Bits Bucket For April 27, 2010
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Good Morning Friends. Today is the big day for Goldman.
Btw, yesterday I drove to Laurel Mall in Laurel,MD and was shocked to see only 4 cars in the Parking Garage around 6PM. Looks like many stores are closing due to poor business but the economy is/has recovered as per Govt./Media.
I can’t wait to watch Fabulous Fab testify. Sometimes sacrificial lambs do some squealing.
It’s gotta be entertaining. Got popcorn?
April 26, 2010, 2:39 p.m. EDT
Tourre emails show agony, ecstasy of being a banker
Goldman executive director wrestled with ‘ethical questions’
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) — Fabrice Tourre comes across as an arrogant investment banker in the Securities and Exchange Commission lawsuit against him and his employer Goldman Sachs Group Inc.
But personal emails released by Goldman (GS 150.83, -1.20, -0.79%) this weekend show Tourre struggling with “ethical questions” as he sold complex mortgage-related securities that he worried were suspect.
The SEC charged Goldman with securities fraud on April 16, alleging the investment bank didn’t tell investors in a collateralized debt obligation that hedge fund firm Paulson & Co. helped structure the deal and was betting against it. Goldman and Paulson have denied wrongdoing. Read about the charges.
The SEC also charged Tourre, an executive director in Structured Products Group Trading, with securities fraud, alleging he was mainly responsible for the CDO, known as ABACUS 2007-AC1. Pamela Chepiga, an attorney for Tourre, declined to comment.
In the suit, the SEC quoted a January 2007 email that Tourre sent to a friend.
“More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab[rice Tourre]… standing in the middle of these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!! (sic)” he wrote, according to the SEC.
…
I have been watching the testimony live. I have never seen more slimy, slippery, evasive, buck-passing dorks in my entire life than these Goldman guys. These guys make politicians look like boy scouts.
Exactly.
But the Eagle Scouts were the congressmen who let this all happen with no investgations when they knew something was up. O, I guess money contributions were more of a important matter.
Tourre is F-ing Fabulous! I keep looking for the ventriloquist sitting next to him with his arm up his butt.
Should be quite interesting indeed:
Goldman Sachs Group’s Fabrice “Fabulous Fab” Tourre is no villain. In fact, there’s reason to find him an unwitting hero of the public conscience, despite whatever efforts are made by a camera-hungry row of senators Tuesday.
Just read a series of 2007 emails between the young Goldman mortgage banker and his girlfriend, recently released by the bank. Endearingly smitten, the then-27-year-old openly questions his place in an ever-absurd realm of CDS, CDOs, and CDO-squareds.
Senators will delight in these sarcastic emails, grilling the only person charged in the SEC’s blockbuster fraud case against the bank. They may not recognize that Mr. Tourre shows powers of self-reflection largely absent from his superiors. From hundreds of pages of documents, only the young, overworked vice president struggles with the ethical role of high finance in a broader society.
http://online.wsj.com/article/SB10001424052748704464704575208522096022434.html
They may not recognize that Mr. Tourre shows powers of self-reflection largely absent from his superiors.
Oh, they’ll recognize his “powers of self-reflection.”
Senators aren’t stupid people (for the most part). The question is whether the Senate has the cojones to pursue higher-ups, or do anything besides bloviating from their committee chairs.
The fact that a 27 year old was the Vice President in charge of anything other than the coffee machine at Goldman Suks says volumes.
Much like the militias and their 12 year old “soldiers” in Africa, it appears that he was picked because he was too young to have developed a set of morals or ethics. Prime material for GS to develop into an amoral killer
Can’t get this post to go through.
Well worth the listen:
This American Life and Planet Money do a story on Magnetar and CDO’s.
Here’s the link: thisamericanlife.org/radio-archives/episode/405/ inside-job
X-GSfixr, you nailed in one.
“…nailed it..”
Is it too late for coffee?
Yes. It is in their best interest to vilify this guy as a rogue monster and make an example of him and others they don’t really give a crap about. Then they can just say they found and corrected the problem, apologize, and move back to business as usual, including a few sweet political contributions.
As President Obama makes the case for strong financial reform, Bill Moyers
sits down with veteran regulator William K. Black, who says Wall Street is
already breaking current rules. You can watch the full interview here:
http://www.pbs.org/moyers/journal/04232010/watch.html
BILL MOYERS: Bill, are you describing a political culture, that is
criminogenic?
WILLIAM K. BLACK It’s deeply criminogenic. And this ideology that both
parties are dominated by that says, “No, big corporations wouldn’t cheat.
Fraud can’t happen. Market’s automatically excluded,” is insane. We now have
the entitlement generation as CEOs. They just plain feel entitled to being
wealthy as Croesus with no responsibility, no accountability. They have
become literal sociopaths. So one of the things is, you clean up business
schools, which right now are fraud factories at the senior levels, right?
They create the new monsters that take control and destroy massive
enterprises and cause global economic crises, cause the great recession.
“They have become literal sociopaths. So one of the things is, you clean up business schools, which right now are fraud factories at the senior levels, right?
They create the new monsters that take control and destroy massive
enterprises and cause global economic crises”
No worries mate,
“TruePatriotCEO™” + “TrueGovernanceBoard™” =
“TrueEthics™” magnified x 7
Hwy’s motto for 2010: “Keep Americans safe…protect CORPORATIONS!”
And a guy who gets caught with an ounce of pot may spend his life in jail (3 strikes law).
WTF.
Another dog and pony show.they wont do a dam thing to them.this is all about show for the sheeple.
Glad to hear that Gollum is going down with the ship they helped to sink.
David Weidner’s Writing on the Wall
April 27, 2010, 12:01 a.m. EDT
Goldman culture crash
Commentary: From white shoes to the ‘Fabulous Fab’ tap dance
By David Weidner, MarketWatch
NEW YORK (MarketWatch) — More than anything else, the Securities and Exchange Commission’s fraud case against Goldman Sachs Group Inc. has illustrated the fall of the firm from Wall Street’s preeminent bank to riverboat casino.
The case is the final indictment in long decline for the brokerage. Some of the wounds have been self-inflicted, others by outside forces. The upshot is that during the last decade, Goldman (GS 151.00, -1.03, -0.68%) has transformed from a client-oriented firm to a bona fide hedge fund. For a while, it was one of the best. But now, as the SEC case shows, it’s as sloppy and imperfect as any on Wall Street.
To understand how far the mighty have fallen, one needs to understand the awe and envy Goldman once elicited. Goldman wasn’t just one of the most profitable firms, it was the No. 1 choice destination for graduates of Harvard Business School and Wharton. It was the first advisory choice for chief executives looking to do deals.
As Jonathan Knee, an investment banker now at Evercore Partners Inc. /quotes/comstock/13*!evr/quotes/nls/evr (EVR 36.54, -0.54, -1.46%) , put it in his book, “The Accidental Investment Banker,” the admiration built into the Goldman brand helped him win the confidence of Fortune 500 CEOs despite his early inexperience.
Knee wrote that working for Goldman carried weight when he proposed sometimes unorthodox ideas that might have been dismissed had they come from other bankers. Instead, Knee wrote, CEOs would say, “‘Well, he’s from Goldman, so there must be something here.’”
He added “At least as important as the money, being at Goldman bestowed a kind of credibility that no other institution could match.”
Knee said he left when he felt Goldman began moving away from its roots and other banks became more competitive by using their balance sheets to finance deals. But there was more to the change. Goldman’s trading desk grew exponentially during the last decade and changed the culture of the bank.
…
To understand how the mightly have fallen?
Wake me up when they actually fall.
Bingo. Until the prime parties end up in jail or the poorhouse, all this is posturing.
Even if GS itself is somehow taken down, as a company - if another entity takes its place and/or if other WS entities simply absorb GS’s power and people, then nothing is gained. What is needed is a total shrinkage of this banking cartel as a whole, and I don’t see that happening at all.
Perhaps a good measure would actually be total banking office space occupancy itself. In nominal terms, that is; or at least population adjusted (i.e. not in terms of percentage of total office space - since I’m sure the latter has grown by leaps and bounds the past 10 years or so).
Here is perhaps one measure. It looks heartening actually, however with two caveats:
1. This doesn’t break out the big guys vs. the small guys. I don’t have the raw data broken out (maybe I’ll see if I can find it sometime), but from various articles I’d venture that the primary component of the recent drop is small and medium banks - the big ones haven’t been affected nearly as much.
2. Despite the recent drop - we’re still far above pre-bubble levels, even in GDP-adjusted terms.
In short - an ever-increasing percentage of our overall economy is simply managing money, with the money managers making big bucks skimming off the top, rather than producing actual stuff.
But…but… I thought they were “producers.”
In short - an ever-increasing percentage of our overall economy is simply managing money, with the money managers making big bucks skimming off the top, rather than producing actual stuff.
DING DING DING. Too little investment is bad because companies can’t buy equipment and plant to maximize efficiency. Look, the financial stuff is necessary to a functioning economy. But we have SO MUCH money circling around Wall Street looking for a place to land that instead of investing in productivity improvements, it simply goes around bidding up the price of assets (stocks, RE, bonds etc.) making it LOOK like it’s being productive while actually just creating greater wealth disparities and increasing the leverage on the economy.
Private Equity Standard Operating Procedure (As seen from personal experience):
-Loudly announce that some publicly held coropration is “inefficiently managed”
-Buy out publicly held company on the cheap, when it is “undervalued” and take it private.
-Pocket all the cash lying around (product development budgets, pension plans, rainy day money).
-Borrow all the money you can while the company still has good credit, pocket this cash as “management fees” (because, after all, great management talent such as yourself deserves it).
-Start reducing head count. Get rid of all the engineers, product support people (aka “unneccesary overhead”). Keep only minimal staff, and run them into the ground with mandatory overtime. Quit buying spares/inventory
-Flip company for a profit after a few good quarters.
This has been SOP since the 1980s.
Comment by oxide
2010-04-27 09:36:00
But…but… I thought they were “producers.”
—————–
Do you dare question the authority and greatness of the mighty financial wizards?!?!
You must be one of those lowly, unproductive “workers” who is a parasite upon the wealth that is *earned* by the almighty money managers.
/sarcasm
I’m not sure how important this all is. What you can also see from all the interaction is the bank acted in bad faith to a wide variety of customers.
Much like any casino, if you get caught cheating nobody want’s to play.
Clearly a business like GS, that is primarily a trust business, has broken that on many levels. They allowed a climate where they had conflicts of interest and activly decieved clients and customers.
Since a bank is a place you are supposed to trust with your money, they don’t serve any function. Except as a criminal enterprise with access to Fed funding to play hedge fund games and do front running schemes with futures.
While there may not be any criminal behavior here, this business is like Arthur Anderson, and not performing their primary function.
Clearly a business like GS, that is primarily a trust business, has broken that on many levels. They allowed a climate where they had conflicts of interest and activly decieved clients and customers.
Unfortunately, the big clients are pension funds, schools, municipalities/governments, etc. Since the people managing these funds likely aren’t directly affected by loss like an individual investor would be, will they change their behavior/take their business elsewhere?!
After this, imagine the delight of your average joe politico when they get to tell voters ” We selected Goldman Sachs as our bond underwriter”.
Or the general pension fund manager saying “We are buying bonds sponsored by Goldman”
Or we have purchased derivatives to insure…
So, yeah, I think they will take their business elsewhere.
There business is taking money and front running the markets OR pumping up markets with selected funds and then buying options and pulling money out.
Basically I believe the criminal part of the action was all the front running. Also probably can use the RICO acts and charge them with conspiracy.
Front running, naked shorts and insider trading.
I am listening to some of Lloyd Blankfein’s testimony, and he is coming off as a pathological liar. He’s not polished, but stammering around with complete defiance and arrogance.
The Ministry of Truth also has told us that the bailouts have been paid back, that sovereign debt levels will have no impact on inflation, that derivatives are essential to the function of healthy markets, and that FASB standards don’t matter when evaluating the health of financial stocks.
All is well.
Nice post, NSO.
4 cars? In the whole parking lot? I think you may have missed a few. There would be more than 4 cars from just the employees if there were 0 customers inside.
Maybe employees have some parking on the rear side of the Mall. Almost 70% stores were locked or vacant. The only big store open was Macys. I was shopping alone in the Mens section.
Yeah, there’s a reason that there’s a listing for Laurel Mall on the “Dead Malls,” website. That place has been in a long, slow death spiral for a decade or more. ISTR that the current management bought it shortly before the money for CRE dried up, so there’s not much chance of the sort of major refurbushment that would be required to bring it back to life. Let’s face it, when you can’t even afford to keep big chunks of the parking structure from falling off, the rest of your maintenance budget is probably being shorted too.
Is this the mall that used to have a Montgomery ward? The whole place was a dump but back then we didn’t know better.
There’s a mall like Laurel here in Tucson. It’s the El Con Mall. Used to be a thriving place — matter of fact, when it first began, it drained off enough business from Downtown Tucson that Downtown went into a death spiral.
In recent years, El Con has become sort of a gangbanger hangout, and a lot of people have decided to stay away. There’s some sort of renovation effort underway, but, in my opinion, it’s too little, too late.
There’s a Home Depot at the mall’s eastern edge. During the housing bubble years, HD was packed to the gills. These days, you can actually get waited on in there. Seems that the employees don’t have that much to do.
There’s a Target south of the Home Depot, but the help is so surly that I try to avoid it as much as possible.
In short blaming Laurel Mall’s problems on the current economy, is kind of like blaming the kicker for missing the 56 yard FG attempt with 30 seconds left whe you’re 6 points behind. Yes, if he’d made it you could try for an onside kick, but…. Yes, if money was still flowing, the management MIGHT have been able to rescue the mall from it’s own demise. But that place has been going down hill for more than a decade, probably something more like two.
There’s a mall like Laurel here in Tucson. It’s the El Con Mall.
I used to call El Con “The Budget Mall” back in ‘88 when I worked at Foley’s.
A drunk guy in one of the fast food joints once told me he was the Sheriff of Nogales. I bought him a soda, because it was really such an imaginative pitch.
Got a smokin deal at Macy’s…. Just bought a pure black Calvin Klein Suit … they were having a sale (when don’t they??)
These suits aren’t cheap… great feel. After discount + additional 20% discount from opening a Macy’s card… out the door for $220
Just for kicks… called Men’s Warehouse. Got a quote for the exact same suit.. salesman says they “start at $400″.
Sometimes shopping can be a good thing, if u hold out for the right deals!!
While my mother had me dressed in them as a small child from time to time, I have never owned a suit in my adult life. With no aspirations to corporate life, I have no need for them. Funeral and wedding attire consists of a nice pair of slacks, with shirt and tie.
But hey, Grizzly Bear, YOU’RE not posing as Secretary of the Treasury!
“…..I was shopping alone in the Men’s Section….”
Maybe this says more about you, than it does about how business is doing.
A full parking lot doesn’t necessarily mean that a mall is healthy either. Around here, many of us (and I’m including myself) use the mall parking lot as a place to stash our cars while we take the bus into town (that way we don’t have to play musical parking spaces — moving our cars every hour.) The owners of the mall seem to encourage the use of their parking lot as a sort of park-and-ride center — it makes the mall look like there are a lot of customers.
Did anyone get into the discussion of whether the 2008 pattern of bailouts and non-bailouts, as executed by former CEO HP, was explicitly designed to sink major competitors Lehman and Bear Stearns in order to strengthen Gollum’s market position? A little bit of Congressional investigation ought to be sufficient to get to the bottom of what really happened. America’s voters would love to know the truth.
Well, this evening I was shocked to find my trailing stop in Pfizer was activated.
I got a rise out of that. Pun intented.
Over $9k added to my cash position. Woot!
Tonight I see Asian stock indices are sinking.
Safe havens are getting popular, be they gold or cash. Interesting.
Unpossible!
Maryland is the center of the known universe! Everyone is rich here - money comes flying out of DC and rains over the land!
Well, okay, that’s what I’m told… but reality is slowing entering even Maryland, one of the last fortresses of the Housing Bubble in this nation.
It would indeed be interesting to see what Goldman has to say…
Bah, these are just circuses for the media. I am still convinced that Blankfien and his priesthood will spout some talking point platitudes approved by legal, and then they will go back to New York to be treated to filet mignon, caviar and Dom. What’s a few hours of humiliation compared to a few billion in profit and few million in bonuses?
Meanwhile, somebody will write a long-winded report in the next 30 days, which will be shipped to the Library of Congress to die that most undiginified Death by Microfiche.
Wake me up when these Congressional hearings are actual trials.
I agree. I somehow doubt the buck stopped at Fabrice Tourre. That would be ludicrous.
If there is a finding of wrongdoing, doesn’t that set the foundation for actual lawsuits?
Some believe that as long as everyone does what they are expected to do, the terms of settlement plan are pretty much already agreed to.
Settlement with the SEC maybe, but I don’t think that precludes other lawsuits. Particularly after they would have just admitted wrongdoing. I predict a lot of ensuing (haha) lawsuits- the giant squid is wounded, gushing blood and attracting sharks.
sacrificial squid anyone?
Does it tell you anything that GS is up substantially today while other banks are down?
sacrificial squid anyone?
I’ve tin-foiled that myself. Heap *all* the blame on GS, breaking them up in some way, and the rest of Wall Street gets a pass.
