Bits Bucket For May 1, 2010
Post off-topic ideas, links and Craigslist finds here. The DC meetup link at the forum is here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Please sir, can I have some more?
azcentral DOT com/news/articles/2010/04/30/20100430pinal-county-deputy-shot-immigrant30-ON.html
Pinal County Sheriff’s deputy shot in desert confrontation
Five men suspected of smuggling drugs across the border ambushed a Pinal County sheriff’s deputy Friday in a remote area south of Phoenix, underscoring the border-related violence that has catapulted Arizona and its new immigration law onto the blah blah blah…
The solution to this:
1. Amnesty for all illegals here
2. Keep the border open
3. Accuse anyone who doesn’t agree with 1 or 2 of being Hitler Jr.
That is key. Make sure to compare it to Nazi Germany or the Soviet Union. Never mind that totalitarian countries have to fight to keep people in and not out.
And never overlook the fact that most people are generally in favor of immigration just not illegal immigration. That is an inconvenient fact when you are calling somebody a Nazi.
I’m going to home depot today to make friends.I will be sporting an az flag making my way through the parking lot.
We have 300 million people in this country. Enough is enough. We need a halt to virtually ALL immigration, not just from the world’s cesspools.
“I’m going to home depot today to make friends.I will be sporting an az flag making my way through the parking lot.”
Our last few on-line purchases have been from AZ businesses, and I suggested to my wife that we boycott all CA businesses until the Terminator changes his tune.
Simple: mine the border. Distribute propaganda in Spanish to that effect.
Treat it as a military problem. S. Korea doesn’t have a significant immigration problem.
The great thing about mines, when used in conjunction with propaganda, is for the most part you don’t do anything. Fear is the real weapon.
“S. Korea doesn’t have a significant immigration problem.”
+1 LOL!
What, seriously, is your solution? 20 million people it’s estimated and that doesn’t count their US born children. I don’t believe we’re going to try to round up and deport that many people, so now what do you do with them? Having an unhealthy and uneducated underclass doesn’t seem to me to be in the best interests of society overall long term. Obviously, the borders need to be tightened, particularly due to the border narco wars, but that’s only part of the the problem. I just don’t hear any real practical realistic solutions being proposed by anyone.
I don’t think there is a lot of Political will to deport that many people and it’s clear that illegals living here were just one more issue that the Politicians turned a blind eye to and didn’t enforce
the laws in spite of legal Citizens complaints about the situation .
Now killer criminals on the Border are making the issue of this
massive illegal migration from Mexico come to the forefront again, as if it hasn’t always been there and the bad economy and budget
constraints are bringing the issues into public debate again also.
Illegal immigration is a huge problem ,no question about it .
“20 million people it’s estimated and that doesn’t count their
US born childrenanchor babies.”There, fixed that for ya.
Exactly my point - what did you “fix”? What solution did you suggest.
End birthright citizenship retroactively. Then they do not qualify to attend our schools or qualify for welfare.
Don’t forget to call anyone who disagrees with 1. or 2. of being a racist.
Good morning HBB gang,
Do we consider today to be May 1, 0001 ACB
(After Current Bribe) ?
…Or is it just another day in the ongoing meladrama of “My roof has a hole in it and it won’t float?”
Grab some coffee, stay tuned and we will return with the answer after this brief message from our creative sponsors, those good folks at NAR and Uncle Sugar…
I have been following foreclosures in the $400k or less price range. Whenever I found a decent one, same old story. Oh, that was snatched up by someone who wanted to take advantage of the tax credit before it expired, usually paying close to, if not more than, market. It would be nice to see some nice foreclosures sit on the market for months or more with continuous price reductions.
At work, I am now in charge of client updates on the financial reform legislation. There are lots of problems with it, and it fails to address the real issue: limits on leverage, the need for accurate mark-to-market and the curtailing of off-balance sheet treatment games. I find toilet paper much more valuable. Just a bunch of people trying to get votes and wanting to sound tough, trying to regulate an industry they dont understand and avoiding the real problems because the financial industry has side deals with them. It will chill the interest rate swap market, especially on the muni-side, crippling cities as they have limited ability to restructure existing debt in times of crisis or assign to a new swap provider and amend there swaps in the event that the swap provider is going down in flames.
there = their
“limits on leverage, the need for accurate mark-to-market and the curtailing of off-balance sheet treatment games”
+1!
The games continue, no end in sight…
Natalie
PLEASE DON’T SQUEEZE THE CHARMIN !
I can see poor Mr. Wipple turning over in his grave.
Mikey Why is Charmin so sqeezeably soft
The inside roll its wrapped on is 1/2 the thickness of a cheap no name brand…
“I find toilet paper much more valuable.”
It might come in handy with all the shitty assets that Megabank, Inc is peddling on its unsuspecting clients these days.
NPR’s Wait Wait Don’t Tell Me is mocking Gollum at the moment — something about ’shame is bred out of the bankers in their breeding tanks’…
Left Ohio,
The violence in the border area hasn’t been adequately reported on by the MSM and this type of incidence has been occurring on the Mexican side for years. Now its coming to the US side.
To those that don’t agree with the new AZ 1070 law, that’s OK, we really don’t care what you think. We don’t want the Mexican criminals in our neighborhoods. Those that are illegal need to go home, come back with papers and start their lives all over again.
Peace to all,
Lip
” we really don’t care what you think”
Wow. Enjoy your intellectual bubble.
Intellectual used in the absolutely loosest sense of the word.
My favorite part is the notion voiced by some that “reasonable suspicion” is a legal standard created by some yahoo Arizona legislators and their staff when it actually is a standard that has developed over decades in the federal and state court systems.
http://www.intellectualconservative.com/2010/05/01/arizona-illegal-alien-crime-wave-continues/
Arizona: Illegal Alien Crime Wave Continues
By Jim Kouri, on May 1st, 2010
While politicians such as President Barack Obama denigrate the government of Arizona and “activists” attempt to punish that state’s citizens, these so-called social justice paragons ignore the fact that the U.S. is Mexico’s de facto penal colony.
Complex problems are associated with illegal aliens who commit crimes. Criminal aliens tend to be drug-oriented and violent, often preying on members of their own cultures. If deported, they frequently use new names to reenter the United States and establish residence in different cities.
Furthermore, aliens do not confine their criminal activities to border cities — communities throughout this country are experiencing increasing alien involvement in drug importation and distribution, weapons smuggling, and violence against persons and property.
The escalation in alien crime has placed added demands on state and local law enforcement personnel. Effective identification of aliens involved in crime requires familiarity with fraudulent documentation. Proper arrest procedures must be carried out, and complex notification and reporting requirements must be satisfied; otherwise, dangerous aliens can escape prosecution and deportation.
Handling the myriad problems associated with alien crimes is often beyond the capabilities of local police departments. Some illegal aliens in the United States have been arrested and incarcerated in federal and state prisons and local jails, adding to already overcrowded prisons and jails. On April 7, 2007, the US Justice Department issued a report on criminal aliens that were incarcerated in federal and state prisons and local jails.
In the population study of 55,322 illegal aliens, researchers found that they were arrested at least a total of 459,614 times, averaging about 8 arrests per illegal alien. Nearly all had more than 1 arrest. Thirty-eight percent (about 21,000) had between 2 and 5 arrests, 32 percent (about 18,000) had between 6 and 10 arrests, and 26 percent (about 15,000) had 11 or more arrests. Most of the arrests occurred after 1990.
They were arrested for a total of about 700,000 criminal offenses, averaging about 13 offenses per illegal alien. One arrest incident may include multiple offenses, a fact that explains why there are nearly one-and-a-half times more offenses than arrests. Almost all of these illegal aliens were arrested for more than 1 offense. Slightly more than half of the 55,322 illegal aliens had between 2 and 10 offenses.
So you think, border patrol & other agencies call up the white house and tell them there’s increased drug war activity at the border and WH just says peace out and ignores it? All the people from the White House down and including the media are all in on the scam? And their motivation is what? How did they come up with this sinister plan & when? How did they pull it off with no one knowing it was going on? When is it “mission accomplished?” What will it look like? If we could get past the idea of people purposely having lived their whole lives and made every life decision based on some plot they’ve been brewing up for lord knows what. Couldn’t it be that the intentions are good, even if we don’t agree with them & maybe there are unintended consequences, & people can be misguided or make mistakes, why is it assumed it’s all purposeful on either side. If everyone would just do right in their own lives and forget about judging everyone else, there would be a lot less problems to bitch about. I’m going swimming.
“So you think, border patrol & other agencies call up the white house and tell them there’s increased drug war activity at the border and WH just says peace out and ignores it?”
Yup. Except they don’t say “peace out”.”
” All the people from the White House down and including the media are all in on the scam?”
Well, not all, but there’s plenty of hay to be made for all the various entities involved, especially the media and shakedown “activist” groups. Servants are necessary and have to be paid, until they’re no longer useful. The servants are but tools, and think they’re involved in some marvellous cause, but that’s not what their masters are up to.
“And their motivation is what? How did they come up with this sinister plan & when? How did they pull it off with no one knowing it was going on? When is it “mission accomplished?” What will it look like?”
I’m glad you asked these questions. For centuries, there have been very powerful groups with a globalist, one-world, new world order agenda. The usual suspects, going back to the days of Rome and even earlier, are bankers, elitists, etc. Much has been written about these various groups over the course of history and some are, in fact, families who go back generations and centuries. I’m not going to give you a history lesson here, you’re intelligent enuf to research it yourself, if you really want to know, although I suspect you don’t. I don’t blame you, I think many people couldn’t actually face the horror of it. But most don’t reach the level of Holocaust Denier, which is what you’d have to be to believe that such things don’t exist, or just happen “by accident”.
What’s the motivation? Power and money, mostly, and a hatred of humanity so deep but carefully masked. The idea is to reduce the masses to the level of hopeless, ignorant, robotic worker, kept in line by vicious guards. If you think such a state of affairs has never happened on this planet before, the you don’t know much about world history, do you? In microcosm, it’s been pulled off again and again and again and again for periods of time in various societies and parts of the world going back into the mists of time. The goal is now a permanent state of such affairs worldwide.
And I think Lloyd Blankfein and Jamie Demon are vying for the role of Pharoah. “Get that block of stone up the pyramid and finish the sucker in time for my funeral, or it’s 90 lashes for the whole crew”.
“If we could get past the idea of people purposely having lived their whole lives and made every life decision based on some plot they’ve been brewing up for lord knows what.”
Can’t. Unfortunately such people exist and that’s why Earth can be such a hell.
“Couldn’t it be that the intentions are good, even if we don’t agree with them & maybe there are unintended consequences, & people can be misguided or make mistakes, why is it assumed it’s all purposeful on either side.”
I can assure you these folks do honestly believe they have good intentions and are doing what’s best for all. “All”, however, may not agree. Even the most evil person thinks he’s doing the right thing when he commits some horror. That’s why they’re usually insane.
“If everyone would just do right in their own lives and forget about judging everyone else, there would be a lot less problems to bitch about.”
How I wish that were true, but these “elitists” do judge me and others like me and think we ought to be held down and dictated to.
“I’m going swimming” I was thinking of doing the same thing myself.
Thank you Palm for taking the time & thought to answer. I believe what we are having is what used to be called civil discourse.
I have issues thinking they can get enough people in these days of enhanced communications, to keep their yaps shut long enough to make any plan work. And which so called plots are even remotely possible: some folks hanging out in a dirt shack in Kenya decide to take down the us so they start by planting a phony birth announcement in a Hawaii newspaper….
The groups you speak of are a different genre the the conspiracies I hear about most. I understand New World Order stuff, I just don’t get the all the smaller issue conspiracies. How does someone suggesting that it’s in the best interests of the entire country to have a healthy and educated population turn into they’re trying to take away all my rights, they’re trying to give my money to someone else?
“How does someone suggesting that it’s in the best interests of the entire country to have a healthy and educated population turn into they’re trying to take away all my rights, they’re trying to give my money to someone else?”
When you find out that what’s being said is not what’s being practiced. Nothing wrong with a healthy population. We used to have a fairly healthy population and our strapping servicemen with good teeth were much admired when they came to help Europe in WW2. It’s when you tell people “this is for your own good” and do something else with what you take from them “for their own good” that it becomes a problem. I’m all for health, but not having an individual mandate. When you force people to pay for a private good or service, you betcha boots some of the money you’re paying is being shifted elsewhere.
As to education, of course an educated population is desirable. But apparently throwing money at a failing education system isn’t working out. I personally hate to pay for a bad product and the children who come out of our education system are generally a bad product, education-wise. I don’t have any kids, myself. But I can see the value in paying taxes to educate kids, because I want smart, good professionals, businesspeople, parents, politicians, medical personnel, employees, etc to exist in the future. As this old bag of bones that I am becomes even older, I am more dependent on an educated community and I want future generations to have it as good or better than I did, especially my nieces and nephew.
Wish the left could get a clue regarding all the points you made above, Palmetto.
I’ve pretty much had to resign from all the lefty blogs I use to frequent. I’ve never experienced so much hypocrisy regarding an issue as I have lately regarding this Arizona bill. It’s turned into zombieland out there. Hell, Sarah Palin is starting to make more sense than most of ‘em. And that’s scary.
Are they crazy it’s hard to argue with a crowd that has made up their mind. You make valid points, all the ranting and raconteuring portraying illegals as criminals is not going to solve the problem. As long as we, the consumers, enable opportunities for people to come over the border, nothing will stop them. It strikes me how our enlightened HBBers forget the simple rules of supply and demand when it comes to the allocation of labor in the economy. Maybe those who citicize illegals should stop using services or purchasing goods that involve this type of labor. I can hear all the BS that will be spouted, but no one is able to survive in this environment. If you are, I’ll happily shadow you for a week and see if you walk the walk.
