people who do make the decisions, have decided to have never ending bailouts. And despite the fact I oppose that in principle, I will profit from it. So yes I have been long financials since about December of last year. I have been long technology since March. I’ve stayed away from metals which looking back wasn’t a good strategy, but oh well can’t win ‘em all.
Fundamentals don’t mean jack anymore. At least not for the short term. When the govt is throwing trillions of dollars around, you can throw fundamentals right out the window.
Obviously this can’t last forever. But it can last another year, 2,5 10? Is there any evidence that the govt spend-a-thon will end in the foreseeable future? If so I have yet to see it. All I hear from Obama and Co. is spend, spend, spend. I don’t think they know what the word “less” means.
Eddie,
Again you are throwing out news about the past. Then you are saying this will go on for the indefinite future with out staking a position.
Either you are very lucky OR your just a big time BS artist.
I like the called the top and bottom on tech, housing, financials and… oh did I miss anything? Did you look up the Nasdaq graph before you decided to say March for tech? What companies did you invest in and why?
So. Good luck down in Atlanta. Enjoy your NASCAR experience.
“If it were up to me I would have no bailouts. But the people who do make the decisions, have decided to have never ending bailouts. And despite the fact I oppose that in principle, I will profit from it.”
The turning point which is hard to time and which will blow everyone (even me) away when it happens is when the current ‘management by bailouts’ policy falls into such severe disrepute that it is no longer tenable, even with the likes of Bernanke and Geithner trying with all the force of their respective MSM bully pulpits to keep the party going. Economic historians will marvel at how long the Keynesian bailout management regime lasted before it finally blew up once and for all.
James,
How much more clear can I be? I think the stock market will continue to go up. I own stocks specifically financials and techs. You want my social security number too?
Never been to a nascar race. Would like to check it out some day see what the hubub is all about. But I appreciate the use of stereotypes, makes your argument that much more cogent. Well done.
“Would like to check it out some day see what the hubub is all about.”
Never been to NASCAR, either, but I highly recommend Talladega Nights: The Ballad of Ricky Bobby as an entertaining parody thereof.
‘Eddie’s broad strategy seems to be betting on endless Bubbles, such as “real estate always going up!” while ignoring fundamentals and mocking anyone who doesn’t buy into the Green Shoots.’
OK, in defense of Eddie, isn’t the Fed’s policy pretty much to endlessly blow asset price bubbles — i.e. to create asset price inflation and claim it isn’t inflation so long as the price increases are confined to housing, stocks and commodities? Why assume the Fed will summarily discontinue the policies it has pretty much consistently pursued ever since it was established in 1913? Don’t fight the Fed!
I’ve been to a Nascar race. I had a lot of fun.
2008 was such a bad year that comparisons to 2007 would be more appropriate.
+1
Why not 1923? Has about as much relevance. When looking at investment strategies you look at the direction. If 2009 > 2008 that means the direction is positive. By the time figures are above 2007, it’s too late to make any money from that information.
Those single digit increases are mostly noise. If everyone was up 20%+ then you would be talking. Still, I agree that its better than single digit decreases. Whether or not its a blip time will tell.
I’m actually pissed about this as I am in the market for a new car and was hoping to be met by desperate salesmen. Damn it.
If sales are only up single digits from last years lows I think that there will be plenty of desperate car salesmen to be found.
Revenue in the quarter ended Sept. 30 dropped to $376.3 million from $649.8 million in the year-ago period as the housing crunch continued to drain the firm’s top line.
Beazer said its fiscal fourth-quarter results included a pretax gain of $89.3 million on early extinguishment of debt.
New orders from continuing operations rose 2.4% year-over-year to 1,012 homes
(snip from marketwatch)
Yeah baaaby, let’s party! Woohoo!
Leigh
Its easy to show a short term profit after you’ve had mass layoffs.
Operating Loss (39,163)
Gain on early extinguishment of debt 89,289
…
Net Profit 33,791
That is, the debt traded at a discount because of their perceive weakness, so they were able to retire it cheaper and book a difference as a gain.
Their financial weakness translates into “earnings” right now..
Does this count as hope or as change?
“In a case that raises questions about online journalism and privacy rights, the U.S. Department of Justice sent a formal request to an independent news site ordering it to provide details of all reader visits on a certain day.
The subpoena (PDF) from U.S. Attorney Tim Morrison in Indianapolis demanded “all IP traffic to and from http://www.indymedia.us” on June 25, 2008. It instructed Clair to “include IP addresses, times, and any other identifying information,” including e-mail addresses, physical addresses, registered accounts, and Indymedia readers’ Social Security Numbers, bank account numbers, credit card numbers, and so on. ”
Becoming more and more like Venezuela every day. But we’ll get “free” health care so I guess a little totalitarianism is a small price to pay.
Got a link to the actual story? The link you provided tells us nothing about the story.
http://tinyurl.com/yfp25em
The link post got eaten up. If this goes through, it’s on cbsnews.com
Found it myself.
http://www.cbsnews.com/blogs/2009/11/09/taking_liberties/entry5595506.shtml?tag=mncol;txt
Kind of a non-story. Someone overstepped their bounds and probably is getting spanked. Request withdrawn. Good.
Otherwise I’m explaining my posts on using landmines to secure the border with Mexico.
Is Obama behind this? I thought he was a Constitutional scholar. Is his Justice Department now secretly opposing First Amendment rights?
I look forward to what Glenn Beck and Rush Limbaugh have to say on this issue. My political leanings may be on the brink of taking an unexpected turn to the far Right.
I hate to break it to you PB, but as amazing as President Obama is, there is no way he can micro-manage the entire Federal government.
Plus it’s a left wing site
but Bush micro managed the whole gobmint.
Substitute Ashcroft for Holder and this story would be getting 24/7 coverage on the alphabet soup networks with Kos and HuffPo in an uproar over the end of free speech.
But Obama’s AG does it and it’s a collective yawn and a general “no big deal, it’s just some tiny website nobody’s ever heard of, so why worry” attitude.
Eddie, Eddie my friend,
Holder was sworn in on the 3rd of Feb.
This subpoena was dated 23rd of Jan.
Obama was sworn in on the 20th of Jan.
You figure out who was playing this game.
(don’t flame me, I am no Obama supporter. Vote Paul/Bair in 2012 on the Libertarian ticket)
This beats all…
WSJ
Life on Severance: Comfort, Then Crisis
It’s a long read - people are stupid!
Featuring er…um…mid/upper class who received pink slips with severance pay and kept on spending as if they were working.
Turned down positions because they didn’t like the $$ or duties or location.
Networked at Starbucks (oy vey), ate porterhouse steak - hair, nails, cars and all that lavish stuff.
Warning: Reading article may cause hair to spontaneously combust.
Leigh
“Turned down positions because they didn’t like the $$ or duties or location.”
I know of a couple of these guys. One guy lost a $170,000/yr job and refuses to consider anything less than $120,000/yr.
As we advise home sellers who cannot find a buyer, “Lower the list price!”
Snips from article:
Mr. Joegriner began his career in banking more than 20 years ago, starting out as a part-time teller in Chevy Chase, Md. Even though he was still in college, his goal was to be a CEO. He took night classes to enhance his knowledge of banking.
Mr. Joegriner says he never craved a lavish lifestyle. When the first of their two children was born in 2000, his wife left her $50,000-year-job as a paralegal.The family settled in Silver Spring rather than pricier communities nearby. Instead of tailored suits for $1,000, he bought off-the-rack styles for $300. Mr. Joegriner purchased a Mercedes five years ago, but at auction.
After losing his job, Mr. Joegriner expected to land on his feet within six months, he says. In that time, he turned down three job offers to be a chief financial officer, either because he didn’t like the salary or the description of duties, and thought he could do better. One was nearby; the others would have required the family to move out of state. All paid somewhat less than he had previously earned.
…
The Joegriner’s four-bedroom residence is currently worth less than their $460,000 mortgage, but they’re still making monthly payments of $2,400.
The couple is also saddled with two former residences — which they once considered investment properties. While both are income-producing, low rents and declining real-estate values mean that they barely break even. At this point, any sale would likely result in a loss.
…
He was selected for a position in Wyoming for $60k less and turned it down - yeah, people are smart.
Good night Irene!
Leigh
He was selected for a position in Wyoming for $60k less and turned it down
Have you ever been to Laramie or Cheyenne? I’m guessing that’s where the job was. Sure, Jackson Hole is nice, but that’s a resort town. No real jobs to be found there.
