Bits Bucket For May 25, 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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Not looking so good for the old opening bell, fat fingers pointing down…
Equity outflows looking similar to that pipe under the gulf.
… and about as toxic to investors as are the oil flows to fish.
My but the Asian markets are getting down there. Looks like the Nikkei wants to drill through the 9,000s in a couple days.
Interesting times, interesting times. Ah, but it’s never been a better time buy - don’t forget it!
Mmmm… Panda loves green shoots!
Watched Koala’s munching on real green shoots yesterday morning, not the other variety lining my bird’s cage.
Ha! After leaving that post I went over to my news site - and what was staring me in the face?
“It’s the best time in our generation to buy” a home, says one economist. - A story on record low interest rates!
edge, did you find out anymore about the BP rumor that they were trying to save the well, and so have been dragging their feet on this top kill manuever?
I’m tellin’ ya, something majorly stinks about how this has been handled.
COmmon sense says no, at least not for more than a few days. This is an unholy nightmare of expense and bad publicity for them ,they would be stuffing their own kids in there at this point if it would stop it. I think the real problem is poor, poor planning on prevention of this, and jus the fact that it is 5000 feet down, the pressures down there are ridiculous. Imagine trying to seal something as simple as a garden hose in your backyard if you were trying to do it remotely using only robots.
Oh, yeah, and if you wanna look at what stinks, Halburton was the ones responsible for putting in the cementing(or whatever) that blew out and caused this, notice how their names arent really being thrown around as the cause of all this?
they would be stuffing their own kids in there at this point if it would stop it
Oh frick… coffee up the nose.
Hey Palmy, not anything that really rises above conspiracy theory level. Still, one cannot discount the argument that they might have thought it was possible and that that led to a delay. Early on I read that the costs of a small clean up were tiny compared to the costs of losing that well.
Could be things just got away from them. Kinda like another story we’ve been following…something about “being contained”.
makes sense, edge.
While I think they’d like to save the well, I’m more inclined to think they really don’t know what to do with this situation nor does anyone else. While there are lots of things they’ve done so far I detest (safety shortcuts, highly toxic dispersants, deceptive PR, etc.), I think they’d be elated to find a timely solution to this ongoing disaster. What’s numbing is the possibility this gusher into the Gulf could go on for months or years.
Back in the good old days, before attorneys got involved, and “punitive damages” came into play, a screw up like this would lead to a fairly rapid, unbiased investigation, and the results would be published, so everyone could learn from the mistakes.
Now, the potential liability is so high, everybody goes into bunker mode, starts pointing fingers at everyone else, and the unbiased truth never gets out.
Seems like a potential source of employment for some of the 7 or 8 million unemployed. BP can house ‘em give them each a few square yards of ocean front to keep clean and pay ‘em $25.00 an hour or so to keep there 5 square yards clean. When the well is capped and the oil is all cleaned up, they can go home.
Might cut into BP’s executive comp a bit, but is only for a short period.
Working the Louisana marshes in a haz mat suit will separate the men from the boys (I would be a boy).
“It’s the best time in our generation to buy.”
Such thinking should be encouraged, IMO.
In a prior life, were you by chance a general in the British, French, or German army - say around 1914-1918?
You seem to have the knack for sending FBs “over the top”. Not that I disagree, but my you’re smooth about it.
They can buy all they want, I just don’t want to see it happen to an in-law who could come begging for a loan later “until the market comes back.”
‘Once more unto the breach, greater fools, once more;
Or close the wall up with our FB dead.’
It is always a good time to buy something! Commissions, bribes, and bonuses depend on it!
Best time for whom?
I don’t think that’s a finger you are looking at, Palmetto. Things indeed are looking ugly. The S&P futures are down about 3%. Europe is down big. Asia was down big. They are rattling sabers on the Korean peninsula. Governments often believe a quick war will solve their problems. Is everybody insane?
It appears that FHA has surpassed both Fannie and Freddie as the subprime lender of choice. FHA has lower down payments so they have more customers. And still I have people around me saying it’s a good time to buy. Why do parrots learn only one line?
The Obama Admin is making the Bush Admin look good. Does anybody now think a Dem Admin would have done any better with Katrina after seeing their ineptitude on the oil spill? Obama tied his star to the stock market. He allowed Broad Street, Water Street and Wall Street to run wild as long as they pushed the market higher. He better have a Plan B. I don’t think he even had a Plan A.
The recovery is looking sick. It’s amazing how few questions have been answered during this Printing Press Recovery. Nobody had to clamp down on immigration. There has been no discussion of repatriating jobs to the U.S. Where is that green revolution that was promised? And on top of all of this the Texas Rangers had to declare bankruptcy.
We should do something fun to take our minds off of this madness. I think we should have a Pro Sports Death Draft. There is no way our economy can support all of these teams. If I get the first pick I think I will pick a professional hockey team south of the Mason-Dixon Line. I’m looking at you, Nashville.
“The Obama Admin is making the Bush Admin look good. Does anybody now think a Dem Admin would have done any better with Katrina after seeing their ineptitude on the oil spill? Obama tied his star to the stock market. He allowed Broad Street, Water Street and Wall Street to run wild as long as they pushed the market higher. He better have a Plan B. I don’t think he even had a Plan A.”
Oh yes, he had a Plan A all along. Bush was easy to figure out, he pretty much made no bones about who and what he was.
Last night, however, it hit me what the “Plan A” of the current occupant of the WH is: level the US with the third world and inflict as much damage and humiliation on the general population while doing so. His comment about “clinging to guns and religion” should have been a clue, but subsequently bowing and scraping to foreign leaders, and hosting the head of a failed narco state at state functions, not to mention permitting that hypocritical speech on immigration in Congress, shouldn’t leave anyone in any doubt what Plan A is. Not to mention his mouthpiece Eric Holder and his “nation of cowards” speech. His Dem enablers are merely insane. He, however, is calculating, but it is carefully masked.
I believe he sees himself as some sort of international avenger of the wrongs of the US. JMO, anyway.
“level the US with the third world and inflict as much damage and humiliation on the general population while doing so. ”
Bingo!
Bush was a dolt - well-intentioned (IMHO) - but utterly clueless. Obummer, however, has made it clear he intends to “level the playing field” by leveling us.
He reminds me more of the dog that chases the garbage truck, and doesn’t know what to do with it after he has caught it.
Happened to one of the dogs my family owned when I was growing up.
She was a world-class squirrel-chasing dog, and dang if she didn’t snag a mouthful of squirrel tail one day. Talk about a puzzled dog. She had no clue as to what to do.
Meanwhile, the partially de-tailed squirrel had high-tailed it up a tree.
world-class squirrel-chasing dog ??
And the squirrel got away ?? What was this a tea-cup poodle ??
Re: Your comment yesterday.
I KNOW the skillset to fix airplanes vs. motorcycles/bicycles is on an order of magnitude higher…..and YOU KNOW that.
The problem is, the standard issue Labor Department employee or HR Department doesn’t. So the jobs are classified as equivalent. And a lot of professionally trained management types are either ignorant, or lazy, or both, and think that since the positions are classified as equivalent, the pay rates should be the same.
This problem is not unique to the wrench-turning business.
I can’t tell you how many times a pilot has come up to me and said “I’ve got this guy who cleans my airplane part-time, and wants to be an A&P…….Why don’t you show him the ropes, and sign him off, so he can take the test?”
I usually reply, “Okay……….as soon as you sign the papers that will make me an ATP.”
I usually reply, “Okay……….as soon as you sign the papers that will make me an ATP.”
And, knowing more than a few people who’ve earned the ATP designation, I will excuse you for laughing in the pilot’s face while delivering your reply.
Plenty to slam Obama on in terms of Wall Street.
But to equate Katrina with this oil spill is a stretch.
The gov has zero capabillity when it comes to drilling oil, plugging wells, or cleaning up major oil spills.
They have plenty of capabillity when it comes to responding to natural disasters that destroy homes, and cities. It’s called FEMA.
Yes, I am sure that nobody will be comparing this to Katrina.
They may compare the spill to Katrina, but they would be incorrect. I tend to agree with Friedman (although he’s been wrong on a lot of things) that this is more of a Sept. 11 than a Katrina. Check out his op-ed in the NYT last week.
As for this administration making the last one look good, that seems like still a lot of hyperbole. But they are headed that way, for sure.
MrBubble
So it’s like a “man caused disaster”?
Look, I don’t know if there’s even the thinnest of connections to Katrina but, Oil Drilling is by it’s very nature human activity.
I would ‘hope’ that we at least think we can assert more ‘control’ over activities of our own doing over the random actions of weather events like a hurricane? If our confidence level isn’t any greater than that ( maybe we shouldn’t even drive! )
Business as usual……
- The much vaunted “free market” company screws up, and the government finds itself being the “bagholder” for the cleanup. Subsequent investigation will discover that the free market company cut corners, exploited loopholes in the current regulations.
-The government will try to pass regulations to prevent a similar occurance.
-The “free market” will protest loudly, throwing out the “socialist”, “over regulation” and “government takeover of private business” bombs.
If the free market wants the government to butt out, they need to stop making eff-ups like this.
I tend to agree with Friedman (although he’s been wrong on a lot of things) that this is more of a Sept. 11 than a Katrina.
I think it could become Obama’s “Iranian Hostage” situation.
As for this administration making the last one look good, that seems like still a lot of hyperbole.
The moment he named Geithner as his Treasury Secretary the fate of his administration was sealed. Hope and change in smithereens.
The moment he named Geithner as his Treasury Secretary the fate of his administration was sealed. Hope and change in smithereens.
True. That was a bad move. But there is more to the strength of a nation (I keep telling/deluding myself) than just money/economy. I think that W set a very high water mark for failure.
I think it could become Obama’s “Iranian Hostage” situation.
I really don’t think so and I think that what Freidman means is that O had a chance to use this disaster for the good of the nation and didn’t/hasn’t, just as W had a chance to use that disaster for the good of the nation yet he chose to tell us to shop and sent a few of us to go bomb a country that had little/nothing to do with the disaster.
Really, you should check it the article. Quick read.
MrBubble
I have developed a wicked Friedman allergy.
Yeah. He’s a donkey. I saw him speak last year.
Can you dissociate the message from the messanger? I’d like to hear somebody else’s take on the article. I’m getting sick of the “This is Obama’s [insert major W screw-up]“, especially when they the events don’t seem to be analogous.
Its the law of small probabilities but lots of events. Even inf the probablility of a disaster is relatively small even a fraction of a percent, if there are enough events eventually there will be a disaster. The discouraging thing is that there were not carefully considered contingency plans to deal with what is guaranteed to occur eventually.
Katrina was also to some extent a man-made disaster, with respect to the decision to build neighborhoods 20 feet below sea level.
LVG:
New Orleans I think is max 12 feet below sea level..(hence everyone on rooftops) .but they also built the projects in the 9th ward which is one of the lowest point in the city…..so it made it easy to blame Bush for not helping black people.
I think we proved we weren’t prepared for big disasters. Not sure the kind of disaster matters.
Don’t think it’s Obama vs Bush here either. Tired old bureaucracy in those organizations with tired old employees.
