Bits Bucket For January 18, 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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Can anyone give me a snapshot of the market and area around Harrisburg PA? What are the schools like? I may be going to the base there…
Fort Indian Town Gap?
Nice area. Quiet. Amish. Farming. Hershey. Dirt Bikes. Hunting. Hiking. Canoeing. Penn State. Pennsylvania Red Necks.
That is about it.
Housing is pretty reasonable. Schools are pretty good. Private schools not that expensive.
That is about it.
check on schools at greatschools.net
Excellent bass fishing in the river. In August sometimes you can walk all the way across the flats above the Turnpike.
Excellent bass fishing in the river.
Just what I am looking for. Although I am more a catfish guy myself….
I am going to be at Carlye (Spelling?) Barracks where the war collage is…
I am looking forward to this..
No more wonderful Afghanistan ? Congratulations !
Whew! Glad you’re back in the States, Step.
Carlisle PA, home of the classic car show.
Plenty of flathead in the Susquehanna River.
Numerous dams in the river below Harrisburg. Public access to all. Make a few friends and you will find yourself on the Chesapeake.
No more wonderful Afghanistan ?
Sorry to say, I have just returned back from leave. I still have about two months to go before we return..
Take care and we’ll look forward to your comments when you hit the soil in the U.S.A. in March !
All I really know about Harrisburg is that they’re the home of http://harrisburgarearollerderby.com/ . But I’m kind of strange.
The Haiti Thing is truely awful , and they need help .. just make sure you give to a real charity .. The scams are numorous .
The following is true , though it sounds like fiction..
‘Joe’ and his wife & baby arrived at the mission station The week before the quake . A 3 story compound in the port a prince hillside .There are thousands of little mission projects like the one he was with scattered all over the country .
They were in the 2nd floor , when the entire building collapsed . They crawled out , and survived though most of the 30 or so folks in the bottom floor did not . The next 4 desperate hours consisted of digging out those he could . He happened to have $6000. in American mission cash strapped to his middle . Missionaries do that ,the cash isn’t safe anywhere else , and he had just arrived with it in country . By midnight , the money was all gone . In the American way he somehow hired a rig to transport the most injured to medical facilities . the problem was , the hospitals were destroyed . Impromto road-blocks thrown up by enterprising citizens took a lot of it , his cash . The Haitian Clinic that they finally found still standing took the rest , $$$$$ first , before we treat you.
Possibly nowhere in the USA , except New Orleans , would that kind of thing take place like that, the selfishness in the face of distaster . Our culture really is a lot better , when the chips are down .
Poverty makes people do desparate things.
An off topic question…
Does anyone have any idea why - geologically - the earthquake damage seems to be so localized?
Haven’t heard any reports of damage from the Dominican Republic or nearby areas.
google “inverse square law”
The island is 400 miles long.
I read somewhere that the epicenter of the earthquake was 1 mile below ground surface. The closer it is to the surface the worse the affects are. Sorry can’t provide a link.
Just read Jared Diamond’s “Collapse”
long, but interesting. lots of case studies.
Dominica - Haiti is included.
He attributes the different outcomes to the more enlightened dictators in the DR in the last half of the 20th century - especially Re: nature conservancy.
Curiously, Haiti started off as the much wealthier of the two.
Interestingly, the value of all the combined exports of North America in 1790 was one tenth the value of the sugar exported from SAint Domingue (what we now call the island of Hipanola).
HAiti was the first (only?) slave colony to achieve independence. My son goes to Rochambeau Middle School in Connecticut. There is a big Mural in the auditorium depicting the General and his army encamped on his way to meet up with Washington, and eventually encircle the British (we always refer to them as “the British”, back then everybody considered themselves British- the enemy was really the Redcoats.)
In 1803, Napoleon sent Rochambeau out on his last military commision - exterminate all the Blacks and Mulattoes on Hispanola and replace them with new slaves that didn’t know anything about “the rights of Man”. Everyone got yellow fever and Haiti kept its independence. Napoleon was forced to sell the Louisiana Territory to finance his invasion of Russsia.
How come the Dominican Republic, which shares the same island with Haiti, isn’t also a failed state?
Building codes addressing seismic loads don’t exist; in cases where other (European or American) codes were followed in the design and preparation of construction documents the builder ignored the drawings and followed local practice.
Also contributing to the damage is the soil characteristics.
For example, I was in the middle east for a while, I saw two guys saw the uni-strut like legs off a desk and use two of them as lintel reinforcement in an otherwise unreinforced masonry wall.
The island of Hispaniola was once the richest of the sugar islands and made fortunes for the European masters. IIRC after the French and Indian War the Brits considered swapping all of Canada for Hispaniola with the defeated French. Hispaniola was considered that rich a resource.
1) All earthquake damage is local (but less so in proportion to the magnitude of the temblor).
2) Especially that which occurs on an island country.
3) The damage may be less local than it appears through MSM reports, given the likely absence of a fully-developed modern communications network in the Western world’s poorest country.
Maybe that’s where the Haitians signed their deal with the devil that Pat Robertson alone seems to know about.
http://www.msnbc.msn.com/id/26315908/vp/34853881#34853881
According to this guy - the Haiti Ambassador to the US - it did happen and it was a good thing. See around 2:40
“Maybe that’s where the Haitians signed their deal with the devil that Pat Robertson alone seems to know about.”
What a senile rip off artist he is. He gives religion a bad rap.
According to this guy - the Haiti Ambassador to the US - it did happen and it was a good thing. See around 2:40
Believe it or not, Haitians can be ironic too. I believe this would be an example.
This is hurricane country, so they tend to build with heavy materials, and tropical weather means saturated soils. It’s a terrible combination for seismic activity.
that and rebar being too expensive.
I saw a lot of rebar poking out of shattered concrete in the news photos. But junk construction is junk construction.
“I saw a lot of rebar poking out of shattered concrete in the news photos. But junk construction is junk construction.”
Hehh hehh hehh…. Those reinforced CMU cells should be filled with grout and the dowel embedments glued into the base slab with adhesive….. otherwise the reinforcing does NOTHING….. But I noticed the same thing.
Proof-read please, hello?
Our culture is better because we have wealth. Don’t fool yourself. The day that wealth goes away our culture goes 3rd wold ASAP.
i think the opposite.
We have wealth because we have a better culture.
Living off the capital built up from free markets long ago. Politicians at all levels of government have gone great strides toward removing individual freedom to provide more security.
I’m gonna hop on a plane in a couple weeks.. can’t pocket my little Swiss Army knife with the scissors and tweezers. Guns and ammo has to go in checked baggage.
Other than that, my freedoms seem to remain intact.
Including the freedom not to be spied on by the government, the freedom to have your assets wherever you want to keep them, the freedom to keep what you earn, the freedom to associate (or not associate) with whomever you want to?
You must live in a different country than I do.
Oh, I forgot: the freedom not to be arrested without a warrant, held without bail or a trial, and/or tortured, all on the basis that you are an “unlawful combatant”?
Tweedle-dee and tweedle-dum will naturally propagate contradictory positions on every issue.
I think we have weath because we have Fannie and Freddie and AIG.
Might have something to do with a huge chunk of pristine, resource rich land we got a couple hundred years ago, too.
Russ.. ever check out the natural resources in Africa?
Perhaps an even better comparison than Africa would be Latin America, whose mineral, petroleum, ranching, logging, and agricultural resources probably exceed those of the United States (although Canada obviously has a lot of resources as well).
In both N. America and S. America, indigenous peoples were conquered by invading Europeans, and it goes without saying that there has been plenty of inequity in various forms in the U.S. throughout the years, but by and large because we allowed an enterprising working and entrepreneurial class to flourish alongside our aristocracy, we’ve been in much better shape for it. Much of Latin America still seems to be in the Robber Baron phase, IMO.
Guys, guys, we have wealth because our political system allows us to pursue our passions in an almost unlimited fashion. We have a rule of law that allows the lower classes near equality with the upper classes. I know its not perfect but its a lot better than a vast majority of the other countries.
How else can you explain the difference between the US and Mexico? If you can go down to the border and on one side you have relative wealth and on the other side you don’t. The only differences are the governments on each side of that fence.
The only differences are the governments on each side of that fence.
Agreed. Just drive down I-19 into Nogales, Arizona. Third world vista on the other side of the valley will take your breath away.
This country sure isn’t perfect, but I’ll take this side of the border any day.
it has a lot to do with a large middle class. if you look at mexico, it more or less looks like only the rich calls vast mjority of the shot. what else do you think is the main rule: protect the status quo and increase their control. ever wondered what our society woud be like if we continue with the current trend?
Realize that, given similar situations, Americans act the same way! As soon as it’s obvious that there’s no law enforcement, either by police force or community pressure, Americans will revert to anarchy.
This ranges from looting during a blackout, to setting fires after unfavorable court decision in LA, to millions of people fraudulently claiming the “first time home owner’s tax credit” which has now cost tax payers nearly $1,000,000,000. In each of these cases the communities either look the other way, or openly support the transgression.
Our culture is better because we have wealth. The day that wealth goes away our culture goes 3rd wold ASAP.
Eddie,
I would expect someone believing this would take positions supporting the working poor and the vanishing middle class rather than positions supporting banks, outsourcing and the concentration of wealth.
If wealth enables culture and most American culture emanates from the “average” American which it has historically, then it’s the average American’s wealth that needs to be nurtured in order to protect our culture.
Very good points Rio . A big and strong middle class is a protection against all kinds of evils .You step on the great middle and upper middle class of America and you destroy America IMHO . The rule of law and the creation of somewhat fair business practice and
fair wages went a long way toward building that middle class .
Possibly nowhere in the USA , except New Orleans , would that kind of thing take place like that, the selfishness in the face of distaster .
I hope I didnt misread what you wrote, if I did, I apologize, but, Why single out New Orleans? I am sort of insulted by that, even though I am not from NA. What you have described is human nature. In our bubble world, protected by (gasp) the police and military, we seem to forget that nature is unforgiving, and when the chips are really down, the strongest always wins. It is the way of nature to ensure the strongest survives. Nature doesnt care that you love or have feelings. What is happening in Haiti would be no different if the same collapse in society happened here. The only difference is, could you protect yourself?
I agree with you Stpn. We better be taking notes when we watch what is happening down there. I see this recession turning into a fullout depression within the next 3-4 years. The gov’t can only tax the people so much before they revolt. I may be a pessimist but at least I will be prepared.
“I see this recession turning into a fullout depression within the next 3-4 years…”
Oh fer cryin’ out loud. Look around; the economic decline is over. Even RV manufacturers are rehiring people they laid off in the last two years. RV’s represent the ultimate in discretionary spending.
No we’re not back to the economic levels of 2004-2005, and it will be some time before we get there. But the direction is up. Will there be another recession down the road? Of course.
Oh fer cryin’ out loud. Look around; the economic decline is over.
Wow, Bill…surprised to hear a long-time regular say something like this. Not disputing it..just don’t think I’ve heard such a statement from anyone else here besides Eddie.
drumminj
I took a stab at packaging up the JTE to offer it for download on my comment search page, but it failed to work after installation.
What happened to your hosting?
“Oh fer cryin’ out loud. Look around; the economic decline is over.”
Eddie said much the same thing in a thread the other day; I posted a response but the thread was already a little cold. Anyone want to take a stab at this?
(From Value is in Vogue, Jan. 12):
I think even a lot of us housing bears predicted that housing would rise (at least temporarily) given the government’s fluffing the market like a porn star. But as to the economy being out of the recession, we’ll just see about that one, kimosave.
With housing still in the crapper, massive unemployment, gov’t debt, and commercial RE about to hit the fan, let’s see if you’re singing the same tune in 6-12 months. This blog has predicted everything to a tee thus far.
Bill - I hope you and Eddie are right, but I am fairly sure you are wrong.
Less total # of employed Americans in 2009 than in 1999 despite population growth (legal & otherwise). $2000 decrease in median household income in 2009 than in 1999. This is just a start.