Colo,
Can”t say I have been to the great state of Wyoming.
I can say (for myself only) that I would not turn down FOUR job offers in this economy, but that’s me.
I’m blessed to have this blog so me head doesn’t end up in me rear…er…view mirror.
Leigh
awwww the poor bankers!!!!
yeah both my brothers were like that in the 1991 recession. It was a dignity thing…and my father propped them up. They never worked again..
that’s exactly the kinda guy i want as my CFO!
Living in Silver Spring is not any indicator of modesty. Silver Spring is extremely varied — anything from urban-infill condos to small ranches occupied by illegals to medium size Tudor Revival, to one little area of old-fashioned mansions on acres. (I’ve seen all of that in person.)
I could understand if he felt justified in making demands three years ago, but it sounds as if he lost his job during the current crisis. Half of the middle class wants to see bankers tarred and feathered, and he’s turning down job offers?
He must be one talented banker. Hasn’t he ever heard of taking a position, keeping current in your industry, and taking a better position when one comes along ? Duh.
She downgraded her cable TV to basic channels, saving $8 a month.
You know things are tough when they have to downgrade the cable!
There are still many, many people who think jobs that pay a living wage grow on tress. So they take their severance (something I’ve NEVER seen BTW) and have themselves a la-di-da extended vacation thinking they can just jump back into the job market at their former pay and position.
Much gnashing of teeth and domestic violence to come.
October 06, 2009
Nomi Prins on “It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals From Washington to Wall Street”
Nomi Prins is a former investment banker turned journalist. She worked at Goldman Sachs and Bear Stearns. She is the author of several books; her latest, just out, is called It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street. She spoke on the themes of the book at the Strand Bookstore in New York on September 29th.
Wall street is laughing all the way to the bank.Not get back to work making more widgets so wall street can get your retirement money too.
It’s great that there are at least a few turncoats like Prins out there to explain to the rest of America how Wall Street is robbing us blind.
Don’t you get the impression that the Megabanks just cannot even figure out what to do with all of the money they are being handed by circumstance? Their plight of suffocation under a mountain of cash has been sold to the public(world) as a necessary byproduct of “saving the system”. Meanwhile, JSP is dying on the vine as he tries to make any sense of it all. This particulary surreal phase of the whole debacle will go down as the “consequence-of-meddling” era and will ring of “you-wouldn’t-have-believed-it-unless-you-lived-in-it” time historically as future economics class students will question: How could something like that ever have happened?
pressboardbox,
Not in any way to exhonerate MegaBank Inc. but we continue to downplay the contribution from hundreds upon hundreds of smaller local failed banks. Not counting the ones FDIC ‘could’ be shutting down but are allowing to continue to operate.
So much for “investing locally” huh?
“…but we continue to downplay the contribution from hundreds upon hundreds of smaller local failed banks.”
You are completely missing the point. Due to the implicit promise free too-big-to-fail bailouts if any of the Megabanks get into difficulty, they have a lower cost of raising capital than smaller local banks. The Fed’s policies are throwing the regionals under the bus in order to preserve the market power of Wall Street’s banking cartel.
Get it?
Ten-Four PB. -and that goes for car dealers, insurance companies, and every other TBTF organization that has done everything WRONG in business and is getting the edge on prudent, honest businesses. It is just sickening.
Professor Bear,
Trust me I get it. I’m living it. All I’m saying is, in our daily rundown of MB Inc. we’ve conducted ourselves as if the lesser players were without guilt.
Ahem, since they were the lender of choice for small business ( read developers ) and… they’re now out of business, who’s going to be making legitimate loans to those of us that remain?
Now you can claim they “weren’t big enough to get a bailout” ( I mean why not! That’s what -every- former bank pres. has complained ) but we never get around to asking them how they got into so much peril in the first place. It’s really just a simple observation to re-center the debate is all.
“Trust me I get it. I’m living it.”
Fair nuff. I suppose I’m living it, too. Even though buying stocks seems like a really dumb idea in the current business environment, I keep doing it, out of fear that the Fed’s printing press will make buying stocks now a good idea through the lens of the rear view mirror.
Similarly, small lenders who did not make crazy loans circa 2005 would have lost out to Megabank’s crazy lending scheme. Such is the nature of manias, where those who try to exercise financial prudence end up stuck on the sidelines while the irrationally exuberant get to enjoy all the goodies.
“How could something like that ever have happened?”
Easily explained by the theory of coalitions (federal government bought and infiltrated by Wall Street financiers).
“Don’t you get the impression that the Megabanks just cannot even figure out what to do with all of the money they are being handed by circumstance? ”
Nah… just remember that those soulless shells (our “talented bankers”) would sooner burn their extra money than do anything productive with it that might help out the middle or lower classes. Oh, maybe they’ll LOAN you some money… maybe… if there’s a way to make you into a debt-serf or otherwise exploit you. But that’s about it since for them, there’s no such thing as too much.
Careful PTM, that’s just damn socialeest/commie talk.
Don’t you know those folks are rich because they DESERVE to be rich?!
As for struggling J6P, LET THEM EAT CAKE!
Marketwatch
Fed’s Tarullo: Don’t break up big banks
Restoring Glass Steagall wouldn’t solve ‘too big to fail’ problem, he says
And a big fat rasberry pfthfffffffffffff to you Mr. Tarullo.
Comment section on article is lively!
Leigh
ROTFLMAO
And a big fat rasberry pfthfffffffffffff to you Mr. Tarullo”
Is he the one who got caught buying Goldman Stock when they knew Goldman was going to get bailed out or was he the one that did it and didn’t get caught??
In other words, “The building burned to the ground proving that fire safety doesn’t work.”
Guess what: Nobody much gives a flying fark about when the Fed is going to “move against inflation.” They already said they are going to maintain ZIRP into the indefinite future.
However, their cozy relationship with too-big-to-fail Megabank, Inc is quite intriguing, no?
* The Wall Street Journal
* OPINION
* NOVEMBER 9, 2009, 7:28 P.M. ET
The Fed Is Already Transparent
The central bank doesn’t need more political interference as it decides when to move against inflation.
By ANIL K. KASHYAP AND FREDERIC S. MISHKIN
Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed’s monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed’s independence. If it passes, it will cripple policy making—particularly when it comes to inflation.
It is completely appropriate to hold the Fed accountable for its decisions. But the Paul bill, H.R. 1207, will only produce redundancies: Congress already has multiple ways of finding out what the Fed is doing and why.
…
Other questions of interest to ask the highly-transparent Fed:
1) How do you decide whom to make whole and where to obtain the money in a shrinking economy?
2) Which asset prices (besides the price of short-term borrowing) do you control, and how?
3) Is there a legal basis for your actions to pick winners and losers in the American economy?
4) How much do you pay economist prostitutes like Kashyap to carry your water?
1) Are you serious? Are you serious?
2) We don’t steer this thing, We just put our foot on the gas pedal.
3) Define “legal basis”.
‘3) Define “legal basis”.’
Something for a deliberative legislative body like the Senate to decide.
Well, they are certainly “liberative”. They are liberating everything they can get their hands on.
“I’ll make it legal” - Darth Sidious.
“2) We don’t steer this thing, We just put our foot on the gas pedal.”
Wouldn’t you like confirmation of this directly from the horse’s mouth? Besides, the Fed could clear up all the tinfoil hat rumors about manipulating stock, bond and housing prices by directly clarifying that they don’t engage in such activities.
We don’t steer this thing, We just put our foot on the gas pedal.
Not so, it seems there was a selective process, some companies got the gas some companies like Lehman got the football pulled away right when they thought they were going to kick a field goal and be saved.
I repeat:
“1) How do you decide whom to make whole and where to obtain the money in a shrinking economy?”
Easy: they make their cronies whole based upon how much they are a part of the Fed’s system (and probably bribes and such), and the get the money from us without any legal authority to do so via printing up debt and sticking us with it.
5) How do your ties to the Treasury Department through the Working Group square with the Fed’s vaunted independence?
The Fed will stop robbing us….when they stop.
We don’t need to know when they intend to do this, but they keep saying they will!
Now get back to work.
I guess if inflation happens later on, it will be Ron Paul’s fault for asking too many pesky questions that weakened the Fed’s vaunted independence, and not the Fed’s monetary policy?
