Bits Bucket For January 5, 2010
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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
Location:Northern Arizona, United States
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Commercial R.E. in Phoenix:
“A foreclosure auction date has been set for March 31, according to documents filed on Dec. 30 with the Maricopa County Recorder’s Office. CityNorth developers Klutznick Co. and Related Cos. owe approximately $290 million to Capmark, formerly known as GMAC Commercial. That makes this Arizona’s largest single commercial foreclosure.”
http://www.azcentral.com/business/articles/2010/01/04/20100104citynorthonline0105.html
The ‘condo king’ strikes again…
WSJ: Housing is a “Lousy Investment” http://blogs.wsj.com/economics/2010/01/05/fed-economist-housing-is-a-lousy-investment/
I agree 100% with her. She missed a few other points. You cannot dollar cost average into a house. I’m not surprised that this is 7:35pm PST and no one mentioned this today here. Most people here think DCA is evil. LOL
I concur. Buying a house is a very lumpy investment — no DCA possibilities. This is why I advocate only purchasing at the very bottom of a crash. And we aren’t there yet, either…
Still another reason to love my wife…
The local Wells Fargo branch carries and ad that suggests that retirees should leave their retirement money in the bank’s care.
My wife’s response: “This is a bank that had to be bailed out by the government. Why would anyone in their right mind trust them to handle their retirement money?”
You are a lucky man!
You are absolutely correct, something that I remind myself of daily.
Just yesterday I learned that my nephew was stung for some serious overdraft fees and… I was curious to get to the bottom of it.
Seems US Bank made him wait a WEEK for a check to clear from ( wait for it… ) Subway! I couldn’t belive it? He’s had an acct. in good standing there for several months and it wasn’t like this check was from some out-of-state Joe Blow.
And during Christmas no less. So I guess I have my work cut out for me today. Call the AG and State banking regulators. It’s incredible just how abusive their relationships are w/ younger people.
yes my bank is being persnickety about that now too, and it’s a good thing so far I’ve noticed it only with denied debits.
And here I thought checks cleared more quickly nowadays.
The only checks that clear quickly are:
1) Banker bonus checks.
2) Checks that can put people in debt.
The level of contempt these crooks are showing for the people is amazing. Sadly, I don’t know what can be done about it. Even if everyone closed their accounts with the crook banks and walked away, they would just turn to the government and get infinite money in the form of Bailouts. We seem to be stuck with them.
Pondering,
Excellent! I called the local USB jerky boy mgr. ( and I hate this part ) since they pull this little NSF stunt w/ such regularity, they’re obviously well rehearsed in their “defense”.
Jerky Boy went on to say that “We make $100 on any check deposited avail. immediately and then make the bal. available within 7 days”. Like Combo said the other day ( “By Law!” ) And that’s a whole other NY’s Resolution topic.
So since the acct. had only been opened less than 30 days ( by law ) they can jerk these poor kids around. I think what we’ll find is that more and more of them will have tired ( or simply can’t afford ) getting jerked around and will opt for cash! Oh and uh… screw the direct deposit scam too! I mean if this is all it leads to?
Not to mention what is happen to us prudent credit card users, by no fault of our own, have seen our APR on cc purchases go straight up. I pay twice a month, in full (leaving a small cr bal), and my APR rate doubled in 2 months. The banks are acting like it’s the wild west.
I called about my 825 FICO and never late status, and I too got a nonsensical rehearsed comeback. I almost did a technicolor yawn.
is s/b has. I’m always in a rush. sorry.
And here I thought checks cleared more quickly nowadays.
The banks clear the big checks at end of day, then all the other smaller ones, which has a serious chance of putting someone in NSF status if a chance could happen.
Not looking for anyone to state they have tons of balance, in these days, it doesn’t matter, if a bank can figure out a way, ya’ll are in danger of it happening to “you” too.
Lots of companies require that you take direct deposit as a condition of employment.
I’d love to have direct deposit, but due to some state law we can’t here. I’ve forgotten the exact reason but I ask just about every year. I think it was because some employees won’t agree to it. I think they take their checks across the street to the company’s banker on payday and get cash.
Combo is King!
I am similarly blessed, with a wife who never doubted my assessment as of late 2004 that the real estate market had gone utterly berserk.
Ditto here. I love my mother-in-law. Because of her cutting off support for my wife after college, my wife knows what it is like to have no money, sleep on the floor and live down the hall from a meth lab.
So when I tell her we are better off sitting on a pile of cash since there is too much risk in the housing market, I get 100% agreement on sitting on the cash.
So far, it has served us well.
Her mother worked her way through daughter’s higher education, only to expect that daughter could support herself with that accomplished?
I hope your wife is in therapy.
Blue Sky, I’m having trouble parsing what you wrote.
Or in other words, “huh?”
Sorry. I couldn’t couple with the crime of ending support for the child after sending her through college. My folks took great care of me as a child, but at 17 I was supposed to take care of myself. Never considered it traumatic.
I was completely prepared with my ‘hope chest’ which was never ever for a wedding, but for my first apt! I couldn’t wait to get out on my own. Now mom keeps wanting to pull me back. Independence was terrific.
Your comment confused me as well. I’m not sure if you were being sarcastic, serious, or saying that parents should not put any $ toward their kids’ college educations.
My wife (nor I) considered how her mother treated her traumatic, although the “me, me, me” society might. Her mom put three kids through college on her own (with the kids working and borrowing throughout to add to the effort), which is a feat on it’s own. It’s not too much to expect your kids to eventually work for themselves and make a go of it especially after getting a degree. I appreciate the fact that she was instilled with work ethic from an early age, with jobs going back to the first time she asked her mom for a luxury item (which she ended up needing to work for to get).
My point was simply that because my wife needed to work to earn money for herself, she understands the value of a dollar.
Because of that, it is very easy for me to convince her that we shouldn’t buy a house.
I would wager a guess that many others who are pushing their spouses to buy a house didn’t have the same experiences as a young adult (or even a teenager).
i don’t think Wells Fargo actually needed the TARP money. It’s more like the money was offered and they took it.
I have a fairly level headed banking rep at WF to whom I expressed all my concerns when the RE market started unravelling. She did some asking around and later assured me the bank was pretty much OK as compared to banks like WaMu.
I didn’t exactly believe that and made my own guestimations based on available data.. and I think she was right. Wells remained comparatively conservative while other banks drank deep of the KoolAid, having little exposure to the CDOs and sub prime stuff..
IIRC, I watched their stock fall from near $25 to below $10 or so, but that was just due to negative sentiment toward the banking industry as a whole. WFC stock has since risen back to where it started.
Of course this thing is still unwinding. Even strong loans might go bad, and nobody outside of WF’s inner circle knows for sure where they stand.. But of all the banks out there I still think WF is in the top three as far as stability and strength.
On April Fools day two years ago Wells Fargo announced they weren’t going to count payments that were 120 days late as non-performing, instead they were going to wait another 60 days. This accounting feat naturally boosted the next quarter’s earnings.
In today’s climate a bank’s stated earnings is whatever the bank wants/needs it to be.
The money was forced on Wells, because the Feds wanted everyone to take it in the hopes that investors wouldn’t figure out which bank was really in trouble.
But then Wells and BOA, which thought they didn’t need it, ended up having to have it as a result of having bought bad banks (Golden West, Countrywide).
forced.. yeah.. my memory is coming back to me.
…and Wells bought wachovia not too long ago.. 6 months? Could they / would they do that if they were hurting bad?
And i’d bet that Countrywide will turn out to be a good investment, giving BofA a ready made, nationwide retail mortgage network. But only time will tell.
Wachovia was one of the most crooked banks in history. I should know - I was stuck with them for a while. They did everything from selling account info to money laundering. That, and they were also stupid crooks, which is even worse in a way.
Wells Fargo could not possibly have made a dime buying those losers; if they didn’t need TARP before buying “Walk-over-yah” they need after the fact!
When I lived in NC (back when they were mostly just a NC bank), we called them “Walk-all-ova-ya”, because that’s what they did. The payroll department in the company I worked made an error one time such that they tagged everyone’s direct deposit to go to their savings accounts instead of their checking accounts. As a result lots of people’s checks bounced (people who had very thin margins). So the company issued a letter informing the banks of their mistake. All the banks except Wachovia refunded everyone’s overdraft fees.
BoA also ingested Merrill Lynch. It appears Megabank, Inc is serving as the toxic MBS repository until a permanent Superfund site can be created and activated.
The money was forced on Wells, because the Feds wanted everyone to take it in the hopes that investors wouldn’t figure out which bank was really in trouble.
I got that line too from WaMu before the ink was dry with Chase’s name all over the place. Meanwhile I call that BS. BS as in even if someone was “Forced” to take the $ they they indeed USED the INTEREST it created for them while they were “forced” to hold onto $. So, they are so damn snobby and their people skills suck. You sign in for ‘new accts’ or other biz transactions and the ones in suits ignore you unless you LOOK like you are Investing etc. This wasn’t done to me, I just observed one day, and another guy with a large acct moved from Korean bank to Wamu-Chase.. mused on whether he was doing the right thing or not, watching how badly they treated customers.
..watching how badly they treated customers…
I like to shop and browse Amazon before buying stuff. The customer reviews are especially helpful.
There’s always the “one stars” that really liked the product but complain about terrible customer service. In many cases I’ve had the opposite experience with that same company, and have to wonder why.
imo, You get what you give. People skills is a two way street.
My recollection is that these marriages, Wells-Countrywide, BofA-Wachovia, etc, were shotgun weddings with the Treasury Dept and Fed pretty much forcing reasonably healthy banks to take on the dogs. I never did see a good explanation of what kind of carrot or stick the regulators used to force these mergers but they must have been huge.
Those goomers at Wells Fargo just sent me an exhortation to open a checking accnt with them and offered to pay me $50 to do so. Can you believe it? Your tax dollars at work.
Mom and I just did the same thing at “Chase” for $100.
Yep, thems our tax dollars. I want mine all back. Thankyouverymuch.
I volunteer as a business community judge for various student competitions at the University of Arizona’s Eller College. (That’s the UA business school.) The most recent competition asked the students to draft a corporate communication plan that was based on a case study of Wells Fargo during the recent financial meltdown.
I’ll have to agree with other posters who said that, as major banks go, WF didn’t succumb to the same stupidities that some of its competitors did.
As for the bailout money, there was a senior WF exec at the competition’s awards ceremony. In essence, he said that WF was made the bailout offer in such a way that they couldn’t refuse it.
“…he said that WF was made the bailout offer in such a way that they couldn’t refuse it.”
And the large shadow of Warren looming in the background, nodded and an invisible voice was heard: “yes, take it freely, it is good for business, there are things we can use it for”
Wan’na bet? This from Karl:
Wells has nearly $35 billion outstanding in HELOCs in California and another $12 billion in Florida - both states where huge percentages of homes are “underwater” on their first mortgages. Again, the problem is the same - should the owners of those homes stop paying and the home be worth less at resale than the first mortgage balance the outstanding HELOC is worth a LITERAL ZERO.
Let’s put this in perspective for Wells - in that same 10Q they claim $53 billion in “Tier 1 Common Equity”, a 5.18% ratio. The outstanding balance on these HELOCs in bubble states is nearly enough to DESTROY the entirety of their Tier 1 Common Equity and should some fairly-conservative assumptions be applied - that is, that a quarter of these loans will ultimately default and be entirely unrecoverable due to the first lien being underwater this would be sufficient to impair their “well capitalized” currently-claimed position.
It sounds like Karl is saying what would happen if all the defaults happened at once… today. No argument there.
But that’s not gonna happen. Every effort is being made to give the banks plenty of time to recover… to slowly meter out their losses in a controlled environment. Economic recovery is too big to fail and I wouldn’t recommend betting against it.
Being seriously in debt on paper is one thing. Realizing all those losses and going bankrupt is something else entirely.
“i don’t think Wells Fargo actually needed the TARP money. It’s more like the money was offered and they took it.”
Actually, my little household doesn’t need the TARP money, either. However, if someone handed us a short-term zero-interest loan of billions of dollars, I bet we could find a good use for it.
Yea but did she add this fact to the print advertisement with a permanent marker?
US will go down in RE prices both residential and commercial starting mid 2010. What about the RE bubbles in India, China, Singapore, Hong Kong and Australia (Australasia)???
There prices are up 200-300%. In India Mercedes launched their S series with a staring price of $180K. Do people in India have that much money now to buy these cars? Just a few years back, even Toyota Corolla used to be a big deal there prices at $22K.
Do they really have money now, or US money has gone there or they have their own massive bubble?
With everybody engaged in massiv money printing it would seem reasonable that a few bubbles are brewing here and there. It would be too easy to learn from other people’s/country’s experinces if you can actually experience it first hand yourself. Of course this time it is different…
Just got back from India. Real Estate is definitely up 10 fold since 2000.
There is a big black money(Cash Component) like 50% of the payment so I dont think the fallout will be that bad. Stuff just stops selling for years till inflation catches up. Imagine if you had paid 100k cash for a 200k house and then put another 30k down to get a loan , your incentive to keep paying the balance is very high.
As you say prices are 10 times than 2000. It means there is some sort of liquidity that is keeping it up. Once that liquidity dries which you call black money, then the houses will not sell for years. But people who would need money, would sell them at a loss. This would be a trend for prices to go down.
Well, are they HELOC’ing the living daylights out of them? Do they have Unlimited 24/7 Drive Up ATM Access?
Cuzz’ that’s how players here roll! No, seriously, this was pretty predictable, new found wealth and all. I mentioned the other day that the economy in the Philippines ’seems’ to be going along just fine.
While RE prices are no longer growing in leaps and bounds, there certainly doesn’t appear to be any kind of nationwide meltdown like we’re experiencing here or the UK, Spain etc.
The difference between US and other countries is they have jobs and we don’t. We just have an economy of selling houses to each other.
If people in India have 100K to pay cash, then it is not a poor country. Or is it all stolen money from India’s uncle Sam?
bipolar state. Many millions of rich and middle class surrounded by even more poor people. Like China. They can have a middle class and rich class the size of the US and still have 35% poverty rate.
that is what it is. There are at least 150 million middle class folks in India in terms of dollar parity> i agree the growth is unsustainable but it has been doing this since 1986. My mom bought a 500 sq yd house for US $3000 today the land is selling for $500,000 US . Selling every day! Freaking Unbelievable!
It could be a massive bubble brewing in all Asian economies. Once interest rates rise in US and carryover trade stops after rate increases, dollar will move up and a lot of air will come out of these economies.
Moreover, outsourcing is also contributing to a lot of cash flow in these countries. On the same hand, here in US unemployment is so high. This is insanity on the part of these corporations. Don’t they have any allegiance to the US or Americans?
On the same hand, here in US unemployment is so high. This is insanity on the part of these corporations. Don’t they have any allegiance to the US or Americans?
I suspect not, unless they can justify allegiance to the US as profitable for the shareholders somehow. I think you could actually make a reasonable argument for it, but management involves more herd behavior than leadership, and right now outsourcing is perceived as the safe and prudent thing to do.
Indians being attacked in Australia:
http://publication.samachar.com/pub_article.php?id=7290551&nextids=7290551|7295325|7295326|7293720|7293721&nextIndex=1
Melbourne, Jan 5:
A partially-burnt body found in Australia’s New South Wales province last week is believed to be of a 25-year old Indian national, police said today, in what might be the second fatality in a slew of vicious attacks on Indians.
The body found on a roadside near Griffith last week is yet to be formally identified but police believe it is that of an Indian man, an ABC report said.
Australian officers are in touch with the man’s family in India and the Indian Consulate to help with identification.
Nitin Garg, a 21-year old Indian was stabbed to death in Melbourne on Saturday night, becoming the first casualty in a series of attacks on members of the community here.
My mom bought a 500 sq yd house for US $3000 today the land is selling for $500,000 US . Selling every day! Freaking Unbelievable!
WOW.
India is a country of extremes.
There is a monied class, a burgeoning middle/professional class, and millions who live in abject poverty. I would think their economic fortunes would be more closely tied to the recessionary times in Europe and America, however.
As my Indian friend describes it, about 300m out of 1000m Indian citizens are “economically viable”…
“There is a monied class, a burgeoning middle/professional class, and millions who live in abject poverty.”
It sounds like a conservatives utopia.
Well, I guess all that outsourcing money from us is enabling them to make their own housing bubble?
ex, your trolling is getting worse than Eddie.
God grant me the serenity to ignore the trolls,
the courage to debate with honest opponents,
and the wisdom to know the difference.
I’ve got a mighty big fish floppin around in my boat if I’m trollering as you assert.
Most of my former colleagues in Bangalore couldn’t afford a car on their meager wages. Their manager had a small subcompact, the rest of them rode the corporate bus.
I think my coworkers helped their parents buy nice homes in India. Then they decided to leave the USA and move over there to work to start companies and such.
So a country is either rich, or steals from Uncle Sam??