But, really, just ask yourself, when has any country solved its debt crises by printing more and more money? We get away with it longer than most because we are the only superpower and have the “reserve currency.” But it won’t last. The fact that the banksters have so many profits they can’t give enough to their leadership while 20% of the country lives on food stamps tells you how the government’s solution has been perverted.
If printing money was really the answer, everyone should get $500K or $1M “electronically” created into their bank accounts and all of our problems would be solved, no?
“If printing money was really the answer, everyone should get $500K or $1M “electronically” created into their bank accounts and all of our problems would be solved, no?”
Rich, rich, we’ll all be RICH!
Wait—let’s do it one better, and just make every American a Billionaire! I wonder what that would do to the price of a loaf of bread.
It should all work fine, right up until we have to buy something form the rest of the world—like say, a barrel of oil, maybe.
“The gov’t can only tax the people so much before they revolt. ”
Check by the end of the day on Tuesday. Massachussetts is probably going to get the 41st Republican senator. If you don’t think that’s part of a revolt, then I don’t know what to say.
I am going to assume that Bill from Carolina (not to be confused with the other Bill) is being sarcastic. There is no way I am believing that the economic decline is over. The propaganda machine can’t feed me enough MDMA to make me believe all is well.
To the other Bill, I don’t think that I consider that a revolt. Both parties work for whomever lobbies the most. There needs to be a change in the system. I don’t think that we have enough choices, we can’t keep choosing between Beavis and Butthead forever.
Bill,
I store my boat at an RV dealership in winter. I go by there every couple of weeks or so to make sure all is well with it. The number of people in the showroom has gone from 0 to a steady stream over the past few months.
The two party system is not the problem, it’s entrenched corruption and citizen apathy. If Mass voters go against their own state machine it is because they want to throw the bums out. I’d call it a start.
We’ve had an era when the only career ending move was personal sexual scandal (queue lavi d’s graphic). I’d welcome an era where poitical and financial corruption was the career ender.
True about that: One party tells the truth that it wants to see a socialist America. The other large party says it wants small government but lies and does the McShame compromise to vote for socialism. The sheeple voters in MA obviously do not like the overtly socialist talk and walk from the left. They are endorsing the capitalist talk from the right, which tends to be the socialist walk. But even though the voters will likely be fooled again, their heart is into the revolution.
At this point, I see two things as equally attractive: Vote Libertarian or don’t vote at all.
Lately I have been leaning to just not vote. There are voluntaryist web sites explaining the advantages of not participating. Also Harry Browne in “How I Found Freedom in an Unfree World” explains it well. I like the HB sovereign individual principles more and more.
True about that: One party tells the truth that it wants to see a socialist America. The other large party says it wants small government but lies and does the McShame compromise to vote for socialism.
One party is honest, the other is dishonest. That’s pretty big in my book.
One party is honest, the other is dishonest. That’s pretty big in my book.
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHHA!
take it up with Bill in LA. He said it.
It’s the truth though.
Note that honest thieves are still thieves, and therefore subhuman.
Sounds like Eddie better buy new bigger boat soon or he will be priced-out forever.
Count De Monet - Sir, the peasants are revolting!
King Louis - You said it. They stink on ice.
23′ is big enough for now for lake boating. If I ever move back to the coast I’ll upgrade to something bigger.
I think it’s possible. But note Harry Dent predicted a depression to start in 2009. He could be a year late.
If he’s five years late, as your prediction, I would be in a more financially secure position. I would move to Tucson where I could get a place to rent even cheaper than Phoenix and be able to live comfortably without a job for ten years. That will be plenty of time for me to work on my dream entrepreneurial projects in computer software.
http://www.lewrockwell.com/poe/poe1.html
If a major earthquake were to hit Los Angeles, we would see some horrific scenes (although the MSM would do its best to avoid showing anything that would suggest LA has become a Third World dystopia). Most LA residents probably haven’t lifted a finger to prepare for such a disaster. Given California’s pro-criminal gun control laws, fewer still would have the will or means to protect themselves or their neighbors against the malevolence that would flourish during such a cataclysmic event.
LA, even more than SF, on their older building structures did a massive re-enforce job in mid 80s to better withstand quakes. I was in one of the older buildings that received the retro fit during a large quake 10 years later and not a crack. Never would have believed it had I not seen with own eyes. So often we see these massive build jobs that are ineffective and money wasting, but not so with the LA building codes/retro fits in the 80’s and 90’s. Occassionally local municipals get it right.
I have an arsenal, foodstock, water all saved up. Might get some solar panel and a windmill. Have basic first aid stuff as well. Several orange and lemon trees too.
I’ve also aquired a safe.
I’m ready man. Trying to build a scilencer for my Rem. 700. Hate to make it easy for people to figure out where the shots are originating. Have a contact that can get me a M60… probably should take him up on it.
Personally think it’s going to be zombies that try to over run us. Not sure I’m ready for that. Will try to cut a path to the marina and escape by sea. Not sure what the zombies will be like. Trying to convince the wife we need some body armor and a couple Katana’s this year. Probably a sugata.
Then I’m ready!
http://www.zombiehunters.org/
Yes, never underestimate the threat of a zombie outbreak. Although in LA you might have a hard time picking them out from the normal scenery.
I’d echo some of your preparedness. Didn’t have a chance to go for boar this weekend, but it gave me an excuse to get more ammo.
Also convinced the lady that, from the looks of NO and Haiti, nobody is coming to help if there’s an earthquake here in the SF Bay. So yesterday, we got extra food, those big blue containers for water, extra propane and a lot of salt to preserve our game when the power goes out.
IIRC, just before the ‘89 Loma Prieta ‘quake, there was an “unlocking” of the CA fault systems that began with small temblors around LA, then a larger one up north which just happened last week. And I think that a 60% chance of an earthquake in the next 30 years is a high enough probability to get most people off of their duffs.
Not making silencers of buying body armor, but we are getting somewhat prepared for a localized disaster (and I would like to know, out of curiosity, where and if one can purchase Level-IIIA).
MrBubble
P.S. I was also shocked at the non-Eddie reports of “green shoots” It’s raining like a mother here, but the only green shoots are in my garden…
I play Killing Floor everyday to prepare for oncoming zombie infestation. Remember, headshots on zombies deal triple damage.
You need a NFA class 2 manufacturers license to make a silencer.
Sammy, when I lived in Florida, Katrina hit us before it hit New Orleans. It was a weaker storm before it entered the Gulf of Mexico, but still whalloped us pretty well — lots of damaged cars, houses, roofs, trees, etc.; enough so that you think people would do at least MINIMAL preparation for the next storm.
Sure enough, Wilma hit us a month or so later, even harder than Katrina. A day or two after the storm, I saw people on TV waiting in a two-hour line for freakin’ water! Wilma didn’t sweep houses into the ocean or anything like that to where these people would have lost emergency supplies; they didn’t have them in the first place! Obviously, nobody in the U.S. is too poor to store a couple gallons of water, nor should they be too stupid after Katrina whacked us. They were simply too freakin’ lazy depending on the gubmint for everything!
That episode scared me a lot — just wait until something really big hits us.
“They were simply too freakin’ lazy depending on the gubmint for everything!”
That’s pretty amazing—hard for me to fathom not being prepared if you live in a place where you should expect hurricanes.
I had never thought about it like this before, but I wonder whether this could be considered the “moral hazard” or unintended consequence of FEMA? Maybe because the government steps in at any crisis, people think they don’t have to prepare for it themselves?
Personally, I think that any society is better off without those who lack an instinct or will for self-preservation. Even after the saturation news coverage of Hurricane Katrina and now Haiti, where the consequences of households not being prepared with stocks of food, water, medical supplies, and other basics, not to mention firearms, most citizens in quake zones like LA are so complacent that they won’t make even the most basic preparations for a man-made or natural disaster. Which will make the job of emergency responders and relief efforts that much more difficult.
Dude that’s sick and twisted. And I like it.
“It is the way of nature to ensure the strongest survives. Nature doesnt care that you love or have feelings. What is happening in Haiti would be no different if the same collapse in society happened here. The only difference is, could you protect yourself?”
Scientifically this is entirely wrong. The largest ant colony in the world is cooperative… sharks, bears, and alligators are physically superior to a humans, but what about 50 humans? Or 500 humans? Or 5,000,000 educated humans using tools?
Is it really the strongest that survive?
Hehe, I said “tools.”
Is it really the strongest that survive?
Intelligence matters, too. Success favors the prepared.
You nailed that one, Steph! Well said.
Our melting pot culture was, in large part, formed by people who ran away from various backward cultures like that in Haiti. It makes sense that we are different.
People get the govt they deserve. Haiti got papa doc and baby doc Duvalier.. nuff said.
People get the govt they deserve. Haiti got papa doc and baby doc Duvalier.. nuff said.
We got Bush/Cheney and Obama/Biden. ‘Nuff said.
“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.”
– H.L. Mencken (1880 - 1956)
Been there, done that (2000-2008)…
I’ve know Haitians who’ve decided that their future is brighter in this country. Some of the sweetest and most go-getting people I’ve ever known. We’re very fortunate to have them here.
No disrespect to New Orleans , I was just remembering the Super-dome mess .
We live in the deep south .In SC . I really do believe our Civilized culture is more sharing , and across all ethnic lines too . Especially in the crunch situations .
“Joe’s ‘ story continues .After 36 hours without food or water , they were evaced by mission personel from 5 hours away . Joe sent his family back to the USA , but he himself returned to the destroyed compound to help . In a strange twist , he is now being hounded and threatened for Cash by the relatives of those locals who died on the bottom floor of the compound . You see , they know about him bribing his way out the first evening , and they assume he has more $$$$$$.
In hindsight , he perhaps should have preserved his available cash , for later on . It really is a different culture .
How come the Dominican Republic, which shares the same island with Haiti, isn’t also a failed state?
I have a best friend from the DR. They view Haiti as an appendage. While their economy isnt good, it better than Haiti. From what I understand, DR also doesnt let alot of Haitians immigrate either.
I really do believe our Civilized culture is more sharing , and across all ethnic lines too.
If it’s all the same to me, I will cling to my guns when others come wanting me to share.
i think the opposite.
We have wealth because we have a better culture.
If that makes you feel better. The Romans probably felt they had culture as well.
I must apologize for my cynical nature. To think that someone wouldnt hurt or kill you to take what you have in the absence of civil authorities and society is…. well….naive.
In hindsight , he perhaps should have preserved his available cash , for later on . It really is a different culture .
Which suggests bribery and corruption. I really hope Haiti can get it together. The news says they were actually on the way up. The country was semi stable and actually making some jobs in manufacturing (of all sectors). Now it seems the president is absent and not responding well to the crisis.
Being the conservative I am, I am actually pleased at the world response. Seems everyone was sending aid. Plus, the world renowed 82nd Airborne is on the ground! All they need is security, and then we can let the aid agencies do their jobs…
I don’t think the US has really been tested yet. Katrina, as bad as it was, will pale in comparison to what will happen when the “big one” hits the LA basin or the SF Bay Area or a Cat 5 hurricane hits NYC.
There is just no way to prepare for the aftermath of such a calamity. So long as people cluster in dense urban areas, the probability of carnage on a epic scale exists, as does the inevitable blame game for the failure of government to protect us from our follies.
Correct assumptions, in my book, Spoke. I remember a few years ago when the electricity was out around here for just 5 days or so, and the water had quit flowing through our city pipes, and I had stopped at a gas station to get a few more bottles of H20 which they had just brought out to sell at a slightly inflated price. People came in and began physically fighting over some 2L bottles of water to mix their babies’ formulas. Guess what ? I handed my two bottles over to the “lady” nearest me and climbed back into my car and took off. I was just trying to add a few more bottles to replenish my supply which I had wisely put aside the previous few years, and certainly wasn’t going to fight it out….so much fun. I think the body count will be nearly 50% should there ever really be “The Big One”. Romans kidded themselves for about 500 years or more about the soundness of their civilization, and I believe that we do, too.
