Bits Bucket For May 10, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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A couple of observations,
A few months back I went to the county courthouse auction just to see what was “on the block”. What surprised me most was the number of professionals I saw. These folks had stacks of information and as each property was announced they would rifle through the stack and pull out the data sheets for that one. They were also on the phone with someone. Sometimes there were two of them, one doing the paperwork searching, the other on the phone or keenly waiting to bid. There were not that many properties actually bid on and those were 300k or less. There was one Asian fellow who bid and got a place at 630k. That elicited a few quiet chuckles from the pros.
My roommate spoke with a Used House Seller recently who told him that chances of finding an SFR, even a distressed or foreclosed REO, here in Costa Mesa/Huntington Beach at < $300k were slim to none now and in the future. She said a condo, or town-home maybe, but not an SFR. She said the pros are buying everything at the low end.
I contend that this train wreck is not over and am keeping my powder dry despite all of the cheer leading of late. I just keep reminding myself that as far as anyone in the REIC if their lips are moving, do not expect truth.
The same thing is going on here in San Diego, and also in other cities and states across the nation based on what I’m hearing.
This is exactly why I’ve been saying the bubble is NOT OVER. Not by a long shot.
IMHO, the current housing market is still being driven by investors of various stripes. The buyers in the REO market are almost entirely investors. Lots of them are flipping, and they’re making a lot of money, unfortunately. They are taking advantage of the lack of financing for REOs (limiting demand and keeping prices down because they have to be bought with cash), then they flip them to clueless souls who are coming in with their 3.5% down payments (which can be borrowed!). The sellers have been allowed to give 6% back as “seller concessions,” which is just another way of saying the current crop of buyers is once again clueless and willing to overbid because THEY HAVE NO SKIN IN THE GAME.
Nothing has changed. No lessons were learned (yet). The fools are still running the show.
Good reports. Sad but good info.
Fannie loses another 11 billion, no biggie right?
http://www.fanniemae.com/media/pdf/newsreleases/q12010_release.pdf
I didn’t get an invoice.
No biggie.
Exeter. Don’t worry, invoice will be mailed to your kids.
The fools are still running the show and the hilarious thing about it is they are as smug as they were five years ago. The debt crisis is getting worse and decades from being over.
Yep.
Why the hell are we bailing out every country that goes belly up?We are setting are self up for a disaster.I cannot see how this drunken sailor like spending can continue.
“Why the hell are we bailing out every country that goes belly up?”
* MAY 10, 2010, 7:48 P.M. ET
J.P. Morgan’s Exposures To Greece, Portugal Each Under $2.1B
By Marshall Eckblad
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–J.P. Morgan Chase & Co. (JPM) said in a regulatory filing Monday that its potential loss exposures to Greece and Portugal, two European countries facing weakening credit, were each under $2.1 billion at the end of March.
In a quarterly filing with the Securities and Exchange Commission, the New York bank also noted the ongoing debt troubles of Spain, Italy and Ireland, and said its exposure to the group of five nations is “modest relative to the firm’s overall exposures.” J.P. Morgan also said “a substantial portion of its exposure to these countries is secured by cash…and collateral or is hedged.” The bank didn’t specify actual exposures for the five countries.
Investors have been particularly concerned over which lenders could face a heavy fallout if one or more countries were to default on their debt obligations. Bank of America Corp. (BAC) said in a filing Friday its loss exposure to Greece was $1.3 billion at the end of March.
World markets have been jarred by fears that a weakened group of European countries, including Greece, Portugal, Spain, Italy and Ireland, are carrying excessive amounts of debt and won’t be able to meet their obligations. European Union leaders took measures over the weekend to backstop Greece as well as the euro currency, calming investors’ nerves Monday.
Churn, burn, then bail:
Wall St. Helped to Mask Debt Fueling Europe’s Crisis
By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: February 13, 2010
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
Gary D. Cohn, president of Goldman Sachs, went to Athens to pitch complex products to defer debt. Such deals let Greece continue deficit spending, like a consumer with a second mortgage.
As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.
The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.
It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.
Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.
Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.
…
The fools are still running the show because of the complacency of the idiots who elected them. When hyperinflation is ravaging this country I hope no Republicrat voters have the gall to whine about it around me. We’re sending at least $60 billion to Europe to cover their bad debts and not a peep of protest out of the zombified citizenry over yet another massive Obama/Fed theft of their money and debasement of the currency.
“…at least $60 billion to Europe to cover their bad debts…”
1) Did the TARP similarly tax the European citizenry?
2) Who is printing up the remaining $900 bn in EuroTARP funds?
“…at least $60 billion to Europe to cover their bad debts…”
More like $150 billion.
How did it go from “busting their a$$ to scrape up $40 billion” to “no problem, we’ll just do a trillion”?
Packman, is that all? How much of the package of $1,000,000,000 is IMF and how much if the IMF obligation is ours? My understanding is that the IMF obligation is subordinated to the EMU part so the US is part of the junior portion of the debt that will eat the first losses. Do you know if that is true?
Good question - I haven’t seen anything about the rankings of the debt. I was giving worst case, based on our funding level that we give to the IMF (17%) times the IMF part of this package ($325 Billion) = about $50 Billion, plus the $100 Billion that the IMF and Obama asked for last week for the NAB.
Um…where is the $100 billion coming from? Because unless there is some way they are scraping that out of the cash that is being paid back from TARP, that is going to require a new appropriation and I don’t see Congress jumping all over that with their happy cash buckets. Not heard anyone around DC talk about how we are going to help Europe bail out their banks. Back door stuff through the IMF is one thing. Adding 1/7 as much money as we used to bail out our own banks to a European slush fund to bail out their banks? Not a vote many people want to justify in November.
where is the $100 billion coming from?
You’ll have to ask Obama that.
link
In a letter to U.S. congressional leaders, Obama said the U.S. funding “does not represent a budgetary expenditure or any increase in the deficit since it effectively represents an exchange of assets.”
I guess money that we don’t have is now just considered an “asset”, and buying stuff (or loaning money) is just considered an “exchange of assets” thus doesn’t really have to be handled as an expenditure.
Did some more research. I think that part is just a guarantee. Which means that you don’t need the money now since it will certainly be a few months or a year or two before any default on the new debt could happen. Not sure if we would have to go through some sort of congressional confirmation that we agree to actually pay our part when IMF takes an action that huge. I don’t remember that happening in the past, but I don’t know that I was paying much attention the last time something even vaguely similar to this happened.
I think that means we’re getting some worthless greek mortgages in exchange, right? Hooray! That could never go wrong!
“… exchange of assets”, isn’t that like a hooker’s defence?
A fat Greek indigent cook in every kitchen of every US taxpayer. I’m going to be sick of kabobs and gyros.
Did some more research. I think that part is just a guarantee. Which means that you don’t need the money now since it will certainly be a few months or a year or two before any default on the new debt could happen. Not sure if we would have to go through some sort of congressional confirmation that we agree to actually pay our part when IMF takes an action that huge. I don’t remember that happening in the past, but I don’t know that I was paying much attention the last time something even vaguely similar to this happened.
Isn’t that the same as TARP though? The EESA (TARP Act) wasn’t to actually spend the money, but just to authorize it to be spent by the Treasury if it was needed; only about $350B (IIRC) or so was actually spent. Only the timeframe was different - for TARP it was immediate vs future in the case of IMF, but it seems the principle is the same. If such a likewise authorization isn’t needed for us to give a thumbs-up to the IMF, then why is Obama asking Congress now?
In other words - I don’t really see the difference between this and TARP.
And with TARP of course the expenditures were booked as such at the time of disbursement, even though they also were considered loans. They weren’t booked as expenditures only after (some of) the recipients defaulted on repaying them. And they were booked as expenditures I believe - not as “exchanges of assets”.
“The fools are still running the show because of the complacency of the idiots who elected them.”
“The fools are still running the show because of the complacency of the idiots who elected them.”
C’mon Sammy! The idiots WANT this. They and those they elect are one and the same and all are on board.
Just met another person this week who is levered up on a house in another city (renting it out - it’s an investment!) and bought another for 50-60% more than what I’d consider fair. Now he and his wife want to buy another one here so they don’t miss out on the incredible savings which are sure to evaporate soon!
And I’m guessing another “responsible adult” WILL come along and give them what they paid for the current house! Madness.
Actually, Ezra Klein at the Washington Post says this is very much like TARP in that it isn’t really a Greek bailout anymore than TARP was an FB bailout. Greece still has to pay the restructured debt back just like the FBs have to give back the house and deal with any recourse loan issues. This is a bank bailout, pure and simple.
He said that it was funny that Germany was blaming the Greeks entirely when they would never have gotten here if Deutche Bank, et al hadn’t lent them so much. Despite the absurd pay stuff for Greek government workers (bonus worth 2 months salary? really?), I’m inclined to agree with him.
Sammy, give me something that will move us in the right direction. Sue Swenson, one of the early women CEO’s (PacTel) in the US, had a great saying.
“Don’t put a monkey on my back without giving me a gun or a banana.”
I know that many sheeple have no clue what is going on in housing. They wake up one day in their rental and say, “I want to buy a house.” Then they think about how to do that and contact a Used House Seller(UHS) because the NAR has been successful in associating buy a house with their membership in the mind of J6P. Then the UHS tells them they need to figure out how much they can borrow so they recommend a Loan Shark (LS) who tells them they can buy a Garage Mahal at 3.5% down with a “sophisticated loan” that will only cost them the same as what they are paying in rent per month - for now. But the LS fails to be very clear that at some point the payments will skyrocket and the JTree will be firmly inserted. Some borrowers will be on to this shenanigan and ask about the JTree reset, but the LS will tell them that by then they will have “EQUITY” (insert religious music here) and they will be able to refi to overcome this minor problem. So they will join the ranks of the FB hordes and then one more mortgage will be added to the pool of potential MBS that will be bundled again into the deritives that Banksters are arguing must not be regulated in the new banking regulation and another set of fools and idiots will buy these nasties and the cycle repeats.
Yep, nothing has changed, no one has learned anything, wash-rinse-repeat.
We did all we could to put our truth out there, we spoke the truth as we knew it and it was proven to be so. Ben went on interviews and spoke honestly of the cracks in the foundations of the bubble and suffered the laughter of the Trolls, then later the accolades of the newly awakened. But it changed little because, and you are right on here, we the sheeple keep electing those who will harm us. This side of marching into the sights of the National Guard with pitch forks and axes, what do you suggest we do sir? Contribute a creative solution to go with that furry creature you have so deftly and repeatedly placed on our backs. I may have missed it when and if you did so and if I have I apologize.
When they created TARP I decreased my withholding. I refuse to contribute to any political party. I have 0 debt and am frugal. I openly share my opinions with as many potential FB’s as I can on this train wreck. I am working on a solution that modifies how “representative democracy works”, but that has a lot of i’s to dot and t’s to cross so it will take a lot of my copious free time. I have precious metals on hand, seeds for an acre of food, scouted out escape zones in the hills, an am skilled in the use of firearms and other technologies of self defense. I vote at every election and I research the issues. I am firmly in favor of replacing all incumbents, but fear that it is the system that spoils any humans who take the seats of power.
Thomas Kuhn wrote of the mechanics of paradigm shifts in “The Structure of Scientific Revolutions” in 1962 and I believe this work is germane to our discussion today on housing, government and why nothing has changed. Even if faulty, a paradigm will not be replaced until there is a new paradigm that is proven an acceptable replacement. This new paradigm is lacking. What is it? What does it need to do that will improve our lot?
I believe that the form of representative government we have today is flawed because it centralizes the power in the hands of the few and those few are easily manipulated by special interests to make decisions that benefit the special interests who in turn shower the representatives with power and wealth. It is the dark side of human nature to fall into the traps of narcissism and our system guarantees that the new royal class will be looking out for their own best interests in lieu of the best interest of the citizens they are sworn to represent. I believe we must use our collective intellect to re-engineer out democracy in a manner that eliminates this situation. It is a flawed paradigm that will only be replaced by a new and better paradigm and it is up to us, the sheeple you so disdain, to engineer the replacement as well as the inevitable chess game it will take to see it supplant the current paradigm.
“am skilled in the use of firearms ” thats why I buy two.
If you get stuck, when the time comes let me know. We’ll both be better off. I’ve found a decent assault rifle makes a great gift.
oc-ed,
Great post. That is exactly why I just can’t get worked up over this stuff any more. I’ve practically allowed it to give me a heart attack and if no one wants to benefit from any of our hard fought and collective wisdom.., well then there’s just not a f#cking thing I can do.
I refuse to get ‘invested’ in this. Not again, not back to back. I don’t think ‘any’ of us could take that? Even if you could, it’s just not worth it. I’m thinking “off grid” and calling it good.
A 552 would make me one happy bear with furniture …
thanks DinOR, To see this repeat really does put it into a different perspective and I agree with you about not letting it get me all bent out about it. I am still angry as a wasp - er - let’s say hornet since wasp has too many other meanings - ticked off beyond all comparison is what I am. But standing here and seeing this, again, is what leads me to my belief that it is the system itself that is broken.
My 552 comment was for Cassandra, whom I suspect will know exactly what I mean by such an obtuse reference.
oc-ed,
Right exactly. The truth is.., I just don’t ‘have’ any patience, or anger or disgust or whatever TO invest in it! If you’re here, and reading this stuff and you’re a -day- over 35, there’s absolutely nothing left to worry about?
Best to look toward your ‘own’ horizon and how you’ll fare in the Post Apocalyptic Bubble End Times. Stock up on what makes you the most happy ( vintage guitars or vintage wine ) and let these chips fall where they may.
You are right, there is a window of opportunity that makes watching this get dragged out almost comical. I know I only have so much time to find and buy a place and then get it payed off before my earnings situation will change. It’s a simple fact of life that at some point irregardless of my skills corporate America will cast me out. The best course of action is to find a way to own something to live in outright and have a skill or better yet a small business that will pay the grocery and tax bills.
I have been pondering buying a small cabin with cash and training myself as a gunsmith or armorer. I figure that would be a valuable skill and give me access to the kinds of tools that may become very valuable down the road. My kid will be off to college in 6 years, if there are any colleges left solvent, and since it looks like TPTB will be gaming this system to prop up prices down here in the flats for a while it may just never be an option to buy down here. I have already seen some properties in the mountains at < $30k and just yesterday I found a whole new area to check out as we did a little off roading. It was magnificent climbing up over 5000 ft with mist and winds swirling all about. I really like it up there, just concerned about community or the lack thereof. I like people, well most of em, so I need some form of community. I wish we HBBers could create an intentional community somewhere. Like Galts Gulch …
Cheers,
Ed
I can understand their smug nature: they won’t be paying for the debt crisis - we will.