“Heap *all* the blame on GS, breaking them up in some way, and the rest of Wall Street gets a pass.”
They can call it, “The Calamari Bill.”
They can call it, “The Calamari Bill.”
LOL - that’s good!
Good analysis Oxy, I have zero expectations for these hearings.
In general, perpwalks are done over at the SEC or DOJ. Congressional hearings are of course mostly political theater, but at least there’s a CHANCE of a “Holy Cr@p, they managed to do all this WITHOUT breaking any laws? We’ll have to change some laws to prevent this in the future.” sort of lightbulb moment.
Goldman is fixing to get nailed to the ‘Barn door”.
They are laughing all the way to the bank.
No kidding! Give me a couple of billion and those crooked pols can yell at me for a whole year straight. (Just keep my water pitcher filled) Think about the risks some people take every single day just to make a living wage!
The bankers know the politicians that run this country are crooked, spineless hacks. Cheaper than Craiglist hookers.
Well worth the listen:
This American Life and Planet Money do a story on Magnetar and CDO’s.
Here’s the link: http://www.thisamericanlife.org/radio-archives/episode/405/inside-job
Boynton Beach newlyweds sue developer saying it allowed their neighborhood to be ruined by flippers
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 5:39 p.m. Monday, April 26, 2010
Newly wed and planning for children, Jonathon and Brandy Miller thought they were buying into Mayberry.
Instead, the Boynton Beach couple say they live in a development ravaged by flippers.
First a ghost town of vacant properties, they complain their community of three-story town homes is now overrun by “irreverent transients” who park erratically, leave trashcans perpetually curbside, throw loud parties, install unsightly and unauthorized satellite dishes, and fail to pick up after free-roaming dogs.
They blame developer K. Hovnanian for letting it happen.
And the Millers, who bought pre-construction in 2004, want their money back.
In a lawsuit filed this month in Palm Beach County Circuit Court, the Millers say sales agents told them the new Firenze development on Congress Avenue was going to be a “warm,” family-friendly neighborhood of homeowners.
At the same time, however, agents were selling multiple properties to individual investors.
Also, despite contractual language to discourage flipping, the lawsuit claims the Tuscan-style Firenze homes were bought and sold unchecked during the real estate “go-go” days.
As the boom went bust, the couple claims investors scrambled to find buyers for the vacant homes. When that failed, they rented, or walked away.
“We just feel like we’ve been wronged,” said Jonathon Miller, 32, who paid $359,326 for the home. “We were misled when we purchased it and we finally just got fed up and had to take some sort of action to address it.”
Miller is an attorney with Wicker, Smith, O’Hara, McCoy & Ford in Fort Lauderdale, the same firm handling his case. His wife is the executive director of a non-profit group.
In 2006, the couple moved into their new 1,890-square-foot home.
Just days later, the lawsuit claims, their “unbeknownst and unthinkable nightmare began.”
Transient neighbors shuffle in and out. The exercise room was burglarized. The clubhouse remains locked for fear of vandalism. Landscaping deteriorated.
——————————————————————————–
•Home purchase price: $359,326
•Total current market value: $166,000
•Of 30 homes in the Millers’ direct vicinity, 22 list the owner’s mailing address as different from the property.
I used to live in Boynton Beach. $166k for any condo that isn’t right on the beach is way, way too high still. Let alone $359k. Cripes.
Congress isn’t exactly the best area of town. Not as bad as the east side of 95, but still - it’s generally strip-mall central. Not a bad place to buy stuff, but I wouldn’t want to live there.
$70k sounds about right.
Boynton Bch. the new Riviera Bch.
Whats interesting about a lawsuit like this is that it has some merits . Instead of the public bailing out the Investment Houses
the real issue is the damage the faulty lending and breach of
fiduciary duty did to the real estate market . People should of had a reasonable expectation that they were competing with viable buyers when they bought rather than being victims of faulty and fraudulent lending . No doubt the public across the Nation overpaid on their property taxes for started as a result of the artificial raising of values by this breach in duty of underwriting loans and rating risk accordingly .
. Would you of put you money in a FDIC insured Bank if you thought it was making loans to flippers who didn’t qualify ,
or a buyer who was getting 50k in incentives under the table to take a property off a flippers hands .And wouldn’t it just piss you off when you found out later that the note was sold to a unregulated entity ,who leveraged by 40X’s
who misrepresented it to a Pension fund for instance .
Is the role of a lender simply to hand out money without the compliment roll of underwriting the loan and preventing fraud ? Is the role of the lender simply to create toxic junk so they can short it ? Isn’t the issue that the Investment Houses got the money to play with to begin with by misrepresentation of the
risk of the securities they were selling ? This is why they enacted Glass -Steagall to begin with .
I think where the public was confused is that they were use to the Banking system prior to de-regulation and there would be a
assumption that they were competing with viable buyers and
Banks wouldn’t make loans unless they were viable . It didn’t take long for the REIC to realize they could get any deal through ,and a person who wanted a money ATM was called on constantly to free their equity by a liar loan that the agent would take care of . Is there any question that Investment Houses treat loans like casino betting ,when lending should be based on very different principals ,such as the borrower having to ability to repay and the asset has to be appraised properly .
This is no joke what the Investment houses did to our Society .
The fact that the TBTF is even acting like they are respectable Lenders that just got caught in a didn’t see it coming out of the blue real estate turn down ,not of their own doing, is absurd .
This does not let borrowers off the hook however who
knowingly committed fraud or any entity or person that contributed to the fraud of the market .
The PR of Wall Street goes into big campaigns to try to take the
heat off of what they actually did ,and the Politicians go right along with the talking points which are absurd . The Investment Houses should of given restitution to the public .
“And the Millers, who bought pre-construction in 2004, want their money back.”
And I want half of the money back that I have paid in rent from when I sold my place and started renting in Sep. 05, I am going to call Wicker, Smith, O’Hara, McCoy & Ford and say I WANT MY MONEY BACK!
They should just go Bk and everything should be overhauled .
They probably make too much money have too many assets to go BK.
It’s a lot harder these days, remember?
Miller is a lawyer and thinks he can sue a real estate agent for telling him the new development will be “warm” and “family-friendly” ?? Nuisance suit. I guess they’ll settle it for a pittance.
I don’t think you can sue for a little bit of sales puff ,but I don’t know about the fact that the lenders conspired in fraud to
give loans to people who couldn’t afford them while they sold this junk to the Secondary Market . Interesting someone was saying on TV today that in 2002 that F&F started taking a back seat in lending and that is when Wall Street stepped in with
their CDO securities and flooded the market with easy lending and toxic product and the lending only went downhill more with time .
A ex-mortgage broker said that the combination of the front line lender incentives with Wall Street and their CDO’s with floods of money from around the World was a combination that should of never come together . Apparently F&F called the underwriting standards prior to this flood of Wall Street Lender financing . When you think about it 2002 was when thinks started turning nuts with the crazy lending and ever increasing new wave loan product .
Interesting someone was saying on TV today that in 2002 that F&F started taking a back seat in lending and that is when Wall Street stepped in with
their CDO securities and flooded the market with easy lending and toxic product and the lending only went downhill more with time .
——————
This is what I’ve been trying to get across for a long, long time. Fannie and Freddie did NOT cause the credit/housing bubble and ensuing crisis. They were pulling out as the gamblers moved in (largely due to their issues in 2003 and 2004, when they were required to reduce their portfolios and increase capital ratios).
The true culprits in this crisis are sitting in front of congress right now (they and their ilk, along with their entourage of supporting entities).
Latest on Greece, Bank Failures Coming:
April 27 (Bloomberg) — Greece’s banks may run out of the collateral used to get funding from the European Central Bank as Greek sovereign debt falls in value, according to Citigroup Inc. Chief Economist Willem Buiter.
Greek banks probably get most of their short-term funding from the ECB, using mainly Greek sovereign debt as collateral, Buiter wrote in a report yesterday. When the value of the state debt falls in the secondary market, the decline in the mark-to- market value of the collateral may trigger margin calls — or demands for more collateral, Buiter said.
Greek Banks Slide
National Bank fell 5.6 percent to 10.49 euros as of 1:58 p.m. in Athens trading today. Eurobank lost 5.7 percent to 5.11 euros, Alpha slid 6.2 percent to 5.65 euros and Piraeus sank 6.4 percent to 5.09 euros.
If Greece’s lenders run out of collateral and suffer an outflow of deposits, the ECB would have “to reduce the minimum quality threshold on securities acceptable as collateral, currently BBB- or the equivalent, or refuse to lend to the Greek banks,” Citigroup’s Buiter said. That would spark “a funding crisis and possible bank failures,” he said.
Oh, PLEASE let the whole thing just cave in, sweep the board and re-set.
Does Greece have any volcanos? Maybe it could team up with Iceland and create a pincer effect on Europe.
Dammit, doesn’t anyone believe in pulling the bandaid off fast?
“Does Greece have any volcanos? Maybe it could team up with Iceland and create a pincer effect on Europe.”
I’m not sure about Greece, but the Azores (a possession of Portugal) definitely does. Maybe one of them will erupt and spew dust into European airspace.
Isn’t it the Azores that has an island ready to shed billions of tons of rock into the sea, creating a tidal wave that wil swamp everything east of the Appalacians?
Canary Islands IIRC
Right you are.
If…probably….may….
2-year bonds at 15% this morning. Ouch.
Three year bonds are almost at 15% yield.
Sorry, two year at 14.85%. My bad. Time for another cup of coffee.
Well by the time you finish that cup….
Too late. They crossed 15% earlier. Dipped below for a short while, but now up to 15.14.
Dominos, anyone?
Has anyone checked if Goldman Sachs (lead by Saint Blankfiend the Merciless) is still involved with covering up Greek debt?
With each of the major parties engaged in the usual partisan struggle to out-demonize the other, it is hard to tell the good guys from the bad guys on the financial reform proposal.
In case any Republican strategists are listening, I have a suggestion:
1) Draw up a counter proposal on financial reform with substantive provisions for ending the Wall Street Megabanks’ sweetheart too-big-to-fail insurance program, in order to make it clear in no uncertain terms that the Republicans are the true party of financial reform and the Democrats are pretenders.
2) So long as the counter proposal would sufficiently jeopardize important Democratic Wall Street connections were it to pass, the Democrats would be forced to scuttle it, thereby revealing their
hypocrisy.
3) The Republicans could then claim the mantle of being the true party of Wall Street reform, and use this to help themselves win Main Street votes come Fall 2010 election season.
4) Wall Street would be the big winner, with an increase in the number of Republicans in office who actually did nothing to reform the financial system, but who appear to have tried, only to be thwarted by anti-reform Democrats.
The Wall Street Journal
* BUSINESS
* APRIL 26, 2010
Finance Bill Hits Impasse
Senate Vote Forces Democrats to Deal; Consumer Watchdog Agency in Play
By GREG HITT and MICHAEL R. CRITTENDEN
…
The temperature will rise Tuesday, when Goldman Sachs Chief Executive Lloyd Blankfein and other top Goldman executives will be grilled by the Senate Permanent Subcommittee on Investigations, which is examining the role of investment banks in the financial crisis. The committee released a raft of emails Monday designed to show, contrary to the firm’s contention, that Goldman had a clear strategy of betting against the collapsing mortgage market.
On Wednesday, President Barack Obama will keep up the pressure with a speech in Quincy, Ill., urging action on the finance bill, which would represent the biggest reworking of financial regulation since the 1930s. Last week, the Senate appeared to be on a speedy track to finish the legislation amid some Republican disarray.
The tables appear to have turned, for now. Monday’s outcome in the Senate marked the first time Republicans have successfully voted to stall action of a major legislative priority of the Obama White House.
Still, both sides are spoiling for a fight over the financial-overhaul bill. Democrats said they’ll use the Monday vote to paint Republicans as doing the bidding of Wall Street, while regrouping to again bring the legislation to the Senate floor. Republicans said they’ll now be better able to win concessions in discussions over the bill.
Before Monday’s procedural vote, Democrats agreed to kill a provision from their bill concerning derivatives that would have helped Warren Buffett’s Berkshire Hathaway Inc., Omaha, Neb., avoid a big financial hit. The initial provision was inserted at the request of Sen. Ben Nelson (D., Neb.). Mr. Nelson joined with Republicans in voting against Monday’s procedural action, saying the impact of the legislation wasn’t yet clear.
“There are more rumors about it … than answers about it right now,” Mr. Nelson said. Among his concerns are the impact on auto dealers and Main Street in general, he said. He didn’t specifically address the Buffett provision.
…
There’s nothing wrong with betting against the fact that the housing market didn’t climb to infinity.
The problem is that Goldman created securities that were designed to fail, by a hedgie who was betting the farm that they would.
Technically, this wasn’t illegal because Wall Street has essentially been regulating themselves the last decade, so “illegal” can’t be proven because there were no laws against the practice. The SEC was too busy downloading pornography to really care. Now they want to prove how badass they are by trying to show J6P their big pendulums are swinging the other way.
The problem is that Goldman created securities that were designed to fail, by a hedgie who was betting the farm that they would.
This feels like a form of insider trading. Same with the “backdated” stock options.
It ALL insider. That’s all Wall St. is.
More and more these days in fact the WS insiders aren’t even people; they’re computers.
I’d like to see some computers do a perp walk, in fact. Seems like an idea for an SNL skit, actually - now that I think about it.
I think the key is that they were betting. This was just like in Vegas.
GoldenmanSucks Inc. = “TrueFinancialCult™”
Change a few Gov’t rules…Shazam!
GoldenmanSucks Inc. = “TruePatriot™”
You forget that both sides work for MegaBank Inc.
One can hope. (not that both sides would work for Megabank, but that one one somehow break out of Its grasp)
PB appears to be, like me, unfortunately infected with a touch of “hope-itis”. Alas though - you are right. Which is why PB’s suggestion will never be implemented.
“You forget that both sides work for MegaBank Inc.”
Oh no, I didn’t forget. Note that my modest proposal creates a win-win for Republicans and Wall Street at the expense of Democrats, who are the party of financial reform at the moment.
Dude. Can’t believe you have any faith in the Republicans to put something like that out there.
Both parties are p’wnd by the banks.
If they make it extreme enough to give the appearance of reining in the financial sector with a financial regulatory measure that is too stringent for even Democrats to support it, then it will not pass. Then the Republicans can claim to have tried to achieve financial reform and blame the failure to get anywhere on obstructionist Democrats.
Where is the downside with this plan?
Don’t let the door hit you on the way out….
Sob story from Reuters today about how the illegals are going to be affected in Arizona.
(Reuters) - With Arizona’s crackdown on illegal immigrants looming, Guatemalan Samuel Roldan is swapping the family’s battered Chevy Suburban, which he feels marks them out as low-income migrants, for a smarter, more corporate-looking Nissan.
For Mexican day laborer Rodolfo Espinoza, meanwhile, it was simply time to go back home to work as a fisherman on the Pacific coast of northwest Mexico, where he has a wife and four children. “This new law gives us no other option than to leave … I’m going back to Mexico, where I feel more comfortable,” he added.
—–
Good. Go back where you feel more comfortable. And if you want to come back, do what millions of others have. Get in line, apply for a green card, wait your turn, then come on in. How radical an idea, eh Rodolfo?
I’ll see if I can find a link, but Mexico has issued a “travel alert” warning its citizens not to go to Arizona. Bwahahahahaha! That’s one way of handling the situation, now if we could get all states to enact AZ’s legislation, then maybe Mexico would issue a “travel alert” for the entire US and that would be a gas!
However, my take is that it is just a stunt. A very childish attempt to take a swipe at the US for its various State Department advisories against travel to Mexico because of violent events.
However, I wouldn’t put it past Mexico to start harrassing the retirement enclaves of US citizens in their country.
The hard truth of the matter is, we are at war with Mexico, despite all posturings to the contrary. I’ve said it before: Fedgov needs to get rid of the popular fiction that anything other than drug cartels controls the government there. Of course, the popular fiction allows Mexico to shake down the US for all sorts of “drug war” money. Yep, that’s Mexico, one big blackmail/protection racket and their people along with their advocates continue it in the US with their constant demands which, if not met, will result in civil unrest.
Bwahahahahaha! You won’t see this in any US MSM. Why? Because the majority of US citizens would love it.
http://www.thaindian.com/newsportal/world/mexico-issues-travel-alert-over-arizona-new-immigration-law_100354774.html
The pro-immigration contingent is far smaller than people think. The Nation is a highly liberal weekly mag. Whenever they publish an immigration article, they get a ton of mail…against amnesty. And these are the liberals.
It’s not about voting D or R, and considering I block the mental pollution of the corporate MSM, I did the only thing I felt I could do that would make a difference: send a check to Arizona Representative Russell Pearce’s re-election campaign.
russellpearce [DOT] com
However, I wouldn’t put it past Mexico to start harrassing the retirement enclaves of US citizens in their country.
I’ve long thought that those enclaves were very, very, very vulnerable.
So have I, Slim, so have I. When I’ve heard of American retirees gleefully departing for places like San Miguel de Allende and other spots, with their praises about cost of living and medical care as good as the US, I’ve had little nagging thoughts in the back of my mind that it will not end well. Maybe 10, 20 years ago it was OK, but not now.
While living in Spain for a summer during the 1970s, I was advised to keep a low profile. As in, don’t be one of those loudmouthed American tourists.