“Weakening the Fed’s independence now might raise the risk of inflation, which would cause borrowing costs to rise and would lower prospects for a strong economic recovery. For these reasons, we joined over 400 prominent economists in July when we signed a petition opposing the type of incursion on the Federal Reserve that Mr. Paul is proposing.”
If the Fed is transparent, why is it in court trying to block Bloomberg’s freedom of information request?
If by independance they mean ‘doing whatever wall street wants’ then yes, Ron Paul’s bill would weaken the Feds independance.
Sad. But what’s the solution when it comes to those facing foreclosure? Give them a break because they’re depressed about it? I still go back to the fact that, even though the mortgage industry was (is?) filled with predators, a person has to ultimately make their own decisions and take responsibility/accountability for them. The argument I get is, “Yeah, well the mortgage lenders are professionals and people assume they can believe them.” My response is, “Same with car salesmen, yet who believes everything they say?” Additionally, I don’t always take what my doctors say at face value without some of my own research. Some would say I’m cynical rather than trusting. I choose to call it self-informed.
Suicides in the downturn raise worries about recession’s real cost
msnbcdotmsndotcom/id/33738656/
Boo. If you’re going to do it, go to wall street and take a few for the team.
Exactly. Take some crooks with ya.
http://tinyurl.com/yd8s72p
ATA Expects 4 Percent Decline in Air Travel Over 12-Day Thanksgiving Holiday Period Despite Deep Reductions in Ticket Prices
The Air Transport Association of America (ATA), the industry trade association for the leading U.S. airlines, today said that it expects a 4 percent year-over-year decrease in the number of passengers traveling on U.S. airlines during the 2009 Thanksgiving holiday season, despite deep discounting over the past several months.
“It is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us. …” said ATA President and CEO James C. May.
bbbbbbbut……. ________.
I used to love to fly, it’s such a hastle anymore.
I wear a backbrace and have the medical documentation required by the airlines, yet I get a private screening EVERY time!
I take it in stride when I must fly - now I just tell them to screen me - look on their faces - priceless.
Not to mention the 3 or 4 oz limit on carry on baggage, no food or drinks unless bought in the “secure” area. Jeesh.
We’ve lost our collective minds, I tell ya.
Leigh
I was taking a flight in my military uniform, along with a large group of soldiers. We were about 1/3 of the people on the flight. While going through the screening, many of were required to remove our boots. I had a small pocket knife with me (I had completely forgot it was in my pocket) and ended up throwing it in the trash. I pointed out to the security gaurd that now, post 9/11, anyone attempting to hijack a plane with such a weapon would find themselves sitting on the bottom of a passenger pile. Safety is important, stupidity less so.
I agree. Pretty much all the current airline security is unnecessary, because the only reason the 9/11 plot worked was that it took advantage of the assumption that if you went along with the hijackers you’d be safe. Now that nobody has that assumption, the next attempt would result in the hijackers being washed from the interior with a hose when the plane lands. Might as well let people carry their pocket knives.
Yep. Not only that but it probably makes it *more* dangerous now, because the passengers have no ability to defend themselves and the plane from terrorists. A terrorist could easily bring aboard a non-metal weapon - e.g. a carbon-fiber knife or the like, whereas very few passengers have such things for defense.
Carl Morris,
Ex….cellent point. Not that the little buggers can’t conjure up something ‘else’? But it’s safe to say the liklihood of pulling of something of the same magnitude/style again is pretty slim.
How many times have we said here; “We’re forever fighting the -last- war”?
Tell me about it.
The last time I had to fly, a mean old screener darned near had me hoppin’ around Billy Mitchell Airport in my socks and undies.
She must have been really bored as Hell because she sure couldn’t have wanted my body !
couldn’t have wanted my body !
hahahahah
And then we have those lovely machines that can see you nekkid.
Picture THAT!?
But did they make you take off your tinfoil hat? For me that would be the last straw!
So far, there are only a few airports that utilize those machines. It isn’t widespread…. get it- hahahaha
Guys guys guys.
There is some important information to be gleened here….
Leigh… girl name
Has to wear a back brace…
It says big h00ties!
Yeah.
I think she hurt it the last time she punched a guy for making really bad jokes. She punches pretty hard for someone with a girl’s name.
Your response had me laughing out loud. Thank you SDRE Bear
I hope traffic is down as well, as I commute from Norfolk VA to near Tampa FL.
Dear Lawd,
Puhlease let Megabank, Inc keep paying its top managers gazillions of dollars in bonuses, so the Northeast economy can survive this wicked financial crisis. (And screw Kaleefornia and those other Western states where Megabanks steals their money.)
Sincerely,
Concerned Northeaster
Praying for Big Bank Bonuses
States in the Northeast already are in deep financial crisis. Without the tax revenue from Wall Street pay and bonuses, they could find themselves closer to the brink, says Dennis Berman.
They’re reeeally scraping the bottom of the barrel of excuses for those big fat bonuses.
“Dear Lawd”
Too funny! Easily the most pathetic MSM piece for the week so far. In fairness though at the bottom of the article Berman concedes that the NE absolutely has to wean itself off the bonus windfall.
( It’s just so damn hard to stop though! )
That may work for the North East but those bonuses get pulled out of the pockets of ALL Americans. Even most of the middle class in the NE are loosing much more than they gain.
I was watching CTV Newsnet, a national general news channel here in Canada. They have a 10 minute business update periodically. The lead story was about investors taking out cheap debt in US currency and buying more risky assets in Western and emerging markets, and commodities. They did use the word carry trade, but not bubble.
A “shoeshine moment”, perhaps?
So much for the idea that we had a housing bubble because the majority of people (those not posting here) were deluded.
http://online.wsj.com/article/SB125781305937039951.html?mod=article-outset-box
According to this article, most of those pouring money into stocks feel it’s a bubble driven by easy money and will end badly, but don’t want to be left behind on the way up.
Which means they’ll all head for the exits at once.
This looks to be the final fleecing.
OR, has the last month’s erratic up and down movements been a consolidation phase in preparation for the next leg up?
I think there will be another leg Up for a few reasons:
1) Get everyone past the “fall is bad for stocks” idea. That way, people will have more irrational hope for the future AND be vulnerable to future fall crashes.
2) Santa Rally. Get everyone doped up and happy on Green Shoots for Christmas to keep the sales going and people buying into the stock Bubble.
3) Weakening dollar makes it look like we’re getting wealthier, but we’re really not.
Once everyone has spent money for Christmas, they can pull the plug and let it crash which should be in time for StimPack 2 next year. If that is timed correctly, it can make our leaders look like heros for “rescuing” the sinking market in time for the 2010 elections.
Am I too cynical? Nah…
It looks like you’ve seen this movie before.
So for what it’s worth -
I’ve been following the various debt levels - consumer, housing, government, etc. - occasionally posting graphs and such. I’ve been very much in dismay, as I’ve seen our debt levels just rise and rise and rise. Overall our debt went from about 235% of GDP in 1997 to 358% of GDP early this year.
However the last few months - I actually see some *somewhat* encouraging stuff. Debt levels are actually falling in every sector now, and that is a good thing.
- Consumer credit, which actually had been flat during the bubble (via HELOCs), is now falling at a fairly good pace. (data through Sep)
- Mortgage debt is falling, albeit somewhat slowly (as of Q2 Fed Res z1 data)
- Believe it or not - the federal government debt number for October was actually lower than September. I’m not sure why, but I would imagine it’s due to some of the TARP repayments. Sep was $11.91T, Oct was $11.89T.
- Financial sector debt is falling as of Q2 data (z1) - down to $16.5T from $17.1T at the peak.
We’re still way high relative to pre-bubble levels, but at least now debt levels appear to be coming down. Some of the data is a few months old - I suspect that the recent uptick in consumer spending will unfortunately slow or stop this good trend. We’ll see.
Another thought - it’s interesting that even though home prices have taken a pause in their downturn, and actually rising some this summer, that there’s been no indication that the rate of mortgage delinquencies is slowing. One would think the rate of delinquencies would be falling or even leveling off now.
Presumably now the delinquency rate is more driven by unemployment, than previously it was driven more by prices falling.
Presumably now the delinquency rate is more driven by unemployment, than previously it was driven more by prices falling.
It may take those with mortgages that exeed the value of their house a while to acknowledge that the best course of action is to walk away.
How much of this debt is due to debt repudiations?
Remember, one person’s debt is another person’s money. No matter how you look at it, somebody gets stiffed.