This what I don’t get. This is a wonderful country. For the most part no can tell from your looks if you belong or not. All one has to do is speak English, even with a bad accent, and obey the laws, and you become invisible.
The real problem I have with illegals, is they tend to do neither.
+1, Cassandra.
Even as I write this, the villa complex in the retirement community where I rent is getting new exterior paint. Guess who is doing the work? I’m not saying anything because I’m just a renter here and I like my landlord and don’t want to make trouble for him.
However, about 30 minutes ago, I was standing in the kitchen by the sliding glass door to the back patio, which is enclosed. It’s actually sort of like a courtyard. We have the windows and doors open because we were told by one of the workers to keep the front door open until the paint dries. It’s pretty humid here today, so it kinda sucks not to turn on the AC.
Anyhoo, I’m standing by the back door and one of these shifty little turds lifts the latch to the enclosure door and comes skittering into the patio area. He didn’t see me immediately, I think the sun was in his eyes and he started peering through the screen. I said “Can I help you?” and startled him. He quickly looks around and picks up a twig from the middle of the patio and says “I looooking for thees” and runs off.
I don’t feel so good about living here anymore.
Personally, rather than “Can I help you?” I like to begin those encounters with the sound of a slide closing. I find it translates better.
When he’s done soiling himself, then if he likes, we can chat.
I wonder if they’ll arrest the sheriff like they did those border guards?
Ghost developments in Ireland. The video is also worth watching. Even after being a bubble believer for 5 years, I still find thwaw stories fascinating.
http://news.bbc.co.uk/2/hi/europe/8653949.stm
The money quote from the video:
“Somebody is responsible when something goes belly up from the top down.”
“There are 621 ghost estates across the Irish Republic now, a legacy of those hopeful years. One in five Irish homes is unoccupied. If the country immediately used them to house every person on the social housing list, there would still be hundreds of thousands left over.”
Never do I see the surplus in this country put in such terms. Instead, we read about how there is a shortage because efforts to boost sales and bank efforts to hold foreclosures off the market create a false impression of the available months of supply. But then again, the source was BBC, not Fox or CNN or any of a number of other corporatist shills in the U.S.
“It’s one heck of a challenge”, he says, “because we have the legacy of many years of poor planning, and an economy that was overheated, paid far too much attention to construction and was more interested in the quantity than the quality of homes”.
A quote that just as easily could have been about the Inland Empire rather than Ireland.
“Now we are all in the middle of this huge comedown. And people are looking around and saying - ‘what happened? Was that us?’ And then we look at our bank statements and we realise - ‘yes, it was’”.
Instead, we get extend and pretend.
The European media is daring to question the value of the rating agencies, wanting to know why such proven failures still control countries’ and businesses’ fates. From Spiegel:
As early as 2006, Angelo Mozilo, then CEO of Countrywide, America’s largest mortgage company, called Countrywide’s subprime loans “toxic.” Yet it took Moody’s until the summer of 2007 to downgrade them. All this happened under the watchful eye of the US government.
That example was no exception. For years, the agencies gave their blessing to subprime loans which would later become the quicksand of the crisis, even when their risks were already known. This puts much of the responsibility for the collapse that followed onto the agencies’ shoulders.
Their ratings helped lead the investment banks Lehman Brothers and Bear Stearns into ruin and helped destroy the insurance giant AIG. They also contributed to a trillion-dollar hole in the US budget. “The story of the credit rating agencies is a story of colossal failure,” says Representative Henry Waxman, the Democratic chairman of the House Oversight Committee.
The agencies and the banks are not just connected by money, but also by personnel. In 2005, Goldman hired Shin Yukawa, a ratings expert, away from Fitch. Yukawa immediately put his knowledge to good use — in Goldman’s mortgage department, which created “structured” credit products and made sure they got splendid ratings. One of these products was “Abacus 2007-AC1.”
Little Chance of Reform
Yet a reform of the system is not in sight. The Democrats’ current proposals to further regulate the US financial industry contain little about the rating agencies, apart from a tepid appeal to “strengthen” their regulation.
Some critics are now trying a different approach. A few institutional investors — among them the state of Ohio — are suing the agencies for their role in the financial crisis. On Monday, a Manhattan court denied Moody’s and S&P’s joint motion to dismiss one of those class-action lawsuits.
Two days later, S&P’s hammer fell on Spain.
I know one of the young cogs in the ratings agencies. Talking to him is like talking to a brick. It is amazing the brainwashing these guys go through. I label him “a sociopath in training”.
Back about 15 years or so ago my sister-inlaw, a financial advisor with 20 years experience, and I had a very serious discuss about the stockmarket and her role as an advisor/consultant. I asked “Who do you owe your fiduciary to? Am I your client or is bit pharma, AT&T, etc your client?” She had this complete blank look on her face for I don’t think anyone every asked her that. I was a client only in name. It became very clear to me that her fiduciary lied with the large brokerage house she worked for. It was all about the firm and not about me the lonely so called client. I was just a small fish swimming with big sharks. That’s when I decided this was a fixed game and got out. I’m glad I did for I know several people that stayed in the game with her and lost a lot of money.
She also was spouting off rating agencies ratings, as if they were the obsolute end all for making an investment decision. I asked her “Who rates the rating agencies and who pays them? How do I know they’re rating is unbias and accurate?” She looked at me like had 3 heads. How dare I question the rating agencies. I’m sure she walked away from our discussion thinking I was a complete idiot. Well, needless to say, some 15 years later she’s now the one wearing egg on her face.
I smelled a “rat” 15 years ago. If it looks like a rat, walks like a rat and smells like a rat,………
But it tastes like chicken.
Domestic & International:
Rating Agencies = “TrueSerialEnablers™”
It just appears that the Rating Agencies passed on the information
and opinion on the Investments that these big Entities want to sell .
I’m sure that the Rating Agencies have disclaimers stating they are not liable . At first I thought that the Rating Agencies would be the most attacked when the melt down started ,but all potential Defendants seem to have their ducts lined up to say everything they did was legal . Putting lipstick on a Pig is the way of Wall Street apparently along with selling the Pig to the suckers right when the Pig is about to be exposed and call it a bad call that nobody saw coming .
The state of affairs today is that the Markets are made by smoke and mirrors and it has nothing to do with true value but just the ability to market the junk and make short term gains and than its passed to a greater fool . The housing market was nothing more than this type of creation of value when the houses were worth far less . Homes became valuable by a false concept of short supply and future value in which if you didn’t buy now you would be priced out forever or you would lose your opportunity to flip or have a ATM machine .Buy this stock when its cheap or you won’t
be able to buy when it gets expensive and you will be deprived of
the opportunity of a lifetime . The talking points during the boom were so zombie-like and absurd ,but they took hold in a massive brainwashing campaign that wasn’t challenged by the Media or the Authorities .
One thing seems to be certain and that is the Power Brokers know psychology and the Market Makers were not in short supply in having Authority figures who would endorse the Mania . The biggest endorsement of the Mania was that you had Lenders willing to loan to anybody on anything based on made-up inflated hit the mark appraisals and borrowers who didn’t qualify .The Scheme becomes really apparent and you can’t help but think that the crash
occurred a little earlier than some of the Power brokers could get out of their positions where you see a mad dash to get sucker insurance Companies to be the bag holders and than the taxpayers
under the illusion of doing it for Main Street to save the Banking system. Who in their right mind would except the analogy that you have to save crooks because if a fire is burning a house the house next door might burn down also . If you arrest us or expose our schemes ,it might expose the schemes of the Investment houses and non-transparent hedge funds and casino games like credit default swaps and all the leverage and all the gambling without reserves .
Since the Government took over providing credit anyway ,it doesn’t appear that the bail-outs were for the purpose to save the availability of credit ,but rather to just obstruct justice and discovery of the real liable parties in the Grand Real Estate Ponzi Scheme .What other story can you tell when you look at what played out after the bail-outs including using F&F as a dumping ground for toxic assets and changing mark to market and than
the penalty that followed to Main Street ,while Investment Houses calling themselves Banks had record earning and profits post
Tarp . Somehow I find it hard to believe that they wasn’t some other less conflict of interest party other than Hank Paulson that could of become the Treasury Sec. at the time ,a man who made 1/2 billion dollars in 7 years selling the high leverage junk in question and a potential Defendant if all hell broke loose .
Not only should crooks be allowed to fail ,but they should be sued silly ,which usually only comes about after they fail when they leave so many penny less . Are these entities to big to fail …..I think its
more a issue of they are to big to be crooks on that scale .
Seeing how deeply Moodys and S&P are in bed with the banks, it would not surprise me if they are mega-speculators accomplices in financial warfare against selected European states. George Soros made billions from shorting the British Pound back in the 1990s. Is he shorting the Euro today? And are the rating agencies acting in collusion with him? It wouldn’t surprise me.
On the other hand, the economies of the PIIGS might be even worse off than their recently downgraded ratings would indicate.
I can’t wait until the class-action lawsuits starting hitting these clowns. Getting their CEOs and principals under oath and on the record is going to be revealing.
What did they say on the Titanic? We’ve likely thrown a propeller blade. That’s the shudder you felt, no worries.
Worst of Florida real estate crash likely over, UF study finds
By Jeff Ostrowski Palm Beach Post Staff Writer
Posted: 5:28 p.m. Wednesday, April 28, 2010
Florida real estate experts believe the worst of the state’s wrenching downturn is past, even if they don’t expect another boom any time soon.
That’s according to a quarterly survey by the University of Florida’s Bergstrom Center for Real Estate Studies. The center asked appraisers, commercial real estate brokers, bankers, investors and others to take stock of the state’s real estate market.
The verdict: Commercial and residential property have hit bottom.
“They’re saying things like ‘not getting worse’ or ‘getting less bad,’” said Timothy Becker, director of the Bergstrom Center.
That’s not to say Florida is poised to bounce back. The state is battling record-high unemployment and tight credit that continue to hinder any recovery, Becker said.
jeff, I was watching the local PBS Friday night punditry show (Florida This Week…yeah, I know, I need to get a life) and instead of the usual half hour, it was an hour and had an extra panelist. One of the panelists, a former State Senator, is VERY nervous and pessimistic about what this oil slick could do to Florida. Even if it only washes up on one area of beach, he laid out the scenario of both national and international television media spreading the bad news and he’s right. Some talking head will stand on a beach in the affected area, but it will infect the entire state. If it washes up on Panama Beach, trips to Key West will get cancelled. Even Disney at the interior.
This is not good news for Florida. And it is not just the beach, it’s the offshore stuff as well, like boating and fishing.
I’m not sure about it affecting the entire state, but the panhandle at a minimum. Oil soaked beaches are not good for beach front property, whether selling or renting. The tourism losses will hammer a lot of other businesses too, not just those right at the coast. This can’t be much short of a death blow to some of the Mississippi and Alabama beaches trying to recover from Katrina.
No telling where all that oil might end up if the spill goes on for weeks or months, especially if a hurricane moves across the Gulf. Anyone buying stock in Beach Polluter?
They’re not making oil-soaked beachfront properties anymore. Buy now or be priced out forever.
Nothing like having property that’s in the black and even more upside down.
It doesn’t matter whether the oil affects only the panhandle, or the Keys, or Tampa Bay. The state representative’s point was that, when it comes to tourism, especially foreign tourism, it’s in Florida, period. What’re we gonna do, run ads that say “The Panhandle is a problem, yes, but come to the Florida Keys, Miami Beach, Fernandina Beach, we’re still OK”?
Nope, most tourists will not want to take chances and will avoid anywhere in Florida. I’d probably do the same. Meanwhile, as he pointed out, Georgia and the Carolinas will be talking up their pristine beaches by contrast. Just wait for the commercials. Especially Georgia, after Crist wouldn’t help them out during the drought.
Did they get Sean Snaith’s valuable input on this?
Everyone ready for the May Day illegal alien mobs today?
Today, the MSM has already started the meme of “Isn’t it wonderful how these people are out these expressing their anger and frustration”. Compared to the outright hostility to the tea party rallies a few weeks ago.
Tax paying, law abiding, US citizens exercising their 1st Amendment rights….worst thing to happen to this country. But a mob consisting of criminals, let’s celebrate it.
Let me guess; you haven’t had your coffee yet.
Never touch the stuff.
Good for you. I never touch it either. Well, I did one time. Somebody slipped it into my Jack Daniels bottle. I felt stupid that morning at work.
jack and coffee? Yuck!
I don’t think coffee is good for the already shot central nervous system of someone running on Jack Daniels.
Good pure water makes me feel better than the feeling I get from coffee, tea, or soda.
Too bad water bars were a fad.
I’m down to four cups of coffee every few weeks when I go home to Phoenix. It helps make me look forward to go home - particularly in the hot months ahead!
You never touch coffee, Ki?
Now we’re getting to the root of your anger.
Morning Combo, I’m on my second.
Ditto here…
The PBS NewsHour analyzed this on Thursday. And they were even fair and balanced.
http://www.pbs DOT org/newshour/bb/politics/jan-june10/immigration_04-29.html
Clarissa Martinez of La Raza basically stressed that “I agree we need to fix the broken immigration system. we need comprehensive reform” etc. Nothing really substantive that I could see.
Roy Beck, Exec Director of Numbers USA, had something very smart to say: “What we have is a country that has almost 10 percent unemployment. We have 25 million people who want a full-time job, can’t find one. And we have seven million illegal aliens who are holding construction, manufacturing, transportation, service jobs.
So, there are seven million jobs that could be made available to unemployed Americans if we moved the illegal aliens out of the jobs.
Roy Beck makes a LOT more sense. Americans are suddenly realizing that for the past 30 years, we have been outsourcing and insourcing our way to high unemployment and covering the gap with credit. And we’re tired. Immigration is low-hanging fruit.
Immigration is low-hanging fruit.
We should hire some illegal aliens to pick it for us!
Now that just broke me up. Good one!
One thing about the illegals, is that they work hard for dirt cheap. Kinda like the Chinese.