You should go out more often dude. You might even learn that stealing did happen, but in the reverse direction by your ancestors/ideological ancestors the UK. So let’s not go there.
Every country, even the poorest of the poor states, has its class of elites. (Or maybe there are poor people because of these elites)
India and China are huge countries and correspondingly have pretty substantial populations that can afford expensive vehicles. And yeah it’s been like that for a long time - back 80 years ago the various Princes from Indian States would buy custom built Rolls Royces, today there are other players (entrepreneurs, politicos, sportspeople, bollywood types, gangstas etc etc) to fill the gap. If Mercedes Benz sells a dozen cars in India, it doesn’t somehow lift 600 million people out of poverty overnight. If it did, hell I’ll get together with my friends and finance the dozen MBs.
“Do they really have money now, or US money has gone there or they have their own massive bubble?”
Sheesh…maybe India and those other countries are really rich and into outsourcing jobs…
“Auh, Hello Good Sir, my name is Punji and I am the huge regional manager of Rupee Bubble, Inc for all of India. Please allow me to transfer you, your money inquiring and your very welcome telephone call to our local caring customer service office.
Please hold onto your telephone line thingy kind Sir.”
A short wait with accompanied with some delightful Hindu elevator music and a few clicks.
“Yeah…I mean…Good Morning Sir, Rupee Bubble Customer Service, representative Bob Tuman here. Would you hold on for a minute?” (noise in the background like wind rattling old window panes or something)
Again, the same delightful Hindu elevator music, only a tad louder this time. click…
“…and Phyllis, throw another chunk of that McMansion beam on the office stove, it has to be -30 here in Detroit with the damned wind chill…”
“Hello, Tuman’s Mortuary, you Stab them, We Slab Them…Ooops!…wrong damned line.”…click..click
“Oh yeah sure, you get the following cash for trash rebates if you buy from our Wisconsin Warehouse outlet today.
Dishwasher: $25
Freezer: $50
Refrigerator: $75
Clothes washer: $100
Water heater: $150 (or $50 for electric heat-pump water heater)
Furnace, oil and gas: $200
Boiler: $200
Central air conditioner: $75
Air-source heat pump: $75
Geothermal heat pump: $75
Solar hot water system: $2,000
Huh, HELLO !?!…all these damned phone buttons…” click
“Hello?….hello?… Let’s try this again. Rupee Bubble, Inc., Customer Service Rep Bob here for all of America, how many I help you today ?”
LOL, Good one Mikey!
I received a call back from India (3 days later) on a question/problem a friend had with %^&&E#^! (Quick Books)
Quickiebook India Dude: “Good Morning Sir, Quickiebooks Customer Service, representative Edward Jones here. Is this Mr. Hwy? I have to tell you Sir, that they ONLY solution to your technical problem is to go online and purchase the latest Revision of QuikieBooks for $179.00 USD, If you do so today, I can give you a code for a $10.00 StarMucks gift card to be sent to you within 90 days, Are there any further questions Mr. Hwy Sir.
Hwy50: Yes, let me get this right, …it’s 8:34 PM here in California, I’m standing here listening to you while I’m Naked with a stiffy and my gal is returning with another beer for round x2 and you want to tell me what?
Quickiebook India Dude: I’m so sorry to bother you Mr. Hwy, perhaps there is another time we can discuss this, good evening Sir…click.
Problem solved.
(It was a conversion/translation Sit-U-A-tion from older Mac to MS Vista)
I’ve been a QuickBooks user and I’ve also been an MYOB user. Much prefer MYOB. I’ve been using the PC version, but I’ve also heard good things about MYOB on the Mac.
Wow Hwy funny.
Several years back, my g/f really fried my old computer.(Don’t ask). I decided use my static guard THIS TIME, to stay with a cheap Compaq, load it up with ram, and then go after big internet game with a DSL and wifi. It seemed to be the thrilling thing to do…Screw those Geek Squad pot smoking teenagers in their VW’s and my old dial up connection.
After 2 days off on the phone, rearranging wires, re-installing software and several trips around the world trouble shooting, my head was spinning and I don’t know if I was talking to HP/Compaq, the phone company, the router outfit or even a Somalian version of Gates himself. These companies were sending me around the freakin’ world with my little puter problems. Phone transfer after transfer, hold after hold. Between computers, modems, routers, manuals, software boxes, wires, tools and gadgets, assorted food stuffs, a crazed fat black lab and a g/f…well, things were getting pretty tense and crowed in my main bedroom primary hook-up!
Anyhow, at 1:30 am on the 3rd day, after my 2nd phone trip to India, some nice girl, who had questionable knowledge of the English language as applied to dumb yet daring Americans, found my solution on her 2nd read her Idiot Trouble Shooting Guide Manual, page 14. History was made!
Poof!!…suddenly I had a high speed internet connection and a wifi set-up. I thanked her profusely but she made me promise to never TOUCH or fiddle with anything and to never call and ask for her again. Haw…I knew I could do it myself !!
To this day, I have no idea on earth who she was or what company or outfit she actually worked for. Meanwhile, I have 2 copies of Windows 7 gathering dust, that stare at me on my desk that look like the googly Gieco Insurance money eyes! (I can be easily tempted but I’m no Fool…been there, done that !)
“…Anyhow, at 1:30 am on the 3rd day, after my 2nd phone trip to India…”
Wow what a tale Mikey, but I’s gots to tell ya, at some point I’d have done a cost/benefit analysis:
1. Buy the $179.00 upgrade
2. Burn thur x12 bottles of decent wine whilst I’m arguing/describing problem between intermittent involuntary directives to being put on “Hold”…
PS,
“They” know what they’re doing by off-shoring customer service don’t ya think?
HAHA HWY!
LOL
“US will go down in RE prices both residential and commercial starting mid 2010.”
You assert your opinion devoid of any explanation or supporting data. Suppose the Fed and Treasury are committed to propping up residential RE until the recovery takes firm hold; what could possibly stop them?
Here is a follow-up to a story I posted about a month ago. Soon the census will reveal if there are really fewer immigrants or just a lot more poorer immigrants?
—
Mexico remittances slump 14.4 pct in Nov yr-on-yr
Mon Jan 4, 2010 10:25am EST
MEXICO CITY, Jan 4 (Reuters) - The amount of cash sent home by Mexican immigrants living abroad sank 14.4 percent in November compared with the same month last year, the central bank said on Monday.
Mexicans sent home $1.495 billion in November in the fifth straight monthly decline. Remittances last touched these levels in February 2005 when Mexicans sent $1.428 billion home.
I’m curious as to how in the world they come up with this number. It’s not as if this money is reported anywhere; it’s strictly under the table.
packman,
I believe they do it thru tracking Western Union and other similar services. Sadly, it’s this very skimming operation that keeps their crooked gov. in power.
I think they ask the Central Bank of Mexico, which probably has an interest in accuracy due to conversion rates, and then estimate a total.
btw, here’s one from the NYT last November about how money is flowing north instead of south..
During the best of the times, Miguel Salcedo’s son, an illegal immigrant in San Diego, would be sending home hundreds of dollars a month to support his struggling family in Mexico. But at times like these, with the American economy out of whack and his son out of work, Mr. Salcedo finds himself doing what he never imagined he would have to do: wiring pesos north….
[snip]
He is not alone. Leonardo Herrera, a rancher from outside Tuxtla Gutiérrez in the southern state of Chiapas, said he recently sold a cow to help raise $1,000 to send to his struggling nephew in northern California.
http://www.nytimes.com/2009/11/16/world/americas/16mexico.html?_r=1&pagewanted=all
Dad’s selling cows just so you can stay in the USA illegally?? Go home you ungrateful putz!
I agree. And I say this as a descendant of a woman who lived very unhappily in this country. That was my father’s grandmother. She missed County Cornwall for the rest of her life. And, lemme tell you, she sure didn’t hesitate to let the rest of us know it.
P.S. What’s an “immigrant living abroad”? Wouldn’t that, by definition, be an emigrant?
It appears our PC language become so pervasive that we’re now actually contradicting the dictionary. The other day I saw an article about a black person living in France, and the author actually called the person an “African American”.
(shakes head)
Well to the French, it’s a big distinction. ISTR hearing a piece on NPR about an African American who emigrated to France, decades ago, and sometimes she INTENTIONALLY broadened her American accent, because the average Frenchman treats African Americans MUCH better than those whose familys came from directly from Africa.
… because the average Frenchman treats African Americans MUCH better than those whose familys came from directly from Africa.
I’d go even further than that — African Americans found France hospitable (in urban areas, at least) long before large areas of the US were. Africans from former French colonies have never received that kind of respect, and the tensions between Frenchmen and African immigrants only seem to be growing.
Lot of blues musicians found that to be true. Nothing like singing tales of the Delta to a crowd drinking warm beer. But hey, they weren’t afraid to tap their toes to, and buy, the music.
…because the average Frenchman treats African Americans MUCH better than those whose familys came from directly from Africa.
That would be in accordance with the alleged fascination the French have for American blues music.
Uh, and jazz, perhaps - ?
Might be because AMERICANS (who may have happened to be black) save France’s duff from the German fire twice in the last 100 years.
Africans (no matter the color) did not do so much. Although points could be given for France’s colonial troops.
“Might be because AMERICANS (who may have happened to be black) save France’s duff from the German fire twice in the last 100 years.”
Big flippin’ deal. So what. You want $$$ as in a protection racket? How about how rebuilt the fascist germany? Good grief.
Mexico remittances slump 14.4 pct in Nov yr-on-yr
Maybe this is good.
One of the greatest untold stories of illegal immigration to the USA is that it has hurt the social, economic and political development of Mexico and Central America. It has been a cheap, “escape-valve” fix that’s enabled delays in making hard choices and sacrifices countries need to make to advance.
There has been NO incentive for these countries to create equality, good jobs, and social justice because they’re able to export people and import money. The Mexican super-rich and their corrupt government feel no pressure to change, in fact they don’t want it to change. They have no interest in investing in public education or in their country’s financial and physical infrastructure because they ALREADY HAVE MASSIVE FORTUNES and they want more.
For the members of that private club, what’s not to like?? I guess when one becomes super-rich, one cares less and less about one’s country AND countrymen, no matter WHICH country.
Mexicans leaving Mexico in droves has not been good for the Mexican society and culture at home either. Massive migration has caused family stress and disintegration in a Latin society where the family is the center of cultural stability. How COULD excessive migration be good for villages and families when, in some communities, 80% of the working age males are absent for years?
Central American countries have also lost many of their hardest working and healthiest workers. This is a loss of “human capital” and human capital is a critical component of social and economic progress.
Rio,
Very well said. As I mentioned above, this ongoing skimming operation creates even more wealth for the well connected in MX. If you could just see how little of their paychecks actually make it to their families, it’s make you cry.
Personally I don’t think the Central Bank there would have a -clue- as to how much is transferred through the remittance pipeline as it’s filtered through smaller local operations. These aren’t the kind of people that have checking accounts.
I have a cousin wh works for western onion in Mexico City. I’ll aske her about this works.
I have a cousin wh works for western onion in Mexico City.
Western Onion is a much better name!
Western Onion is a much better name!
Makes me cry.
here’s a line from wikipedia’s page on “Wire_transfer”
International transfers involving the United States are subject to monitoring by the Office of Foreign Assets Control (OFAC), which monitors information provided in the text of the wire to ascertain whether money is being transferred to terrorist organizations or countries or entities under sanction by the United States government. If a financial institution suspects that funds are being sent from or to one of these entities, it must block the transfer and freeze the funds.
I have to believe that every bank and business involved in money transfers in and out of the USA.. including Western Union.. is being monitored. While some small amount might pass under the radar in plain envelopes delivered by mail, the main bulk of it is known or can be known if someone cares to add it up.
joey,
I don’t believe OFAC gets involved in this. After all, ( the whole transaction pipeline is so one-sided ) And we’re talking petty amounts here. In many cases less than $100 bucks. A daunting task to say the least.
After the money leaves the US, we really don’t have any control over it. I know a great many of us would love nothing more than to believe ( like our TSA ) that ‘everything’ is being watched carefully, but I think at least this end of it is still pretty much a free-for-all?
i understand where you’re coming from.. Who would believe millions of small transactions are being tabulated.
Then again, millions of people sending $100 a month adds up to many billions of dollars per year (article says 1.5B per month). A steady flow of billions across the border is real money, and that govts might take interest in such a phenomena wouldn’t surprise me, if for no other reason than that they want a piece of it.
There’s gotta be other reasons that an influx of billions is worthy of note… it’s not enough to cause inflation of the peso.. or is it?
Anyhoo, Western Union’s contribution would be simple to calculate. So would all the bank-to-bank transfers. Transaction records are on computers so that data is easily available and tabulated.
Why would anyone send (untraceable) cash money? .. and by mail?? I suspect very few people do. Too risky. I wouldn’t feel secure sending two cents by snail mail. And send it into Mexico?? Fug that..
Uh guys, that’s what computers are MADE for. It’s what they excel at.
Agreed. I already mentioned that I’m a descendant of people who took part in the Cornish Diaspora. While not as well-known as the Irish Diaspora, the effects on County Cornwall’s economy were similar. To this day, County Cornwall is one of England’s poorest. (And, being the Cousin that I am, I choke at the use of “County Cornwall” and “England” in the same sentence. We’re Cornish, after all.)
The Cornish were the backbone of the hard-rock gold mining in northern California. To this day there’s an annual “Cornish Christmas” festival in Grass Valley/Nevada City.
The Mexican super-rich and their corrupt government feel no pressure to change, in fact they don’t want it to change. They have no interest in investing in public education or in their country’s financial and physical infrastructure because they ALREADY HAVE MASSIVE FORTUNES and they want more.
Rewrite for a “Global” audience of 189 Nations:
The _____________ super-rich and their corrupt government feel no pressure to change, in fact they don’t want it to change. They have no interest in investing in public education or in their country’s financial and physical infrastructure because they ALREADY HAVE MASSIVE FORTUNES and they want more.
Greed,…it does a FAMILY good!
Yes. Thank U Hwy!
(But not the Swedish OK?)
Have dear friends who are from Sweden…
Also have a hard drinking Englishman grifter hooligan that I constantly tease:
(Hwy at he pub) : “You blokes spend centuries sailing around the world conquering peoples in India, Asia, Africa, South America…when all the whiles yous had “the girl next door”… Nordica… beauitful, smart, tough…but noooooooo,…you gotta have the Falklands!
I’ve wondered if a major portion of the problem is the hardest working Mexican’s get up, leave then show up here.
These guys that I see might be involved in some sketcy stuff but for the most part it seems like they stay out of trouble and under the radar.
Most of the problem Mexican’s are not Mexicans. They seem to be largely nth generation Americans that have gotten involved in gangs.
And, for some reason, they continue to self-identify as Mexicans. This, despite the fact that they were born in this country.
Cornish? Slim? ;P
“I’m Cornish!”
“Mexicans born in the US continue to self-identify as Mexicans.”
Headline from yesterday’s WSJ: “Real Estate Faces Tough Recovery Slog”
Link to article: http://online.wsj.com/article/SB10001424052748703521904574614833750873314.html
Well… Manhattan is not alone…From Bloomberg…Silicon Valley has 43 million square feet of vacant office space most of which has lost 50% of its value over the last two years…What kind of absorption rate do you need to make that vacant space go away and what does that say about the future of commercial construction here ??
Not to mention the fact that if a startup 20 years ago required 20 engineers, they were all located in SV. Now a startup with that requirement can outsource 15-19 of those engineers elsewhere.
Could be a really tough slog.
Then again, 20 yeras ago, a company couldn’t have a global presence overnight with a good ideal. Today, they can, making the potential for quick-hitting startups greater.
I suspect, as with most market cycles, fortunes will be made by people willing to buy when no one sees how the property could possibly be needed for a long time.
An item in the online WSJ “Housing is a Lousy Investment”
http://blogs.wsj.com/economics/2010/01/05/fed-economist-housing-is-a-lousy-investment/
Gettin’ closer. Don’t pull the trigger until you see it on the cover of Time.
LOL - I was thinking the exact same thing.
Iceland’s having a referendum on whether the people should pay for the big banks’ mistakes:
http://finance.yahoo.com/news/Iceland-faces-crisis-after-rb-2752131899.html?x=0&sec=topStories&pos=6&asset=&ccode=
The first time that average citizens actually stand up against the bankers and the international financial elite. I hope they will succeed.
From the BBC
Iceland’s president has refused to sign a controversial bill to repay $5bn (£3.1bn) to the UK and the Netherlands.
President Olafur Ragnar Grimsson said he would instead hold a referendum on the bill, following public protests.
The legislation was designed to compensate governments forced to bail out their savers with Icesave accounts following Iceland’s banking crisis.
Landsbanki, which ran the Icesave accounts, collapsed and was nationalised in 2008.
Legislation to repay the money was approved by Iceland’s parliament in December, but the approval of the president is also required before it can be passed into law.
Public opposition
The government has seen significant public opposition to the bill.