I’d say our best hope is faith/community organizations.
Oil spill though… well… something else we need to think about.
I’d say our best hope is faith/community organizations.
I’m not so sure. For many years, I’ve been part of Tucson’s Community Emergency Response Team. My class was trained at the behest of a city council member, and we graduated during a city council meeting at which the mayor was present.
That was back in 2003.
We’ve heard through the Citizen Corps Council (a local volunteer group) that all sorts of periodic drills and trainings would happen. Few have.
I don’t think that CERT should become as structured as the Disaster Medical Assistance Teams. (When something bad goes on, those volunteers are essentially drafted into federal service.)
But I do think that an organizational layer needs to exist above the CCC. A group of volunteers just isn’t getting ‘er done here. We need to train and drill, and if it takes FEMA or some other agency to organize it, I say let’s do it.
Hey Slim,
I didn’t say this was a good option. I said our best hope.
Was having a lunch conversation and noting that a lot of agencies have been gutted over the years and we really needed their research arms now, FHA, Army Research Labs, ACOE exc. Kept a lot of welfare orgs which don’t do much.
So, I see a lot of the basic community groups as having a lot of bang for the buck. However, they are not prepared for massive large scale interventions.
If I had a good plan i’d be screaming it at Obama from a megaphone in front of the whitehouse.
On another note Slim,
The man overboard drill as taught to you as a boat captain…. Well, it involves you sailing a figure 8 to get back to the person/child in the water. It’s slow and takes a while. They used to teach a crash jibe or heaving too.
Well, the best thing to do is keep the boat under power and go into reach and cut down below the person.
Here is the thing: can you imagine sailing away from your small child in the water to loop back? Maybe 100 yrds away! Meanwhile your frantic friends and family members are going totally bonkers.
I talked with the instructor and he said, first thing that happens is that every single thing on the boat that floats goes into the water. Life rings, seat cusions, empty bottles and generally a parent or two will be naked and swimming really fast. Then you do what ever you can.
I’d fire the engine right away but you have to be gosh darn careful. Probably furl the sails and go under power.
Drill is good but when you get to a site and there is a fire, half collapsed building, blood and chaos… well it’s just a very different story. About 80% of the people crack and need to be led.
If you don’t believe that, look at the pictures of the passengers on the US Air Hudson River flight and count the number wearing their PFD. Dang few if any. Yet how many times have we seen the drill?
I got news for you, the green revolution is still a ways off BUT it will be deflationary when it gets here. Consumption will go down the greener we get.
+1, James.
I am trying to get the Mrs. to agree to downsize and move so I can build a new green house…It will be totally off grid although I will remain in the urban core of the city…I will need sewer, water and minimal garbage container and even my water will be cut by at least 50% or more…Limited success so far…
The “Green Revolution” really means the “Black Revolution”, because we will all be living in dark caves eventually.
“Mad Max” will be painted on cave walls and shown to the kids, as a training aid.
“Consumption will go down the greener we get.”
Is this not a good thing?
“The “Green Revolution” really means the “Black Revolution”, because we will all be living in dark caves eventually.”
The first “Green Revolution” was actually a black revolution in that we learned how to use fossil-fuel derived pest,herb and fungicides and fertilizer to grow food for many more people. I would argue that if we don’t have a real green revolution, the type that you fear, then that will be the cause of the Mad Max cave painting. But then you would argue against that idea.
MrBubble
Some people think that scrapping modern civilization, and having us all go back to scratching out a living in the dirt (either literally or figuratively), would be an improvement.
My dad’s side of the family survived the Dust Bowl in Oklahoma, and lived that lifestyle. Up close and personal, it doesn’t have much to recommend it.
I agree. I don’t want to go back to living in caves at all. I like being able to work on the computer and take a flight once a year to see my folks and enjoy my iPhone, etc.
However, there is so much waste involved with our consumption and planned obsolenscence models right now. Rather than just an extraction based system, an integrated system would be a good start.
Instead of people commuting 60 miles to work at the same time every day and sitting in traffic, how about telelcommuting or shifting hours? It’s not as though many of us still work in factories (CEOs living in Greenwich, CT moved them all).
Instead of driving to the track to jog (my Dad used to do this), how about running on a trail or just walking to work that would preclude the need to jog at all?
We’re just using too much and it’s so like the housing bubble. When home prices only increased with inflation for a hundred years and then started increasing by 10% a year, it’s obvious to see what would happen.
When resource extraction, pollution, population and environmental degradation are either non-existent or pretty flat for millions of years and then escalate rapidly, its’ obvious to see that at least something will happen. And we’re living on such a knife-edge within a fully-integrated system in the vacuum of space, that “something” probably won’t be for the good.
MrBubble
Which is what may happen. The US economy itself from 1940 to 1980 may have been a statistical blip, and most of the population is going to revert back to a circa 1900 standard of living……..no private transportation, no/minimal health care, no public services, city governments controlled by the political bosses, everyone packed into tenaments, “upward mobility” being the thing of the past. The “best/brightest” (however that is defined) will do fine.
The challenge will be becoming one of the “best/brightest”. One thing I’m telling my kids is that this “Work hard, and you will be rewarded” mantra is Bullchit. Just a mechanism to keep J6P’s nose to the grindstone.
It’s now about what you know, being able to articulate that, and developing a personal network to put yourself out there, and to pick up on job opportunities.
Every job I’ve found in the last 10 years wasn’t found by applying for it and going thru HR. It was by knowing someone, who knew me, and knew someone else that was looking for someone with my qualifications.
Nobody in a leadership position is willing to tell 40% of the population that they and their kids are pretty much fooked.
I’ll personally do okay (knock on wood), because I can displace easily if I need to, have a job that can’t be outsourced readily, and don’t have to worry about younger guys underbidding me, because we have pretty much stopped producing training aircraft mechanics in the US.
All I need to do is get used to is not having health insurance, and working my aZZ off for two weeks, then twiddling my thumbs for two weeks.
The problem with reverting back to 1900, is that our national leadership has demonstrated no ability to articulate a plan or manage such a transition, and all the money that could have been used to ease the transition has been blown on Banker/Wall Street/FBer bailouts.
Tin Foil Hat theory: The reason we are still in Iraq and Afghanistan, is because they do not want guys who have seen an insurgency “up close and personal” coming back to the US, becoming civilians, and be forced to find jobs in this economy.
(Two guys with a clapped-out Chevy and a single AR-15 turned the DC area upside down for the better part of two months. Imagine the chaos caused if (say) 50/100 guys decided to do the same nationally…..or in the NYC Metro area.
I believe that I agree with everything you wrote. One thing though, do you think that there would be a blow up (ca. 1789) if we revert to “city governments controlled by the political bosses, everyone packed into tenaments?”
Mr. Bubble/X-GS,
Oh so right! Look, I ditched the commute over 7 years ago, and had it not been for this bust, I’d be ‘perfectly’ happy.
Yes, I enjoy being able to set my own hours and don’t regret leaving gridlock behind? Technology has made all this possible for me, and millions of others. We need to reach even more.
All that aside though, the wife and I are finally getting serious about our 2nd home. So much so ( we no longer really care about our first? ) What we’ve strived for is a place where we’re really not all that reliant on the grid. And of course a much simpler way of life, it’s not necessarily a bad thing.
Good lord. You people went from 1997 house prices to 1900 standard of living. Whats next? Bubonic plague coming back?
Yall need to get a grip on reality.
“The Obama Admin is making the Bush Admin look good. Does anybody now think a Dem Admin would have done any better with Katrina after seeing their ineptitude on the oil spill? ”
GWB knew a category 5 hurricane (when over the central Gulf) was headed toward New Orleans, yet stayed on vacation, then went on fundraisers, before doing a flyover of New Orleans. While Clinton put a professional in charge of FEMA, GWB put an utterly unqualified crony in charge of FEMA. My biggest criticism of Obama in this matter so far is he didn’t work fast enough to clean out the Bush anti-regulatory zealots in MMS, Interior, EPA, etc. If the Feds had a solution, BP would have been kicked to the curb.
While I’m hardly elated with some of things Obama’s done, he was left a once in a century colossal mess from Bush. Obama is absolutely not Bush.
“The Obama Admin is making the Bush Admin look good.”
Not by a long shot. The Bush admin damn near single-handedly destroyed this country and left Obama to pick up the pieces. Hell, we might so FUBAR he may NOT be able to fix it, but he’ll sure as hell get blamed for it.
As for the Bush Admin disasters, shall I put up the list?
A fat thumb seems to be squashing the market like a bug any more these days. If there is a silver lining of any sort, it is that mainly fat cats are getting squashed, as most folks in the lower half of the income distribution have bank accounts that are too threadbare to allocate new money to the stock market.
Enjoy drinking your ‘toxic cocktails,’ stock market bulls!
Page last updated at 11:56 GMT, Tuesday, 25 May 2010 12:56 UK
Global stock markets have fallen heavily on Tuesday over continued fears about eurozone debt problems.
At midday in Europe the FTSE 100 in London was down by 2.52%, Germany’s Dax index was 2.46% lower, while in France the Cac 40 index had dropped 3.17%.
It came after shares in Asia had seen sharp falls. Stocks in South Korea and Japan had been affected as North Korea reportedly went on to military alert.
Japanese stocks fell by 3.1%, and shares in South Korea fell by 2.7%.
In London, the FTSE 100 has fallen by more than 10% in little more than a month after hitting a 22-month high in April.
‘Toxic cocktail’
Another factor worrying investors was the weekend rescue of Spanish bank Cajasur by Bank of Spain, only the second time the central bank has saved a regional lender.
Amid concerns over solvency in the sector, and in the wake of the Cajasur rescue, four Spanish savings banks then announced plans to merge.
Cajastur, Caja de Ahorros del Mediterraneo, Caja Extremadura and Caja Cantabria said they had reached agreement to form a group that would “strengthen solvency and assets of the participating banks”.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “The toxic cocktail worsens. Continuing fears over the European debt situation stalling the global economic recovery has been exacerbated by the potential of military tensions in Korea.”
And he said there was a shortage of buyers prepared to commit to the market at the present time.
The continued weakness of the euro is a concern, with investors dumping the currency amid fears that debts will cause defaults by weaker countries in the European Union.
In Tuesday trading the euro stood at $1.2237, after earlier falling as low as $1.2218.
And the euro stood at £0.8564 against the pound, compared to £0.8587 at close on Monday.
“The euro problems are very deep-rooted as eurozone members share a common currency but fiscal policies are left to each country,” Japanese Finance Minister Naoto Kan told reporters.
“I hope financial markets will calm down gradually.”
…
EURO V US DOLLAR
Last updated: 25 May 2010, 13:40 UK
EUR:USD intraday chart
*Chart shows local time
€1 buys change %
1.2227 -0.0145 -1.17
it is that mainly fat cats are getting squashed
If that’s the case then TARP2 is around the corner.
“If that’s the case then TARP2 is around the corner.”
The markets will have to survive without TARP2 until after November. There’s no way any TARP2 is happening before then, if ever.
Just posted a section of the BBC article linked below, but forgot the link. If this is what the global stock market looks like in a recovery, I am sure glad we aren’t headed towards a double-dip recession.