That doesn’t mesh with the past 30++ years of expected standard of living, though.
That’s a sore and ongoing point of confilct if I’ve ever seen one.
OK, that was hilarious.
In a certain way, the Feds’ refusal to enforce immigration laws are a surreptitious way of acceding to 1930’s far-right cries that unemployment was caused by inflated wages. Right now, we have a recently-increased Federal minimum wage, with lots of ensuing unemployment, esp among teenagers, (legal) minorities, etc. Employers who use illegal workers may (?) pay the Fed min wage, but can certainly be cheating on mandated benefits, work conditions and so forth. American workers have the choice of remaining unemployed or of somehow trying to “underbid” the illegals…which is hard to do.
Personally agree that better enforcement against those who hire masses of illegals would be a good thing.
That will just infuriate these corporations to move yet more work offshore, to the region of who works the hardest and the cheapest.
You have to solve that core issue. Somehow.
Even offshore, when workers from one area get too much pay, they move some more.
“That will just infuriate these corporations to move yet more work offshore, to the region of who works the hardest and the cheapest.”
Except a lot of the work the illegals are doing can’t be sent offshore. If it could, those same companies wouldn’t have hired illegals to do it here.
Factory farms are among the worst offenders when it comes to hiring and exploiting illegals. Family farmers can’t compete with them on sheer economies of scale. These agribusiness cartels are pure evil in my book.
Well either that or these companies simply continue to break the law anyways.
“… just infuriate these corporations to move yet more work offshore”
How does one offshore an orchard harvest?
My pals and i are “Tax paying, law abiding, US citizens exercising their 1st Amendment rights” and we are going to the Arizona Capitol grounds to protest Arizona’s new law. BTW, we won’t be carrying guns.
Gotta go- May Day calls!
“Five men suspected of smuggling drugs across the border ambushed a Pinal County sheriff’s deputy Friday in a remote area south of Phoenix, underscoring the border-related violence that has catapulted Arizona and its new immigration law onto the national stage.
More than one helicopter came under fire during the evening as officers rescued Deputy Louie Puroll, who had been shot with an AK-47-type weapon around 4 p.m., according to the Sheriff’s Office.”
Have fun at the protest.
They commit the crimes that Americans are too lazy to do.
ki, the real problem is not the illegals. It’s our so-called friends, neighbors and fellow citizens, like loco guillermo there, who support, aid and abet the illegals. The blood of American citizens who have been killed, maimed, raped and otherwise molested is on their hands. Illegals may be enemies of the US, but their supporters, being traitors, are lower than that.
Republicans like them because they are anti abortion, large-familied Catholics, and they work hard for very little.
Democrats like them because when they grant them citizenship they will have twelve million more people voting for more taxpayer handouts (spreading the wealth around).
Arizonans had enough. Three years ago they were about ready to lynch RINO John McSame for his support of amnesty. Funny how RINO McSame opportunist is claiming to support 1070. He is the sluttiest politician in America.
BiLA, you may not like McSame, but you must concede that we would not have the new health-care law if we had elected Mc. (And I’m sure you don’t like the new HC law any more than I do.) Anyway, it’s a good thing that Mc is running away from his previous advocacy of amnesty. He may very well win re-election, and it will be good to have one LESS amnesty advocate in the Senate.
He is the sluttiest politician in America ??
Which tells you something about the group of people who wanted him President…
McLame will immediately flip-flop back to being a RINO if he’s re-elected. Like most Republicrat whores he has no true principles or convictions, just an overweening craving for power and the perks that go with it. His corporate masters need cheap Mexican labor. McAmnesty won’t think twice about betraying his constituents to keep the plutocrats happy.
His opponent is a demogog and snake-oil salesman in his own right, but I’d still like to see him unseat McCain.
“His opponent is a demogog and snake-oil salesman in his own right, but I’d still like to see him unseat McCain.”
Agreed. We need more turnover in the Senate.
Sammy you are right about McLame.
Immediately after he’s re-elected he will revert to his pro-amnesty and pro-tax stances that he’s had in the past.
You’ve got to be kidding me. We have long time
rancher friends in AZ and TX who have been
victimized by these illegal scum for years and
law enforcement does nothing. I’d like to see
a hundred yard wide band of claymores from
Tijuana to Brownsville backed up by thousands
of MaDuece.
I like your anger!
It’s the coffee, obviously.
We’ll be in Orlando, FL the weekend of July
8 - 11th. Anyone for a cold one?
You’ll have good sweatin’ weather in Orlando in July. All you’ll need to do to break a sweat is blink.
You know, if these gun carrying illegals would start shooting in a direction 180 degrees from where they’re pointing their weapons at now, they might actually change something.
To steal the idea from Edward Abbey, maybe we ought to give every illegal a gun and a map to Mexico City, and let them solve their own problems.
The Petty Beef Pimp is back.
Good morning Ki.
More like the shill for the Oxycontin pimp.
You can recognize the talking points from West Palm Beach to DC.
Comment by palmetto
2010-05-01 06:39:04
Traitor is correct.
The masses have been brainwashed to believe that someone ELSE’s rights are more important than their own. That’s what it all boils down to, Ki.
The pan-ultimate accomplishment of the liberal hand-wringer/elitist class. If you want to lord over the lives of others, it’s what you must do. Eliminate self-worth any way you can.
“Eliminate self-worth any way you can.”
Testify, Brothah! Whew, you articulated EXACTLY what I have been observing. The subtle and not-so-subtle debasement of American spirit. I’ve seen it spreading on this board many times as well. “We” are fat, lazy, stupid, bigoted, etc., etc. That’s the real Nazi-ism, but you see, criminals generally accuse others of that which they are doing.
Well actually most Americans are spoiled, and lazy because we think we own all the world’s resources and should be paid far more than Indians and Chinese. As for fat, just go to any sports game and look around. Go to any Wal-Mart. Go into any airport and look at the land whales gorging on fries, Pizzas, and whoppers. Obesity and gorging is an epidemic in the USA. I certainly do not think most of us are bigoted. I work with mostly Asians and the male members of that group tend to be far more racist than any of the other skin colors (white, brown, black) of people I work with.
“Well actually most Americans are spoiled, and lazy because we think we own all the world’s resources and should be paid far more than Indians and Chinese.”
Wow, who knew we had a blogger who can claim to know “most Americans”. Now, most of the Americans I happen to know are pretty hard workers and juggle volunteer work, sometimes two jobs and family. They don’t get handouts.
As to pay, it’s pretty much relative. Chinese and Indian wages can’t support people in the US. Now, if costs came down, they might. Working for myself, I pretty much determine my own pay.
No question more people are fatter than they used to be. Have you seen the size of a lot of the illegal mamas and their anchor babies? And they call Americans fat? Bwahahaha.
I didn’t know Asians were so racist, but now that I think of it, I believe I remember someone writing about how the Han Chinese are literally relocated by the gov’t to various ethnic enclaves in China to weed out the “less Chinese”.
Americans work more hours a year than any other industrialized country. Yet Americans are lazy.
Americans admit the most immigrants of any country in the world, yet we’re anti-Immigrant, xenophobes.
America gives more per capita money in foreign aid (govt and private money combined) than any other country. Yet we’re stingy.
The US could have easily occupied all of Europe and Asia after WW2 yet instead gave we trillions of dollars in aid to Europe and Aisa to rebuild, propping up the companies that now compete directly with us. Yet we’re imperialists.
How do you know they are ALL illegal and criminals? Is it simply by the way they look? Is cardinal Mahony an illegal criminal?
“Is cardinal Mahony an illegal criminal?”
Worse. More like a pedophile priest enabler.
http://www.kqed.org/news/story.jsp?id=29172
“How do you know they are ALL illegal and criminals?”
They simply aren’t. There’s a big difference between those just crossing the border to work (still illegal) versus those that are armed and smuggling drugs (much bigger problem). There’s still a big collective impact from the former, but it’s mostly not violent.
Hey Ki why don’t you link where you state that the MSM is pushing the supposed “meme”? Who’s been hostile toward the Tea Partiers? One thing is to call them out on their BS another thing is being hostile towards them.
Contrast and compare two articles from the LA TIMES:
“LOS ANGELES—Tens of thousands of demonstrators are expected to take to downtown streets Saturday to call for immigration reform and protest Arizona’s new immigration rules. Immigrant rights activists hope the controversial law, which requires law enforcement officers to question people about their immigration status if there’s reason to suspect they’re in the country illegally, will draw record-breaking crowds. ”
with
“SANTA ANA AND WASHINGTON — Republicans sought to ignite a popular revolt against President Obama on Wednesday by staging “tea party” protests across the nation to demand lower taxes and less government spending — but the tactic carried risk for the party. With half a million or more jobs vanishing each month, many Americans are less concerned about how much Washington deducts from their paychecks than whether they will have a paycheck at all.”
Illegal alien mob mentions no party affiliation, but only Republicans showed up at the tea party rallies.
Those rascally Republicans sought to “ignite” a “revolt” against Obama vs. simply calling for reform on immigration. Yeah no difference in the words used at all.
The illegal alines are simply “immigrant rights” groups. No mention of the fact they are ILLEGALLY in the country of course. But why bother with pesky facts.
In the first paragraph the LA TIMES is editorializing that the tea party carries risk. No such editorializing that the illegal alien mob carries risks. Of course not, everything Dems do is loved by the people, right? And exactly how do they know what Americans are most concerned about? Did they ask?
I don’t see a similar sentence of “Most Americans - 70% in most polls - say that they want an end to illegal immigration”.
Well of course the corporate owned MSM is sympathetic to illegals. Corporations love them! They work hard and for peanuts.
Quit yer squealin’.
“….. everyone ready for the May Day illegal alien mobs today?”
Hey, maybe if the INS works some overtime today they could take the rest of the year off.
Banks in Trouble
The FDIC closed 7 more banks yesterday. Officials say 2010 is shaping up as a worse year than 2009 when 140 banks bit the dust. Only 25 banks went under in 2008 and 3 failed in 2007. The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, hitting a $20.9 billion deficit as of Dec. 31.
There is no need for depositors to worry, we are told. The FDIC can tap the general fund for several billion dollars more, which is to say - taxpayers may ultimately be on the hook.
More monkey business from the Federal Reserve….
WASHINGTON (AP) — The Federal Reserve has adopted a plan allowing banks to set up the equivalent of certificates of deposit at the central bank. The move would help the Fed mop up money pumped out during the financial crisis and prevent inflation from taking off later.
Under the plan, the Fed would offer so-called “term deposits” that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy. (To put it another way - the new “CD Plan” for banks would encourage them to safely park money with the Fed, at interest, rather than lend it borrowers who might have trouble paying it back. This will keep a damper on the economy.)
Save the banks, it’s all about saving the banks. If you look at everything from this perspective then everything makes sense.
Also making sense is to look at events in the contex of this being an election year.
It’s all about saving the big banks and allowing them to consolidate their positions. We shall see if this new “reform” effort has any effect on that trend. I don’t see any of the big banks on those Friday evening lists. Hmmmmm.
Kick the can YET again down the road some more…
Does it EVER end?
Extend and pretend, with the help of their accomplices at the Fed and in government.
Wait let me get this straight… Banks can borrow money from the Fed at zero and lend to the Fed via this CD at (has to be) better than market rates? God save America
What is the difference? Right now they can borrow from the Fed at zero and park that money in Treasuries. That funds our deficits and allows the big boys to make huge profits. What if interest rates on Treasuries rise? The big boys have automatic bailouts so there is no risk.
I believe the term is “money laundering”.
It didn’t work out so well for the Greek banks, however.
Greek banks = no printing press
There is no need for depositors to worry, we are told. The FDIC can tap the general fund for several billion dollars more, which is to say - taxpayers may ultimately be on the hook.
Well, I was assured here, a few days ago, that the FDIC is as American as apple pie and we should never consider getting rid of it. So I know we’ll all be happy to chip in for bailouts of incompetent banks and their clueless customers.
I believe they said “as American as apple juice”. Much of which is now imported from China.
We tend to wholeheartedly approve of taxes spent on things we directly benefit from, and object to paying for anything else..
While many people who don’t drive or have kids object to being forced to contribute to schools and highways, it’s plainly obvious how such a person draws much benefit from schools and highways… or it will become obvious the first time they need an ambulance ride to a hospital to be treated by people with degrees from schools.
It’s not as easy to see how somebody with no money benefits from people’s bank accounts being federally insured, but we all do benefit.
We tend to wholeheartedly approve of taxes spent on things we directly benefit from, and object to paying for anything else..
Well, duh. How much money do you voluntarily spend on things you don’t get any benefit from?
While many people who don’t drive or have kids object to being forced to contribute to schools and highways, it’s plainly obvious how such a person draws much benefit from schools and highways… or it will become obvious the first time they need an ambulance ride to a hospital to be treated by people with degrees from schools.
It’s also plainly obvious that the benefits people get from these things have no relation to the amount they contribute. That’s what people object to. When you use the roads or schools, you should pay. When you don’t, you shouldn’t. Anything else is just forced conformity.
Concerning schools, when you use services from people educated in schools, the price implicitly covers part of the schooling, because they have to make a return on their investment. There is no need for you to pay taxes over and above this price.
It’s not as easy to see how somebody with no money benefits from people’s bank accounts being federally insured, but we all do benefit.
No, we all lose, because reckless lending and credit bubbles are encouraged by deposit insurance.
No, we all lose, because reckless lending and credit bubbles are encouraged by deposit insurance.
..and car insurance encourages reckless driving. Health insurance promotes dangerous and unhealthy behavior… right?
Being insured encourage you to do reckless things, or are you.. different.
The moral hazard that exists in all insurance can be mitigated by private firms that have an incentive to watch their money closely. No one at a government insurance plan has the incentive to care about taxpayers at all.