I would imagine a significant portion. The fact that the savings rate is still very low (around 4% vs. historic levels around 8%) would indicate that.
Nevertheless - it’s a good thing the levels are coming down. No chance I’m guessing of them getting back to pre-bubble levels; there’s too much pumping going on.
Did you look at the Federal Reserve “expanding its balance sheet”? That’s where all the negative entries have landed up recently. I have no idea what it means when they say “expanding the balance sheet” but I do believe it won’t end well.
Not really sure what that is to be honest. The monetary base of course has gone way up. I’m not really an accountant though so can’t say otherwise. Of course the Fed’s been buying tons of MBS, so presumably it refers to that as well (though in the end they’re probably the same thing).
‘I have no idea what it means when they say “expanding the balance sheet” but I do believe it won’t end well.’
I believe it means (for example) they create a $1t electronic book entry on the asset side of their balance sheet and announce to the public that they have $1t in new spare change to buy whatever they want. Creating new money has never been easier than it is in the high tech era! No need for the messy process of running the physical printing press when the electronic variety is in play.
Not suggesting there is no downside to this virtual money creation process, though.
But look on the bright side: With electronic money, you will never need to worry about needing a wheelbarrow to bring enough money to the store to purchase yourself a loaf of bread.
LOL at the pic. Good find.
Round numbers are best, since 0’s are lighter than 1’s. By “round numbers” though I mean binary - e.g. $65,536 is a lot lighter than $65,535. (1 00000000 00000000 vs. 11111111 11111111).
(Side funny - I like the Dilbert where he goes to his boss to ask for a new hard drive since he’s running out of space, and his boss tells him to just change to a smaller font in all his documents)
Any thoughts on how much higher the DJIA will shoot up before the next substantial crash?
I’ve been wrong too many times recently (and have the scars to prove it) to make any more predictions about the stock market.
I’ve been pretty much out all along, and have been just gritting my teeth at this extended rally. However I just know that the moment I jump in, it’ll plummet again.
Well, you just jump in and the rest of us will short and cover your losses.
LOL - I’ve thought about that. I’m accepting money now for the “packman reverse psychology fund”. I accept paypal. If I get enough $$ from HBBer’s, I’ll invest a few $k in a given stock. I’ll let you know what it is beforehand so you can set up your shorts properly.
VEry funny stuff. I agree. I think if the hbb does a group investment fund, somewhere along the line, it could actually be financially a good idea!
It’s all good, man. A little dot com crash never hurt anybody. It’s not like your losses will go toward recapitalizing big banks or anything.
I hear an echo….my sentiments exactly.
The lesson of the housing bubble is that this sort of thing can go on far longer than I ever could imagine.
And memories are short: I couldn’t believe there was another housing bubble after the post-1987 carnage in the Northeast, and am amazed people are bidding up stocks relative to earnings after the 2000 and 2008 debacles.
Perhaps most people don’t have free will, and are responding to easy money like Pavlov’s dogs?
That’s also the lesson of previous bubbles. For instance, Sir Isaac Newton sold his stake in the South Sea Bubble as it was collapsing for the first time, then lost his shirt when he tried to cash in on the giant dead cat bounce.
I expect many (like our own Eddie) will make the mistake of confusing the giant dead cat bounce now in progress for a true recovery, and will lose a bundle of money when the next wave of collapse buries them. I will savor every moment as I watch it play out from the sidelines.
Got popcorn?
PB obviously has missed the 50% rise since March.
As a retiree I don’t play in that sandbox any more, but at least our kids followed my advice and didn’t get off the elevator when it stopped in the basement back in the spring.
This is from an article I saw in the WSJ several years ago.
“There is a small god on the trading floor who allows everyone to pick the top correctly once and to pick the bottom correctly once and to be wrong as many times as they want.”
Yeah, I fell to 50% in the previous year, but now I’m pretty much back to 100% again a year later across all my investments. If it falls again, I’ll just jack up my 401k and ride the wave.
I think PB took profits recently. So, he captured some of the 50 pct gain.
There is not a single seasoned trader on the planet who believes he can perfectly time tops and bottoms. That’s why its best to stop losses and take profits often. What’s the point of not taking profits? Where is the virtue in watching losses mount?
Since I made a bunch of buys in March and have 32% of my assets in gov. securities and nearly 12% in PM, a massive 50% or 60% correction would not cause me to flinch.
I’m continuing to buy and yes I know these heights are unsustainable.
I’m actually hoping for a major correction very soon. I’m going to put more money into stocks in the next ten years than I put in the previous 20.
“I’m continuing to buy and yes I know these heights are unsustainable.”
Ditto. I did take some money off the table after the 50 pct gain, though.
P.S. A bear has to hold his nose while investing in stocks in the current highly-manipulated environment, but as they say, “Don’t fight the Fed.” I’d rather be hedged against inflation than financially dead.
Agreed. Stocks are one hedge against inflation. My favorite buy was 1700 shares of my company stock in early March at its lowest price ever. It went public in the mid 1990s at a slightly higher stock price than I bought it at in March.
Pb(lead),
You must admit it’s fun to have buffoon in the HBB family.
Exy as usual keeps it classy. I would expect nothing less of a union man.
Yep. Pay up Sassy.
WT Economist,
I’ll have to agree, longer than one’s imagination. It’s good to see so much candor amongst the posters though.
Where “I” have made my most visible errors.., has been in judging ( or rather misjudging ) just how self-serving those around us can be on the local level?
Everyone is convinced ( or strongly suspects ) a vital recovery could be any day now!? And as such, they’ve no qualms about walking away, throwing their creditors under the bus and stiffing whomever they ‘need’ to stiff in anticipation of said “wreckovery”. I’ve never seen so many otherwise reasonable adults shed their dignity so willingly?
It’s good to see so much candor amongst the posters though
Ditto. I think more would be helpful though!
DD,
At one point, and we may still be there, collectively, this Blog had a 1,000% Batting Avg. I mean to the ‘t’.
When you’ve called everything from the collapse of the credit default swaps to ‘which’ areas ( down the neighborhood ) would get hit the hardest.., it can be hard to be humble. Even to admit the smallest of mistakes.
My issue is when we ( granted.., w/ a flawless track record ) begin to take every possible outcome as a ‘given’?
It’s been said before and we’ll say it again before we learn.
We may not be doing too hot but the DJIA Casino better NOT be all there is to the American Economy !
Care for some jam with your toast Crispy Critters ?
Well. The new money doesn’t have a lot of places to go. All the financials are lined up at the discount window and are sitting on bad loans.
Could go for a while longer. My guess is we head to 12000. I’m mostly still in cash but my hedge bets are catching up to the rest of my portfolio.
Once they get that high I’d expect the banks try to raise capital with some stock sales. Then take some write offs to balance things out.
Soon we are going to be talking about bailouts only if they hit 1T or more. Anything else will just be trivial.
Interesting stuff on Mish and TMTGM. Basically some billionare hedge funder that found the Enron disaster has noted irregularity with China’s consumption pattern. Believes they are buying fleets of cars and parking them. Remember China doesn’t have a social security net like we do.
Also the mortgage insurers are starting to fail. This before the second wave of defaults starts to show up on the street.
Still not changing my guess on the 12K top though. Will be a while before they notice the too big to bail problems.
Here’s a story from the CA Bar Journal. “More Lawyers in Trouble for Foreclosure Activities”.
http://www.calbar.ca.gov/state/calbar/calbar_cbj.jsp?sCategoryPath=/Home/Attorney%20Resources/California%20Bar%20Journal/November2009&sCatHtmlPath=cbj/2009-11_TH_02_foreclosure.html&sCatHtmlTitle=Top%20Headlines
The State Bar’s loan modification task force obtained the resignations of three more California attorneys as a result of misconduct related to their loan modification activities. It also placed another attorney on inactive status, charging his work poses a substantial threat to the public, and has undertaken similar efforts against two other lawyers.
whoa
Good find.
Shiela beats down Geithner for earlier F-bombs From Timmy Boy
WASHINGTON, D.C. - The Treasury Department, not the Federal Deposit Insurance Corp., should be held responsible for a public relations gaffe last month in which the FDIC closed a Chicago bank just hours after it received an award from Treasury Secretary Tim Geithner, according to FDIC spokesman David Barr.