As for the “gimme” voters, they’ll be paying, too, but since we’re rapidly establishing a new culture that rewards incompetence and punishes success, I think they’ll do just fine in the new Amerika.
Bill in Los Angeles,
I can deal w/ just about all of it ( except the smugness factor ) You have to imagine at some point the infestor crowd was praying for every bit as pyrotechnic a blowout as we were?
This whole Echo Bubble was as predictable as it is boring.
Combo should be happy about this. The bank/government plot to flush out the shadow cash appears to be working. And even worse, there appears to be a fresh crop of knife catchers, just waiting to be mown down.
I guess this is how it’s going to go for the next decade. Every few years, a new crop of young people has accumulated money, and banks release a little more shadow inventory. Prices will never go back to normal.
Sucks for us, but I guess I’d rather have the investors put up the cash than the taxpayers. And the needs of the many taxpayers outweigh the needs of the few HBBers.
“Combo should be happy about this.”
Happy? Do you think I really enjoy this nonsense?
errr, happy that you were right?
It kind of sucks to be right when you predicted a catastrophe, doesn’t it?
What really sucks is when, like me, you predict a regular catastrophe and are mocked by all your friends. Then it turns out the great catastrophe which actually occurs is much worse than you predicted.
“Every few years, a new crop of young people has accumulated money, and banks release a little more shadow inventory. Prices will never go back to normal.”
One flaw in this plan: young people currently have the highest unemployment rate. Without jobs, they will have accumulated that money how, exactly?
Multiple trillions of $$ in stimulus/bailouts buys a lot of jobs. They will come. Just at a price (debt).
Prime_Is_Contained,
Well, young “at heart”. Without the benefit of even having time to lurk of late, it just strikes me that everyone has come to more or less the same conclusion:
All we can do is mind our own business and keep your hands and feet well clear until this feeding frenzy blows over ( if ever )
“I guess this is how it’s going to go for the next decade. Every few years, a new crop of young people has accumulated money, and banks release a little more shadow inventory. Prices will never go back to normal. ”
Agreed.
I see absolutely no ability for my generation to think in terms other than “affordable = spend nearly my entire paycheck and then some.” They don’t get it. They assume endless raises and promotions based upon happy thoughts and delusions of their own abilities. They assume infinite economic opportunity - they’ll never be in a situation where they have to sell their house unless they want to, and even then, they assume they’ll make a huge profit on it. They assume “everything only goes up!” so the only goal is to buy as many “assets” as possible today. In short, they are clueless.
The bankers know this and have helped cultivate this dopey culture where people know the value of nothing but can tell you exactly how much more everything will be worth in a few years. So, sitting on crumbling homes and selling them at inflated prices at a very slow rate would make sense. It prices out real buyers (people who won’t get deeply in debt) and keeps the steady chain of crash and burn, starry-eyed f’d buyers coming. And the banks can magically make themselves whole while clearing out the shadow inventory.
Depressing but true. I used to read this website every day, which was initially helpful for my sanity (”I’m not the only one who sees this!”). But after seeing everybody here being so right about so much so often, and still seeing the same b.s., I quit reading as regularly. I’ve tired of schadenfreude and just want to see a return to some degree of sanity. Looks like it’s not going to happen anytime soon. There’s enough shadow inventory to last at least a decade if not longer. By the time wages inflate to match housing prices, or housing prices fall enough to be affordable, buying a house isn’t going to be an option for me, anymore, anyway.
I’ve just tried to get on with my life, knowing that I’m never going to own a house, and that generally people in the U.S. will on average do worse financially than their parents from here on out. Knowing these things, I’ve been working on trying to set myself up for a low-paying (gives the bastards less in taxes) but rewarding (psychologically) career that I’ll be able to keep doing until I drop dead on the job in my 80’s or 90’s.
Bub Diddley,
Another… great set of observations! Yeah, I’d given up on being part of the bottom feeding crew at ‘least’ by ‘07 and now given up on sane pricing altogether.
But there’s no reason you can’t continue to work on having some property in an out of the way place you like ( sort of ) and work-as-you-go on it?
Thank GOD we were able to talk our eldest daughter out of the debt trap the in-laws were trying to DUMP on them. Right now they’re able to keep their heads above water and lead a decent life. They work on one project at a time ( paying cash ) and have plenty ( well, enough ) left over to have friends over and entertain when they like. That and a little savings used to be good enough. Now everyone wants to play double or nothin’ HB Roulette.
Sucks for us, but I guess I’d rather have the investors put up the cash than the taxpayers. And the needs of the many taxpayers outweigh the needs of the few HBBers.
——————-
Ah, but therein lies the rub…
Since ~90% of the current mortgages are essentially guaranteed or offered by the govt, it is the **taxpayers** who stand to lose anyway.
We are f****d.
“IMHO, the current housing market is still being driven by investors of various stripes.”
That seems right, and the important difference between investors and end-users is that investors typically* buy on speculation that they can buy low, hold for a short while while prices increase, and sell at a profit to some clueless greater fool. If this type is driving the market, it should be assumed unstable and unsafe for anyone except those who enjoy passage where angels fear to tread. The best signal this period has finally ended will transpire when ‘everyone’ generally agrees, “Real estate is the worst investment.”
We’re not there yet.
*There are long-term buy-and-hold investors who want to get into the landlording business, but there are so many ‘accidental landlords’ out there right now (like the investor who owns the home where we live, for instance) that there is an awful lot of competition.
It’s almost like some of these investors think real estate will hold value better than the mellow yellow and they’re loading up as they await the same endgame we do.
One advantage the precious has over real estate is that its transportable.
GLD can’t be air conditioned to keep the heat at bay.
Plant some carrots in your gold and see how it helps you in the ‘end game’.
As distressed sales become more common, I believe that we’ll see some shrinking of the huge price differential between forclosure/pre-foreclosure auctions and brokered sales before this whole thing is over. I think this will tend to squeeze a fair number of these flippers out.
We’re Number 1 again, at least in the housing bubble boomlet price increase department. And Zilldo says that ‘given current conditions’ (whatever that is supposed to mean), prices will stay above their 2009 nadir from here on out. If Zilldo says it, then it must be so.
P.S. Good luck at finding a livable San Diego home priced to sell at $364,800!
San Diego leads nation in rising home prices
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Monday, May 10, 2010 at 12:04 a.m.
Online: For the complete real estate report, go to zillow dot com/local-info.
San Diego County led the nation in rising home values in March even though prices nationwide dropped 3.8 percent, according to a report released today by Zillow dot com.
The Seattle-based company, which provides consumers with estimates of specific home prices in addition to trends, said San Diego County values rose 3.7 percent to $364,800 compared with March 2009.
Five other markets, including four in California, showed a year-over-year increase out of 27 tracked.
“Home values in those markets have risen significantly for at least the past 10 months after values in all five markets reached a low point in April or May 2009,” Zillow said of the California markets. “Although home values could fall again, it is more likely, given current conditions, that they will remain above their lowest level reached last year.”
…
The bottom end of the Zillow chart which accompanies this article contains some eye-popping figures, especially for certain flyover country housing markets:
- Atlanta -6.4% (HI EDDIE
)
- St. Louis -6.8% (My sister owns two homes there, one she still hasn’t quite gotten around to selling since buying a nicer, bigger home in December 2006!)
- Portland, OR -6.9% (Recently visited a friend there who is in a similar situation to my sister)
- Phoenix -13.9%
- Las Vegas -18.2%
- Detroit -18.8% (How much farther down is it from here to the bottom of the pit?)
By contrast, SD could only muster a paltry 3.7% YOY gain, despite myriad housing stimulus programs that were in play. I am thinking the tepid rate of price appreciation isn’t nearly enough to cover flippers’ carrying costs at this point…
You’re not supposed to factor in transaction costs, carrying costs, taxes, etc. when flipping (or so I’ve been told by plenty of clueless infestor wanna-bes.)
Just take the number you paid, add a magical “jackpot” amount to it based upon how much cash you want to have, then subtract the amount you paid and you get your Happy Housing Bubble profit number! Because everything only goes up!
Detroit
I’m just laughing.
Will be moving down to Carlsbad in a couple months. Got room on the couch?
Thinking of San Marcos? Any thoughts on renting there?
“Got room on the couch?”
We had a teenage runaway sleeping on it last week (well, not quite — let’s just say our daughter’s close friend has serious issues relating to her parents). The problem is that it sits directly below our waterbed; don’t know how it will do if a magnitude 7.0 quake hits nearby without warning.
“Thinking of San Marcos? Any thoughts on renting there?”
Stay away from fire-prone areas, and good luck at finding those.
Wow. I haven’t seen a waterbed in quite a while.
If Zilldo says it, then it must be so.
I recently looked at the Zillow stats on a place - the Zestimate™ was for $370k. Last sale price? $180k
“Nothing has changed. No lessons were learned (yet). The fools are still running the show.”
Same here in Maryland. People overbidding, people without money buying houses, “housing only goes up!” nonsense still believed, etc.
The Bubble is only spoken of in past tense here, as if it was some strange event, like a spring snowfall, and now that it is behind us, we can get back to the business of flipping houses, watching prices increase at double digit rates per year, and buying places we can’t afford to look in future gains forever. It is scary and shows a complete disconnect from the basic laws of economics, but that seems to be the way things are.
It may not be “different” here, but people are sure acting as if it is!
Pondering the Mess,
We’re even dropping any pretense that “they aren’t making any more land” or working off long debunked boomer hoarde models etc. It’s just naked, unadulterated speculation.
Sadly, it’s somehow reassuring that so many seasoned posters have come to the same conlusions I have over the last few months. I was walking passed a Flop the other day and there was a whirr of activity all about. I asked a 20-something if he was part of the “clean up crew” ( hoping to elicit a response ) and boy I wasn’t to be disappointed!
Smug/smirk response? “Yeah, something like ‘that’! ” I swear, for years we said the only way to stop a realtor was driving a wooden stake thru their heart. Now the same is true of Flippers. Still no buyer.
While they have no skin in the game, this time around, the buyers are far more likely to afford the payment. At $500k, that home was a ticking time bomb. At $225k (bought for $180k at the foreclosure sale), the buyer can actually make the payment. That is the fundamental difference between then and now.
“She said the pros are buying everything at the low end.”
That’s what separates the pros from the greater fools — they presumably know where lies the true ‘low end.’
But even these guys may end up surprised if home prices take another dive over the next three years to ‘lower-than-expected’ levels.
Well, oc-ed here’s their thinking in Costa Amazing:
(And by extension, any location nearby a wealthy desirable area)
The SFR is 5 minutes from Newport Beach, and in a smart car that’s about .12 cents
yup! Man, I don’t even go to the beach in the summer, it is a zoo. I go a lot off season.
go to the beach in the summer, it is a zoo ??
Ditto here…We do our Beaching from February to June 10…Then back again after September 20….Two reasons…The little sprogs (tm Tchic) are gone and the “Jumbo” sprogs are back in college.
This is part of the goal. Churn is good.
Sell houses to various people who can’t afford them. Make a fortune on the churn while the people get into debt and eventually lose the houses.
Then, sell the houses to more infestors. They can swap them back and forth, sell them at inflated prices to buyers, etc. Just so long as more debt is piled on, more commissions are made, the houses keep swapping hands.
A banker’s worst nightmare is a fully paid off house owned by somebody who doesn’t intend to move.
Pondering,
Right, like shipwrecked survivors eating and purging so the next swabby on the boat can at least feel like he has something in his gullet, matey.
And I think we all know what comes next.
I’m afraid you’re right PtM. Churn is the REAL name of the game of our economy.
ecofeco,
I must get 3 calls a week from some bright young enterprising fellow with plans to set the CRE world on fire! They’re going to buy malls for pennies on the dollar etc. etc.
Of course none of it is going anywhere but that doesn’t mean there won’t be a fresh crop ( of equally enthusiastic ) specuvestors right behind him!
Churn is good.
Pondering the Mess
I worked for a franchise owner who loved the model of churn. He was an Ex-Produce Mgr, who’s wife became a R E Broker (This guy could barely read. He married up big time.) They didn’t care about anything other than commissions. They loved to see the house back on the market. New idiot, possible new listing, new loan, more commissions. It was amazing. I was glad I had a real job, when the auditors came a knock’n. Those two were slim with a big “S”.
We’re going to be a banker’s worst nightmare.
Off course it’s not over. The banks got bailed out. We just gave more crack to a crack addict.
It will end the same way a crack addict ends their habit. Now think about how many ex-crack addicts you’ve ever known.
Get the picture?
Speaking of which, what happened to Ate-up?
The pros will stop when the realize the rental market sucks. Every one thinks they can get rich being a landlord. If they only knew…
After talking to a few folks who are actually doing this, one of the groups they are on the phone with are people actually in cars looking at houses. The information about the bank’s credit bid may not happen until relatively late, so folks literally have guys driving around looking at the houses while the auction is going on.
If they can’t get to the house before the auction, they don’t bid. They will also have someone checking on title for the property. They want to confirm first that the house doesn’t have a title issue and second that the house hasn’t been trashed. Even then, they are not buying unless they know they can get their margin based on recent comps.
As an investor, I understand the opportunity. My concern is the competition and the duration of the opportunity (some of the guys doing this wanted money contractually for a few years, the opportunity might not last that long). The opportunity is quickly getting squeezed out since there is more capital chasing the foreclosures, and the margins are getting squeezed. A few mistakes in terms of not getting the physical nature of the property right and your margins go right out the window. No thanks.
Get ready for the mother of all stock market rally’s today.
Do you think Goldman was telling clients to sell on friday while they were loading the boat?
+404.71. Good call.
Damn!! My China short, just gave up it’s 10% gains from last week! I am glad I am still 90% in cash, sleep is important.
Phew…It’s all good, just throw a trillion at it. Worked for us why not follow the leader.
EU Crafts $962 Billion Show of Force to Halt Crisis (Update2)
May 10 (Bloomberg) — European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stop a sovereign-debt crisis that threatened to shatter confidence in the euro. Stocks surged around the world, the euro strengthened and commodities rallied.
Similar to the Paulson’s big Bazuka…
Let’s see in a few days if it would really work.
Don’t know whether the Eurobazooka is going to work, but I do have a few questions about it:
1) Seems like stocks crashed globally for maybe the next half a year following the TARP announcement; will the Eurobazooka have a similar panic effect on share prices going forward?
2) Was Fat Finger Boy’s typo last Thursday a prelude?
3) If so, was he trading on insider information?
4) If yes, where did he work, and who tipped him off?