The FDIC fund premiums are paid by private firms: banks. Except under extraordinary circumstances, it’s virtually a private insurance fund and no taxpayer money is involved at any time.
Banks offer the insurance because they want people to know their deposits are safe in the bank, even if that bank goes under– unlike during the Depression, when without the FDIC, 10 million of people’s bank accounts just evaporated. Afterwords, people didn’t trust banks.
The government regulates banking activity, and the FDIC sets the rules. If banks want that FDIC sticker on the door which encourages deposits, they must follow the guidelines. Carrot and stick.
Deposit insurance doesn’t encourage banks to be careless with deposits.
Something(s) certainly did create an incentive for banks to take too many risks, but it wasn’t FDIC insurance.
Reckless lending is encouraged by separating lenders from repayment risk.
The basic question of the financial crisis is, “Why would lenders make loans without caring about whether they’d be paid back?”
Fix this problem and you prevent much if not all of the financial crisis.
The FDIC is shutting down banks at a slow drip reminiscent of the failed institutions policies towards foreclosures. Funny how Frontier Bank in WA was closed, yet Sterling Savings, the most unhealthy, insolvent POS in the state, remains open thanks to a giant chunk of TARP change which has not been repaid, and a pretend balance sheet. I’d venture to guess that the FDIC isn’t even shutting down 10% of the institutions it should be.
“I’d venture to guess that the FDIC isn’t even shutting down 10% of the institutions it should be.”
But does the FDIC have the staffing necessary to shut them down any faster and do it properly? I highly doubt that FDIC staffing has increased in proportion to the increase in bank failures.
Going slower probably has the advantage of keeping the process more orderly and avoiding the type of panic that would cause a run on the banks.
I don’t know. But is it possible Sterling Savings is a credit union and not an FDIC bank?
Several on this board seemed to admire Taleb’s “Black Swan” book. So when I found it in the house where I am a houseguest just now, I read a little, and will read a little more. It seems to me that his argument would dismiss the real and important achievement of Ben Jones and of our HBB group. Taleb seems to say that anything you CAN predict or explain is unimportant. “We” have been right in our major premises all along. The preponderance of opinion here has been that the waves of foreclosures would go on for a number of years (when MSM was NOT saying that). Anyway, Taleb’s idea is interesting, but his dismissal of statistics seems silly to me: it is exactly statistics that enabled us to know the HB would burst, and a bit later, to know that its bursting would continue. Yes, we possibly failed to predict the sudden events of 9/15/08, or at least, failed to predict their timing; but so what? we still have had a major advantage over lots of other people (such as bitter homedebtors).
That housing crash really came out of nowhere. It was worse than anybody could have expected. G-d damn it, AZ_Lender, now I need a drink. And I was trying to hold off until 9:00. It is all your fault.
“… it is exactly statistics that enabled us to know the HB would burst …”
I would use the word “mathematics” instead of “statistics”. The math guaranteed there would be a bust.
The numbers told the story, but so did mass psychology. They were both telling the same story but is different ways.
Not always sure about math guaranteeing anything, Combo. Yeah, math can pro-offer a great deal, indicate much, but who is to say that mass psychology alone isn’t enough of an indicator? In the absence of statistics, I mean.
The math drives the psychology and the psychology drives the math. As soon as one breaks down the other one
follows.
That’s the beauty of math. Calculus gives us both integration and differentiation. Just don’t divide by zero or you’ll destroy the universe.
“Just don’t divide by zero or you’ll destroy the universe.”
Multiply the number of houses for sale in a ghost town by the number of people who would like to buy one - zero - and you end up with the intristic value of the houses.
From what I recall of Taleb’s book is that unexpected/unpredictable events happen that influence or change the course of action of an otherwise likely progression. I would use the example of 9/11 and upstate NY home prices. While rural upstate NY is generally growing older, has a declining economy, rising property taxes, and population loss, one would think that real estate prices would fall or remain stagnant. The 9/11 event crystalized the need in many metro New Yorkers minds that they needed a place in the country to escape to and so the event has actually fueled the rise in prices of rural housing in upstate NY where many metro New Yorkers are purchasing their vacation home.
Trapper
And that deluded trend has reversed in a very big way.
Don’t forget that 9/11 itself had considerable influence on how the populace regarded housing.
The “Buy Now or Be Priced Out Forever” meme was directly linked to the lack of security that many Americans felt from 2001-2005 or so, following 9/11.
Realtors used Fear to full effect to sell houses at grossly inflated prices. Buy a House and Feel Secure.
You summed it up tidy and succinctly.
I would say it more broadly - salespeople use fear to sell most everything. Much easier to sell when you first create a perceived need.
Salvation through consumerism, it runs the gamut from real estate to “eco” bath soap and everything in between.
+1…Spot on iftheshoefits
I began to think housing was crazy a few months after 9/11 when a co-worker bought a “loft” (one large 1200 room) in a converted industrial building in central Brooklyn for $325,000. That seemed outrageous at the time.
About 5 years later when he sold it for $635,000, and I was sure this would not end well.
..Taleb seems to say that anything you CAN predict or explain is unimportant.
The impression I got was a “black swan event” cannot be predicted. It’s totally unexpected. Nothing in the past prepared us for it, or gave us the ability to foresee such a thing happening.
That’s not to say that nobody can predict one.
Before the cops break down your door, they can predict that YOU are about to experience a “black swan event”. You certainly didn’t predict it as proven by your being home at the time.
Later, having the benefit of hindsight, you’ll claim that you could have predicted it (which, btw, is another criteria for it being a true “black swan event”). We have the urge to rationalize things that have a huge impact on our lives and throw us off balance..
—–
For me, the book’s object lesson is to be prepared for the unexpected so as to deflect or lessen the impact of negative black swans, and to take advantage of black swans bearing gifts..
So would this oil spill in the Gulf be considered a “black swan” event? Personally, just knowing about human error, I would have said it was totally predictable, which was why I was againt expanded drilling. Of course, you don’t know where or when such a thing will happen, but happen it will, sooner or later.
It’s gonna take down Florida, that’s for sure.
Palmy, my wife is also against expanded drilling. Oh, wait, you are discussing oil. Never mind!
“Palmy, my wife is also against expanded drilling. Oh, wait, you are discussing oil. Never mind!”
NYCB-Am I the only pig that that got your joke? I liked it!
I agree. Similar events happen quite often. It’s practically taken for granted that spills will happen on occasion, and resources are waiting to respond when they do.. So I don’t think it was a black swan.
Its not a Black Swan event “yet”….
I agree with you, dave, but it is looking more and more like one, since they can’t seem to get the leak capped.
So much for resources that are ready to respond. LOL, didja see that creature Napolitano on the TeeVee? She looked like a pull-toy doll of Liza Minelli in drag. I think she’s one of those space aliens among us they’ve been talking about on the net.
I heard pretty frightening possibilities from a gal on TV this morning about the Shrimp & Clam industry…If even half of her concerns were to come true it would be a “Black Swan” for the gulf coast…
And they don’t know how to fix it supposedly because it’s never happened before. It’s being described as an upside down faucet, a mile underwater, with choppy seas. I lived in AK when the Exxon Valdez happened and worked for an attorney that filed the 1st case in state court the next day representing the fishermen he already had as clients. They came to him when they realized, the were finished fishing for a while. Exxon was smart and immediately hired as many as would work at super high wages & in return, many agreed that their wages would be deducted from any later settlements. I can’t even imagine what will fix this one - EV was finite.
Joey’s description of Taleb’s viewpoint is legitimate, but I stick to my interpretation, that Taleb dismisses our effort to know what IS knowable and to extrapolate from previous data (which actually works in many areas and much of the time). Certainly there is a value in understanding that not every significant event will be predictable, and I don’t dispute T’s effort to bring that to our attention…and yes, you repeat his excellent point about how we try to pretend (in hindsight) that such-and-such Black Swan event COULD have been predicted (when in reality it couldn’t).
Taleb is categorized as an epistemologist.
Epistemology, or theory of knowledge, is the branch of philosophy concerned with the nature and scope (limitations) of knowledge.
I doubt he intended to give the impression that our efforts to know whatever is knowable by any means available should be dismissed. We cannot and should not stop reading history books, or ignore data that helps explain and predict things.
He might be dismissing certain ways of knowing to clarify the meaning of a black swan event. These are different.. they have no connection to past events. Studying past events will not help us see black swans coming.
btw.. you got me wondering, so i found my copy.. hardcover, first edition.
If you’ve got an example of where he implies that anything we can predict or explain is unimportant, gimme the page or chapter.
He gets into so many things, you might have seen something I missed.
aleb’s “Black Swan” book.
It seems to me that his argument would dismiss the real and important achievement of Ben Jones and of our HBB group. Taleb seems to say that anything you CAN predict or explain is unimportant.
Maybe the author meant anything the masses or MSN predicts is unimportant. Housing Bubble predictors are a small lot.
I have a co-worker that is looking at house’s in Jersey. He currently owns a condo. He could pay that off in a few years or sell it and walk away with a huge check. He bought at the end of the last bust.
This guy is in great financial shape. There is no reason for him to do anything risk. Especially since he seems happy where he is at. But he has friends and family telling him that he should buy a house. They are pressuring this guy to go back into deep debt on a house in the state with the highest property taxes. The herd is trying to get him into their line.
I don’t think he will cave in. I hope he doesn’t. Yesterday as he left he did jokingly say something like, “I’m off to buy a house”. I just responded, “congratulations. What do I care if you f–k up your life?”
Misery loves company. The Herd hates that we were ahead of them, and wants to pull us down with them. No dice.
He bought at the end of the last bust.
Maybe he (mistakenly) thinks he’s doing the same thing now.
Well stated NYCBoy and Oxide.
I have the same comments for those buying. Typically I’ll get the same dumb response like “It’s a great time to buy” to which I state, “And it’s only gonna get better over the next 10 years”.
“It’s a great time to get boned by the REIC.” There. That seems better.
By the way, I made it back to New York. And I’m finally over the jet lag. There were no slow boats involved.
The Europeans really screwed up that one. I guess they were distracted by the good work they are doing with Greece.
How could they not have contingency plans for an Icelandic volcano eruption? The whole country is a freaking volcano. Those of us in business know we have to have contingency plans for everything. That would be like California not being prepared for a fire or New Orleans not being prepared for a hurricane. Never mind!
Soon you can forget the agony of being trapped over seas and relish the memory of the volcano episode…
“By the way, I made it back to New York. And I’m finally over the jet lag. There were no slow boats involved.”
NYCityBoy I’m shocked by your need to provide this statement and explaination. Shocked I tell you ! You are among friends here.
Nobody here would have given a second thought or said a word about your illegal midnight entries into the US via Canada by canoe and paddle with a load 8 cases of Duty Free Jack Daniels.
Our only possible thoughts or concerns this time, had you taken your normal “slow boat” route have been, was there any room left in the canoe for your wife?
Or….Get a visa or a green card NYCityBoy.
It was 11 cases of Duty Free Jack Daniels. Get it right. The other 3 cases were disguised to look like my wife. I don’t know where she is but bringing her back would have cost me 3 cases. Do the math.
Love it NYCityBoy
Would have said so sooner but my danged Amish designed gerbil powered computer system ran out of steam and I was hunting for carrots and a connection.
Glad you’re back on these shores, Boy. I’m wondering if/when Katla is going to erupt next and the impact that’s going to have.
Funny, I don’t remember approving this sweetheart deal? Oh that’s right I don’t have a say…
“The U.S. Treasury will accept a steep markdown of its investment in Sterling Financial Corp. as part of a recapitalization plan, the Spokane company announced Thursday.
The markdown was a condition imposed by Thomas H. Lee Partners, which has committed $134.7 million to Sterling’s recapitalization.
Treasury in November 2008 invested $303 million in Sterling from the Troubled Asset Relief Program.
According to the terms of the agreement with Sterling and Lee, Treasury will get $75.8 million worth of common shares as payback, plus 6.4 million warrants to purchase shares at 20 cents apiece”
http://www.spokesman.com/stories/2010/apr/30/in-brief-treasury-accepts-sterling-discount/
It’s good to know people at the treasury and the FED I guess.
I don’t know if I would use the term “people”.
Doesn’t sound like much of an “investment.”
Maybe there is still some hope left for big ideas to trump small-minded political expedience in the financial reform debate?
* POLITICS
* MAY 1, 2010
New Life for ‘the Volcker Rule’
Senate Weighs Curbs on Bank Trading Sought by Former Federal Reserve Chief
By BOB DAVIS
Former Federal Reserve Chairman Paul Volcker is 82 years old. He can’t hear so well. And for a time he was outmaneuvered by President Barack Obama’s economics team.
But as the Senate moves toward the biggest rewrite of financial rules since the 1930s, Mr. Volcker’s ideas are having a profound impact on the debate.
The Senate is considering writing into law what Mr. Obama calls “the Volcker rule,” which would effectively bar banks from the risky and often lucrative practice of trading for their own accounts. The Volcker rule is aimed at undoing a side-effect of the bailouts of 2008 and 2009: An assumption that government will always rescue big financial institutions, and thus make it easier for them to borrow heavily to make risky bets.
Mr. Volcker, now head of the president’s economic recovery advisory board, proposes that the government’s safety net be extended only to banks that stick to taking deposits and making loans, not to those that engage in proprietary trading for their own profit. Banks would be forced to give up such trading or surrender banking licenses. If they choose to retain proprietary trading, they would be allowed to fail.
“We’ll give you a nice coffin and an easy cushion…but you’re not going to be saved,” Mr. Volcker said.
“We’re talking about changing the rules governing global finance for the next 25 or 50 years,” said Harvard University economist Kenneth Rogoff. “Thought leaders like Paul Volcker help shape the accepted wisdom.”
…
“…Mr. Volcker, now head of the president’s economic recovery advisory board, proposes that the government’s safety net be extended only to banks that stick to taking deposits and making loans, not to those that engage in proprietary trading for their own profit. Banks would be forced to give up such trading or surrender banking licenses. If they choose to retain proprietary trading, they would be allowed to fail.”