One has to wonder whether global markets haven’t sniffed out the failure of U.S. financial reform measures to address the root cause of the Fall 2008 meltdown, implying years of U.S. economic dysfunctionality ahead. It’s beginning to look a lot like 1931, in fact; note that 1931 was similarly two years out from the Fall 1929 stock market crash as 2010 is from the Fall 2008 crash.
Euro worries prompt global stock market falls
Page last updated at 11:56 GMT, Tuesday, 25 May 2010 12:56 UK
Global stock markets have fallen heavily on Tuesday over continued fears about eurozone debt problems.
…
Interesting point. It’s relatively straightforward to BS the voting public. It’s quite a bit more difficult to BS smart money.
“fat fingers pointing down”
Fat middle finger pointing up.
How many times do I have to say it?
That’s NOT my finger!
Roidy
That’s not Mr Market’s belly button, either.
I like it! S&P go down at least to 980 please!
Was afraid to jump in at the March 2009 bottom. But this time I will pull the trigger on at least half the money now in MM mutual funds. IMO the market is already oversold but it’s going to get even better (lower). So right now the safety is still on, but my thumb is resting on it.
Buy when everyone else is selling…
“I don’t know why it works. But it does!”
Putting my money into schemes like that makes me uncomfortable. I really do need to fully understand the details.
Bill,
Carefully remove your thumb from the safety…put the gun down…place it safely away…crack open a beer, or run around the block…or do both.
Patience is a virtue…those 2009 lows will be your friend. Like you - I’m in MM funds plus gold and silver. Had the benefit of bailing securities in Oct. 2007. Yep - missed the current run-up but didn’t miss a single night of sleep.
My thumb will be on the safety when this market approaches those 2009 lows!
Could Mr. Bernanke help?
New rule says banks must prove ownership before foreclosing
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 11:09 a.m. Sunday, May 23, 2010
Foreclosure filings have backed off this year, dropping 36 percent in Palm Beach County last month compared with March, but it may not be a brightening economy causing the decline.
A new Florida Supreme Court rule requires lenders to verify they are the actual owners of a home before making the initial case for foreclosure.
Show me the “note,” in other words.
The problem is that the notes - legal promises from borrowers to repay a debt - have been sold and resold, bundled into securities, scanned into computers, sealed in unknown vaults and lost in other ways as homes got caught up in the puzzling markets of the real estate boom.
“The original note is something very significant, and they just seem to have lost thousands of them,” said Boca Raton attorney Marlyn Wiener, who handles real estate cases. “Nobody knows where the stuff is.”
The new rule was approved in February with the intention of unclogging the foreclosure courts, which have an estimated statewide backlog of 500,000 cases. It also gives judges power to sanction plaintiffs who make false accusations on the ownership of notes or missing notes.
“Nobody knows where the stuff is.” Could it be here?
Bernanke Admits Printing $1.3 Trillion Out Of Thin Air
By Greg Hunter
USAWatchdog.com
Fed Chairman Ben Bernanke admitted the central bank created $1.3 trillion out of thin air to buy mortgage backed securities. This shocking admission came from the Joint Economic Committee hearing on Capital Hill last week. I was dumbfounded when I saw Bernanke shake his head in the affirmative as Representative Ron Paul said, “Well, where did you get the money? You created this money. So you did monetize debt, and that went into the banking system.” I was amazed he admitted this. I looked up the original hearing on C-Span to make sure the clip was not edited. It was not.
I’m amazed that someone is amazed. Of course the Federal Reserve creates money, that is essentially their job.
Yeah…….it wasn’t like they sold cookies, or had a garage sale, to generate 1.3 billion.
This is what happens when the “Peter Principle” becomes a National Policy.
” to generate 1.3 billion.”
a lot more cookies to get to 1.3 trillion
“New rule says banks must prove ownership before foreclosing”
You have to wonder how many FBs didn’t, and won’t, think to challenge the banks ownership during foreclosure?
Looks like the PPT has its work cut out for it. May have to postpone their afternoon on the back nine if things continue to go south, eh GS?
Looks like the PPT decided to stabilize the DJIA at a 2 pct loss for the day…
They continue to do their “magic” as the Dow is just a whisker short of 10K as I type this. It might even close with little or no loss.
All hail the PPT.
Sometimes I think that a giant meteor could Hit the Earth, killing a billion or more people and they (the PPT) would find a way to stop the plunge.
Step 1: Work to crash competing currencies
Step 2: Watch as foreigners flock to U.S. treasuries to avoid major currency losses
Step 3: Watch as mortgage rates drop to all-time lows
Step 4: Pray that the wheels don’t come off the whole thing
Too bad those low mortgage rates are predicated on collapsing currencies. That kind of kills the idea of exporting yourself out of this mess. That idea was a slab of nonsense in the first place.
Step 5: Refinance U.S. Treasury debt at very attractive rates
How does that do us any good when we are adding trillions to the debt on a yearly basis?
It helps us get away with adding trillions to the debt on a yearly basis.
Which means we are not really reducing our payments. It’s like a credit card junkie getting a lower rate and then figuring that gives them more room to run up debt. The only way it actually helps is to stop adding to the debt.
It’s like a credit card junkie getting a lower rate and then figuring that gives them more room to run up debt.
Good analogy.
However that then leads us to - what normally happens when the rates go up on a credit card junkie’s cards, and they also find that they can no longer get any more cards?
“Which means we are not really reducing our payments. It’s like a credit card junkie getting a lower rate and then figuring that gives them more room to run up debt. The only way it actually helps is to stop adding to the debt.”
It’s like an underwater homeowner with a mortgage so large that he will never be able to pay it off out of his lifetime earnings getting a low-interest workout so he can afford to make the monthly payment.
It’s also like a drunkard with a hangover taking a sufficiently large dosage of his favorite hair-of-the-dog hangover cure to make his head stop pounding.
It’s like an underwater homeowner with a mortgage so large that he will never be able to pay it off out of his lifetime earnings getting a low-interest workout so he can afford to make the monthly payment.
Except in this case it’s a reverse mortgage - where the principle keeps going up as withdrawals are continually made.
Problem is that with a reverse mortgage there’s an assumption that the principle won’t keep building indefinitely - due to… the death of the borrower.
“It’s like a credit card junkie getting a lower rate and then figuring that gives them more room to run up debt.”
Except this junkie has nuclear weapons pointed at it’s creditors.
“Except in this case it’s a reverse mortgage - where the principle keeps going up as withdrawals are continually made.”
Remember that pick-a-pay mortgages also let the loanowner build negative equity for the first couple of years of loan ownership.
Here’s another thing I never understood about Boomers and The Boom? If you and the Mrs. have design on retiring at X, then it’s a simple matter of looking at your current incomes and the number of years you have left in the workforce!
So combined you make… 100 grand a year. You plan on working another 7 years but bought a house for $750K! People, even if you ‘could’ adjudicate every stinking dime of your income toward paying off your house, it STILL wouldn’t cover it! ( Let alone int? ) Assuming your -entire- income was somehow tax exempt.
Never got it. This wasn’t rocket surgery.
Oh, you are sooooo clueless. You forgot to factor in 20% yearly price appreciation. The place pays for itself. That should be obvious. Now go away with your negativity and math and stuff like that.
“PFFFFFFTTTTTTTT……..” (Sound of drink being sprayed on keyboard thru nostril).
“You forgot to factor in 20% yearly price appreciation” LOL ( and evidently so has the real estate market )
Yeah even with… 20% annually it still didn’t make any sense? Boomers ( and lots of folks ) came to realize exactly that, this is where just having (1) home wasn’t going to cut it!
Remember, in 2005 NAR’s own estimates were that 40% of sales were second homes. So now if we have (2) homes, both brisking along at a 20% clip.., noope.
This is where they got wrapped around the axle, saw the folly ( a bit late I might add ) and everyone rushed for the Exit at the same time. Even had everything gone according to plan, there still wasn’t enough critical mass to retire on, not for long anyway…
The Next Bailout: $165B for Unions - FOX Business
A Democratic senator is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers.
The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people.
Gerri Willis reported Monday, these pensions are in bad shape; as of 2006, well before the market dropped and recession began, only 6% of these funds were doing well.
Although right now taxpayers could possibly be on the hook for $165 billion, the liability could essentially be unlimited because these pensions have to be paid out until the workers die.
Just last week President Obama said there would be no more bailouts.
Buying votes ain’t cheap.
Just because the bill was introduced doesn’t mean it will become a bailout, in the future or ever.
The guy that introduced it must have a bunch of union members in his district. So he introduces a bill to give away goodies to his constituents, then sends out the press releases. Knowing that the bill has zero chance of passing.
Sort of like saying you are introducing a law mandating hot chicks wear halter tops, or the “Hot Guys to Wear Tight Jeans” Act. Or the “22 inch Dubs for Everyone” Act.
the liability could essentially be unlimited because these pensions have to be paid out until the workers die.
I don’t recall “eternal life” being one of the parts of the health plan. But then again - it was 1000+ pages or so, maybe they just found that clause.
That’s what happens when you invest in derivatives.
“Just last week President Obama said there would be no more bailouts.”
Look at Arizona, look at the BP oil leak in the Gulf and pay no attention to the $165B bailout for Unions behind the curtain.
BHO says there will be no more bailouts for the unions???
I’ll believe it when I see it. IMO the only way he would say that to the unions is that it is impossible for them to borrow/print any more money without causing a catastrophe in the markets.
Meanwhile, they are studying ways to cut Social Security, which is all most people will get.
After the program ran supluses for nearly 30 years, which were spent elsewhere, with IOUs from generations that plan to be dead before they are cashed in place of real assets.
which is all most people will get ??
Its all that both my Mother & Mother-in-law have..
Oh Hell NO!!!!!!!!!!!!!!!!!!!!!!!!!
If this happens, I will actually joing the god dmn tea party activitists and protests
No Money for Unions… PERIOD!!!!!!!!!!!!!!!!!!!!!!!!!
Sorry, but there is not even one slim chance that unions pensions will not get bailed out.
I agree wmbz….
But I am sure the pension administrators will be held accountable for their shortcomings or any misleading statements they have made over the years.
(Crickets chirping)
Being held accountable just like the Big Boys on Wall Street?
I hear crickets chirping quite loudly.
Joe Biden, unions: ‘Comfort zone, man’ ‘Time we start dancing, man,’ Biden told the union, ‘time we start dancing.”
Posted March 5, 2009 3:20 PM
by Mark Silva
Vice President Joe Biden has gone around the block several times, and labor unions have been there with him. Today, they came around together again, at the AFL-CIO’s annual executive council meeting in Miami Beach.
“I tell you what, it’s like visiting Jimmy Williams in Philadelphia,” Biden said at the old but renovated Fontainebleau hotel - the place where Sean Connery once filmed that scene about getting cheated at poolside Gin Rummy with Goldfinger with the help of a telescope.
“Hey, it’s good to be — at least in my best comfort zone, man,” Biden said today. “The best place for me to be my whole career is surrounded by organized labor. And I know how to say ‘union.’
“You know, you go home with them that brung you to the dance,” Biden said. “Well, you all brought me to the dance a long time ago. And it’s time we start dancing, man. It’s time we start dancing.”