On Saturday, the president received a petition calling for the bill to be vetoed, signed by almost a quarter of the country’s population.
Presidents that stand up for their people usually wind up like Peter Pumpkinhead.
Why don’t they just do what Mexico did in the 80’s when the Peso collapsed?
Mexican banks froze all dollar bases accounts and replaced the dollars with “Mex-dolares” which could be redeemed only in Pesos and at a rate worse than what real dollars would fetch at exchange booths (say 20%).
Now Mexico was able to get away with this as it was highly self reliant at the the time (unlike Iceland).
My understanding is that the UK government has already compensated the savers, and is now demanding recompense from the Icelandic government. One serious problem, though, is that legally the UK bailout was premature. The deposits should have been covered under Icelandic deposit insurance (and terms, and receivership of bank operations), not under the UK’s. So I would think legally Iceland would have a strong case for denying the UK’s request.
Can only happen in a place without an ARCORN and a SEIU…
from the article-
“The Icesave deal is deeply unpopular with the Icelandic population and there is widespread feeling that taxpayers are being left to foot the bill for mistakes made by financial firms operating under the watch of other national regulators.”
The danger (to the PTB) of an educated population? Should be interesting to watch, as similar movements will surely take place in other countries. Will Iceland be crushed by the banksters as a warning to the others?
Will Iceland be crushed by the banksters as a warning to the others?
Probably.
Hope not.
Iceland is Unique . Nothing to export except Banks , and they bankrupted the Country , or nearly so .
At least they were not a retirement haven . With a lot of retired folks who have lots of $$$$ before they lose it all . Then who will take care of the paupers ? That may be something to consider for all the states that love to attract the ”Rich” retirees .
From fishermen, to financiers, to fishermen in one generation.
measton,
Thanks for sharing that and yes, it will be interesting to see how this develops? In fact, I’m sure a lot of what’s driving the protests is that they’ve seen how WE have gotten stuck w/ the bill and they want no part of it!
They may not have had rich retirees, but they certainly had plenty of them parking their money there in above mkt. avg. accounts. In fact when this topic came up in ‘06 on Patrick.net, they were offering north of 11%.
And at the end of the day, foreigners don’t vote. All they can and will do is stop lending you money. A lesson we in the US should learn.
From
fishermenhonorable tofinanciersdishonorable, tofishermenhonorable in one generation.But they were lucky it was so quick.
With a lot of retired folks who have lots of $$$$ before they lose it all . Then who will take care of the paupers ?
They would deport them. Believe it or not, some countries actually deport people rather than wring their hands over their “rights”.
I think they have mineral wealth, a well educated population, and cheap energy. Tourism is probably dead and gone. I’ll toast them if the succeed with a little aquavit and rotten shark.
Great Music scene, man.
When do we get a similar referendum here? I already have my vote in mind…
“Only once in the republic’s 65-year history has a president, whose post is largely symbolic, refused to sign a bill into law.”
(Hwy wonders what THAT was all about?)
Listen to the language, sounds very much like “TrueBeliever’s™ / TrueDeceiver’s ™” of Christmas’s past 2008:
Cheney-Shrub: “We need to do this NOW, or this whole sucker could go down!”
“You can’t hold a referendum in three days and this issue is pressing. The IMF will have to put on hold payment of any future tranches of aid until we have a ‘yes’ vote,” Danske Bank analyst Lars Christensen said.”
“British Finance Minister Alistair Darling warned on Monday that Iceland would face problems if it did not follow through on the agreement struck with its European neighbors.”
“This is a big surprise … it’s very market negative,” said Petter Sandgren, head of money markets at SEB.
“I assume it would affect the IMF package.”
Those Norse/Scotie trouble makers, always so preoccupied with Freedom. Let the first shot of an international taxpayers revolt be fired!
Those Viking/ Norse kicked some serious butt, so don’t count this generations clout out, yet.
Great news, Manhattan RE prices has bottomed for good and now is a good time to buy.
Suckers.
NYT
Sales Spur Optimism in Manhattan Real Estate
By ELIZABETH A. HARRIS
The 2009 Manhattan real estate market ended on a better note than it began, according to fourth-quarter reports that were to be released Tuesday by the city’s largest brokerages.
The improvements in the market that began over the summer pushed through to the end of the year. Most reports found that sales increased from the third quarter to the fourth, which helped eat away at the inventory of unsold apartments. Prices, meanwhile, stayed about flat — some of the reports showed slight increases, but most showed small declines.
“Considering where we came from, the results this quarter were much better than we could’ve imagined a year ago at this time,” said Jonathan J. Miller, president of the appraisal firm Miller Samuel, who prepares the market report for Prudential Douglas Elliman. “There are a lot of challenges ahead for housing, but I think the worst is behind us.”
Dottie Herman, president of Prudential Douglas Elliman, said that in the first half of 2009, apartment sales were low. “People were thinking, If I buy this, will the market go down more?” Ms. Herman said. “You don’t have that any more. People feel the market has pretty much bottomed out.”
The Prudential report showed that the median sale price in Manhattan was $810,000 in the fourth quarter of 2009, a 10 percent drop over the same period in 2008 and a 4.7 percent decline over the third quarter of 2009. The average sale price, $1.296 million, was down 2.1 percent since last summer and 12.7 percent since the fourth quarter of last year.
Coaxing the first round of buyers off the fence was the low hanging fruit. Conjuring up successive waves of buyers will prove progressively more challenging…and interesting for us to watch.
It’s already starting to show. Take a look at the pending home sales report today. When the free government money runs out, this train will come to a screeching halt.
And people have short memories…
Have friends who bought a 2 bedroom, 2 bath with eat-in kitchen in a doorman building at CPW and 101 twelve years ago for - get this -$170,000. (moving up to make room for second child)
At the time they had a one bedroom in the building next door that they had bought several years earlier that they were happy to sell for EXACTLY what they had paid for it.
They tell me it at peak it would appraise 5X what they paid or more.
HBB bloggers should not be surprised, but QE 2.0 is coming your way:
ZH:
We all knew it would happen, and now the Fed is implicitly confirming it - Quantitative Easing 2.0 is on the docket, with a sole purpose of purchasing of MBS, reports Market News. As the private MBS market is dead and buried, much more on this coming in a post later today, the Fed can not afford to abandon MBS and the GSEs in March. If it does, it is game over for interest rates, mortgages, and the stock market. Period.
From Market News:
Fed officials, are prepared to contemplate changes if need be, depending on conditions in the economy, housing finance and in financial markets more broadly.
“Among the options that has been discussed, say people in a position to know, is doing additional MBS purchases.”
And, again, as all know, QE 2.0 only for MBS will be insufficient, as even if the 10 Year UST - 30 Year Mortgage spread goes to zero, Treasuries, especially the 10-30 year part of the curve, are set to explode courtesy of trillions in new treasury issues in the coming months.
Look for the dollar to renew its downward trajectory as this story picks up steam, even as events in Europe imply the euro is massively overpriced. Race to the bottom, 2010 edition, is back.
Wouldn’t that be Q.E. 3.0? Or are they combining the previous $1.25T MBS purchases and the $300B treasury purchases into one big Q.E. 1.0 package? IIRC on 3/18 last year they announced the initiation of the $300B, as well as an “expansion” of the MBS purchases - not sure though if they had already started the MBS or not.
Either way - nice to see how well Ben’s vacuum is working.
“It’s gone from suck to blow!”
(Though I guess it never really got to the suck phase; except, well… the whole thing just sucks all around)
packman,
LOL. 3.0.., you DOG you!
Yeah, and this is shocking ‘how’?
What I have said often recently and will repeat here and now:
Every time one of these government market life support programs is phased out, accompanied by loud fanfare, keep your eyes trained behind the curtain for a similar or greater replacement program to serve exactly the same purpose.
Exhibit A:
First-timehome buyer tax creditExhibit B: Fed’s toxic MBS purchase program outsourced to GSEs w/o budget limits
PB,
Exactly, rinse, lather and repeat until negative feedback loop diminishes to a point you can live with. Deal w/ unintended consequences later.
“…the Fed can not afford to abandon MBS and the GSEs in March. If it does, it is game over for interest rates, mortgages, and the stock market. Period.”
Isn’t it about time to take the housing market off Fed life support, let the bubble die a natural death, and give this episode of financial market history a decent burial? Or is the plan to go Japanese? Enquiring minds want to know…
The plan is to go Japanese, but without the pesky savings, jobs, or social cohesion.
“…Isn’t it about time to take the housing market off Fed life support, let the bubble die a natural death, and give this episode of financial market history a decent burial?”
Eeyore: “Oh joy, I guess I’d better put on my “black blanket” for Mr. Bear’s award ceremony this week”
“Isn’t it about time to take the housing market off Fed life support, let the bubble die a natural death, and give this episode of financial market history a decent burial? Or is the plan to go Japanese? Enquiring minds want to know…”
They can’t. The TBTF banks would immediately be insolvent. They are anyway, but with extend & pretend programs, this is kept hidden from the masses.
Take the case of all the HELOCS the banks have on their books. Every time a property goes belly up, the bank has a 100% loss on whatever the second mortgage is.
I agree with you completely, the housing market needs to be taken off life support. It should never have been put on life support in the first place. Especially since everyone including BB acknowledges there was a housing bubble, it makes no sense to continue to stiff consumers into paying bubble prices for a roof over their head.
“Every time a property goes belly up, the bank has a 100% loss on whatever the the second mortgage is”.
LOL. Yes they do. And that’s a promise! God, it really is that simple. Oh I’m sure they’re kicking themselves for having written it in the first place?
Yep, extend & pretend time.
“Every time a property goes belly up,
the bank has a 100% loss on whatever the the second mortgage is”. and angel gets his wings.oh wait, what season is thsi? see, I mean ‘this’. All mixed up.
“They can’t. The TBTF banks would immediately be insolvent. They are anyway, but with extend & pretend programs, this is kept hidden from the masses.”
But shouldn’t an honest assessment of the financial position of TBTF banks be a policy goal, perfectly in line with the Fed’s promised glasnost? Otherwise, the extenders-and-pretenders will come up with some BS arguments (based on efficiency and economies of scale) to justify the continued existence of these financial black holes into our children’s adulthood. It is time to pull the life support plug and help return our banking system to economic viability as soon as possible…
Pending home sales fall 16 percent in Nov.
WASHINGTON (AP) — The number of buyers who agreed to purchase previously occupied homes fell sharply in November, an indication that sales will fall this winter, undermining last summer’s recovery.
The National Association of Realtors says its seasonally adjusted index of sales agreements fell 16 percent from October to a November reading of 96. It was the first decline following nine straight months of gains and the lowest reading since June.
The drop was far larger than the 2 percent expected from economists surveyed by Thomson Reuters.
http://finance.yahoo.com/news/Pending-home-sales-fall-16-apf-4260670970.html?x=0
I thunk the extension of the home buyer tax credit was supposed to make sure real estate would always go up from here on out?
Gee whiz this is a demanding crowd! The people were out hoilday shopping and had no time for house hunting - that’s why the NOV #s are down so much silly!
Seaonally adjusted…shopping is taken into consideration.
I’m assuming there was sarcasm there, but I can never be sure.
My doctor says sarcasm is bad for my heart.
Speaking of shopping..wandered down valley to the Hom e Goods store to see if there might be some really cheap seasonal stuff left to buy/save for next yr- yep I was bored today waiting for tongue to unnumb, and so much J-U-N-Kkkkkkkk in that store and wealthy snowbird women all over the place with carts buying even more junk from China.
Women standing in long line waiting to buy more junk… it was amazing. Went home w/o… pleased not to buy.
Pending home sales fall 16 percent in Nov
Um, but this means I can modify my 2010 predictions right??
I think this is the NAR’s way of ensuring our govt. not only extends but increases the first time home buyer tax credit. I am thinking that $50,000 tax credit given to any individual whether they pay taxes or not should help prop up those sales. /sarcasm off
The spin I heard on this figure was that it’s due to so many buyers rushing to settle before the first tax credit was set to expire and before the extension was announced.
Yeah, whatever. Seems pretty telling to me. Now, dammit, will prices please drop in my area?! It’s time, already.
So how much did they pay someone to tell us that residential RE sales goes up at the beginning of summer and drop in the fall?
And this would be news, why?
I’m looking for some opinions on my particular situation.
I’ve been renting an apartment in Tampa for 5 years. It converted to condo about 3 years ago. Someone bought it for $260,000 and I started paying them rent. Last week I was served foreclosure paperwork and found out the buyer hasn’t made a payment in about 6 months. Should I continue to pay them rent (I never signed a lease when they took it over)? Or should I contact the bank and start paying them?
BTW, I could probably purchase it now for $70,000.
Or should I contact the bank and start paying them?
Why would you pay a bank you have no connection with on a mortage that isnt yours?
At 70k, would your mortagage payment be less than what you are paying in rent? Do you think you will be in the area? Alot of questions to ask…
The mortgage payment would be a lot less, but there is the question of the monthly maintenance fee, which I found out a lot of owners have fallen behind on. I don’t believe there will be enough money available to keep the complex in good repair. I’m really not thinking about buying after what I learned, but I feel it isn’t right for me to pay rent to someone who stopped paying the mortgage.
Bob G,
So sorry to hear that. I went thru a… similar situation myself. We actually coined a term to address this very issue, we call them “repartments” where perfectly good apartments were taken out of the rental pool b/c some schmuck thought he could turn a fast buck on selling them instead!
I can’t speak to FL law but my guess is that a move is in your future, so you may want to save up for that. I don’t believe there’d be a whole lot of recourse against the “loanowner” as obviously, he’s BROKE! My guess would be to hoard cash in the meantime and start shopping for new diggs. IMHO/Not Legal Advice.
A lot of mortgage documents on rental properties include “Assignment of Rents and/or Leases” in the language. That basically means the lender (in the event of default by the owner) can step in their place and collect rent directly from the tenant. The lender must notify the tenant that they are doing this and where to send the rent payments.
I’m assuming you signed a lease at some point that is valid and not expired. If expired, it probably automatically converts to a month-to-month.
If it were me, I’d probably stop paying rent to the deadbeat and place the same amount in a savings account on a monthly basis. If the lender attempts to collect back rents, you are prepared . . . if not, you have free rent for a while. Sounds like you won’t be in that particular unit for too long . . . good luck to you.
Thanks for the lengthy and informative responses. I appreciate the help. I’m going to start packing up and getting ready for my eventual move.
“…the lender (in the event of default by the owner) can step in their place and collect rent directly from the tenant.
So Bob G, how’s the toilet, shower, screens, garbage disposal, outside facility maintenance doing?
The place is about 10 years old. I’ve only had one repair done to the apartment in 5 years which was the A/C (about $300). It has the cheapest fixtures available and the shower and sinks look pretty bad. Outside the place still looks very nice, but it seems to take a long time to get a malfunctioning gate or hot tub working.
Most residential new construction starts needing repairs at ~12 years.
This continues until every appliance, rotten board and flooring in the place is replaced.
BOB…Yo listen up man
Do you think your landlord has any cash to hire a lawyer and evict you? Nope….
It is Illegal to lock you out or turn off the utilities you could have him arrested for that…so why not stop paying….start packing but whats the hurry?
The condoze complex cant do anything either they cant lock you out without a court order…
Longer answer is pending . . . short answer is to not pay the deadbeat, save the rent payments in your savings account and wait for the lender to invoke their Assignment of Rents clause. If they don’t and/or if you don’t have a signed lease, I wouldn’t pay. Sounds like you will be changing addresses soon . . . good luck to you.
don’t do it - the HOA part is a deal-breaker IMO.
But don’t pay rent either. He might still be able to get you evicted but what the hey, it’s worth it.
Uh, considering an eviction on your credit report gets you blacklisted from 90% of rental property I’m not sure that’s good advice.
Is it though? Might even delinquent landlords be able to trash your credit if you don’t pay the rent?
Be careful you don’t get really hosed.
Don’t let that ‘catholic guilt’ take you over. Save your $ from here on out. Get your ducks in a row, but pay no one but yourself.
Sorry about your situation, except save your money.
Legally, I don’t know where you stand. But as a practical matter, you should take it up with your landlord. Ask him if he is okay with you not paying rent for the duration of the foreclosure. Also ask if he’ll consider your security deposit as the final month’s rent (since you won’t see a penny of that back otherwise). If he isn’t okay, start looking for new digs immediately.
Kim,
Excellent point, no he won’t be seeing ANY of the deposits he put down. Plan accordingly. I just don’t see any advantage to continue to pay rent to this schmuck LL?
It won’t ‘help’ your credit, it won’t assure you won’t be evicted anyway and it certainly won’t forestall the inevitable forclosure! So WHY!?
Here’s yet another glaring example of why bubble-sitting is no cake walk. Remember, this was in a multi-family unit not some over leveraged pipedream of a McMansion in an exclusive neighborhood? My guess is the LL has just been pocketing BobG’s rent for the last six months anyway.
i’d pay rent to avoid them filing a complaint..
i’d plan on moving asap..
i’d consult an attorney sometime between the two.