This from a man who raised interest rates to 18+%…Lil Opie might get a general that takes Vicksburg yet.
“proposes that the government’s safety net be extended only to banks that stick to taking deposits and making loans, not to those that engage in proprietary trading for their own profit.”
How come this does NOT sound like rocket science to me? That this idea represents some sort of “breakthrough” is rather odd, is it not?
Seems more akin to the “obvious to the most casual observer” train of thought.
There’s not much difference between Government Motors and TARP banks, really. The fraud and malfeasance of both were inspected by the Feds (who were malfeasant, too, obviously) and stamped with a ‘Pass”.
True, this is not rocket science. It’s what the Spanish call “cojones”.
Volcker had the cojones to raise interest rates to the teens in the early 80’s and he did it because it was necessary to fix the problem of inflation.
Yep…Although, it did take down thousands of good, prudent business people who did not see that “Black Swan” coming….
I wouldn’t even call it “cojones”.
I’d call it required. It doesn’t take gonads of any sort. If you can’t do the right thing, then step aside in favor of someone who can. Doing the right thing rarely takes “guts”.
It takes integrity.
We live in times when exercising integrity does take guts.
Not anymore than it ever did.
The problem is that most people feel entitled, which means that integrity is out the window.
This is all well and good. However, you know that if the big investment banks forgo regulatory bailout guarantees now, they’ll just have the rules changed again when they start to fail. It will be “for our own good”.
The only true way to prevent this from happening again is to divide up anyone too big to fail and prevent them from merging… ever.
With no $8k credit, how is a jobless guy with no assets supposed to become a homeowner anymore? It just isn’t fair.
Who cares about the jobless guy. It’s all about the poor realtors and the poor banks and the poor mortgage pimps.
The poor mortgage pimps!!!!!!
I think they will still find a way to get the jobless guy into a home. It is his right, after all. Pimping ain’t easy, you know.
For the record, it’s now a $10K credit (at least in California). Where a state with a $20 bn budget hole finds an extra $200m lying around to subsidize the residential construction industry is a puzzlement.
Recordnet dot com
May 1, 2010
State tax credit to kick in
April 30, 2010 6:25 PM
SACRAMENTO - Buyers of new homes and first-time home buyers in California can benefit from a state tax credit program offering them up to $10,000 starting Saturday.
Assembly Bill 183, signed by the governor in March, extended and expanded the Home Buyer Tax Credit Program, making $200 million available to first-time home buyers: $100 million for the new home credit and $100 million for the first-time buyer credit.
Under the provisions of the bill, a first-time home buyer or a buyer of a new home can receive up to a $10,000 state tax credit for purchases that close on or after Saturday. Tax credits will be given on a first-come, first-served basis.
…
“Tax credits will be given on a first-come, first-served basis”
They ain’t making any more of those tax credits!! Better get one before they are gone!!
This is OUTRAGEOUS. As CA is looking into new ways to confiscate more money from me and regulate my business even more, they’re taking my money and using it to prop up house prices?
And, of course, the Federal $8,000 giveaway program had an astonishing 50% fraud rate. I don’t expect the state program to be any different. http://online.wsj.com/article/SB10001424052748703574604574501253942115922.html
How DARE California complain they’re out of money while they do things like this!
It’s only a credit against your tax liability for 3 years, and is not a “refundable” credit, i.e. NO CHECK. Check out the details on the Ca State Franchise Tax Board website.
A uhs told me the $8K Fed credit was extended to July. I searched the net and found nothing. Either the pos was confused or is just a liar.
Goodbye (federal) tax credit. Please do not return. Maybe one day we can even send your older cousin, the mortgage interest deduction, out to pasture as well.
send your older cousin, the mortgage interest deduction, out to pasture as well ??
Just think about that for a moment….The Government pulls out “all the stops” to encourage people to stay with their mortgages and get millions into new ones and then they eliminate the mortgage interest deduction ??
Not going to happen…IMO, what will happen will be a significant curtailment of the mortgage cap that is allowed for deduction (1-mil)…This administration will see that benifit accuring to a small group of “wealthy” people…
Look for the new mortgage “cap” to be in the vicinity of +/- $400k….
“Not going to happen…IMO, what will happen will be a significant curtailment of the mortgage cap that is allowed for deduction (1-mil)…This administration will see that benifit accuring to a small group of “wealthy” people…”
I agree, but I have the audacity to hope that it might someday be eliminated.
I am actually less concerned with the actual use of the deduction than its use to sell people on real estate. I guess that I am against both. People borrowing more than they can afford, happy to pay a bank 10 grand to avoid sending Washington 3 grand is an odd thing to me.
It has long been a part of the bag of tricks to induce purchases, often for people who will still be better off using the standard deduction or who may only pay marginally less by itemizing.
I can’t tell you how many people over the years have tried to convince me over the years about how smart it is to take a huge mortgage because “after all there is the huge mortgage deduction”. Or say, don’t prepay your mortgage, even if you can, because you lose the mortgage interest writeoff.
It is never smart to pay $1 in interest to save 25 to 30 cents in taxes. Why can’t people figure this out?
This doesn’t even take into account how much less risk you have when you have no mortgage. I can’t wait until I get there.
B…bu…but homeownership is a RIGHT! It’s the American DREAM!
From BBC: “There are 621 ghost estates across Ireland now, a legacy of those hopeful years. One in five Irish homes is unoccupied…”
I work with many Irish. Of course in 2006 and 2007 I was the only one at work questioning housing anywhere in the world. You should have seen their faces when I would tell them that Ireland would suffer a tremendous crash. They looked at me like I had brain damage. I guess they should have realized that just because I’m an idiot doesn’t mean I’m a moron.
They should eat the houses.
Washing down a granite counter-top with a Guiness doesn’t sound too bad.
It’s hard to eliminate the lingering stench left from past associations with peddlers of sh!tty assets.
Whitman camp’s plan: Link Brown, Goldman
By Steven Harmon
Contra Costa Times
Posted: 04/29/2010 04:30:36 PM PDT
Updated: 04/29/2010 10:39:22 PM PDT
SACRAMENTO — Trying all week to dig out from underneath a torrent of bad news surrounding her ties to Goldman Sachs, Meg Whitman employed what political observers say is a well-worn campaign tactic: deflecting the harsh glare onto her opponent. It was a difficult sale to make.
The Republican gubernatorial front-runner’s team has tried to pump up media interest in a once-obscure 1998 deal between the city of Oakland and Goldman Sachs to paint Jerry Brown, Whitman’s Democratic rival, as equally yoked as Whitman is to the ill fortunes of the giant investment firm now facing a federal probe for fraud.
Brown, the state attorney general, is a former Oakland mayor.
Whitman, the billionaire ex-CEO of eBay, has faced questions all week about her relationship with Goldman Sachs, which included a 15-month tenure on its board of directors. She’s been hounded by resurrected stories about profits she received from insider stock deals — known as “spinning” — with the firm, her role on the board’s compensation committee, in which she approved huge bonuses to executives; the tens of millions of dollars the giant investment firm is managing for her family and untold millions she has invested in Goldman stock.
“The point is to nullify the negative taint that comes from her relationship with Goldman Sachs,” said Joe Tuman, a San Francisco State professor who specializes in political communication. “It’s called the You Too fallacy: ‘What I’ve done is not a problem because you did it, too,’ even though it’s not clear the two actions are even comparable. It’s really to distract attention from you because you don’t want to be tainted by the Goldman Sachs brush.“
…
California Über Alles
I believe this is what 4 year olds do. The one good thing you get with Whitman is you know there won’t be any sex scandal during her administration. Helen of Troy’s face launched a thousand ships. Whitman’s face launched a thousand lunches.
LOL!
“…there won’t be any sex scandal during her administration.”
I will comfort myself with that thought if Hitlary ever gets elected president.
http://www.nationalenquirer.com/reports_obama_cheating_scandal_vera_baker_investigation/celebrity/68590
National Enquirer (unimpeachable source, I know) is claiming Obama was diddling a campaign staffer.
His sodomy of taxpayers and future generations is the greater scandal.
Whitman’s face launched a thousand lunches.
That is SO stolen.
I can think of a couple dozen names to put in there, starting with Carly “Demon Sheep” Fiorina.
How about Pelosi? I would rather kiss Brezhnev and he’s been dead for 28 years.
You know you’re butt ugly when even a billion dollars won’t sway the judges.
You know how a plain looking girl usually looks better driving a high dollar car.
Meg breaks this fundamental law of nature.
Hilarious
Whitman’s face launched a thousand lunches.
Make that 1001. LOL!
Buddy Holly version #2:
Meggy Sue, Meggy Sue ….Pretty, Pretty, Pretty Meggy Sue
Oh, Meggy…. My Meggy Suuuuuuuuuuuue owhoooooooooo
If California elects that Goldman whore, they deserve an earthquake.
Goldman CEO sounds like the Vatican. Arrogant. Clueless.
Mon Apr 19 2010 9:12 am
by Bob Morris.
Goldman CEO Lloyd Blankfein sent a voicemail to employees Sunday night exhorting them to stay the course, work hard, and ignore the foolishness and attacks.
Among his delusional and inadvertently comical comments:
“I will repeat what you have heard me say many times in the past: Goldman Sachs has never condoned and would never condone inappropriate activity by any of our people.”
I bet a lot of Wall Street types spat coffee out their noses this morning reading that.
“To that end, in the next few weeks, Goldman Sachs will have the opportunity to appear before Congress and discuss our role and participation in the mortgage market more broadly.”
Yes, being ripped to shreds as the nation watches is most certainly an “opportunity” to be welcomed.
“As you return to work on Monday morning, I ask that you maintain the level of focus on our clients that is at the heart of Goldman Sachs’ success over the past 140 years.”
Does that include backstabbing clients and selling them toxic glop deliberately designed to fail?
As always, the comments at Zero Hedge are fun. Here’s a selection.
So is “strong record of risk management”… I guess that is the term being used these days for the theft of taxpayer money, wherever and however it can be had.
As you return to work on Monday morning, please continue to disregard all concepts of ethics and morality in the unending quest to pad your bonuses. Sincerely, Your Supreme Ruler.
Such a fine line between Peptalk & Perpwalk.
“There is no blue dress”.
I for one welcome our slimy mollusk overlords.
Blankshooter at his best. He will look great in a cell with Madoff
Define inappropriate Mr. Blankfein.
He may have been telling the truth if he considers theft and rape appropriate.
Just keep paying me my 1.2 million bucks a year Mr. Blankfein and I’ll believe whatever you tell me.
As a wise, wise man once said “Just remember, it’s not a lie if you believe it”!! George Costanza
First Illegals now section 8:
http://www.ny1.com/8-queens-news-content/top_stories/117824/rockaways-residents-protest-section-8-vouchers-cuts
I just can’t watch the video. I wonder how many people that can’t afford rent without Section 8 can still afford iPods, cable TV, cell phones and flat screen TVs. Me thinks a lot.
Would Shat be a nickname for Shatavia?
I was on the subway last week and a teenager axed* me if I had a dollar. I shook my head. I should mention that our disadvantaged yoot was wearing the hang-off-the-rear jeans and fashionable sneakers and was listening to one of the MP3 players that looks like a little data key with the lights. So why did he ask me for a buck? Because I’m white, probably.
————–
*”axed” is Urban for “asked.”
“So why did he ask me for a buck?”
Because he could?
What did it cost him to ask? If he asked a hundred people for a dollar and only one gave him a dollar then he would still be a dollar richer than if he asked nobody for a dollar.
The risk/reward ratio is very favorable for panhandlers. It’s not as if they are giving up doing something else in order to panhandle.
I was told there was a panhandler at Venice Beach who set up a display of a sort informing passerbys of his woes with a can attached to accept contributions. He made deals with other in-person panhandlers to keep a watch over his proceeds so’s not to be ripped off.
Then he left for the day.
At the end of the day he would return to collect his money (if any) and take down his display. I was told he did this every day.
Combo, there’s a great Sherlock Holmes story about this. Young husband discovers that he makes more money panhandling in London than as a solicitor/lawyer. He went to the city in a suit, changed into bum costume, collected $$, washed up and changed back, went home. Wife was none the wiser until she was in town one day and spotted him at a window. She engaged Holmes’s services, and he figured it out, of course.
I would be willing to bet a week’s pay that he wasn’t planning on buying books with that dollar.
What is 100% Alex?
The woman on the video summarized the progressive mentality well - “It is a crime” to not give people money extracted from others by tacit concent a.k.a. coercive force. Is this the same crime as trying to prosecute an illegal in this country such as auntie Obama?
consent - or maybe I am subconsciously on to something
concent: the tactic of a government or state to con a subject out of their cents
That was your Freudian Moment
Progressives believe that affordable housing is a basic human right, as espoused by the United Nations.
If the friggin’ market wasn’t so gamed and home values weren’t so “protected”, there would be no need for Section 8 vouchers. Prices would naturally fall to where people could pay cash.
Article reads like a post from an HB’r
yahoo.com/s/usnews/20100430/ts_usnews/whybusinessleadersremaingloomy
None of these articles seem to ever mention Goldman’s role, as one of the subprime mortgage lending kingpins, in planting the seeds of the housing market meltdown which provided the opportunity to engineer Paulson’s toxic mortgage portfolio.
This was financially-engineered disaster capitalism at its worst: First break a window, then kill the glazier who is sent over to repair it, and collect a claim on the life insurance policy Gollum wrote on him.
Goldman Sachs under fire: Is Wall Street cheering or cowering?
By Ron Scherer, Staff writer / April 27, 2010
New York
Is Wall Street enjoying the roasting of Goldman Sachs by Congress? Or, do financiers see the grilling of Goldman Sachs executives as a politically motivated witch hunt, which could just as easily shift to another firm?