It is rather odd, but we live in bizzaro world so must think like we do. Of course the U.S. offering more support than expected either means the government knows the problem is much more serious than we do, or the government doesnt care about giving our money away. Either case shouldnt be viewed as a positive.
Look on the bright side: At least the stock market is rocketing up today, which proves that investors know this massive bailout is the right course of action.
Schapiro and Gensler to testify on market plunge
WASHINGTON (MarketWatch) — Securities and Exchange Commission Chairwoman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler are scheduled to testify before a key congressional panel on Tuesday about whether there is a need for industry-wide risk controls in the wake of Thursday’s extreme market plunge, officials said Monday. The Dow Jones Industrial Average dropped almost 1,000 points on Thursday before swiftly rising to a 348-point loss.
Are they going to investigate today’s melt-up as well?
Are they going to investigate today’s melt-up as well?
—————-
Good question. Funny how they’re all bent out of shape when it comes to short sellers or falling markets, but when things go UP, it’s all good.
Uhm. I wondering if I made the right guess.
A lot of people fleeing the Euro to the dollar might float the market?
Things should work out well with human nature being what it is!! If I see my neighbor being bailed out how long before I want to be bailed out too. Do Spaniards feel themselves superior to Greeks, or Italians to both?
I think the IMF has more than a tiger by the tail here and it ain’t gonna end nicely.
Furthermore, do American FBs consider themselves superior to financially reckless fat Greeks?
+1
I cannot figure out the reaction. Asian markets react well, European stocks love it even more. I would say because it is inflationary, but gold fell a bit. So maybe investors are looking for quick gains. European stocks, paid for by dollars and gold.
“I cannot figure out the reaction.”
Since the TARP panicked world stock markets, you have to figure the IMF/FED folk would have budgeted a little up front liquidity bond to calm world markets when they announced the EuroTARP.
They’ve learned how much of our money is needed to paper over the crisis created by spending even more of our money. Good thing this all somehow makes sense or I’d be worried!
They feel so big and bad pledging more money than we can comprehend and pat themselves on the back as a new bubble forms (look what we did mommy, look, look), not realizing or caring it will eventually fall back to equilibrium without repeated injections and we are all a little worse off because of it. This has become a sick and twisted addiction.
Is there any precedent to this worldwide bank insanity? South American countries were notorious for getting into major monetary crises in the 1970s and 1980s, but were bailed out by the big stable (in those days) developed nations and of course IMF.
The real question is “who will be left to to any bail outs?” This is massive fiddling by grasshoppers. This is a big game of musical chairs and all of the remaining chairs will be taken away - and everyone left standing.
How is it going to end? The bank window will close and the teller (whose real job is to “tell” you…) will tell you “sorry, there is no money in your account.”
So I’m told that cash is king? Maybe if I had it under my mattress. But I think otherwise everyones deposits stored electronically will be reset to zero at some point and it could be in our lifetimes. That’s how they will default. That’s why I still hold physical bullion - the electronic form will be reset to 0 too, I’m thinking.
deposits stored electronically will be reset to zero at some point ??
Then does debt get reset to zero also ??
Bill, there is no reason to reset to zero, when you can move the decimal point one place at a time without any of the sheeply being the wiser.
Reset would lead to uprisings. Slow reset via decimal-point moves do not. Which route do you think will be chosen, when the outcome is the same?
“That’s why I still hold physical bullion - the electronic form will be reset to 0 too, I’m thinking.”
Anyone stupid enough to hold “electronic” gold deserves to lose their @ss. What an absolute joke.
I have over $1 trillion dollars of “virtual gold”. Would any of you like to purchase some? Just send me cash and I will transfer the gold vouchers to your online account. Cash takes thirty days to clear though.
“Anyone stupid enough to hold “electronic” gold deserves to lose their @ss. What an absolute joke.”
I’ve been holding some for the past couple of years, and I’m pretty sure I could sell it at any time for a nice gain.
Whether or not it is back by physical, the price has to track fairly closely, or the alleged sham/gig would be up.
That’s really all I care about, since I don’t really buy the mad max scenario.
The only way this thing works is world wide insanity.
If there is a currency that isn’t debasing itself to save the banks everyone will flock to it. Thus the need all major currencies to participate.
It’s the same reason I’ve predicted stagflation rather than inflation or deflation. If everyone gets convinced it’s inflation or deflation the jig is up. It’s like a tight rope walker lowering his bar to much on one side. At some point he can’t recover.
Right now the tightrope walker is on the wire and his bar is going up and down in wild abandon.
The Fall of the Roman Empire would be the precident. And the dark age will last 10000 years….
…. unless a small foundation can be formed to store all of human knowledge….
It’s supposedly not inflationary, as the ECB will be offsetting any bond purchases with the sale of other assets.
To whom? Where will the purchasers of these assets get their money?
The printing press?
They can sell the sucker bonds to pensions or something… that works well here!
Yep we’ll need to get the rating agencies to stamp the stuff with AAAA status and get GS to go on Bloomberg and tell their clients this is the best stuff since sliced bread.
I cannot figure out the reaction. Asian markets react well, European stocks love it even more. I would say because it is inflationary, but gold fell a bit. So maybe investors are looking for quick gains. European stocks, paid for by dollars and gold.
My take is that gold is flat for that reason, and also because we’ve just come out of the latest “oh s***” moment, however the floor price of gold just got raised a few notches.
The floor price being what where it would be if/when we ever truly get back to a normal stable economy again.
KaBoom: Britain And Now Germany
Britain is refusing to underwrite the so-called “Euro Stability” fund:
But the loan guarantees are too much for the UK to swallow, and the Treasury will have nothing to do with them. Without them the package looks pretty thin.
It also appears that Merkel lost her majority in the German Parliamentary elections, which means her Greek bailout support has now cost her the coalition government she previously enjoyed.
That, in turn, means that it is very likely that Germany has provided the last support it is going to be “contributing” (more accurately, being extorted from German citizens at gunpoint) to Euro “stability” as well.
Here comes the fun folks, pretty much exactly as I expected.
Anyone want odds on the Germans returning to the Deutchemark?
To the banksters: Bonne chance.
“But the loan guarantees are too much for the UK to swallow, and the Treasury will have nothing to do with them. Without them the package looks pretty thin.
It also appears that Merkel lost her majority in the German Parliamentary elections, which means her Greek bailout support has now cost her the coalition government she previously enjoyed.”
I’m sensing a really great chance to buy the dip may soon materialize; stay tuned and don’t miss out!
Maybe that’s where the Fed’s contribution comes in, to smooth things over with any dissenters?
Talk about money laundering!
How could the Brits be bound to support the Euro since they have retained the Pound Sterling? There is no controlling central “European Government” to which the UK belongs: neither are they a Euro country.
Is this proof of their wisdom in not abandoning the Pound?
“The sun never sets on the British Empire because even God doesn’t trust an Englishman in the dark.”
There is no controlling central “European Government” to which the UK belongs: neither are they a Euro country.
Yes there is, and yes they are.
Packman,
Notice my word “controlling”. The EU is not yet a “government” which can issue orders to the UK which the UK is bound to obey. As far as the Brits are concerned, the Euro is a “foreign currency”.
The EU is not yet a “government” which can issue orders to the UK which the UK is bound to obey.
You should learn more about the EU - it’s more powerful than you think. E.g. they were responsible for removing passport restrictions between member stats - no small feat.
Nevertheless, there are many different types of power than legislative - e.g. economic blackmail, excuse me “influence”, (such as exists between China and the U.S.)
Actually I’ve read up a lot on the EU. The various proposed treaties of union (Maastricht, Amsterdam, Nice, Lisbon) have never been ratified by all the countries involved and have been flatly rejected by certain countries when put up to a vote in a plebiscite.
I’m actually writing a book whose thesis is that the UK should drop the EU and instead join the US as a collection of states.
Talk to me when you’ve actually written your book.
Kidding - seriously - so much of the decision-making of these guys is based not on what’s written in the law but on what’s politically expedient. Britain’s fortunes are as you say of course very tied to the U.S. - in most cases probably moreso than their more-local neighbors.
However even across the Atlantic, the U.S. is committing tons of money to this bailout - money we don’t have of course.
I really hope Britain doesn’t cave on this, and indeed just refused their requested part of the funding. I’d be willing to bet though that enough pressure will be brought to bear on them that they will cave.
How likely is it that Britain wants to get it’s pound of flesh. No time like now to ask for gifts from Europe and the US in exchange for it’s help.
I’m actually writing a book whose thesis is that the UK should drop the EU and instead join the US as a collection of states.
Why the heck would we want the UK? You can already buy HP sauce here. What else have they got?
DennisN,
Interesting theory. One of the reasons I may get behind that is, our trajectory into their very same social structure has been greatly accelerated!
We have more in common than many of us might imagine.
“…the UK should drop the EU and instead join the US as a collection of states.”
For many
practicalcorporate/financial/political purposes, it already is.Packman,
I recommend “The Great Deception” by Christopher Booker and Richard North (book’s subtitle is “The Secret History of the EU). It’s about how the UK is getting bamboozled by the EU, and just bends over and takes it. E.g. the EU sends over a raft of regulations and the UK parliament just rubber-stamps it into UK law. And the EU regulations have NO force of law until AFTER the UK parliament OKs it.
Note - after looking at this more - this came out before last night’s package, and refers to Britain’s reaction to the previous bailout package.
Britain has agreed to the 750B Euro package, though apparently grudgingly, and attempting to minimize their own contribution. It appears worst case they’d be on the hook for 15B Euro.
It`s only a trillion.
There are one million millions in a trillion.
One trillion is 1,000,000,000,000. That is 12 zeros.
One trillion is more stars than there are in the entire Milky Way galaxy.
Trillions in Time
One million seconds will pass in the next 12 days.
One billion seconds will take 32 years.
One trillion seconds will pass in 31,688 years.
Some highlights from a trillion seconds ago.
30,000 – 1,000 BC
Historical Events BC
30,000–20,000 Blade tools of bone and antler. Bone fragments with markings.
First sculpture: female figurines. Stone spear points. Body ornaments. Ceramic articles.
Complex burials with grave offerings.
Pictographs appear suggesting an early form of visual communication.
20,000–10,000 Invention of eyed needle. Tailored skin clothing. Spear–throwing device.
Stone oil lamps. Cave paintings. Barbed harpoons. Bow and arrows. Early rope.
First settlers fom Asia in New World. Six–hole flute.
10,000–5000 End of Ice Age. Domestication of sheep and goats.
Cultivation of wheat and barley. Introduction of pottery Mining of copper.
ca.5000 Linen produced in Middle East.
4241 Earliest date in Egyptian calendar.
3760 First year of Jewish calendar.
ca.3300 Wheeled vehicles, plows, sailboats, potter’s wheels, and writing paper appear.
ca.3100 Cuneiform writing developed by Sumerians in Mesopotamia, now Iraq.
ca.3000 Baked bread, brewed beer, minted coins, and astronomical observations appear.
2750 Epic of Gilgamesh, King of Uruk.
2680 Pharaoh Khufu (Cheops) begins Great Pyramid at Giza.
2500 Papyrus and bows and arrows introduced.
2258 End of Old Kingdom in Egypt.
ca.2000 Bronze Age in Western Europe.
ca.1800 Stonehenge, England, active as religious center.
ca.1750 Code of Hammurabi in Babylon—the first written legal system.
ca.1700 Phaistos disc found in Crete and still undeciphered.
ca.1500 Moses receives Ten Commandments on Mt. Sinai.
ca.1385 Pharaoh Ikhnaton attempts to establish a religion with sun god Aton as supreme god.
ca.1350 Tutankhamen becomes ruler of Egypt.
ca.1200 Troy destroyed during Trojan War. Iron comes into use.
ca.1075 Collapse of Assyria.
ca.1002 Saul becomes first king of Israel.
ca.1000 Phoenicians import tin from Cornwall, England. Camels in common use in Middle East.
ca.850 Moabite stone of King Mesa written in early Semitic alphabet.
ca.700 Cypriotic syllabary written with fifty–six signs representing syllables.
1 trillion molecules of H2O = 30 picograms = droplet 3.9 microns in diameter.
If 1 trillion mosquitoes farted at once…the universe would explode.
jeff saturday,
Great point of ref. Too funny. Maybe it’s time more of us gained from that perspective? Oh well, I’m off to drink a trillion beers. I’ll let you know when I work my way thru ‘em.
What could possibly go wrong?
Taxpayer revolt.
Taxpayer revolt ??
Not yet, but it is coming…And it may be a revolt of “non-compliance”…That then will reduce revenue further in the face of insurmountable obligations…Keep a eye on California…
Ka-Boom…
Increase tax deductions to max, stop all unnecessary spending, don’t bank-just use cash for everything possible, barter, shop on ebay, craigslist, thrift stores. Start Jan 1, 2011. It wouldn’t take long to get the message across. By April 15, 2012, tax time, maybe? Then we wouldn’t even be breaking any laws.
Thats what I really meant by “Non-compliance”…Tax avoidance by all the means you mention and some…
Tax payers won’t revolt until 1 of two things happens.
1. Massive unemployment with no unemployment checks.
2. Massive inflation
oh one more
3. American Idol is taken off the air.
#1.. Almost there….
#2.. How about Stagflation ??
#3.. OMG !! Not American Idol !!!
I’m not going to advocate any of those extreme measures and I certainly hope things don’t come to that. But the truth is, a lot of people are just barely getting by. Especially the self employed.
How much of a shove would it take for them to simply ‘not’ be able to afford to pay their taxes and stay current on everything else? May not be a matter of ‘wanting’ to?
Your correct DinOR…They are barely hanging on but that who they want to tax more…
Wait… what was that about American Idle?
Just wanted to comment on this post from the other day:
Comment by eudemon
2010-05-08 19:17:46
“I don’t disagree with the tea baggers. But personally find it dangerous.”
Cassandra - yeah, it is potentially dangerous, especially if government stooges attempt to silence them.
Consider the alternative….more dangerous is what the government/corporatist will do to all of us if allowed to continue on their current path.
Nefarious people only succeed if the good allow it. Time to take a stand. Now.
———————-
First, a couple of things:
1. The Tea Party came about because of Rick Santelli’s rant against the bailouts of FBs and banks.
http://www.youtube.com/watch?v=bEZB4taSEoA
It had nothing to do with “smaller government” or the Constitution.
2. You commented on the govt trying to silence the Tea Partiers? It’s already done. They have distracted people from the original purpose of the Tea Party movement — THE BAILOUTS (which almost all HBBers could agree with, regardless of political party), and co-opted the movement by installing Republican “leaders” in the TP movement and changing the focus to more emotional “patriotic” nonsense that could get people riled up, but didn’t pose a threat to those who are REALLY in power.