Park National Bank of Chicago received $50 million in tax credits to encourage investment in poor communities at an Oct. 30 ceremony attended by Geithner. Hours later, though, it was seized along with eight other banks around the country that formed part of a holding company called FBOP Corp. and sold to U.S. Bancorp.
One financial services executive, who did not want to be on the record for fear of running afoul of regulators, accused the FDIC of timing the closure as it did in a deliberate effort to embarrass Geithner.
FDIC Chairman Sheila Bair has tangled with Geithner before over issues such as her approval of Wells Fargo’s acquisition of Wachovia after the failed bank had initially struck a deal with Citigroup, according to a Bloomberg News report last year. The report said Geithner tried to push Bair out of office.
FDIC Spokesman Barr says questions over the issue should be directed to John Dugan, the Comptroller of the Currency, which is a bureau within the Treasury Department. Barr says Dugan sits on the FDIC’s board and could have warned Geithner of the impending closure, since the FDIC took bids on FBOP Bank October 20 — 10 days before the bank was closed.
You go, gurrrl!!!
Is she the new Brooksley Born?
FDIC Spokesman Barr says questions over the issue should be directed to John Dugan, the Comptroller of the Currency, which is a bureau within the Treasury Department. Barr says Dugan sits on the FDIC’s board and could have warned Geithner of the impending closure, since the FDIC took bids on FBOP Bank October 20 — 10 days before the bank was closed.
Question is - what would have triggered Dugan to do give such a warning? That would imply that Geithner tells the FDIC about such awards ahead of time - is this SOP?
tax credits……
Another money pathway off the books?
Sheila Bair seems to be the only reasonable honest one of the various Powers That Be, so I fully expect Turbotax-cheat Timmay and his goons were trying to oust here and install some other Goldman Sachs pawn in her place.
Don’t forget Elizabeth Warren. She is on the up and up.
WOMEN!!
Brooksley Born, Elizabeth Warren, Sheila Bair…hopefully more will step up and slap those bad boys.
Don’t forget Ayn Rand - wasn’t she indirectly responsible for the mess we are in?
Federal prosecutors are seeking the harshest prison sentence ever handed out to a member of Congress for former Rep. William Jefferson (D-La.), arguing that his “stunning betrayal of public trust” warrants what could be a life sentence for the long-time lawmaker.
The Justice Department is asking a federal judge in Alexandria, Va, to lock up Jefferson, 62, for up to 33 years, according to documents filed by prosecutors on Friday.
That is far longer than the eight-year sentence given to former Rep. Duke Cunningham (R-Calif.) when he was sentenced in March 2006 for taking more than $2.4 million in bribes, as well as tax evasion and fraud.
Jefferson was convicted in August on federal charges of bribery, fraud, money laundering and violating the Foreign Corrupt Practices Act, the first sitting member of Congress to be hit with that allegation. Jefferson tried to bribe the Nigerian vice president on a telecom contract for a company that the congressman secretly had a stake in. About $90,000 from that bribe was later found in Jefferson’s freezer when federal agents raided his home.
“The defendant betrayed the public’s trust time after time by using his congressional office as a criminal enterprise to a further a pattern of racketeering acts of corruption and self-enrichment,” federal prosecutors wrote. “His crimes included no fewer than eleven distinct bribe schemes as well as a conspiracy involving an extraordinary and historically unprecedented to agreement to bribe the the-sitting Vice President of Nigeria, Atiku Abubakar.”
If You Thought the Housing Meltdown Was Bad.
~ Doug Hornig
…wait until you see what’s in the cards for commercial real estate.
That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.
Every part of the sector - from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels - has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand.
Just ask Andy Miller.
Andy is one of the most knowledgeable people around when it comes to commercial real estate. Co-founder of the Miller Fishman Group of Denver, he has spent twenty years buying and developing apartment communities, shopping centers, office buildings, and warehouses throughout the country. He’s also worked extensively - especially lately - with asset managers and special servicers (those who handle commercial mortgage-backed securities, or CMBS) from insurance companies, conduits, and the biggest banks in the U.S., advising them on default scenarios, helping them develop realistic pricing structures, and making hold or sell recommendations.
It isn’t easy. Commercial real estate sales are off a staggering 82% in 2009, compared with 2008, and last year was worse than ‘07.
http://www.321gold.com/editorials/casey/casey111009.html
wmbz,
With all due respect ( and thanks for sharing this all the same ) but the current trend be it Wilbur Ross or whoever is to talk down the Comm. RE market as much as possible.
They know in many cases that their portfolios are underwater too.., so now this is just a matter of “He who has cash last wins”. If they have to torpedo smaller firms and mom & pops to get bargain basement deals, well then that’s what it comes to!
These guys are just frustrated that the collapse of bridge fin. hasn’t brought them the fire sales they thought would have come by ‘now’? So… they’ll talk the market down.
Commercial is NOT going to get the same government handout that residential did. With residential “you have to live somewhere” and “children are living in tents.”
Commercial RE has no such appeal to the heartstrings. It’s seen as a pure risk. The only way to help commercial RE is another handout to the banks, and the voters will NOT allow that.
oxide,
Good point. As I’ve said, by REIT mgrs. being able ’sit’ on the dividend and preserve cash, the major players are getting a little impatient.
I think they know there won’t be any cavalry coming so they’re sitting on the sidelines wondering how long lesser players can keep afloat. They’ve got a number in mind and I’m guessing it’s 20% of peak. Yeah, ‘that’ would be nice…
Dude, you don’t really think that anyone cares what the voters think. Do you? Serious question.
NEW YORK (MarketWatch) — Tyco International Ltd. said Tuesday its fiscal fourth-quarter profit fell more than 50% on less demand for its security, flow control and fire protection systems, tending the general decline in commercial construction activity.
America is collectively voting against the Fed’s recommendations on too-big-to-fail. Will our elected government officials listen and respond?
Op-Ed Contributor
Too Big to Succeed
By PHILIP BOWRING
Published: November 10, 2009
HONG KONG — This week is the 10th anniversary of the signing by President Clinton of legislation abolishing the Glass-Steagall act, which, since 1933, had kept a wall between commercial banking and investment banking and insurance. That Depression-era law stemmed from the role that speculative investment banking had played in the failure of many commercial banks, which in turn wrought havoc on the U.S. economy.
The abolition, passed by a large majority in Congress, was strongly supported not only by the big names on Wall Street but by the then Treasury secretary, Lawrence Summers, and his immediate predecessor Robert Rubin, a star of Goldman Sachs. Glass-Steagall was, it was argued, outmoded and a barrier to innovation and competition. I was then in a minority in worrying about the return of huge financial consortiums. But events suggest that the essential wisdom of Glass-Steagall remains intact. Separation of powers and functions should be as important to the finance sector as to the U.S. Constitution.
By the 1990s, Glass-Steagall was certainly out of date, having been bypassed by financial sector developments, astute lawyers and compliant officials. However, the principle enshrined in it — that finance should be compartmentalized to prevent problems in one sector from wreaking havoc on the whole industry — remains valid. Today, even those who most strongly supported abolition are having second thoughts. They include John Reed, former chairman and chief executive of Citigroup and the man primarily responsible for turning Citibank, a world leader in commercial banking, into a conglomerate with investment banking, insurance and broking interests. Mr. Reed recently noted the wisdom of compartmentalized ship design: “If you have a leak the leak doesn’t spread and sink the vessel.”
Since 1999 there have been three financial sector crises that in different ways have shown the dangers of financial arrangements with internal conflicts of interest, a tendency to cross-sector infections, and emergence of the “too big to fail” mentality that has cost American taxpayers billions in bailouts.
…
Question for the blog: I know that bills and laws can be repealed. Can they be reinstated? Nothing frosts my patootie more than watching Congress dick around with “new” legislation, when old legislation that worked has been repealed.
I say reinstate Glass and also reinstate the old bankruptcy legislation, which worked just fine.
And while we’re at it, usury laws.
I don’t see why not. If nothing else, I guess Congress could just write the old law as a regular new law.
There is a lot of talk on the Hill about re-instating Glass-Steagal right now, but the bank lobby is a lot more powerful now than it was 30 years ago. Bawny Fwank wants to do some Glass-like breakup on a company-by-company basis. Maybe that’s a start.
Thanks heavens for all this financial “innovation” - somebody got rich from it, but it wasn’t America.
AutoNation CEO sees depressed sales through 2011.