A little bit of both could be happening Tuesday, as Goldman Sachs officials appeared before a Senate subcommittee and tried to explain their involvement in the subprime mortgage crisis.
Internal Goldman documents, released by the Senate, show that the firm appeared to be profiting from the collapsing housing market – even bragging about it at times. That wouldn’t be surprising.
…
May 1 (Bloomberg) — Greek Finance Minister George Papaconstantinou said Greece faces “unprecedented” budget cuts as the euro region and International Monetary Fund near approval of a bailout of as much as 120 billion-euro ($159 billion) for the debt-stricken nation
159 billion , wow that increased rapidly. I remember when little Greece’s debts could be covered w a 30 billion dollar package.
After May 10th well see money rain from the German sky.
They just have to get past that pesky election thingie and then the Germans are free to do as they like. They can represent their true constituents.
Having spent a lot of time in Germany I would not be surprised to see a massive uprising to prevent these bailouts. Germans are some of the stingiest people I’ve met and they won’t hesitate to make their feelings known.
It really surprised me how many German banks bought into mortgage backed securities. I’d almost believe they had to be infested with foreigners to make such huge mistakes with money.
The comments yesterday about “homes selling for less than replacement cost” has been nagging at me. One of the many things that was going wrong during the bubble was the McMansion-mania - homes that are just ridiculously large.
And the problem with McMansions is that they are expensive to keep going. The costs of heating and cooling are larger. The cost of upkeep (painting, roof repair, etc) are going to be higher. It costs more to furnish (well, if you leave some rooms empty, it might not, but what’s the point in paying for empty space). Even if you hire cleaners to come in once in a while, it is going to cost more. If you happen to have a large family, you might be able to make good use of the space, but most people don’t have a large family..
Eventually builders will start building new homes - when they do, I suspect that they will build smaller homes, and by decreasing the size, the other costs associated with home ownership would be smaller as well..
I remember well the day we moved into our McMansion. I was so proud of myself. I was so happy. I had finally made it. It was the second best day of my life. I remember even more vividly the day we sold the POS. That was the best day of my life. That is a mistake I will never make again.
- This message has been typed from a studio apartment.
I remember being so nervous when I brought my first 3,000 sq foot new suburban home about every little issue I found. What if I have to incur more maintenance costs? What if no one will buy this POS? Memories of those feelings made it impossible for me to be willing to pay $500k or more for a similar pos when i sold and moved from my last house in 2005. I too rent.
I should add I paid 150k for the house that caused me nightmares.
What metro area was that, Natalie?
If you had a bigger apartment you would have more room for “expanding” your drilling.
First I would have to expand the size of the rig.
I bring up this point often. There were many distortions in construction that were a direct or indirect result of the housing bubble, that have left us with properties that may have zero value. Here in N AZ, there are a bunch of huge, expensive houses that aren’t fit for the climate and that local incomes can’t support. Who cares if it’s on a golf course, if the annual fees are north of 20 grand? Same with the ‘luxury’ condos all over the place. And one that is often overlooked; the drive till you qualify suburbs that shouldn’t even be there.
“…that have left us with properties that may have zero value.”
How do you define value? For instance, if there is a government program which qualifies buyers and provides them with a loan to pay $300,000 for a home which otherwise would sell for $0, what is the ‘value’ of the home?
I guess what I’m saying is that the foreclosure rate in some of these dubious categories could run close to 100% eventually. We already see that in some condo projects, and headed that direction in places like Lake Las Vegas.
Out in here in ca they have fees called mello roos.Homes I was looking at in lincoln, ca have 200-300/ month mello roos fees.Evidently these are bonds sold at the beginning of the subdivision to help pay for infrastructure.Basically a way to get more money out of you and dodge proposition 13.Add in hoa fees and a modest 250k home can run you easily 500-600/ month in property tax and fees.
If a buyer couldn’t rent it at a price that would cover all costs associated with the property assuming they bought it for zero dollars, than I would say it has zero value, at least on the resale market. Such situations do exist.
On another note about replacement costs, I believe those replacement costs continue to drop. Much of the price of a house is in the land and the labor. Both of which can shrink in price rather dramatically. Here is a case in point. A friend just got a deck built onto his house. He paid $4,200. I believe that same deck would have run him $7,000 in 2006 or 2007. Competition is a beyatch on the way down.
Here’s one for ya; I know a guy who bought a hot-tub last year. He told me the other day that there are numerous local ads saying you can have one for free if you pick it up. One thing I remember during the Texas bust was a report that Dallas pawn shops stopped taking expensive rolex watches because they were overwhelmed with them. And a Dallas banker told me in the 80’s, that the joke was the only things that could put a deposit on a mercedes were the pigeons.
Land cost is the big variable in falling replacement cost…
When material prices fall to much they cut production thereby stabilizing the price and sometimes even increasing it due to lack of supply…
Same can be said about labor…Some (not all) of it is “skilled” that tend to hold in pricing…
Government associated cost only go “up”…
So, again I say, land cost are the big variable witnessed by the dramatic fall in land prices even for fully improved lots…
Oh they built plenty of smaller “homes.” They were just all Attached Product. You see, a young or single person has no right to live in a SFH small cute cottage to suit her size.
You see, there’s little profit in building one of those. Oh no, she must needs buy a hip new floating box of air, paint the walls HGTV brown, and go clubbing every night.
Go clubbing or mow the lawn? Go clubbing or clean the gutters? Go clubbing or rake the leaves? Go clubbing or…, well you get the idea. A single, young person often has a different idea of what constitutes the perfect domicile.
That’s the Baltimorgue way!
1) Buy an overpriced, falling apart, old rowhouse in the city. Make your decision based on the theory that the more bars that are in the area, the better.
2) Tell folks about the “fun” of your neighborhood: people urinating on your front door, your car being keyed, etc.
3) Deny all claims that Baltimore is not the greatest place in the world, and mock people who won’t buy into the overpriced, urban bar-slum lifestyle with you.
The Goldman hearings
Sachs and the shitty
A ghastly day on Capitol Hill for Goldman Sachs’s top brass
Apr 29th 2010 | NEW YORK | From The Economist print edition
A different oath from Blankfein
“ONE of the worst days of my professional life” was Lloyd Blankfein’s characterisation of April 16th. That was when the Securities and Exchange Commission (SEC) filed civil fraud charges against Goldman Sachs and an employee for alleged failure to disclose that a hedge fund that had influenced the composition of a complex mortgage-debt transaction was also shorting it. April 27th was surely not much better, either for the Wall Street firm’s boss or for the six other current and former Goldman bankers who testified before the Senate Permanent Subcommittee on Investigations. The roasting, which lasted more than ten hours, was as dramatic as any discussion of synthetic collateralised-debt obligations (CDOs) could be.
Goldman’s persecutor-in-chief was the panel’s chairman, Carl Levin. The gruff Democrat went beyond the SEC’s complaint, accusing the firm of having concocted several deals, not just one, to profit from the collapse of the housing market, and also of being riddled with “inherent conflicts of interest”. Not content merely to skewer America’s pre-eminent investment house, the senator harrumphed that its conduct “brings into question the whole function of Wall Street”. His attack rested, in part, on internal Goldman e-mails. In one, a senior executive described a Goldman-underwritten CDO as “one shitty deal”. In another, a colleague applauded the structured-products team for making “lemonade from some big old lemons”.
…
Those weren’t lemons. They were Rocky Mountain oysters.
We got a real “SHITTY DEAL” when Sen. Carl Levin voted for repealing the Glass-Stegall act.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132×6716539
[broken record]
It’s spelled Glass-Steagall, and no senator has ever voted to repeal it… The Gramm-Leach-Bliley Act only repealed about 10% of the provisions of the Glass-Steagall Act.
[/broken record]
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by a Republican majority, basically following party lines by a 54–44 vote in the Senate[12] and by a bi-partisan 343–86 vote in the House of Representatives.[13] After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90–8 (one not voting) and in the House: 362–57 (15 not voting). The legislation was signed into law by President Bill Clinton on November 12, 1999.[14]
—————————————————————-
Even after your facts are taken into consideration….it’s still a shitty deal.
Where do I sign?
1.1M signatures secured in effort to stop state raids on local gov’t, public transit, transportation
April 30, 10:19 AM
Fresno Transportation Examiner
Alan Kandel
The message of the Californians to Protect Local Taxpayers and Vital Services coalition is clear and direct: Stop state raids on “local government, transportation and public transit funds,” according to information in the coalition’s Apr. 29, ’10, press release.
“‘Enough is enough,’” added “Josh Shaw, Executive Director of the California Transit Association and Co-chair of the coalition.”
In no uncertain terms
“‘Local transit agencies up and down the state are cutting routes for buses, shuttles and commuter trains as a direct result of continued state raids of local transit funds,’” Shaw said. “‘These cuts are creating real hardships for working families who have no other mode of transportation to and from work, school, health care appointments and other life responsibilities. The decisions made in Sacramento are harming real people who rely on local services.’”
Now, in an effort aimed to stop the raids, 1.1 million California voters have signed a petition all but assuring “a constitutional amendment” for November’s statewide ballot. At least 694,354 valid signatures is the minimum qualifying signature number required.
“Counties will now begin the process of validating the signatures, and each county will turn in its results to the Secretary of State as soon as they have finished. The deadline for the Secretary of State to certify measures for the November ballot is June 24,” information in the release points out.
“Chris McKenzie, Executive Director of the League of California Cities and Co-Chair of Californians to Protect Local Taxpayers and Vital Services” said, “‘We will now turn our attention to educating the voters to support this initiative to protect funding for the vital local services that they rely upon.’”
In front of Henry’s Market
I smell Unions with this one….
They call a cut in funding a “raid”? I hope they don’t win over many people with silly word manipulation.
Petitions are the lowest form of political life. They will be ignored. Money talks. Follow the money and your Republicrat “representatives” loyalties will become clear.
Petitions are to politics as puns are to humor?
I guess the printing press technology is not sufficient to cure all financial woes? Especially those involving bailing out profligates…
Greek financial crisis now considered contagion ‘like ebola’
No longer a mere threat, the Greek financial crisis has spread to the eurozone and has raised concern over contagion.
Flags wave at the headquarters of the National Bank of Greece, the biggest bank in the country, in Athens, Thursday. The Greek financial crisis has now spread to the eurozone.
Thanassis Stavrakis/AP
By Rocky Vega, Guest blogger / April 29, 2010
Since Greece’s 2-year debt hit a new record-high yield of 26 percent stock markets around the world have been struggling. Likewise, the euro, now at about $1.3213, recently had its worse one-day decline against the dollar in about 12 months.
How bad is it really? According to Bloomberg:
“The yield on Greece’s two-year note has risen almost fivefold this month on concern euro-region support for the country will come too late to prevent a default. The yield soared almost 600 basis points at one stage today. Ireland’s jumped 90 basis points to 4.64 percent, Portugal’s increased 93 basis points to 6.24 percent and Spain’s rose 20 basis points to 2.26 percent.
“Credit-default swaps on Greece, Portugal and Spain advanced to records, according to CMA DataVision. Contracts on Greece climbed 42 basis points to 865.5, Portugal jumped 20 to 406 and Spain increased 2 basis points to 211, CMA prices show.
“’It’s not a question of the danger of contagion. Contagion has already happened,’ Angel Gurria, secretary general for the Organization for Economic Cooperation and Development [OECD], said in a Bloomberg television interview today in Berlin. ‘This is like Ebola. When you realize you have it you have to cut your leg off in order to survive.’”
…
It will all be good. I saw Bernanke coming out of the Staples on 42nd Street yesterday. His cart was loaded with HP toners. It’s all good.
Well, they do say toner costs most per gallon than oil.
I saw him yesterday, too! He was talking to the traffic guy from the local morning news about something.
Now this is what I call a price reduction:
3155 E Harrison Ave, Coeur D’Alene, ID
Reduced by $10M from $27.5M to $17.5M
Depends how unreasonable it was to ever expect anyone would pay 27.5M in the first place. Could be no different, or even more absurd, than marking up $10 items to $20, and then having a 50% off sale.
My wife and I decided to tally up our net worth this week. It turns out that for the first time in our lives we are actually millionaires. Then we marked everything to market and it turns out we are broke. Easy come! Easy go!
Man you guys gotta look at it. Zillow has 46 photos. Whoever designed this home must have had the WORST taste in the world, over all of history. It looks like it was designed over a weekend in Vegas, on a cocktail napkin, by a 70’s mobster who OD’s on some obscure drug.
And Idaho? You can probably buy all of Idaho, except Boise and Idaho National Lab, for that.
I looked at the pictures. All I have to say to that is, “Rosebud”.
Which bedroom is Marion Davies?
Not one of those rooms appears comfortable to me, and many are disasterous architectural and design horrors. I should add that I am huge fan of post modernism and out-of-the box design done appropriately, but this one is just craptastic.
http://www.buymarcello.com/properties/3155-e-harrison-ave-09-9523.html
ONLY 4 bedrooms in 14,993 square feet?
Doesn’t look like a residence to me…looks like a conference center. Looks like a nice conference center, though…I wouldn’t mind hanging out there.
I agree. A bowling alley, lap swimming pool, driving range and putting green are all nice things to have. The conference room and dining room with several tables for 4 gives it a conference center feel. It’s definitely too big and lacks a homey atmosphere.
I’d give’em three nickels for it. That’s about all it’s worth to me.
The irony is that the poor fellow who owns something like this is probably married to a high maintenance barren spitter. He’d be happier in a Section 8 trailer park scoring 3 of 3.
I place 100% of the blame on the municipality that allowed it to happen…No “reasonable” planning controls…
The outside looks like a hotel and the inside looks tacky. They actually have wooden dogs?
It is funny how they calculate mortgage payments just like they do for normal houses. Only 75K$/month…
You have got to wonder if the previous owner was a former mob boss in the witness protection program…
You’re right. Stay away from Idaho, Montana, Wyoming, E. Washington. Nothing but people living in mud shacks.