3. If one wanted to get cynical about it, one would have to ask who benefitted from this shift **from the opposition to bailouts** to more vague “patriotic,” pro-Constitution/smaller govt/anti-socialized medicine issues. These were never part of the original movement’s goals.
IMHO, the almighty financial institutions are behind this shift. They were scared to death that there was a REAL threat from angry citizens (and there was a real threat), and they took over the movement to once again guide the sheeple to their will.
I don’t consider myself a Tea Party type, mostly because dissent can be dangerous. I distrust government so much that I don’t want to be put on a watch list. But Sara Palin has been trying to take over the Tea Party as her own. That’s the clincher for me not wanting to be part of it. I cannot stand Sara Palin! The Republican Party has been at least as nutty as the Democrat Party since the Moral Majority hijacked the RP in the late 1970s. When some dingbat promises with the help of her imaginary friend to take over the tea party, the revolution has died before it began.
+ one trillion
you nailed it Bill
you can’t just throw a trillion around like that, its inflationary.
Maybe she’s a plant? A toxin administered to kill off a challenge that’s far more unsettling for the status quo. If so, it’s working very well for the them.
Republicrats co-opting the Tea Party movement is no stranger than Christians co-opting pagan holidays. The principle in play is exactly the same.
I totally agree Bill…
I don’t consider myself a Tea Party type, mostly because dissent can be dangerous. I distrust government so much that I don’t want to be put on a watch list.
Dissent is a necessary part of democracy/freedom/liberty (choose your own buzzword if needed) — I have no problem whatsoever with the Tea Bagger’s dissent per se. If the entire populace is afraid or unwilling to express dissent, our entire system becomes stagnant.
I do have issues with their agenda, motives, and unacknowledged string-pullers, however (Dick Armey et al).
I’ll take an oath to write them a check and get involved locally when:
1) They repudiate imbecile-like morons. Palin and Armey top that list.
2) Repudiate the Chicago school/borrow and spend/Laffer “theory/supply-side failure.
3) Abandon unquantifiable bull$hit pseudo-issues like abortion, flags, guns and gays
4) Develop a top 5 action item list that includes Dept of Defense spending cuts(hardware, wars, etc)
5) And first and foremost, a specific plan to reel in Wall Street/Banks and a sense of urgency as it relates to indicting the financial thugs under RICO (Ken Lewis, Mark Zandi, Lereah, Yun, the decision makers at MBA, the rating agencies, leadership at Phoney and Fraudie, etc etc)
http://www.washingtonpost.com/wp-dyn/content/discussion/2010/05/05/DI2010050502168.html
Q&A with Judson Phillips, Founder of Tea Party Nation.
I don’t think that cutting defense spending is on his agenda.
I don’t think that cutting defense spending is on his agenda ??
We need to re-think what “Defense” means…Get out of the “Neanderthal” boots on the ground thinking…The majority of the “Boots” on the ground should be right here at home with the National Guard…
I’m with you.
scdave, you can’t defend the corporate/banking’s international interests like that.
Actually, that’s a little lopsided. Our military does perform a lot of humanitarian acts around the world.
And honestly, if we weren’t there, the Russians or the Chinese would. Don’t ever believe otherwise.
But it wouldn’t hurt to pull some of that back. 700 bases worldwide. I mean, come on.
“I don’t think that cutting defense spending is on his agenda.”
Then the TeaParty doesn’t really mean what they say when it comes to spending.
I consider myself to be very progressive. But yeah, if the Tea-Party did all those things, I’d join the movement as well.
So…you’ll join them when they become Democrats and then do something the Democrats would never do? Why not just save time and try to get the Democrats to do that which they will never do?
Hwy’s applauding Mr. exeter…
My siblings my always still be “TrueHypocrite’s™” but I know that they truly do not want to see America be “all evangelical” either…less hypocrisy, more tolerance…it’s doable…
Kinda like Virgin Atlantic’s motto: “Less commitment, more love!”
I think we’ve seen a lot of distracting people by shifting the focus of their discontent to “hot button” social issues in the past few decades.
Easier to have people ignore their true economic issues when they are emotionally worked up over issues like evolution, non-traditional marriages, etc.
You NAILED it, WHY! It’s like a pickpocket diversion and that’s exactly what happened/is happening. Most people don’t get it and would rather blather about abortion, gay rights, etc. In fact, sex is used to distract people from money. War, too.
Absolutely agree with you guys, 100%.
These emotional issues are how they control the masses…and keep them distracted from what’s really important.
CA renter,
Great observations to begin with and thanks for re-centering the debate. You’re absolutely right, from it’s infancy, all they were asking was to Stop The Bailout!
Plain and simple. And yes, I ‘did’ worry the whole movement would get hijacked for whatever agenda people thought they could feed into ( a finally ) positive feedback loop?
If they re-center they’ll be just fine. Mindful, a good many of these people had never been pol. active at ALL prior to the Bailout-athon.
Wait…. did you say something about American Idle?
I find it amusing that the evangs are so worked up over “non-traditional marriage” when their “unbiblical” divorce and remarriage rate is even higher than the rate of the general population.
And here’s the latest closeted gay “Christian” hypocrite to violate the very values he harps on everyone else about….. Oh yea…. He’s from the “Family Research Council” which is the sister organization to James Dobson’s Focus on the Family.
What a bunch of freaks.
http://tinyurl.com/2bzrrsv
Ted Haggard for the lols! I remember seeing him in Dawkin’s documentaries, then when I heard about his bust it was pretty amusing.
I find it amusing that the evangs are so worked up over “non-traditional marriage” when their “unbiblical” divorce and remarriage rate is even higher than the rate of the general population.
Do as we say, not as we do …
They don’t care if the US goes economically communist as long as they get to cram their religion down our throats. That is why I reserve hatred for social conservatives. I hate to use the word “hate,” but they have been most damaging to the free market cause.
The only thing worse than a rapture evangelical is a re-born rapture evangelical.
Doesn’t the former imply the latter? What I’m saying is that all evangs are “born again” (in theory all Christians are reborn, but it has a slightly different meaning for evangs).
Goes economically communist?
We’ve been corporate communist since the mid 1970s.
“Doesn’t the former imply the latter? What I’m saying is that all evangs are “born again” (in theory all Christians are reborn, but it has a slightly different meaning for evangs).”
I’m not clear on the former/latter case. Are the children in a rapture evangelical family raised neutral so they can later decide their own beliefs and fate?
“First, a couple of things:
1. The Tea Party came about because of Rick Santelli’s rant against the bailouts of FBs and banks.
http://www.youtube.com/watch?v=bEZB4taSEoA
It had nothing to do with “smaller government” or the Constitution.”
MEGA BS
I sure hope you didn’t pay too much for that subscription.
1. The Tea Party came about because of Rick Santelli’s rant against the bailouts of FBs and banks.
http://www.youtube.com/watch?v=bEZB4taSEoA
It had nothing to do with “smaller government” or the Constitution.
Wrong.
Santelli’s rant was on Feb. 19th, but the tea parties started before that, in direct response to the TARP and to the Stimulus bill. The first intended “commemorative tea party” (not sure if it happened, the info isn’t there on the server anymore) was for Feb 1st, as proposed by FedUpUSA.org, which is a group actually quite similar to the HBB, in being focused largely on the corruption in and around government. Other tea parties happened in February as well, but it didn’t really start to get organized until later in the spring.
And of course it was about big government and the Constitution, since that’s what the protests were all about - the TARP and stimulus were the government going beyond its constitutional bounds.
It very much did start as a grass-roots thing focused on government spending, though as mentioned was co-opted eventually by the more general conservative movement.
It very much did start as a grass-roots thing focused on government spending, though as mentioned was co-opted eventually by the more general conservative movement.
Which is why folks like Yours Truly declined to join.
Arizona Slim,
( Well, I’m not a member either ) but, no group or club or party is perfect. If you can get on board w/ 75% then hey, whatever.
I ‘do’ think it’s wrong to withhold support for something you believe in most part, simply b/c of a minor issue. I know you’re not The Princess & The Pea and do a LOT locally, but it wouldn’t hurt for us to share w/ them that if they’d get their focus back, we’d love to join!
Actually I should caveat that. The Tea Party as a nationally-organized movement does appear to have been largely prompted by Santelli’s rant. However lots of local protests happened before that.
I think the theory is that his rant was a staged advertisement.
CNBC Asks Santelli to React to Tea Parties: ‘I’m Pretty Proud of This’
Chicago Mercantile Exchange floor reporter and taxpayer tea party revolt inspiration calls movement ‘about as American as it gets.’
By Jeff Poor
Business & Media Institute
4/15/2009 9:25:04 AM
While Fox News has celebrated the Taxpayer Tea Party rallies and MSNBC has denigrated them, the impetus of the movement – CNBC and specifically Rick Santelli, its inspiration – had been conspicuously quiet about it.
But on CNBC’s “Squawk Box” April 15, co-host Joe Kernen asked Santelli what he thought of being a “cultural phenomenon.” That was the same show Santelli famously called out President Barack Obama for the unfairness of his housing bailout proposal on Feb. 19.
http://www.businessandmedia.org/articles/2009/20090415092104.aspx
————————–
IMHO, without Rick Santelli, the Tea Party movement would have amounted to nothing. I was reading and linking to FedUpUSA at that time, too.
The TP movement was co-opted by the Republicans who stirred the pot with the “emotional” issues of the right wing. What it was originally about (against the bailouts) would have easily gone viral, as almost everybody at that time (irrespective of political party) would have gladly done whatever they could to oppose the bailouts of “fat cat banksters” and FBs.
Sorry guys. It’s ALL ABOUT THE BANKS AND FINANCIAL INSTITUTIONS. They were afraid of the original Tea Party movement and quickly moved in to plant their own agenda to distract the masses.
You’ve been had.
CA renter,
Oh, agreed. I was just starting to get excited about something for the first time in a long time and… it just died on the table.
I still believe there is something to get behind, but now they’ll have to use valuable energy getting rid of the parasites first.
Sorry guys. It’s ALL ABOUT THE BANKS AND FINANCIAL INSTITUTIONS. They were afraid of the original Tea Party movement and quickly moved in to plant their own agenda to distract the masses.
You’ve been had.
Bingo!
I still believe there is something to get behind, but now they’ll have to use valuable energy getting rid of the parasites first.
It won’t happen.
The only hope is for a brand new movement to get started that makes it clear from the start - perhaps even from some kind of stated mandate, that it’s all about stopping economic corruption and wasteful spending, and is not to get involved in social issues.
But it’s tough - there are some things that blur the line - like immigration, outsourcing, and unemployment benefits. These are both economic and social issues.
I’d like to see a single-issue grassroots movement that is dedicated only to financial reform (including bailouts).
It should stipulate that it is 100% non-partisan, and there would be zero tolerance for any political divisions.
Nothing else. Not other types of “wasteful” spending (because “wasteful” depends on one’s perspective), not tax reform, nothing. Just financial reform as it pertains to the Federal Reserve (full transparency and accountability), and the banks (insured institutions cannot engage in investment banking and cannot engage in proprietary trading, etc.).
We don’t care about what happens to non-insured institutions, as long as they don’t pose a systemic risk…and they are NOT going to be bailed out by taxpayers.
Also, it’s time for some indictments. It’s been too long now, and nobody is in jail yet!
The Tea Party was a necon construct from the git go. I heard about the first protests promoted on Limbuagh, Hannity and O’Reilly.
My, my how people forget.
I don’t think it was a neocon construct, but it was picked up by them early on, and co-opted as many say. That all happened in March, in prep for the big set of them on tax day.
You’re right, but the neocon media talking it up almost at its inception was where I stopped giving it any credibility.
2 of the top 5 headlines in the money section of the Palm Beach Post
Top headlines
U.S. job growth hits four-year high
Call it a ray of sunshine breaking through stormy skies: The U.S. economy added 290,000 jobs in April, the biggest monthly gain in four years.
Then 3 headlines down.
Nearly 142,000 Floridians out of unemployment benefits.
Believe that if you want to.
ADP does most payrolls and the gain was very modest. They also don’t count temporary govt jobs like the census.
Govt model is based on a bunch of birth death models. When the market goes up they apparently increase the gains in the old spread sheet.
Good luck.
You have to love the blatant doublethink going on recently. Employment is up and in the same paragraph, unemployment is also up.
Ye… ah.
jeff,
Here in Oregon we’re calling it “Club 99″ ( for the 99 weeks of unemployment benefits! I have a good friend who claims UN was the place to be during all of this!
1) The man can’t “hassle” you about your mortgage!
2) You don’t lay awake nights worrying if you’ll get laid off!
3) No sweating whether there’ll be a wage reduction.
4) Zero anxiety over reduced/eliminated 401k contributions!
He’s got a whole list ( but in a way, I think the man has a point? )
Real Estate’s Far Reach to Continue to Pinch ~ WSJ
Highflying property prices drove the most-recent economic boom, and a collapse in real-estate values hammered it back down. Now, as the economy struggles to regain strength, real estate is expected to continue to act as a brake, rather than an accelerator.
Despite clear signs of revival in the larger economy, including upturns in manufacturing and consumer spending, the nation’s market for homes and office buildings remains mired in foreclosures and oversupply. That imbalance will be worked out over time, but in the meantime, it is slowing the recovery in myriad ways.
I was wondering, what ever happened to the commercial crash?
what ever happened to the commercial crash ??
Its happened and happening…
I don’t know. It’s chaotic, I’ll grant you that. Just not seeing any dime on the dollar screaming Buys out there and all the Vulture Funds have turned out to be All Wing ( and no beak? )
Hey we didn’t need it anyway! All of those waiting for the other shoe to drop have had a horrific Nike delivery truck accident on the I-5 overpass. Take your pick, CRE will just have to wait it’s turn!
What ever happened to anything based on reality?
American Idle, what?
Well, yeah. LOL
Short squeeze on… at least for now.
Yes, the shorts are peeing all over themselves. It should gravitate down later in the week. I would never short this market. Its not about fundamentals anymore, but about back door deals and secret handshakes. Tax and spend like there is no tomorrow, and remove incentives for productivity and job creation. This is most corrupt government we have had in awhile.
Won’t we all be surprised two decades hence when the First World ever so closely resembles the Third World, especially with respect to crony capitalistic governance and feudal era wealth distributions?
I purchased some VGK on Friday. Best not try to fight them, but try to understand them and predict their screw ups. Momma needs a new pair of shoes.
Just sold it. I can always buy it back for cheaper later this year if I desire.
I only believe successful stock picks if you tell me in advance. Ex post facto we’re all Warren Buffett.