Romans kidded themselves for about 500 years or more about the soundness of their civilization, and I believe that we do, too
Hey, if you can get 500 years out of it…
And the more we reward laziness, incompetence, and complacency, the worse off we’ll be. It’s not a matter of if, simply a matter of when.
Does it have anything to do with quality of construction? As I understand it, Haiti was deforested quite a while ago, so a fair number of their buildings were unreinforced masonry (weak, inflexible, and heavy).
I’m guessing construction quality had a lot to do with how bad the damage was, but location was the most significant factor as to why the DR didn’t have many problems as compared to Haiti. I lived about 50-60 miles away when Loma Prieta hit. To us, it felt like about a 5.0 (only 2.0 on the scale, but about 900x less energy released than a 7.0). Only minimal, if any damage where I lived.
umm, I seem to remember looting during Katrina?
I just sent a check to the relief agency I went with for post-Katrina reconstruction. I know for a fact that this outfit is good at handling donated money.
200 Bank Failures Expected in 2010
Martin D. Weiss, Ph.D. ~excerpt~ Money&Markets
Washington has so thoroughly botched its supervision of the banking industry that 200 banks are likely to fail this year — easily surpassing last year’s 140 bank failures … inevitably involving the greatest bank losses in history … and already costing the FDIC ten times more than the great S&L and banking crisis of the 1980s did.
I am not basing these conclusions on conjecture. They come straight from official sources. Specifically …
In her testimony before the Financial Crisis Inquiry Commission on Thursday, FDIC Chairman Blair attacked the Fed under Greenspan for causing the housing bubble and subsequent debt crisis with its highly stimulative, low interest rate policy of the 2000s.
She slammed virtually all of Washington for allowing banks to establish a huge, high-risk “shadow banking system.”
And she made it abundantly clear that, without sweeping, far-reaching reforms, we risk another devastating debt crisis.
Each of her conclusions is abundantly obvious and thoroughly documented. What she did not mention, however, are the following equally obvious facts:
Obvious fact #1. The Fed under Bernanke is now pursuing an even more stimulative, lower interest rate policy than it did under Greenspan, threatening to create even larger bubbles and more devastating busts ..
Obvious fact #2. In just the last two years, between bank bailouts and easy money, Washington has done more to encourage the growth of the shadow banking system than in all previous years combined, and …
Obvious fact #3. Despite all the talk and testimony, the nation’s powerful banking lobby virtually guarantees that, in the absence of another Wall Street meltdown, the chance of sweeping reforms is virtually nil.
There were more than 200 failures every year between 1986 and 1991. In 1989 alone there were 520 failures.
Eddie, no one here wants this kind of reality check. Doom and gloom only please.
You know, you can kiss my ass. Nobody makes a bigger effort to stay positive than me, and this is my blog. What’s gloomy about affordable housing? This crap is semantics. And if the economy is doing well or not, that’s independent of what anyone “thinks.” But what is the long term fall-out from the biggest asset mania in the world? Well, pardon me for pointing that ‘reality’ out.
I like your anger, Ben.
Did all of the big banks fail back in the late 80s and early 90s? They sure did in 2008. They are still failed. But through the use of chicken wire and hay bails we are trying to hold them together. Fannie and Freddie failed and are now failing even worse as they are intentionally taking on bad loans. The same can be said of FHA. Just ask Barney “well, we have to make bad loans” Frank.
The failure of EVERY one of our largest financial institutions is now being hidden by The Federal Reserve. Of course The Fed is starting to more closely resemble the Alamo. They are being attacked on all sides to reveal the dark secrets hidden within their walls. What happens if this battle precludes them from being able to finance our 1 trillion plus dollar deficits? KABOOOM!
A civil war is being played out right now. It is the government versus its citizens. The weapons are financial. Was that going on in that late 80s and 90s? I don’t think so.
Second Lieutenant Eddie can rush all the pillboxes he wants. Bill in Carolina can join him. To mock people for being scared in this environment is beyond classless. There are so many bombs waiting to blow up it is hard to imagine a safe haven.
Good luck to Eddie and Bill. Many of us on the HBB do have money in different markets. We just aren’t willing to tell others to dive right in.
‘And if the economy is doing well or not, that’s independent of what anyone “thinks.”’
The people in the world who pay attention to the economic situation fall into two camps:
Those who believe an objective economic reality exists independent of expert opinion, and those who accept the delusion that whatever the ‘experts’ say somehow determines economic reality.
To which camp would you prefer to belong: The objectivists or the delusionists?
You know, you can kiss my ass.
ROTFLMAO! Tear ‘em up, Ben!
I don’t even bother correcting the delusional morons who claim the economy is coming up roses again. This false “recovery” paid for with trillions of borrowed or printing press greenbacks is doomed, and harsh cold reality is about to impose itself. After which these jerk-offs will happily drop out of sight.
Affordable housing itself isn’t gloomy, but it appears that the path on the way to affordable housing is gloomy indeed. I’m thinking of the tent cities in public parks in California, and the poor lining up for charity health care in animals stalls at state fairgrounds in rural Virginia.
“Of course The Fed is starting to more closely resemble the Alamo.”
More like Waco…
Eddie, Bill, and other hopium smokers don’t care about how many must be sacrificed to get back to “housing only going up!” again.
Smoooooooooooooooch! lmao.
Get kissin’ boy!
not for anything, but I don’t think it was you that was invited to kiss the royal patoot.
Are you jealous?
You know, you can kiss my ass.
I *heart* Ben Jones.
So exactly where are the shantytowns popping up all over America due to this great economic cataclysm? Everywhere I go I see nothing but prosperity, people driving new cars, eating at restaurants, drinking in bars, going on vacation, wearing new clothes, talking on new smart phones, attending expensive sporting events.
If that’s the definition of your depression, fine by me.
“So exactly where are the shantytowns popping up all over America due to this great economic cataclysm?”
Some of them went underground. Of course, high rollers who spend all their time in the Sin City at the poker tables could understandably miss this detail…
Everywhere I go I see nothing but prosperity, people driving new cars, eating at restaurants, …
…living in tents.
“…living in tents.”
Form the article:
The city will shut the tent city as soon as early October because the tents sit on what will be a parking lot for a complex of shelters and services for homeless people. The complex will include a men’s shelter, a women’s shelter, a family shelter and a resource center.
When I read that, I heard someone singing in my head:
“Paved Tent City, to put up a parking lot.”
How far away is Athens from Atlanta, Eddie?
From the linked article:
‘From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.
Nearly 61 percent of local and state homeless coalitions say they’ve experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report’s release in April, with foreclosures mounting, gasoline and food prices rising, and the job market tightening.
“It’s clear that poverty and homelessness have increased,” said Michael Stoops, acting executive director of the coalition. “The economy is in chaos. We’re in an unofficial recession, and Americans are worried, from the homeless to the middle class, about their future.”‘
“Paved Tent City, to put up a parking lot.”
I know the article’s old, but even if these people are not in tents, they’re far from “Everywhere I go I see nothing but prosperity, people driving new cars, eating at restaurants…”
LOLZ again Bear.
Homeless advocacy groups are claiming there is a “crisis”?!?! State officials saying they need more money?!? Say it ain’t so Bear. That must be news. Because as far as I can recall homeless advocacy groups usually say everything is fine and nothing to worry about. And state officials never go begging for more tax funds to solve all the people’s problems.
Next thing you know teachers unions will claim there isn’t enough education spending, even though the US spends more money per student than any country in the world.
And people living in tents…that’s new too. Why pre-2008 there wasn’t one homeless man, woman or child in the country.
You cannot be this gullible man.
Here’s a NY TIMES story from 2001…about a TENT CITY. Imagine that.
“PORTLAND, Ore., Sept. 6— As one who calls himself both homeless and a resident of the tent city known as Dignity Village, Ibrahim Mubarak has gotten used to moving along.
Now, though, as they erect their camp with its large yellow Dignity Village flag yet again, they are doing so with official sanction. In an unusual move that has stretched the definition of public services for the homeless, Portland has provided a patch of land for the tent city and put in a water hookup and portable toilets.
The site is no paradise. The new Dignity Village is a fenced-in block of asphalt in a corner of the city’s leaf composting operation, just a few hundred yards from a runway at the Portland International Airport. On the other side of the tents is a state prison. “
even though the US spends more money per student than any country in the world.
Why would one deride this fact but defend the same situation in regard to inefficient per capita health care spending?
Because of lobbying influence or lack of critical thinking? Or both?
Bad news for the Las Vegas storm drain dwellers:
Heavy rain, possible flooding forecast for West Coast
January 18, 2010 — Updated 1653 GMT (0053 HKT)
Recent burn areas, like this one in California’s San Gabriel Mountains, are vulnerable to mudslides when rain is heavy.
Recent burn areas, like this one in California’s San Gabriel Mountains, are vulnerable to mudslides when rain is heavy.
(CNN) — Heavy rain and snow were falling over California on Monday, the first round in a series of storms poised to pummel the West Coast this week, bringing potential flooding and mudslides.
The El Niño-type storms forecast for the West could dump up to 6 inches of rain in some areas, according to CNN meteorologist Rob Marciano. Rain began falling Sunday night and was continuing Monday. A second round was expected later Monday night and Tuesday, with a third coming late Tuesday and into Wednesday.
In mountainous areas, 2 to 3 feet of snow is forecast. Heavy snow was already falling Monday. The storms are fueled by what is seen as a very typical El Niño pattern.
Flash flood watches were already in effect in southwestern California on Monday morning. The National Weather Service said coastal areas could experience 1 to 2 inches of rain near the coast and 2 to 4 inches in the foothills and mountains through Monday night. Maximum rainfall on some southwest-facing slopes could reach 8 inches, forecasters said. The rain could trigger mudslides, especially in recent burn areas.
The news is not all bad, forecasters said. The rain will help with severe to extreme drought conditions in much of California, and help build the snowpack in the Sierra Nevada.
However, areas like Las Vegas, Nevada, and Phoenix, Arizona, could see 3 to 4 inches of rain — rainfall such areas are not equipped to handle, Marciano said.
…
“There were more than 200 failures every year between 1986 and 1991. In 1989 alone there were 520 failures.”
From 1943 - 1980, the average is under 10 bank failures per year. Seeing 200 bank failures per year is a big deal, if not unique.
Are you suggesting a parrallel between these 2 periods?
From 1943 - 1980, the average is under 10 bank failures per year. Seeing 200 bank failures per year is a big deal, if not unique.
Lets take this into context. Were there more banks in volume in the later years as compared to the early years (as in more physical banks)? Were the ealier failures due to bad loans and an economic meltdown?
No I am saying between 1986 and 1991 there were 200+ failures. Then the 10 years after 1991 were very prosperous and the banking industry did not collapse like many of you here wish for.
Conclusion: this is much ado about nothing, although it lets the MSM produce some nice scary headlines that without context seem to spell disaster.
Did the FDIC go broke between 1986 and 1991? No?
Going in to 2010, it already is. Yet another area where we are simply printing and papering over.
Why is it so difficult for people to understand that printing money, instead of saving & collecting money, is an economic death sentence?
“…the banking industry did not collapse like many of you here wish for.”
Based on its own merits, the banking system did collapse. Only government & fed reserve money saved it. If a bus driver caused a fatal accident, would you want that driver behind the wheel again?
I don’t want a collapse. I want new drivers for the economy.
I’ll try again:
1986-1991 - 200+ bank failures a year
1992-2007 - general growth and prosperity, economy stabilized, then boomed. Banking sector quite alright .
2010: 200 bank failures = not end of the world.
It’s not hard people.
In 1986 there were over twice as many commercial banks in the U.S. (14,300 then vs. 6,800 now). So 200 failures per year in 2010 would be roughly equivalent of 450 in 1987.
P.S. the rate of bank failures is still rising.
“2010: 200 bank failures = not end of the world.”
I actually agree, Eddie: it is not the end of the world.