DETROIT — U.S. auto sales should recover a bit next year but will remain at depression levels through 2010 until housing prices and job cuts stabilize, the CEO of the nation’s largest auto dealer chain said Monday.
AutoNation CEO Mike Jackson said in an interview that tight credit is holding down sales this year, but they will hit bottom in 2009 and start to increase next year, rising to around 11 million cars and trucks. Sales this year are running at an annual rate of around 10 million vehicles.
“We still have more demand than credit,” Jackson said after speaking to the Original Equipment Suppliers Association meeting in Detroit. “We see the credit environment ever slowly, gradually improving.”
Auto sales, he said, won’t return to normal levels until job losses and housing prices begin to stabilize. He predicted improvement in 2011 and 2012, and a return to more normal sales after that.
Earlier this decade U.S. auto sales exceeded 16 million vehicles a year, although industry analysts caution that those numbers were artificial because automakers were producing more vehicles than the market would buy.
This in contrast to Fast Eddie’s post. They are using the terms depressionary levels.
These guys are also waiting on the credit enviroment to improve. With the large number of defaults cooked in the books, it could be a while before credit improves.
I probably won’t buy me a house next year, due to the government’s ongoing housing price support measures, but I am strongly leaning towards buying a new car (even though we recently purchased one) as the end of Cash-4-Clunkers has driven prices towards the ground.
I am perfectly content to wait until Dough-4-Dumps is phased out before I even begin to consider getting into the RE purchase market. We have prime and Alt-A resets scheduled out for another 4 years to keep hammering down the high end of coastal California housing prices towards affordable levels, and I have virtually unlimited patience, plus confidence that it is not different this time.
Hang in there PB, CA is facing another budget crisis again.
Let’s get ready to RUMBLEEEEEEEEE!
I am definitely waiting it out until housing prices hit rock bottom, as I have no desire to get stuck with a large property tax bill to pay for the faux Republican Schwarzenschpender’s busted budget. Besides that, why not lock in a Prop 13 basis at a once-in-a-lifetime low level? What’s the hurry, with all the vacant soon-to-be-marketed houses dotting the California landscape?
Trucking Headlines ~ 7,500 trucking jobs lost in October.
Payroll employment among for-hire trucking companies in October dropped 0.6 percent on a seasonally adjusted basis from September levels – slightly more than the decline the month before. Employment is down 9.3 percent from October 2008, according to preliminary figures released Friday, Nov. 6, by the U.S. Department of Labor’s Bureau of Labor Statistics.
With the estimated 7,500 jobs lost in October, the trucking industry has lost more than 91,000 jobs since the end of 2008 – a decline of 6.8 percent. Job cuts since July 2008 – just before the current decline – total 141,400. The BLS numbers reflect all payroll employment in for-hire trucking, but they don’t include trucking-related jobs in other industries, such as a truck driver for a private fleet.
Seasonally adjusted trucking employment peaked in January 2007 at more than 1.45 million, according to BLS figures. Since then, for-hire trucking companies have shed 204,800 jobs, or 14.1 percent.
In October, the decline in trucking employment significantly outpaced that in the entire U.S. economy. Nonfarm payroll employment fell by 190,000 jobs or 0.1 percent from September to October on a seasonally adjusted basis. Compared to September 2008, nonfarm payroll employment is down 4 percent.
Median home prices fell nationwide in 3Q
Median home prices fell in 80 percent of US metropolitan areas in third quarter of 2009 * AP Tuesday November 10, 2009
A real estate group says home prices fell in eight out of every 10 U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals.
But home sales continued their climb, with quarterly sales outpacing the second quarter and the previous year’s figures, the National Association of Realtors said Tuesday.
The median sales prices of existing homes declined in 123 out of 153 metropolitan areas compared with the same period a year ago. Prices rose in the other 30 cities.
The national median price clocked in at $177,900, or 11 percent below the third quarter last year.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, ” said Lawrence Yun, the group’s chief economist, in a statement. “But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market.”
Prices in Fort Myers, Fla., plunging 40 percent to $98,000 from a year ago, the worst in the nation. Las Vegas saw its median price tumble almost 35 percent to $138,500 year-over-year.
Wasn’t our concensus forecast a few year back that crime would go up, possibly significantly, during the bust?
—————————-
Recession’s good news: Cities see burglaries fall
[...]
A national total of this year’s burglaries will not be available from the FBI until late next year, but experts said the anecdotal evidence from individual cities paints an unexpected picture.
Richard Rosenfeld, a sociologist at the University of Missouri-St. Louis who has studied crime trends, said rates typically rise during a recession, especially property crimes.
“We’ve seen that in every single recession in the U.S. at least since the ’50s,” he said. “I would have expected by now some upward movement in burglary numbers.”
The burglary rate has, in fact, climbed this year in some cities, including Houston, San Jose and Chicago. But in Chicago, the rate is climbing at a slower clip than it did last year. And in Houston, this year’s slight increase comes after a substantial drop in burglaries between 2007 and 2008, the first full year of the recession.
In other places where burglary rates already were dropping, they are falling even faster. That includes Los Angeles, where the number of burglaries in the first three quarters of 2009 fell 6 percent, compared with 1 percent during the same period in 2008. In Phoenix, there were 429 fewer burglaries in the first nine months of 2008 — and 4,000 fewer in the first nine months of this year.
Some police believe the falling price of copper and other scrap metals — a target of burglars who strip the metal from vacant homes — may have contributed to the trend. But they say that alone would not explain why burglaries are dropping so steeply in so many places.
Phoenix police detective James Holmes believes his city’s 14 percent drop in burglaries in the first nine months of this year mostly reflects a stepped-up effort to target habitual burglars and expand neighborhood watch programs. But he said residents clearly are paying more attention, and more people are home to keep watch.
Link: http://finance.yahoo.com/news/Recessions-good-news-Cities-apf-1371256971.html?x=0&sec=topStories&pos=8&asset=&ccode=
I know in Dallas, the police department is manipulating the numbers to make it look like the crime rate is dropping.
For example, the number of burglaries is down, but they count a whole bunch of attempted break-ins as vandalism instead of burglaries. Dallas got tired of being the no. 1 crime city of its size in the country.
Here’s the story in the Dallas Morning News:
http://tinyurl.com/yexbps5
Just like the FAA. They used to consider aircraft within 1000′ as a near miss.
For last several yrs, a near miss is around 300′ IIRC.
The FAA, not unlike the FED, and the DFW cops call everything by a different - non dangerous sounding name. Must have Focus groups for these changes, I suppose.
…and it’s the same all over.
The numbers are phoney. Bad news is bad for business, don’t ya know?
Identity theft and hacking is where the money is at. Who wants to go breaking into houses? No money in the houses.
I’d like to see other crime statistics.
I’m having a real problem with how Lobbyist twist concepts . To confuse the
concept of the first amendment of free speech with the concept of false advertising in business practice is a example . For instance ,the way the REIC was allowed to make claims that real estate always goes up,or make claims that a party could get financing in the future .While the Courts use to allow a little bit of salesman hype ,a total misrepresentation
of the facts or future projections of gains would be more of a fraudulent
misrepresentation . With the adverting dollars during the boom going toward this Ponzi-scheme hype which was pure BS ,I think increased regulations are needed regarding just how much hype in business
is allowed ,(actually I think laws are already on the books against fraudulent claims ).
I have even noticed lately when I talked to a couple of Bank Reps that they simply made absurd business claims to me to try to lure me in .
They need to crack down on what claims are allowed in advertising again
because it’s simply become a matter of mass brainwashing .
Remember how the Realtors had a big adverting campaign in 2006 in which they
claimed that it was a “Good Time to Buy “. Anybody that bought during that time loss money . Guys like Crammer act like they are just expressing opinion ,but in truth Crammer is a PR campaign machine that
moves the markets under the guise of free speech . In other words ,I think the lawmakers need to address the mass marketing of Ponzi-schemes and bubbles that are moving markets in spite of the truth of the claims .
Housing Wizard,
Here here! To most, that sounds like just so much of an altar boy statement. We’d rather b!tch about the collapse and taxpayer shoring up of banks than address the issue at the SOURCE!
( It’s SO much more ‘fun’, don’t you think? )
Problem is, lots of these scheisters put their warnings in the fine print which absolves them of liability, right? Even Glenn Beck’s show has a disclaimer that “what you’re about to hear is a fusion of entertainment and enlightenment.”