Which is why it’s so important to removed the “regulatory captured” politicians running this show.
“Its not about fundamentals anymore, but about back door deals and secret handshakes.”
-Has there ever been a different time?
I have always been able to make money by modeling fundamentals of stock prices but now I only have one way to model that makes any sense: WWOD (what would Obama do).
Thanks for that comment, Natalie. I myself often wonder whether this is the first time in modern financial history when the central banks’ Shock and Awe campaign of bailout bombing completely obliterated the role of fundamentals in setting asset prices, or if it has always been this way and the finance theory textbooks on my book shelf (e.g. “Asset Pricing” by John Cochrane) were merely a straw man creations of talented academicians’ fertile imaginations. I still think we should consider making a big pyre of finance theory textbooks and burning them, as the notion that fundamentals have any role in setting asset prices at this point seems highly questionable.
WWGD (what would Gollum do?)
Professor Bear,
Amen, well said. In ways I’ve come around to Natalie’s way of thinking. I’m tired of giving myself a hernia understanding this debacle and keeping w/ “the trend, is your friend”. All you can do is roll w/ it.
I guess we can moralize over it later, assuming we survive?
“…as the notion that fundamentals have any role in setting asset prices at this point seems highly questionable.”
Now, now Mr. Bear…why is the sea… king of a x10 thousand streams: because it lies below them.
Yes, the shorts are peeing all over themselves. It should gravitate down later in the week. I would never short this market. Its not about fundamentals anymore, but about back door deals and secret handshakes. Tax and spend like there is no tomorrow, and remove incentives for productivity and job creation. This is most corrupt government we have had in awhile.
I agree completely, the only problem is that the same could be said for going long stocks, bonds, and cash.
The only reality is the one that occurs in that backroom.
U.S. Pre-Market’s up over 400, the waters fine jump in.
Liquidity bombs are great for share prices. Besides that, now that the Eurozone has been rescued, the latest crisis is as good as over.
I’m a little confused. Is it our turn again for a crisis already?
Of course silly. Alt-A and commericial real estate are primed and ready to explode.
Eurozone has been rescued ??
Rescued with what more debt ??
Hair-of-the-dog hangover cure number ???? (I’ve lost count…)
At this point, the recovering reveler is at risk of dying from cirrhosis of the liver …
My company stock is at just above where a trailing stop triggered a sale of 10% of my shares of it last week before the big drop. It’s up well over 10% today. Google up 5% today, wow!
Have lots of liquidity and I’m going to keep that foundation for several years. But have to bias more against inflation, so with my new money coming in (my income) I’ll focus on stocks and precious metals.
Bill,
Good for you. I’m tired of trying to Save The World too. No future in it. You’ve just got to do what’s right for ‘you’. Hell, do you think any of these Flipper Revivalists are worried about ‘us’?
You’re kidding right?
http://www.zerohedge.com/article/latest-us-taxpayer-bill-save-europe-57-billion
US taxpayers will pay at least 57 billion to bail out European banks. Thank you Republicrats and the idiots who elected you.
http://www.huffingtonpost.com/2010/05/09/fed-opens-line-of-credit_n_569516.html
Do sovereign (so-called) governments and taxpayers exist solely to bail out the bankers and make good on their creative financing deals? For God’s sake people, WAKE UP.
How do you stop this? You go to bed Friday night thinking the Greek government is going to collapse due to an unrepayable debt burden, and wake up Monday morning learning that you, too, are partially on the hook for someone else’s profligacy. It isn’t really as easy as going to the ballot box in November and casting a vote for someone (Ron Paul?) who doesn’t buy into the madness; it appears that most politicians who have a reasonable chance of getting themselves elected are happy to ride Bernanke’s bailout bus over the edge of the nearest cliff.
Just remember that 2 + 2 = 5, and you’ll be fine.
“2 + 2 = 5″
Inflation?
Come on, man - didn’t you read 1984? Think “climax scene” (well - referring to the end scene, not the sex scenes). Or are you pulling my leg?
Not sure that the 2 + 2 = 5 is the climax scene or not. 1984 didn’t have a single scene where it could have gone one way or another. There were several scenes. 2 + 2 = 5 is one of them, Winston training himself to do doublethink in the prison cell, I thought “Do it to Julia” was the biggest one, and of course “He loved Big Brother” was the final bullet in the brain so to speak.
Heck it’s been since high school since I read it. Wasn’t his “come to the dark side moment” at the end when his head was in the rat cage, and he finally came to believe that 2 + 2 = 5?
(though after checking out Wikipedia - maybe my memory is failing me - it doesn’t really talk about that, just his betrayal of Julia during the rat scene)
Winston saw 2 + 2 = 5 during one of the torture sessions when they had him strapped to the table with the pain dial. After one epiphany (seeing himself skeleton-like in the mirror), he began to mentally train himself in his little jail cell. He mastered doublethink and 2 + 2 = 5, and was tortured less and less. But didn’t let go of Julia, which is when they sent him to the rat cage. After that he was a soulless shell and they let him go free for a while until the killed him.
Best book written. Ever.
Dang - I think you’re right, and I misremembered. Gonna have to read it again now.
Well yes Sammy, they do. Isn’t capitalism great?!
What are you, some kinda dang socialeest/commie?
Sammy,
I think you raise an interesting point? If your “governement” needs to be bailed out on a bi-weekly basis ( is uh… it really a gov. at all? )
I have friends that constantly need outside sources of revenue to pay off their bad bets, but they’re not “gamblers” ( just losers ) We really need to take a look at that.
60-minutes ‘Strategic Defaults’ piece last night was interesting.
Mirrored pretty much predictions on this blog for the last few years.
Comments?
The last FB, Hansen; apparently took out a 2nd for $400+k.
What are you talking about? Our Ahansen? Where did she go anyway?
The last FB on the 60 Minutes piece about strategic defaults was named Hansen.
I love Hansen! “MMMmmm-Bop!”
“Puttin on the foil, coach”
Where did she go anyway ??
Good question….
HWY…Isn’t she up near you ??
I’ll check it out, she’s keen about her privacy, rightly so…
I believe she was due for some operations (from the bear attack) and would be taking some time off.
Thanks SFbaygal…
“What are you talking about? Our Ahansen? Where did she go anyway?”
She’ll be back. She’s just working on some projects and finishing up her healing.
I like the contrast between the two deadbeats. They both did the same thing, but one (IMHO) was ethical and one wasn’t.
The young couple with the baby said they didn’t want to do it until (paraphasing) “The bank was rude to them and refused to work with them!” Imagine that! They want the money they were promised! How dare them!
The second couple said that it was a business decision; the contract stipulated that the house was the sole collateral for the loan, and there’s no recourse beyond that. They weren’t doing it to “get” the bank, or because they thought they deserved it because the bank was mean to them.
Frankly, I’d rather the banks take the hit than cramdowns. Even though taxpayers end up bailing out the banks and paying FDIC insurance, cram-downs are extremely unfair, especially because our Administration has forgiven income tax on forgiven mortgage debt. Imagine handing out 6 figures of tax-fee income to people! It’s enough to drive me to tears when I look at my quarterly tax bills. (And no, that’s not hyperbole.)
As an advocate of draconian cramdowns, I mostly agree with you. I don’t think we should have to even contemplate cramdowns — we should never have come this far in the first place. Cramdowns are unfair, but they seem to me to be the least of the evils. It would certainly stop all this extend and pretend nonsense forthwith.
Cramdowns that are taxed as ordinary income I’d be OK with.
I think that cramdowns should come with a BK, so I don’t know how much of those taxes the FB could pay.
I saw that last night as well. It’s like they lifted the entire piece right out of here.
$145,000 for a month, not bad…
Illegal immigrant’s 145G ‘deport gift’
May 9, 2010 ~ NY Post
An illegal immigrant with a long rap sheet got a $145,000 parting gift from New York City taxpayers before he was deported, after city lawyers decided his civil rights had been violated when he was held too long on Rikers Island.
Federal rules allow local law enforcement to detain suspected illegal immigrants for 48 hours after their criminal cases are resolved, to give Immigration and Customs Enforcement a chance to pick them up and move them to federal facilities.
Former Brooklyn resident Cecil Harvey, 55 — backed by an immigration-rights advocacy group — argued that his rights were violated when he spent more than a month in a Rikers holding pen before being transferred to ICE.
Harvey was shipped to his native Barbados in October 2007; the city settled his civil suit late last year.
Ben lurkin
6:06pm - Mon May 03rd, 2010
@Jennifer Stagg - You don’t need to ‘feel’ anything. Just use the information already out there and it will give a clear indication of the real problem Jennifer:
2006 (First Quarter) INS/FBI Statistical Report on Undocumented Immigrants
CRIME
* 95 % of Warrants in LOS ANGELES are for ILLEGAL ALIENS
* 83 % of Warrants for MURDER in Phoenix Arizona are FOR ILLEGAL ALIENS
* 86 % of Warrants for MURDER in Albuquerque New Mexico are for ILLEGAL ALIENS
* 75 % of those on the most wanted list in Los Angeles, Phoenix, Albuquerque are ILLEGAL ALIENS
* 24.9 % OF ALL INMATES in California detention centers are Mexican Nationals here ILLEGALLY
* 40.1 % of all inmates in Arizona detention centers are Mexican Nationals here ILLEGALLY
* 29 % (630,000) Convicted ILLEGAL ALIENS felons fill our state and federal prisons at the cost of $1.5 Billion Annually
* 53 % Plus of all investigated burglaries reported in California, New Mexico, Nevada, Arizona and Texas are perpetrated by ILLEGAL ALIENS
* 50 % Plus of all gang members in Los Angeles are ILLEGAL ALIENS
* 71 % Plus of all apprehended Cars stolen in Texas, New Mexico, Arizona, Nevada, and California were stolen by ILLEGAL ALIENS or “Transport Coyotes “
* 47 % of cited / stopped Drivers in California have NO License, NO Insurance, and NO Registration for the vehicle of that 47 %, over 92 % were ILLEGAL ALIENS
* 63 % of cited / stopped Drivers in Arizona have NO License, NO Insurance, and NO Registration for the vehicle of that 63 %, over 97 % are ILLEGAL ALIENS
* 66 % of cited / stopped Drivers in New Mexico have NO License, NO Insurance, and NO Registration for the vehicle Of that 66 %, over 98 % were ILLEGAL ALIENS
Gee,
Those future democrats sure seem like an unruly bunch.
* 83 % of Warrants for MURDER in Phoenix Arizona are FOR ILLEGAL ALIENS
“But now suddenly if you don’t have your papers and you took your kid out to get ice cream, you’re going to be harassed, that’s something that could potentially happen.”
Nice post Jeff…Wow…So tell me how this does not end badly…
“I think we were pleased to quit of him so cheaply.” — Robert Louis Stevenson, Treasure Island.
Just try that in another country.
That is so wrong on so many levels but mostly on the “the SOB should NOT get squat” level.
What a difference a weekend can make!
Don’t you just have to wonder whether Megabank, Inc had advance notice about this development, and was able to make a handsome profit on short trading the 1000 pt Fat Finger drop on Thursday?
The New York Times
News Analysis
Greek Debt Crisis Raises Doubts About the European Union
By STEVEN ERLANGER and MATTHEW SALTMARSH
Published: May 7, 2010
PARIS — Europe’s consistent inability to move quickly enough to get ahead of the financial markets during the Greece crisis is shaking the euro and the foundations of the European Union itself, as critics of the euro have long predicted would happen.
The question being raised with increasing urgency is whether the European Union can fashion a mechanism to speed decision-making before irreversible damage is done and the euro itself slips into history.
The delays are inevitable, most experts say, stemming from the nature of the European Union and its own institutional voids: no single government, no single treasury, no effective fiscal coordination, no mechanism for crisis management.
Every major decision on the euro must be negotiated among member states and European institutions, a torturous process that also plays up political fissures both within and among member countries. That breeds uncertainty and even panic among investors, who already doubt that the Greek deal that the European leaders finally sealed on Friday night will forestall an eventual restructuring of Athens’ crippling debt.
“The European Union is running behind events,” said Anne-Marie Le Gloannec, a political scientist at the Institut d’Études Politiques in Paris. While, for example, the United States could “shock and awe” the markets early in the global financial crisis with the TARP bailout money and a huge stimulus program to restart the economy, there is no single European institution that can do the same. By contrast, every decision about Greece has been a painful, time-consuming bargain among the different national governments, with their own political requirements and concerns, and their own views of economic virtue.
“There are no more bullets in the gun right now,” said a senior French official who spoke on the condition of anonymity before the Brussels summit meeting on Friday that confirmed the $140 billion relief package for Greece. The deal was reached over a period of months with the European Union and the International Monetary Fund. “Markets are reacting now because they think it’s too little, too late,” Ms. Le Gloannec said. “And because it’s too late, it’s too little.”
The European Central Bank, too, has been largely inadequate to the task. On Thursday, the head of the European Central Bank, Jean-Claude Trichet, failed to calm the markets with his assurances that Greece would not default and that the bank was not considering buying up Greek, Portuguese or Spanish bonds, which many analysts consider an obvious next step.
…
Party is back on!!!!!!!!Throw a trillion at it and forget about it.
This short covering rally will peter out.
“SAY HO!”
“HOoo”
“SAY HO”
“HOoo”
Don’t you all have to wonder a whee bit about the timing of this Euro-TARP bailout announcement the day before the “audit the Fed” vote in Congress? Mere coincidence, I’m sure…
BINGO
There is no such thing as investing anymore. It has been replaced by
Insider trading
and for the rest
gambling.
I’ve heard of Euro trash before, but Euro-TARP?
It’s pretty interesting how the Shock and Awe doctrine is now being applied to financial markets. I doubt blowing up markets with liquidity bombs will prove much more effective than blowing up Baghdad with ordinance did, but time will tell.
The New Ledger
Euro-TARP!
by Francis Cianfrocca
Holy smokes, people. They said it couldn’t be done. But it looks like the European finance ministers decided to get together and disprove everyone who has been saying for days now that they couldn’t even come close to acting in a coordinated way.
They pulled 440 billion euros out of a hat, as a bailout fund for sovereign states. The IMF kicked in another 250 billion, and there’s another 60 billion coming from the EU itself. It’s just under a trillion dollars.
You’re not going to believe what you see when Wall St. opens this morning. A rally is going on in European stock markets like nothing I’ve seen there before.
It’s too early for armchair analysis, but a few points spring to mind: first, this is clearly an application of the Bernanke Doctrine: respond to incipient liquidity crises as fast as possible, and in SIZE.