Applause.
PERIOD!!!!!!!!!!!!!!!!!!!!!!!!!
Probably should be ‘EXCLAMATION POINT!!!!!!!!!!!!!!’
These pensions won’t be at full face value; ask the retired airline captains who are now eligible to sing on the baritone choir.
Some unions are more equal than others.
more equal ??
More equal = Government…
more equal ??
A George Orwellism, from “Animal Farm”.
I’m sure you meant falsetto?
Obama is really stuck. After you bailout the banks, how is it going to look when the union guys go away with empty pockets.
He will buy the votes.
Pensions should be reduced to minimal levels. Course should be in conjunction with prosecutions at the big investment banks that created the mess.
Bubble burst inspired music:
LOVE, YOUR BROKEN HOME
By: Tim Miller © 2010
VERSE 1:
I’M IN WITH AN AMERICAN WHORE
I LAID DOWN WHEN YOU SAID HEY SIR,
YOU COULD HAVE SO MUCH MORE
GOT ME RIGHT TO THE LINE
A GENTLE NUDGE BEGINS THE FALL
HEY, HOW COME YOU NEVER FELL AT ALL
CHORUS 1:
FOOLISH CHILD, I’M FEELING LIKE A FOOLISH CHILD
HOW YOU PUSHED ME ON, OH THE BULLY HAS A BLINDED PAWN
AND I, I I …
I’M SEEING WHY YOU WERE SO FAST AND LOOSE FOR THE CLOSE
LOVE, YOUR BROKEN HOME
VERSE 2:
HEY SIR SO WISE WITH YOUR BIG DEGREE
I HEAR YOU’RE OUT THERE LIVING LARGE IN SOME VELVET ROPE RED CARPET SCENE
WELL I HOPE YOU ARE HAVING A VERY NICE TIME YOU LITTLE SHIT
THEY LOCKED US OUT OF OUR HOUSE WE CANT GET IN
CHORUS 2:
FOOLISH CHILD, I’M FEELING LIKE A FOOLISH CHILD
WHERE HAVE YOU GONE, OH THE PAPER MAN WONT LEAVE US ALONE
AND I, I I …
I’M HERE WITH MY FAMILY WE’RE BARELY AFLOAT
LOVE YOUR BROKEN HOME
BRIDGE:
I GUESS I MISREAD YOUR ROLE
PLEASE LET ME KNOW HOW I SHOULD TELL MY WIFE AND KIDS
IT’S TIME TO GO
CHORUS 3:
FOOLISH CHILD, I’M FEELING LIKE A FOOLISH CHILD
WE’RE ALL ALONE
HEY MISTER IT’S YOUR FAMILY OF PAWNS
AND I, I I …
I AM NOT SURE WHERE YOU TOUGHT WE COULD GO
MY KIDS TRYING TO OPEN UP THEIR FRONT DOOR
HEY FUCK YOU FOR IGNORING MY CALLS
LOVE, YOUR BROKEN HOME
http://www.youtube.com/watch?v=Hm_W445bidA
Sorry Ben, I did a straight cut and paste and should have edited those lyrics a bit. Noticed after I hit send (blush)
Obama adviser calls for new ‘mini-stimulus’
Washington ~ May 25 2010 ~ FT
The Obama administration made a strong plea to Congress on Monday to grit its teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to help dig the economy “out of a deep valley”.
The call for action, which was made by Lawrence Summers, Barack Obama’s senior economic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures.
Being that we’ve already has two - wouldn’t that be the “third stimulus”?
hashad twoWhat counts as stimulus?
- $8,000 tax credit (twice)
- Cash for clunkers
- Foreclosure relief (HAMP)
- $1.25 trillion in MBS purchases
- $700 billion in free cheese
- 99 weeks of unemployment
- Record food stamp program
- Record low interest rates
I’m talking specific money allocated as stimulus, by the U.S. Treasury and via an act of congress.
Stimulus 1 was the $168 Billion one in early 2008 - the Economic Stimulus Act of 2008. It was composed of:
- Taxpayer rebates
- Business tax incentives
- Increase in Fannie/Freddie mortgage purchase limits.
Obama’s was stimulus 2.
Somehow everyone seems to always forget about the first one.
you left out those $300 checks for individuals from Bush that started all the stimulus.
Actually, based on those numbers, Obummer’s was Stimulus 3 since we’re still forgetting about the Bailout / TARP/ Banker Full Employment and Bonus Act of fall 2008.
The Bailout that 95% of the people were against.. the one that so angered the population that Congress was flooded with letter and phone calls… the one that was only passed AFTER a ton more pork was added to it… and yet the media has amazingly managed to make this nearly $1 trillion Bailout vanish from history as if it never happened.
“Somehow everyone seems to always forget about the first one.”
It was only $168 billion, hardly worth mentioning.
The government is desperately trying to avoid having 60 million (formerly middle class) people living in tent cities, riding the rails, or loading up the Escalades and hitting the road for the “Promised Land” (which may be the D.C. Metro area this time).
“Grapes of Wrath, 2010……..The story of the Joad Family, from Victorville, California. As the California housing market dries up, Juan Joad, a residential building contractor and his wive Suzanne, a Real Estate Agent, load up their H2 Hummer and the extended family, and head for Washington D.C., where it is rumored real estate is still going up, and there are all kinds of government consulting jobs available.”
I’ll be the “starving old man” in the film version, if Salma Hayak plays “Rosasharon”
you left out those $300 checks for individuals from Bush that started all the stimulus.
Those were the 2008 Stimulus 1 tax credits.
Actually, based on those numbers, Obummer’s was Stimulus 3 since we’re still forgetting about the Bailout / TARP/ Banker Full Employment and Bonus Act of fall 2008.
Well kind of - but most people consider “stimulus” to be a more general spending / tax credit package - an indirect bailout of the economy rather than a direct bailout of specific institutions like TARP was.
“Grapes of Wrath, 2010…”
Damn, and here all this time all I could think of was “Those poor damned DC bubble bloggers, they just can’t catch a ( price ) break!”
When really all the time they ( their co-workers/neighbors ) have been in the lap of luxury! Love to stick around but I’ve got a Hummer to load.
( Sadly I don’t think Salma still looks as good as she did in Dusk ’til Dawn but what the hey! )
“The government is desperately trying to avoid having 60 million (formerly middle class) people living in tent cities, riding the rails, or loading up the Escalades and hitting the road for the “Promised Land” (which may be the D.C. Metro area this time).”
This is NOT hyperbole. I remember the tent cities of the early 1980s.
Funny how $200 billion dollars is now referred to as a “mini” amount of money.
And NONE of that $200 billion will be used to put people to work, or get a better education while on unemployment.
How would any of that help out the banksters and other crooks? Yeesh…
This is sad, like a has been boxer swinging feverishly at a young contender, each punch weaker than the last one, until the former champ collapses.
“If we continue on our present fiscal course, it is only a matter of time before the bond vigilantes now ravaging Greece make their way across the Atlantic. When that happens (if not before), countries like China and Russia will take concrete steps to dissociate themselves from the U.S. dollar. Given that few other currencies are ready to take the dollar’s place, don’t be surprised if their next move is a transition back to a metals-based monetary system.”
~Avik Roy
Let’s not forget IMF SDRs.
“Growing strength in the U.S. consumer could provide some relief to weary investors because the country’s economy is predominantly driven by consumer sales,” says Associated Press this morning.
What a dilemma! Consumers must open their pocketbooks and spend with greater abandon in order to pump up the economy. BUT, a growing number of people want to get out from under their financial burdens and tend to spend less. The savings rate is up…and that’s bad news in an economy that lives mainly on people’s willingness to take on debt.
Consumers? I thought this was supposed to be a manufacturer/export led recovery? Man, I wish they’d make up their minds!
It is a printing press / bankster bonus led recovery, IMHO.
It is a printing press / bankster ONLY recovery.
Would that be the very same consumers who don’t have jobs? Or no raisers? Or wage cuts? With rising inflation?
This should be REAL interesting. But I’ve seen this movie before.
**SPOILER ALERT**
It doesn’t end well.
I’m certain lugging groceries home in the pouring rain will be a real treat…
Developers plan to build bicycles-only community
Subdivision near Gaston to have no asphalt, offer miles of trails
thestate.com ~ Tuesday, May. 25, 2010
Soon there will be a subdivision where your car is not welcome. Developers plan to build a bicycles-only community in Lexington County, near Gaston.
Those developers — from Ohio and the Lowcountry — think their Bicycle City will be the first subdivision of its kind in the nation.
It will have no asphalt. It will have miles of trails and ponds for boating. It will have eco-friendly homes. And residents and their visitors will have to park their cars outside the community and bike — or walk — to their homes.
Developers have spent nearly $1 million to buy 140 acres about 15 miles south of Columbia, according to land records. They also have hired community designer Ozzie Nagler, planner of Harbison and the Three Rivers Greenway.
“It could become an eco-tourism destination,” said Joe Mellett, a Cincinnati-based Internet marketer and one of the developers.
And moving a couch by bicycle. ANd ambulance service. ANd when you break your leg.
And don’t forget the moving vans!
“It will have eco-friendly homes. And residents and their visitors will have to park their cars outside the community and bike — or walk — to their homes.”
Yeah, until one of the home owners has an accident and gets a blue handicap placard.
build bicycles-only community ??
Neat concept…Wrong State…
“Neat concept…Wrong State”…
Correct, and the area it is perhaps going to be is out just past our airport where the soil composition is pure sand. In fact Foster-Dixiana has several plants in the area, where they dig silica sand.
Nothing but scrub pines, and oaks along with mobile home (trailer) parks. It won’t fly, but they’ll try.
Motorcycle gangs!!!!
Nothing inherently wrong with wanting to do that. There is an island up by Vancouver where motorized vehicles are not allowed. They seem to be doing fine.
Everything is horse drawn, is that so bad?
They even have a large statue of Catharine the Great in the town square.
Do they? I’m not saying the Amish lifestyle is for everyone ( and I recall FL posters pointing out “Nudist Developments” in a desperate attempt by builders to move inventory late-bubble )
But what a difference from just a short time ago when we were all about the amenties? It just shows me people are thinking. Not necessarily properly, just out of the REIC-induced slumber they’ve been in where ‘more’ was always assumed to be better.
http://www.mackinacisland.org/
My in-laws say it’s beautiful there.
Aren’t the islands off NY like that in summer? Pretty sure there are no cars on Fire Island during the tourist season. its all bicycles.
Meow.
I do groceries in the rain all the time. Two rear-mounted panniers and a backpack is a lot of groceries.
They drive up to the community in their am-blance get out and use the “bike-tow-stretcher” to grab the goner and get him back to the bus. Same for couches except it’s towed by mulitple bikes.
There is one recumbent arm-powered bike for broken leg bikers.
Don’t let the perfet be the enemy of the good enough (or better than what you have now. see also BP and our foreign policy and obesity and enviro problems)
MrBubble
That is truly one of the dumbest ideas I’ve ever heard of, and mind you I’ve been following this Bubble for years and am normally friendly to good ideas to help the environment.