Well, I did my best to keep that profile low, and it seemed to work. Was even mistaken for a French gal. And my Spanish is a lot better than my French.
As for the loudmouthed tourists, that honor went to the Germans. You could hear them long before you saw them.
I spent a summer backpacking around Europe with a Canadian flag sown on my backpack.
“You could hear them long before you saw them.”
LOL, Slim! When I was in Italy in 2008 that was my experience as well. And the “walking sticks.” They ALL had walking sticks.
By the way, I’m tired of the “don’t be a loud American” advice. I’ve noticed it usually comes from the holier than thou trying to prove what well-traveled folks they are…
You’re either obnoxious or you aren’t, whether or not you’re an American.
By the way, I’m tired of the “don’t be a loud American” advice. I’ve noticed it usually comes from the holier than thou trying to prove what well-traveled folks they are…You’re either obnoxious or you aren’t, whether or not you’re an American.
———–
I spent a summer in Europe after college. The most obnoxious people I met were Americans pretending to be Canadians. (PS. nobody was fooled, least of all true Canucks who thought you were very foolish). Brits after 2 beers came in a close second.
Chicks kinda dug the American and proud thing too….the Euro equivalent of a pissing off your dad by dating someone he really hates.
R U nuts Palmy?
The drug cartels have influence in Mexico at lots of levels but little real power. Mostly they can unleash mercenary attacks.
The other problem is the cartels are big business down there. So, you are talking about killing the lifeblood of their economy since all the remitinaces from illegals working construction went away.
The cartels are small and in no way are capable of governing anything. Much like mafia in the US, these little cockroaches exist in the shadows by inspiring terror. When confronted by organized force they crumble.
James - they routinely attack police stations in Mexico now.
When confronted by organized force they crumble.
I think they just ambushed and killed a bunch of soldiers. And they regularly kill cops.
Skip/Alpha… big difference in asymetrical warfare and actual widescale combat.
Eventually if the system gets messed up enough by the mafia, the people/military will resort to some form of military government.
Now, back in the 60s to late 80s the Soviet’s were able to totally bottle up any form of smuggling. If things get that out of control, that is where it is going.
Sometimes you guys have to fact check yourselves on scale of events.
Mexico has about a 1.5 Trillion dollar GDP. The scale of the drug trade is large. About 50 billion. That is 3% of the GDP of which a lot less than 50 billion stays in the country.
Estimate it’s high margin at probably at 25% of that. This in a time period where they’ve picked up a lot of the trade from Columbia and other business is way down.
I think as the violence gets worse the govt/popular response will become increasing dramatic forcing that trade out of the country. Again they might be able to pull of some mercenary type action but can not seriously exert any type of governance.
Personally, agree that we could legalize and tax here. That would put an end to things. However, not sure that is the best answer either. Right now that kind of behavior is marginalized.
I do find it funny what we’ll do in the name of “security” (everything from the Patriot Act to removing shoes at the airport) while the southern border is almost completely unguarded as an invading army basically marches in and takes over our land. Oh, sure - they (generally) don’t walk around wielding weapons, but that doesn’t make it any better. Why should an unarmed guy be allowed to live at my place, take my stuff, etc. just because he wants to be there and isn’t armed?!
Insanity…
Though I favor enforcement of Immigartion laws, I am little curious how to enforce it.
I think 60% of the U.S. Senate doesn’t even have a passport. Do people in AZ walk around with their birth certificate in their pocket?
Maybe it’s not such a far fetched idea that people should carry it. I remember when I was a kid how my parnets had to hunt around for it, before gettin a certified copy from the city hall where i was born.
I thought, foloowing 9/11, that the country might actually develop a national I.D> card— what happened to that idea?
We all know that a driver’s license is not prooof of citizenship, right?
Voter’s Registration Card would do the trick.
ISTR that mine says “not to be used for identification.”
How about a biometric tattoo and number for everyone?
Mark of the beast, anyone?
Sorry, I for one am not interested in having to carry ID with me at all times. That is the first step toward a police state.
Or maybe because I am blonde and blue-eyed I will be exempt?
Lovely.
It’s a little amazing that one could get a driver’s license without a citizenship check. Somehow, I imagine that in France or Japan, say, you’d have to jump through some hoops like that. And people are now screaming about the AZ law for the supposed requirement about producing “papers,” but in NYC you’ll go to Central Booking for 3 days, full-body search and all, if you have any “contact” with police and don’t have a license or the equivalent on you.
Yeah, ain’t it amazing that little Napoleon Buonaberg is stamping his foot about Arizona when NYC has turned into a police/nanny city state with crappy second rate Eurotrash architecture.
Why? There’s no citizenship requirement to drive. I don’t think that there is ANY US state where US citizenship is required to drive. Legal residency, even if not permanant and does not include permission to work is usualy adequate. (like student visas) And really, why should the states be forced to administer some sort of citizenship test at the DMV? If we collectivly decide that we need portable proof of citizenship, than it seems to me that should be issued and administered by the federal government.
France and Japan are not federal states, like the U.S. or Switzerland. In France, for example all lesson plans in the schools are made out at the national level. Every class across the country teaches the same thing on the same day. I suspect that most here would not readily accept the amount of central control that the national government exercises there.
No citizenship requirement to drive, understood. But to be issued a state license conferring this fairly significant privilege, maybe some differentiation should be made between a citizen’s license and a noncitizen’s.
Again, why this proposed linkage between driving and voting? Hey, there are plenty of reasons for some form of national ID that would include citizenship and right to work information. Although we shouldn’t be fooled into believing that it will be any less subject to forgeries and fraudulent issuance than any other kind of ID. But I really can see little justification to forcing state motor vehicle departments to do the issuance. As somebody who already HAS a Federal Passport, I think that forcing me to pay* for another, state level agency to inspect the same documents AGAIN to make a determination of my citizenship is profound waste of money.
I’ve gotten somewhat cantankerous in my old age, and I think that driver’s licenses are for driving, and my SSN is for keeping track of my SS contributions. It irritates me when people try to use them for everything else in the world.
*either as a fee, or with my taxes.
I’ve gotten somewhat cantankerous in my old age, and I think that driver’s licenses are for driving, and my SSN is for keeping track of my SS contributions. It irritates me when people try to use them for everything else in the world.
I’m with you, cantankerous Jim.
Speaking of silly, non-essential use of the SSN, I’ve been asked for it when calling my ISP’s tech support. I mean, for pete’s sake, I’m trying to figure out what’s up with my cable Internet connection, not what’s happening with my Social Security.
Jim A:
You’re being disingenuous. No state is denying anyone the right to drive for lack of US citizenship. What some states - thought sadly not most - require is some proof of legal status in the country before being given a licence.
I don’t think it’s asking too much that the state know who I am before giving me the licence with which I can then board a plane, buy a firearm, open a bank account and oh yea, show up to the voting booth and present as my ID (the odd time anyone actually checks for ID when voting).
<>
Well that would be a social security number. But yeah, when they ask you for your SSN for every little thing, it kind of makes it irrelevant.
Ki:—I think that was my POINT. My post was a response to NYCjoe’s amazement that you could get a driver’s license without proof of citizenship. If citizenship isn’t required in any state for a driver’s license, why SHOULD DMVs concern themselves with proving citizenship? Keep in mind that the more uses there are for any one form of ID, the more people will be willing to pay for fakes, the more expensive it will be to try and prevent them. I’m not convinced that creating “one ID to rule them all,” will actually cut down on fraud.
“I am little curious how to enforce it.”
Other countries know how to do this. For example, we had some friends who thought it would be a real lark to live in Costa Rica. They’d “heard” how friendly Costa Rica was to Americans. The reality was, whenever they left their home and went into the village, they were followed by suspicious natives, who wanted to make sure they weren’t working.
Other countries aren’t fools when it comes to protecting their job market.
Years ago, I was considering a move to Canada. I wasn’t happy about the rise of Reaganism in this country, and, quite frankly, I wanted out.
While visiting Canada, I learned that landed immigrant status wasn’t too easy to achieve. You had to prove that what you’d be doing for work couldn’t be done by a Canadian. That, in itself, was quite a hurdle.
Long story short, I came back to the States.
Other countries aren’t fools when it comes to protecting their job market.
Or rather, they are fools, because like many people here, they think that the job market is a zero-sum game.
Fools about protecting our job market. Sad but true. But the big guys who can will either import illegals or export the jobs.
Then again, how many of us who have used nannies are absolutely certain of their immig status? I don’t want to huff and puff so much here on the subject because of that, but if a new immigration reality were to be established, there’d quickly be more jobs for HS and college kids, and more of them actually looking for work. Now, you get the sense that, with good reason, many of them have given up. A summer construction or landscaping job, restaurant job, nanny job? How much hope can our young folks have of getting them now?
A summer construction or landscaping job, restaurant job, nanny job? How much hope can our young folks have of getting them now?
In this part of the country, the above kinds of employment have been hard to get for many years. And it’s not like kids aren’t interested. They are.
If we want to protect jobs, go after the employers who hire undocumented workers.
But what are the chances of those businesses getting in trouble for illegally hiring non-citizens? There is way too much profit to be made from hiring illegals.
“Other countries aren’t fools when it comes to protecting their job market.”
That’s because they have not yet discovered the benefits of Corporate Crony Capitalism, comrade!
I think we’re about the only developed nation on the planet that goes out of its way to destroy its own job market.
‘..We all know that a driver’s license is not prooof of citizenship, right?”
Here in Florida, the law now requires the same documentation to renew your driver license as is required to obtain a passport. Therefore after one complete renewal cycle a Florida driver license will substantiate citizenship. A lot of trouble for a lot of people as the renewal comes up but very good outcome eventually. All states should do this.
Ditto for Maryland. Huge illegal population…all with legal kiddies.
This business with illegals and their “anchor babies” should have been nipped in the bud years ago.
But like everything else, government in this country tries to ignore the problem, until it becomes too big to ignore. Or their favorite constituents benefited from the illegals, so it was not a problem……at least until the electorate got mad enough about it to kick their Azzes out of office, if they didn’t “do something” about it.
And you know that no politician wants to be associated with video showing a 12-13 year old anchor baby who has only lived in the USA, being shipped back to El Casa de Mudhut. So there will be some kind of amnesty program for little Juan Seizpacko and, of course, the immediate family.
Of course “amnesty” is a third-rail type of policy. And we’ve already been sold that program before, back in 1986 when we were assured that in exchange for “amnesty” for the then current crop of illegals, new stricter immigration laws would be enforced, thus fixing the problem……my, how young and naive we were back then.
The pi$$ing contest about “amnesty” is just a delaying action, and perpetuates the status quo. Which suits certain people in this country just fine.
Exactly x-GSfixr ,totally agree with your post . How we could of got 20 million illegals residing in America for years is just the proof that the Government didn’t really do very much to stop it and didn’t care to . The status quo ,as you say, is what they want ,but the problem is the welfare state can’t afford the costs
and the crime problems are rising ,as well as competition for jobs . For God Sakes the Financial sector sold homes to these illegals an we have provided medical care .
You have a high percentage of students from k-12 in public schools in LA that are the children of illegals .
As you say ,there isn’t much Political will to actually address
the illegal problem . I just don’t see how you can kick out 20
million people that you allowed residency here and even gave benefits to that sector .
“Ditto for Maryland. Huge illegal population…all with legal kiddies.”
Yep, they are all over the place here… but somebody has to build all those grossly overpriced, crummy McMansions, or so I’m told… Argh!
You must present a driver’s license + birth certificate to get a US passport.
So other than birth certificate, what is Florida requiring?
From watching reruns of the Rockford Files, I seem to recall, you can order copies of birth certificates of deceases people your own age in order to create a false identities…
When I was visiting Vermont last summer, my aunt and I took a drive up through Canada. We had to have our passports with us so that we could get back into the U.S. That’s a relatively new requirement, BTW.
Any-hoo, back in Vermont, I was told that there are quite a few Vermonters who carry their passports at all times. Reason: They’re never quite sure when they’ll be popping across the border for this, that, or the other thing. Plus, the U.S. passport is a pretty handy form of ID.
I can’t imagine any Congressman not having a passport and missing out on all those junkets to Tahiti.
Illegals have been moving back as a consequence of the bursting bubble for some time now. That’s not a new story.
Way back when (before your time), we discussed “The Mad Max” scenario on this blog. At that time, many posters said they’d move outside of the US border to wait it out. Heck, Aladinsane moved to NZ as a result, dude was way ahead of us.
I guess if you don’t have the capacity to identify the causes of the housing bubble, the next best thing is to blame the weakest elements of society, the invisible men.
The illegals are not the cause, but I can’t imagine that a large group of people who are here illegally and who refuse to integrate into our culture will react well when the economic collapse results in them losing access to cheap construction jobs and handouts. Many of the sane ones have begun returning home; the problem is the ones who stay - they will expect continued handouts and will do whatever it takes to get them. The last thing we need is yet another greedy special interest group set on looting the state.
Ki, I don’t agree with you on much of anything, but on this I do.
For those interested, the new Arizona law is post on the government website and can be googled. It’s very short and concise and I see nothing in it that violates any civil rights.
History shows time and time again that any nation that cannot control its immigration, is doomed.
BB is not going to raise rates, surely everyone knows that by now. He has his butt clinched tight and believes he can “time it” just right. Then others already think he’s to late with an interest rate raise. One thing is certain, time will tell.
Fed ‘Squeezed’ by Recovery Momentum May Affirm Low-Rate Pledge
April 27 (Bloomberg) — Federal Reserve officials may indicate the U.S. recovery is strengthening while avoiding any signal of a change in monetary policy by saying interest rates will remain near zero “for an extended period.”
Economic growth is exceeding analysts’ forecasts on a rebound in manufacturing and consumer spending. At the same time, slowing inflation and an unemployment rate persisting above 9 percent will probably prompt policy makers to affirm their commitment to record stimulus, economists said.
“They’re squeezed between a recovery that is really clearly gaining momentum and financial markets expecting them to act, and big question marks about the recovery outside of 2010,” said Paul Ballew, a former Fed economist who’s now a senior vice president at Nationwide Mutual Insurance Co. in Columbus, Ohio.
He said…she said…
The Wall Street executive set that demonized short selling is now caught in its own web of deception.
* BUSINESS
* APRIL 26, 2010
Senate Readies Goldman Assault
Assails Bank’s Shorting Strategy as Blankfein, Other Executives Set to Testify
By JOHN D. MCKINNON, SUSANNE CRAIG And FAWN JOHNSON
[SENATEGS] Bloomberg News, European Pressphoto Agency
Goldman’s Lloyd Bankfein, left, said, ‘We didn’t have a massive short against the housing market and we certainly did not bet against our clients.’ Sen. Carl Levin, said, ‘By early 2007 the company blew right past a neutral position and began betting heavily on [the market's] decline.’
WASHINGTON—Goldman Sachs Group Inc. had a clear strategy of shorting the collapsing mortgage market and made $3.7 billion through the tactic, Senate investigators said, setting up a showdown with Goldman executives testifying before a Senate subcommittee Tuesday.
The testimony was poised to highlight the fundamental split between Washington lawmakers-who see Goldman as an archetype of the problems that drove the financial system into crisis—and the Wall Street firm, which says it was merely managing risk and didn’t make big profits from housing’s decline.
Goldman Chief Executive Lloyd Blankfein was set to tell the Permanent Subcommittee on Investigations that Goldman acted “as our shareholders and our regulators would expect.” In prepared testimony, Mr. Blankfein said: “We didn’t have a massive short against the housing market and we certainly did not bet against our clients.”
SEC v. Goldman Sachs
In a briefing Monday, the subcommittee’s chairman, Sen. Carl Levin (D., Mich.) made the opposite case. The subcommittee said Goldman’s strategy of “shorting” the mortgage market—betting on its decline—was so extensive that, at one point in mid-2007, its mortgage business made up more than half its value at risk, a measure of the firm’s overall exposure.
“By early 2007 the company blew right past a neutral position and began betting heavily on [the market's] decline,” Mr. Levin said.
Goldman was “not hedging but betting heavily against the market,” he added, accusing the firm of being “misleading to the country…and not fair to their customers.”
…
Personally I have no problem with GS betting on housing’s decline. I did the same, in fact - and did well for a while until the insane post-decline rally.
What I have a problem with is them being heavily involved with causing the decline (vis a vis causing the bubble itself), and then avoiding the collateral hits on the backside (e.g. AIG losses) when it went bad.
Well the problem is that they were betting against their own bonds without telling the people purchasing them.
I think the real problem is allowing someone not affiliated with GS who intends to short the CDO to hand pick the mortgages that went into the CDO in a manner that guaranteed that the CDO would default then selling this CDO to an unsuspecting party without disclosing that the performance of the CDO is very dubious. I cannot imagine a much better example of fraud.
I think the damages ultimately done by planitffs lawyers will be far more damaging to GS than anything the SEC can do.
..hand pick the mortgages that went into the CDO in a manner that guaranteed that the CDO would default..
Since house prices were headed for the moon and beyond, even the weakest home owner would be able to refinance, and to continue to pay the mortgage forever. Thus the rising value of the securities and bonds was never in doubt.
Nobody imagined the strawberry picker’s mortgage would ever default… not the lender that originated it and not the investors that bought the securities.
——-
…then selling this CDO to an unsuspecting party..