…
HISTORY REPEATS ITSELF
In 1938 in order to insure peace by solving Hitler’s lebensraum problem, the British & French leaders gave the Sudetenland to Germany. The German Chancellor then said, “he had no more expansion plans”. Prime Minister Neville Chamberlain arrived back home with a piece of paper that he said, “would bring peace in our time”. Meanwhile gloomy Czechs looked on as German troops poured into their country.
In 2010 in order to insure prosperity by solving the sovereign debt problem British & French leaders today gave Portugal to China. China agreed to buy all the sovereign debt of both France & Britain. The British prime Minister BCC ( Brown/Cameron/Clegg) arrived back home with a piece of paper that he said ” would bring prosperity in our time”. Meanwhile gloomy Portuguese looked on as Chinese Banksters poured into Lisbon.
Good one.
Filed under: “These Fu#king Guys…” Jon Stewart ..or…”Anything you can trade, we can trade faster…:
By Christine Harper May 10 (Bloomberg)
Goldman Sachs Has First Perfect Quarter With Zero Trading Loss:
“This is the first time we have reported zero trading loss days in a quarter,” Samuel Robinson, a GoldenmanSucks spokesman, said in an e-mail today. “We believe it shows the strength of our customer franchise and risk management.”
Well, they certainly beat the cr@p out of Lehman Bros, no?
“…generated $9.74 billion in trading revenue in the first quarter, exceeding all of its Wall Street competitors. Trading accounted for 76 percent of first-quarter revenue.”
It’s a no-hitter!
“This is the first time we have reported zero trading loss days in a quarter,” Samuel Robinson, a GoldenmanSucks spokesman, said in an e-mail today. “We believe it shows the strength of our customer franchise and risk management.”
What about your risk management circa 2000-2008, Mr. Robinson?
“The…only…winning…move…is…not…to…play…the…game.”
War Games whooo!
We believe it shows the strength of our customer franchise and risk management.”
What risk?
They have no risk?
They know what the gov/FED is going to do before everyone else.
They also know what the average traders are doing before their trades are executed.
What risk?
Guys,
True story. On Thursday morning at the open I couldn’t log on. I called an affiliate in the next town over and HE couldn’t log on! Then he explained to me that the whole FIRM couldn’t log on!
All through the day ( prior to the crater ) the whole platform was sporadic at best. Coincidence? I’ll leave that to you.
Good info, DinOR.
We’ve heard that from others, too.
Nothing to see here…now move along.
Banks Lobby Against Derivatives Trading Ban:
NYT On Monday May 10, 2010
‘…The nation’s five largest banks, which dominate the derivatives business, have dispatched trade groups, paid lobbyists and their own executives to convince senators that excluding banks from the derivatives business would make markets less safe by shifting the trading to foreign banks and other institutions that are subject to less federal oversight.’
But this strategy would still get them a TBTF US taxpayer bailout right?
“These swaps have become standard bank products. The proper response would be to recognize that the markets have evolved and there’s been innovation and they need to be regulated by bank regulators rather than pretending that they’re not integral to the system,” said Daniel F. C. Crowley, a partner at the K&L Gates law firm and an industry lobbyist.
The change could cost the industry a lot of money. Banks reported $22.6 billion in derivatives revenue in 2009, according to the Office of the Comptroller of the Currency.
The executive, who said he had spoken with several senators in recent days, said the industry now was simply trying to get a hearing.
“So how does it feel, to be like a rolling stone…”
“We’re on the outside, knocking on the window and saying,… ‘Hey, listen to us just a little bit,’ ” the executive said.
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
“But this strategy would still get them a TBTF US taxpayer bailout right?”
That’s the main point, isn’t it? An implicit TBTF guarantee, backed by the full faith and credit of the U.S. Treasury, enables Megabank, Inc to grow an eternally-lived money tree, which gets resurrected from the dead every time what would otherwise be a fatal banking crisis erupts, thanks to bailouts provided by other people’s money at the height of panic.
There’s that word again:
“Rosebud…“TrueFinancialInnovation™”
Financial Innovation = “TrueLiquidityKudzu™”
Kudzu is sometimes called: “the vine that ate the South” (of the United States)”
…it has found it’s way to Manhattan & DC (in America)…it’s roots are like “TrueBamboo™” it spreads above ground & beneath ground 24 hrs a day…it’s currently registered as a “Multi-National” CORPORATION.
Cool! JPM and GS are getting their own stock exchange.
Now they can shear the sheep more efficiently than ever.
Direct Edge set to become 4th U.S. stock exchange
(Reuters) - Direct Edge said on Friday it has received approval from the U.S. Securities and Exchange Commission to operate two stock exchanges, in a decision that will make it the fourth U.S. equities exchange operator and likely boost its trading revenue and speed.
…
Direct Edge, which is owned by Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), Knight Capital Group Inc (NITE.O), hedge fund Citadel and the International Securities Exchange, an options market owned by Deutsche Boerse’s (DB1Gn.DE) Eurex, had applied for exchange status last May.
BATS won exchange status in 2008 and is set to enter the listings business later this year.
Based on first principles of finance, this sounds like a dumb idea, and I expect the sheeple who buy into it as clients will lose a lot more wool than the average sheered sheep loses.
Aww dear lord Martha! Come look what they’ve done to the poor banks! They’ve done kicked up off the public exchanges!
The poor banks!!!
Hang’em high.
As the excess consolidation in finance continues, we may end with more exchanges than major financial firms trading on them.
I like JP Morgan Chase and Goldman Sachs so much, I’d like them broken up so we can have three of each.
“Anything you can trade, we can trade faster…:
The SEC had better grow another set of eyes in the back of their head…That way they can regulate the fraud…coming & going!
The SEC had better grow another set of eyes in the back of their head…That way they can regulate the fraud…coming & going
Why doesn’t the SEC work for GS?
Yes, things would be easier. ( Chuckles ) Yeah, I mean just get a room you two!
definately no glitches today.
My inner conspiracy theorist has to wonder whether some internationally prominent banking institution (e.g. the Fed, IMF, whoever) dropped a massive liquidity bomb on world stock markets at opening bell time in order to stave off a similar stock market crash to the one that ensued after the Fall 2008 TARP. It is still too early to gauge the effect of Euro-TARP on stock markets…
Put on your tinfoil hat for this this read. It’s out there, though perhaps not implausible IMO.
The gist - Thursday’s action was a purposeful move by the big guys to scare Congress into backing off on doing anything about TBTF. One of the authors was Max Keiser, who holds a program trading patent, and claims he knows of what he speaks.
He also proposes the same things happened on 9/28/08 - to force the TARP, and also January this year, to quash the move towards the Volcker rule.
“Thursday’s action was a purposeful move by the big guys to scare Congress into backing off on doing anything about TBTF.”
Scour last Friday’s bits bucket if you want to find where I conjectured this…
Yeah I remember (though can’t remember what pseudonym
) - a lot of us were thinking the same thing. Interesting to hear it coming from this source, as a flat-out statement rather than as conjecture.
Yep. Lots of members of the Tin Foil Hat Club around these parts.
Is this conjecture or a statement?
GoldenmanSucks: “you twist my arm,…then I’ll just slap your Gov’t nuts”
I’ll say it again. You’d think by now we’d have had more than one or two fat-finger days in the past 25 years, so I can’t buy the mis-type/glitch explanation. Of course, perhaps now we’ll see more frequent glitch days just to throw people off (”See, our software really IS that buggy.”) Tin foil securely in place here.
“You’d think by now we’d have had more than one or two fat-finger days in the past 25 years, so I can’t buy the mis-type/glitch explanation.”
Right — one day out of 25 * 365 = 9,125 during a week when a big fat Greek bailout and Senate debate on financial reform are on the policy table seems a little bit too rarefied to attribute to bad luck.
sleepless,
No foil necessary. You’re right, I think that “explanation” was pretty quickly smoked out. That’s when we began getting alternate versions.
Fannie Seeks $8.4 Billion From Government After Loss
Monday, 10 May 2010 AP & Reuters
Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter.
Including the latest request, Fannie Mae [FNM 1.06 0.03 (+2.91%) ] will have received more than $84.6 billion from the government, and the firm said it saw no end in sight to federal assistance.
The announcement comes less than a week after smaller mortgage finance company Freddie Mac [FRE 1.365 0.075 (+5.81%) ] said it would need $10.6 billion in government funds after losing $8 billion in the first quarter.
The U.S. Treasury took control of the two entities at the height of the financial crisis in 2008 as mortgage losses mounted.
The two firms have now tapped about $140 billion in assistance from Uncle Sam’s unlimited credit line.
Things must be even worse than ayone knows at Fannie and Freddie if their earnings numbers could not be massaged to show a surprise profit like AIG and other failed institutions. To actually have to show a loss in this fantasy environment is pretty dire.
Only private companies get to have profits.
If they become losers, we taxpayers get to become the “owners.”
Works rather nicely, no?
Where is tact located in the world of zombie GSE balance sheets?
The two firms are emblematic of everything that went wrong with the financial system, and of what seems to be making taxpayers so mad. Fannie and Freddie have been kept alive by the largest taxpayer-financed bailout to date, and now have the luxury of a blank check from the Treasury Department. Their housing-related losses continue unabated, with Fannie Mae saying on Monday that it needed another $8.6 billion in taxpayer support, and Freddie Mac having requested another $10.6 billion last week to keep its balance sheet in tact.
Anyone else getting a whiff of moral hazard in creation of the EU bailout fund?
Sure, it’s big enough to calm fears of Greece defaulting; but it’s also big enough that the next few dominoes at risk of falling will likely feel more confident of their future security, and thus less likely to make the changes that are required. It is rather hard to sell the pain of austerity now when there is a huge safety net to do a belly-flop into in the future.
My gut say that this pushes this crisis down the road, probably to manifest in a different context/country, but resolves nothing.
Its like being a passenger on the Titanic and it hits the iceberg and starts to sink but everytime people start heading for the lifeboats the captain makes an announcement that they have just hooked up a really big battery to the bilge-pump so everyone should just stay calm and keep partying. Whenever that battery drains itself and the passengers start to get anxious, another announcement is made about an even Bigger battery the crew just found for the pump. The ship is still dead in the water with a huge hole in the hull and eventually it will sink with everyone on board.
Try that analogy, Mr Bernanke and TTT.
“…a whiff of moral hazard…”
How about a whiff of severe understatement in your post?
Ok, let me try again: Is anyone else gagging on the overwhelming, eye-wateringly strong, decaying-carcass stench arising from the EU’s trillion-dollar bailout fund?
I feel like I am breathing in the death-scent of the euro, though my gut says that it will take four or five years or so to really breathe out its death-rattle.
I don’t see any way that the structural problems inherent in the euro can be addressed; eventually the productive nations will tire of paying for the profligate ones. Without the cost-of-production changes that exchange-rates shift automatically, the debt-laden countries will never become competitive enough to recovery.
Ok, let me try again: Is anyone else gagging on the overwhelming, eye-wateringly strong, decaying-carcass stench arising from the EU’s trillion-dollar bailout fund?
(raises hand)
That’s more like it. As J.M. Keynes long ago noted, “Words should be a little wild, for they are the assault of thought on the unthinking.”
Good quote.
Homes still sinking, 44.3 percent in South Florida underwater
by Kim Miller
A first quarter report from analysts at real estate research firm Zillow found that 44.3 percent of homes in Palm Beach, Broward and Miami-Dade counties were underwater during the beginning of 2010. That’s a small increase from 2009’s 4th quarter statistic of 41.2 percent.
Nationally, 23.3 percent of all single-family homes were underwater, meaning the borrower owes more on the loan than the home is worth.
The report, released this morning, also found a continued decrease in home values. The Zillow Home Value Index for Palm Beach County was $158,900, down 5.6 percent from the same time in 2009.
Zillow analysts said it could be up to five years before home values begin climbing.
“We suspect that the homebuyer tax credits are, for the most part, stealing demand from later this summer, rather than creating new demand,” said Zillow Chief Economist Stan Humphries. “Even with the tax credits in place during the first quarter, inventory levels were rising, and home values continued to decline at a steady clip, rather than steadying.
“Because of these factors, we believe national home values are more likely to reach bottom in the third quarter of 2010, rather than in the second quarter, as we had hoped. When we do get there, we expect the high rates of negative equity and foreclosures to keep national home value appreciation near zero for some time, possibly as long as five years.”
This entry was posted on Monday, May 10th, 2010 at 8:20 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
““Because of these factors, we believe national home values are more likely to reach bottom in the third quarter of 2010, rather than in the second quarter, as we had hoped. When we do get there, we expect the high rates of negative equity and foreclosures to keep national home value appreciation near zero for some time, possibly as long as five years.””
Wouldn’t “appreciation near zero” in a non-zero inflationary environment mean that you had reached nominal bottom, but not real bottom?
Canada is trying to make us look good by comparison again…
http://www.cbc.ca/canada/calgary/story/2010/05/09/calgary-bmo-mortgage-fraud.html
RCMP and the Calgary police have told the Bank of Montreal they won’t investigate what could be the biggest mortgage fraud in Canadian history, CBC News has learned.
RCMP and the Calgary police have told the Bank of Montreal they won’t investigate…
Future prediction in x3 letters: “…Yet”
“RCMP and the Calgary police have told the Bank of Montreal they won’t investigate…”
Noooo … actually they didn’t say that at all according to Sgt. Patrick Webb of the RCMP…
http://www.globaltvcalgary.com/Special+Features/story.html?id=1809867
about 6:50 minutes into the Early News -May 10 video.
Which video? cool site!
Sorry, here’s a better link
http://www.globaltvcalgary.com/video/index.html
It’s under the “Early News” link on the left, video entitled “Early News -May 10″.
How can you print more euros to save the euro? That’s complete nonsense. It’s pretty clear the Europeans have abandoned sound money principles.
May 10 (Bloomberg) — The euro’s rally after European policy makers announced a loan package worth nearly $1 trillion as well as government-bond purchases will be “temporary,” according to UBS AG, the second-largest currency trader.
Policy in the region is becoming “very unfavorable,” said Mansoor Mohi-uddin, Singapore-based global head of currency strategy at UBS. Investors should use gains in the euro to make fresh bets it will decline toward $1.20 within three months, according to Barclays Capital. Schneider Foreign Exchange cut its forecast for the euro, citing risks to the currency following the European Central Bank’s asset-purchase plan.
In real life $h!& happens, and you have to abandon sound money principles once in a while.
If that weren’t true everyone would still be on the gold standard. Instead, nobody is on it.
Debt limits are fine until disaster strikes. Then what? You tell the kids “Sorry. We’ll have no food to eat for a few weeks. We are out of money and I’m not allowed to borrow any.”
You don’t have to wait for your government to act to put yourself on the gold standard.