However, the S&L crisis was a drag on the economy for many years, and this time is much bigger; thus I don’t think it’s a stretch to think that it will drag longer or harder, or both.
In 1989 there were 520 failures. The US population was 250M. That’s a failure rate of 1 bank per 480K people. The population in 2010 is around 310M. If there are 200 failures this year that would be a rate of 1 bank per 1.55M people. So on a per capita basis 2010 is 30% what it was in 1989.
It’s really not that hard folks.
Sorry Eddie but get a clue. The fact that there is more population is relevant. What’s relevant is the number of banks, which was over twice then what it is now.
In other words - even though less banks are failing - each bank is on average 3 times bigger than they were in the late 1980’s. So it takes 1/3 of the number of bank failures to make an equivalent impact in terms of number of people affected, or about 1/2 the number of failures to make an equivalent impact in terms of percentage of population effected.
Yeah, but the banks are much larger now than in the late 80s bubble. Also from the history of that last bubble, bank failures tend to significantly lag the bubble bursting.
Some of the econblogs have lots of data on this.
There were more than 200 failures every year between 1986 and 1991. In 1989 alone there were 520 failures.
The total NUMBER of bank failures is not really that relevant of a metric. Why don’t you compare the scale of the two period in terms of total assets, total deposits, or total losses to the FDIC of the failed banks?
Answer: the two periods are quite comparable in terms of the metrics that actually mean something. In other words, the banks failing now are on average larger than the banks failing during the S&L crisis.
There were more than 200 failures every year between 1986 and 1991. In 1989 alone there were 520 failures.
Between 1986 and 1991 there wasn’t $2+ Trillion per year of government and Fed propping either - nowhere even close.
The piper must be paid.
P.S. check this out - http://en.wikipedia.org/wiki/Largest_bankruptcies_in_U.S._history#Largest_bankruptcies
Of the top 10 - how many in this downturn? Six (already). How many in the late 80’s downturn? Zero.
…the nation’s powerful banking lobby virtually guarantees….the chance of sweeping reforms is virtually nil.
Meaning.. banks will continue to prosper and, in the near term, we should invest in the financial sector?
BofA and Citi got two of the biggest government bailouts known to man. Their stocks are still a shadow of their former selves. With the way sentiment is running I believe another bailout would force the government to first wipe out all equity holders.
What part of those TBTF banks will you be investing in?
At your own peril.
Weiss has a couple or three investment newsletters. One is “Safe Investment Guide” or something like that. He’s generally conservative and has been known to be among the few who had accurate insights, especially when cautioning about dangerous situations.
Since he appeared to draw no conclusion in the above article, other than that it’ll be business as usual for financials. I’m asking.. What’s his view? What should an investor do assuming Weiss’s opinion is accurate?
Last year, Mike Larson (of Interest Rate Roundup fame) co-authored a very good Weiss Research white paper called “Dangerous Unintended Consequences.”
The predictions laid out in that paper have been pretty accurate.
One thing in all this; the FDIC has told a bunch of people who were then quoted on this blog that 2,000 banks will fold…
We’re renewing our lease!!
w00t! w00t!
We’re renewing our lease!!
w00t! w00t!
We’re renewing our lease!!
w00t! w00t!
We’re renewing our lease!!
w00t! w00t!
We’re renewing our lease!!
w00t! w00t!
Congratulations, condolences and apologies (the latter for my heavy-handed jests…) — I can feel your perplexed mixture of relief and regret.
PB, thanks… I get carried away often, so I completely understand (while we’re at it, my apologies to all Boomers on this board).
We all need to remind ourselves that this board is many things, but sometimes it’s for support and advice. I am not against owning a house, but I am against overpaying for it. This is likely going to be an ongoing clusterbump for my family, so please bear (no pun) with me…
Given my present cynical state of mind about the likelihood that Washington’s current political Kabuki Dance of Wall Street Shame-and-Blame will result in plenty of finger pointing with no serious financial reform to follow, I am not likely to be a very good source of emotional support to anyone presently brave enough to dip their toes into the home purchase market.
In all honesty, I can’t rule out the possibility that the efforts to prop up home prices through engineering a shortage of entry-level housing won’t succeed. If your income is stable, you have half-a-year’s worth of savings in the bank as personal insurance, and you can find a home that works for you at a monthly payment level below rent, your best choice may be to find a place that works for you and buy. But you should realize that, given first-time-homebuyer stimulus, the readily-available supply of entry-level housing will tend to be scarce (unlike at this point in the early-1990s recession, when there was a great abundance of homes on the market from which to choose) and you will have lots of competition, which tends to drive up prices to levels which may lead to subsequent declines (what I call a “dead cat bounce”). I also note that unless this time is different, this bubble has a considerable amount of deflation ahead of it before it is finished.
My question about top-down coordination of lender inventory held off the used home market still stands. The only way to answer the question is to conduct an inquiry into why banks are withholding supply, as there is a natural impulse among would-be sellers to avoid selling at a loss in the wake of a price crash.
My question about top-down coordination of lender inventory held off the used home market still stands. The only way to answer the question is to conduct an inquiry into why banks are withholding supply, as there is a natural impulse among would-be sellers to avoid selling at a loss in the wake of a price crash.
Right on, Bear. Now, who will conduct this inquiry? Us?
Don’t laugh, because it was the blogosphere that outed the MIT economist who’d been cheerleading the Obama administration’s health care plan. Turns out that the economist had a contract with the Department of Health and Human Services, which has more than a single dog in this fight.
It was a diarist on Daily Kos. A person left a comment about Jon Gruber being paid by the Obama administration. A Firedoglake writer Marcy Wheeler than took off with it and started asking lots of questions. Paul Krugman didn’t appreciate his dear friend Jon Gruber being attacked by someone from the blogger sphere.
You must have brought up my b-job option with her.
A year from now, when Mrs. Muggy sees home prices plunging, she may choose to reward him for his far-sightedness. By cooking an especially good meal or … something.
Bah, food is overrated. Go for what NYCBoy suggested.
OR, in that unlikely chance of housing prices actually keeps going up for another 1-2 years, Muggy will NEVER do it with the wifey ever again.
Good job, Muggy! I think you’re doing the right thing.
You don’t sound like a bitter renter to me.. Hmmm…
Eddie, welcome to the club. I am betting my Phoenix apartment rent will be down another double digit percentage this fall.
And I’m thinking when the shadow inventory gets put on the market, RE prices will be down so much that there will be a cultural shift away from being Donald Trump wannabes. That will be the time to buy a home. It will be decades before people regard their primary residences as investments again. Even Real Estate is cyclic.
oops, I mean “Muggy, welcome to the club…”
HUH?
One ship sails East,
And another West,
By the self-same winds that blow,
‘Tis the set of the sails
And not the gales,
That tells the way we go.
It sounds like you were more tied to the mast than at the wheel.
Sorry you will miss out on NYCityboy’s coin, but glad the wind swept you into a safe harbor for a bit.
Is Ratzilla still subletting?
“Is Ratzilla still subletting?”
Nope. Got him that weekend. One of my projects is turning half the garage into a moderate indoor/outdoor space so we have more room inside.
Yes I’d like an update on the rat that ate Tallahassee.
“Yes I’d like an update on the rat that ate Tallahassee.”
I tried peanut butter and it wouldn’t bite. So I went South Florida on him and used grapefruit and oranges from my backyard as bait. Snap-trapped him that night. I did not get out the tape measure, but he was unpleasantly large.
Muggy: you won’t regret your decision. Now take a good, long year to save money and wait for the right, cheap house to come along.
The little kitten thanks you.
And the children you saved by not buying
Good move. I’m renting about 60 miles south of you. Went to open houses yesterday for fun and education. Sellers are still dreaming. Not my job to bail them out of their present situation at wishing prices.
Builder reps told me that they are not building spec houses, just trying to sell what they have and take an order for a new build. Good lots are scarce and too expensive closer in, so its tough to make it work. (Closer in look run down and depressed anyway, as some folks here said the other day; its not quite a beautiful village by the sea, and its far from a cultural magnet).
My sense is everyone is waiting out the freeze and hoping for a kick start from heaven.
It is amazing how many sellers still expect buyers to make them whole. Even when a huge part of their debt is due housing ATM cash out expenditures.
It is amazing how many sellers still expect buyers to make them whole. Even when a huge part of their debt is due housing ATM cash out expenditures.
This past weekend, I was doing a volunteer project in an area that looked like the ATM cash out had been quite brisk. Fairly new vehicles in the driveways of triple-S (sticks, stucco, and styrofoam) houses that were starting to run down.
Muggy and Ride the river:
Where are you guys?
JD, I live in Belleair Bluffs, Pinellas County, Florida.
B. Bluffs is a tiny town right by the Belleair Causeway. The closest major city is Clearwater and then St. Pete and Tampa — but this area is basically a megalopolis.
I also post a lot about Rochester, New York (my hometown) and the Finger Lakes area, which, if I could wave a magic wand, is where I would live. These areas are just beginning to crack.
Lakewood Ranch, about 10 miles esat of Sarasota.
I meant East of Sarasota.
We’re renewing our lease!!
w00t! w00t!
Legions of puppies and kittens everywhere thank you.
Congratulations Muggy to you, your wife and your children.
I did find out from TCF Bank yesterday when we were in there doing some bidness that they are doing NO commercial lending. AT All. Wow.
Ready for your morning cup of paranoia? Wall Street Journal reporter says that Goldman Sux is working to squelch ‘rumors’ on blogs(!) Ceck at the 3:15 point of the interview.
finance.yahoo.com/tech-ticker
I’ve been squelched! Try this, or else go to yahoo finance tech ticker bonuses cause washington headaches
http://finance.yahoo.com/tech-ticker
Why on earth would any company make an effort to squelch rumors.. i wonder… We know it can only be for some nefarious reason!
Aha! The first ’squelcher’ has fallen into my trap!
The concern is not over companies legitimately trying to “squelch rumors,” but rather over their employing public relations campaigns to create straw man caricatures of inconvenient truths as “rumors.”
Public Relations = a fancy word for propaganda
Let’s PR/propaganda what they really are: malicious rumors.
“Let’s call…”
(Eeyore: “Oh bother…”)
Is it legitimate to squelch rumors incognito? And what if the rumor is true and the squelching is not?
And of course the gov does it too. (I suspect…everyone;)
http://www.salon.com/news/opinion/glenn_greenwald/2010/01/15/sunstein/print.html
How do you know Salon is not just trying to spark rumors to scare people away from publicly discussing the actual news?
The sort of gutless wonders who would be “scarred away” by rumors of such a plan, or even its actual existence, wouldn’t have anything of value to say in the first place.
Aha! Another one falls into my trap! This was your own link from last night, and you said this about it (besides calling it ’spine-chilling’):
…in all seriousness, this is the creepiest thing I’ve seen in a long time.
Gotcha, Sammy. Advantage, sloth.
“In 2008, while at Harvard Law School, Sunstein co-wrote a truly pernicious paper proposing that the U.S. Government employ teams of covert agents and pseudo-”independent” advocates to “cognitively infiltrate” online groups and websites — as well as other activist groups — which advocate views that Sunstein deems “false conspiracy theories” about the Government. This would be designed to increase citizens’ faith in government officials and undermine the credibility of conspiracists.”
Eddie?
alpha-sloth,
Sunstein’s proposal to fund “perception management” and infiltrate blogs advocating “false conspiracy theories” - meaning “inconvenient truths” in some cases - is totally creepy. Not sure what “trap” you’re referring to.
Well, make up your mind, Sammy. Is rumor manipulation ‘totally creepy’ and ’spine-chilling’ or is it something that would only scare ‘gutless wonders’ with nothing to offer anyway?
(The trap was that your desire to contradict me led you to contradict yourself. And you’re still doing it.)
Luckily, we generally link in actual MSM financial news stories here and discuss them, rather than starting any rumors (Joey-Eddie excepted).
For instance, here is a story with some legs, reported last month in the New York Times Business pages, which brings to mind the effort
by one Wall Street firm CEO to demonize short sellers a year or so ago. Did he have Goldman Sachs and their Megabank, Inc brethren in mind?