There was far more investor demand for MBS than there was existing MBS. Synthetic CDOs were invented to satisfy that excess demand.
Investors didn’t care WHAT was in the CDOs or even what they actually were.
“It’s a derivative? You mean it derives it’s value from home mortgage values? Fine! That’s close enough for me. I’ll take a thousand.”
As long as it was based on the value of real estate, investors wanted to buy it. They wanted a piece of the housing boom action…
The ducks quacked and the brokers fed them.
Joey,
While I’m sure a lot of people were not aware of what a front running system would look like, the SEC and Goldman were fully aware of what they were passing off.
As I’ve said, the poltical cost of support of a bank like them is going to get real high. I expect them to fail.
Broken trust and they are toxic waste.
Anything they touch will be considered garbage by anyone. Every move they make is going to be looked over and suspect.
I’m thinking that you and your little friends under the refrigerator ought to know it’s time to find a new nest. Somebody is about to throw in a bug bomb.
Is Joey another paid hack on here?
front running.. oh my..
As if that accusation hasn’t already been shot to pieces all over the net..
james, why don’t you and your fellow Brown Shirts storm the GS building and drag everyone out and hang them from lamp posts.. get it over with.
and then avoiding the collateral hits on the backside (e.g. AIG losses) when it went bad.
I don’t think you can blame GS for this. It was our government which handed the money to GS. Our Government had a choice and they made a colossal mistake.
You say “our government” and “GS” as if they were different things.
(tongue-in-cheek, but only partly so)
P.S. Everyone’s acting like GS is the only one of the WS banks culpable - JPM, Citi, etc. were right there with them.
Yes, they were, along with other smaller companies we’ve never heard of.
Well, but GS was indeed one of the few that came through the whole thing making ever bigger profits. The fact that very unusual actions were taken when H. Paulson was Secy of the Treasury doesn’t FEEL like an accident.
“What I have a problem with is them being heavily involved with causing the decline…”
Right: A key problem with TBTF firms is that they can create their own financial weather and profit from it.
that they can create their own financial weather and profit from it
Damn… great analogy!
Comment by packman
2010-04-27 06:25:33
Personally I have no problem with GS betting on housing’s decline. I did the same, in fact - and did well for a while until the insane post-decline rally.
What I have a problem with is them being heavily involved with causing the decline (vis a vis causing the bubble itself), and then avoiding the collateral hits on the backside (e.g. AIG losses) when it went bad.
————————–
With you 100% on this, packman.
People are making an issue out of the short-selling, when the real issue is how the securities were structured that were being sold **on the way up.**
I don’t have any problem with GS betting against the housing market either. But, in our entitlement society, it has become unAmerican to bet against the housing market. You can certainly bet against the USD (many US-based international companies do this all the time, hoping for currency devaluation), stocks, gold, or any asset you like–except housing. Because that is where the “victims” are.
I think that is the one thing that has surprised me the most about all of this–5 years into the crash, speculators and homemoaners are still looked upon as victims rather than the co-conspirators they are.
This whole spectacle is designed to enrage. Bottom line of the PBS coverage last night was GS “bet against YOUR house!” As if otherwise, prices would have kept going up.
Prices stopped going up because we physcially ran out of buyers, even when the interest rates were lowest and lending requirements were non-existent (early 2006 or so).
GS may have had something to do with the runup, but nothing to do with the pop. Noboby had anything to do with the pop. The pop happened by itself. You can’t blame the pop on anyone.
Yes. I have to explain this to people (not so much on HBB) over and over. Lots of people blame the crash on things that happened in the 2005-2008 timeframe, but in reality a crash of some kind was set in stone already before 2005.
Not sure I’d say we “physically ran out of buyers” though, since many people were buying 2, 3, 10, etc. homes as speculation. I think eventually there was just enough “critical mass” of caution, where enough people realized that we were getting deep into bubble territory and maybe they better not buy any more homes, and the like. Same thing as happens with any bubble - be it tulips or whatever.
I’d have to that NINJA loans represented scrapping the bottom of the barrel and therefore the end of the supply of buyers.
“…to say that…”
Right, eco. I knew the bubble would burst when my friend Louise got a loan for 10 times her annual income, to start as interest-only. That was mid-2005.
Yes, eco.
We hit the affordability ceiling on PITI payments even after scaping the barrel and creating mortgages that had very low monthly payments **in the beginning.**
People were refinancing/HELOC’ing more and more debt in order to make their monthly mortgage payments! That could only last as long as prices went up rather dramatically. As soon as prices stalled (because nobody else was able to buy, even with the “toxic” mortgages), the game was over.
This is why I get sick and tired of everyone focusing on the short selling. They are trying to make it look like the 2001-2006 period was “normal,” and if not for those evil short-sellers, prices would have continued to go up. We need to get the word out that this is entirely wrong!
scraping the bottom of the barrel (sorry for all the typos!)
I refinanced in 2003. Even then, they were willing to loan me 125% of the current “value” of my house. In fact,they were pushing it real hard.
Fortunately, I didn’t bite, mainly because :
-I believe the only time salesman lie, is when their lips are moving (and what is a Mortgage Broker, after all?)
-”Too good to be true” deals are actually schemes to get into your pants/wallet 99% of the time.
-Through semi-bitter previous experience, I knew that house prices CAN go down.
-I can do a little math, and can estimate in my head how far I would have been upside down, if I refi’d @ 125% of value, and the house dropped 30% in price, and
-Conventional wisdom is for people who don’t want to think too hard.
There are a lot of people in this country that aren’t really too smart. More that trust “experts” way too much. Even more who have never been backstabbed by someone they thought they could trust. I’d call them gullible, but not criminal.
The banksters were being paid to be the “adults”. They were responsible for other people’s money, and destroyed trillions of dollars, while paying themselves ridiculous salaries and bonuses….Hell, pay me a quarter billion bucks a year, and I’ll change my name to Adolph Eichmann Stalin, and take the blame for the whole fiasco.
The financial industry’s job was to not let the kids drink from the punchbowl. Instead, they spiked the kiddie punch with Everclear, while taking swigs from the bottle.
Can this be true?
“Congressional Democrats have no intention of enacting serious immigration reform before November. President Obama is surely playing politics with the situation in Arizona for gain in the fall. He’d like to pick a fight and define Republicans as anti-Hispanic going into the election, without having to propose anything substantive.”
~Wall St. Journal
< Good ol’ American partisan politics…a force that does far more harm than good.
What was it Lincoln said about “a house divided?” Polls reveal US voters are almost evenly split on the question of socialism vs. free enterprise. Intelligent people on both sides of the issues come to opposite conclusions.
Immigration reform is a loser from any perspective, which is why the mess just keeps getting bigger. Most people are indifferent, and there are a lot of open borders advocates (incompatible with a welfare state) and bigots among those paying attention. Anyone trying to propose a reasonable solution gets shouted down.
“Anyone trying to propose a reasonable solution gets shouted down.”
Other than strict enforcement of the law, what’s a “reasonable” solution? The US takes in more legal immigrants than the rest of the countries in the world, combined. Birthright citizenship is (mistakenly and fraudulently) granted to any baby born to an illegal immigrant within the borders of the US, and all sorts of benefits are immediately available. Cultural accomodations are constantly demanded and met. What’s reasonable?
You’re right, open borders are totally incompatible with a welfare state and if it isn’t handled, China’s our future. No gov’t benefits of any kind, one child, forced sterilizations.
I think the most insane aspect of this whole situation, however, is the reaction of fedgov and its many bloviators, including the bloviator in chief. AZ was desperately pleading for National Guard on the border and other assistance. Fedgov just blandly stood by with its small, cruel smile and did nothing, even after law enforcement officers and the rancher Rob Krenz were viciously murdered. Instead of acknowledging that assistance is needed and rendering that assistance, it is looking into “civil rights” violations and the “constitutionality” of the bill.
What a bunch of sick, perverted whack jobs. I think they get off on the violence and the agony of American citizens who have had to deal with the situation. Little Caligulas, all.
AZ was desperately pleading for National Guard on the border and other assistance.
Why should AZ need to plead for Nat’l Guard assistance? State Governors control the guard. They were all simply stupid for ceding control to the Commander in Chief.
Reality becomes the problem, IMHO. We’re not going to round up and deport 20 million people. It’s just not going to happen. So the real question is what now? They’re here and we have to deal with them. Having a huge segment of the population unhealthy and uneducated is not going to be of any benefit to society at large. My usual question: What will it look like? How will it work?
I say that we bribe them to leave. Given the lack of jobs it could be enticing to them.
Have them sign on the bottom line that in exchange for $10,000 they will pack up their families and go home, with the understanding that if they sneak back in later that it will be considered a felony and they will do jail time. The 10K will be paid at the nearest US consulate back home.
Attrition through enforcement, it’s the only answer. And then mop up what’s left. No jobs. No automatic birthright citizenship. No foreign language accomodations. No housing subsidies of any kind. Dissolution of LaRaza, much like Acorn, on the grounds that it is an ethnic supremacy movement (which it is, can you imagine an Anglo group called “The Race”?) disguised as a “rights” movement.
I feel sorry for the kids. Had one approach a family member and ask if they could adopt him for 2 years because he just found out (16) that he’s not legal - he was brought here as a baby. He doesn’t really know anyone from where he came from and has only lived here. I wonder how many of them there are. I hate to see us lose the best and brightest of them and keep the cheapest and least educated. Slim, what do you see in AZ in terms of who is leaving & who is staying?
Slim, what do you see in AZ in terms of who is leaving & who is staying?
We had quite an exodus ’round the time that the employer sanctions law went into effect. That was in ‘08. The lack of construction jobs to come to, plus layoffs from the jobs that already existed, has also made AZ less attractive.
“…the time that the employer sanctions law went into effect. That was in ‘08″
Know a “TruePurity™” / “TrueHypocrite™” business owner, his current era laments: His Hummer registration fees in CA & loss of his illegal cheap labor that had 20+ years experience on his equipment. The trunk of his white Lexus now sports a bottle of bleach & pillow cases, his haterade email box over-floweth…he’s talkin ’bout relocating to: AZ
What are you talking about?
So the real question is what now?
First part of a solution when you find yourself in a hole is to STOP DIGGING! So we need to plug the holes in the border and not allow anymore illegals. Then we can worry about dealing with those that are already here. Otherwise we’re temporarily solving a problem that will just re-create itself in short time.
“We’re not going to round up and deport 20 million people. It’s just not going to happen. ”
This is the cop out the pro-amnesty lobby always uses. Well gee, you can’t just deport 20 million people, so you have to give the citizenship.
Here’s how you deport them. Make them deport themselves. Announce that any employer caught hiring an illegal will be fined $100K per infraction. The day after the first fine is imposed. 19.5 of the 20 million will be out of a job and heading home on their own.
Operation Wetback was a 1954 operation by the United States Immigration and Naturalization Service (INS) to remove about one million illegal immigrants from the southwestern United States, focusing on Mexican nationals.
-Wikipedia
It was successful.
Yes, it was wildly successful. I read an account of one of the men who captained a ship that transported illegals all the way to the south of Mexico, so they couldn’t just walk back. The crew had a gas steering the ship from side to side. Hard a port, hard a starboard. The illegals didn’t like it, but they got a free trip back to their home country.
Of course, if you did that today, there’d be all this whining about Nazi-ism, comparing it to packing humans into freight cars. I don’t know why they’re so sensitive about it, they don’t mind being packed into trucks and vans to get here.
“Having a huge segment of the population unhealthy and uneducated is not going to be of any benefit to society at large.”
….. Why, you just pass universal health care and make them all healthy. There, that should fix things.
wmbz, we could afford the split between free-enterprisers and socialists if (1) “states’ rights” made it possible for the free-enterprisers to go to right-to-work states, and for socialists to go to the welfare states, and if (2) there were any chance that both sets of states would enjoy similar prosperity.
My personal opinion is that (2) is very unlikely, so (1) cannot be permitted by the socialists. But if the socialists think I am wrong, why won’t they support (1) ??
Rep. Ron Paul says people are wrong to suggest that Obama and political leftists are Socialists. They are “Corporatists,” he says.
“Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.”
Touché! But it’s doubtful critics of the welfare state can be converted to using the word “Corporatist” as readily as they do “Socialist.”
What’s it called when businesses own and control the government?
banana republic?
Goldmanist?
Used in a sentence: “He was always making racist and sachsist remarks against minorities and the constitution.
Or used by us as old people in the future: “You kids don’t understand what it was like before the sachsual revolution…there were serious consequences for that sort of fooling around”.
“I did not have sachsual relations with that investor.”
That would be Corporatism - what’s stated above - wouldn’t it?
And RP’s dead right.
He may be dead right about corporatism’s definition. He just fails to point out that he’s a member of the corporatist party.
Cripes man, could you possibly give it a rest?
I’m tellin’ ya.
Ron Paul is not your solution, either.
3 point shot for alpha.
He’s proven himself in my book.
“He just fails to point out….”
Clearly, you haven’t read ‘End the Fed.’
The Reagan Revolution.
“….What’s it called when businesses own and control the government?”
“TrueWarMachine™”
“WarMart”
Fascism. I am not kidding. That is what a fascist goverment is defined as. It does not end well.
Relax dude. What happened to the arrogant “banks own everything” debt holders with GM? Got their backsides handed to them in bankruptcy court.
If Obama thinks amnesty for illegals is a winning issue when unemployment is 10%, he’s a fool.
I think Amnesty would be unfair, especially to all the people who are getting to the US legally and waiting for years and years to get their Green Card and then another 5 years after Green Card to get Citizenship. And also unfair to all Citizens who played by the rules for employment and benefits.
“Reform” = amnesty, no?
OK………..BUY into America for a green card put 40% down on a house get a card, don’t make your payments ?….get deported with all those living in the house…lose the money and the house…
Ki,
Yep, and that’s on the low skill end. How about the million new H1-B’s (L1-B’s too) our govt. just approved. I guess they don’t want to anger their business masters who feeds them lots of re-election dough.
At least the H1s pay taxes and don’t use the ER as their doctor’s office. And I don’t recall ever seeing a riot by H1s demanding citizenship.
I have no problem whatsoever with legal immigration.
They still displace educated American workers.
Wait a sec, 1 million? I thought the H1-B number was capped at about 65,000. Perhaps it went up, but I’m doubting it shot up to a mil.
My wife-to-be was on one when we met, and for a few years after. And yes, it’s quite possible Americans could be found to do these jobs, so the number should be kept low. She’s in the fashion biz, and these companies tend to be run by Brits, who employ the same. Now and then a spoiled little FIT grad slips in, so I’m told, but very few.
H-1Bs are capped at 65K. They come legally and many of them get paid really good. They pay into Soc. Sec. and Medicare even on temporary visa. But a group that enters USA illegally or overstay their visa and become illegal are a cost on country’s infrastructure and drive wages down.
Btw, it is the issue of corporations that like cheap labor for farms and construction or landscaping, that want cheap labor and not hire Americans at full wages. Americans have bills to pay like health ins, car ins, rent etc., and they don’t live 10 in one apartment.
There is an additional 20k (making 85k) for those who graduate with Masters/Ph.d.
In addition, all of the graduates can stay in the US and work 24 months after the graduate while waiting upon a visa.
The million plus number comes into play when you add up the total number of visas issued over the past 10 years (it had a much higher cap in the past).
And you also assume none of them ever left which is a bad assumption.
About 85K per Annum. Don’t forget L1 visas.
As for many terminated H1-b’s because company goes out of buisness still work illegally, some in hightech others as dish washers.
Quintuple witching hour:
1) Gollum to testify
2) Financial reform fracas on Capitol Hill
3) Bernanke speech
4) Case-Shiller data release
5) Consumer confidence data release
Got popcorn?
* The Wall Street Journal
* APRIL 27, 2010, 7:48 A.M. ET
BEFORE THE BELL: US Stock Futures Down; Goldman Faces Questions
By Steve Goldstein
U.S. stock futures continued their pre-Fed drift on Tuesday, with Goldman Sachs in the spotlight as the investment bank faces questioning from a U.S. Senate committee on the extent it benefited from the collapse of the housing market.
S&P 500 futures fell 3.5 points to 1204.70 and Nasdaq 100 futures dropped 4.25 points to 2043.00. Futures on the Dow Jones Industrial Average edged 9 points lower, outperforming the other indices after components DuPont and 3M hiked their earnings guidance.
U.S. stocks meandered on Monday, with the Dow Jones Industrial Average edging up a point behind Caterpillar’s improved 2010 outlook while the S&P 500 and Nasdaq Composite finished with moderate losses. Cyclical stocks advanced while defensive sectors declined, and financials were hit as banking reform concerns lingered.
Reform plans may be impacted by the hearings in Washington D.C. on Tuesday featuring Goldman Sachs Group Inc. (GS) CEO Lloyd Blankfein and a vice president, Fabrice Tourre, testifying just days after the Securities and Exchange Commission accused to the investment banking stalwart of securities fraud relating to the sale of collateralized debt obligations.
“The financial industry is more interested in seeing the new set of rules and regulations. They can move forward once they know what the game plan is,” said Marc Pado, a strategist at Cantor Fitzgerald.
Ahead of the Federal Reserve’s interest rate decision due Wednesday, Fed Chairman Ben Bernanke will be testify (sic) in front of the National Commission on Fiscal Responsibility.