In that case, you’d better hope your government doesn’t act. But perhaps if you store your gold under a mattress instead of inside a bank safe deposit box, you will be fine. A Swiss bank account might be a better option, so long as you don’t cheat on your taxes.
Actually, according to the link you were probably alright if you kept it in a safe deposit box:
“Safe deposit box seizure myth
According to a folk rumor on the internet President Roosevelt ordered all the safe deposit boxes in the country seized and searched for gold by an I.R.S. official…
In fact, safe deposit boxes held by individuals, were not forcibly searched or seized under the order and the few prosecutions that occurred in the 1930s for gold hoarding were executed under different statutes.”
Even at the personal level, how many people never need a loan for which they lack the collateral?
It’s a fine way to live, in theory. A person is frugal and careful, and avoids debt like the plague. But when something bad happens, the choice becomes either abandon one’s principles, or starve.
This debt crisis is forcing the EU to face up to reality, and there are two choices as I see it. Either borrow (or print) themselves out of trouble, or dissolve the union.
“Then what?”
Reflexivity catastrophically and chaotically unravels.
Poor Uncle Buck; I wonder how well today’s currency moves reflect bailout versus non-bailout countries?
From Bloomberg:
CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.2786 0.0031 0.2450% 13:08
GBP-USD 1.4844 0.0041 0.2739% 13:08
USD-CHF 1.1100 0.0020 0.1778% 13:08
USD-SEK 7.5358 -0.1114 -1.4567% 13:08
USD-DKK 5.8204 -0.0139 -0.2385% 13:08
USD-NOK 6.1490 -0.0746 -1.1980% 13:08
USD-CZK 20.0240 -0.1002 -0.4978% 13:09
USD-SKK 23.5630 -0.0541 -0.2292% 13:08
USD-PLN 3.1470 -0.0840 -2.5998% 13:09
USD-HUF 214.0850 -5.1550 -2.3513% 13:08
USD-RUB 30.1570 -0.4583 -1.4970% 12:59
USD-TRY 1.5279 -0.0329 -2.1064% 13:09
USD-ILS 3.7470 -0.0504 -1.3285% 13:08
USD-KES 77.6000 -0.5500 -0.7038% 10:06
USD-ZAR 7.5138 -0.1460 -1.9057% 13:08
USD-MAD 8.6752 -0.0266 -0.3057% 13:08
Well…. it’s been a week since the EmptyPocket/TireKicker tax credit expired. I really expected (maybe foolishly so) the REO rosters to grow dramatically but they haven’t. Actually they’re still falling in size although at a much slower rate.
Who is in the buyer pool? Who are they? What is the demographic? It would seem nobody at this point. It’s certainly not me given the attitude of the RealtWhores and the grossly inflated prices.
What site are you using to query REO? RealtyTrac?
I think it would take a while for the REO numbers to start falling - doesn’t an REO cease to be an REO only after the closing date? (i.e. it’s still owned by the bank until after the actual sale) If so then it won’t be until after June 30th for the numbers to start falling, since the April 30th deadline only applies to the contract date.
E.g. I have one fried who’s buying a short sale - he went to contract I think right on April 30th (specifically to beat the deadline), but doesn’t close until the end of June. I think short sales aren’t REO, but I think the same would apply for them - lots of people went to contract two weeks ago but won’t close until next month.
My suspicion is that the termination of the tax credit is just a test.
If sales numbers fall dramatically in these next few months, the government knows the credit was actually working and (in their view) was money well spent.
But if sales rise, are flat, or decline only slightly, the credit was a waste of money, and a new one is unwarranted.
I can think of no way to gauge what effect the credit was having without letting it expire.
Good points. Guessing their motivation is conjecture but it’s anyones guess at this point.
Packman….. I monitor the GSE’s, BofA, Wells, etc. All of them basically.
Does it strike anyone how odd it is that the two of three biggest losses anticipated by the FDIC in 2010 on bank closings are on banks outside of the United States.
http://banktracker.investigativereportingworkshop.org/stories/2010/may/08/failed-bank-list/
No. Haven’t you heard yet about One World Government? Coming soon to a Third World sovereign state near you…
“One nation, under bankers, with liberty and justice for bankers.”
Well America is safe, then. We may be degenerating into a Third World dystopia and plutocracy, but we gave away our sovereignty years ago.
not really..
A bank in Puerto Rico is gonna have most of it’s assets and liabilities in PR.
Who would want to take on stuff that is way out there on some island? Healthy, local banks would.. maybe some Florida banks.. but the remote location limits the number of potential buyers. Few buyers means few offers and low bids.
Why are these hand wringers wasting so much lotion? If rationally-expectant stock markets all around the planet are all rallying, the markets are signaling the ECB made the right move — end of story.
=============================================================
* The Wall Street Journal
* HEARD ON THE STREET
* MAY 10, 2010, 1:56 P.M. ET
The ECB’s Dangerous Flirtation
By RICHARD BARLEY
So the market got its way after all. The European Central Bank’s decision to sanction the purchase of government and private debt securities is potentially the most significant plank in the package of measures unveiled Monday to tackle the euro-zone crisis, not least because this remarkable U-turn risks enmeshing the ECB deeply in the realm of fiscal policy, compromising its credibility and independence. But the ECB’s refusal to spell out the details of its program means the full financial implications are hard to judge.
The absence of these details is probably part of the policy, keeping market participants uncertain as to where, when and whether there will be an intervention, and thus possibly deterring short sales of securities. It may also reflect that, in some illiquid markets—Portugal, for instance, has just €97 billion ($123 billion) of benchmark government bonds outstanding—only small amounts of purchases may be necessary to cap yields and spur private buying. In this respect, the program may be like that under which the Bank of England bought corporate bonds in order to help boost liquidity, J.P. Morgan notes; purchases there amounted to just £1.4 billion ($2.1 billion). Monday’s extraordinary rally in euro-zone peripheral bonds suggests the ECB has so far got a lot of bang for its buck.
Still, the ECB insists its planned bond purchases are different from the quantitative easing undertaken by the U.S. Federal Reserve and the BOE since they are aimed at improving financial stability rather than loosening monetary policy. Although the purchases will involve the expansion of the balance sheets of euro-zone members’ central banks, President Jean-Claude Trichet said Monday the ECB would seek to minimize inflation risk by “sterilizing” its interventions—in other words, by draining excess cash from the system, possibly through the issue of term deposits.
Even so, the ECB’s experiment with bond buying will increase the European monetary system’s exposure to potential credit losses if the sovereign-debt crisis turns out to be one of solvency rather than liquidity. Meanwhile, the risk remains that the ECB will allow itself to be pushed again by the market into making the program too big or using it too frequently, at which point investors might simply use the ECB’s bid to exit, rather than enter, the euro-zone government-bond markets. Once gone, they may be hard to lure back.
Write to Richard Barley at richard.barley@dowjones.com
germany is to greece as china is to the united states.
Transitive property of subprime creditor/borrower symbiosis:
California is to the United States as the United States is to China.
I don’t think DC will help California…Most there don’t like us much except for our tax receipts…
Word to wise and politically-expedient Californians: Let’s elect Jerry Brown this fall and see whether our bailout fortunes don’t change with a Democrat in the governor’s mansion.
Wisdom and political expedience are mutually exclusive. Come to think of it, wisdom and electing Brown are likewise.
Yep, I’m voting for him…I’ll wear a tie-dye and let the exit polls have to guess my persuasion…
tie-dye and let the exit polls have to guess my persuasion ??
You crack me up Hwy…
Weren’t Fan and Fred private until they blew up real good? Given that they blew up, why does Kocherlakota think private securitization is “better”?
And given that Congressional reformers could not bring themselves to ending TBTF, how does he propose to prevent them from “the kind of risk-taking that was socially undesirable”?
Enquiring minds want to know.
Fed Kocherlakota prefers private mortgage securitization
Mon May 10, 2010 2:20pm EDT
MINNEAPOLIS, May 10 (Reuters) - Minneapolis Fed President Narayana Kocherlakota on Monday said he doesn’t have a preferred plan for reforming Fannie Mae and Freddie Mac, but there needs to be a way to prevent them from “the kind of risk-taking that was socially undesirable” that was allowed by their implicit government debt guarantee.
“In the long run, I think that we would rather have private securitization markets providing this kind of service that Fannie Mae and Freddie Mac are providing currently,” Kocherlakota said after a speech at the Economic Club of Minnesota. “But in the current situation that we are in, we have to plan appropriately for the transition somehow.”
He was responding to a question about giant mortgage lenders Fannie Mae and Freddie Mac, which were taken over by the government to prevent their collapse in 2008.
(Reporting by Ann Saphir, additional reporting by David Lawder in Washington, Editing by Chizu Nomiyama)
They were private but with an implicit/assumed government backstop.
Watch Your Step
LA will consider repealing a 1974 ordinance that made the city responsible for sidewalk repairs
To reduce the city’s budget deficit, Los Angeles may soon stop repairing sidewalks and driveways on the city’s dime.
This month, the City Council will consider repealing a 1974 ordinance that made the city responsible for sidewalk repairs, according to the Los Angeles Times.
The policy was initiated with a federal grant that ran out long ago, according to the newspaper.
“We have no ability to perform these repairs,” Councilman Bernard Parks told the paper. “The money ran out in the mid-1970s, yet the city has continued to hold itself responsible.”
According to the city’s Bureau of Street Services, of the city’s 10,750 miles of sidewalks, about 4,600 miles are in need of repairs, at a projected price of $1.2 billion.
City Council committees have recommended the city devise a financing system enabling the city borrow money through a “revenue anticipation bond,” with the understanding that property owners would pay for sidewalk repairs through annual property taxes, according to the newspaper.
Until the 1970s, property owners were responsible for maintaining sidewalks.
“…about 4,600 miles are in need of repairs, at a projected price of $1.2 billion”
I calculate this translates into $261,000 per mile of sidewalk repair. Looks like a possible stimulus project.
Here in Tucson, as in many communities, city sidewalks were constructed by the WPA during the Great Depression. In Tucson’s Armory Park neighborhood, those WPA sidewalks are still going strong.
Ditto in Phoenix. My sidewalk too. My Dad said if it wasn’t for Roosevelt we’d still be walking in the mud.
No rain, no roots, no settling. LA is not Phoenix.
city responsible for sidewalk repairs ??
A “excellent” example of what is coming…This is the stealth ways to raise revenue on the backs of “captive” real estate and there isn’t any way to avoid it..With this vote, the cost of real estate ownership has just increased…How about paying for first responders to an accident where the liable party pays ??
The “Greedy Hand” cometh for your money to allow it to continue to “Feed The Beast”….
Pays to be a renter more and more doesn’t it?
Look at San Jose, home owners are finding out they are responsible for the trees that are planted on the strip between the sidewalk and street.
responsible for the trees that are planted on the strip between the sidewalk and street ??
Oh…It goes much further than that…Owners are responsible for the maintenance and liability but need a permit and permission to remove it…So, tree roots bust up and lift the sidewalk and you get to pay for replacing the sidewalk but cannot remove the tree…Part of the permit process for tree removal is neighbors are notified within 300 feet for their input on your right to remove your tree…There’s more…This also goes for trees with a chest high circumference of I believe 24 inches even if the tree is in your own front or backyard !!
Even worse….the San Jose City Arborist (how’s that for a government job?
) can condemn your tree for being of “an improper species”. You then have to PAY for its removal and replacement off the Arborist’s “approved tree list”.
Who 1st planted it?
Who 1st planted it?
City requirement…Street tree planting ordinance..They require it but you bought it & maintain it under their suppervision…And, DennisN is correct about having to replace it with a City Arborist’s “approved tree list”. I suspect it would need a permit also to inspect the “hole” before you put it in the ground…No s$.t…I am not kidding here…
I only mention that because in Orange CA, the city planted the trees in front of citizens homes…then in Fullerton, CA they planted those beautiful trees with the spikes all over their trunk, then 20 years later, after they started to rip apart the business sidewalks complete with stumble & fall lawsuits, decide to cut them down.
Loanowners and homeowners here split the cost of those trees with the town. Come to think of it, that may apply to sidewalk repairs too.
Landlords can always try to pass along sidewalk repair costs to renters, but with so many accidental landlords in competition with each other, rent increases are likely result in walkaways and vacant rental properties.
“Few forecasters expected the Greek debt problem to threaten the world financial system, yet it has. And yet again, governments will claim to have ‘fixed’ the problem and halted the rot.”
~Spengler
Greek Finance Minister George Papaconstantinou warns of catastrophic consequences if Greece were to default on its debts — something the government is racing to avoid.
“The banking system would stop operating and businesses and households would automatically lose access to bank funds,” Papaconstantinou said.
“We would enter an even deeper recession of around 10 percent, maybe more, which we would not exit for years,” he added. Tensions Simmer
~~~ A 19 year old girl named Penny demonstrated in front of the Parliament building in Athens because of the changes being recommended to the government’s astonishingly liberal pension plan.
“I feel angry that my right to dream has been denied and it’s mainly the government’s fault,” she said.
Penny, Penny, Penny. Your “right to dream” is not being curtailed. Only your desire to retire at age 50 at full government-paid salary. Your retirement age may be raised to 65. What’s so awful about that?
Has anyone posted an actual comparison of Greek public benefits such as this? I’ve heard lots of anecdotes, but it’d be nice if someone did a good item-by-item comparison between different countries.
I heard one theory which explains the 50 yo retirement age. It a measure intended to help stem the unemployment problem. The sooner people retire, the sooner a job opens.
That they are from age 50 onward, on the dole, is of less concern. Don’t ask me why. I’m not Greek.
Anyway, if through “austerity measures” the retirement age is raised to say 65, Penny’s chances of finding a job are severely undermined.
“I heard one theory which explains the 50 yo retirement age. It a measure intended to help stem the unemployment problem. The sooner people retire, the sooner a job opens.”
And a very sound theory that is. By extension of course we should just make 18 the retirement age - then we’ll have 0% unemployment.
Sounds like the banks threatening the people with armageddon to me. Been there, done that.
Hope You Enjoyed the Housing Recovery … Because It’s History, Says Suttmeier
Posted May 10, by Henry Blodget in Investing, Banking, Housing
Since the recovery in house prices began last summer, homeowners and real-estate agents have embraced what many believe is a return to normalcy (forever rising prices).
In Wall Street-fueled markets like New York City, properties are once again getting multiple bids, and optimists are chattering about a quick return to old highs. If the trend continues, friends, neighbors, and real-estate agents will no doubt soon start repeating the adage that helped inflate the housing bubble in the first place: Real-estate is always a great investment.