Banks Bundled Bad Debt, Bet Against It and Won
By GRETCHEN MORGENSON and LOUISE STORY
Published: December 23, 2009
…
Goldman was not the only firm that peddled these complex securities — known as synthetic collateralized debt obligations, or C.D.O.’s — and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail, according to Wall Street traders, include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner.
How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority, Wall Street’s self-regulatory organization, according to people briefed on the investigations. Those involved with the inquiries declined to comment.
While the investigations are in the early phases, authorities appear to be looking at whether securities laws or rules of fair dealing were violated by firms that created and sold these mortgage-linked debt instruments and then bet against the clients who purchased them, people briefed on the matter say.
One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.
Some securities packaged by Goldman and Tricadia ended up being so vulnerable that they soured within months of being created.
Goldman and other Wall Street firms maintain there is nothing improper about synthetic C.D.O.’s, saying that they typically employ many trading techniques to hedge investments and protect against losses. They add that many prudent investors often do the same. Goldman used these securities initially to offset any potential losses stemming from its positive bets on mortgage securities.
But Goldman and other firms eventually used the C.D.O.’s to place unusually large negative bets that were not mainly for hedging purposes, and investors and industry experts say that put the firms at odds with their own clients’ interests.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
…
Seller beware.
Gollum beware.
Why would anybody do business with Golem Sacks? I don’t get it. Why would you buy so much as a bagel from these sheisters?
LOLZ.
Poor Bear actually still believes the MSM = truth, especially the NY Times.
Feel free to cook up another straw man characterization of what someone else believes, Eddie-Joey — it’s what you do best.
Eddie-Joey
This and tweedle-dee, tweedle-dum… Man, the dad in you is really coming out today.
For instance, here is a story with some legs, reported last month in the New York Times Business pages, which brings to mind the effort
by one Wall Street firm CEO to demonize short sellers a year or so ago. Did he have Goldman Sachs and their Megabank, Inc brethren in mind?
Sort of like the banking people interviewed on the msm that say it is immoral to walk away from you mortgage, while banks and business do it all the time.
I’ve heard that Blankfein is in Haiti, passing his hands over contaminated water to make it clean.
You got that backwards. He is passing his hands over clean water to make it contaminated. He will then setup a booth selling his own “Goldman Sucks” brand clean water to the locals at inflated prices.
No no no. He’s turning wine into yellow water. Get your facts straight.
Here is another non-rumor for Goldman Sachs PR (public retaliation) staffers to suck on:
Kill Wall Street’s Bonuses Or Tax Them To Death, Says Simon Johnson
Henry Blodget | Jan. 12, 2010, 12:32 PM
Tags: Goldman Sachs, Bonus
We had Simon Johnson on TechTicker yesterday. He’s appalled that Wall Street are paying out their winnings as bonuses 15 months after getting their collective asses bailed out. He thinks the government should immediately enact a windfall tax.
Aaron Task: ‘Bashing big banks is all the rage this week, with White House officials and New York Attorney General Andrew Cuomo scolding Wall Street fat cats ahead of the Financial Crisis Inquiry Commission, which gets underway Wednesday.
At issue is what level of bonuses are appropriate for publicly traded firms that posted record profits in 2009 thanks to the government’s largess and after being rescued in 2008.
Simon Johnson, professor at MIT’s Sloan School of Management and former chief economist of the IMF, says there’s a simple solution to this seemingly complex problem: “People working at our largest banks - say over $100 billion in total assets - should get zero bonus for 2009.”
…
Robert Scheer’s Columns
McCain Gets It, Obama Doesn’t
Posted on Jan 6, 2010
Obama and McCain
AP / Haraz N. Ghanbari
By Robert Scheer
Maybe I got it wrong. During the presidential campaign I wrote columns blasting Sen. John McCain for siding with the big bankers on deregulation, citing his choosing ex-Sen. Phil Gramm, currently a vice chairman of the Swiss-owned banking giant UBS, as his presidential campaign chair. Barack Obama, on the other hand, repeatedly blasted Gramm and the Gramm-Leach-Bliley Act, which the Texas Republican had pushed through Congress, with President Bill Clinton’s support—legislation that repealed the Glass-Steagall Act and radically deregulated the financial industry.
But now the roles are reversed, and it is McCain who, along with Sen. Maria Cantwell, D-Wash., has sponsored a bill to repeal Gramm’s legislation, while Obama seeks to preserve it.
The Gramm legislation, which permitted the merger of investment and commercial banks into too-big-to-fail corporations (including Citigroup and AIG, two financial giants that had to be bailed out by taxpayers), was thought by Obama the candidate to be a key cause of the meltdown. But as president he reappointed the Clinton-era officials who had sided with Gramm in ending sensible banking regulations that had protected the public for 70 years and made the U.S. banking system the envy of the world.
Rather than restore Glass-Steagall, the Obama-backed banking regulation bill passed last month by the Democratic majority in the House went along with the desire of Wall Street lobbyists to prevent the breakup of the big conglomerates and to block control of their massive trading in the derivatives that proved to be so toxic.
The result, with some deceptive reformist window dressing, is a pro-Wall Street business-as-usual cop-out, and the Senate version is likely to be more of the same. Fortunately, there is a better way, and thanks to the McCain-Cantwell bill and a companion one authored by Rep. Maurice Hinchey, D-N.Y., in the House, there is still a chance at serious financial regulation through the restoration of the key provisions of Glass-Steagall.
How odd that it now remains for McCain to stand up to the oversize banks.
“… I want to ensure that we never stick the American taxpayer with another $700 billion—or even larger—tab to bail out the financial industry,” McCain proclaimed in introducing his legislation. “… This country would be better served if we limit the activities of these financial institutions.”
But just the opposite happened under the great bailout. The big investment houses of Goldman Sachs and Morgan Stanley were allowed to suddenly attain the status of commercial banks in order to qualify for federal bailouts, and the once staid commercial Bank of America was encouraged by the Fed to buy out the investment house Merrill Lynch. As a result, banking has never before been concentrated in so few hands. As Rep. Hinchey put it:
“Today, just four huge financial institutions hold half the mortgages in America, issue nearly two-thirds of credit cards, and control about 40 percent of all bank deposits in the U.S. In addition, the face value of over-the-counter derivatives at commercial banks has grown to $290 trillion, 95 percent of which are held at just five financial institutions. We cannot allow the security of the American economy to rest in the hands of so few institutions.”
…
You can’t help but wonder whether McCain would be singing the same tune if he were sitting in the WH and stead of looking in from the outside…
He didn’t sing this way with the Keating 5.
A ’round the corner neighbor once worked for American Continental, which was one of Charles Keating’s companies. My neighbor’s comment about McCain? After stating the name of his former employer, he’ll tell you that the experience taught him about what kind of crook McCain is.
Is this a rumor?
Robert Scheer
Cashing in on ‘Government Sachs’
Posted May 6, 2009 | 10:30 AM (EST)
Read More: Fed, Goldman Sachs, Henry Paulson, Robert Scheer, Stephen Friedman, Timothy Geithner, Treasury, Wall Street
We are so inured to tales of business corruption that even a devastating exposé in The Wall Street Journal no longer shocks us. The fact that the chairman of the New York Federal Reserve Bank made millions off his secret purchase of Goldman Sachs stock, “in violation of Federal Reserve policy,” as the WSJ put it, at a time when the N.Y. Fed was ostensibly overseeing the antics of the Wall Street firm, has barely registered a blip of outrage.
When N.Y. Fed Chairman Stephen Friedman bought stock in the company that he once headed, and where he still serves as a director, he was already in violation of Federal Reserve policy and was hoping for a waiver to permit him to hold his existing multi-million-dollar stock stash and to remain on the Goldman board. The waiver was requested last October by Timothy Geithner, then the president of the N.Y. Fed and now Treasury secretary. Yet, without having received that waiver, Friedman went ahead in December and purchased 37,300 additional shares. With shares he added in January, after the waiver was granted, he ended up with 98,600 shares in Goldman Sachs, worth a total of $13,330,720 at the close of trading on Monday.
Friedman was in violation of the Fed’s policy because, thanks in part to the urging of Geithner and the N.Y. Fed, Goldman Sachs was allowed to become a bank holding company, making it eligible for government bailout funds (an option that Geithner had denied to Goldman rival Lehman Brothers). But that shift also put Goldman under more rigorous banking regulations that required Friedman as Class C director of the N.Y. Fed, a position in which he ostensibly represents the public instead of the banks who dominate the board, to step down as a Goldman director and divest his holdings. Instead, he stayed on the Goldman board and added additional shares while waiting for the Fed waiver. Nor did he inform the Federal Reserve of his additional purchases last December, and the lawyers for the N.Y. Fed didn’t know about that purchase until the WSJ raised questions in April. Friedman has made a profit of about $3 million on the additional shares.
The significance of this conflict of interest was summarized by the lead of the WSJ story: “The Federal Reserve Bank of New York shaped Washington’s response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.”
…
Yeah, I can’t believe how little play this is getting. It’s heinous.
This guy should be doing the perp-walk, no question about it.
Martha Stewart gets jail-time for a teeny-tiny trade on inside information, and this guy is not even in irons yet? He not only KNEW about the inside information, he was helping FORMULATE the policies that helped enrich himself and other banksters while trading on that inside information in his private account.
PERP WALK!
Prime is contained …I always thought it was equally a joke that
the Treasury Sec. Hank Paulson had the degree of conflict of interest he had by being a ex Goldman Sakes executive who made a fortune off CDO securities and still was holding Stock at Goldman’s at the time of his “FIRE” cry to Congress/Senate
for a blank check . You mean to tell me that they couldn’t find anybody else on the face of the earth with less conflict of interest to take that spot?
And what did you get but a contrived merger of Investment firms with regulated Banks so they could pull off the bail-outs .
And than they gave the largest loan to AIG ,a insurance company ,so they could make those 100% on the dollar Credit Default Swaps payoff’s that they like to think is insurance in their Casinos .
* The Wall Street Journal
* JANUARY 17, 2010, 9:51 A.M. ET
Paperwork Woes Plague Mortgage Plan
By RUTH SIMON And MICHAEL CRITTENDEN
Thousands of homeowners participating in the Obama administration’s foreclosure-prevention plan could miss a government deadline for completing necessary paperwork, putting them at risk of disqualification.
The program, a cornerstone of President Barack Obama’s housing-rescue effort, was launched in February and has been bedeviled by paperwork problems from the start. Many companies have given borrowers modified mortgage terms on a trial basis, based on verbal information, and have struggled to get the documents required to finalize mortgage modifications.
According to data released by the Treasury Department Friday, more than 900,000 borrowers have begun trial modifications under the program, but just 7% of them have received permanent changes so far.
Borrowers must make three trial payments and provide a hardship affidavit and other paperwork to receive a permanent mortgage fix. Many are still in the early stages and aren’t at risk of being disqualified. But thousands are at risk.
Wells Fargo & Co. said 10% of its mortgage borrowers who have made the required trial payments under the program haven’t provided any documents; another 15% have provided some, but not all the needed paperwork.
The administration last month gave borrowers who were current on their payments after at least three months an extension until Jan. 31 to provide needed paperwork. But the administration doesn’t plan to extend that deadline, Assistant Treasury Secretary Michael Barr said Friday.
“We are going to have further guidance for [mortgage] servicers at the end of the month,” he said.
…
“Never underestimate the power of incentives.” - Charlie Munger
Who has the incentive to delay mortgage modifications if not the banks?
As long as FBs struggle to keep up with the older, higher payments (while hoping they’ll get them reduced sometime in the future) the banks get the full benifit of delaying modifications for as long as possible.
If any of the PTBs were serious about this loan modifiction program then they’d set it up in such a way that allows banks to compete with each other for the business.
I was thinking that perhaps the 7 percent uptake rate was a sign of success: They got the headlines trumpeting the rescue, and the results suggest program costs were “less than expected.”