The courts aren’t clogged up enough with frivolous lawsuits. Let’s allow lawsuits for every ad campaign ever made that stretched the truth. Good thing Billy Mays is dead, the guy would be the subject of about 100,000 lawsuits alone.
Nice to see you condoning fraud.
Oh, and maybe we would have less “frivolous lawsuits” if there were better regulation and enforcement.
Naw, couldn’t be!
Golf balls: ‘Humanity’s signature litter’
London, England (CNN) — Research teams at the Danish Golf Union have discovered it takes between 100 to 1,000 years for a golf ball to decompose naturally. A startling fact when it is also estimated 300 million balls are lost or discarded in the United States alone, every year. It seems the simple plastic golf ball is increasingly becoming a major litter problem.
The scale of the dilemma was underlined recently in Scotland, where scientists — who scoured the watery depths in a submarine hoping to discover evidence of the prehistoric Loch Ness monster — were surprised to find hundreds of thousands of golf balls lining the bed of the loch.
It is thought tourists and locals have used the loch as an alternative driving range for many years. The footage shot by underwater robotics team SeaTrepid, can be seen below.
With an increasing number of golf balls discarded each year, the Danish Golf Association devised a number of tests to determine the environmental impact of golf balls on their surroundings.
It was found that during decomposition, the golf balls dissolved to release a high quantity of heavy metals. Dangerous levels of zinc were found in the synthetic rubber filling used in solid core golf balls. When submerged in water, the zinc attached itself to the ground sediment and poisoned the surrounding flora and fauna.
Humanity will never fail to find a new way to mess things up.
Hey, bankers golf a lot… maybe we can slap them with something like “carbon credits” to pay for environmental damage caused by years of golfing? Just kidding, I think!
It was found that during decomposition, the golf balls dissolved to release a high quantity of heavy metals. Dangerous levels of zinc were found in the synthetic rubber filling used in solid core golf balls. When submerged in water, the zinc attached itself to the ground sediment and poisoned the surrounding flora and fauna.
So we’re saying that eventually the Loch Ness monster will be revealed - just floating to the surface upside down?
Used range balls still have some value. I’m surprised no-one has tried to recover them if there truly are “hundreds of thousands” on the lake floor.
OK - nerd alert (me).
Who here remembers a Hardy Boys story about exactly that? One of Chet’s schemes.
The enviro freaks will try to ban golf now too. Or like they did with light bulbs force me to use some “green” ball that travels 80 yards maximum. Only thing worse than unions in this world is environmentalists.
“watery depths in a submarine hoping to discover evidence of the prehistoric Loch Ness monster — were surprised to find hundreds of thousands of golf balls lining the bed of the loch.”
Dang scientists can’t see a thing! Those were not golf balls. They were dinosaur eggs and proof that Nellie exists!
This from the same idiots who keep saying those strange lights are weather balloons, not UFO’s. They only see what they want to see.
(For the record, I believe a lot more in the possibility of Nellie than I do UFO’s.)
“…That whenever any form of government becomes destructive of these ends [Life, Liberty, and the pursuit of Happiness] it is the right of the people to alter or abolish it, and to institute new government…”
~ The Declaration of Independence Jul 4, 1776
And you can do that on an individual basis by ignoring the Constitution and the government. After all, the Congress does not follow the Constitution either.
I write often to my congressman, Harry Mitchell, on various issues. His last response was to my plea to vote No on the Pelosi health care bill. He always votes with the criminal class though. He indeed voted for the Pelosi-care.
Tonigh tI wrote him another e-mail reminding him that Congress is not following the Constitution. I was about to hint that we the people should become civil disobedient. Instead I said “Congress is no longer of the people and by the people. Congress is an aristocracy.”
So…I wonder if he will start considering me a pest. maybe I will become a political prisoner of this socialist class?
These guys need to hire Eddie’s company ASAP to dispel these fear-mongering, unreasonable downbeat outlooks. OR, Eddie can just fly himself all over the country and stay in 4/5 star hotels 1,000,000 times between now and Christmas to show that in fact the travel industry is booming.
ATA Expects 4 Percent Decline in Air Travel Over 12-Day Thanksgiving Holiday Period
NEWS RELEASE
WASHINGTON, Nov. 9, 2009 – The Air Transport Association of America (ATA), the industry trade association for the leading U.S. airlines, today said that it expects a 4 percent year-over-year decrease in the number of passengers[1] traveling on U.S. airlines during the 2009 Thanksgiving holiday season[2], despite deep discounting over the past several months.
“It is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us. The recent announcement that U.S. unemployment surpassed 10 percent highlights one of the key factors impacting consumer buying decisions,” said ATA President and CEO James C. May.
LA Times Business By Hugo Martín
November 10, 2009
Airlines, hotels face bleak holidays
Many travelers plan to take car trips, stay with friends and family and spend less — bad news for the struggling industries.
Despite airfares and hotel rates that are among the lowest in over a decade, more recession-battered travelers will forgo the airports, hit the freeways and stay with family and friends to save money during the upcoming holiday season.
…………
Times are also tough for the hotel industry. Occupancy rates have dropped for the last two years, resting at an average of 52% nationwide by the end of October, according to Smith Travel Research Inc.
Hotel revenue per available room also has declined for the last five consecutive quarters, the research firm reported.
Washington, DC – November 2009 – The U.S. Travel Association announced Thursday (November 5) that projected modest 2010 increases in leisure, business and international inbound travel will enable the industry to add nearly 90,000 American jobs. Leisure travel is expected to rise 2.0 percent, business travel is projected to increase by 2.5 percent and international inbound travel will increase by 3.0 percent. These job gains come on the heels of 400,000 combined travel industry job losses in 2008 and 2009.
——–
CHICAGO (Reuters) - Shares of online travel agency Priceline.com (PCLN.O) jumped more than 17 percent on Tuesday, a day after the company reported earnings that beat forecasts and posted large gains in bookings and revenue.
Priceline on Monday said it made its third-quarter profit on increased bookings in an “exceptionally strong” summer travel season.
————
CHICAGO (AP) | Vacationers helped Marriott International Inc. post a better profit for the third quarter than the hotel owner and operator had forecast.
The hotelier, whose brands include its various namesake Marriott brands as well as the upscale Ritz-Carlton chain, said leisure travelers spent about 7 percent more nights at the company’s lodgings during the quarter than they did a year earlier.
——
You were saying…
Paul B. Farrell
Nov. 10, 2009, 11:03 a.m. EST · Recommend (20) · Post:
Financial innovation is Wall Street’s new ’soul sickness’
Commentary: New mutant American capitalism has no moral compass
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) — Could our headline just as easily read: “Financial innovation: Wall Street’s biggest con game?” How about: Rip-off? Joke? Oxymoron? Maybe “Wall Street’s big lie?” Or something darker: “Financial innovation: Wall Street’s deadliest sin, greatest evil, even soul-sickness?”
In fact, they all fit. Each reveals Wall Street’s dark side: Why are they at war to keep financial innovation secret, hidden, without public transparency? And why is Wall Street spending millions on lobbyists to kill financial-regulation reforms? Why? Because Wall Street rakes in tens of billions of dollars annually from their financial innovations, gambling in the shadowy $670 trillion global derivatives market. And Wall Street does not want government, investors or competitors digging into their “financial weapons of mass destruction,” as Buffett calls them.
Swine-flu uproar on Wall Street
Goldman Sachs, Morgan Stanley and Citigroup are among several large New York City employers that got doses of the H1N1 vaccine, which remains in short supply. WSJ’s Betsy Mckay discusses Wall Street’s latest public relations nightmare on The News Hub.
Remember, financial innovation is just a Wall Street code word. Translated it simply means derivatives and other proprietary secrets like the high-frequency trading algorithms used by their quants. Yes, Wall Street wants you to believe that financial innovations also help Main Street, but that’s just Wall Street lobbyist propaganda to mislead the public, regulators and legislators. Remember when Washington proposed standardized mortgages as a way to help consumers? Wall Street attacked, spending millions to kill it.
Wall Street has no interest in helping Main Street. Time magazine’s Justin Fox, author of “The Myth of the Rational Market,” said it best in his “Curious Capitalist” column. Most so-called financial innovations are “just new ways to fleece customers or hide risk, and all major financial crises have been associated with some financial innovation.” Even credit-card innovations are used against customers as marketing tools to increase fees. The truth is: Wall Street’s greed-driven financial innovations fuel our bubble/meltdown cycles in many ways.