Seriously, how will people get groceries home? Move heavy objects? God help them if they need a fire truck or ambulence to get to them?! What type of insanity is this?!?
I carry groceries home in my bike packs. They’re suspended from a rack that’s bolted to the frame over the rear wheel.
Okay, that’s groceries. Let’s say that, and this is a real-live example, that I’ve spotted some used bricks a few blocks away. I want them for the platform I’m planning to build beneath my water harvesting cistern.
Can’t carry too many in the bike packs, so it’s time for the trailer. That thing can haul bricks. Enough for my cistern platform project, in fact.
LOL - yeah I can just imagine what happens when someone needs a new floor or roof due to water damage, or wants to do any kind of significant home improvement project. I guess they’ll have to plan a 20-bicycle lift caravan to carry the sheets of plywood, packs of shingles, etc.
I guess they won’t need that if they plan to live in holes in the ground or the like.
As I posted above, it’s easy to do groceries. And if there is an emergency, a fire truck could just cruise down one of the trails. It’s not as though there’ll be tank traps in the way. C’mon, people! Where’s your will to be weird?
During Tucson’s 4th Avenue Street Fairs, the paramedics are on bikes. If motorized vehicles are needed, they call ‘em in.
You don’t know what the design layout is. There are probably access roads across the development, as it would be impossible to build otherwise. What probably don’t exist are parking spots for cars or two lane roads to allow for driving within the development. The result is less pavement and more usable land. Take a look at a suburban development and think of how much space wide avenues and driveways take up. This tradeoff could work. It did for thousands of years before the automobile.
I live in a house on a regular street with a regular driveway and garage and everything. And guess what? I’m still free to ride my bike to the train station or hardware store or friend’s house or whatever. I like to save gas and mileage on the car. But why would you want to limit yourself so this was your *only* option? I like the ability to use my car if it’s like, snowing out.
Chris M,
I can get on board with that. As I mentioned though, just rattling these REIC’sters out of their pipe dreams of lower middle class retirees being lavished w/ every amenity they can’t afford is a start?
My office is a block away and I’ve only taken the car a few times on the weekend when I had other chores immediately thereafter. But when you’re a conservative…, you’ll never get credit for doing frugal/env. friendly things. Those sacrifices only count when you’re a liberal.. Sorry, that’s just how it’s supposed to work.
But when you’re a conservative…, you’ll never get credit for doing frugal/env. friendly things.
I hear ya! I was raised by a couple of conservative environmentalists.
Arizona Slim,
If you think it can get bad ‘here’ ( you really -must- try the local Portland Blog! )
It’s as if they have some sort of Proprietary License on all things enviro-friendly. And it’s so counter productive. Rather than embracing you for doing the things they place a value on.., they just gloss over it ASAP and press on w/ the fun stuff like where you stand on gun control or abortion or the slightest crack where they can drive a wedge?
It’s exhausting. Every newbie on the pike wants his crack at a conserv. ( cuzz’ they heard we’re easy pickens ) and when you explain “Hey @ss-hole ( I’m… the guy that walks to work, remember..? )” they just quietly slither off and then conveniently forget until the Next Round. Just exhausting.
My Republican, Volkswagen-driving father was an around-the-block jogger decades before such an activity got popular. And, these days, I like to tease him by telling him that his crew cut is fashionable.
“I like the ability to use my car if it’s like, snowing out.”
That’s the difference between softcore and hardcore. Well, there is another difference. Heh.
Oh man, this is a real nugget:
“The first-time buyer’s credit was a boon to Tiffani Burleson, 29, and her husband Tony. They are on track to buy a four-bedroom $202,000 home outside Portland, Ore., by the end of June.
The couple saved for nearly a year to afford the 3.5 percent down payment required by their Federal Housing Administration-backed mortgage. They even moved in with friends for several months.
Without the tax credit, she said, “We would have eventually done it, but we would have waited a lot longer.”"
http://tinyurl.com/23n35×4
3.5% down payment, ~7.5K.. 1 YR to save? AND they spent a few months living rent free?! I just hope (I really do) that their new MTG payment is less than their old rent payment. Because, if not, these folks are in for a rude, rude awakening. What happens with the dryer breaks? Or, even worse, the furnace or central AC? If you’re living that “close to the edge” on a day to day basis; you simply can’t afford the house.
No, no, no… see, houses have no expenses to maintain and they only GO UP! in value. This is the mindset used by the terminally dim I see making real estate decisions around these parts… Take the toxic loan payment, assume that equals the total amount one has to pay for the house (ignore insurance, upkeep, taxes, etc.) and then assume the “value” will double in a few years and PROFIT!
You’re missing half the equation Pondering. In a few years Tiffini and Tony will surely be making oooodles more than they are now, because wages only GO UP!
And Tiffini is all, like, “Oh my God, I had to give up manicures for a whole month! I was, like, totally bummed…”
The real horror in this story is that, we’ve utterly ruined heterosexuality for young people! Why are they even trying… to be ‘normal’!?
PDX would be a lot better off if we all just became drug addicts that don’t think beyond our next buzz. Hey, it’s gotten us this far?
At least we haven’t run out of financial journalists with a punny sense of humor:
EUROPEAN MARKETS
A real PIIGS sty
Shares in Italy, Greece, Ireland, Portugal and Spain all are down more than 20%.
…
I still like ‘GIPSIs’, but I guess it’s not PC.
Why do Wall Street traders care so much about Main Street housing prices? I thought Wall Street and Main Street were decoupled?
BTW, I am guessing the March drop in the Case/Shiller index is merely the tipping point in the next leg down of the housing crash. The real action will start once the effects of the $8K first-time buyer credit wear off, at which point the more financially astute among those who drank the government’s first-time buyer koolaide may begin to perceive the damage they did to their household financial balance sheets.
market pulse
May 25, 2010, 9:06 a.m. EDT
U.S. stock futures sharply off after Case/Shiller
By Kate Gibson
NEW YORK (MarketWatch) — U.S. stock futures remained steeply lower on Tuesday after an index pointed to a drop in home prices in March. But traders were likely bypassing the Case/Shiller home price results to focus on global worries including European debt issues and Korean tensions. Futures for the Dow Jones Industrial Average fell 229 points to 9,814. Those for the S&P 500 were down 28.3 points at 1,042.7. Nasdaq 100 futures fell 42 points to 1,770.5.
Why do Wall Street traders care so much about Main Street housing prices?
Because they’re all in RE up to their eyeballs themselves. The Hamptons ain’t cheap, either.
ha ha ha. 2 different headlines in 3 minutes
1. Case Shiller data shows US home prices up 2.3% over the past year. CBS MarketWatch
2. Case-Shiller National Home Price Index Down 3.2% in 1Q vs Prior Quarter, but 10-City Home price Index Up 3.1 Year over Year. CNBC
Oh well - i am surprised that CNBC is trying to be neutral.
It’s all Doubleplus good!
We draw your attention now, to the lost persona of Eddie, last seen sporting a green shoot pretense, somewhere outside Atlanta:
Stock futures plummet, market set for lower open
Stock futures retreat on continued worries about a potential slowdown in global growth
Stephen Bernard, AP Business Writer, On Tuesday May 25, 2010, 9:13 am
NEW YORK (AP) — The Dow Jones industrials looked to plunge below 10,000 Tuesday as investors worried about a global economic slowdown and tensions between North and South Korea turned away from stocks.
Dow futures fell 219, or 2.2 percent, to 9,824. The Dow average closed at 10,066 on Monday and has fallen 1,138 points, or more than 10 percent, from its recent high of 11,205, reached April 26.
Good riddance!
Monday, May 24, 2010
It’s not so peachy for Georgia banks
A closed bank
Georgia is the state that’s seen the most bank failures since the beginning of the financial crisis. You’d think this would be good news for regulators, at least they’ve got plenty of business right now. But Georgia’s been cutting back on the folks who keep the banks in line. Jeff Horwich reports.
The most bank failures.
Wow. I did not know that. Good find.
the lost persona of Eddie ??
Ah…Eddie is to busy for us now…All time is now consumed trying to split Fulton county into two separate counties…One in the North (White) and one in the south (…..)…Let them eat cake is the mantra…Can’t blame him I guess given that he has all those private property rights that have been compromised by the 1964 civil rights act…
Maybe EddieTard was in fact Ru Paul Jr.
Fulton county used to be 2 counties. Merged in the 30s to save money. Now it is time to divorce. I live in Dekalb county. And this is a buying opp. I predicted dow 12k in 2010 and sticking with it.
Speak of the devil, and he shall appear…
What’s up, eddie? Where ya been?
Too busy with business and travel to Asia and Europe. Not complaining though.
Fat finger warning!!!
Dow Jones Industrial Average
Darn, I liked their meatloaf & cornbread…
Looks like Goldenmansucks is in to other things besides oil storage:
Sun Capital Partners is a private equity firm whose portfolio includes Boston Market, Souplantation parent Garden Fresh Restaurant Corp., Bruegger’s and Fazoli’s. The company’s majority stakeholder is now banking giant Goldman Sachs.
“… a giant vampire squid wrapped around the face of humanity.”
Oh poop, I meant “yet.”
We haven’t even gotten one here het.
Down -252
Looks like we broke 10,000.
Again.
Reminds me of the back and forth around 1,000 for a decade or two I read about following the stock bubble of the late 1950s and early 1960s.
Down -252 ??
Yeah…Kind of interesting that there is a huge sell off and then 2 1/2 hours later we here the news out of North Korea severing ties with the South….They get the information first…We are playing poker with three cards and they have five…You can’t win unless you guess right…
I will keep repeating it: the market is RIGGED. Doesn’t mean you can’t make money, just as long you play the pilot fish to the shark.
“Europe turns its back on Keynes; austerity is the new black,” reads the Telegraph.
Keynesian maniacs won’t admit adding more debt to the upside down pyramid of debt is toppling some European sovereigns and threatens to topple the entire western world.
Not to mention, botching the financial rescue and now the necessary reforms. How can the PTB ask for austerity when Big Finance just recently rewarded itself huge bonuses and continues to sock away billions more every quarter?
Of course the masses are going to take to the streets. They’ve been swindled.
The masses will take to the polling booths in November.
Then, what? Wait for more change?
Then, what? Wait for more change?
… well at least stop digging.
I think what unfolded on a neighborhood by neighborhood basis is now playing out globally. Just because you let your equity be and refrained from MEW-orgies and choking off your 401k to get the biggest house your MB said you deserved ( doesn’t mean more frugal nations are any less screwed? )
All this stock market turmoil, and inflation worries to boot? (I happen to share his concern, as it appears to me that “higher than expected” inflation is the Fed’s best hope going forward…)
My timeless advice to stock market investors:
SELL IN MAY AND GO AWAY.
Irwin Kellner
May 25, 2010, 2:36 a.m. EDT
Anchor’s ‘away’
Commentary: US. inflation expectations have come undone
By Irwin Kellner, MarketWatch
PORT WASHINGTON (MarketWatch) — Guess what? Inflation expectations are no longer well anchored — at least according to one key measure of market thinking.
This may come as a shock to most people for two reasons: First, both the consumer and the producer price indexes actually dropped in the latest month when compared with the previous month. If anything, this suggests deflation.