I still think the sole purpose of all this noise about loan modifications was just to Keep Hope Alive among the FBs (and Keep The Payments Coming In).
I think it’s a diversion from what is really going on to keep the banking system from imploding.
“If any of the PTB were serious…that allows banks to compete with each other for the business.”
If competition to benefit consumers at the American household is the policy objective, I recommend invoking the Sherman Antitrust Act to bust up the too-big-to-fail banks that comprise Megabank, Inc. Presto-chango, the banking industry would be miraculously transformed from a thinly-disguised theft operation back into a service industry.
“If…benefit consumers…..is the policy”
You really could stop that train of thought right there.
…the banking industry would be miraculously transformed from a thinly-disguised theft operation back into a service industry.
But then where would I go to take advantage of innovative new loan products?
“As long as FBs struggle to keep up with the older, higher payments [...]”
Interesting thought! I hadn’t even thought of the incentives the program is providing to those who are not even in the program. It’s a carrot, hope that some help will be there for them if they need it in the future.
I was thinking that pretty much all of those in the program are already paying lower payments, not the older, higher payments, and that th eprimary effect was on those homedebtors, incenting them to continue to pay.
…incenting them to continue to pay.
And, as we all know, nothing is more important keeping the payments flowing to the banksters.
Is it accurate to interpret the bank tax as populist window dressing to further Democrat party political objectives by kicking some sand into the bankers’ eyes? If not, what purpose does the tax serve? I am pretty sure it will have no material impact on either the budget deficit or Wall Street compensation practices.
* JANUARY 16, 2010
Bank Tax Is Centerpiece of Party’s New Populism
By PETER WALLSTEN
WASHINGTON—Democrats’ last-minute scramble to salvage the special U.S. Senate election in Massachusetts is offering the first test of a populist pitch that party strategists hope to take to other campaigns this year.
Central to the strategy is the new White House plan to tax big banks as punishment for their role in the financial crisis. President Barack Obama announced the proposal Thursday amid reports that financial institutions bailed out by the government are enjoying healthy profits and paying generous bonuses, and as a bipartisan commission began hearing testimony on banks’ role in the economic crisis.
But events Friday in Massachusetts showed how the White House and top Democrats aim to use the bank tax as a political weapon: Senate candidate Martha Coakley, Vice President Joe Biden and others used the issue to portray Ms. Coakley, who is vying to succeed the late Edward Kennedy, as tough on bank executives and portray Republican Scott Brown as coddling them.
The shift suggests Democrats view Mr. Obama’s health-care overhaul, his top domestic priority and a leading issue in the contest, as a less effective political topic, and possibly even a disadvantage.
Polls show declining voter enthusiasm for Mr. Obama’s health-care plan. Mr. Brown has campaigned on a promise to provide the 41st GOP vote to secure a Senate fillibuster to scuttle a health-care bill.
Democratic strategists concede Mr. Obama’s support in the past for a Wall Street bailout has fueled voter anger, particularly among conservatives and supporters of the antiestablishment Tea Party movement who are pouring money and volunteer hours into Mr. Brown’s race.
With the bank tax, “we can take populism back to our side,” a Democratic Party strategist said.
…
“With the bank tax, “we can take populism back to our side,” a Democratic Party strategist said.”
IMO opinion these guys are trying to use a PR stunt to change the public perception of their party. Good luck with that.
I would guess that 75% of the population doesn’t know or care that the biggest banks are making a killing. Isn’t that what they always do? But the healthcare bill will touch everyone’s life except for a few favored Dem interest groups.
If its good for one group, it should be good everyone, “especially the governmental employees, the House, the Senate and the Executive branches”.
“IMO opinion these guys are trying to use a PR stunt to change the public perception of their party. Good luck with that.”
It’s working great!
Before now, I suspected the D-rats sucked; suspicions confirmed!!!
“With the bank tax, “we can take populism back to our side,” a Democratic Party strategist said.”
This reminds me of the douchebag incumbent governer in “Oh Brother Where Art Thou” plotting to appropriate the midget “reform” broom-sweeper from his rival candidate.
A phony proposal proposed by a stuffed suit. This is worse than pointless.
worse than pointless…as in pointing away.
misdirection.
Internal Affairs: Phil Angelides back from the dead
By the Mercury News
Posted: 01/17/2010 12:00:00 AM PST
Grilling Wall Street honchos, Angelides is in his element
First he took on the Terminator. Now, Phil Angelides is facing down Wall Street titans.
The former California treasurer, a Democrat who ran for governor four years ago, was back in the news last week, in a big way. As in front-page coverage in The New York Times, Wall Street Journal and Washington Post.
Angelides took center stage in Washington as chairman of the Financial Crisis Inquiry Commission — a panel charged with getting to the bottom of what caused the financial meltdown.
The real estate developer and Harvard grad was appointed to the post last summer by a fellow California Democrat, House Speaker Nancy Pelosi of San Francisco.
Angelides, who lost in a landslide to Gov. Arnold Schwarzenegger in 2006, did not shrink from the spotlight, aggressively questioning Goldman Sachs CEO Lloyd Blankfein.
The high-profile appointment — the financial panel has been compared to the 9/11 Commission that investigated the 2001 terrorist attacks — won Angelides a stand-alone profile in the Journal.
…
Talk about a reversal of fortune: Schwarzenegger is a lame-duck governor spending his last days in office tending, yet again, to the broken state budget.
And Angelides is poised to make national headlines for the better part of this year.
Whod’ve thunk?
Let’s hope a personal scandal doesn’t hit Angelides as it did with Elliot Spitzer.
Really. It brings to mind a bad joke about the secrets to success — I can only recall the punchline:
“Keep your nose clean, and don’t screw up.”
Horrible band name: Singlet of Transparency
‘Sorry’ still seems to be the hardest word on Wall Street
Goldman Sachs Chairman Lloyd Blankfein seems to consider himself a bystander during the nation’s economic crisis and bank bailout.
By Dana Milbank
Thursday, January 14, 2010
Goldman Sachs Chairman Lloyd Blankfein still doesn’t get it.
Unemployment is at 10 percent and Americans are suffering because of the meltdown he and his colleagues helped create. But Blankfein’s firm, generously bailed out by taxpayers, has already returned to its ways of greed.
Next week, Goldman, the most powerful firm on Wall Street, will report its bonuses for 2009, and through the first nine months of the year it had set aside nearly $17 billion for compensation — roughly on par with 2007, when Blankfein was paid a record $68 million as his firm led the country off an economic cliff.
Blankfein, called to Washington on Wednesday to testify before the federal Financial Crisis Inquiry Commission, made it plain that he was done apologizing.
“Would you look back on some of the financings as negligent or improper?” asked the commission chairman, former California state treasurer Phil Angelides.
“I think those were very typical behaviors in the context that we were in,” Blankfein replied.
Angelides pointed out that others regarded Goldman’s behavior — in which the firm sold mortgage securities to customers and then placed bets against those same securities — was “the most cynical” of practices. “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” observed the chairman.
Blankfein treated the chairman to a patronizing account of Goldman’s function. “That’s what a market is,” the CEO explained.
“I do know what a market is,” Angelides replied sourly. He tried again to get Blankfein to acknowledge that “excessive risk was being taken.”
“Look, how would you look at the risk of a hurricane?” the man from Goldman retorted.
“Acts of God we’ll exempt,” Angelides said. “These were acts of men and women.”
But Blankfein seems to exempt himself from the rules of man. Last month, he blew off a meeting with President Obama at the White House because his plane was delayed by fog in New York; evidently he couldn’t bring himself to fly in the night before.
…
“his plane was delayed by fog in New York; evidently he couldn’t bring himself to fly in the night before”
I often am delayed at airports. Naturally, when that happens, I decide to take an earlier flight. Doing something yesterday is such an easy solution.
That part is kind of silly. I am sure Wall Street executives have better things to do than to catch early flights and hang out in hotel lobbies.
Yes, PB, I’m sure his to do list was in order.
- Create pools of toxic assets
- Contact Senator Dodd to keep the whore whoring
- Swindle a pension fund
- Pick up dinner for the kids
- Fly out to meet with the President of the United States (weather permitting)
“I am sure Wall Street executives have better things to do than to catch early flights and hang out in hotel lobbies.”
And what ever would a banking executive do in Whashington, other than hang out in the hotel lobby?
Call an escort agency for two or three call girls ? Just guessin’.
Not only could he not fly in the night before, he obviously never heard of Amtrak.
Why would God let fog stop him from meeting with God? Must have been an act of god.
* The Wall Street Journal
* REVIEW & OUTLOOK
* JANUARY 15, 2010
D.C. Witness Protection Program
A financial inquiry hits the bankers, ignores the Fed and Fannie Mae.
…
Our point isn’t that bankers didn’t make stupendous blunders. It is that the roots of the mania and panic are so much larger than any single financial security, compensation practice or regulation. And those roots are found as much in Washington as on Wall Street.
Start with the Federal Reserve, which for years kept interest rates below the rate of inflation and thus created a global subsidy for credit. Bankers and investors had an incentive to sell and take on more debt. A Journal survey of economists this week found that a majority now think Fed policy was a major culprit. Providing a rare source of wisdom at yesterday’s hearing was FDIC Chairman Sheila Bair, who explained how the Fed’s monetary policy helped inflate the housing bubble.
If the commissioners are looking for historical guidance, they might consult the late Charles Kindleberger’s classic, “Manias, Panics, and Crashes: A History of Financial Crises.” On page 10 of the Fifth Edition paperback, the good professor declares that “The thesis of this book is that the cycle of manias and panics results from the pro-cyclical changes in the supply of credit.” (Our emphasis.) An inquiry that ignores the sources of credit that fed the mania is like a history of the Civil War that ignores slavery.
Also missing this week was anyone from Fannie Mae and Freddie Mac, the mortgage giants that turbocharged the housing boom. With their implicit taxpayer backing, Fan and Fred held or guaranteed more subprime and Alt-A loans than anyone—much more than the combined holdings of the four bankers represented this week.
So long as Fan and Fred kept increasing mortgages to low-income borrowers, the dynamic duo’s political protectors kept fighting off efforts to cap the size of Fan and Fred’s mortgage portfolios. The pair would ultimately hold or guarantee mortgages amounting to more than $5 trillion. That sum is greater than the annual GDP of Japan, the world’s third largest economy, and yes, a whole lot bigger than the balance sheet of Goldman Sachs. A serious inquiry will examine the business practices of Fan and Fred, the long battle to rein them in, and the Members of Congress who blocked reform.
…
This is soooo sad…..
Dream for the Plaza Fades in a Not-So-Gilded Age
By CHRISTINE HAUGHNEY, NYT
Published: January 17, 2010
When an Israeli billionaire bought New York’s storied Plaza Hotel for $675 million, he envisioned turning the plucky grande dame with the globally recognized name into mainly a luxury condo tower that would cater to the world’s wealthiest buyers and offer stores to satisfy their every desire.
But now, six years later, with the city in an acute recession, the grandest aims of the new owner, Isaac Tshuva, and the excitement of the new Plaza’s first residents seem to have dimmed, according to sales data.
The last 11 owners to sell their luxury condos at the Plaza Hotel sold them at a loss, including the owner of Apartment 409, which sold for $8.5 million less than it cost 16 months before.
The Plaza’s underground luxury stores are struggling to attract shoppers, and one expert broker is consequently advising clients not to take space there.
And this spring, steps below where F. Scott Fitzgerald found his muse for “The Great Gatsby,” the hotel is opening an upscale food court offering burgers and pizza. The Palm Court, the Plaza’s famous restaurant, has been closed.
“It’s gone from being a landmark to being just a building,” Clark Wolf, an independent restaurant consultant, said of the situation. “In an era without a Tavern on the Green or a Cafe des Artistes, we need something. New York City is screaming for a landmark.”
The last sentence should read, “A serious inquiry would have examined the business practices of Fan and Fred, the long battle to rein them in, and the Members of Congress who blocked reform.”