According to Google, “The Tampa Bay area is home to several law schools including Stetson University and the Florida Metropolitan University…” See if any have a free law clinic set up to help renters.
No lease? No brainer.
Save your money and move.
Hello everyone,
Well, this morning I sold my last gold double eagle. I bought it for $950 and sold it today for $1400 to APMEX. The gold fund I was in with USAA I closed today. Didnt make much on it, but didnt lose either. I am now almost exclusively in physical silver, EE and I bonds and cash. I have a small amount in the govt’s TSP fund, but I dont count it. Like they say, cash is king…
$1400 to APMEX? How did that work, if you don’t mind me asking? Current spot is $1125 or so.
Depending on the coin, you may get more.
I sold an ultra high relief double eagle in the box with the certificate…
Oh - didn’t realize it was certed.
Didn’t you already sell all your physical gold in December?
No, I didnt sell all of them. The Ultra High Relief was in it’s own box. The others were loose double eagle and platinum coins. Easier to mail.
“Cash is king.”
Make sure you are adequately hedged against treasonable usurpation of the crown.
Good for you Step! I’m still holding my metals since my asset allocation is only slightly over 11%.
I think the first six months of this year will be good for equities and metals. But also good for TIPS and Series I bonds. From there, if interest rates start ratcheting up, tangibles are hosed. I still think Bernanke, Obama, and Geithner want to keep RE prices artificially high the next few years and will do everything to keep housing unaffordable. So by December of this year if rates are still low and unemployment still high, we’ll probably see gold above $1500 spot and stocks up at least 10% this year.
Jan. 5 (Bloomberg) — Greece may borrow privately through banks for the second time in as many months after investors sent yields on the country’s bonds to the highest since March as the growing budget deficit prompted cuts to its credit ratings.
I wonder when that could happen here ?
If/when China stops buying. And that will be a seismic event.
That’s a popular myth actually. For the 12 months ending in October (latest that data was available) there was $1.643 Trillion of new debt, but China only bought $105 Billion of it; less than 7%.
But who did buy it? Households, right?
They’ll take up China’s slack.
hmm, I’d forgotten how annoying that emoticon is
-sorry ’bout that
Yeah pretty much - “households” (I assume you’re referring to the posts last week on the apparent treasury ponzi scheme). Amazing how much richer “households” got in 2009 - they were able to scrape up about $600 Billion extra dollars it seems, despite also pumping tons of money into the equities market. Apparently they were just holding out on us.
I wonder how long they can maintain their level of purchasing. At some point inquiring minds will want to know where all that money’s coming from- real big cookie jars?
Yep - that’s what I’m hoping. It’s already making the rounds of the blogs. WSJ will be next, followed by the rest of the MSM. When the outcry gets too loud to ignore it’ll stop, causing interest rates to skyrocket.
Maybe.
FWIW - there may end up being legitimate buyers behind those “unknown” purchases. Probably “encouraged” buyers but perhaps legitimate buyers. It’ll be interesting to see how it washes out.
Yep - that’s what I’m hoping. It’s already making the rounds of the blogs. WSJ will be next, followed by the rest of the MSM. When the outcry gets too loud to ignore it’ll stop, causing interest rates to skyrocket.
I see already I was wrong. Marketwatch was the next media outlet to pick it up.
NEW YORK (MarketWatch) — The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.
“We cannot identify the source of the new money that pushed stock prices up so far so fast,” Biderman said in a statement Tuesday.
The source of approximately $600 billion net new cash necessary to lift the market’s overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn’t come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.
…
Noting that the Fed has been buying Treasurys and mortgage-backed securities to keep interest rates low and support the economy, even firms such as Sprott Asset Management have started to accuse the U.S. government of running a Ponzi scheme.
“There’s a lot of backlash against the government right now and the hate for the Fed has gone into overdrive” in some corners, Greenhaus said. “The fact that the government stepped into the abyss [angered] a lot of people, and the fact that things are better a year later flies in the face of some long-held beliefs about free markets.”
Investors are so so smart,
Back in May, there was an auction of condos in downtown Austin, TX (Brazos Place)… Units sold on average 29% less than the listing price. Obviously, investors rushed to get the properties pronto!
http://www.austintowers.net/Austin_Downtown/files/brazos_place_auction_results.html
And of course, some of those units are back in the market for a much higher price. For example, unit 1008 sold for 326k ($247/sq ft) during the auction.
The same unit is now back in the market for an outstanding 445k. (MLS 9480826)
They are so smart…they know how to make 100k overnight. Sigh, I wish I was one of them.
“…They are so smart…they know how to make 100k overnight.”
Good summation for the adulated “professional” “work ethic” in America for the last 9 years.
Gotta love that “work ethic” where the rich bitch about low paid workers lack of motivation while making thousands a week and cutting employees wages every chance they get.
Recto-cranial-inversion like that really requires serious medical attention.
partner at large accounting firm told me he has never seen things this bad. all the firms are dropping rates to rediculous levels to just stay afloat. he said it could take 10 years to get out of this mess.
take it however you want. i can personally attest to the rock bottom rates though.
Gues who won’t getting a pay increase.
Big fee reductions in many dental offices as well these days, not the case six months ago. In California, anyway.
It’s about time!
I think I already told y’all the tale of the dental visit of February 2009. They were all hot to do an ultrasonic deep cleaning for the princely sum of $655. “Too rich for my blood,” I said.
Haven’t been back to that office since. But, lest you think I’m a total scofflaw, I got a second opinion at the Pima Community College Dental Studies clinic. Pima’s Dental Studies program trains a good bit of southern Arizona’s dental hygienist population.
Both the student and his instructor told me that the deep cleaning wasn’t needed. Which told me that the dental office I’d first visited was more interested in ginning up business than improving my health.
Slim:
Glad you found a tooth place to your liking. Lot of dentists do do the “upsell,” and quadrant treatment to claim annual insurance coverage payments in one sitting are pretty common.
On the flip side, infections that can easily slip inside the brain can be stopped, and more than one patient perhaps has had his/her life saved with early oral cancer detection.
Me again.
Since I’ve been self-employed, I’ve never had dental insurance. Seemed to me that it was too much pay-in for too little pay-out. Y’know, kinda like health insurance.
BTW, I had dental insurance through a former employer. Lemme tell you, if you were a crummy dentist in Tucson, you were on the list of dentists who were on that insurance company’s approved provider list. Never have I seen such a bunch of incompetents. I was convinced that, if it wasn’t for the insurance, those guys would be out of business.
Dentists don’t rate much above used car salesmen in my book.
I’ve had the dreaded TMJ disease (according to my dentists) for about 30 years. Have been hearing horror stories from dentists for years about how my jaw was going to fall off (I exaggerate, but not much), if I didn’t sign up for the “treatment”
My personal view wonders how it was possible for the human race to survive for millions of years without Orthodonture, so I chose not to participate. The ex-, however, bought into their deal.
Results?
Me…… No problems whatsoever
Ex…. …..thousands of dollars pi$$ed away, jaw problems because every one of these bozo doctors thinks the other guy doesn’t know what he’s doing, so they reinvent the wheel every time she changes dentists.
Never had a cavity, but I bit (pun intended) on getting some “soft spots” on 8 surfaces redone. 7 went well and the 8th has been redone again due to pain and still is sensitive when I chew with it. The originals lasted me about 40 years. I’m beginning to regret getting this done since they worked just fine before. Who knows, I was told that the spots would continue to decay but “if it ain’t broke…” still comes to mind. Probably should have gotten 2nd opinion on it.
Anybody else have the soft spots on enamel drilled out? Results?
X,
What do they do to treat TMJ that has caused her problems?
I can attest to the value of getting second opinions. Saved me $655 last February.
I might add that the cost of the exam at the Pima Community College Dental Studies program was zero dollars. They only charge you if they take you in for treatment. Since I didn’t need treatment, no charge.
SnS…..
Braces……retainers…….mouthpieces…….supposedly because the alignment of her teeth was causing misalignment of her jaw.
All of this to prevent “major surgury” on the joint in the future.
At last report ( I don’t talk to the ex- much, if at all), her jaw was so bad, she had trouble chewing, because the joint kept popping loose………is it loose because these idiot dentists kept putting different appliances in her mouth, pulling it this way and that?
My jaw, on the other hand, is actually BETTER than it was when I was 30. True, my teeth aren’t in “optimal” alignment……
I had adult braces, and my teeth look and work so much better. My teeth were way out of alignment. I have been wearing bedtime retainers (on my tops) for 30 years.
Speaking of dentists, just got the stitches taken out of my tongue today. Now it doesn’t feel like I got a pierced tongue anymore. YIPPEE!
Short story, I bit a chunk out of my tongue eating at IN/OUT. Wont’ be eating burgers anymore! 3 days had a tooth sized flopping piece, then stitches before Christmas. Couldn’t eat the fudge- no weight gained this yr. New Diet! woo hoo.
One of the most hidden and dishonest things are cavities. Teeth heal themselves. Minor cavities will heal themselves with proper cleaning.
Probing for miniscule cavities and drilling out healthy enamel guarantees both a short-term cavity filling bill, but more than that - provides a lifetime of income to dentists. They have basically guaranteed that those drilled teeth will fail.
I would pose this to all parents - upon a dental visit that your dentist identifies a cavity, or multiple cavities, ask to have them show you the cavities, note the location - don’t allow them to drill that day as is the usual tactic…”We can take care of this before it becomes worse”
Then one month later, after regular brushing and care, take your child to a different dentist. You will likely be surprised that the cavities your dentist identified no longer exist. No guarantees that the new dentist won’t find new cavities tho!
sleepless wrote:
I once went to a dentist who looked annoyed when I asked a question about a procedure he wanted to do. It was a real cattle shop - move the meat and out. At that same place, they purported to find a cavity. I called BS, never got it filled. Another said my wisdom teeth were “infected”. I regularly brush and floss. That was like 13-14 years ago. I’ve had no problems since. I went to another dentist who was more trustworthy due to pre-existing wealth. At that office, they never found any of the nonsense the other places “found”.
It is regrettable that it is so hard to find an honest dentist. There is every incentive on the dentist’s part to do unnecessary procedures.
Is it possible that the dental “professionals” have learned something from the medical “professionals”…like:
“Well let’s see now, (so glad you came in, just in time I might add)…you teeth need a cleaning definitely, oh my, what’s this…here look over these choices (hands patient a list with x38 procedures) I’d strongly recommend the one’s that start above $500.00 and are covered by your type of insurance…pick at least x3 items on the list”
Is it possible MD’s and dentists learned something from
Wall Street
Auto Mechanics
Lawyers
Politicians
Salesman on commission
Accountants
etc etc etc
measton,
I’d have to say it was likely the other way around. It never used to be all that damned expensive to bring your car in for a tune up.
Now you bring it in and they’ll use the same fear tactics doctors and dentists have used for years. “Well, you could use the regular oil but..?”
Just saying most are affected by the human disease known as greed.
measton,
The way “I” look at is, if a mechanic looked at ten cars over the course of a day, most of them will need something.
There’s no crime in saying “Yes, your car needs brakes and I rec. these Long-life (TM) brake pads.., they’re only a few dollars more?”
Nothing wrong w/ that at all.
The “change your oil every 3000 miles” = “real estate only goes up”.
3000 mile oil changes back in the carburator days made some sense; not so much today, with electronic fuel injection, better filters, and better oil control designed into the engine.
Who knows more about how often your engine needs the oil changed? The engineers who designed the engine, and did all the durability testing, or some shmuck at Jiffy Lube?
Use the intervals specified in your Owner’s Manual…if you feel guilty, use the intervals recommended for “Extreme Service”. If you are really worried about your oil, use Mobil 1.
(X-GSfixr changes his oil every 5000 miles, mainly because that is an easy number to remember)
Changed my ‘93 Honda Civic’s oil every 3000 miles, or there abouts; gave her away 10 years later with 319+K. Never touched the injectors, timing belt, motor or standard transmission. Replaced mufflers, tires, spark plugs and one distributor gear (worn out at 225 K). Back of the envelope calculation gave about 6 cents per mile + gas. Go ahead. Dont change your oil every 3K. Dont complain, though, when she blows.
So you’re saying you got how many miles out of a timing belt? If you’re saying more than 150k I’m going to have a hard time with that. Although if you’re saying you put 300k on it in only ten years, I guess I’ll have to admit I don’t have timing belt experience with cars that get mileage put on them that fast. The Mitsus I’ve been around really needed a new one every 50k or so to be safe. I realize the Honda ones last longer, but still…
I’d say that you results had more to do with the kind of car you bought, than your oil change intervals.
Your car is a pre-1996 car. Not too many computers on it. Most cars are scrapped because something expensive (other than the engine) fails. Like an electronically shifted automatic transmission. Or the body computer.
Hmmm….not a very good argument as we’ll never know how well your Civic would have done with oil changes every 5000 miles now, will we…
Even though my 1995 Volvo Owner’s Manual says every 5,000 miles for an oil change, I do mine every 3,000. I figure it’s cheap “insurance” for a car 15 years old, and 300,000 miles later. Truly, you’re talking about a few extra bucks, well spent. What’s the big deal.
Now, the $500,000 you lay out in So Ca for an average home, now that’s worth fretting over.
“Never touched the timing belt,…gave her away 10 years later with 319+K”
Gomer Pyle: Surprise, Surprise,Surprise Mr Carter!
Click & Clack muttering in the background: “…and that engine as cylinder invasive valves Martha!”
Repairs go from $300.00 to $1,475.00 in less than 2 secounds!
Speaking of oil changes, why do the Japanese continue to place the engine’s oil filter mount at an angle rather than vertical? I’m so tired of the mess that results when unscrewing the oil filter. Seems like a “no-brainer” to me.
Slim, this happened at every dental office me or a family member went to in the OC, CA over the last two years. Except at the one I go to now, run by a dentist from Eastern Europe. Deep cleaning to me means Deep Six their office.
Sorry I meant to reply to Slim’s Dentist post!
IMHO, the large accounting firms have always been overpriced.
Jim Jubak writes
Tejon Ranch: This is a negative judgment not so much on Tejon Ranch (TRC, news, msgs) as on the state where all its real estate is: California. The state’s politics are completely dysfunctional. Its tax system is broken. Its vaunted quality of life — which once included such things as the best state university system in the country with a quality at many campuses equaling that of much more expensive private universities — is decaying.
The value of real estate depends on the quality of the public infrastructure, and California’s crisis makes the land that Tejon Ranch owns less desirable.”
Yes like my HOA analogy a few days ago Cali is poorly run and broke and all CA property owners will suffer for it
“Yes like my HOA analogy a few days ago _____ is poorly run and broke and all _____ property owners will suffer for it…”
No way that CA has a lock on this mess, it’s nationwide baby!
High-speed rail could turn it into a gold mine. Properity like the railroad days of yore.
Course, that’s some serious “infrastructure” that might not arrive in my lifetime.
If I had my druthers, the state would find a way to pay for conservation easements and give the land back to the condors. Deporting convicted illegals from state and federal prisons would be a good place to start.
I know, I dream occasionally.
Having just taken a trip aboard Amtrak (Metroliner, not Acela), I can attest to the idea that train travel just flat-out works. Especially for trips of 300 miles or less. Dad and I spent an hour getting from Wilmington, DE to DC, and this included a stop in Baltimorgue. (Thanks, fellow HBB-ers for the name. It fits that city perfectly.)
And, at least in the Northeast Corridor, the high-speed infrastructure already exists. The tracks are continuous welded — no more clickety-clacking — and the ties are concrete.
Biggest problem in the U.S. isn’t so much the trains themselves - it’s getting *to* the train station. In Europe where cities are more compact and tend to have their own local metro service it’s easier, and thus trains are more common. In the U.S. though with our suburban lifestyle it’s a lot more difficult.
As you say it’s better in the NE corridor, which is more dense and less suburban. Trains are also great for cross-country trips, but only if you’re going to a specific destination and don’t plan to travel around that destination much (which is rare), or plan to rent a car there.
I live just 1.8 miles from the Tucson Amtrak station. Yes, the train goes through here in the wee hours of the morning, but, hey, Club Congress is across the street. Might as well go hear (and dance to) a good band while waiting for the choo-choo.
Trains aren’t bad for vacation travel. Business travel? Not so much.
Everybody uses the Japanese High Speed system as a system to duplicate, but nobody ever asks what their system cost to build (millions of dollars/FOOT in some places). And who is going to pay for “TSA” levels of “security” for these high speed lines?
Don’t know how it is on the coasts, but between the Rockies and the Appalaicians, from “door to door” you can drive a 300 mile trip about as fast as you can fly the same trip on the airlines.
I’ve noticed a preponderance of business travelers when I’ve been on Acela trains. And, from what I’ve heard, those biz-travelers are doing wonders for Amtrak’s revenues.
Acela = Northeast Corridor, on Amtrak owned trackage.