…
“Remember when Washington proposed standardized mortgages as a way to help consumers?”
See, I don’t remember. I had to google it. Sure enough, they did and they did.
Do any of you remember how many other regulations to help J6P were proposed and then shot down by Wall St., et al? I’ll bet you don’t either.
I therein lies our problem.
Wall St has successfully turned the fed into the scapegoat. Sure the fed ain’t perfect, but I’ll take the government over Wall St. social Darwinist communism any damn day.
Would be a valid argument if the Fed were career bureaucrats recruited from school, and Wall Street characters were a different bunch. Problem is, they are the same. There is too much mobility across these teams, and the White House administration (US Treasury) to boot.
Too Big To Succeed . . .
By Barry Ritholtz - January 14th, 2009, 7:07AM
If they are too big to fail, make them smaller.”
-Nixon Treasury Secretary George Shultz about Fannie Mae and Freddie Mac
The operative expression about many of the bailouts we have seen — AIG, JP Morgan (via Bear Stearns), Goldman Sachs, Fannie/Freddie and of course Citibank — is “Too Big To Fail.”
Perhaps the better expression is “Too Big to Succeed.”
…
“If they are too big to fail, make them smaller.”
Reminds me of that other great quote: “The emperor has no clothing.”
A new Newsweek DOT com article / book review:
“The Greatest Trade Ever
How hedge fund manager John Paulson bet against the real estate bubble and made $15 billion in a single year.”
Only Ben knows whether and how often Paulson visited here
Very nice piece by Diana Olick, enlightening and honest. Wonder why they still keep her around on CNBC.
http://www.cnbc.com/id/33834317
The Financial Times
When banks are too big to succeed and too big to fail
By Paul Betts
Published: October 27 2009 18:38 | Last updated: October 27 2009 18:38
Brussels could be setting the stage for a new wave of consolidation in the European financial services industry. By demanding that banking groups that were granted massive state aid during the crisis shed large chunks of their assets on competition grounds, the European Union risks fuelling a merger and acquisition revival in the financial sector that may not be in the best public interest.
The break-up of ING announced this week is likely to have a domino effect on the sector and get a lot of banks and insurers thinking hard about their next moves.
…
The lesson of gargantuan institutions – the likes of Citigroup – is that these banks have become too big to succeed and impossible to run, as well as too big to fail. And the bigger the group, the bigger the systemic risk in the event of a financial meltdown.
So governments and regulators have every reason to be wary of consolidation and, if anything, should be keener to see the development of smaller banking groups rather than new banking giants.
At the height of the financial crisis, governments on both sides of the Atlantic allowed a whole series of mega-mergers as a solution to the problem. The irony is that in so doing their solution has simply created a new problem since size itself may ultimately be a fundamental hazard for the banking industry.
…
Some Bear Sterns snakes acquitted. The bar to indictment so high in our democracy for white collar crime, but lord-y don’t get caught with a bit-o-dope or you’ll go straight to the hoosegow. Many well-meaning young people serving far away in God forsaken hell holes dodging IED’s and shooters, while back home comfy and safe, the snakes plot on & on on how to rip-off their neighbors for the extra, extra dosh to live the lifestyles few main street people can even imagine.
Go Barry care! There are tens of thousands of dolts that think that da rich will be paying for their health care.
During an exclusive interview with ABC News’ Jake Tapper today, President Obama said that penalties are appropriate for people who try to “free ride” the health care system but stopped short of endorsing the threat of jail time for those who refuse to pay a fine for not having insurance.
“What I think is appropriate is that in the same way that everybody has to get auto insurance and if you don’t, you’re subject to some penalty, that in this situation, if you have the ability to buy insurance, it’s affordable and you choose not to do so, forcing you and me and everybody else to subsidize you, you know, there’s a thousand dollar hidden tax that families all across America are — are burdened by because of the fact that people don’t have health insurance, you know, there’s nothing wrong with a penalty.”
Under the House bill those who can afford to buy insurance and don’t’ pay a fine. If the refuse to pay that fine there’s a threat – as with a lot of tax fines – of jail time. The Senate removed that provision in the Senate Finance Committee.
1. I’m OK with not requiring insurance if hospitals have the right to refuse to treat the uninsured.
2. I’m OK with requiring insurance if everyone is going to be required to treat patients when they show up at the door sick.
3. The problem of course is that one or two insurance companies control most markets and thus there is no free market. As soon as everyone is required to buy insurance they will raise their rates and draw blood. I’ve read that states that require auto insurance often have higher rates than states that do not for this very reason.
I still think the public option is the best option for preventing a meltdown and controlling costs. The data support this. Private insurance could be offered to pay for things that don’t have good data or have a poor cost benefit ratio.
4 Hackers Indicted in $9.5 Million Bank Card Attack.
Four men have been indicted in Georgia on charges that they hacked into the Atlanta-based bank card processing company RBS WorldPay. They allegedly used an army of flunkies to steal $9.5 million in cash from ATM machines around the world in a span of hours.
Sergei Tsurikov, 25, of Tallinn, Estonia; Viktor Pleshchuk, 28, of St. Petersburg, Russia; Oleg Covelin, 28, of Chisinau, Moldova; and a fourth person identified only as “Hacker 3″ were indicted by a federal grand jury in what’s being described as “perhaps the most sophisticated and organized computer fraud attack ever conducted.”
The hack involved reverse-engineering PINs for payroll debit card accounts — the holy grail of bank card hacking. Another four people based in Estonia were also indicted on access-device fraud charges in connection with the hack.
The case is being prosecuted by the U.S. Attorney’s office for the Northern District of Georgia, in Atlanta.
http://www.postchronicle.com/news/breakingnews/article_212267013.shtml
Outrageous. The victims of the DC sniper are awarded millions of dollars from Bushmaster, the maker of the AR-15 rifle used in the shooting spree. What a travesty. Second Amendment foes don’t need to outlaw the private ownership of firearms, if they can bankrupt gun dealers and manufacturers who legally make and sell a product.
OK, so what am I missing here? Isn’t a yield of 1.47 historically low by any reasonable retrospective of the history of modern developed country bond markets?
The Financial Times
Japan worried about steep rise in bond yields
By Lindsay Whipp in Tokyo and Gillian Tett in London
Published: November 10 2009 18:35 | Last updated: November 10 2009 18:35
Hirohisa Fujii, Japan’s finance minister, on Tuesday said he was highly concerned about the recent rise in long-term government bond yields, which threaten to increase the cost of funding for one of the world’s most indebted governments.
Yields on benchmark 10-year Japanese government bonds closed at 1.47 per cent, close to the highest level for five months, after rising steadily
in recent weeks.
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Hmmm… will higher yields on Japanese bonds draw investors away from U.S. bonds, and thus pull U.S. prices up with?
Depends on how “coupled” everyone feels us and Japan are, I suppose. Would it really be feasible for Japan to default?
I don’t get the scare tactics over the potential need for a future FHA bailout. If they have a bottomless credit line from the Treasury, why would they ever run out of money? Ditto for the FDIC — how could they ever run out of money if the Treasury has their back?
FHA’s reserve fund hits 7-year low
Agency’s cash running low; automatic bailout possible if loss continues
By Dina ElBoghdady
Tuesday, November 10, 2009
The Federal Housing Administration, which has played a crucial role supporting American home buyers after the collapse of the mortgage market, has burned through a huge cash reserve in less than a decade and could soon wind up with what amounts to an automatic taxpayer bailout if the agency’s fortunes don’t improve, according to a review of FHA finances.
Senior FHA officials have assured Congress that the agency will not need a bailout, which would be politically sensitive for lawmakers to approve after the government has already spent hundreds of billions of dollars rescuing financial companies.
But the agency’s complex funding mechanisms — little understood in Washington, including on Capitol Hill — do not require the FHA to turn to Congress if the agency cannot cover losses on its outstanding loans. The agency, which collects premiums from borrowers who take out FHA-insured mortgages, has been automatically drawing down on money it deposited with the Treasury Department when the FHA was flush with cash. Those funds have dwindled as the FHA’s losses grew. If the losses continue unabated, the FHA would still receive money from Treasury.
“It is absolutely a myth that they would have to go to Congress for money,” said Marvin Phaup, a former budget analyst at the Congressional Budget Office and now a budget expert at Pew Charitable Trusts. “The FHA has permanent authority to get money from the Treasury because it is backed by the full faith and credit of the federal government.”
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