The other reason is the decline in long-term interest rates, especially the yield on the bellwether 10-year Treasury note. It has fallen from a 17-month high of 4% in early April, to Monday’s close of 3.2% — the lowest yield since January 2009, which in case you forgot, was when the financial meltdown was at its worst.
But there is one interest rate that has fallen even faster than the rest and this, ironically, is a sign of concern about inflation.
In seeking to protect themselves from inflation, bond buyers purchase more of this instrument than others, thereby driving up its price and pushing down its yield faster than the others. I am referring to Treasury Inflation Protected Securities, or “TIPS” as they are widely known.
The spread between the 10-year TIPS and their plain-vanilla counterpart is today about 2-1/4% — the same level it has been running since the turn of this year.
Seventeen months ago, at the start of 2009, this spread was zero. That was when the markets were concerned that the tumbling economy could actually lead to deflation.
If this is not enough to convince you that inflation is not as benign as it seems, look at the price of gold.
Five years ago, gold sold for $500 an ounce. A couple of weeks ago it hit an all-time high of $1,250 an ounce. Monday’s close of $1,191 was still high historically.
…
Inflation expectations of the flock
As I recall the flock thought housing was a great investment up until 2008.
Sung to the Tune of Green Acres (many of you won’t know this)
Stagflation is the place to be
Hard livin’ is the life for me
Debt, spreadin out so far and wide
Keep on pumpin that price index and buy!
(da unt da da dunt)
The scores!
(da unt da da dunt)
Offshores!
(da unt da da dunt)
My shares!
(da unt da da dunt)
Are pared!
Your are my strife!
Goodbye city life,
Stagflation here we come!
(da unt da da dunt)
(…dunt, dunt!)
This is shaping up to be one hell of a summer, folks!
market pulse
May 25, 2010, 7:55 a.m. EDT
Dollar Libor continues rise as tensions mount
By William L. Watts
LONDON (MarketWatch) — The three-month U.S. dollar London interbank offered rate, or Libor, was fixed at 0.5363% Tuesday, up from 0.5097% on Monday. The rate is the highest since early July of last year and has been on the rise since the spring on growing worries over sovereign debt problems in the euro zone. The spread between Libor and overnight index swaps have also widened, a move that’s viewed as a sign of banks growing more reluctant to lend to each other.
More money to megabank is the only answer! Complete and utter doom will befall if you balk!
“If anything, this suggests deflation.”
Yep.
Yep +1…
The western world’s only recourse is the printing press. You think central banks are going to sit idly by while the masses take to the streets?
Bernanke will double or even triple the Fed balance sheet if necessary. He won’t stop until inflation is at least 5 and maybe even 10 pct. One way or another, debt defaults are coming.
House inventories are going up, you say?
Banks are therefore still in trouble?
People are walking away from their obligations to pay their house payments?
Am I hearing about a 2nd dip? Gee, it looks like stocks are not climbing 1% a day. Oh the humanity!
Hmm, I have one comment: We need debt destruction.
Can we reflate the housing market? Can we reflate the world economy? Sure we can - that is called debt destruction.
The Fed has tried inflation. That is a method of debt destruction. How’s that workin’ out for ya’?
One way or another, we can’t pay the money back, the Europeans can’t, 90’s Russia couldn’t, Argentina couldn’t, etc.
So, Dr. Bernanke is a student of the Great Depression. Hmm. I’m firm in my belief that The GD was a result of too much debt - The Roaring 20’s- and a stubborn unwillingness to write it all down.
We need a RESET button. NOW! We need a way to write-down with knowledge and understanding of the consequences that will arise if we take that action.
I will point out that we already know the consequences if we don’t. That was called World War 2, 50 million men, women, and children dead, a dark and frightening Cold War that continued the risk to civilization.
Me? I’d rather take the writedowns.
Roidy
P.S. History doesn’t repeat. It rhymes. We don’t have to survive this time. That is not assured. Have a nice day!
“Hmmm, I have one comment: We need debt destruction.”
Righto. One large dose of debt destruction coming right up.
What’s wish number two?
Roidy,
Good points, great post! There’s no way for me to tell how much my heart sank when we poured all that money into AIG at the time.
My only guess as to why your suggestion wasn’t followed is that The Pigmen thought they were so… close… to ruling the world they just couldn’t be expected to stop at the 5 yard line?
Write it off, let’s move on.
Wish #2: A pony.
Roidy
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Texas Rangers Declare Bankruptcy:
by Mike Krumboltz
“Owning a baseball team isn’t always a license to print money. Take the Texas Rangers, for example. Ten years after signing Alex Rodriguez to a then unheard of $252 million contract, the MLB franchise has filed for bankruptcy.
Now, it’s probably not exactly fair to blame the team’s financial failings on the current Yankees slugger. Still, USA Today explains that A-Rod is one of the team’s largest unsecured creditors. He is currently owed nearly $25 million in compensation, six years after he was traded away.”
They ran out of Greatah Fooouls to pay $50 for bleacher “seats”
Texas Rangers Declare Bankruptcy ??
So all those bonds that Arlington and Tarrant county voters passed to build that stadium for the benefit of Bush and his cronies are now compromised ?? Oh my…
Pffftt, precisely the response Hwy 50 is always… groping for. Newsflash! ( This happens wherever… a stadium is built! )
FWIW, Coors field in Denver was paid off years ahead of schedule. Of course the Rockies still suck…
This happens ??
What happens…Bonds or tax payers get screwed by the owners ??
Wonder if this will have any impact on the 49er stadium vote?
Here’s the solution, just.vote.no.
The White Sox played in the same dilapidated stadium for almost 90 years.., was it? Sure it was a pain, but I loved the old ball park. Still do.
The Kindgdome in Seattle was imploded after what, 25 years? If all you get in terms of service life out of bldg. is 25 years somebody needs to get fired.
In Europe, super valuable soccer clubs play in stadiums that are 50 years old or more. The idea that Man U would tear down Old Trafford or Barcelona would bulldoze the Nou Camp and move to bigger, fancier digs is simply out of the question.
NEW YORK, May 24 (Reuters) - The Texas Rangers baseball team filed for Chapter 11 bankruptcy protection on Monday to ease the sale of the team to a group led by team president and Hall of Fame pitcher Nolan Ryan for about $575 million.
The voluntary filing calls for creditors to be paid in full, and has the support of Major League Baseball, current Rangers ownership and Ryan’s group.
Texas Rangers Baseball Express, the group led by Ryan and his partner Chuck Greenberg, a Pittsburgh-based lawyer at Pepper Hamilton LLP, is also buying the lease for the Rangers’ Ballpark in Arlington, as well as nearby land.
Really, great…GO Yankee’s & NYC
Stadium 1.5 BILLION! $$$$$$$$$$$$$$$$$$$$$
You ought to wiki the Greek Olympics and see what all those “events” stadiums are being used for today…just imagine how much more trouble GREECE would be in if they had not made all that PROFIT for hosting: “The Games”
Teachers Seek $23b- Lifeline or Bailout?
Education Secretary Arne Duncan is asking lawmakers to put aside “politics and ideology” as they consider a request for $23 billion in “emergency” funding for public schools – a measure Republicans reject as a massive federal bailout for the teachers’ unions/
“Fundamentally, what you’re seeing is the failure of the stimulus,” Rep. Thaddeus McCotter (R-MI), chairman of the Republican House Policy Committee, told Fox News. “What we’re looking at here in Michigan is 14 percent unemployment; nationally, we’re looking at 9.9 percent. We’ve seen a spike in jobless claims — all of which was supposed to have been prevented by the trillion dollars this administration already spent to ‘create or save’ jobs.
Education Secretary Arne Duncan is asking lawmakers to put aside “politics and ideology” as they consider a request for $23 billion in “emergency” funding for public schools
All of these “bi-partisan” Dems make me laugh. It’s amazing how throwing billions to their core constituencies is always framed as a bi-partisan move. I especially loved their foreclosure relief that benefited their victim constituency and their Wall Street constituency. Unions are next.
“Unions are next”.
The move is well afoot, they just a “mini” amount to start…$165 billion.
Don’t you get it?
Teachers were promised 2% payraises each year… It’s the God given right… and the taxpayers must hand out the money!
It’s crunch time in education land. Fiscal years are ending and no one knows what’s in store for FY 11. Local news outlets have all sorts of stories about layoffs - both actual and threatened. Such uncertainty is not easily palatable amongst those in the “job for life” set.
Mo change you can count on…
Private pay shrinks to historic lows ~ USA TODAY
Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.
Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
Mission Accomplished!
suckers! I got a 20% raise last month.. ha!
Great time to open a new business and start hiring right ??
Socialism on the march… must… make… all… work for… Dear Leaders…
Many people are getting neither.
Anyone here ever read the book “Beggars in Span” by Nancy Kress? It is a near future sci-fi about a very distopian world.
Another good one is “The Unincorporated Man” by Dani Kollin & Eytan Kollin.
Well the new Case/Shiller numbers are out (as mentioned above). Looks like the 2009 dead-cat bounce is officially over.
One interesting bit - note the divergence between the various indices. Looks like it’s better to be a city dweller these days.
“…dead-cat bounce is officially over.”
– Back to 2001 levels?
– Prediction: Pre-2000 levels will be hit by the end of the red hot 2010 summer sales season
Yep - looks that way to me.
FunYun - bite us. HBB is Your Daddy. You’re being pwned as we speak.
Also on tap for later this year:
Flipper-flush, as the latest cohort of too-clever-by-half investors realizes they caught themselves falling knives and race for the exit door from to escape the burning theater.
“Looks like it’s better to be a city dweller these days.”
It’s my sister’s lake house that is pulling down the national index relative to the two city indexes.
it’s better to be a city dweller these days ??
And safer…Bait fish all fighting for the center of the ball….
Uh, I think I said that yesterday. Or maybe it was Friday.
The Cost of College: Dream school, nightmare debt
(CNN) – For high school salutatorian Ryan Durosky, there was no question that he would go to his dream school, New York University. It’s a name-brand school, but it cost him. Now, he’s nearly $300,000 in debt, and he’s not alone.
He certainly did not expect to be laid off, especially so soon after graduation. NYU tells CNN its advice for prospective students is to “plan ahead.” College is an investment and people need to save for it.
———-
someone needs to ask this kid how he spent 300k…
I think I saw him doing Jaeger bombs at Off the Wagon on MacDougal Street.
“CNN its advice for prospective students is to “plan ahead.” College is an investment and people need to save for it”.
Save for it? That’s practically treasonous talk, besides college should be a “right”, it’s just not fair.
Seriously, college debt is and has been the largest unpaid private debt in the U.S. for a very long time. It’s most likely that 300k will never be repaid.
They are learning for the pros though, the U.S. will never repay it’s debt either.
How is education a right? Expand, please!
“How is education a right? Expand, please”!
From me that would always be sarcasm! It is not a ‘right’.
However stories like these get the wacko’s to howl just that, and Barry believes that it is and should be.
Uhm. I get something like 150k for tuition, fees, housing and food for five years. Probably could squeeze a little more out of that. That is around 300$ a month for a room, the meal plan @2K$ and tuition and fees 20K$ per year.