Refresh my memory. Who were some of those political protectors?
I believe Barney Frank was number one with a bullet.
What did I win?
Oops. The above was a response to Bear’s post. Don’t know how it ended up here.
That’s OK. I could recite the list, but we have been over it again and again here. I will let the right wing attack dogs who post here tear into this piece of red meat (not to suggest that I am a vegetarian who doesn’t enjoy a good steak…).
Eddie — yoo, hoo…(waves red cape in front of the right wing attack bull’s bloodshot eyes…)
I Have a Dream - Address at March on Washington - MLK Speech
“I say to you today, my friends, that in spite of the difficulties and frustrations of the moment, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident: that all men are created equal.”
I have a dream that one day on the red hills of Georgia the sons of former slaves and the sons of former slave owners will be able to sit down together at a table of brotherhood.
I have a dream that one day even the state of Mississippi, a desert state, sweltering with the heat of injustice and oppression, will be transformed into an oasis of freedom and justice.
I have a dream that my four children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.
I have a dream today.
I have a dream that one day the state of Alabama, whose governor’s lips are presently dripping with the words of interposition and nullification, will be transformed into a situation where little black boys and black girls will be able to join hands with little white boys and white girls and walk together as sisters and brothers.
I have a dream today.” - - -
“When we let freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, “Free at last! free at last! thank God Almighty, we are free at last!”
http://www.mlkonline.net/dream.html
When y’all get the chance, do a little websearch on some of his famous speeches. He was a great man, I think he would be encouraged by our progress and I suspect that he would be pushing for even greater things in the future.
Even though we have our disagreements, I think that we can all agree that this is a great country and that our future will once again be bright sometime in the near future.
Have a great day.
Lip
It’s a shame that, today, freedom means shoving others to the back of the bus.
Free at Last - DC Talk / No-Way-Dude.com
I have been humming this all day long.
http://www.youtube.com/watch?v=EdPtx1Ij9VE&feature=related
For a fast moving song that is a type of tribute to MLK. Warning, DC Talk is a christian group but this song doesn’t seem to be offensive. (5:03 min)
Hurry up and buy your own Space Shuttle, since they are not making any more of them and the value always go up:
For Sale: Space Shuttle Fleet - one fairly careful owner
by Stevie Smith - Jan 18 2010, 05:33
So, what do you get for the man who has everything? How about one of NASA’s soon-to-be decommissioned space shuttles? More pointedly, if you love your man that much – or perhaps fancy owning your very own iconic orbiter – then a mere $28.8 million USD should do the trick.
While many prospective buyers will likely balk at such a price, it’s considerably more tempting than the $42 million USD ‘For Sale’ sign NASA had initially slapped on each of its greying vehicles ahead of their collective retirement towards the end of 2010.
NASA’s decision to knock more than 25 percent off the asking price comes after a December 2008 call for potential buyers at $42 million USD only attracted the serious interest of around 20 inquiries.
If the revised pricing is tugging at your bank account and you’re curious to know what’s on offer in NASA’s exorbitant shop window, both the space shuttle Atlantis and space shuttle Endeavour are currently available for purchase – for those with a big enough driveway.
Not limiting its adjustments to just shuttle pricing, NASA has also said the deconstructed main engines from the fleet are now available for free alongside associated costs covering transportation and handling. The engines previously carried a price tag of between $400,000 USD and $800,000 USD.
$42 million asking price attracted ONLY 20 serious inquiries.. sheesh.
If you plan to remodel it and use it as a private residence, does it qualify for an $8000 home buyer’s tax credit?
There are people who will live anywhere, check http://www.silohome.com.
There are about 15,000 silos for sale.
There are 3 silo sites from the early liquid-fueled Titan missiles around Boise. One is used by an individual for housing and storage. Another is now a toxic waste dump.
If they had 20 serious inquiries and only 3 shuttles for sale, why do they need to lower the price?
Maybe NASA made the mistake of hiring a realtor to handle the sale and thus over-priced it at wishing price to start off?
Overpriced? But they’re not making any more shuttles!
And they all have granite countertops.
The Fed should buy them at full asking price. Shuttle has scrap value, mortgage debt has none.
Would they be exempt from property tax as a “mobile home”?
Only if you keep the tires inflated.
Does this mean that Discovery is the one to go to the Air & Space museum?
When Katrina hit and all those homes went underwater it was a strange
statement as to the state of the entire Country soon to be exposed in the form of underwater mortgages . Now we have Haiti who is unable to endure a earthquake emergency because of the long term corruption and lack of true support from its government . Corrupt systems or buildings have the potential of not being able to withstand and crumble .
Without true reform of the systems that caused the financial debacles ,our ability to withstand even a minor jolt is compromised .Why isn’t it taken serious what the causes of the financial debacle were ?It’s not enough to rack it off by saying “We didn’t see it coming .” How do you explain that the financial systems were somewhat stable for decades …until deregulation
combined with Globalism and Global wage competition .How do you justify
Insurance monopolies or slave labor monopolies and all the other unfair playing fields that the Politicians can’t seem to address .
We have to go back to the tried and true in order to have a future . These greed motive Power Players do not have the best interest of the Country at heart ,they are incapable of seeing eventual cause and effect
or don’t care as long as their pockets are lined in the now . But for the government to spend trillions in welfare for these entities that needed to be torn down and rebuild is not excusable . Just keep looking at Haiti
and ask yourself what kind of foundations are we accepting that will surly leave the people trapped in the rubble crying out for relief that doesn’t come .
I’m starting to wonder where this odd spacing/punctuation style is coming from, as we now have more than one poster using it. I’m not trying to be snarky, but is this a cut+paste thing or were you taught to put spaces before commas/periods and not before starting a sentence? I’ve studied several foreign languages and never come across such a thing.
Or maybe you’re typing with a broken finger (like me) or using a wonky text-to-speech program?
TheoddspacingcomesfromMars. No serious ,when you get to be my age you make up your own language . But my question is ….do you agree with the post or not ?
I read “The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History” this weekend.
It was a great read. Even as the market was starting to collapse, few people really believed it could happen, and Paulson was able to continue buying CDS contracts at very favorable rates.
It was also a great education on how these types of instruments are created and traded.
Johnny’s a nice guy.
The only hedge fund manager I root for.
But remember, they all talk their book.
Comment by eastcoaster
2010-01-17 15:01:36
SEEKING ADVICE…
My realtor just called. The other realtor is going to meet with the family tomorrow at noon to make a decision. That realtor is emailing everyone who expressed interest to say if you’re going to make or change an offer, do it by then.
Get this…as of RIGHT NOW, my offer is the only one in his hand. So what’s with him having “multiple” offers when he called my realtor yesterday?
I can do one of two things: leave things where they are (offering 90% of asking) or up it (I can up just slightly without over-extending - maybe to 94% of asking). What would you do?
——————————————
Since their realtor lied to yours, and your offer is the only one in their hands, perhaps you should drop your offer to 85% of asking?
No update on this situation yet. I will post when a decision is made. I appreciate all input I’ve received!
I would lower my bid because of lying. If you don’t get this house count yourself lucky. Price are going to drop further with millions more of foreclosures in the pipeline.
I’d let them just sit on your offer. Don’t offer a penny more. If they turn you down cold without a counter offer, then wait a few days, and offer them EIGHTY percent of asking price. Screw them.
Just a little mental note here…
We are entering year FOUR of this bust. Real estate has been in the dumper since late 2006 time frame.
Preparing for TARP2 this year.
Trying to remember what all of our time lines were for this thing bottoming out. I seem to remember wishy-washy predictions from me that 2010 would be a better candidate than 2008. Though there seems to be some bounce from there. I’m still expecting a second wave of forclosures to make another leg down. We had record forclosures last year and I think it will accelerate this year in the coastal areas.
Haven’t seen Neil in a while. He was thinking this was the time.
I’ve seen plenty of inland areas of California and I’m guessing in lots of flyover country that it is cheaper to buy than rent BUT still having some risk.
Oh well, the seige continues. I think we are winning.
I suspect the “time frame” for the correction has been bastardized significantly.
The major banks were given money to tide them over until they could unload all of their toxic paper onto the american taxpayer and citizens of this country. They created them and they should hold them, but no the geniuses in DC let them create “innovative financial products” whatever that meant. So when the government money pump falters then what do you think is going to happen? Beats me, but it won’t be pretty. Recognizing this as the cause of the effect means that they won’t be received well in this country. When might this happen? Sooner or later, but the actual collapse will only take a few short days. Then all of it hits the fan, and be sure to get your foul weather gear ready.
Unless you have actually lived and watched a country implode you can only imagine some of the actions that take place so being prepared is not only necessary but it is smart too. We shall see who makes wise decisions in the near future. Plus geologists have warned that there are more big quakes on the way for this area. It might not be over yet.
probably be best to follow aladinsane and get up to the high country.. i bet he’s got everything set up.. gold and silver coins.. food.. water supply.. claymores around the perimeter.
Per John Mauldin, it happens this March.
“When the Fed Stops the Music
The Federal Reserve has been very clear about the fact that they intend to stop the quantitative easing program at the “end of March.” What that means in practice is that they are going to stop buying mortgage securities. That does two things. As Bill Gross so aptly points out, those mortgage purchases helped keep mortgage rates low. But they also financed the US government fiscal deficit, albeit indirectly. It seems that funds and banks that sold the mortgage securities turned around and bought US government debt or put the cash right back at the Fed.
Foreigners bought about $300 billion of the $1.5 trillion in new government debt. The rest came from the US, courtesy of the Fed buying mortgages. But that program stops (theoretically) at the end of March. The government still plans to run yet another $1.4-trillion-dollar deficit (give or take a few hundred billion). The question is, who will buy the debt? Foreigners will kick in another $300 billion, unless they decide to stop selling us stuff, or buy other less liquid or physical assets. So far there is no sign of that.
But as I asked last year, who is going to buy the multiple trillions in government debt that the G-7 countries want to issue? Who is going to buy another $1 trillion here in just the US? That is 7% of GDP. That means that consumers and businesses will have to save an additional 7% of GDP just to finance government debt at the federal level, not counting state and local debt.”
Looks like things are going start happening pretty soon.
No. (well at least maybe no)
Per the FDIC at least - as of Q3 2009 the banks only held $85.1B of treasuries (up from $37.2B at the end of Q1). The vast majority isn’t held by the banks, at least directly or officially. The bulk of the new debt is the “other” category that’s been discussed a lot lately - about $600B worth, being bought by some entity that isn’t reporting it. If this is being bought by the individual banks then then they’re not reporting it to the FDIC (since it’s not showing up either the FDIC data or the Federal Reserve flow of funds data), which I’m guessing is a no-no. It’s easier for the Fed itself to get away with this than the individual banks, at least I’m guessing; being that the banks are audited; the Fed isn’t.
Update on my rental re-negotiations I’ve mentioned a couple of times here: mid-Dec, my LL had dropped the rent 10%, and I had told him I thought it was still above-market (cause I was seeing houses at identical prices that had better amenities and nicer finishes); he suggested that we both monitor CL for a while and see what other good comps came past. I was amenable to that suggestion, and started paying the reduced rent on Jan 1st.
Well, while doing said monitoring, I saw a _really_ nice rental go by, which already had all of the things that I missed in my current rental. So I put in an app, was selected (apparently there were a number of applications), and signed the lease late last week.
I’ll be paying almost exactly what I was for the past 2.5yrs, and the place is SO SO much nicer! I really can’t express that adequately. I’m particularly looking forward to the really nice wood-burning stove insert in the fireplace—my inner caveman rejoices greatly.
Hi, my name is Prime, and I’m a renter; my quality of life is increasing, and I’m not feeling the least bit bitter about it.
Oh yeah, I forgot one tidbit: my current LL told me that after I move out, he is going to replace the carpet (which is truly hideous, and that’s coming from a guy who doesn’t care much about this aethetics stuff), and he is likely to list it another $50 below the “reduced” rent he had asked of me. Neither would be enough to make me think twice about moving, though!