There also will be releases on the S&P/Case-Shiller home price index for February, due at 9 a.m., EDT, and the Conference Board’s consumer confidence gauge for April, due at 10 a.m., EDT.
…
This housing market is ready to ride on its own two wheels, folks. It is high time to take off Uncle Sam’s training wheels.
market pulse
April 27, 2010, 9:11 a.m. EDT
U.S. home prices show year-over-year gain: S&P
By Rex Nutting
WASHINGTON (MarketWatch) — Home prices fell 0.9% in February compared with January in 20 major U.S. cities, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s. However, prices were up 0.6% in the past year, the first time since December 2006 that prices were higher than the year before. On a not-seasonally adjusted basis, prices fell in 19 of 20 cities in February compared with January. David Blitzer of S&P cautioned that prices could fall further, with foreclosures still mounting and the federal subsidy for buyers expiring.
Housing prices were up 0.6% yoy, but what happens now that the incentive money is out?
Even if the credit stays, there is a limit to cannibalizing future sales with rebates. Ask any automaker.
So…. yesterday’s bits bucket was…. disturbing.
Can we perhaps keep the partisan/political sniping to a minimum? There are certainly valid discussions to be had, but it really seemed to elevate outside the realm of reasonableness, IMO. It seems to detract from a lot of the great discussions/information that goes on here.
Does cheering for Ron Paul count?
No.
Give us an effin break alpha. Agreeing with RP on one point does not constitute “cheering for Ron Paul”, and even if it did - he’s not exactly a partisan person. He changed parties a few years ago in fact, and quite often disagrees with his own party.
There are several on this board - especially you - that take virtually every discussion and attempt to degrade it with your partisan sniping. Well I for one am getting quite tired of it.
I like the HBB, particularly the bits buckets, for the great information presented and the correlating discussions. But it’s starting to get tiresome slogging through the mud.
In your defense, I understand that it’s natural for the bulk of attacks (right or wrong) to be aimed at the current party in power, and as a result those who would defend the party in power get - well - defensive. Try to understand though that the attacks against the party in power aren’t necessarily due to partisanship, but rather can sometimes be just because of what’s going on at the time.
Like I said yesterday, if you don’t want me to comment on the worn out pseudo-conservative hate, don’t post it.
It’s really that simple.
Live from the playground…It’s: “we can dish it out, but won’t take it!”
Whatever. Someone posts an old, very partisan Ron Paul quote. The usuals rah-rah it. I point out what I perceive to be a hypocrisy, and I’m the partisan.
Because somehow RP is in the Republican party, but not of it. Sort of like a…’messiah’.
But, I agree to some extent. If the usual one drum bangers will quit banging it, I’ll quit responding, deal?
“responding” generally isn’t a problem - it’s “elevating” that’s the problem; or perhaps more appropriately “generalizing”.
How about we take this tack - address the specific people and issues (legislation, etc.) that are causing the problems, rather than the parties. If/when it becomes apparent that all the people/legislation causing the problems originates from the same party, then the point will be made.
And know that no matter how hard anyone tries - certain disagreements will always exist (e.g. the extent and nature of regulation as a prime example). Sometimes it’s good to just let it rest, as a horse thoroughly beaten.
Oh. I’m sorry I ‘elevated’ the discourse.
There’s one problem with your new rules for posting. You see, I was responding to a post about RP that specifically attacked one political party. I pointed out another political party (his) was, in fact, much more guilty of the charge. (And seriously, does anyone *really* think that the dems are more in bed with big biz than the repubs?) Following your rules, I would not have been able to respond. So your rules kind of interfere with my ability to respond accurately. Is that your goal? Hobble the opposition?
And of course, all discourse about how great Ron Paul is, I suppose is exempted from your rules too. Since he is totally non-partisan, even when he’s being partisan.
a post about RP that specifically attacked one political party
That’s where you’re wrong. The post about RP never mentioned a political party. It say “Obama and political leftists”. There are leftists (and rightists) in both parties.
And he didn’t even attack the leftists even. He attacked those that label the Obama and leftist policies as “socialist”, which would include people from all facets, including the media. His “attacks” in fact were mostly aimed towards conservatives.
It was your knee-jerk reaction that (once again) somehow took it as an attack on Democrats.
He attacked those that label the Obama and leftist policies as “socialist”, which would include people from all facets, including the media. His “attacks” in fact were mostly aimed towards conservatives.
If you read his words as ‘attacking’ conservatives, then you’re the one with blinders on. He was merely pointing out that they should call Obama and the ‘leftists’ corporatists rather than socialists. That’s hardly an attack on conservatives.
I think the partisan bloviating gets tiresome, too. But I’m not going to surrender the stage to the far-more-numerous and far-more-incessantly-posting right-wing/RP drum bangers. When they stop the partisan sniping, I’ll happily quit responding. In the meantime, someone has to speak up for reality. Sorry if I interrupt the dittohead coffee klatch, but this is the bits bucket, not a private room in the forum.
“…Try to understand though that the attacks against the party in power aren’t necessarily due to partisanship…”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Palin/ Jeb III 2012!
It pays to throw a Tea Party:
“Palin Inc.” According to both Sherman and ABC News, Palin has gone from a state of indebtedness (due to legal troubles in Alaska) to estimated earnings of $12 million in less than a year. Palin makes $1 million a year for her contributions to Fox News. She sold her first book, “Going Rogue,” to HarperCollins for $7 million and a second book for an undisclosed amount. She gives speeches around the country for an average fee of $100,000 each. According to Sherman’s reporting, Palin insisted on charging full fee for her speech to the National Tea Party Convention because the event itself was being run for-profit by its organizers. The $100,000 included $18,000 for a private jet. Beyond her Tea Party activities, Palin has also signed up to star in a reality show on life in Alaska for the Learning Channel. She’ll reportedly be paid $250,000 per episode.
Beck was blunt with Forbes Magazine when discussing his success. “I could give a flying crap about the political process,” he deadpanned. “We’re an entertainment company.” Forbes said that Beck’s company, Mercury Radio Arts, raked in $32 million from March 2009 to March 2010. That included $2 million from Fox News for his daily television show, $10 million for his daily radio show, $3 million for speaking events, $4 million from his online operation, and a whopping $13 million in print endeavors with Simon & Schuster (books and a magazine). Beck dominated the New York Times bestseller list in 2009, with three separate No. 1 books and a total of 3.5 million books sold.
Our Corporate sponsor : MUrDoch’s “TrueProvoker ™” Faux News
Yahoo News. Andrew Golis is the editor of the Yahoo! News blog. Brett Michael Dykes is a national affairs writer for Yahoo! News
You have your your POV… others have theirs, only you’re the one telling folks what they should and should not post, how come?
Nanny, nanny boo-boo, stick your face in doo-doo.
My bogeyman’s bogeyer than yours. Neener Neener!
Does wanting to shoot at illegal border jumpers and give mexico a taste of their own medicine count? …hint that do that on their southern border…and they don’t aim to miss
They also staunchly protect their domestic job market from illegal aliens. But if we do the same thing, it’s racist.
To both sides - one thing I learned years ago is that the person who gets the last word doesn’t actually win. You post your position, and the readers decide who has the most compelling case. A hundred spastic, content-free posts will not degrade a compelling, cogent post.
So, let people post propaganda. Respond in a manner you’re comfortable with. And be the change you want to see on the forum. A long, crude, incoherent low-content post in a group of thoughtful ones won’t be very compelling.
From the FBI:
The FBI investigates Mortgage Fraud in two distinct areas: Fraud for Profit and Fraud for Housing. Fraud for Profit is sometimes referred to as “Industry Insider Fraud” and the motive is to revolve equity, falsely inflate the value of the property, or issue loans based on fictitious properties. Based on existing investigations and Mortgage Fraud reporting, 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders.
Fraud for Housing represents illegal actions perpetrated solely by the borrower. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding his income or employment history to qualify for a loan.
http://www.fbi.gov/publications/financial/fcs_report2006/financial_crime_2006.htm#Mortgage
Fraud for Profit = Fee & Flee
Fraud for Housing = Flip & Deposit
[T]he money that the government spends on a failed modification goes to banks, not homeowners. Typically, the government will have substituted an FHA insured mortgage for the original mortgage issued by a bank. This means that when a redefault takes place, the bank will have received most of the principle back on the loan, with the government incurring the loss on the redefault. The net result of this policy is that far more money is likely to be given to banks through the HAMP than to homeowners.
-Dean Baker, Money for Failed Modifications Goes to Banks, Not Homeowners, CEPR
Read more: http://www.creditwritedowns.com/2010/04/are-the-housing-bailouts-for-banks-or-borrowers.html#ixzz0mJCdvmqR
Surprise, surprise!
/sarcasm
You HAVE to see this:
http://www.phoenixrealestateguy.com/idx/mls-4370622-207_w_clarendon_avenue_unit_8c_phoenix_az_85013
Caution is advised if you’ve already had your second cup of coffee—the stimulation might be too much. Apparently somebody was going for a ghastly reincarnation of Studio 54. Who puts a transparent glass door on a bathroom??? GEEZ.
That one deserves plaudits. At the Lovely Listing website.
I LOVE that website!
“you had me at…Phoenix”
Talon, thanks for another fine example how money cannot buy class or taste.
Home Prices Fall in February; Further Declines Possible
27 Apr 2010 Reuters
US home prices fell in February but rose compared to a year ago for the first time in more than three years, in the latest sign that the housing market is slowly recovering.
House prices have benefited recently from a federal homebuyer tax credit that expires on April 30, but a glut of mortgage foreclosure sales continue to weigh on the market, Standard & Poor’s said on Tuesday.
The S&P/Case-Shiller 20-city composite price index fell 0.9 percent on an unadjusted basis in February, worse than a 0.3 percent decline estimated in a Reuters survey. Seasonally adjusted, prices declined by 0.1 percent, as expected, after a string of eight straight monthly increases.
Seasonally adjusted, prices declined by 0.1 percent, as expected, after a string of eight straight monthly increases.
Ruh roh.
Keep in mind this is data is from before both the expiration of the tax credit and while the Fed was still purchasing MBS. In other words - prices are back to declining despite the Fed/guv throwing everything they’ve got at the housing market.
A few months ago I commented that I thought the PTB might actually be able to reinflate the housing bubble, by their various methods of holding off shadow inventory, tax incentives, etc. It’s becoming apparent that that’s not going to happen - that we’re indeed in for another inevitable significant price drop.
This fall could get really ugly again.
Was at a community meeting yesterday evening. It was hosted by a city council member, and, since she was on the road conducting business relating to her job, her aides filled in quite well. (In case you’re wondering, being on the Tucson City Council pays pretty poorly. That’s why our council members have other gigs.)
Any-hoo, I was sitting next to a neighbor, and I asked him about the house across the street. It had been purchased by a specuvestor back in ‘05. He tried flipping it in 2007, and the sale attempt went thud.
So, he started renting it, and let’s just say that, over time, the quality of his tenants went downhill. The aforementioned neighbor and his elderly mother spent more than a little bit of time calling the city council office, the police, and lots of other officials to get something done about the problems across the street.
Well, the specuvestor was foreclosed on last year, but not before his last set of tenants turned the place into a flophouse/party pad. According to my neighbor, this crew also tore the copper out of the house. Oh, I might mention that the final tenant group wasn’t paying rent for the last six months they were there.
The house was recently sold, and there’s quite a bit of fixup work going on. I asked my neighbor about it, and, well, you guessed it. A couple of flippers bought the place.
Lady’s in real estate, and the husband appears to be sort of a handyman. No quarrel with the quality of his workmanship, but my neighbor doubts that they’ll get their money of of the place.
In short, these flippers are about to get a haircut. Whether it’s selling at a loss, or becoming accidental landlords, they’re going to be shorn.
Keep in mind this is data is from before both the expiration of the tax credit and while the Fed was still purchasing MBS.
The latter only seems relevant if interest rates rise due to the reduced demand for securities (which assumes the fed isn’t continuing it’s purchases clandestinely). While I’m hopeful, I’m not going to get excited until I see the actual numbers climbing. Last week it looked like one could get a 5/1 for < 4% and a 30 year for around 5%.
Definitely the mortgage rates haven’t taken a big jump up relative to other rates as you say - though I think they’re up just a bit at least the last week or two (finally); e.g. the 10-year dropped from around 4.0 at its recent peak to about 3.75 (25bp) , but 30-year mortages only dropped from 5.26 to 5.14 (12bp). So there are signs at least that the gap is back to widening some. Still a long ways to go though.
Seems like it may be harder to hide MBS purchase than treasury purchases, due to the parties involved. I could be wrong through.
Seems like it may be harder to hide MBS purchase than treasury purchases, due to the parties involved. I could be wrong through.
Seems like so long as they can do one or the other, the net result is the same. If they can suppress treasury yields, then people will buy more MBS and keep those yields down.
Seems like so long as they can do one or the other, the net result is the same. If they can suppress treasury yields, then people will buy more MBS and keep those yields down.
In normal times, yes - but the private market right now is scared s***less of MBS right now (still). Virtually all MBS are Fannie and Freddie still.
State notified of 210 layoffs in Greene Co., 222 at Knoxville Bosch plant
Published April 27th, 2010
Michigan-based Robert Bosch LLC will start laying off 222 workers at its PBR Knoxville automotive brake operation next month, the Tennessee Department of Labor and Workforce Development said Monday.
Labor and Workforce Development also has received notice of 210 people to be laid off at Greene Valley Developmental Center in Greeneville. Bosch also announced last month it would close its Johnson City brake production plant by the end of July and lay off 140 people there.
The company has cited the recession and declining demand for brakes because of the downturn in the automotive industry as reasons for the plant closings.
Bosch is one I’d like to see implode. If the item has the name Bosch on it, you can gaurantee it will fail prematurely.
Haber-Bosch?
Hieronymous
I’m no fan of their automotive electronics, but my Bosch cordless drill has been going strong for >4 years.
How much do you want to bet that a replacement offshore plant is ready to take its place?
Greene Shoots?
Oh, and Moorpark has really grown up. The commercial building blew our minds. We moved out of Mountain Meadows in 1998. Had not been back until this Saturday. Anyway, I welcome you and your family back home.
”
awaiting wipeout thanks for the welcome back. The die is cast I should know maybe as early as today about the job. Been looking at rentals in Thousand Oaks and Newbury Park and I know the area quite well having moved there in 1964 at the age of 4 and leaving Moorpark in 2006 at the height of the madness. I live in old Poway in N. San diego co. now and don’t feel like living in old TO by the Elks Club or by the freeway or by section 8 apartments it would be the same thing as old Poway with murdering maniacs shooting each other over parking spots ( my neighbors) . However its very expensive there so I can’t be super choosy, I could move back to Moorpark but family dosen’t like the schools as much and the drive up the 23 always was dangerous.
I used to live in the townhomes by the Junior College in Moorpark it was real nice back in the day I thought. Got out just in time although I probably didn’t need to quit my job and move to Phoenix, looking back that was a little over the top. I was relly getting obsessed with the housing bubble and NONE would listen to me. So I just bailed figuring if I was wrong I would never return because you know what they say about costal CA ” once you leave you can’t come back” ha
Good luck with your new job and your new housing situation, cactus!
It was easy to get obsessed with the housing bubble. I think we’re all a little bit guilty.
S&P downgrades Greek debt to junk. The ECB window is probably closed.
Contagion? Is this the begining of the new leg down?
I was in Greece over the weekend and lots of folks there telling me how nervous they are. Things are not looking good for them!
Wow. Would love to hear more details if you have any.
To be a fly on the wall in Greece right now would be a very interesting thing.
The way this week is starting out - you may be glad you went last weekend instead of next weekend.
My Big Fat Greek Wedding III
Plot:
The groom is from Iceland, when suddenly a boat filled with starving Irishmen flounders on a hidden reef…
Flirting with 1,187 again a half hour into the close.
On a lighter note, Olygal would be proud.
—An endangered species of frog recently got a helping hand from Evergreen State College, in Olympia (pop. 42,514), and inmates at nearby Cedar Creek Corrections Center. Two inmates raised a number of young frogs through the Sustainable Prisons Project, a partnership between the college and the Washington State Department of Corrections that allows incarcerated men and women to participate in science-based conservation projects. The frogs were released into a wetland on Fort Lewis Military Reservation in Pierce County.
first appeared: 4/18/2010
Yep, …Rrribet, rrribettt
Frogs raised by prisoners, released onto a military reservation. Am I wrong to think that some day these frogs will be fighting a war against humanity?
Maybe that’s just wishful thinking.
Fool! You have a million dollar movie idea and you just gave it away!
Olygal would indeed have been proud.
And in honor of that, I don’t know whether to laugh or cry, but I’d almost bet the correct Olygal answer would be to… drink!
To Oly and the freed frogs! Bottoms up!
Saúde!
And too all those “emancipated” frogs who know how not to take swamp life too seriously!
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Cheers!
The Value Added Tax (VAT) is being revived as a scheme for getting more loot from the people into the national treasury, it’s instructive to see what the reaction was to earlier attempts:
“It is not the size of the yield, nor the certainty of collection, which gives indirect taxation [read: VAT] preeminence in the state’s scheme of appropriation. Its most commendable quality is that of being surreptitious. It is taking, so to speak, while the victim is not looking.
“Those who strain themselves to give taxation a moral character are under obligation to explain the state’s preoccupation with hiding taxes in the price of goods.” This was written in 1962 by Frank Chodorov.