Look up “superelevation” on Wiki.
Mandatory on high speed rail. Unneccesary and an added expense on track that carries freight.
We use the Los Angeles subway system a lot, and we live in another county. We drive to a park and ride, use the “train on wheels” bus system, which hooks up to the subway station.
You can’t be lazy, and you have to plan accordingly, but we love it. It sure beats the freeway, parking headaches, and wear and tear on our nerves.
A lot of people we know are starting to see the advantages. Yeah, there are some disadvantages, but we know it’s a give and take.
As much as I love cars, trains are a great way to travel. My parents took us kids across the country on a train. Its been a great childhood memory.
Business travel? Not so much.
In these days, I would think the IE- LA area, SD- LA, LA- Santa B, LA- SFO, LA- PHX, and so forth as well as the Dallas to airport, Dallas - Houston, lots of interesting High speed links and time slots would be great for business and pleasure.
Think of the time saved going to an airport, standing in line, flying, and so forth. On a train you would have high speed WI FI and get stuff done, see views, get there in 1 day or less…cool.
Hi DD-
You have to have a certain mindset to take a train. It has a very urban feel to it, and you mix with a lot of different types of folks. We’ve met people traveling in Los Angeles, from all over the world. We all learn from each other.
There is nothing better for business travel than Amtrak in the Northeast.
From DC to NY with stops in Wilmington, Philadelphia, Newark and NY - and actually up through CT - you can’t fly it quicker or cheaper. You may occasionally drive it quicker, but the 95 corridor more often than not will have some kind of disaster.
Nothing beats the train for consistent, comfortable and reliable 95 corridor travel!
WASHINGTON (AP) — The number of buyers who agreed to purchase previously occupied homes fell sharply in November, a sign sales will fall this winter, undermining last summer’s recovery.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales agreements fell 16 percent from October to a November reading of 96. It was the first decline following nine straight months of gains and the lowest reading since June.
The drop was far larger than the 2 percent expected from economists surveyed by Thomson Reuters, and analysts were surprised.
Is the next leg of the real estate crash now underway, or is this merely a flesh wound?
The DJIA seems to be selling off today on the NAR’s gloomy news. I guess Wall Street and residential real estate are not fully decoupled, just yet?
Wait for the end of the day PB
That mean my staggering FAZ will find new legs?
The big drop was to goose the bond market, nothing else. The FED really needs that long term bond market to bounce so they can unload another ton of crap debt. Add to this the backdrop of TERROR threats and 90% of the market will stampede into the long bond. If it gets down to 3.6% on the Ten year I’m going to go short again.
Ever since being right except too early on my home builder puts (purchased in mid-2005, expired before fall 2008), I have sought ways to make infinite-lived bear bets. Do you have any suggestions along these lines on how to bet on two-or-so decades of incipient l-t T-bond price declines due to uptrending interest rates off historic lows?
The only thing I know of is one of the several ETF like TBT & TMV. The problem with these inverse funds is that they have a built in decay which kills them for the long term holder. The only way I play them is look for trends and play the top and bottom of the channel. The low in rates is in as of last year @ 2.7% so i’m looking for the 10 yr. to trade up to 5.5 % by March. Maybe if the Senate rejects Bernanke the market will panic and there might be a big move.
More of that “larger than expected” news that “surprises” the analysts.
OTOH, we HBB-ers expected something that large, didn’t we.
Just been sampling the pimento cheese crackers as the virtual dinner table here of late, so apology if this has been covered.
The California DRE has been dutifully publicizing a new rule which now requires Mortgage Loan Originators to be able to walk the walk while they talk the talk to would-be borrowers. It seems SB 36, also called the Secure and Fair Enforcement License (SAFE) Act, disqualifies originators who have “demonstrated a lack of financial responsibility by showing disregard in the management of his or her own finances.” Then there are the usual exclusions for people who are felons (such as having a penchant for money laundering) or have had other licenses yanked for various misdeeds.
No mention is made about the wisdom of allowing people with a record of offering really bad financial advice being allowed to continue to do so Maybe at the end of the day, people who opted for interest-only loans and such have to carry that cross themselves, public handouts notwithstading.
Also, if you bought a house three years ago for $800,000 and it is now worth $580,000, and you scored it with 10 percent down, would that loss of equity mean the buyer acted in “disregard” for proper personal financial management?
milkcrate,
Very interesting stuff. Here in OR the Guv. got involved with all these rotten ( coming out of the woodwork ) “modification companies”.
Seems they’ve finally gotten on board w/ the reality that many of these clowns are former mortgage brokers. I mean, their tactics are identical. Over promise/under deliver. The one story was for a gal in NoPo ( North Portland ) that got a HUD Forebearance that the lender usually gives people no questions asked!
And to think it only cost $3,500 to get it! Yeah, about time.
Americans’ job satisfaction falls to record low
Survey says American workers can’t get no job satisfaction; recession partly to blame.
WASHINGTON (AP) — We can’t get no job satisfaction.
Even Americans who are lucky enough to have work in this economy are becoming more unhappy with their jobs, according to a new survey that found only 45 percent of Americans are satisfied with their work.
That was the lowest level ever recorded by the Conference Board research group in more than 22 years of studying the issue. In 2008, 49 percent of those surveyed reported satisfaction with their jobs.
The drop in workers’ happiness can be partly blamed on the worst recession since the 1930s, which made it difficult for some people to find challenging and suitable jobs. But worker dissatisfaction has been on the rise for more than two decades.
“It says something troubling about work in America. It is not about the business cycle or one grumpy generation,” says Linda Barrington, managing director of human capital at the Conference Board, who helped write the report, which was released Tuesday.
Workers have grown steadily more unhappy for a variety of reasons:
– Fewer workers consider their jobs to be interesting.
– Incomes have not kept up with inflation.
– The soaring cost of health insurance has eaten into workers’ take-home pay.
If the job satisfaction trend is not reversed, economists say, it could stifle innovation and hurt America’s competitiveness and productivity. And it could make unhappy older workers less inclined to take the time to share their knowledge and skills with younger workers.
Nate Carrasco, 26, of Odessa, Texas, says he’s been pretty unhappy in most of his jobs, including his current one at an auto parts store.
“There is no sense of teamwork in most places any more,” Carrasco gripes.
It’s funny how some of the same reasons cited above for the decline in job satisfaction are also not conducive to supporting/raising house prices.
1. Incomes have not kept up with inflation.
2. The soaring cost of health insurance has eaten into workers’ take-home pay.
“1. Incomes have not kept up with inflation.
2. The soaring cost of health insurance has eaten into workers’ take-home pay.”
Ha, all the more reason for continuation of this policy:
“…They are so smart…they know how to make 100k overnight.”
Cue camera’s to: China & India & __________
“There is no sense of teamwork in most places any more,”
No teamwork??? WAAAAAAAA!
It’s because there is no “I” in team…PUNK!
But there is an “m” and an “e”, and that spells…
Or look at it from Michael’s (The Office) POV:
“Hey guys,…team spelled backwards is: meat
Dwight: “Damn right!”
(Jim looks into the camera, rolls eyes)
It’s because there is no “I” in team…PUNK!
You guys didn’t misunderstand but as I re-read my post I realize it can be misunderstood. I am not putting down the guy who is complaining about the lack of teamwork.
I wanted to imitate someone just in it for himself, someone who looks down on someone who prizes teamwork.
“There is no sense of teamwork in most places any more,” Carrasco gripes.
When times are tough you learn who the backstabbers are, plain and simple.
There’s no teamwork anymore = the guy that used to do my work for me got laid off.
In Colorado,
Sometimes you don’t even have to wait ‘that’ long? But you’re right, nothing brings it out of them like the slightest downturn, let alone full blow meltdown.
This is where the jealousy really starts to show. I’ve seen several instances just among my adult kids in the workforce. And this is the part I really, really wanted to avoid.
Do you think I really care if some guy in Diamond Bar, CA buys a mansion and sells it for TWICE what he paid for it just a few years earlier? Hey, have it pal. But where we didn’t get the memo was that “Winner” by today’s definition involves leaving nothing but scorched earth behind you if you fail so there won’t be any one gaining ground on you!
Scorched Earth goes -double- in the work place now.
If the job satisfaction trend is not reversed, economists say, it could stifle innovation and hurt America’s competitiveness and productivity. And it could make unhappy older workers less inclined to take the time to share their knowledge and skills with younger workers.
Nate Carrasco, 26, of Odessa, Texas, says he’s been pretty unhappy in most of his jobs, including his current one at an auto parts store.
“There is no sense of teamwork in most places any more,” Carrasco gripes.
This really hits it on the head.
I don’t know about the employment world — haven’t been a part of it since the 1990s — but out here in Freelancia, life is good. I’ve got a full plate of design projects (which I’m putting off for a moment) and more are on the way.
And I’m not the only resident of Freelancia who is reporting such things.
It’s because nobody wants to hire full time employees anymore.
We’re all going to be contractors eventually. Just like it was before the Industrial Revolution.
Intelligent people can disagree on whether this is good or bad.
I’m currently working on a Freelance Switch article about this very thing. We, the residents of Freelancia, are reporting that business is good, our clients appreciate our talents and our work, and that (gasp!) we truly enjoy what we do.
BTW, a very common Freelance Switch meme is how miserable we used to be as employees.
I’m finding that being a (involuntary) contractor is more stressful than being a hired hand.
Along with all the pressures of working on these high-dollar airplanes with no safety net (if I screw something up, the pilots and passengers will be the first ones to know), now I have to worry about actually getting paid.
As if I didn’t have enough stress already.
“Job satisfaction” was replaced by “house satisfaction”, at least while house prices were going up. But that has ended.
On CNBC just heard about the idea (by Democratic representative) to reduce principal amount of the loans on delinquent loans … Is this a jock?
They have been talking about that idea for years, already; somehow they cannot manage to translate cheap talk into dear action.
Already happening en masse via the loan mods, is it not?
Yeah, but everything I read about them suggests far fewer than initially announced and intended have been “helped” by loan mods.
I suppose loan mods are “harder than expected” for households that are more than $100,000 underwater on their mortgages (e.g., millions of California households)?
Everyone is still trying to avoid being the bagholder.
Guess it depends on who the Dem was. If it was Barney Frank then no - not so much. Though I’m not so much an expert on such things. (…not that there’s anything wrong with that)
Jim Lockhard was one pretty recently advocating the same thing.
(irony on)
Principal reduction? I think that is called a short sale?
(irony off)
I saw that clip this morning. It won’t work. Two simple reasons:
1) The govt cant make anyone do this unless they really have a write-off or reimbursement of some type. This won’t happen because everyone is hacked off about this kind of stuff already.
2) Funny money accounting will allow “legacy assets” to sit on the books for as long as the bank wants.
Roidy
P.S. I love the term “legacy assets”. Apparently calling a poop a rose IS possible.
I had Mexican for dinner last night.
Afterwards, I had to get rid of my “legacy assets”.
I can smell the aroma all the way to nu york citie…
In that case, then all of us should get an across the board reduction on our principal, and it should be principal based on the original loan, not the 2nds, 3rds, 4ths or 5ths….
Is this a jock?
Nah, I think it’s a couch potato. Athletic statements tend to come from Republicans.
Silicon Valley ‘Bloodbath’ Leaves Entire Office Buildings Empty
Jan. 5 (Bloomberg) — Silicon Valley is beset by the biggest office property glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents.
More than 43 million square feet (4 million square meters) — the equivalent of 15 Empire State Buildings — stood vacant at the end of the third quarter, the most in almost five years, according to CB Richard Ellis Group Inc. San Jose, Sunnyvale and Palo Alto have 11 empty office buildings with about 3 million square feet of the best quality space.
“There is a bubble bursting in much the same way as the residential market burst,” said Jon Haveman, principal at Beacon Economics, a consulting firm in San Rafael, California. “None of those towers will fill up anytime soon.”
Unemployment in the San Jose-Sunnyvale-Santa Clara metro area that includes Silicon Valley was 11.8 percent in November, down from the August record of 12.1 percent, according to California’s Employment Development Department. Applied Materials Inc. and Sun Microsystems Inc. in Santa Clara and Adobe Systems Inc. in San Jose announced more than 5,000 job cuts since October amid falling sales of computer chips, software and equipment.
Commercial property foreclosures will at least double in 2010 and job growth won’t return for two years after that, held back by U.S. consumers who are saving more and “getting back in line with sustainable spending habits,” Haveman said.
“the equivalent of 15 Empire State Buildings”
So that’s like a lot, right? LOL. Yeah they won’t be filling up any time soon.
Ok, what is this as a percentage of the total available? 15 Empire State buildings is a lot, but what is that as a percentage of the whole?
Roidy
“About 21 percent of Silicon Valley’s Class A office space is vacant, as is 20 percent of low-rise so-called flex or research and development space for offices or manufacturing, CB Richard Ellis said.”
“Many of these assets have lost half their value,” said Dan Fasulo, managing director of New York-based research firm Real Capital Analytics Inc. “That’s a bloodbath.”
“Property owners are feeling pressure from tenants who want to lease for at least 10 percent less than published rates, said Michael Grado, a CB Richard Ellis broker. That makes this market worse than the dot-com bust after 2000 because back then defunct Internet companies continued paying rent despite a 60 percent vacancy rate, he said.”
“Asking rents averaged $34.56 a square foot for Class A space in the third quarter, 21 percent less than a year earlier. The rate for flex space was $14.16 a square foot, down 16 percent, according to CB Richard Ellis.”
Schwarzenegger Girds for Deficit Fight as Borrowing Costs Soar
Jan. 5 (Bloomberg) — California Governor Arnold Schwarzenegger is entering his last year in office the way he began: presiding over a government in financial turmoil.
Schwarzenegger, 62, tomorrow is set to give his final State of the State speech, setting the stage for one more fight with the Legislature over a budget that will total $89 billion this year. With a $21 billion deficit forecast over the next 18 months, the governor of the most populous U.S. state has said he won’t boost taxes again, leaving him reliant on spending cuts and federal help to balance the books next fiscal year, which starts July 1.
The financial strains facing California show how local governments are still dealing with the recession that began in 2007 even as the national economy recovers from the worst slump since the 1930s. The latest struggle comes after legislators already erased $60 billion in gaps in the past two years by raising taxes, slashing school spending and borrowing, in a political battle that pushed the state close to insolvency.
“This is much worse than anyone thinks,” said Marilyn Cohen, president of Los Angeles-based Envision Capital Management Inc., which manages $250 million on behalf of wealthy individuals. She is moving clients out of California debt. “I have no confidence in the state Legislature.”
The whole California thing is just… bizarre to me. An interesting case study would be to compare CA and FL. While I’m sure Florida’s budget isn’t exactly rosy, it doesn’t seem to be nearly as in shambles as CA. However it seems to me the reverse should be true, for several reasons:
1. Due to prop 13 CA’s revenue from property taxes shouldn’t have spiked up as high during the bubble, and therefore they should be better positioned than other states, since they shouldn’t have (presumably) spiked up expenditures as much as other states.
2. While CA obviously was a big housing bubble state, it was roughly comparable to FL, NV, and AZ, thus shouldn’t be *that* much worse off than those other states.
3. FL has no income tax - it gets most of its revenue from tourist taxes I believe. It seems like therefore FL would get hit worse, since tourism has been slammed so badly. Worse so, it seems, than unemployment itself, which would erode CA’s income tax base.
4. Plus FL’s housing prices have fallen worse than CA prices, I believe.
So - why is CA’s fiscal problem so much worse than FL’s? Or is FL’s budget just as bad, they’re just better at keeping it out of the MSM?
“So - why is CA’s fiscal problem so much worse than FL’s? Or is FL’s budget just as bad, they’re just better at keeping it out of the MSM?”
Prop 13 isn’t the problem. It’s tends to slow increases on the way up, and slow declines on the way down.
The problems are more on the spending side than the revenue side.
The mix of taxes could be changed to smooth out some of peaks and valleys in revenue.
The two big problems are the increase in the number of state employees and the increase in state employee pension benefits. The state has been on a decade long hiring binge and state employee pensions were increased 50 percent about 10 years ago with no means to pay for that benefit increase. The pension plan at that time was already underfunded before promised benefits were increased.
SDGreg,
http://www.pensiontsunami.com
For all the latest dirt on CalPers. Sure they cover other debacles but they go to great lenghts to share what is so wrong w/ that system.
Thanks SDGreg, but I this “Monk” type thing when it comes to CULTS.
I just can’t help myself:
“The two big problems are the increase in the number of CA state…Cults… and the increase in state…Cults… pension benefits. The state has been on a decade long hiring binge and state employee pensions were increased 50 percent about 10 years ago with no means to pay for that benefit increase. The pension plan at that time was already underfunded before promised benefits were increased.”
Previously:
“…Strapped municipalities will face pressure to cut back on promised benefits.”