From last week’s Financial Crisis Inquiry Commission session:
Illinois Attorney General Lisa Madigan entered testimony that described how federal regulators–specifically the OCC–preempted various state’s actions against abusive mortgage lenders, and then did nothing to restrict the latter’s actions. Of course, such a scenarios comes as no surprise to readers of this blog. But it’s different when various state officials go on record. Maybe something good will come of these hearings.
Click here
Cadence to Lay Off 120 Workers.
17 January 2010
SAN JOSE — Cadence Design Systems will lay off 120 full-time workers and take $11 million to $15 million in pretax charges as part of a just-announced restructuring plan.
The layoffs will be realized over a period of time and are expected to be completed by the end of fiscal 2010. The company, which makes software for printed circuit and semiconductor design, did not specify which business units or regions would be affected.
The EDA company, the world’s second-largest in terms of revenues, expects annual operating savings of approximately $19 million through a combination of workforce and other expense reductions.
The firm said it expects to record restructuring charges of $10 million to $12 million in its fiscal fourth quarter, mostly for employee-related costs and costs related to facilities reduction.
Are there any PR consultants lurking around here who want to ‘fess up regarding their corporate ties?
Business
Public relations in the recession
Good news
Jan 14th 2010 | NEW YORK
From The Economist print edition
Other firms’ suffering has bolstered the public-relations business
…
Perhaps the best indication of PR’s growing importance is the attention it is attracting from regulators. They are worried that PR firms do not make it clear enough that they are behind much seemingly independent commentary on blogs and social networks. In October America’s Federal Trade Commission published new guidelines for bloggers, requiring them to disclose whether they had been paid by companies or received free merchandise. Further regulation is likely.
…
America’s Federal Trade Commission published new guidelines for bloggers, requiring them to disclose whether they had been paid by companies or received free merchandise
Unless you’re a celebrity blogger.
IMF says it’s safe to go back into the water now, all the sharks are gone. Just remember to wear your water wings.
IMF chief: global recovery stronger than expected!
IMF chief says global economy recovering but warns about money rushing into emerging markets.
TOKYO (AP) — The head of the IMF said China and other developing Asian economies are leading a global recovery that is faster and stronger than expected, but warned that money rushing into emerging markets could lead to asset bubbles.
Dominique Strauss-Kahn, the managing director of the International Monetary Fund, strongly suggested Monday that the IMF would raise its 2010 global growth forecast from the 3.1 percent it projected in October.
China, India and other emerging Asian economies were close to returning to their pre-crisis growth rates, while rebounds in the U.S., Japan and other advanced economies remained “sluggish,” he said.
“The forecasts we’re going to release in a couple of days will show that this recovery is going faster and stronger than we expected” several months ago, Strauss-Kahn told reporters in Tokyo.
While the IMF doesn’t forecast a “double-dip,” or second recession, risks remain, he said. “We have to very cautious because this recovery remains very fragile.”
Some 390 tons of U.S. ground beef recalled. ~ Jan 18, 2010
WASHINGTON (Reuters) - Some 390 tons of ground beef produced by a California meat packer, some of it nearly two years ago, is being recalled for fear of potentially deadly E. coli bacterium tainting, U.S. officials said on Monday.
The beef was produced by Huntington Meat Packing Inc of Montebello, California, and shipped mainly to California outlets, the U.S. Department of Agriculture’s food safety arm said.
An initial problem, in ground beef shipped by the plant from January 5 to January 15, was discovered during a regular safety check, the Food Safety and Inspection Service said.
It said it had received no reports of illnesses associated with consumption of the recalled products.
During a follow-up review of the company’s records, government inspectors determined additional products produced and shipped in 2008 to be of concern because they may have been contaminated with E.coli, the service said in a notice on its web site.
This batch was produced from February 19, 2008, to May 15, 2008. It also had been shipped to distribution centers, restaurants and hotels within California, the notice said.
“While these products are normally used fresh, the establishment is taking this action out of concern that some product may still be frozen and in commerce,” it said.
What’s really gross is that one hamburger patty can be sourced from dozens of cows, from all over the world. Burgers should be called “e.coli surprise”
The pirates are doing a hell of a job boosting their local economy!
Somali pirates free oil tanker for record ransom
MOGADISHU ~ Jan 18, 2010
MOGADISHU (Reuters) - Somali pirates freed a Greek-flagged tanker carrying 2 million barrels of oil for a record ransom on Monday and witnesses said four pirates were killed in a clash between rival groups over the cash.
The release of the ship came a day after the money was dropped onto its deck.
The Maran Centaurus was seized on November 29 with 16 Filipinos, nine Greeks, two Ukrainians and a Romanian on board. An aircraft dropped a ransom believed to be between $5.5 million and $7 million onto the vessel on Sunday, officials said.
“We have agreed to solve our disagreements and release the ship. It is free and sailing away now,” one of the pirates, Hassan, told Reuters by telephone. “The crew are all safe.” Another pirate and a regional maritime official confirmed that the tanker, hijacked near the Seychelles archipelago in the Indian Ocean, had been freed on Monday.
The ransom dwarfed sums paid previously for vessels held by Somali sea gangs. A dispute between two rival pirate groups over the spoils had delayed its release.
Long time lurker……..need some help.
I live in bubble central…….orange county in central florida.
I am currently renting a house……..how do i find out what mortgage(s) are tied to the owner of the house? (website link if at all possible……)
Lease is up and we were going to renew for another year but the owner of the house just sent an email stating that a couple of unforseen things just came up and they will let us know next week if they are able to put the house up for rent. Very strange……….knowing what they paid for the house…..i can’t see how they could be losing money on what we pay each month but i am sure they took out an HEL………just trying to prepare for what our next steps might be……….thanks in advance for any help!
http://www.ocpafl.org/rec_srch.html#1
You may have just hit paydirt: the bubblesit-turned-squat. You may be able to live rent free for a year or so if this plays out a certain way… if you’re lucky the bank sold the mortgage and it was securitized, and the LP was filed by MERS. I’m drooling right now — you might have a grandslam here.
BTW, I put all of the pieces together on my rental deal. As it turns out my LLs are really worried about vandalism and squatters, so I really could have put the screws to them over our monthly rent, but it’s still a great deal for both parties.
Anyway, check the above site. Let me know if you need more help.
Muggy- Pulled up the web site and searched by address.
8743 Coco Plum Place Orlando FL 32827
Found the house and those are the current owners.
Do i go to “sales information” next?
Not really sure what I am looking for……….
Appreciate the help.
Just to clarify………i checked the house and it is not in foreclosure…just wanted to check if they had a huge mortgage or heloc the crap out of it. Either that are they want to cut their losses and just get rid of the house……
You might also need this site:
myclerk.myorangeclerk.com/default.aspx
Hang tight, I have a longer post that may take a while to load. Here is the short of it (dig around here):
http://www.ocpafl.org/rec_srch.html
Thanks Muggy!
No problem. There will probably be a lot of terms in latin, our property appraiser acronyms… feel free to ask for more help. It took me a while to get up to speed, but I can navigate Pinellas public records now with blazing speed and accuracy.
Muggy- Pulled up the web site and searched by address.
8743 Coco Plum Place Orlando FL 32827
Found the house and those are the current owners.
Do i go to “sales information” next?
Just to clarify………i checked the house and it is not in foreclosure…just wanted to check if they had a huge mortgage or heloc the crap out of it. Either that are they want to cut their losses and just get rid of the house……
Appreciate the help.
Owner 2 is a flight instructor — might not have much work
Owner 1 no info
They paid their 2009 tax bill
Still looking… I may have to revisit this tomorrow — I’m tired!
WTF, they paid off their note 11/19/07!
Here is where the problem may be:
Domestic Relations Court Pape
Rec Date: 08/18/2009 02:20:09 PM
That record is not viewable to the public. Divorce maybe? You’re close to the bubblesit jackpot!
Run your owner’s name on the comptroller site:
or.occompt.com/recorder/eagleweb/docSearch.jsp
Muggy- The husband is a pilot working for the United Arab Emirates from what we know. ……
Interesting if they did get divorced.
When youy say they paid off their note…..does that mean they don’t have a mortgage any longer?
Once again i appreciate the help…….go to bed!
Interesting, the woman’s name came up as “living in Dubai” on some social networking site, but I don’t understand Arabic.
Yes, “paid off note” means that they paid off the mortgage.
Off to bed! Good night, and thank you HBB. This bubble sucks. I can’t believe I am thinking back to the dotcom crash as the “good ol’ days.”
Sale Date: 12/30/2002 $/Sq. Ft. $121.00 2nd Mtg.
Estimated Sale Price: $225,500.00 1st Loan: $214,150.00 Prior Sale Amt: $480,700.00
Recorded Doc No: 6752-3563 Loan Type: CONVENTIONAL Prior Sale Dt: 02/11/2002
Doc Type: WARRANTY DEED Xfer Date: 1/21/2003 Prior Doc No: 6465-3817
Seller: CAMBRIDGE HOMES LTD Lender: CAMBRIDGE MTG CO LLC Prior Doc Type: SPECIAL WARRANTY DEED
Following is the history I see (including the above):
2/2002 Purchased by Lake Nona Land for $480k (perhaps just bought a bunch of land at that site)
1/2003 Purchased by current owners for $225k, financed at $214k
9/2004 Refi for $24k (looks like a HELOC)
9/2006 Refi for $148k (looks like another HELOC)
Same two names are on each transaction.
does make more sense that they refinanced.
woops! Does make more sense that they refinanced as they told me the rent we pay doesn’t cover their costs.
Not sure what is going on at this point…she asked if we could do a month to month thru the end of April.
I sent an email back asking what the deal was. (i.e. are they trying to sell etc.)
Appreciated the help.
Hey Muggy
i posted a couple of days ago about my sister and BIL who forked over $152,000 for a 3,000 sq.ft. (2005) in citrus springs. The lot is 9,000 sq. ft.
If it were you deal or no deal?
JD, I really have no idea. Rural New York puts me at ease, but rural/ex-urban Florida is very scary. I went to Citrus County for Thanksgiving two years ago, and honestly, that’s the Florida of my nightmares.
I just don’t know enough… however, my wife’s cousin was a Salvation Army officer in that area and he said he kept up with about 300 hundred men who lived in the wild, off the land. They would come out of the woods for service, or the occasional can of beans or whatever. My BIL was floored when a work buddy took him up there and they kilt and cleaned a hog and cooked it with pure lard.
I dunno, I say culturally no deal, but that doesn’t mean it isn’t great for you sister. Does she like paddling faster?
Funny Muggy
i know she likes limbaugh but isn’t into the evangelical scene at all.
RE: upstate Ny
ever heard of dolgeville (near little falls) I visit a friend up there from time to time.
I think it avoided the last half of the 20th century. Did you mention bubble pricing in Rochester? If the bat factory in dolgeville closes i think the town will disaoppear.
It definitely seems to be a different sort of backcountry compared to upstate Florida.
Really interesting finds about Bobb Mac’s homeowner’s history. I would have thought that you need to trot into the city hall for all those records.
Here we go again!
Hi John,
As we have been saying all along … short sale and REO flipping
are becoming more and more accepted by the government and major
lending institutions. This is evidenced, among other things,
by Freddie Mac’s recent bulletins, updated credit policies by
major lenders allowing for C buyer financing, and revised title bulletins
stating that the C purchase price does not need to be revealed
to the A lender as long as certain disclosures are made.
Last Friday the FHA has rescinded its 90 anti-flipping rule and will,
for a period of 1 year, allow FHA buyers to obtain loans
on properties that have been recently purchased by investors
who intend to flip them for a profit.
This “green light” by FHA means that if you’ve been on the
sidelines of property flipping, you need to educate yourself
as soon as possible, because investors will be coming on
strong for 2010 given this latest news.
So click here to sign up for our webinar Tuesday night at
8:30 PM ET, 5:30 PM PST where we’ll explain everything:
http://www.shortsalewebinarsignup.com