Ten years later Murray Rothbard also warned of the VAT. ~VAT Not The Answer.
The VAT is a sneaky means of taxing the poorest among us.
Those who strain themselves to give taxation a moral character are under obligation to explain the state’s preoccupation with hiding taxes in the price of goods.
Polly?
The Value Added Tax (VAT) is being revived as a scheme for getting more loot from the people into the national treasury
Sounds like an incentive to spend money now and stock up on what you might need in the future. They’re not *THAT* smart, are they?
Yep
and yet the top 25 Hedge Fund managers who pull in about a billion a year pay an effective tax rate of 15%.
Right.
Well, how about they have VAT for Super luxury goods that the wealthy tax dodging lot like? Yes, I know, then we get to what is a luxury item, what isn’t? Serious bling would be one of the first things I would tax. If you’re poor you’re probably not going to be buying that???
Maryland is very heavily Democratic, both individually and in state government (archetypical one party government). The leadership talks misty-eyed of the importance of helping the poor.
Then they promptly institute a sales tax increase (regressive - more burdensome to the poor), and significantly increase gambling (again, more burdensome to the poor).
Politicians on both sides are more feckless and venal than most can imagine. They will betray their principles in a heartbeat. As I heard it put, “The only politicians with principles are the ones out of power.”
Morning all.
Taking a few days off work between jobs so I can actually read and participate today. Thought I’d share another anecdote regarding the jobs market in my area.
In the past month, 4 out of roughly 20 people at my (now previous) employer have found new jobs. Each of us has moved on to a better opportunity, all in the tech field (engineering or QA). Meanwhile, on the radio last night I heard the statistic that for every job opening their are 9 applicants. Perhaps in the tech field (at least in Seattle) there are starting to be opportunities for senior people.
You would think an employer that loses 20% of its work force in a month might do things a little different…
Yes, you would hope. Funny thing is they didn’t even do an exit interview with me. If I were one of the people remaining, I’d certainly be concerned.
And it’s arguably the “top” folks who are leaving, not those you can afford to lose.
Back in the early 1980s, my dad’s company started downsizing. They wanted to reduce his research staff by a third, and he couldn’t run an effective program with one third fewer people. So he tendered his resignation. Company wasn’t happy about that.
A few years later, I asked him how his former employer was doing. His reply, said without any sort of glee, “It’s a shadow of its former self.”
Alas, for this company, downsizing didn’t solve its problems.
IT people are totally interchangeable. I think they teach that in MBA school.
No, they teach that anyone not on the BOD is interchangeable and cutting staff is ALWAYS the solution. The thinking is that even though your people are making money for the company, they are really just “costs centers.” As if servicing the customer and creating the service/product somehow magically happens by itself.
Great anecdote, drumminnj. Thanks for sharing it.
I’m also hearing (on Piggington’s site) that the tech industry here in San Diego is looking up again, too.
It’s a good idea to keep an eye on these trends to see where things might be headed.
Best of luck in your new position!
Greece Just Tip of Debt Crisis Iceberg: Roubini
27 Apr 2010 CNBC
The sovereign debt crisis will get worse and bond vigilantes could move on to even bigger economies like the United States and Japan when they are done sweeping through vulnerable European nations, according to economist Nouriel Roubini.
With government debt across the world soaring, the man who predicted the credit crunch is predicting a reckoning.
“The recent problems faced by Greece are only the tip of a sovereign-debt iceberg in many advanced economies,” Roubini told readers of his RGE Monitor Web site.
“Bond-market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher.” “Eventually they may take aim at other countries – even Japan and the United States — where fiscal policy is on an unsustainable path,” he wrote.
Roubini said he fears failure to learn the lessons of the credit crisis will simply mean a bigger, more dangerous crisis is just around the corner.
It’s hard to learn a lesson from the credit crisis when all the perpetrators were rewarded for their recklessness…at the expense of everyone else.
My question is, that if God thought it was corrupt back then, wonder what he thinks now? Gonna need a bigger flood.
‘Noah’s Ark’ found in Turkey ~ The Sun
THE remains of Noah’s Ark have been discovered 13,000ft up a Turkish mountain, it has been claimed.
A group of Chinese and Turkish evangelical explorers say they have found wooden remains on Mount Ararat in eastern Turkey.
They claim carbon dating proves the relics are 4,800 years old — around the same time the ark was said to be afloat.
He said the structure contained several compartments, some with wooden beams, that they believe were used to house animals.
The group of evangelical archaeologists ruled out an established human settlement on the grounds none have ever been found above 11,000ft in the vicinity, Yeung said.
Local Turkish officials will ask the central government in Ankara to apply for UNESCO World Heritage status so the site can be protected while a major archaeological dig is conducted.
The biblical story says that God decided to flood the Earth after seeing how corrupt it was.
No worries mate, go back to polishing your car, ..God can handle it, …ALL of it.
..Gonna need a bigger flood..
Genesis 9-11
And I will establish my covenant with you, neither shall all flesh be cut off any more by the waters of a flood; neither shall there any more be a flood to destroy the earth.
Promised Noah no more floods. Must use some other method if there’s a next time.
Maybe a meteor shower. Rain hell-fire for a couple months. “Noah’s cave” would be the refuge.
Promised Noah no more floods. Must use some other method if there’s a next time.
Noah’s dead, no?* That promise has been fulfilled
* (assuming there was a Noah)
What did all the animals eat for 40 nights? Ever see Joe Rogan’s act on this? Hilarious!!
What did all the animals eat for 40 nights? Ever see Joe Rogan’s act on this? Hilarious!!
All the species that are now extinct.
Maybe a flood of printed money will drown us with watermarks? A gold-hulled lifeboat would be the ticket in preparedness.
God gave Noah the rainbow as a sign,
No more water, the FIRE (economy) next time.
–
He sent us a housing bubble.
Nice, alpha!
“carbon dating proves the relics are 4,800 years old”
It’s always a hoot when the religious types jump on the science bandwagon when it proves their worldview. Science!!
religious types..
no.. it’s your stereotype.
If you’d bother to take a look you’d find that hundreds of top notch scientists had a distinctly religious bent.. Galileo.. Millikan .. Max Planck .. Lord Kelvin .. Louis Pasteur..
Not usually. They were just going with the flow so as not to be tortured/censured/denied funds from religious types.
they went with the flow?
Francis Collins
Current head of the National Institutes of Health.. was the director of the US National Human Genome Research Institute.
Described by the Endocrine Society as “one of the most accomplished scientists of our time”.
In “Faith and the Human Genome” he states the importance to him of “the literal and historical Resurrection of Jesus Christ from the dead, which is the cornerstone of what I believe.”
—-
Of course this guy is afraid that the Pope will have him tortured if he doesn’t pretend to be religious..
Right, bad faith. That works. Similarly, I think a lot of atheists are in bad faith are are really just pissed off at God.
jiC –
You hadn’t mentioned Collins in your hand-picked list. Most scientists don’t believe in god and that’s something that you can look up. Many did in the past because it was a serious heresy not to and because there was so much superstition in the world due to a lack of understanding. Without understanding, people can be willing to believe in many strange things.
Now, clearly Collins did some good, and clearly scientists can believe in strange things (Newton alchemy, etc.), but he is anomalous in the scientific community.
(In a bunker) In Montana
“I think a lot of atheists are in bad faith are are really just pissed off at God.”
I don’t even know what you’re talking about. Pissed off at something that doesn’t exist (most likely, though I could be wrong). Are you pissed at Shiva? Atlas? THe Flying Spaghetti Monster?
No? Sinner!
..Most scientists don’t believe in god and that’s something that you can look up..
You think it’s my job to find data that supports your point of view?
Most? A few? A large portion don’t believe?
Just one example of a pro-religious or pro-God scientist exposes your original statement for what it is.. naive stereotyping, at best.. some other things, at worst.
Galileo, eh? From wikipedia:
Galileo’s championing of Copernicanism was controversial within his lifetime, when a large majority of philosophers and astronomers still subscribed (at least outwardly) to the geocentric view that the Earth is at the centre of the universe. After 1610, when he began publicly supporting the heliocentric view, which placed the Sun at the centre of the universe, he met with bitter opposition from some philosophers and clerics, and two of the latter eventually denounced him to the Roman Inquisition early in 1615. In February 1616, although he had been cleared of any offence, the Catholic Church nevertheless condemned heliocentrism as “false and contrary to Scripture”,[10] and Galileo was warned to abandon his support for it—which he promised to do. When he later defended his views in his most famous work, Dialogue Concerning the Two Chief World Systems, published in 1632, he was tried by the Inquisition, found “vehemently suspect of heresy,” forced to recant, and spent the rest of his life under house arrest.
Galileo’s championing of Copernicanism was controversial within his lifetime..
Scientist who ARE religious in today’s “enlightened” scientific world tend to be controversial too.. So what?
—-
Copernicus was a Catholic priest few christs sake (pun intended)..and lived a hundred years before Galileo. Yes their work was forbidden by the Church.
Do you think Galileo or “Father” Copernicus had no religion simply because the Catholic church persecuted them?
Sparks, NV - Forty-one employees will be laid off at the City of Sparks and a total of 56 positions will be eliminated.
The Sparks City Council voted to move forward with the layoffs Monday and they include 11 firefighters.
The city has been asking unions and bargaining groups to take a 7.5% permanent pay cut this year and another 7.5% pay cut next year (for a total of 15% cuts) to bridge the budget deficit, but two of the city’s large unions have not agreed to the cuts.
The firefighters union and the operating engineers union have not agreed to permanent cuts. The police union has agreed to a permanent 5.4% cut next fiscal year.
City officials say, the employees can avoid layoffs if every union and bargaining group agrees to a total of 15% salary reductions over two years.
They still won’t touch the pensions or 20 years and out…geez
Unions LOVE layoffs. The laid off cannot vote.
Since much of the cost of public services goes to the retired, and retirement costs are fixed, a 10 percent cut in the budget means a 20 percent cut in services. Meaning the union can rightly claim its members are offering a much worse deal to the rest of the community, which is their goal.
Laying off firefighters in a city called “sparks” seems kinda dangerous.
Actually it was first called Harriman after the president of the railroad, but when Nevada started making noises like it was going cause the RR trouble, the town was renamed Sparks after John Sparks, Nevada’s governor.
This gesture was an unsuccessful attempt to forestall safety and tariff regulation of the railroads by the state.
AZ governor dismisses threat of economic boycott.
AP ~ Tue Apr 27,
TUCSON, Ariz. – Gov. Jan Brewer is dismissing the threat of an economic boycott over the new state immigration law she signed last week.
Appearing Monday at an Arizona Town Hall in Tucson, Brewer said she doesn’t believe the law is “going to have the kind of economic impact that some people think it might.”
U.S. Rep. Raul Grijalva, a Tucson Democrat, has called for a boycott of convention business for the state and other calls have come for a boycott of Arizona goods, services and tourism because of the nationally controversial immigration law.
The Arizona Daily Star reports that Brewer says outrage over the ability of police to ask people for citizenship documentation will fade. She recalled how another uproar faded when she was secretary of state and rode herd over a requirement that voters show ID at the polls.
She is correct, boycotts have little to no effect and what ever if any negative impact would be very short lived.
The race pimps at the NAACP have been boycotting my home state of S.C. for years on end, over the confederate flag. Makes absolutely no difference.
Raul is my Congressman. And here’s another story from the Arizona Slim File:
Each spring, our local food co-op sponsors an outdoor concert called Solar Rock. It’s a great day of solar-powered music, public education, exhibits by solar installers, and other activities.
Between musical acts, there are speakers, and last year, Mr. Grijalva was on the schedule. And he didn’t show up. Solar Rock organizers scrambled to fill the void, and let’s just say that they managed to find someone else on the spur of the moment.
A few weeks before this week’s event, I was in the co-op, and I asked the outreach coordinator, who was organizing Solar Rock 2010, if Grijalva was going to speak this year. Her answer: No way. The Solar Rock people weren’t happy about being blown off last year, so he wasn’t invited this year.
So the pro illegals will boycott and the anti-illegals will be booking their trips there today. Sum game: a potential boost. Next!
A few years ago, there were massive immigration rallies and marches on May Day (May 1st). There was supposed to be some sort of shopping boycott, but I know more than a few people who saved up their shopping trips just so they could do them on May 1st.
SHe is handling this all wrong. She should have said they are going after criminals, not illegals! All of the hotels in Scottsdale NEED illegals.
I was teasing my son’s Mexican-American girlfriend yesterday that I won’t take her to Arizona next winter for a meeting I attend every year unless she brings her passport. She said that she’ll ride in the trunk. Joking, but definitely uncomfortable.
Gotta keep the DOW above 11,000 today.
Good thing the SEC is only looking into Goldmans’ criminal business practice and not currently investigating Goldman’s Market Manipulating Software (TM) that is used daily to move equity markets higher as a backdrop to the Recovery (TM).
Some accomplishment. The Dow first closed over 10K on 3/30/99. Applying the the CPI inflation formula to that number would require the Dow to be a little north of 13,000 just to be even with 10K in 1999.
In real terms, the Dow has gone down over the last 11 years. But don’t tell that to the public. Math is hard, after all.
10994 at 3:57 it`s gonna be close
There’s a decent amount of talk on this board about municipal and federal employees, specifically regarding compensation, pensions, etc. I’ve been lucky to get some insight into the workings of these organizations since I’m dating a gal who works for city government.
I must say I’m envious of her guaranteed 5% annual raise. And even she thinks she’s overpaid compared to the rest of the market. But it’s been most interesting hearing about her drama with a subordinate who’s job performance is quite low. It’s a large political battle to get one fired, and there’s constant concern/checking to make sure they have a solid enough case that they could defend it against the union.
I’m really hoping municipalities get a wakeup call in the near future. I’m optimistic since they can’t print money like fedgov, they will have to cut their budgets at some point. Hopefully the workers and unions will realize how nice they have it, and will realize that they’re killing the host.
Then again, fedgov might just ride to their rescue and bail them out. Ugh.
Not all muni employees get automatic raises. In out little burb they were frozen last year and will be frozen again this year, they also had furlough days last and will have even more this year. And only the cops and firefighters get pensions, everyone else gets a savings plane they have to contribute to.
guaranteed 5% annual raise
WTF?
Note to self - avoid living in drumminj’s gf’s community.
Where did you say that was?
Where did you say that was?
I’m not going to say
But yeah, it’s ridiculous. I don’t know all the details - if it’s just her pay grade, if it’s across the board, only for a few years, etc. But that raise is in the bag for her, as far as I understand.
I hooked my wagon up to the right horse
Now if I can just convince her to be my sugar momma….
A lot of State and Federal jobs have With-In Grade or Step increases. You start at the bottom and get a 5% increase every year until you top out in that pay position. After that your pay is topped until raises are negotiated (Unions) or COLAs are approved. If you promote to a higher pay position it’s an automatic 5% increase, and the steps begin again.
One of the issues I find fascinating about immigration issues, is without the Mexicans around, who is actually going to do the work?
As in who’s going to pick grapes, pack meat, haul garbage etc.
You people don’t think for one minute that Americans are going to this kind of work do you?
Who knows what is possible? This hasn’t played out yet. The majority are still in the denial phase. Looking, hoping, and praying that some bankers and politicians they have never met will make all the right moves and save their way of life with a minimum of pain.
After the passage of time crushes that misplaced hope things might change quite a bit.
I never picked grapes.. no grapes to pick where i lived.. But i’ve hauled garbage and packed meat. Moved furniture (that was a fun one).. washed dishes.. was a hot-tar roofer for a while.. lots of similar things.
Try not to project. Rest assured that people will fill any jobs that need filling.
My first job in high school was working as a janitor at local bank.
I used to clean the Avista stadium bathrooms in summer, after baseball games, while I was a wee lad. There were no mexicans lining up for that job. (Woman bathrooms are the WORST, what the heck are you gals doing in there, anyway?)
wow.. a bank.. classy.. you musta been a celebrity at school.
“Well of course I have the key to the vault.. what do you think?”
Who did those jobs before “the Mexicans”? High-schoolers, college students? And now, we have word by the day that older folk don’t feel like they can retire, or who want to work part time. And as we move further away from being producers/manufacturers, more an more people come into view as potential hires in these positions.
In the case of the meatpacking industry, the work was done by American union labor. Then, in the early 1980s, the companies broke the unions and brought in illegals as replacements.
Correct. I suppose that once global wage arbitration has done its thing that all Americans will be replaced with foreigners. I wonder where they will send us?
I wonder where they will send us?
Iraq, Afghanistan, Iran? Something that plays to our core competencies?
“You people don’t think for one minute that Americans are going to this kind of work do you?”
They will once the largesse is cut off.
(also see Bill Black’s comments on big business schools as fraud factories. The whole idea is its more impressive in America to cheat and be successful then to do good honest labor well.)
Preach it, CarrieAnn and Bill Black!
Case in point: I have more than a superficial level of familiarity with one of our nation’s b-schools. They’re making quite a public show of zero tolerance toward ethical breaches.
However, a faculty member recently told me that cheating among pre-business students is a huge problem. Faculty member told me of several cases where a dean was notified — and I think that dean was the dean of students for the entire campus — and the response was a blow-off.
Meat packing used to be a good paying vocation, until they busted the unions and replaced the workers with much lower paid illegals.