But the trend won’t continue, says Richard Suttmeier, strategist at ValuEngine.com.
The temporary increase in prices has been driven by government efforts to prop up the housing market, Suttmeier says, and those measures have come to an end. A new wave of foreclosures is hitting the market. Fannie Mae and Freddie Mac have become black holes into which taxpayers must shovel endless billions just to keep the mortgage engine running. Most importantly, as measured by the Case-Shiller index, housing prices are still way too high.
In most major house-price indexes, prices have already begun to roll over and head back down. Suttmeier thinks this trend will continue. In fact, he thinks prices could fall another 25% nationwide.
Do Suttmeier’s estimates reflect the latest crop of greater fool speculators who will likely walk away if they figure out a 25% haircut awaits them, or more hair-of-the-dog housing stimuli to avoid speculators walking away en masse? Just wondering how chaotic nonequilibrium conditions factor into these seat-of-the-pants estimates…
David Tice on Bloomberg Radio right now saying we’re in a 20 year bear market (started in 2008), deflation to continue followed by inflation, that banks need to take their lumps, and we won’t have clarity until they’re forced to mark to market again. Woot!
And when in what world do you see this actually happening? I believe sometime after the November elections.
Merkel has already been slapped in Germany.
What makes the gloomster Tice believe the global banking cartel cannot keep asset prices propped up indefinitely from here on?
(started in
20082000)Yes, PB. That looks more like it.
Ron Paul Backs Fed Audit Compromise
http://www.huffingtonpost.com/2010/05/10/ron-paul-backs-fed-audit_n_570487.html
uh oh..
BO’s nominee for SCOTUS, Elena Kagan was, from 2005 through 2008, a member of the Research Advisory Council of the Goldman Sachs Global Markets Institute.
She appears to be a liberal, so don’t just go nuts and smear her like you have all the other prominent political females of late who have business ties and/or a conservative bent.
This one is tricky.. think carefully.
Got it correct there… “She appears to be a liberal”….
yeah.. lots of indicators.
But you never know what they will do once on the court.. No more pressure to please anyone or to conform or obey. Pretty much free to do as they please.
When asked if there were any mistakes he regretted making as President, Eisenhower said that there were two. And that they were both sitting on the Supreme Court.
“Pretty much free to do as they please.”
But not with Anita Hill.
New Dem attack calls Whitman “poster child for Wall St abuse;” Meg’s team says Dems, Poiz working together
The campaign team of GOP gubernatorial candidate Meg Whitman says it has evidence that the California Democratic Party is preparing a major “Goldman Sachs hit” on the former eBay CEO — and will spend $800,000 in the next four days to buy anti-Whitman attack ads based on the Goldman issue.
Read more: http://www.sfgate.com/cgi-bin/blogs/nov05election/detail?entry_id=63099&tsp=1#ixzz0nZ5dovE2
Gollum is everywhere!
Putting a Gollum alum on the SCOTUS should help firm up the legal basis for defining corporate financial contributions as “free speech.”
Possible Supreme Court pick had ties with Goldman Sachs
Updated 4/27/2010 2:14 AM
U.S. Solicitor General Elena Kagan
By Jose Luis Magana, AP
By Matt Kelley, USA TODAY
WASHINGTON — A top prospect for the Supreme Court was a paid member of an advisory panel for the embattled investment firm Goldman Sachs, federal financial disclosures show.
Solicitor General Elena Kagan was a member of the Research Advisory Council of the Goldman Sachs Global Markets Institute, according to the financial disclosures she filed when President Obama appointed her last year to her current post. Kagan served on the Goldman panel from 2005 through 2008, when she was dean of Harvard Law School, and received a $10,000 stipend for her service in 2008, her disclosure forms show.
A spokesman for Goldman Sachs did not respond to requests for comment Monday.
Hardly everywhere. I’d guess that one in a thousand (or less) potential nominees had any ties with the company.
That BO would pick a Goldman Sachs adviser in the midst of a campaign to throw GS under the bus is a bit puzzling. Another fat finger perhaps?
Could a never-ending series of short-term hair-of-the-dog hangover cures serve to rehabilitate the debtoholic patient? Time will tell.
The Bailout Only Fixes Short-Term Problems
4:01 pm May 10, 2010
By Jacob Goldstein
The massive bailout fund the EU promised early this morning should be enough to keep struggling euro-zone nations afloat for the next few years.
But it doesn’t solve longer-term problems. Greece, Spain and Portugal, among others, face the difficult combination of rising debt and little or no growth. Bailouts would take the form of loans, and would only add to countries’ debt.
“This doesn’t solve any of the basic fiscal problems, so ultimately it raises the stakes and creates a chance of even greater financial failure,” the economist Tyler Cowen wrote today.
The bailout includes not only the promise of loans, but also action by the European Central Bank to buy government bonds, which should make it cheaper for governments to borrow money.
The idea is to buy time for troubled euro-zone nations to both cut spending and get their economies going again. It’s very tough for any country to do both at once; it’s particularly tough in the euro-zone, because individual countries can’t devalue their currency, which both reduces the value of existing debts and makes exports more competitive.
Still, the picture in a few years could be much brighter for the EU, the economists Simon Johnson and Peter Boone write: lower deficits, Spain out trouble, and Portugal and Ireland “scraping by in limbo but now isolated problems.” (Even in a rosy scenario, they figure that Greece won’t be able to keep up with its debt payments.)
On the other hand, they write, countries may simply tap bailout money without addressing their underlying problems, allowing the debt issue to “fester.”
Speaking of, what happened to the TARP funds that were supposed to be used to relieve Wall Street banks of their toxic asset problem? Isn’t this issue still “festering,” and didn’t the TARP monies get tapped to pay big bonuses in a year when Wall Street would have collapsed w/o intervention?
Did someone’s fat finger hit homebuilder shares after hours (e.g. Tool Bros, Lennar, etc)? I see a big dip followed by quick reversion in several of the tiny charts in this link…
WTH? I thought Barry was going to put and end to this type of thing, especially when the evil Halliburton is getting the money…
KBR to Get No-Bid Army Work as U.S. Alleges Kickbacks (Update1)
(Bloomberg) — KBR Inc. was selected for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, the Army said.
The Army announced its decision yesterday only hours after the Justice Department said it will pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work. The Army also awarded the work to KBR over objections from members of Congress, who have pushed the Pentagon to seek bids for further logistics contracts.
WMBZ votes for Lil’ Opie to pull a Cheney-Shrub:
Shrub: “I’m “The Decider”
Cheney: “See this paddle,… it’s called offical name is: “mini-micro-manage-me” …Oh, the initials AM? that stands for: “Abuse me” …the other side? oh, PM…”Punish me”
ROTF….
Oh, so like driving a car..a Ratings license is a PRIVILEGE…
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Judge Hwy50: “You license is revoked, you must pay a fee $$$$$$$$$$$, you must enroll & complete a “TrueSerialEnabler’s™” course, you’re on probation for 5 years, you must install a “Anti-AAA” ratings device, you must pay & attend a CTDCF (”Corporations that don’t commit fraud”) course, You must post a sign on all “bidenss” locations: Hi, we’re Moody’s, we’re “TrueSerialEnabler’s™” any violation or non-compliance of the following orders will require a warrant for your arrest of your CEO & board of directors and immediate closure of all “bidness” activities…
Moody’s may face SEC action over application:
AP Monday May 10, 2010
“…Ratings agencies must be licensed by the federal government.”
“Moody’s disclosed late Friday that it might face a Securities and Exchange Commission administrative charge that it misled regulators when it applied for its license in 2007″
Filed under: “circumstantial evidence, like when you find a trout in your glass of milk…”
Something is just not kosher about this story
Attorneys lay out cases in Iowa child labor trial
Attorneys dispute whether former Iowa slaughterhouse manager knew children worked at plant:
On Monday May 10, 2010, 3:08 pm EDT
WATERLOO, Iowa (AP) — “Attorneys in the child labor trial of a former kosher slaughterhouse manager are disputing how he much knew about minors working at the plant in Iowa.
Former manager Sholom Rubashkin faces 83 child labor violation charges.
The trial comes as Rubashkin awaits sentencing on separate federal financial fraud convictions.
ABN AMRO bank pays 500 million for busting US sanctions
(AFP) – 2 hours ago
WASHINGTON — Former ABN AMRO bank is paying 500 million dollars to the United States for operating a huge money-laundering scheme for banks and clients in blacklisted countries, US officials said Monday.
“Over the course of a decade, ABN AMRO assisted sanctioned countries and entities in evading US laws by facilitating hundreds of millions of US dollar transactions,” said US Attorney Ronald Machen.
The Department of Justice said the Dutch bank, taken over by Royal Bank of Scotland (RBS) in 2007, had helped banks and customers from blacklisted countries — including Cuba, Iran, Libya, and Sudan — to carry out transactions.
Those countries are all under US sanctions. Communist-run Cuba for example has been under a US economic embargo for almost half a century.
But according to court documents, more than 3.2 billion dollars involving shell companies and high-risk transactions with foreign financial institutions flowed through ABN AMRO’s New York branch.
http://www.google.com/hostednews/afp/article/ALeqM5hjCjJ5madssSuazUPoLx6DZOgzPQ
“We need a senator who is committed to balanced budgets, constitutional limits and individual liberty. I believe that person is Mike Lee,” said DeMint, R-S.C., in a statement.
rewinding the tape back 10 years:
“We need a President who is committed to balanced budgets, constitutional limits and individual liberty. I believe that person is George W Shrub,” said DeMint, R-S.C., in a statement.
Conservatives sharpen knives after Bennett’s ouster
Republican establishment picks are targeted in Kentucky, California
Market Watch, Capitol Report May 10, 2010
Knighted Economists & triple AAA rating agencies & Goldenmansucks Inc….does any of the following have an “ethical” application in your mindset?
“…but we don’t know what any of the details are, we don’t know what doctors he may have consulted with, we don’t know what evidence that the league might have had … which is a very bad position to be in because we’re the guy that’s got the investment in the player. The league doesn’t have any money invested in the player, the union doesn’t have any money invested in the player, and yet they get the information and we don’t.”
“Cushing was voted The Associated Press NFL Defensive Rookie of the Year at the end of the season — part of the AP’s annual awards honoring outstanding on-field performance by players. As a result of the penalty and admission, the AP is taking a revote for the defensive rookie award plus All-Pro outside linebacker”
Texans owner: Team knew about Cushing “issue”
By BARRY WILNER (AP)
The crash happened at 3:30 a.m.
Published: May 10, 2010
16-year-old in coma after crash
By ERIKA I. RITCHIE THE ORANGE COUNTY REGISTER
No comment.
Sarah “The Barracuda” + “TrueAnger™” Family values:
Bristol Palin goes clubbing after celebrating the National Day to Prevent Teen Pregnancy:
“For me personally, [abstinence] is the answer,” she smiled sweetly at the daytime event. “And for teens out there, yeah, having sex has consequences, no matter how safe you are.”
But Sarah Palin’s pride and joy turned sour at least once during the day — when she was asked about ex-beau and fame chaser Levi Johnston.
“If I could go back, I would have told myself that just because he’s good at sports and drives a cool truck, it’s meaningless — it’s pointless,” she sighed.
Imagine if Levi “sported” a “Hummer”…
Originally Published:Thursday, May 6th 2010,
Updated: Friday, May 7th 2010
Imagine if Levi “sported” a “Hummer”…
Must…not…reply… …family…site…
“If I could go back, I would have told myself that just because he’s good at sports and drives a cool truck, it’s meaningless — it’s pointless,” she sighed.
We just identified the deepest thinker of the Palin clan.
Filed under: “It’s a mystery Charlie Brown” …or…”Anything you can trade, we can trade faster…:
US market plunge puts spotlight on futures trading
e-Mini contracts continue to draw scrutiny:
By Matthew Goldstein and Jonathan Spicer, NEW YORK, May 10 (Reuters)
“…The CME and U.S. Commodity Futures Trading Commission both have been requesting information related to e-Mini trading during the mysterious 15-minute stock plunge that resulted in the biggest intraday drop in the Dow Jones Industrials.”
“We are getting regulators coming by and asking for data, which is out of the ordinary,” said one trader who requested anonymity because he was not authorized to speak to the media.”
Is Greece the Eurozone’s answer to Donald Trump?
SPV = Superfund Profligate Vesicle?
* The Wall Street Journal
* EUROPE NEWS
* MAY 11, 2010
EU Bailout Sparks New Challenge: Enforcing Fiscal Rigor in Euro Zone
By STEPHEN FIDLER
A €750 billion ($955 billion) bailout package for euro-zone governments facing debt troubles has created another urgent challenge for European policymakers: how to keep free-spending governments in line.
The rescue funds, together with a commitment from the European Central Bank to buy up governments bonds, have “weakened incentives for fiscal discipline” in the euro zone, says Marco Annunziata, chief economist of UniCredit Group in London.
Economists say the euro zone needs more budget discipline and much greater fiscal coordination if the common currency is to survive. But past European efforts to interfere with governments’ rights to tax and spend as they please have foundered.
Eleven years of sharing a currency have pulled the 16 nations of the euro zone ever closer to one another. So close that when Greece, which accounts for just one-fortieth of the euro-zone economy, hit debt troubles, it started to threaten the entire currency union.
That is because the financial systems of euro-zone countries have become, almost unnoticed, more intertwined. Because there was no currency risk, banks, insurance companies and pension funds in every euro-zone economy became the biggest investors in the bonds issued by governments of other countries using the euro.
That meant that if Greece or another government defaulted, it would have severe knock-on effects on the financial health of banks across the euro area. That risk to banks elevated even small European economies to the “too big to fail” category.
Mr. Annunziata says it also became clear that a default in one country would force up the interest rates on bonds issued by other European governments, increasing their borrowing costs perhaps to prohibitive levels. “My debt problem thus becomes your problem,” he says.
…
Last-Resort Lending
Two initiatives that the EU plans to help countries that fall into financial troubles:
EMERGENCY FUND
Amount: €60 billion, from European Union budget
Description: A fund to help strapped nations in Europe, through loans to governments
How it works: Nations that need help apply to Brussels; no agreement by euro-zone nations’ lawmakers is required
SPECIAL PURPOSE VEHICLE
Amount: €440 billion, raised on capital markets with the guarantees of euro-zone nations
Description: An off-balance-sheet entity, in which euro-zone countries would be shareholders. The SPV would buy the sovereign debt of strapped countries.
How it works: Nations seeking aid apply to Brussels, which taps the SPV only if the emergency fund is exhausted. Many countries would need parliamentary approval.
What’s sparking the tonight’s selloff on the global DOW? Don’t folks know that big fat Greek bailouts are good for everyone?