Police Officers = hero = cult
Firemen = hero = cult
Prison guards = unseen-hero = cult
City worker = semi-hero= cult
County worker = less-than-semi-hero = cult
State worker = special-less-than-semi-hero = cult
Federal worker = National hero = cult
There seems to be a CULTure of giving EXTRAordinary compensation to people who are hired by their CITIZENS to do what is basically an HOURLY JOB.
A welder has a long ways to go welding a bridge or sky-scraper or aircraft-carrier, or kids bicycle to ever hope of being given CULT status
Run Hwy,…RUN!
This is what the Democrats/liberals never seem to understand………all these little programs that are near and dear to their heart require government hiring to implement/regulate.
A few hundred government employees here, a few hundred there, and pretty soon, you are talking real money. Add to that the increase in “overhead” employees needed to comply with all these regs. (HR specialists, Safety compliance officers, etc. etc.)
There’s nothing wrong with this, as long as you have a healthy, diverse economy, which we haven’t had for about 20 years. And you aren’t having to compete with countries that don’t impose these costs…
X gsfxr are you in TX?
No. Jayhawk-land.
Packman
Some possible reasons:
1. The bubble in N. Cal started with the tech bubble in 98. Florida’s was much later thus CA’s greater speculative churn on large numbers of then re-assessed homes. California population 37 million, Florida 18 million, wiki,
2. Florida’s houses began their bubble much later and at prices about 1/2 those of CA. Florida bubble had less houses, at cheaper prices and came later so the froth did not have as much time to get built into the state budget maybe.
3. Total 2007 State Expenditures per Capita: California-$5028, Florida-$3633 statehealthfacts d ot or g
State Taxes per capita 2005 CA-$2700, FL-$1900
stateline d o t or g
And what SD said.
To be honest - my question was mostly rhetorical. Much of the gory details (unfunded pension increases, etc.) have been hashed out in bloody detail here. It’s still amazing nonetheless.
I just realized Schwarzenegger is termed out! How lucky can a guy get? lol
Roach Says Bernanke Should Start Exit Now If Recovery Strong
Jan. 5 (Bloomberg) — Morgan Stanley Asia Ltd. Chairman Stephen Roach said U.S. policy makers should start to exit emergency stimulus measures now if the economic recovery is as strong as they say it is.
“There is never an easy time to do it,” Roach said on Bloomberg Television today. “The longer they wait, the greater the chance they sow the seeds for the next bubble. So I’m in favor of an early exit strategy.”
The Federal Reserve on Dec. 16 pledged to keep interest rates “exceptionally low” for an “extended period” even as officials said financial markets were healthy enough to allow most emergency lending programs to expire at the end of this month. Chairman Ben S. Bernanke and his fellow policy makers cut the benchmark rate almost to zero in December 2008.
“We’ve seen the most extraordinary monetary stimulus on the record in the 15, 16 months post-Lehman Brothers,” Roach said. “We’ll have to see the most extraordinary withdrawal of stimulus on record” and “if this recovery is as strong as Bernanke and markets think it is, the time to exit is now.”
My hunch as to how this plays out:
1) The Fed pretends not to notice the strength of the recovery;
2) Hence they take a precautionary approach to raising interest rates, only doing so once they are well behind the curve on containing inflation.
3) When inflation turns out “higher than expected,” they will say “no one could have seen it coming.”
4) After inflation goes through the roof, having been fed by the easy money buying up everything in sight and thus causing shortages - then blame Wall Street for its greed.
5) Pretend to “punish” Wall Street for causing shortages and inflation, with what amounts to not-even-slaps-on-the-wrist.
6) Extend and pretend until unforeseeable encounter with BRIC wall occurs…
I think you mean “cautionary” approach, as precaution would have them raising rates before it was obviously needed.
Japan sales of new autos plunge last year to lowest in 38 years, underlining slowdown. ~~ January 5, 2010
TOKYO (AP) — Auto sales in Japan declined to their lowest in 38 years, slumping 9 percent to 2.9 million vehicles for 2009, an industry group said Tuesday.
Auto sales have been hammered by the economic slowdown as consumers tightened their pursestrings, despite tax breaks and cash-for-clunkers incentives introduced by the government.
Sales of new vehicles for 2009 fell below 3 million units for the first time since 1971, the Japan Automobile Dealers Association said.
When including minicars, which have a smaller engine, sales fell below 5 million vehicles for the first time in 31 years at 4.6 million units last year, it said.
State cuts coverage for glasses, oral surgery ~~ January 04, 2010
I Want To Know ~~ The World
Question: I recently received a letter in the mail saying I’d lose some of my benefits from the Oregon Health Plan. I want to know why is that happening?
Answer: About 175,000 Oregon Health Plan members will have to pay for certain dental and vision services themselves due to the state’s budget cuts.
As of Jan. 1, the state program will no longer cover bills for glasses, contact lenses, dental crowns, denture replacements, root canals and some oral surgeries.
The cuts do not affect pregnant women, minors and OHP Standard members. OHP Standard clients already had these services removed from their coverage.
The changes will save Oregon taxpayers more than $9 million for the rest of the 2009-2011 biennium, a notice said.
Boy, does this one ring my chimes!
If you go upstairs a few posts, you’ll read my story about having dental “insurance” through a former employer in Tucson. In which the insurance consisted of a list of approved, but incompetent, providers.
Well, here I am on the dental story-wagon again. This one’s set in Pittsburgh in the late winter of 1987. I had to have my wisdom teeth out, and I went to an oral surgeon whose office was within walking distance of my then-employer, the University of Pittsburgh.
Surgery went off without a hitch. In fact, I felt so good afterward that I walked the two miles between the surgeon’s office and home.
Then I got the bill, which Blue Cross/Blue Shield was to cover. Before I turned it in to Pitt’s insurance people, I showed it to the secretary who worked in the office next to mine.
She was appalled.
Seems that this oral surgeon rang BC/BS up for just about everything he possibly could. And this was for a no-complications surgery that left me in good enough shape to walk home. But, no matter. Insurance was paying the bill, right?
Even though Pitt was a quasi-private institution, the taxpayers of the Commonwealth of Pennsylvania were on the hook for part of the tab.
“…Seems that this oral surgeon rang BC/BS up for just about everything he possibly could.”
Hwy’s POV:
“…Seems that this _____________ rang BC/BS up for just about everything he possibly could.”
1. Hospital
2. Prosecutor
3. Medical “Specialist”
4. Hospital
5. Factory repair facility
6. IRS rookie auditor
7. IRS “ambitious” auditor
8. Hospital
9. Surgeon
10. Plumber
11. Hospital
12.
I love progress. It seems that diseases of the teeth were more or less resolved in the 1600’s. We are apparently heading back those good old days of yore in the 21st Century. Civilization is going out with a whimper, not a bang.
Roidy
You know how is someone supped to get a job if they are missing a front tooth, or have cracked yellow teeth?
Why not save the teeth money and eliminate breast reductions..you know 90% are not necessary
“Why not save the teeth money and eliminate breast reductions..you know 90% are not necessary”
??? Do you mean enlargements? I promise you if a woman is getting a chunk of her body cut off, a chunk that is highly desired by males to (usually) be as large as possible, she is not doing it for unnecessary reasons. Severe back pain, circulation and breathing problems are some of the reasons women get this surgery, and if it’s covered by insurance there is a medical reason.
Or are you just an Dolly Parton/Angelyne fan who wants the world “beautified?”
Severe back pain, circulation and breathing problems are the COACHED answer yo give on your insurance form
Is a CASH COW (pun) for the doctors….lets say I have and am with women who were well endowed and not a single one of them ever considered this operation….so its all BS….unless you are so big you need special made bras…then you might have the back pain. Why not make it an option? And let the employees vote on it.
Insurance $500mo without $550 with reduction….how many would vote to pay more money?
Bombardier jet orders at risk from Mesa bankruptcy. ~Tue Jan 5, 2010
* Bombardier has 10 regional jets on order from Mesa
* Bombardier owed $133 million by Mesa
* Analysts say impact on Bombardier will be manageable
TORONTO, Jan 5 (Reuters) - Canada’s Bombardier Inc (BBDb.TO), the world’s No. 3 civil aircraft maker, risks losing an order for 10 regional jets due to Tuesday’s bankruptcy filing of U.S. airline operator Mesa Air Group Inc (MESA.O).
Mesa, which has about 52 of its 130 planes parked, said it needs to reduce its fleet to eliminate the significant costs associated with retaining, maintaining and storing excess aircraft. [nSGE6040DB]
The bulk of Mesa’s fleet is made up of Bombardier aircraft. Bombardier said that while it had not been aware that Mesa planned to file for bankruptcy protection, it had been in discussions with the regional carrier regarding a potential restructuring outside of bankruptcy.
“We work with Mesa regularly and we will continue to work with Mesa while it restructures and we are monitoring the situation closely,” said Bombardier spokesman John Arnone.
They’ll work something out…..it’s not like the OEMs haven’t had to deal with bankrupt airlines before.
Bombardier has the trump card, if Mesa plans to stay in business. Bombardier sells parts.
Man…Don’t look at this chart very long and don’t show it to a certain someone because it might even bum HIM out….
“Change in U.S. Employment: Current Recession vs. Summary of 10 Postwar Recessions”
http://minneapolisfed.org/publications_papers/studies/recession_perspective/img/1employment_length_large.jpg
Dang…
Tentative conclusion: This recession is on a far deeper, longer wave length than other post-WWII recessions were…
Kinda like a tsunami?
Well yeah. And there is another similarity besides those I already mentioned: In between moments when a tsunami hits the beach (analogous to the moment of sheer financial terror in Fall 2008), it is quite hard to notice the risk. In fact, vessels at sea can barely detect the passing of a tsunami under their hulls. Once the naked swimmers on the beach are met with the receding water followed by the gargantuan wave crest, the experience becomes quite another matter entirely…
“Household debt as a share of GDP sits near record levels in two-fifths of the world economy. Our long purge has barely begun. That is the elephant in the global tent.”
~ Ambrose Evans-Pritchard
How does this purge work, given the interaction between underwater fundamentals and Central Bank attempts to make it all good again?
I omitted a word:
“…Central Bank attempts to painlessly make it all good again?”
No. Household debt is currently going down, albeit at a slow pace and from record highs.
Government debt - skyrocketing - is the new elephant in the tent. And that elephant’s a lot more stubborn than the household elephant.
Also much easier to hide off balance sheet than HHs going BK and getting foreclosed on their underwater Faux Chateaus…
I’m so glad that I am a prudent, careful taxpayer. I love being used as “lube” for those citizens, illegals, and corporations that aren’t.
Roidy
Iowa Man Spells Out Wife’s Birthday Message in Manure.
05 Jan 2010 ~~ myFOXDetroit.
ZWINGLE, Iowa - Ask this Iowa wife if she got the perfect birthday present and she’ll tell you her hubby “dung good.”
Carole and Dick Kleis live together on their eastern Iowa farm. This year for her birthday, Dick used more than 120,000 pounds of manure to spell out a special message. It basically says ‘Happy Birthday, Love You,’ but in shorthand.
And it only took three hours to spell it all out in a stinky, but mushy way.
“It’s not hard,” said Kleis. “Any manure will work but the good, soft, gushy, warm stuff works the best. It kind of melts the snow.”
Carole say Dick’s birthday is in May and she’s already thinking of ways to beat out his gift.
“…she’s already thinking of ways to beat out his gift.”
No sh!t?
Homeland Security somewhere in rural Delaware: “Now tell us sir, one more time for the record, why have you stockpiled 120,000 pounds of fertilizer?
Mohammed Ahmed Umar Farouk Saleh Omair Abdulmutallab: “I’m going to surprise my wife for her birthday.”
Mr. and Mrs. Kleis sound like a fun couple.
Only FreexNews would call that journalism.
New scanners break child porn law ~~ guardian.co.uk, 4 January 2010
The rapid introduction of full body scanners at British airports threatens to breach child protection laws which ban the creation of indecent images of children, the Guardian has learned.
Privacy campaigners claim the images created by the machines are so graphic they amount to “virtual strip-searching” and have called for safeguards to protect the privacy of passengers involved.
Ministers now face having to exempt under 18s from the scans or face the delays of introducing new legislation to ensure airport security staff do not commit offences under child pornography laws.
They also face demands from civil liberties groups for safeguards to ensure that images from the £80,000 scanners, including those of celebrities, do not end up on the internet. The Department for Transport confirmed that the “child porn” problem was among the “legal and operational issues” now under discussion in Whitehall after Gordon Brown’s announcement on Sunday that he wanted to see their “gradual” introduction at British airports.
So - basically they’re saying it’s OK to take what are considered pornographic pictures of someone - against their will - as long as that someone is not a child?
Nice.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
- Benjamin Franklin
Yeah I know people don’t *have* to fly, but hey - it’s Britain - there’s only so far you can go by car.
Safety trumps liberty when there’s bills to pay, gotta keep the consumers alive dontcha know!
Reading the stories in the wake of this latest attempt made me think that a good number of folks are just itching for an excuse to stock up on duct tape again.
Props for the Ben Franklin quote. Here’s one from James Madison:
Crisis is the rallying cry of the tyrant.
All Eyes on Japan
“The shocker will be Japan, our Weimar-in-waiting,” opines Ambrose Evans-Pritchard, British economics commentator. ” This is the year when Tokyo finds it can no longer borrow at 1pc from a captive bond market, and when it must foot the bill for all those fiscal packages that seemed such a good idea at the time. Every auction of JGBs will be a news event as the public debt punches above 225pc of GDP. Finance Minister Hirohisa Fujii will become as familiar as a rock star.
“Once the dam breaks, debt service costs will tear the budget to pieces. The Bank of Japan will pull the emergency lever on QE. The country will flip from deflation to incipient hyperinflation”.
Japan’s Bond Crisis
Japan’s decade long economic slump cannot continue much longer. Evans-Pritchard thinks the central bank may push the hyper-inflation button. If you were thinking of investing in the Japanese bond market you may want to re-think the gamble.
For how many more years will gloomsters have to continue with their stopped-clock hyperinflation prediction before it finally happens?
Could be they force companies to write off the bad debts?
I’ve spoken about automotive and how well the Japanese have done. Still I wonder though. How much was built on the backs of bad debt? Was it from getting steel for free and parts way under costs? Were all the suppliers bankrupt?
Hard to find evidence of that kind of shenanigan but I’m prepared to eat my words.
I’ve often felt stung by the amount of stuff stolen by oversea’s competition. Heck, China and India might as well have a policy of buying one national license for software. All sorts of other things to cut costs that would get you fined/jailed in the US. Not to mention the industrial espionage. I still remember finding the Sumitomo guys in our little companies dumpster searching for prints. Then I went to work for a competitior and found out a customer (AT&T) that had occasional unusual requests was sending our parts to the competitior to steal/copy them.
Good times in high tech. Good times.
Sumitomo Steel visitors to our research lab used gumshoes to get samples of free machining steel being machined in our test shop; they came out with the same product several months later. Wouldnt trust japanese any further than I could throw them.
Wow - shades of the Russkies. Guess we didn’t learn our lesson - confiscate all visitor shoes when leaving the metal shop.
Yrs ago, had a side biz of selling packaging and one client- big store in NYC turns out parent corp was Japanese. I spent mos and mos submitting samples, only to be finally told nope, Japanese owners took samples to korea to be made.
Learning curve had steep climb.
I hope they time it just right. I bet China would really like Japan to fall so China will be the #2 economy in the world. Give them 5 more years and they might be our equal in mfg. and finance.
Since they are losing influence, anyway, wouldn’t this be an optimal time to eliminate subsidized TBTF subsidies? May as well go all the way for the jugular, before they are back on their feet and fully capable of stealing from Main Street America once again.
Banks lose sway on Street
Sector’s influence over the stock market is fading, analysts say.
Once again you’re setting your sights too low. Repeal the bank charters and their enabling statutes, and adopt a Constitutional amendment prohibiting their re-enactment. Now THAT would be going for the jugular.
Thanks for the excellent suggestions. It would be good to drive a stake through the heart of TBTF bailouts as well. Any suggestions in that area?
Thanks for the excellent suggestions.
It would be great to drive a stake through the heart of TBTF bailouts as well. Any suggestions in that area?
Count me in the optimist camp: 2010 should be a great year to buy some really, really big dips!!!
Paul B. Farrell
Jan. 5, 2010, 12:01 a.m. EST
Optimist? Or pessimist? Test your 2010 strategy!
12 ‘Dr. Dooms’ warn Wall Street’s optimism misleads, will trigger new crash
What would Buffett, Bogle and Buddha say?
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) — Test time: A neuroeconomic peek inside your brain’s new strategy as we enter the “Doomsday Decade” and leave behind the “Lost Decade” (”lost” because the Dow dropped from 11,497 to 10,428 in 10 years, while Wall Street got rich wiping out almost 10% of your retirement funds). Test your 2010 strategy. Are you an …
1. Optimist? As the new decade starts, are you an optimist who trusts Wall Street’s advice that 2010 will be a great time to buy stocks. Wall Street says the “Lost Decade” (what a great title) is now behind us. So you believe that the 60% market rally since the March 2009 bottom will continue, with at least 20% gains in 2010.