Americans used to do this kind of work, but now they are undercut by illegals who will do it for peanuts.
Yeah, all those obese Americans out there picking fruit and veggies in the hot sun for 8 hours a day.
I think not.
Back in the mid 60’s, (I had just gotten my Drivers License), I answered an ad in the Dallas Morning News to “chop cotton”. I figured “how tough can that be”. So I drive out to the cotton fields west of town. Chopping cotton was essentially hoeing the weeds using a very short hoe (so you could get around the base of the plants). It was piece meal work, $1.00/row, as I recall. Minimum wage was $.70/hour, so I figured it was pretty good work. I did notice that I was the only gringo, but figured I was young and tough so how bad can it be?
I lasted one row, went for a drink of water, and never went back. Forfieted my $1.00.
How did America do before the 1970s?
Hint - Americans did it.
There were lots of immigrant workers back then, too. I knew a family of them from Mexico who eventually bought land here. They traveled around the Westl through the 50s and 60s and were succeeded by newer immigrants when they finally settled down.
Fine. Bring in braceros to harvest the crop and send rthem home when its over, like they used to.
There’s nor reason why 90% of all jobs in the “hospitality” industry have to be covered by illegals. It seems these days that McDonalds only hires illegals.
Americans are really too fat to do this kind of work anymore.
Sad but true.
Are they too fat to do the work, or are they fat because they don’t have work to do anymore?
Note the correlation between obesity rates, and the illegal immigrant population.
And……are obesity rates adversely affected by all these fat Mexican illegals I’m seeing around here?
Back in the 60s, everybody smoked and drank hard liquor, ate Porterhouses, fried food, and thought sushi was bait, and NOBODY exercised, jogged or rode bikes.
But now our obesity rates are (supposedly) higher. Makes no sense to me.
Four years ago, no they wouldn’t. Now, three years into the recession I think that Americans are happy to do any kind of work.
Who will do this work? Those that used to; high school and college students and people down on their luck.
You people don’t think for one minute that Americans are going to this kind of work do you?
Yes. I did that kind of work before as have many of us.
Yep. Been there, done that.
My dad grew up on a farm, and they never had immigrant help — that’s what the kids were for!
Lindy sez…
GOP’s Graham: No immigration bill until 2012
April 27, 2010
Sen. Lindsey Graham, the sole Republican who was working on a bill to legalize illegal immigrants, in effect put the bill on the shelf on Tuesday, saying a debate now would destroy any prospects for passage and saying the issue needs to wait until 2012.
The remarks likely signal the end of any serious chance for broad immigration legislation to pass this year, since Mr. Graham, South Carolina Republican, was the best hope for a partnership with President Obama and Democrats who want to write a bill.
“It is impossible for me and any other serious Democrat to get this body to move forward until we prove to the American people we can secure our borders,” Mr. Graham told Homeland Security Secretary Janet Napolitano, who was testifying at a Senate Judiciary Committee hearing.
“I believe we can do it by 2012 if we’re smart,” he said.
“TrueDoNothing™ / “TrueObstructionists™ / TrueGridLokers™”
We have our own “solution”, it’s called the Tommy DELAY policy.
Here, let me fix it……
“I believe we can throw sand in the gears until we get the White House back in 2012, then we can pretend like were developing a bill for the Tea Partiers, while throwing in all kinds of loopholes for our business buddies in the fine print.”
There……that’s better.
Goldman’s Take-No-Prisoners Attitude
by Kate Kelly, Monday, April 26, 2010
“…In the months that followed, as more lenders filed for bankruptcy and hedge funds appeared troubled, the notion of “the big one” — a major event that would crack the market — became fodder for dark humor, say these people.”
Arrrgh, …The Krackin’!
“…Still, the traders hoped their big returns would lead eventually to a ticket to “Hitters Row,” the 50th-floor enclave in Goldman’s One New York Plaza building where the firm’s top securities-business executives worked.”
“The whole building is about to collapse any time now,” Mr. Tourre wrote to his girlfriend. “Only potential survivor, the fabulous Fab … standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!” according to an email in the SEC case. “Anyway, not feeling too guilty about this.”
If it smells like a CULT and dresses like a CULT and walks like a CULT and talks like a CULT…it is a:
“TrueFinancialCultress™”
Their analysis of the 2008 presidential campaign found that University of California employees were Obama’s top donor, giving a collective $1.6 million. That system is run by the state of California, and hence is a public employer.
No. 2 was Goldman Sachs. Goldman employees gave Obama $994,795.
@Joey,
I will try not to project.
Doesn’t change the fact that something like 30% of adult Americans cannot pick up a dollar bill off the ground. A similar number cannot walk further than a hundred yards without resting.
The point is that illegals are doing jobs that require physical attributes; more than 50% of adult Americans lack these attributes.
Collectively we are the world’s most powerfull nation, but as individuals we are hands down the wimpiest. We simply will not tolerate discomfort.
If there is a cost we will pay for the elimination cheap, illegal labor, it will be higher prices.
Crops will not be allowed to rot in the fields. Garbage will not go uncollected. Instead, wages will rise to whatever point is required to attract the required laborers.Consumers will absorb that higher costs of doing business.
People who take on a labor intensive job get into shape in a surprisingly short period of time.. It’ll hurt like hell for the first couple months, and you’ll wheeze and cough from running out of breath, but before you know it your clothes are too tight around the shoulders and baggy around the waist because you’re losing all the fat and getting buffed up..
Well all the folks who are anti-immigration AND want to pay their workers the cheapest wages possible (anti-union, anti-minimum wage) would be in for a big surprise if this were to come to pass.
I, for one, would love to see it. Would agribusiness allow it? I doubt it.
It’s not ALL immigration that would be eliminated… it’s just the illegal portion.
New legal immigrants probably won’t have enough skills to avoid working fields or other min-wage labor, at least for a while, and should be more than satisfied with current, legal wages, since the money and work conditions are bound to be lots better than back home..
The really cheap-o illegal laborers who are coerced into working for peanuts in fear of deportation won’t be around.. How many of those are there? Might be millions.. might be less.. I have no idea.
In 1987 there was an amnesty for illegal aliens.
It only took 20 years for 20 million more to make it here again.
you got any links?
I found one page with some numbers.. Center for Immigration Studies.
..About 2.7 million people received lawful permanent residence (”green cards”) in the late 1980s and early 1990s as a result of the amnesties contained in the Immigration Reform and Control Act (IRCA) of 1986. But these new INS figures show that by the beginning of 1997 those former illegal aliens had been entirely replaced by new illegal aliens…
[snip]
Overall, the estimates show that nearly 500,000 illegal aliens settled here each year in the mid-1990s. This total number of new illegal settlers is offset by about 145,000 illegals who returned home on their own each year, 40,000 deportations, 20,000 deaths, and around 150,000 illegals receiving green cards as part of the normal “legal” immigration process.
(500K a year.. minus around 355K .. a net gain of only 150,000 per year. That does seem to be low.. )
[snip]
These numbers suggest that Congress’s focus on border enforcement as almost the sole means of controlling illegal immigration is inadequate. Illegal immigration can be controlled only with a strategy that combines border enforcement with efforts to turn off the magnets that attract illegal aliens in the first place — jobs and green cards.
http://www.cis.org/articles/2000/ins1986amnesty.html
“Garbage will not go uncollected.”
In my neck of the woods good old American guys pick up the trash. Of course they are paid more than minimum wage.
UCF Tuition and Fees Could Soar 23% Combined Under Legislative Deal
Academics, News, Politics, Tuition, UCF Administration, UCF SGA
April 27, 2010
State lawmakers gave the greenlight for the University of Central Florida and other state schools to hike fees by 15 percent and raise tuition by another 8 percent — while at the same time slashing funding for the Bright Futures scholarship program.
The South Florida Sun-Sentinel reports the budget deal was made Monday in Tallahassee, and will give universities more money by placing the higher costs on the backs of students and parents.
In addition to other cuts to Bright Futures, the deal yesterday slashed the scholarship by $1 per credit hour. In other words, the extra fees and tuition being tacked on by Tallahassee won’t be covered by Bright Futures. It will also be harder for future students to qualify.
Lawmakers told the Sun Sentinel Bright Futures held Florida universities back.
“It’s a dilemma. Universities drive economies, and we starve our universities with Bright Futures,” Sen. Jeremy Ring, D-Parkland, told the Sun-Sentinel. “Bright Futures was set up to be a merit-based program, but it’s free college for all. As great as that sounds, it doesn’t allow our universities to thrive.”
Bidness as usual, and many a poor schmo hoped things would change…Ain’t gonna happen, pay-go.
Would-be replacements raise for Harry Reid.
Sen. Chuck Schumer invited Harry Reid to spend Monday morning with him in Brooklyn, where some of Schumer’s well-heeled friends opened their checkbooks to help the Senate majority leader’s struggling reelection bid.
Democratic Whip Dick Durbin has invited Reid to join him next week in Chicago, where he’ll connect the Nevada Democrat with Windy City business leaders who’ll pour even more money into Reid’s campaign.
For Schumer and Durbin, it’s all part of a delicate dance. While Capitol Hill insiders say the two men appear to be jockeying to show their fellow Democrats that they’d be the logical successors to Reid, they’re also showing Reid unyielding loyalty where it counts: campaign cash.
So, there Schumer was Monday morning, introducing Reid to the big-money developers of the New Jersey Nets’ new $4.9 billion facility in Brooklyn.
While Schumer’s office won’t say how much money the event raised for Reid, cash poured in from a number of developers and real estate types. The event came just hours before a procedural vote on a plan to rewrite the rules for Wall Street, but Reid’s office stressed that the donors who turned out Monday weren’t bankers or Wall Street officials — and that, in fact, many work for Ratner’s company as well as for electrical and construction companies.
The FIRE economy…
What ever became of the NAR’s “Time2Buy” campaign complete with campaign buttons? The timing of the “big-push” was fall of 2006, I think and we made merciless fun of it on this blog. Does anybody remember?
Here is the press release:
http://www.sarasotarealtors.com/Time2BuyPR.pdf
And the ’spread’ will keep right on creeping along…
Europe Debt Crisis Spreads to Portugal- AP
The government debt crisis that has shaken Europe’s shared currency widened and intensified Tuesday as Portugal saw its credit rating cut — and Greece’s was reduced to junk status.
TTT just said yesterday that the greek thing was contained.
Indeed. Mars will not be effected.
Money talks, bullsh!t walks.
Europeans Fear Greek Debt Crisis Liable to Spread
By LANDON THOMAS Jr.
Published: April 27, 2010
As Greece inches closer to the brink of financial collapse, fear that the debt crisis will spread is engulfing Europe.
Thanassis Stavrakis/Associated Press
Unemployed school teachers chanted slogans at an anti-government demonstration in Athens on Tuesday.
Increasingly, investors wonder if Portugal, Spain and even Ireland may not be able to borrow the billions of dollars they need to finance their government spending.
“It’s like Lehman Brothers and Bear Stearns,” said Philip Lane, a professor of international economics at Trinity College in Ireland, referring to the Wall Street failures that propelled the financial crisis of 2008. “It is not so much the fundamentals as it is the unwillingness of the market to fund you.”
A major ratings agency cut Greece’s debt to junk level on Tuesday, warning that bondholders could face losses of up to 50 percent of their holdings in a restructuring. The agency also downgraded Portugal’s debt by two notches.
Leading stock indexes across Europe plunged by 2.5 to 6 percent, and the euro fell to a recent low, for a 13 percent decline against the dollar since December. The Dow Jones industrial average slumped 213.04 points, to 10,991.99, a fall of 1.9 percent.
The downgrades, by Standard & Poor’s, pushed up the interest rates that Portugal must pay on its 10-year bonds to a high, and Spain’s costs rose, too. Investors are already demanding nearly 10 percent in returns on Greek’s 10-year bonds. The cost of insuring all three countries’ debt against a default are also at record levels — a clear sign that investors are shunning them.
“The situation is deteriorating rapidly, and it’s not clear who’s in a position to stop the Greeks from going into a default situation,” said Edward Yardeni, president of Yardeni Research. “That creates a spillover effect.”
…
Two days ago there was no threat of oil spill and the possibility of a spill was “contained”. Sound familiar?
http://www.orlandosentinel.com/news/local/breakingnews/os-oil-spill-florida-threat-20100427,0,1452152.story
Just what we need. A subprime oil spill threatening a bubble-icious coastal housing market.
They can use robotic submarine machines to shut down a high pressure well head 5,000 feet under-water…but there’s not good ideas how to make a plug-in battery car for the masses of humanity…how ’s that for progress?
…or make a car that comes to a stop when you apply the brakes.
I watched what their 3 options were this morning. The valve system that the robotic submersibles are trying to shut off weighs 450tons, and may be damaged. This could take a while if they can’t just shut the valve. I hope it works,and works quickly! The crude is flowing steady, and is going to be very bad news for a lot of critters.
Coast Guard officials have reported that about 42,000 gallons of crude are escaping each day from crumpled pipe.
Oil company BP is using robotic submarines in attempts to close powerful emergency valves attached to the well on the seafloor.
If that doesn’t succeed, other options include installation of a large cap to capture escaping oil and the drilling of relief wells to pump heavy mud and cement into the damaged well. Those measures could take weeks or months to complete.
So much for “Drill Baby, Drill!”
Eventually, we’re going to have too.
As for this mess, one word: BP
Man what a mess. I just heard about it last night. A Scottish man who works on the big, new Petrobras platform that left Rio Harbor today told me about it.
Lots of Brits and Norwegians working on those down here. After learning I was American, one Norwegian guy took great delight in telling me how much he loved eating whale meat.
He seemed bummed out when I asked him the best way to cook it.
(yea, I was messin’ with him)
By Brian Palmer Posted Thursday, March 11, 2010, at 6:11 PM ET Slate Magazine
What does whale taste like?
It’s similar to reindeer or moose. Whale tastes much more like its hairy cousins on land than its gilled neighbors in the sea. In places where gamey meats are common—like Norway, Iceland, and among the indigenous people of Alaska—whale is served straight up with little or no seasoning. For those who find its unrefined flavor off-putting, whale is cured, marinated, or slathered with a flavorful sauce. Whale bacon, marketed in shrink-wrapped packages of thin marbled slices closely resembling pork bacon, is offered at some Japanese markets. Whale meat curries are sold from a few Tokyo lunch trucks. Japanese schools are currently trying to figure out a way to get children to eat the meat for lunch, possibly turning to whale burgers or fish stick-style preparations. But some Japanese traditionalists still enjoy gamey, unadorned strips of whale meat sashimi. (Slate’s Seth Stevenson offers an opposing viewpoint: He thinks whale is a delicious beef-fish hybrid.)
Final spin: Grieving families offered environmentally friendly cremations… with a £300,000 ‘tumble dryer’
Daily Mail Reporter 27th April 2010
The funeral business in the UK could soon be revolutionised by an ingenious new cremation device which looks like a giant tumble dryer.
The Resomator is a green initiative that offers a smokeless alternative to cremation using chemicals to speed up the decomposition process.
An ornate, reusable wooden casket is used to carry the deceased to the Resomator.
The person’s body, in a sealed internal silk or wool coffin, is placed on a stainless steel shelf inside the metal cylinder and then the chamber is heated to 180 degrees under extreme pressure breaking down the body in less than three hours.
Any harmless residue left over is then drained away, leaving the skeleton which is ground to dust ready to be laid to rest.
The Glasgow-based inventor Sandy Sullivan is pushing for UK cremation laws to be adapted to allow for the new devices, which have already been sold abroad.
Engineering firm LBBC Technologies of Stanningley, West Yorkshire, who make the Resomator, based the technology on the chemistry of natural decomposition.
They have already sold three of the machines in America and Canada.
Managing director Howard Pickard, 44, said: It’s potentially fantastic for us. It’s such a new thing in an industry which hasn’t had a new form of disposing bodies for a long, long time. How well it is taken up is yet to be seen.
LBBC’s Quicklock door, invented by Howard’s grandfather Maurice, was the reason inventor Sandy Sullivan from Glasgow-based Resomation Limited chose the firm.
He said: ‘There’s a very aggressive liquid in the chamber under great pressure. We searched for a good door and after a year of searching, we were directed to LBBC.’
The Resomator cremation system is legal in five U.S. states with units being delivered to Florida, Minnesota and Toronto in Canada.
Mexico Issues Travel Warning for Arizona Over Law (Update2)
April 27 (Bloomberg) — Mexicans in Arizona should carry documentation and “act carefully” after the state passed a law requiring local police to determine the immigration status of anyone suspected of being in the country illegally, Mexico’s Foreign Ministry said.
The ministry said the warning is directed toward Mexicans living, studying or planning to travel to the southwestern U.S. state, which shares a border with northern Mexico, according to the e-mailed statement sent today. It comes as members of U.S. President Barack Obama’s administration said they have concerns about the new law and may seek to overturn it in court.
“There is an adverse political environment for migrant communities and all Mexican visitors,” Mexico’s ministry said. “It’s important to act carefully and respect the local laws.”
The Arizona law makes it a state crime to be in the U.S. without proper documentation. The state has an estimated 460,000 residents living there illegally, the seventh highest total in the country, according to the U.S. Department of Homeland Security. Opponents say it will lead to discrimination and racial profiling by law enforcement authorities.