How did this lunk head end up with 300k in the hole?
You get a shared room in off campus housing at 400$ a month and eat PB&J, mack-n-cheese, beans & Rice, make you own coffee and you shave a hell of a lot of the food price.
The food plan is nearly 8$ a meal which you could eat steak on that kind of number.
Look guys, I’m moving to a new town 6 month before my family. Will be renting a room with a private bathroom. Have kitchen privilages. Want to get some serious savings. Will make PB&J a staple food. Expect that I am going to be able to bike to work every day.
A student should be with in biking range. Get a student job and some assistance. Not to mention get out of school in 4 years.
Total costs at a high end school like UCLA for a resident are 22K per year or so. USC is 56K per year, which is crazy. You can under cut the cost by maybe 6K.
I guess this guy maxed out loans like crazy and blew money like hell.
Like most of the bubble stories there is more than meets the eye with this.
$300,000 will buy a lot of beer, even in NYC.
NYU
$50,000 per year for tuition and books and stuff
$30,000 per year living expenses
An NYU student used to live next door to us, by herself. Her apartment was empty the entire summer. I guess mommy and daddy didn’t mind shelling out $2,500 per month for an empty apartment.
Depending how rich Mom and Dad were, that $2500 might have been mere chicken feed.
I just got finished reading a book called The New Global Student by Maya Frost. It describes how American kids are foregoing the SATs, high school diplomas, and going abroad to receive fabulous college educations.
They come out of the experience with zero debt — and an international perspective that many Americans lack. This perspective is very attractive to employers.
Zero debt? Foreign colleges, while often free for the natives are seldom so for expats. Most are also exclusively taught in the local language.
BTW, I studied high school abroad as well as 3 semesters of college. I can assure everyone here that my background has never made me more desireable to employers in any way. Ever.
Zero debt? Foreign colleges, while often free for the natives are seldom so for expats. Most are also exclusively taught in the local language.
The tuitions are substantially less than what these students would pay if they stayed Stateside. Which means that it’s possible to graduate without student loan debt.
As for having your classes taught in the local language, well, talk about total immersion. Foreign students in the U.S. know this feeling well.
Colorado,
We always look askew at technical people from abroad. It is a very mixed bag, no mater how they did on the college board exams or pulled a 4.0
“NYU tells CNN its advice for prospective students is to “plan ahead.” College is an investment and people need to save for it.”
Well, I did save for it — as a parent. But how is kid supposed to save $300,000. By going without lunch and pocking the lunch money starting in kindergarten?
The reality is this. State schools, attended by 80% of all students, have been increasingly starved for resources for 20 years (football and basketball teams excluded). Quality is going down.
And private colleges and universities have just lifted their cost structures too high, to the point where quality no longer matters.
That’s what Ivy’s & “Fancies” cost
Fortunately, I can pay for my kids Ivy tuition because I don’t currently own a home.
The light is at the end of the tunnel - he’s a Senior next Fall !!
Now Dad & Mom can go steal a deal from someone who has to sell & didn’t get a Contract during the 8K free money deal
I’m thinking Sept will be the hand writing on the wall for these Sellers
September 2012
depends on where u are at NYC boy -
our market (DC/NoVA) is still holding on since we are the only place in the Country still hiring…….
only place in the Country still hiring……. ??
And why would that be..Is it different there ?
yes, Dave, it’s the Federal Government
It hasn’t shut down yet
It hasn’t shut down yet
As a matter of fact it appears employment is up a fair amount since this whole thing started.
I hate to break it to you, but I was the only thing holding the entire mid-Atlantic region together. Now that I’m moving away it’s all going to collapse.
What did that kid major in that costs $300,000? Sounds like medical school debt, but I am curious.
I’ll bet you he didn’t major in math.
They said he got a degree from the College of Business… didn’t specify what the major was
They also said he got a scholarship somewhere else, but wanted to go to his ‘dream school’ instead. $300,000 later, he says he now realizes he made a mistake.
The allure of Waverly Place couldn’t be resisted. They even have a K-Mart at Astor Place.
College tuition will be one of the last bubbles to burst, but it will burst.
There is a good edububble blog:
http://www.edububble.com/dpp/
A lack of jobs for new graduates may greatly accelerate that process.
I don’t know how the tuition bubble has lasted this long.
EZ Student loans
EZ student loans that are essentially nondischargeable in bankruptcy. Thus, loans are issued without any concern as to the borrower’s ability to repay, since the debt can’t be flushed in BK.
Want to end the tuition bubble? Make student loan dischargeable, and the banks are going to become very careful about how much they will lend to and to whom.
Kirisdad,
For sure. It hasn’t made sense since the 90’s ( not that it made a lot then? ) and it damn sure doesn’t hold water today. Truthfully, it should have been the -first- to pop.
Maybe people would have sobered up before we damaged things beyond all repair. Nice point.
What a great day!!
1) Libor up, home mortgage rates headed down.
2) Consumer confidence reported to be up, Shiller can’t say wether housing prices are headed lower or we are at a bottom, but he gets daily tv time.
3) Markets headed lower, interest in gold and PM’s starting to soar.
4) US press avoiding all financial news if possible, overseas press has fat fingered releases on real world financials.
This does not bode well for Timmy & Co. Time for him to come up with some medical malady and exit stage right.
Financial journalists seem to have re-entered a state of severe panic.
AM Report: Risk Aversion or Bank Panic
May 25, 2010
As European markets drop sharply from renewed bank jitters, particularly in Spain, banks across Europe were forced to pay more for short-term dollar loans than banks in the U.S. Dave Kansas, Bob O’Brien and Neal Lipschutz discuss. Also, renewed tensions flare on the Korean peninsula.
For the record, I expect future generations of historians will report that we have been in a banking panic since July 2007 or so.
Risk aversion — or bank panic?
As European markets drop sharply on renewed jitters, particularly in Spain, banks across Europe are forced to pay more for short-term dollar loans.
I see the Russian market dropped almost 6.5%. I’m sad to say we’ve seen worse than most other European numbers so I’m feeling pretty confident the ride can only get bumpier.
http://indexq.org/
U.S. Turns Up Heat on BP ~ Wall Street Journal (05/25/10)
Coast Guard Admiral Thad Allen said on May 25 he would not recommend the White House take control of the cleanup of the oil spill in the Gulf of Mexico, noting the government doesn’t have more technology or expertise than BP PLC to deal with the leaking well. “To push BP out of the way, it would raise a question: Replace them with what?” says Allen, who’s leading the federal disaster teams in the Gulf. He says he had consulted with leaders of rival oil companies, who told him that BP appears to be doing what they would do. Political leaders traded barbs over the response to the spill by BP and the government, amid a rising tide of criticism from left and right.
Interior Secretary Ken Salazar promises that the government “will keep our boot on their neck until the job gets done,” repeating a phrase that the White House has used previously to characterize its pressure on BP. Louisiana’s Republican Gov. Bobby Jindal is criticizing the federal response. “We need more boom. We need more resources. We need the materials we requested to fight this spill,” Jindal says.
BP aims to try again on May 26 to plug the gushing well, but Chief Executive Tony Hayward warns that the operation may not work. Hayward says the likelihood that the company will succeed later this week in using a so-called “top-kill” procedure to stem the leak is at 60 percent to 70 percent. “It has never been tried in 5,000 feet of water,” he states.
Why again do we have a Department of Energy? I thought it was just the SEC that surfed porn all day.
As I’ve said here many times, the federal watchdog agencies have all been gutted over the last 3 decades in the name of “free market deregulation.”
Yes, Mr. Voodoo Economics Raygun, I’m looking at you.
And the many that Raygun kept on the job surf porn, use methamphetamines, and take care of their shopping. Good work if you can get it. Who’s watching the watchers?
Unfortunately I think there’s a very good chance the end result of this mess will be the partial or complete nationalization of the oil industry.
Well, deregulated private industry has done a bang up job of handling this current problem. Renews my faith in the free market.
/BTW, anyone want to buy a greasy pelican?
Nationalized energy production hasn’t done so hot either. Ever hear of Chernobyl?
Sounds as though you’re both using the exception that proves the rule.
Sounds as though you’re both using the exception that proves the rule.
That only applies when it’s stated as an exception. It’s not.
E.g. China has about 20,000 coal mining deaths per year. The U.S. (private coal industry), which produces about half as much coal, has about 30 deaths per year.
There are many, many other examples.
I’m sure that there are many examples on either side. I think that comparing the China coal industry and the US coal industry is not really apples to apples. John Henry vs. the Steam Powered Hammer and all that. More people having to be in the mine means more people in the mine when it collapses (possibly due to lack of materials or using Chinese drywall instead of pillars) means more dead miners.
I’m sure that there are many examples on either side. I think that comparing the China coal industry and the US coal industry is not really apples to apples. John Henry vs. the Steam Powered Hammer and all that. More people having to be in the mine means more people in the mine when it collapses (possibly due to lack of materials or using Chinese drywall instead of pillars) means more dead miners.
It is apples to apples - the whole point is that a freer economic system (i.e. one less under the government thumb) means that more resources can be, and are, allocated towards safety. It’s why we have a lot better and safer mining equipment than China. And why we have a lot better environmental standards than China. Etc. etc.
the whole point is that a freer economic system (i.e. one less under the government thumb) means that more resources can be, and are, allocated towards safety.
On the contrary, it is government regulation (such as it is) that makes US coal mines much safer than China’s. Without those regs, we’d have a fatality rate comparable to China’s. Competition would force it- if your competitor cuts corners and gets the coal out cheaper (and it is way cheaper to cut corners) then you’d have to follow suit, or be replaced by someone who would.
One of the many flaws ( a fatal one, at that) in the libertarianism-solves-everything argument.
On the contrary, it is government regulation (such as it is) that makes US coal mines much safer than China’s.
Why yes, of course it is. Coal companies CEO’s don’t give a rat’s ass about their employees.
I see that now. Thanks.
“Coal companies CEO’s don’t give a rat’s ass about their employees.”
Read Massey coal’s CEO letter to his gruppencommanders and you’ll see that that statement is true. It’s a real eye opener. Ah, heck. I’ll post it for you:
““If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal (i.e. — build overcasts, do construction jobs, or whatever) you need to ignore them and run coal,” Blankenship wrote. “This memo is necessary only because we seem not to understand that coal pays the bills.”
Overcasts are ventilation controls, Stanley said. The widows claimed in the suit that the memo showed a company policy to downgrade safety in favor of production.”
He claims that that memo was taken out of context, to be fair.
“It is apples to apples … Etc. etc.”
I respectfully disagree. I believe that we are ahead of them technologically and that that is reason there are fewer deaths in addtion to alpha-sloth’s comments. Now, why they have worse equipment is a different issue. I’m just restating my original argument: one reason that they have more people dying in mines is because they have more people in those (admittedly dangerous, but perhaps for other reasons) mines.
MrBubble
There really isn’t much of a technological gap between the US and China- coal mining is relatively low-tech. The main problem is the build-up of coal dust/methane/etc where the digging is occurring. To fix this potentially deadly problem requires stopping mining in the area and fixing the ventilation, which, as the Massey CEO points out, greatly cuts into profits- and profits are all that matters in an unregulated market. Gotta keep that coal coming out of the mountain.