2. Pessimist? Or, you’re distrustful, cynical and pessimistic about all predictions made by Wall Street’s bosses and pundits. You’re particularly skeptical of any and all forecasts by the “too-greedy-to-fail” bankers who stole trillions from taxpayers, the Fed and Treasury, then failed to stimulate the economy and now pocket mega-bailout bucks as record bonuses, just one year after we saved Wall Street from near bankruptcy.
…
“Count me in the optimist camp: 2010 should be a great year to buy”
HAHAHAHAHAHAHAHA!
HAHA HAHA Ha ha hhh….
The Decade of the Lost. All aboard! And you have one more full year to join the train. (When you count to 10 is the last number 9?) Y2K math abyss redux.
So far, this has been the decade of escaped, delayed, ignored consequences. True recovery begins only after the correction.
Please post details of your deals of a lifetime so that we can live them vicariously with you.
You missed the “really, really big dips” part of my post. At any rate, I plan to dribble money into the stock market (drip, drip, drip) over the next two decades under the assumption that the stock market always goes up, at least nominally, and over the very long run…
Hanjin Shipyard to Cut Workforce 30 Percent
Jan 5, 2010 ~~ The Journal of Commerce Online
Recession drives restructuring as lines cancel, delay ship orders
Hanjin Heavy Industries and Construction, Korea’s fifth-largest shipyard, plans to cut its shipbuilding workforce by at least 30 percent to help overcome a management crisis arising from a worldwide recession in the industry.
The plan calls for the company to begin layoffs in its shipbuilding unit in February and spin off part of its technology group, according to the Yonhap News.
“The company did not receive any new ship orders this year and we are not structurally capable of taking on low-priced orders at the moment,” it said. “For the survival of the company, layoffs and workforce restructuring are inevitable.”
Troubled container lines have been trying to cancel or delay their existing ship orders placed during the boom years that preceded the recession.
~Clipped from The Daily Reckoning…
Our friend Marc Faber writes that Congress has just voted the biggest health care initiative of all time - forcing everyone in the nation to participate, except Congress itself. The parasites have a better plan, naturally.
The number of federal employees making big money is growing fast. In the Defense Department, for example, “civilian employees earning US $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available…” writes Marc.
Marc sees the US rapidly becoming a banana republic, in which elites use positions of influence to feather their own nests. Federal employees, lobbyists, politicians, government contractors, favored groups - all of them connive to strip assets from the public and use them to cushion their own fat derrieres. Typically, the banana republics have nice weather and bad money. They borrow too much…run their printing presses when they get in a jamb…and then go broke.
The world turns, doesn’t it? While the US slips into banana-ism, the world’s biggest banana republic, Brazil, is booming. It has the number one position for stock markets in 2009 - up 145%.
Also from TDR…
“The recession isn’t over.” In a Bloomberg Radio interview on December 17th.
David Rosenberg explains that 90% of the ‘growth’ in the third quarter came from stimulus measures. And that still only produced a 2.2% annualized GDP increase, far below the rates typical at the end of a recession.
“What is normal is that the first quarter of post-recession growth is that real GDP expands at a 7.3% annual rate; 2.2% is really nothing to get excited about - it’s actually quite worrisome.
“Never in recorded history has growth coming out of a string of declines been as weak as what we just witnessed. Considering all the government efforts to usher in a V-shaped recovery, what we saw unfold in the real economy in Q3 - admittedly quite divorced from the action in financial markets - was, in a word, sad.”
What is happening? How come so much government ’stimulus’ produces so little real stimulation?
Well, because an economy is so heavy…you can only push it downhill!
Monetary stimulus only works when it pushes the economy in the direction it wants to go. When people want to buy, you can make them buy more by giving them more credit. But when they don’t want to buy, extra credit doesn’t help. Extra credit is what people don’t want. Offering them more of it doesn’t make it more attractive.
But government spending on the other hand - fiscal stimulus - is a more effective imposter. People see the feds spending money and they mistake it for genuine, economic activity. The government hires people. The government spends money. It looks just like the real thing!
Heck, it’s better than the real thing. Because the feds pay better. And they don’t have to worry about showing a profit either; the whole idea is to lose money…that’s what fiscal stimulus is all about. Want a fiscal stimulus program? It’s easy. Replace honest business activity with phony federal make-work. And replace honest workers with parasites!
We’re reverting to the mean.
“The parasites have a better plan, naturally.”
House Resolution 615
Over the past few months, members of Congress and the American people have come to know the details of the Administration’s proposed health care plan. Call it whatever you like, I believe this proposal is nothing more than government-run health care. As a physician, I am amazed at the number of bureaucrats in this House who are quick to claim a government-run health care plan is the reform this country needs. In response to this, I have offered a resolution that will offer members of Congress an opportunity to put their money where their mouth is, and urge their colleagues who vote for legislation creating a government-run health care plan to lead by example and enroll themselves in the same public plan.
Under the current draft of the Democrat healthcare legislation, members of Congress are curiously exempt from the government-run health care option, keeping their existing health plans and services on Capitol Hill. If Members of Congress believe so strongly that government-run health care is the best solution for hard working American families, I think it only fitting that Americans see them lead the way. Public servants should always be accountable and responsible for what they are advocating.
Together we will work to ensure that any plan that is good enough for American families is good enough for every member of Congress.
Congressman John Fleming
The world turns, doesn’t it? While the US slips into banana-ism, the world’s biggest banana republic, Brazil, is booming.
It’s weird I know. They have a “Socialist” president with a high school education who used to be a machinist and union organizer. They are very corrupt but throw bones to the poor too. They have some of the highest import tariffs in the world. They have very expensive consumer items. They have no black Friday, HELOCS or even a history of mortgages. Smart students who pass the test get FREE college educations in the Federal Universities which are rated higher than the private Universities.
They like “stuff” but don’t worship it like we do because they value free time and good life a more. Even the rich people don’t have houses crammed with “stuff” and yet the middle class has increased by 35 million in the past 12 years and Brazil makes about 75% of what Brazilians buy. They are ENERGY INDEPENDENT. What the …??! They have a trade surplus too! Dang!
Do you know how mad this makes me as an American to see? Not mad at Brazil but MAD at our American government and us Americans ourselves for letting us get into this situation. Brazil’s future maybe brighter than my own country’s?? WT-????!
I’m tellin’ you, we gotta get our act together fast. We have to. Outsourcing, the rise of the SUPER rich, Illegal immigration, the religion of “free-trade”, money worship and petty party squabbles in the face of disaster will KILL US.
“…They like “stuff” but don’t worship it like we do because they value free time and good life a more. Even the rich people don’t have houses crammed with “stuff”
Hwy thinks Brazil lacks x3 key American things:
1. Hollywood
2. Madison Avenue
3. “As seen on TV”
If I was a bettin’ kinda man, I’d say that in 10 years 30% of this companies profits $$$$$$$$$ would be coming from Brazil:
Public Storage
“……highest import tariffs…….”
I’ll bet we can solve a LOT of problems, if we had ‘high import tariffs”.
Take Embraer (please):
-Brazil puts high import tariffs on airplanes from the Wichita OEMs for 30 years, allowing Embraer to get their $hit together.
-Embraer becomes a competitor to the Wichita OEMs, mainly Cessna. Nobody in Washington cares about a few thousand jobs in flyover country; they have bigger fish to fry, like promoting the “free trade” dogma, and buying support for the “War on Terror”.
Multiply this, X about a hundred other US industries.
Wooooooeeeeeee, You nailed it. Rio.
HWy, don’t think public storage will ever be an issue for middle class of any country but ours. The other countries don’t worship stuff like we do.
Pensioners burn books for warmth
Hard-up pensioners have resorted to buying books from charity shops and burning them to keep warm. (uk)
Logs burning in fireplace Pensioners are burning books to keep warm
Volunteers have reported that ‘a large number’ of elderly customers are snapping up hardbacks as cheap fuel for their fires and stoves.
Temperatures this week are forecast to plummet as low as -13ºC in the Scottish Highlands, with the mercury falling to -6ºC in London, -5ºC in Birmingham and -7ºC in Manchester as one of the coldest winters in years continues to bite.
Workers at one charity shop in Swansea, in south Wales, described how the most vulnerable shoppers were seeking out thick books such as encyclopaedias for a few pence because they were cheaper than coal.
One assistant said: ‘Book burning seems terribly wrong but we have to get rid of unsold stock for pennies and some of the pensioners say the books make ideal slow-burning fuel for fires and stoves.
A lot of them buy up large hardback volumes so they can stick them in the fire to last all night.’
A 500g book can sell for as little as 5p, while a 20kg bag of coal costs £5.
Since January 2008, gas bills have risen 40 per cent and electricity prices 20 per cent, although people over 60 are entitled to a winter fuel allowance of between £125 and £400.
Yeah, that story has “global recovery” written all over it.
Instead of burning books that might actually have real value, why not just send them every copy of the world’s financial magazines and newspapers hot off the presses?
“Logs burning in fireplace Pensioners are burning books to keep warm”
I know that’s what it says, but my mind keeps translating it thus:
“Logs burning in fireplace Corporations & Bankers are burning books to keep warm”
correction: first they cook’em… then when caught, they burn’em.
“Logs burning in fireplace Corporations & Bankers are cooking books to keep warm”
S. Fla. foreclosures up 29% in 2009 ~ South Florida Business Journal
January 5, 2010
Foreclosure activity in South Florida was up 29 percent, year-over-year, in 2009 – to 97,000 actions taken, according to brokerage and real estate research firm Condo Vultures.
In 2008, there were 76,000 foreclosure actions taken, more than double the 32,000 foreclosure filings for 2007.
Peter Zalewski, managing principal of Bal Harbour-based Condo Vultures, said foreclosure activity tapered off toward the end of the year because banks were more willing to work with mortgage holders to find alternatives to foreclosure.
“The newfound willingness of lenders to suddenly work with borrowers to modify mortgages or approve short sales has undoubtedly had an effect on the number of foreclosure filings in South Florida,” he said.
President Barack Obama’s $75 billion Making Home Affordable program has been criticized because it has only been able to help a small fraction of homeowners most vulnerable to foreclosure. Many homeowners trying to participate in the program have complained about the slow vetting of applications, constantly changing rules and bank reticence to granting modifications. The program also falls short because, even if a modification is achieved, the principal on the mortgage remains unchanged, which potentially keeps mortgage holders in homes with debt much greater than the home’s market value.
How the next year will play out in terms of policy and impact is unclear, but banks are more inclined these days to shrink inventory, Zalewski said.
“The newfound willingness of lenders to suddenly work with borrowers… ”
Okay Pete, but why the sudden change of heart? And don’t even try to suggest that kindness, in any shape or form, is their motivation.
Discovery Communications plans 3D television network
Washington Business Journal - Tuesday, January 5, 2010
Discovery Communications will partner with Sony Corp. and IMAX Corp. to launch a cable channel airing 3D programs and movies 24 hours a day, seven days a week.
Financial terms of the partnership weren’t disclosed.
The joint venture will launch the new 3D network in the U.S. in 2011.
“By partnering with Sony and IMAX on 3D, Discovery will lead the way in revolutionizing the next-generation home viewing experience in the U.S. and around the world,” said Discovery Communications CEO David Zaslav in a statement. “Today’s announcement is the next step in fulfilling Discovery’s mission of providing groundbreaking content for our affiliate partners and enlightening viewers with the most immersive and realistic viewing experience available anywhere.”
Silver Spring-based Discovery (NASDAQ: DISCA), Sony Corp. of America and IMAX will be equal partners in the joint venture, with a goal of driving consumer adoption of 3D televisions, they say.
The companies will also explore international distribution in the future.
“By partnering with Sony and IMAX on 3D, Discovery will lead the way in revolutionizing the next-generation home viewing experience in the U.S. and around the world,” said Discovery Communications CEO David Zaslav in a statement. “Today’s announcement is the next step in fulfilling Discovery’s mission of providing groundbreaking content for our affiliate partners and enlightening viewers with the most immersive and realistic viewing experience available anywhere.”
True confession: When I worked in a PR office, I wrote gar-bazh similar to this. Glad those days are gone forever.
“Today’s announcement is the next step in fulfilling and enlightening viewers with the most immersive and realistic viewing experience available anywhere.”
Geez, I just take Mr. Cole for a day hike someplace in the wilderness. I hope he doesn’t become an “Alan Shore” and sue me when he’s older.
The bald eagle perched on a branch of the Sycamore by my window today. I can see that his head and tail feathers are showing white, so he is maturing. As he flew away, a partner rose from the field to join him in flight.
Will I miss out not subscribing to the 3-D TV channel?
Ice Slows Operation At N.J. Nuclear Power Plant.
SALEM, N.J. (CBS 3)
A nuclear power plant South Jersey was forced to partially shut down due to ice build-up on the Delaware River.
Officials said the power plant in Salem County had to shut down one generator and reduce power in another at about 8 a.m. Saturday due to floating ice on the river.
Ice was accumulating on rotating screens used to take water to a non-radioactive part of the plant.
Plant officials told Eyewitness News that it is the first time that they had to take this unusual step because of ice.
Officials are continuing to monitor the situation to determine when the plant can resume full operation.
Geez, mwbz what’s taking you all so long…
“…Officials are continuing to monitor the situation to determine when the plant can resume full operation.”
wmbz answers: When HE!! FREEZE”S OVER!
Ramble o the day….
I can’t help wondering if the current health care bill is just designed to draw attention away from the marginally legal efforts to prop up the bubble.
That with backstopping the GSEs, MBS purchases, Feds free money for big banks, AIG bailout, TARP money. Perhaps this is all just some weird sort of attempt to distract people?
We beat on the healthcare thing plenty around here.
Do we have any idea of how much stimulis money was left around?
That with the TARP money and any repayments?
Any idea how GM is doing at this point? I think I read China is now the top auto market too. You’d think we’d be able to sell cars there, right?
We beat on the healthcare thing plenty around here.
As well we should.
And, at least from my perspective, it’s comforting to know that others have been in the same boat I have. As in, the one where you’re urged to have this test, undergo that procedure, or something along those lines, because if you don’t your health will go ker-flewie.
You have the sneaking suspicion that the urging has more to do with the financial health of those doing the urging, so you blow off the test or procedure. And years go by. You’re still fine.
Matter of fact, you’re in better shape than those who took the urgent-people’s advice. X-GS-Fixer’s ex (and the TMJ treatments that didnt’ help) is the latest case in point.
“…I think I read China is now the top auto market too. You’d think we’d be able to sell cars there, right?”
Here’s how it works:
China: “Yo, GM bro…design us some really cool cars and we’ll let you sell them in China”
GM ($$ signs in their eyes):”Right ON! We’ll do it.”
2 years & 2 Billion $$$$$$$$$$$$$$$ in design costs later:
GM: “Here ya go, as promised.
China: “Here’s are markets, as promised.”
GM (look of stunned amazement): “What are all these cars…they look just like the one’s we designed for you…”
China: “They are ALMOST just like the one’s you designed, only they cost 78% $$$ less than yours, and they wear out sooner which helps with resales…”
With your permission, a minor modification….
China: “Yo, Gm bro………..let you sell them in China. But you have to do it as a minority partner in a joint venture partnership. You supply all the intellectual property and give it to us. You have to build a new factory here, instead of using your factory in the USA. For that, you get government permission to sell “your” product in our market. And if someone comes along with a sweeter deal, we have the right to kick you to the curb”
See…other Countries aren’t stupid like us ….they know that jobs are of great value in many many ways .
Permission granted!
Also: “You have to build a new factory here, instead of using your factory in the USA.”
“…and bring all your production tools & equipment, so that we can copy those as well. Our National QA environmental policy is thus fulfilled by reducing the return of containers.”
Great News!!! Now with a little elbow grease perhaps gubmint motors can hit a 10 billion dollar loss 1st. quarter 2010.
GMAC headed for $5 billion loss ~~January 5, 2010:
NEW YORK (Fortune) — GMAC, the troubled finance company that last week scored a third government bailout, said Tuesday it expects to post a record fourth-quarter loss of $5 billion.
The company also said it has decided to try to sell its ResCap mortgage unit, which has lost billions of dollars since the U.S. housing market crashed. Those losses have strained the already stretched finances at GMAC, which is best known as a lender to the troubled U.S. auto industry.
ResCap has been “very much a millstone around the company’s neck,” GMAC chief Michael Carpenter told investors on a conference call Tuesday afternoon. He said GMAC’s board entertained all alternatives for ResCap, including possible bankruptcy filings, before deciding to consider its so-called strategic alternatives.
Asked if he could describe what the alternatives might be, Carpenter replied, “Not really.” He then said GMAC might sell some mortgage assets but added that the GMAC’s plan is essentially “a blank sheet of paper.”
GMAC –> ResCap –> Ditech
Ditech are the ones that told us “People are smart”.