You’re right. Stay away from Idaho, Montana, Wyoming, E. Washington. Nothing but people living in mud shacks ??
I sense a degree of sarcasm in your post…The rich, hollywooders and the wannabee’s have in fact “screwed up” a lot of those area’s..Jackson Hole is only one example…
Notice that this place was built in 1967. None of the interior shots look like “1967 style”. That granite kitchen was built in the last 10 years I’d wager. Perhaps the original ranch house was gutted and remodeled to death.
A house that big on 15 acres in Coeur D’Alene was probably reasonably priced in 1967. Perhaps the original owner decided to doll it up and sell it at bubble prices - and then got stuck when the bubble burst?
Zillow says you have to be making $3,182,828 a year to afford this place.
Too bad there’s no sales history for this place. Idaho has an odd law on transfers of property: the buyer and seller do NOT have to report the sales price. Any reporting of sales price is purely voluntary, so there’s no public record of sales history in most cases.
The Environmental Calamity is getting worse with the weather and the type of oil, all combine will make this catastrophe worse.
(In 1855, the Dwamish Chief Seattle, of Washington Territory, sent the following letter to President Franklin Pierce. Not surprisingly, his powerful plea was ignored by Pierce, and every President to follow. Now, we need, more than ever, a president who will listen to Chief Seattle’s simple words.)
To the Great Chief in Washington,
We know that the white man does not understand our ways. One portion of the land is the same to him as the next, for he is a stranger who comes in the night and takes from the land whatever he needs. The earth is not his brother but his enemy, and when he has conquered it, he moves on. He leaves his father’s grave, and his children’s birthright is forgotten.
The sight of your cities pains the eyes of the red man. But perhaps it is because the red man is a savage and does not understand. There is no quiet place in the white man’s cities. No place to hear the leaves of spring or the rustle of insect wings. But perhaps because I am a savage and do not understand, the clatter only seems to insult the ears.
The Indian prefers the soft sound of the wind itself cleansed by a midday rain, or scented by a Pinion pine. The air is precious to the Redman. For all things share the same breath: the beasts, the trees, and the man.
The white man does not seem to notice the air he breathes. Like a man dying for many days, he is numb to the stench.
I have seen thousands of rotting buffaloes on the prairie left by the white man who shot them from a passing train. I am a savage and do not understand. What is man without the beasts? If all beasts were gone, men would die from great loneliness of spirit, for whatever happens to the beast happens also to the man.
This we know: The earth does not belong to man; man belongs to the earth. All things are connected. Whatever befalls the earth befalls the sons of the earth. Man does not weave the web of life, he is merely a strand in it. Whatever he does to the web, he does to himself.
Our children have seen their fathers humbled in defeat. Our warriors have felt shame. It matters little where we pass the rest of our days; they are not many. A few more hours, a few more winters, and none of the children of the great tribes that once lived on this earth will remain to mourn the graves of a people once as powerful and hopeful as yours.
But even the white man cannot be exempt from the common destiny. We may be brothers after all; we shall see. One thing we know, which the white man may one day discover: our God is the same God. You may think that you own him as you wish to own our land, but you cannot. He is the Body of man, and his compassion is equal for the red man and white. This earth is precious to him, and to harm the earth is to heap contempt on its Creator.
The whites too shall pass, perhaps sooner than other tribes. Continue to contaminate your bed, and you will one night suffocate in your own waste.
But in your perishing you may shine brightly, fired by the strength of the God who brought you to this land and for some special purpose gave you dominion over this land and over the red man. That destiny is a mystery for us, for we do not understand when the buffalo are slaughtered, and the wild horses tamed. Where is the thicket? Gone. Where is the eagle? Gone. And what is it to say goodbye to the swift pony and the hunt? The end of living and the beginning of survival.
We might understand if we knew what it was the white man dreams, what hopes he describes to his children on long winter nights, what visions he burns into their minds, so they will wish for tomorrow. But we are savages. The white man’s dreams are hidden from us. And because they are hidden we will go our own way.
If we sell you our land, love it as we have loved it. Care for it as we have cared for it. Hold in your memory the way the land is as you take it. And with all your strength, with all your might, with all your heart, preserve it for your children and love it …. as God loves us all.
One thing we know. Our God is the same God. This earth is precious to Him. Even the white man cannot be exempt from the common destiny. We may be brothers after all.
What a crock. Where is the fun in all of that? Geez, I sure wouldn’t want this Indian chief looking after my 401k. I better get going. There are tires to burn and squirrels to shoot.
Bush was blamed for the flopped response to Katrina and rightfully so. Obama will be blamed for the flopped response to the oil spill and rightfully so. I don’t understand why we haven’t mobilized every available resource to get this under control. Meanwhile they’ve reverted to the blame game. The continuing environmental disaster will be felt for many years.
Nice! I also like the Agent Smith version:
http://www.youtube.com/watch?v=UOi6v5DD_1M
I’m tellin’ ya, these “current foreclosure alerts” are landing in my inbox at the pace of about 2 a day, when it used to be once a week, then twice a week. I guess the banks are opening the valves?
I’m gonna get me that little concrete shack soon, a birdie tells me.
palmetto
Who’s alerting you, and how did you sign up?
wipeout, it was some real estate foreclosure service I found on Craigslist and I subscribed to their notices way back in like 2005, around the same time I got on this blog. I suspect it’s just some RE company trolling for buyers and looking for a commish.
palmetto
Thanks for the reply. I dug into RealtyTrac’s non-stop of automatic cc subscription renewals, and I thought it might be them. People could not terminate the service w/o closing their cc account. (Trul*a message boards)
Yes, there’s an avalanche coming in 85310 and 85383. We’re finding about 90% of the listed homes are short sales (which can take months to close) and sooner or later they have to foreclose. IMO prices will take another dive when the wave hits.
“Yes, there’s an avalanche coming in 85310 and 85383.”
That is interesting. My cousin and his wife divorced in 2004 and sold their house. One then bought a house in 85310 (subdivision not far from that water park) and the other bought in 85383 (westwing) because I guess that it would have been outlandish to house their kids in a rental for the 3 1/2 days a week that each has them. Both have since walked/ran from those obligations. Add some to the pile.
Posted this late yesterday, thought it was worth a second look.
http://www.dsnews.com/articles/california-to-implement-four-distinct-programs-with-hardest-hit-funding-2010-04-30
Of the 4 point program I thought this was the most interesting.
“The Mortgage Reinstatement Program was designed to provide financial assistance to reinstate delinquent mortgage loans that are in arrears to prevent foreclosures. Funds available through this program will provide benefits of up to $15,000 per household or 50 percent of the past mortgage due arrearage amount, with a required dollar-for-dollar contribution match from the lender, servicer, insurer, and/or borrower.”
Reason being, most of the NOD’s I see on Foreclosure Radar are in the neighborhood of 20K - 30K. Get people current and get State Tax Revenue, while artifitally keeping prices up. They got a margin call and Uncle Sam gave them a gift so they can collect on their interest yielding stocks (Property Tax’s). Problem is they didn’t fix the problem, just more can kicking.
Add a year or so to the unraveling in CA., when it finally comess it will be spectacular.
The other 3 parts of the program are crazy too. How does the rest of the country feel about paying for CA property loss’s?
house bill would allow homeowners facing foreclosure to stay on as renters
http://www.dsnews.com/articles/house-bill-would-allow-homeowners-facing-foreclosure-to-stay-on-as-renters-2010-04-29
OCBear- Great sector newspaper. Thanks for the link.
Rents are pretty dang high in OC. I don’t think they are really doing them (Debt Serfs) any favors. It does more can kicking though.
Rents are high in Thousand Oaks (East Ventura County) too, due to H1-B’s who can’t afford to buy a house, and the sardine lifestyle of the illegals.
Yeah, and while they are kicking the can down the road, I am stuck still awaiting a re-entry point. This is getting d*mn old.
And they say, this isn’t a Depression. OK, I believe them.
Yes it is. From the article:
“HAMP is simply an insufficient response to this crisis,” Grijalva said. “Right to Rent is a fair and sensible solution for struggling homeowners. Banks will still get reliable rental income, and families will be able to stay in their homes and significantly lower their monthly housing costs.”
So there you have it. You can rent from the banks, or rent from the banks.
Home loanership society at its finest.
“Banks will still get reliable rental income …”
Plus they’ll keep the house occupied which will help maintain the values of other houses in the neighborhood for which the banks hold mortgatges. Also, banks won’t be forced to write down the loan as non-performing and thus will avert taking a hit on their balance sheets.
See, it’s all good … for the banks.
good point
i dunno why, but this idea gives me the willies..
Rent regulation and control.. banker slumlords.. FBs with one foot out the door who won’t maintain the property or have reason to care about the neighborhood.
Seems more sensible to kick them out, let prices fall and resell the homes.
“house bill would allow homeowners facing foreclosure to stay on as renters”
Seems like squatting in California would be cheaper than paying rent.
http://www.bild.de/BILD/news/bild-english/world-news/2010/04/30/greece-bail-out-cash/why-is-german-taxpayers-money-going-to-greek-billionaire.html
The German tabloid press is up in arms - for good reason - about the beneficiaries of a massive EU bailout for Greece which will benefit mainly banksters and speculators. Germany will bear the brunt of the bailout costs, which are now up to around $160 billion (and counting). The IMF (which receives about 30% of its funding from the US) is also throwing tens of billions of dollars down the Greek black hole.
I have written to my useless Republicrat Senators and “Representatives” to protest but of course they’ll go along with the swindle.
Why not stick this in there from the “DS” (Default Servicers) newspaper: (Florida)
http://www.dsnews.com/articles/index/florida-submits-detailed-proposal-for-utilization-of-hardest-hit-funding-2010-04-29
They keep talking about “protecting” home values. More artificial Cialis. More kicking the goddamn can down the road.
At least the Greeks have the balls to do this. Can’t say the same for us Americans:
“Hundreds of youths rioted in Athens on Saturday, throwing Molotov cocktails and stones at police who responded with tear gas at a May Day rally against austerity measures being enacted by the cash-strapped government to secure foreign loans to stave off bankruptcy.”
“At least the Greeks have the balls to do this. Can’t say the same for us Americans.”
Stay tuned.
“We have met the enemy and he is us.”
Americans think that Wall St. and Corporate America are God! Heck, that practically what evangelical pastors preach from the pulpits every Sunday. Why would they ever react in anger to that which they idolize?
Let’s hope the Americans are just waiting for the right time … it is better to prepare. Violence is not the answer and I wonder how the police would respond if confronted by peaceful yet well armed citizen group in full tactical gear. Something needs to stop the madness. Unfortunately until the govt’s exclusive right to the power of force is diminished it is just business as usual.
“At least the Greeks have the balls to do this. Can’t say the same for us Americans:”
Even if it did happen here, would we target those responsible or instead those we don’t otherwise like because we are mad at what has happened to us irrespective of who caused it?
Of course, if we started burning down big banks and lobbing molotov cocktails at Wall Street in September, it might make the November election more interesting.
Americans scoff at rocks…and keep buying ammo.
Hundreds of Greek anarchist dirtbags riot every May Day. No big deal.
Greeks are overwhelmingly opposed to the austerity measures demanded by the IMF. But they’ll be smart enough to stay quiet and subdued until they get their first big tranche of the bailout money. Then they’ll turn around and default anyway.
“Can’t say the same for us Americans”
In due time.
..At least the Greeks have the balls to do this.
To throw a tantrum because daddy has to cut your allowance is an exhibition of an extreme lack of balls.. and hair.
http://www.dsnews.com/articles/borrowers-continue-to-spend-minimal-time-researching-home-loans-2010-04-30
“Humphries said he is surprised that people spend more time shopping for cars and televisions than they do researching mortgages, and he’s further shocked that borrowers spend no more time shopping for mortgages now than they did two years ago, even in the midst of a foreclosure crisis. He said people spend countless hours shopping for their home, yet few realize that small differences in the interest rate or discount points can add tens of thousands of dollars to the overall cost a home.”
Do I want the 42 inch or the 50?
“Do I want the 42 inch or the 50?”
Do you want the HAMP bailout or the walkaway-and-send-jingle-mail option?
If Uncle Warren backs Gollum, then they must be innocent of any wrongdoing. There is no conflict of interest here, just because Uncle Warren is a major share holder…
* The Wall Street Journal
* BUSINESS
* MAY 1, 2010, 2:52 P.M. ET
Buffett Defends Goldman; Berkshire Posts Profit
By SCOTT PATTERSON And ERIK HOLM
OMAHA, Neb.— Warren Buffett offered a vigorous defense of Goldman Sachs Group Inc. Saturday, saying the embattled firm hadn’t engaged in improper activity and shouldn’t be blamed for the losses of its clients.
Goldman has been reeling from Securities and Exchange Commission allegations that the bank had engaged in fraudulent activities in relation to a mortgage deal called Abacus 2007-AC1. Goldman says it did nothing wrong.
Mr. Buffett’s comments—which came early in the day at Berkshire Hathaway Inc.’s annual shareholders meeting—offer a powerful vote of confidence in Goldman, which has seen its shares slide since the SEC announced the investigation on April 16. Goldman’s stock fell 9.4% on Friday alone after it emerged that the Manhattan district attorney’s office was conducting a preliminary criminal probe into its mortgage-trading activities.
Berkshire Hathaway shareholders react to the SEC lawsuit against Goldman Sachs. MarketWatch’s Alistair Barr reports.
“We have had a lot of very satisfactory transactions with Goldman Sachs,” Mr. Buffett said.
…
Warren Buffett makes a big deal about his reformation of Salomon Brothers and how important it was to come clean ASAP during that scandal. I don’t know how much control or insight Mr. Buffett has over Goldman, but I doubt even he would be willing to expose all of their dirty laundry to save his name. I’m sure he knows the consequences.