There was talk in Mexico of “closing the border” with Arizona.
Is that a promise?
Ooops, couldn’t hold 11,000 we will need to get the team on that ASAP!
Police say man wrapped in toilet paper robs store
April 27, 2010 Lincoln, Neb. (AP)
A man who concealed his face by wrapping his head with toilet paper robbed a Lincoln convenience store. Police said the man was armed with a knife when he robbed the store around 10:30 on Saturday night. He escaped on foot with an undisclosed amount of money from the safe.
“Here’s your key back… and.. let me have one of them Slim Jims. By the way, the bathroom is out of toilet paper.”
“Yeah, I know. We stopped putting toilet paper in there. It was causing too much trouble.”
He’ll never outdo our local ‘duct tape bandit’:
http://www.wsaz.com/news/headlines/9129056.html
“Kazee said in a jailhouse interview today police got the wrong man and Kazee says he has no memory of going in to the liquor store. He also says he has no memory of police removing the duct tape.
We asked Kazee how he could deny being the duct tape bandit even though police have photos showing Kazee with the duct tape on and then a photo where Kazee’s face is revealed.
Kazee looked straight at the camera and said, “Do I look like the duct tape bandit to you?”
Miller says Kazee also had a t-shirt pulled up around his head during the robbery attempt. Miller says it reminded him of the “Cornholio” character from the “Beavis and Butthead” cartoon.”
Levin asks Goldman CFO, “When you heard your employees say on email about MBSs they said, ‘God, what a shitty deal, God what a piece of crap, do you feel anything”
Answer: “I feel it’s very unfortunate to have on email.”
Laughter in the hearing room.
I think that says it all.
Yep.
Now get back to work you peon.
Answer: “I feel it’s very unfortunate to have on email.” = “So we fired them.”
“…I think that says it all.”
I think that his binder was 16″ thick, says it all
note: that was chum for fpss
We should subpoena all the Congress-critter’s email.. see if anyone said ‘God, what a shitty deal, God what a piece of crap..” when referring to the Health Care Reform bill.
I found this blog in late 2006, when I was trying to figure out why we couldn’t sell our house. We kept cutting the price until it finally sold (after ten months on the market) and we moved. But by then I was addicted to the HBB and continued to read it. Many thanks to all of you, as you helped us decide to rent instead of buy again. After nearly 30 years of home ownership, we find we like renting! But we hope to buy again in a few years….maybe.
Anyway, I have to share this. Over the weekend we visited family in IN. They had told us about a house in their upscale subdivision (3 years old) that’s become the neighborhood attraction. As they emailed us before we visited:
“The house is in foreclosure and the basement has water about a foot from the windows and up the basement stairway. There is stuff growing on top of the water. That also means the furnace and water heater are ruined. There is mold on the walls upstairs. They left the house in September and all the utilities were turned off so needless to say the sump pump could not work. The mortgage company is in FL. According to a realtor they don’t care since they have insurance to cover these homes. There ought to be a law against this. It would have cost everyone involved a lot less money down the road to keep the utilities on. Our average gas bill this winter was around $45 and the electric $60 and it would not have taken that much for an unoccupied home. I have met a lot of my neighbors the last couple of weeks because I have been outside when they come to see the damage. Even if they gutted the house who would want to live there?”
We saw the house for ourselves on Saturday. Since the house has a daylight basement (above-ground windows), it’s easy to peek in and see the scummy water hovering now just about an inch below the bottom of the windows. There’s probably at least five feet of water in there. Going around to the front of the house to look in the first-floor windows, you see mold growing up the walls (upscale ranch with high ceilings) in strange curly patterns. I’ve never seen anything like it. I can’t imagine how toxic the air inside must be. The house has been closed up since fall, with all that gross water inside.
Our relatives tell us more and more people keep coming to see it; word travels fast in small towns. Our relatives have named it “The Science Experiment.” Sign of the times.
Ugh.
A great example of how the problem of overbuild is not simply resolved by waiting for population to catch up. There was and will be a massive amount of wasted work due to this bubble (as there is with all bubbles).
They should check if the local government has any health and safety ordinances relating to that.
So if those deteriorating messes are taxpayer backed property are we on the hook for that loss? That may explain why the original mortgager doesn’t give a hoot.
I’m reminded of the trash compactor scene from Star Wars.
NPR had a shocking report this morning! An “expert” came on and said that it’s sometimes better to RENT rather than BUY (of course, he hedged it a bit).
They even interviewed a couple who had the nerve to say they rented for the past 40 years and were perfectly happy!
http://www.npr.org/templates/story/story.php?storyId=126298763 (story here)
They’d better be careful at NPR! If Barney Frank hears them saying things like this, he may cut their funding.
GM: Who Do You Think You Are Kidding? Repaying Us With Our Own Money? 27 Apr 2010
By: William Dunkelberg, Economics Professor, Temple University
GM is running TV ads claiming that they have repaid their government TARP loan of $8 billion and change early.
Eight billion?
The taxpayer invested 80 billion of TARP money into GM and Chrysler, most of that to GM. How does $8 billion pay that off? It doesn’t. What it bought us is 61% ownership in the new GM and a block of stock for the UAW. Previous shareholders and bondholders got virtually nothing.
General Motors recently reported a LOSS of over $4 billion dollars, not a great return on the tens of billions taxpayers “invested” in the car companies (not voluntarily, no sane private investor would have invested which is why government had to).
With profits like this,the share price will surely fail to rise to the historically high levels needed to insure a return of taxpayer money.
The problem could get even worse long term.
The GAO has reported that the pension funds (for 900,000 workers) are underfunded by $17 billion. Payments of about $15 billion have to be made in the next few years to the pension funds.
Hard to make these payments with no earnings.
The company continues to liquidate itself, this time losing taxpayer money.
As long as “mark-to-fantasy” is still legal, this kind of crap will continue.
Mark-to-fantasy is the whole basis of the Recovery(TM).
People didn`t really think GM made money did they? Those TV ads are a joke. Calling 80 billion of TARP money going into GM and Chrysler an investment is a joke. It was a gift to the UAW.
Someone should sue them for false advertising. It pisses me off to watch those commercials.
Thirty-one House Dems quizzing Toyota execs got UAW campaign cash
February 24, 5:34 PM Examiner Mark Tapscott Previous
Two committees in the U.S. House of Representatives are holding hearings this week concerning allegations of sudden acceleration problems in Toyota cars and trucks sold in this country.
There is a combined total of 59 Democrats serving on these two panels, which hold potentially life-and-death power over Toyota’s ability to continue offering its products to American consumers. So far this year, 31 of the 59 have received re-election campaign contributions ranging from as low as $500 to as high as $10,000 from the United Auto Workers union.
Why is that significant? Because the UAW is a major stockholder of Toyota’s top U.S. rival, General Motors. Also, Toyota has successfully resisted UAW attempts to organize the Japanese firm’s estimated 31,000 assembly line workers employed in five plants here in America.
Democrats have been telling America for years that special interest money corrupts government. I wonder if that is not the case now in these hearings in which Toyota executives are being grilled and are being subjected to an avalanche of negative coverage in the Mainstream Media.
Coincidentally, Toyota sales are down and GM sales are up. Nothing to see here, folks, now move along!
“Coincidentally, Toyota sales are down and GM sales are up. Nothing to see here, folks, now move along!”
Lemmings buying lemons.
How anyone could choose to own a GM when a Toyota/Nissan/Honda is available as an alternative is beyond me.
when a Toyota/Nissan/Honda is available as an alternative is beyond me.
Why do I get the feeling that you approve of Baby Einstein video’s?
Damn Ki, let me check if hell has frozen over because I agree with you again!
I have a small Japanese P/U that is far nicer and gets better gas mileage than GM’s current small truck. The real kicker is that it’s 10 years old.
The state is broke, OMG we’re in crisis. Armageddon, schools will close, police laid off and prisons closed……
One month later: we’re gonna spend $40 mil on a museum a Finger Lakes Museum. We’re all so happy. Halleluiah!
http://www.syracuse.com/news/index.ssf/2010/04/keuka_lake_park_site_picked_fo.html
Gheesh!
i went to the link hoping to find out who might profit in the $40M deal.. but there’s this:
The museum is to be built in the next couple years with private donations and grants.
and
Yates County and Keuka Lake-area businesses have pledged over $2 million in start-up funding.
so, it might be a worthy effort.. gotta discover all the particulars to be certain about it..
Derivative markets … an understandable explanation:
http://bigpicture.posterous.com/derivative-markets-an-understa
..A …vice-president at the local bank recognizes these customer debts as valuable future assets and increases Heidi’s borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral.
He sees NO REASON for undue concerns when the debt is owed by a bunch unemployed alcoholics? That’s crazy!
There must be more to the story.. and of course there would be (was) in real life.
——
Here’s what happened.
This smart bank VP did lots of research and really believed that all these unemployed alcoholics would inherit a fortune from their rich uncles. (guaranteed that property prices would rise forever).
However, before making out their wills, all those uncles died when their junket bus to Reno went off the side of a mountain. (bubble popped .. unexpectedly).
——-
And the debt underlying the bonds was toast.. along with anything that derived it’s value from it.
News from behind “The O.C.” Curtain:
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Street on Goldman Sachs: America hates a cheat
April 27th, 2010, by Teri Sforza, Register staff writer
Irony alert! Irony alert!
Chriss Street, Orange County’s outgoing treasurer-tax collector, has penned a withering broadside at Goldman Sachs (Heads Goldman Sachs Wins), one of the greedy investment firms folks love to hate, and one of the County of Orange’s trusted financial advisers.
Goldman, in case you missed it, helped spread toxic mortgages throughout the financial system, and when the system finally collapsed, Goldman profited from that collapse by placing large bets against the very investments that it was selling to others (Goldman is being grilled before a Senate committee even as we type; see The Washington Post’s coverage here, and the New York Times coverage here.).
“Goldman Sachs continues to perform like a magician,” Street writes as he eviscerates the marketing prospectus Goldman used to sell some of those poison securities. ”Americans may enjoy being fooled by magicians do(ing) card tricks, but very few would enjoy betting money against a card shark. All good magicians use a distracting motion with one hand to mask attention away from what they are doing with their other hand….
“America loves a winner, but they hate a cheat.”
And it’s here we can’t help but note that a federal bankruptcy judge recently found that Street breached his fiduciary duty five years ago when he served as a trustee for a bankrupt truck-trailer company.
The judge ordered Street to pay more than $7 million in damages in the case.
Street abandoned his re-election run and county supervisors have stripped him of his power to invest public funds.
Street was one of the first whistle-blowers on Citron’s doomed investment strategy before the county bankruptcy in 1994. And, you know, he’s not a bad writer, and he raises some interesting points.
“…(P)erhaps it is time to pull back the Orange Curtain to learn why the County of Orange has been paying the big bucks to hire financial advisors who do not even have an office here,” Street writes. “Is it just magical that Orange County’s financial advisors over the last few years have been Bear Stearns, Lehman Brothers and Goldman Sachs???”
Went to a real estate conference. Residential land was a big topic of discussion. The people speaking were major investors and consultants who work with builders. A few takeaways:
1. FL is a mess still (lots of shadow inventory, few sales relative to current listings);
2. Chicago is a mess still;
3. CA has shadow inventory, but strong demand. Pretty much the whole state has less than 4 months of inventory based on sales pace as compared to listings;
4. It was one consultant’s opinion that after research, they don’t think the banks are holding onto inventory, the shadow inventory has more to do with the process of the banks foreclosing and attempting restructures, workouts, etc. While any house is mired in that process, it is shadow inventory.
5. The large investors were lamenting being unable to buy finished lots, the prices have been bid up too high by builders. They feel that if they want to buy residential land, they need to take more risk to enter land investments (partially finished lots, entitlement risk, etc.)…the low hanging fruit has been picked, and it seemed like they felt they were a little late to the finished lot party.
6. Housing starts were at a 50-year low in 2009. Even if they double in 2010, it will be the second lowest year on record.
7. One consultant’s opinion is that the high end (non-conforming) has another 10-20% to fall. Low end has likely bottomed.
8. The general feeling was that once finished lot supply has been used up, construction of new homes will largely stop until prices rise to a level where construction starting from raw land makes sense again.
9. Builders are selectively hiring. The overall view was that job growth is occurring in other industries as well.
10. Builders are raising prices on some subdivisions.
11. Affordability levels are quite high.
12. The Fed leaving the mortgage market has had minimal impact on mortgage rates.
13. There will be a gap in land supply, as entitlement efforts substantially stopped for an extended period. In many markets (California in particular), where entitlements are difficult, there will be lack of buildable land in the coming years (2012, 2013, 2014).
Modestly optimistic on housing, not roaring back, but new home starts increasing in 2010 over 2009, expect that it will take (on average) until 2015/2016 until people are not underwater generally.
Very optimistic on land values, as the feeling is that the builders who disposed of land will need to buy it back to have inventory to sell as the economy recovers, and no new land has been entitled for a while.
Flip-Flop:
Location! Location! Location!
Jobs! Jobs! Jobs!
Here’s Mr. Cole’s (age
“forward looking” insight taken from a “Rebuild America” construction funded project sign:
“Work ahead…expect delays”
Great info, Rental Watch.
This is very much in line with what I’m seeing/hearing here in California.
We’ve seen worse in international markets but this sure is an awful lot of red.
http://www.indexq.org/
Yikes!
It’s a great time to buy the dip, as it’s all contained!
Fascinating PBS Nova show on the financial bubble, and the rationality of markets:
“Mind over Money” http://www.pbs.org/wgbh/nova/money/
It relates the housing bubble to other bubbles and the bubble-like patterns that can be created for assets in laboratory experiments.
The real estate market is roaring back, even though government price supports have been or will soon be eliminated. Buy now, fence sitters, or get priced out forever!!!
—————————————————————————————————————-
Real Estate
New Homes Surge Heralds Future Sales Gains
Published: April 26, 2010
By Steve Cook Real Estate Economy Watch
Last week’s 27 percent surge in new home sales in March, the largest advance since April 1963, signals future increases in existing home sales, which rose only 7 percent in March, and may show the real impact of the homebuyer tax credit, which expires at the end of this week.
That’s because new home sales reported by the government are closings. Existing home sales reported by the National Association of Realtors represent contracts on properties. It may take as long as two months for a buyer and seller to close after a contract has been accepted. First-time and existing buyers whose contracts are accepted by May 1 have until June 30 to close if they want to qualify for the tax credit.
The new homes numbers surprised economists, who had expected 330,000 new home sales in March after February’s results were revised upward to 324,000, still an all-time low. In fact, sales of new single-family houses in March 2010 were at a seasonally adjusted annual rate of 411,000, according to U.S. Census Bureau and the Department of Housing and Urban Development. Sales exceeded the March 2009 estimate of 332,000.
“Undoubtedly, the tax credit is working,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Builders are seeing a growing optimism among consumers.”
“The near record-breaking 27 percent increase over February was the result of home buyers taking advantage of the tax credit as well as a carryover of demand that was held back by unusually bad weather in February,” said NAHB Chief Economist David Crowe.
“The increased sales are very welcome news and sales will continue to improve, although we expect them to plateau in late spring and early summer when the credit expires. Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth,” Crowe said.
Is there any chance that deliberate efforts by Wall Street firms to destabilize America’s mortgage finance system and profit from such efforts could be declared acts of treason? Because I have the strong conviction that whatever comes out of the Senate’s mock trial will not be commensurate with cost of the lasting damage Megabank, Inc’s subprime mortgage lending kingpins inflicted on America’s financial system.
* The Wall Street Journal
* BUSINESS
* APRIL 28, 2010
Goldman Is Bruised, Defiant in Senate
By JOHN D. MCKINNON And SUSANNE CRAIG
WASHINGTON—Goldman Sachs Group Inc. endured a day-long thrashing from lawmakers over its tactics in dodging the mortgage market crash, in a spectacle that highlighted the gap between Washington’s and Wall
Top Goldman Sachs executives are under fire on Capitol Hill. WSJ’s Evan Newmark joins the News Hub to talk about how they fared. Plus, Greek debt is downgraded to junk and taxi television is getting mixed reviews in the Big Apple.
The firm appeared to avoid major setbacks in its legal fight against regulators’ charges that it defrauded investors in one big subprime-mortgage deal. Goldman’s stock was slightly up on a day when the European debt crunch hit other financial shares.
But the political and public-relations damage for Goldman—and Wall Street more broadly—might have been more extensive. Lawmakers repeatedly criticized the firm and its executives for allegedly stacking the deck against clients during the market’s slide in 2007. Chief Executive Lloyd C. Blankfein aroused the committee’s ire in a sometimes-halting defense of the firm’s trading methods.
Senators said those methods included setting up the firm’s own securities to fail and betting secretly against those securities, or helping clients do so.
“I don’t know if Goldman Sachs has done anything illegal, [but] from the reading of these emails…there’s no doubt their behavior was unethical, and the American people will render a judgment as well as the courts,” said Sen. John McCain (R., Ariz.).
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I think the issue is that if a lending source has enough money to actually
make a fraudulent market and breach underwriting duty and mis-allocate funds and create a highly inflated market and a financial meltdown ,than they are a threat to the USA on many levels .
Why is it that the new age bogus risk standards and totally defective loan product riddled with fraudulent underwriting viewed as something acceptable ,along with mis-rating it in order to keep that money coming ?