” … GMAC’s plan is essentially a ‘blank sheet of paper’.”
Lol. For years GMAC’s plan has essentially been a blank sheet of paper.
Forty years ago GM OWNED close to fifty percent of the U.S. car market. And then … slowly…something happened …
About fifteen years ago an ex-GM vice president said “GM is making a big mistake but won’t know it for ten years”.
The ex-VP went on about how GM used to be a collection of markets for cars. There was the Cadillac market, the Buick market, the Chevy market, etc. Each car market knew just who its customers were. The Cadillac folks knew what a Cadillac should look like, same with Buick, same with Chevy…
Then, something happened. For example: GM decided it would be a good idea to save money and, say, design one engine that would fit both a Cadillac and a Chevy. The Chevy buyers might have thought this was a good idea, but it’s doubtful the Cadillac buyers did. So GM ended up losing Cadillac’s share of its market to Mercedes or BMW or whoever.
I’m not a car guy so I’m fuzzy on the details, but that’s what I understand is one of the screwy things GM did to kill their customer base.
The oil embargo had a big effect on how cars were built. Both companies and customers forced a major shift in the types of cars that were built. They put “economy” at the head and left almost everything else behind.
It was a completely unnatural move, being based on nothing more than a temporary shortage of oil. It allowed upstart car companies from overseas, who already had some experience in fuel economy to infiltrate the US market.
And WHO caused that shortage??????
The idiot environmentalists delayed the Alaska pipeline for 5 years so then OPEC had a Gigantic window of opportunity to cut off the oil and screw America…
Whoever was at fault , we da peeple made it worse by our knee jerk reaction. Waiting in line at the gas station scared the piss outta us. Our very “way of life” was threatened.
We wanted better gas mileage.. screamed for it. The car companies tried to give the customers what they demanded. Now you can’t tell a Cadillac from a Honda.
I don’t remember if there was any appreciable enviro-movement back in them days.. as I recall people would throw their garbage out of the car window and nobody took much notice. The word “recycling” had yet to be coined..
or the idiot antienvironmentalists fought conservation tooth and nail. Take a look at alaskan oil production and tell me if you think that drillin in Alaska is really a long term solution.
Can’t help but think that any Company that owns a lending division is
going to need a bail-out ,and that might be the reason why GMAC
is needing the bail-outs along with their pension obligations .
Company pension plans should be set up based on profit sharing ,rather than a fixed contract , and Corporations shouldn’t be allowed to underfund them ,with the Government backing those obligations .
The Government has become nothing but a welfare system to the
Corporations foul play while they rob the coffers for short term gain.
Not a good day… wifey and I had our first shout match in a very long time and it was over housing. I think my bubblesit is over.
The only solace is that I got her to agree to a “starter” home.
This might be an ideal time to show her one of the various humor-laden YouTube versions of the Suzanne Researched This commercial.
Muggy — You definitely have to show here that YouTube. It has these delightfully irritating ‘beeps’ that interrupt the Suzanne commercial to give ‘Dave’ a chance to rant. My wife did not watch the YouTube segment, but she was in the room while I did, and complained vehemently every time the ‘beep’ segued into another rant. (I would have made her watch it, but she is already with the program, so the aggravation induced would be wasted…)
Dang Muggy - sorry to hear.
Did you show her that slide?
Another thing that has the greatest impacts are graphs showing delinquency and foreclosure rates - still going way up.
FWIW - at least we’re now through the bulk of the drops, so if you’re going to get back in early, you may be all right, barring a total SHTF scenario.
“Dang Muggy - sorry to hear.”
I’m not happy about it, but I can “snag” a 3/2 for about the same as my rent on a 2/1 and have it paid off in a few years. Look, I avoided the worst of it, but at some point we’ll all need to do what we’ve got to do.
I didn’t realize how batty I was making my wife — then she snapped. I think the 2nd baby and the idea of packing two kiddos into a room pushed over the edge + our house is on a busy road. Worse, all of the rentals we’ve checked out are dumps. There is a 3/2 that we’re going to offer $135k or so on (depending on the inspection).
My wife grew up in a 4,500 sq. ft. bed and breakfast, so she’s tired of our 1,110 sq. ft.
As long as you can afford it, and have a stable job situation, seems like you should be fine.
Whatever you do - if you buy now, and the market continues to tank - do NOT give your wife an “I told you so”. Your life will end up pure misery.
One of the greatest mistakes of husbandkind is to accept the premise that he actually made his spouse batty, and subsequently that he can undo that with greater works.
Blue Skye speaks much wisdom.
I was gonna suggest you hire a maid a couple days a week to take some of the stress out of the Mrs. life but I see it’s not that simple.
It’s no big deal.. that 2nd kid will be graduating from college the next time you turn around, the home you’ll soon buy will have been sold off (as well as the one you guys bought after that) and all this bubble stuff will be but a vague but pleasant memory. Keep the peace. Go with the flow.
Geez muggy tell her she lives in the lap of LUXURY 1100 sq feet fro 4 people…. you would be lucky to get 700sq ft in NYC
so tell her to toss out the junk, or just buy the 8 ft tall metro shelving units and stack stuff to the ceiling to open up more floor space.
Well Muggy, you talked the good talk for a long time, we’re sorry you have to walk the plank. Call it an “ender home” at least, a guy has to keep some dignity in slavery.
The only solace is that I got her to agree to a “starter” home.
Is a starter home better or worse in a state that’s imploding? My guess is worse.
If you’re taking the plunge, might as well try to get what you want … no? (See all caveats re:affordability, FB’er-ism, living in a dystopian society, etc.)
I agree with this guy except on one point: The capacity to deal with the crisis was already not there during the current episode, but through hiding the unmitigated damage, deceptive accounting tricks are enabling the false appearance of a recovery.
The Financial Times
The cause of our crises has not gone away
By John Kay
Published: January 5 2010 20:13 | Last updated: January 5 2010 20:13
The credit crunch of 2007-08 was the third phase of a larger and longer financial crisis. The first phase was the emerging market defaults of the 1990s. The second was the new economy boom and bust at the turn of the century. The third was the collapse of markets for structured debt products, which had grown so rapidly in the five years up to 2007.
The manifestation of the problem in each phase was different – first emerging markets, then stock markets, then debt. But the mechanics were essentially the same. Financial institutions identified a genuine economic change – the assimilation of some poor countries into the global economy, the opportunities offered to business by new information technology, and the development of opportunities to manage risk and maturity mismatch more effectively through markets. Competition to sell products led to wild exaggeration of the pace and scope of these trends. The resulting herd enthusiasm led to mispricing – particularly in asset markets, which yielded large, and largely illusory, profits, of which a substantial fraction was paid to employees.
Eventually, at the end of each phase, reality impinged. The activities that once seemed so profitable – funding the financial systems of emerging economies, promoting start-up internet businesses, trading in structured debt products – turned out, in fact, to have been a source of losses. Lenders had to make write-offs, most of the new economy stocks proved valueless and many structured products became unmarketable. Governments, and particularly the US government, reacted on each occasion by pumping money into the financial system in the hope of staving off wider collapse, with some degree of success. At the end of each phase, regulators and financial institutions declared that lessons had been learnt. While measures were implemented which, if they had been introduced five years earlier, might have prevented the most recent crisis from taking the particular form it did, these responses addressed the particular problem that had just occurred, rather than the underlying generic problems of skewed incentives and dysfunctional institutional structures.
The public support of markets provided on each occasion the fuel needed to stoke the next crisis. Each boom and bust is larger than the last. Since the alleviating action is also larger, the pattern is one of cycles of increasing amplitude.
I do not know what the epicentre of the next crisis will be, except that it is unlikely to involve structured debt products. I do know that unless human nature changes or there is fundamental change in the structure of the financial services industry – equally improbable – there will be another manifestation once again based on naive extrapolation and collective magical thinking. The recent crisis taxed to the full – the word tax is used deliberately – the resources of world governments and their citizens. Even if there is will to respond to the next crisis, the capacity to do so may not be there.
…
PB ..This article by John Kay is well written and is a great summary . I especially like the sentence ……..
“The resulting herd enthusiasm led to mispricing -particularly in asset markets, which yielded large, and largely illusory profits of which a substantial fraction was paid to employees. ”
So much is said in that sentence . Of course the herd enthusiasm was
fostered by easy credit and the fake run up of the real estate bubble that was used to create leveraged money …..and I blame the “Market Makers” for that one . How do you get people to spend money they don’t have ,without raising their wages? You mess with the home ,something everybody needs and is a asset class that you can get big money from .Than you pump this money out by using other peoples money to do it ,so Wall Street/Lenders were the go betweens getting both ends of the transaction fees by this leveraged money .
We all know that the common middle class employee didn’t share in the wealth by wage increase ,yet CEO’s and stockholders ,Corporations and commissioned salespeople were rewarded in a big way . China didn’t pay their common workers enough to become big spenders either . The workers of the World were exploited by the boom ,and we have the most hideous examples of the mis-allocations during the boom which includes cheaply made poisonous products and millions of extra pieces of ugly real estate to show for it . Mis-pricing is the right word to describe how high prices got because of the Ponzi scheme of credit ,not supported by higher wages .
The illusionary profits that Mr Kay speaks of went into someones pockets before someone took the hit for the loss of value ,the current bag-holder, who now has become the taxpayer ,the party that couldn’t afford the darn products and real estate to begin with because of lack of wage increase combined with Global wage competition .
Wall Street /Lenders/Corporations/Insurance Companies got a favorable playing field for exploiting the World and their greed knew no bounds . Shame on the Politicians for trying to rescue a unfair playing field that should of been busted for the scheme of it all .And in the end they make the people pay for their crimes ,and they want to continue with this stacked deck?
I like your thoughts Mr. Wizard.
“Wall Street /Lenders/Corporations/Insurance Companies got a favorable playing field for exploiting the World and their greed…”
My rewrite to smooth the tip of my glass wine in contemplation of your post, Cheers!
“Wall Street /Bankers/Corporations/Insurance Companies got a Lobbied/Bought/Paid financial playground for exploiting the wage slaves and generous bling to adorn amongst themselves and thus shine brightly in their glorious yet humble greed…”
Shakespeare would probably just say…”The pigs entered, wearing silk panties and speaking of their pains & appetites of self importance…”
What think ye Mr. Bear, entertain us with a barb for the MegaBankers of 2010
You crack me up HWY.
“How do you get people to spend money they don’t have ,without raising their wages?”
Apparently it can work for a while, at least up until the point when everyone’s home equity and savings are gone, and many households are generally broke if not underwater to the tune of hundreds of thousands of dollars (like about right now, for instance…).
I saw an amusing commercial about debt consolidation. The commercial was very sympathetic to the debtor receiving collection calls and undergoing various stress. I thought, “Hah, you had a good enough time spending the money, but now that you have to pay it back, it’s all wailing and gnashing of teeth. Of course.”
Then I thought, I’d have no problem if clowns wish to lend other money. I just don’t want to be stuck with the bill when the loans go bad. Which is how the current system works now. Which is completely outrageous.
Of course, the government asserts that lenders are the cornerstone of our economy and thus must be protected at any cost (see the unlimited bailout of Fannie and Freddie). How did this mentality come to be? Why is it tolerated in this country? How have the lending institutions supposedly so completely managed to hold the economy hostage?
While it’s not the only one, lending IS IN FACT a cornerstone of any economy.
How many bills do we pre-pay? Phone? Rent? Any of them? Nobody prepays anything. We’re all borrowing all the time. Transactions are either settled immediately by paying cash or we somehow borrow.. and we mostly borrow.
Borrowing is simply convenient. It usually does cost us some amount of interest, but it’s worth the convenience.
Businesses are much deeper into the borrowing game. They need large chunks of cash at times when they don’t have the cash, which is essentially all the time.
As long as we can trust each other to make good on our promises (to repay) everything runs smoothly. When we can’t or won’t repay or debts things go to hell.
The only weakness with this system, if there is one, is ourselves.
Lenders who lend money to people who cannot pay should die a quick and painful death ….like BK . Of course lending is part of the economy ,based on prudent principals of lending ,not this scheme of making short term money by driving up the price of real estate to create money .
Why should Lenders be protected ,at least why should bad lenders be protected …get rid of them ….reform the systems ……and come up from the ashes ….or else the corruption and stacked decks will
continue and continue . Look at how the financial systems have been contorted in order to try to make the culprits healthy .
neuromance…Your word outrageous is a great word to express the
nerve of the Powers to steal from the public coffers to pay for bad lending ,crimes ,and a total breach of duty of the financial systems to operate anything but a Ponzi scheme of leveraged money . It was bad enough that they were passing off this bad paper rated AAA to various investors ,which is swindling them ,but now they want to swindle the public by making them the bag-holder . Think of how those trillions of dollars could of been used . I say that they should of
busted all the schemes ,reformed the systems, and than given bailouts where it would of counted the most . Oh well ,life goes on .
I say that they should of
busted all the schemes ,reformed the systems, and then given bailouts where it would of counted the most .
Totally. It was the golden opportunity to put us back on a sound footing for the future. The American people would have supported it and endured the sacrifices as we have done many times in our history when faced with crisis.
We would have become Americans citizens first and foremost instead of consumers, Republicans and Democrats. Maybe that’s another reason why they didn’t do it.
Dodd is retiring.
See ya.
Scum.
Who is going to mop up all those campaign contributions from Megabank, Inc once Dodd retires? And as for Dodd, and all his pandering to the bank lobby, not to mention his acceptance of a Friends of Godzilla loan from Countryside, I have to say, “Good riddance. Don’t let the door hit your back side on the way out.”
* JANUARY 6, 2010
Dodd, Dorgan Set to Depart Senate
By PETER WALLSTEN and NAFTALI BENDAVID
Sen. Christopher Dodd of Connecticut, chairman of the Senate Banking Committee and a Democratic Party stalwart in the Senate, is set to announce today that he will not seek re-election this year, according to a party strategist familiar with his plans.
Sen. Dodd’s decision was the latest in a string of big-name Democratic retirements revealed Tuesday as the party struggles to contend with a challenging political climate.
…
The Wall Street Journal
* LETTERS
* JANUARY 5, 2010, 6:58 P.M. ET
Let’s Stop Pretending Fannie and Freddie Serve the Taxpayers
Rarely have I come across more cringe-inducing reading than the article “USA Inc.: After the Bailouts, Washington’s the Boss” (page one, Dec. 28). You assert that with Fannie Mae and Freddie Mac “the administration has put public interest first. It has instructed their regulator to have them administer efforts to cut monthly mortgage payments for millions of Americans to avert foreclosure.”
It seems to me that taking some money from tens of millions of taxpayers to give lots of money to a few million overleveraged homeowners may not be in the “public interest.” When the next politician congratulates himself over this heist while asking us for gratitude, Americans should realize whose interest is really being served.
In addition, erstwhile D.C. insiders who make “private sector” salaries while funding the moochers’ political campaigns also appreciate this public service.
Matt Commons
Jacksonville, Fla.
Till debt do us part…
I am wondering if California might be able to learn any useful maneuvers from the Icelandic response to their debt crisis? Given their stubborn $21 bn budget gap that simply refuses to close, I am thinking California had best pay close attention to how this bagholder identification process plays out for Iceland.
* JANUARY 5, 2010, 8:31 A.M. ET
3rd UPDATE: Iceland Defies U.K. and Netherlands On Debt Pact
By Terence Roth
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)–In a decision with profound implications for his country’s future, Icelandic President Olafur Ragnar Grimsson on Tuesday vetoed legislation to compensate U.K. and Dutch depositors for $5.5 billion in losses from the collapse of Icesave, a popular Internet bank.
The president’s politically charged decision came amid growing popular opposition to the repayment in Iceland, with nearly a quarter of the voting-age population registering disapproval in a signature campaign.
Under Icelandic law, a vetoed bill will now be put before the country in a national referendum, where it is likely to face strong opposition.
Voters in the island nation were concerned that the terms of the repayment agreement were too harsh and risked ravaging an economy still struggling after the Icelandic banking system crashed in 2008. InDefence, which led the petition campaign against the compensation plan, said it had gathered the signatures of 62,000 voters who oppose the legislation.
The veto could complicate Iceland’s bid to join the European Union and to receive further financial assistance from the International Monetary Fund, which has made future support contingent on the debt deal going through.
Grimsson said in a statement explaining his decision that petitions, public opinion polls and appeals by members of parliament and the population registered strong opposition to the plan.
“Now the people have the power and the responsibility in their hands,” Grimsson said. “It is my sincere hope that this decision will lead to permanent reconciliation and prosperity for the people of Iceland, at the same time laying the foundations for good relations with all other nations.”
…
To the posters in CO, does anyone have any personal observations about Bon Travay Development, Inc.? It is billed as “a luxury residential development company operating in Telluride, Colorado?”
Thanks,
AC
AC - you may want to repost this tomorrow in the current bits bucket as early as possible. I’m only here because I’m behind in my reading.