If he said Gollum sucks and all the other banks suck, what might happen to all of his shares in financials?
Where is the sophistication in flushing other people’s money down the toilet by investing it in shitty assets?
Big Money: Debunking the myth of the ’sophisticated investor’
By Heidi Moore
Sunday, May 2, 2010
As part of their defense in a messy SEC investigation, Goldman Sachs and investor John Paulson have trotted out a classic Wall Street defense: Their customers were “sophisticated investors.”
So buyers, beware — this is just how the big boys roll. It’s a high-stakes game for experienced players; they all know the real rules; the public shouldn’t care. Don’t fret over the higher workings of the princes of finance, because it’s not as though Mom and Pop lost money in their deals. Goldman’s Fabrice Tourre told the Senate on Monday: “I was an intermediary between highly sophisticated professional investors — all of which were institutions. None of my clients were individual, retail investors.”
Wall Street loves the “sophisticated investors” argument, and little wonder: It could generate infinite financial fees if only the populace could be convinced that it’s okay to fool some of the people all of the time. The problem is that even when only some of the people get fooled, all of us are paying all of the time.
Let’s examine what happened with Goldman and Paulson. Goldman Sachs stands accused, in part, of giving favored financial treatment to Paulson’s firm, allowing him to advise on the creation of a security, Abacus, that he wanted to fail; Goldman later sold it to investors who wanted the security to succeed, but it didn’t tell them Paulson had played a role in creating the thing and shorted it to bet it would fail. To sell the deal, Goldman apparently withheld information about Paulson’s involvement from the buyers, including Royal Bank of Scotland and Germany’s IKB Deutsche Industriebank. The buyers lost about $1 billion on the deal, according to the Securities and Exchange Commission.
Telling the whole story
Economists call this “informational asymmetry.” Everyone else calls it “not telling the whole story.” The hitch is that America’s securities laws require disclosing all warts to potential buyers, and banks pay lawyers millions of dollars every year to comply.
Informational asymmetry is also contagious: Once it’s started, it becomes easier and easier to withhold information that buyers need in order to make decisions. And if it’s done to one client, it can be done to any. Most of those clients can put 2 and 2 together and recognize that what happened in the Abacus deal is probably not an isolated incident; in Wall Street parlance, there’s never just one roach. That’s why Goldman and Paulson started assiduously groveling to their other clients after the SEC announced its case, hoping to ease those clients’ predictable fears that the bank and the hedge fund could have treated them the same way they treated RBS and IKB.
It’s not just the big clients, however, that get hurt. What Wall Street would like to ignore when it is taking bets in its casino is that a big pile of chips on the table come from regular consumers — from their bank deposits, retirement accounts, credit-card balances, car loans and mortgages. That’s why the distinction between these sophisticated investors and everyone else is nonexistent. When Wall Street banks omit information and draw profits from “institutional investors,” that means they are taking money from your pension funds, your school endowments, and your city and state governments. Other sophisticated investors include hedge funds, which take money from those pension funds, or private-equity funds, which own companies that employ 10 percent of all Americans.
Pension funds, for instance, are considered “sophisticated investors” on Wall Street. But those are just pools of retirement money owed to workers. The pension funds, looking to expand their stash, invest in stocks and bonds sold by Wall Street. These pension funds also give their money to other funds, such as hedge funds and private equity funds, that invest that money in riskier investments, perhaps troubled companies or distressed mortgages. Pension funds play the Wall Street game to score a healthy return — but when they lose, the money lost belongs to regular people.
…
Goldman Sachs stands accused, in part, of giving favored financial treatment to Paulson’s firm, allowing him to advise on the creation of a security, Abacus, that he wanted to fail; Goldman later sold it to investors who wanted the security to succeed, but it didn’t tell them Paulson had played a role in creating the thing and shorted it to bet it would fail.
I go to the track. Instead of picking winners, I want to bet on which three horses will come in last. There is no such bet available at the betting window. I can only bet horses to win, place and show (come in 1st, 1st or 2nd, and 1st, 2nd or 3rd.)
So, they send me up to the office to ask if that special bet can be set up.
They figure “What the hell .. this guy wants to wager big money on which horses will lose, fine. What’s the difference to us? It’s no easier to pick a loser than a winner. We will take the bet on those horses losing.”
—–
Should the track announce to all the people betting these three long-shots will win, that I have bet them to lose? Odds are that they will lose anyway. Everyone already knows this. The bad odds are posted.
Why would people betting on them to win change their minds because they know someone’s betting them to lose?
People bet them because the odds are BAD. They bet them to make great profits, like 100 to 1 on their money.
My bet won’t matter to them, nor will my bet slow those horses down.. Goldman “withheld” information that didn’t matter and wouldn’t matter to anyone anyway.
I think if you owned the horses, or had some sort of personal connection with the owners or jockeys, and had bet against them, it would be highly relevant for the public to know this.
But neither Paulson nor Goldman had a connection.
The “horse” was some mortgages. The bet was that people would start missing payments, and the mortgages would lose value.
http://www.timesonline.co.uk/tol/news/world/europe/article7113941.ece
America, meet your future. Especially note the anger of the young Greeks at the selfishness and heedlessness of their elders who lived large at their expense. And don’t expect any gratitude for the Germans who are bailing them out.
..The violence came as negotiations were concluding between the socialist government of George Papandreou…
It may well be in our future if we continue down the path of socialism.
I hear that ‘W’ is being primed for a comeback.
No.
Roidy
Next opportunity for sheeple to get themselves slaughtered: Bubbly bond funds.
BTW, rising interest rates can also cause the value of stocks and houses to drop, not just bonds. The Fed realizes this, and hence will do all it can to keep long-term rates as low as possible for as long as possible.
It’s good for me either way; I am getting use to panic. In fact, I find it somewhat exciting when the fear-stricken bovine herd stampedes towards the edge of the nearest cliff.
Investing April 30, 2010, 8:27PM EST
Fixed-Income Pros Fear ‘Bond Fund Bubble’
Seeking safety, inexperienced investors have poured record volumes of assets into bond funds. That’s risky—especially if interest rates rise
By Ben Steverman
Finance
* Why Small Investors Are Shying from Stocks
* Fixed-Income Pros Fear ‘Bond Fund Bubble’
Good news for the economy could be very bad news for bond investors this year.
It may come as a shock to the unprecedented number of retail investors who—fleeing the stock market and seeking stability—have poured their savings into fixed income over the past year, but rising interest rates can hurt the value of bond investments. With the U.S. Federal Reserve holding its federal funds rate near zero, short-term rates have nowhere to go but up. The Fed said in a statement on Apr. 28 that it expects “exceptionally low levels of the federal funds rate for an extended period,” but an improving economy could cause the Fed to change its stance. Economists’ predictions vary, but typical is Jefferies Fixed Income’s prediction that the Fed will begin raising rates in the first quarter of 2011.
Although the economic environment still feels bleak to many Americans, a rebound could be swift, especially if stimulus from the Fed and the federal government proves successful. Data released on Apr. 30 showed that U.S. gross domestic product grew at an annual rate of 3.2 percent in the first quarter of 2010. “Once those sparks catch fire, it’s going to be a quick turn in the economy,” predicts Lorenzo Newsome Jr., chief investment officer at Xavier Capital Management in Largo, Md. That will push up interest rates by the end of 2010 and “cause the value of investment-grade bonds to fall,” he says.
Feeling the impact could be millions of new, inexperienced, fixed-income investors. According to TrimTabs Investment Research, investors poured $467.2 billion into bond mutual funds in 2009 and a further $115.8 billion so far this year. By contrast, an average of $43 billion flowed annually into bond funds from 2003 to 2008.
“It’s a bond fund bubble,” says Marilyn Cohen, chief executive of Envision Capital Management in Los Angeles and author of the book Bonds Now!: Making Money in the New Fixed Income Landscape. Most of these new fund owners are “unsophisticated investors” who are unaware how much rising rates can hurt bonds, she says. (Because institutions and wealthy investors tend to buy securities directly, mutual fund customers tend to be retail investors.) “If we get a big spike in rates, there will be a mass panic,” Cohen says.
…
“Most of these new fund owners are “unsophisticated investors” who are unaware how much rising rates can hurt bonds, she says.”
Fear and greed; little people have no business on Wall street.
This seems like a fitting activity for a Grecian May Day.
Greeks Take to Streets in Protest of Deep Spending Cuts
Orestis Panagiotou/Eurpoean Pressphoto Agency
Hundreds of protesters rioted in Athens on Saturday, venting their rage at tough new government austerity measures.
By DAN BILEFSKY
Published: May 1, 2010
ATHENS — Tens of thousands of demonstrators took to the streets across Greece on Saturday, including hundreds of black-clad youths who clashed with the police here, as Greeks vented their rage at tough new austerity measures aimed at securing aid and avoiding a debt default.
Protesters clashed with the police in Athens on Saturday, May Day. Other demonstrations in Greece were largely peaceful.
While the May Day rallies were largely peaceful — and modest by Greek standards — the protests here turned violent at times. Anarchists in hoods and motorcycle helmets threw Molotov cocktails at the police, set a television van on fire, smashed shop windows and ignited trash bins.
Police estimated that 17,000 people protested in Athens. They said 10 people were arrested and reported no serious injuries.
The protests, and a planned strike on Wednesday, are a sign of the challenges ahead for Greece. On Sunday, Prime Minister George Papandreou is expected to announce cost-cutting measures totaling 24 billion euros (about $32 billion) that will include freezing public-sector salaries, raising taxes and slashing pensions. In return, Greece is expected to receive up to 120 billion euros in aid over three years.
The Greek cabinet was to meet on Sunday morning to finish the austerity measures. Mr. Papandreou was expected to announce them on television, before the finance minister, George Papaconstantinou, flies to Brussels to attend an emergency meeting of euro-zone leaders.
The government’s proposals for deep spending cuts pushed by the International Monetary Fund have met angry resistance in a country where one out of three people is employed in the civil service, which until now has guaranteed jobs for life. The shake-up of Greece’s bloated public sector represents one of the biggest overhauls of the country’s welfare state in a generation. Fears are growing that once Greek society begins to feel the effects of the austerity measures, social unrest could unhinge a potential recovery or force the government to dilute some changes.
“This crisis is not my fault, I won’t accept these austerity measures and I want to know where all the money has gone,” Emily Thomaidis, 29, the owner of a coffee shop, said as she marched through central Athens past vendors selling newspapers with the headlines “Fear. Rage. Hope.” She added, “Why should my generation have to pay the price for problems created by our parents’ generation?”
…
The Financial Times
Escalation of Greek debt crisis sparks volatility
By Dave Shellock
Published: May 1 2010 03:00 | Last updated: May 1 2010 03:00
A dramatic escalation of the Greek sovereign debt crisis triggered huge volatility in financial markets this week, even as corporate earnings and economic releases offered fresh evidence that the global recovery was on track.
A further undercurrent of tension came from uncertainty over reforms to the US financial sector, as Goldman Sachs found itself under attack from a Senate subcommittee for profiting from the financial crisis. Reports yesterday suggested the investment bank might face a federal investigation, just two weeks after it was accused of fraud by the Securities and Exchange Commission.
On a more positive note, the Federal Reserve reiterated its pledge to keep interest rates low for an “extended period” as it offered a slightly more upbeat view of the US recovery.
The upshot for the markets was a week of violent swings in global share prices, while the euro sank to its lowest for a year against the dollar and gold hit a 2010 high. The Vix index of equity volatility - a closely watched measure of risk aversion - recorded its biggest one-day increase since the height of the credit crisis in 2008, before easing back.
“The Greek problem matters for global markets because it raises serious issues about the operation of the euro currency bloc,” said Simon Hayes, economist at Barclays Capital.
But he added: “The importance of the continuing good news on global activity is hard to overstate.”
…
Why not kill two birds with one stone: Break up the systemically risky Megabanks into small-enough-to-fail pieces, and you will relieve the Fed of the need to regulate them and the taxpayer of the burden of future bailouts.
And as regards the assertion that a Fed audit would constitute meddling into the conduct of monetary policy, I have a simple suggestion: Let the Fed draw a red line around monetary policy secrets which would be off limits for auditors to question. Monetary policy is deadly boring anyway when the Fed is pushing on a string. The interesting bits concern non-monetary-policy issues, such as whether the Fed is actively propping up asset prices in a manner which siphons money away from Main Street and into Megabanks’ coffers.
The Financial Times
Fed official hits at ‘political meddling’ in reform bill
By Tom Braithwaite in Washington
Published: May 1 2010 05:05 | Last updated: May 1 2010 05:05
A senior Federal Reserve official said the financial reform bill being considered by the Senate would result in the “blatant politicisation” of the central bank and questioned the credibility of a proposed system to wind down the biggest banks.
In unusually outspoken comments from a member of the central bank’s interest rate- setting Federal Open Market Committee, James Bullard, president of the St Louis Fed, told the Financial Times that the bill jeopardised the Fed’s independence and had failed to solve convincingly the problem of institutions that are “too big to fail”.
He hit out at plans for a full-scale audit of the Fed as “blatant political meddling in monetary policy”. The audit is in the House regulation bill that was passed last year and is likely to be offered as an amendment to the Senate’s bill, which enters its first full week of debate next week before a vote that could come the following week.
Mr Bullard said he was “very concerned” by plans to remove the Fed’s supervision of smaller banks, with the central bank only retaining direct oversight of the biggest institutions.
“We think it will cut the Fed off from Main Street America,” he said. “It makes it look like the Fed is there to help Wall Street. We already have that label – too much of that label – and this would make it worse.”
…
EDITOR’S CHOICE
Regional chief fears central bank overhaul - May-01
Fed rolls out tool to drain liquidity - May-01
Money Supply: Broken eggs - Apr-30
In depth: Obama and Wall St - Feb-05