And yes, packman, if you knew anything about the coal mining industry, you’d know that many CEOs do look upon their employees as expendable. It pays great for the areas where it goes on, and there’s a ready supply of people waiting to take the dead one’s place. If they don’t know much about mining, so much the better, as far as the CEOs are concerned. They won’t know how dangerous their working conditions are.
Sorry packman, but you really do need to get out more often.
It is, indeed, government regulations that has made all industries safer for employees and customers, and it has been the gutting and/or ignoring of those safety regulations that have been responsible for increased injuries and therefore, increased lawsuits. (which is why “tort reform” is actually nothing more than taking away your right for compensation due to a company’s criminal negligence)
And if you don’t realize that ALL industries pretty much think of their employees as mortally expendable, then you really have no clue.
“And more importantly, pays my lieutenants’ and my bonuses.”
I’m willing to bet there will be absolutely no nationalization of oil production.
Rich people own oil.
They didn’t nationalize banks for the same reason.
I’m willing to bet there will be absolutely no nationalization of oil production.
Rich people own oil.
Who said anything about change of ownership?
When Fannie and Freddie were nationalized two years ago the “ownership” didn’t really change, just that the losses for screwups were now explicitly put on the back of Americans, rather than implicitly.
Oh, I supposed a ledger sheets will change, but in the end it’ll be the same people running the show; just now they don’t have to be nearly as accountable for their failures.
Under the reported plan, the federal government, via the FHFA, would place the two firms into conservatorship and for each entity, dismiss the chief executive officer, the present board of directors, elect a new board of directors, and cause to be issued new common stock to the federal government. The value of the common stock to pre-conservatorship holders would be greatly diminished, in the effort to maintain the value of company debt and of mortgage-backed securities.[7][38][39][40]
The difference of course
Freddie and Fanie were worthless minus the takeover.
Big oil is worth a lot.
And the former CEO of Fannie Mae - Daniel Mudd - is now CEO of Fortress Investment Group - that does hedge funds, real estate funds, etc.
These guys basically just are moved from company to company and/or company to government agency back to company - they don’t get pushed down anywhere near to street level, or jail, where they should be. I guarantee he has as much or nearly as much influence in WS and DC circles as he used to.
Here’s a subject for debate.
Can the PPT get the Dow above 10,000 by the end of the day, to avoid a round number headline that will attract the attention of the sheep?
It’s an empirical question which will be resolved by the end of the trading day.
how about by OCT ?? whats the market going to be at then ??
double dip ?? Home prices are still way to high
Home prices are still way to high ??
They are here thats for sure….
Sure they can!
When one has infinite 1’s and 0’s to print up worthless “currency” one can do amazing things.
The only challenge is if they print enough to balance out the bankster’s profits on shorting the market and trying to drive it down. This could be resolved by the independent Fed calling up Goldman Sachs and chatting about where they want the market to end today.
Look at the spike in volume and price in the short/bearish etfs — sh, dog, skf.
Yes we can!
Dow Jones Industrial Average
10,000
Change
-66.66 -0.66%
Volume
Volume 215.54m
May 25, 2010 3:24 p.m
Good call, WT Economist.
Market closed
DJIA
10,044
Change
-22.82 -0.23%
Volume 315.98m
May 25, 2010 4:03 p.m.
It was a terrible open to put on a short. Most of the down was at the open. Plus, there is support in the charts and at the 10k number.
If the market futures are startlingly down, the market always seems to manage to rebound by days end.
It’s like the weather adage: “Red in the morning, sailors take warning, red at night, sailors delight.”
For the market it seems to be the opposite.
Talk about your black swan guano bombs: The Korean tensions could not possibly have been better timed on the back of the Eurozone sovereign debt woes, could they?
I have to wonder if N. Korea is some how buying the dip on the global stock market selloff?
Page last updated at 14:52 GMT, Tuesday, 25 May 2010 15:52 UK
North Korean soldiers patrol the banks of the Yalu River, opposite the Chinese border city of Dandong, 25 May 2010
Pyongyang said all ties, including communications, would be cut
North Korea is to cut all relations with South Korea, Pyongyang’s official news agency reports.
KCNA said the North was also expelling all South Korean workers from a jointly-run factory north of the border.
The move comes after an international report blamed North Korea for sinking a South Korean warship.
Pyongyang denies it torpedoed the Cheonan near the inter-Korean maritime border on 26 March, killing 46 sailors.
Seoul announced on Sunday it was ending trade relations with the North in response to the sinking.
South Korea says it plans to refer North Korea to the UN Security Council, and is seeking a unified international response to the incident.
…
Goodyear Closing Taiwan Plant, Moving Production ~ May 25, 2010
In a cost-cutting move, Goodyear Tire & Rubber Co. is closing lone plant in Taiwan, with plans to move production to lower-cost countries.
Located in Taoyuan, the passenger and light truck/SUV tire plant will close as of July 31, leaving 240 people without jobs. The plant was opened in 1969, and served both the Taiwan and export markets, primarily in Asia.
Come on Baltimore, any fool knows that raising taxes will solve this problem…
Pink slips coming next week for up to 600 city workers
New taxes could prevent 350 layoffs ~ The Baltimore Sun
Six hundred layoff notices are slated to land on the desks of Baltimore union leaders next week, as the City Council scrambles to reach an agreement over a bevy of competing tax proposals to plug a huge budget gap.
About 350 of those positions could be saved if the council passes $50 million in new taxes and fees before the end of next month, but the union contract requires leaders to be warned of possible layoffs at least 30 days in advance, city labor commissioner Deborah Moore-Carter said Monday. Individuals will receive layoff notifications in mid-June, she said.
raising taxes ??
Coming to your home soon….
According to what I’m told by coworkers, Baltimorgue is the greatest place in the universe, one should buy the most expensive crumbling rowhome one can’t afford, and proximity to a bar is the most important part of any real estate transaction.
+1
My sister’s place at Fell’s Pt. is great precisely because…there are lots of nice pubs nearby!
11:17a Fed’s Bullard: Euro crisis no Lehman-style shock
11:17a Bullard: Euro will withstand current crisis
11:17a Bullard: Europe may need to restructure some debt
I AM THE GREAT AND POWERFUL OZ! IGNORE THE MAN BEHIND THE CURTAIN!!
Yes, the debt restructuring will only amount to 50 cents on the dollar versus the 90 cents on Lehman debt.
So he works for the ECB too then?
Those central bankers stick together.
Except for the default and restructure part, sounds like it’s pretty much well contained, right?
“These f@!kIng Guys!,” Jon Stewart.
How did so many economists manage to convince themselves that there is positive value in deceiving the sheeple with an endless stream of Green Shoots propaganda?
Though I don’t approve of very many things W did while in office, I will always feel indebted to him for his candid remark on national teevee during the Fall 2008 financial meltdown: “This sucker is going down.”
NIKKEI under 9500
Down from 40,000 in 1990.
Now just think of all those public employee pension enhancements over the past 12 years they said would cost nothing, based on a projected 8 percent rate of return.
Greek, Japanese, or Weinmar?
What do you call a 75 percent haircut over a 20-year period?
- Permanent baldness…
slo-mo-hawk?
The Friar Tuck?
Insolvency is imminent as Horizon Bank races to raise capital.
Tampa Bay Business Journal
Horizon Bank has fallen to critically undercapitalized status and agrees with state and federal regulators that it is threatened with imminent insolvency, according to a filing with the Securities and Exchange Commission.
Horizon Bank’s board of directors consented to the appointment of a receiver at the discretion of the Florida Office of Financial Regulation, the filing said.
Horizon Bank, like many banks in Florida, was adversely affected by dramatic declines in the real estate and capital markets. Its parent company, Horizon Bancorporation Inc. (OTCBB: HZNB)
Think housing is recovering? Think again. ~ May 25, 2010:
(Fortune) — Americans purchased homes at a surprising clip in April, but don’t let that fool you into thinking the housing market is back.
Although economists were expecting a month-over-month increase of 5.5%, the National Association of Realtors reported yesterday that sales of previously owned homes rose an unexpected 7.6%. That continued a yearlong rise in housing activity and marked the highest number of sales recorded since November of last year.
It also follows a drumbeat of similarly rosy economic news signaling the possibility that the United States may be on the economic mend. Government spending has helped spur factory production. A rising stock market and an improving job market have led to greater consumer optimism, which has stimulated spending. Further reports on housing and durable goods orders, due out later this week, will likely give consumers even more reason to feel confident that a recovery is at hand.
But prospective home buyers, particularly those tempted to think of real estate as an investment again, should tread with caution. One critical obstacle to a housing recovery remains intact: supply. Until the number of empty homes starts to shrink, prices could still fall further.
Meredith Whitney had a 2:20 video interview in that article- double dip in housing, she predicts:
http://money.cnn.com/2010/05/25/news/economy/housing_recovery_slows.fortune/index.htm
supply
Got shadow inventory?
At least one politician sees the light, and is willing to take a stand against too-big-to-fail. What does Wall Street have against capitalism, anyway?
…
Social politics aside, Paul’s views are shared by more than just an angry bloc of Kentucky voters. It’s a movement that favors, among other things, a return to pure free markets and getting laws and government out of private business.
From a Wall Street perspective, Paul’s views are a mixed bag: They allow for the freedom to trade, make risky bets, enrich and let greed run wild, but they offer no government support should those bets turn sour.
…
from the article;
“What would Wall Street look like under Paul’s vision?
It’s easier to imagine than you might think. Until 1933, there was no Securities and Exchange Commission and no Federal Deposit Insurance Corp. The Federal Reserve was a nascent, inactive and poor regulator. It’s different now in that the Fed is no longer new.
The decade that preceded the creation of the SEC and FDIC was not too far from the vision Paul and his kind want to see again: markets full of speculation, manipulation and unprecedented leverage through investment trusts — a kind of mutual fund on steroids that promised to give investors access to an ever-inflating stock market. We were on the gold standard. The U.S. had a balanced-budget policy. It was Paul’s kind of market.
It was a great system until 1929.
We were on the gold standard. The U.S. had a balanced-budget policy. It was Paul’s kind of market.
It was a great system until 1929.
“Paul’s kind of market” very much precludes a central bank (as explicitly stated by him), which had been in existence for 16 years by 1929.
But the Fed was created in the aftermath of another crash- surely that one occurred during ‘Paul’s kind of market’? And all those crashes and panics and bank runs that used to occur with ‘depressing’ regularity during the 19th century? Those were during his kind of market too, no?
Most amazing aspect of current situation in global equity markets: The central banking liquidity footprint uniformly drives all major stock exchanges the same direction.
Click on the tabs on this page to see the curiously similar trajectories of major stock market indexes in every corner of the planet. Fundamentals no longer matter; all stock price movements are now driven by greed, fear and liquidity injections.
Dollar Stores across Washington are closing
KTVB.COM May 25, 2010
SPOKANE VALLEY– In five weeks, 37 Dollar Stores across Washington State will close down and hundreds will be out of work.
Shelves are emptying out at the stores across Spokane. Employees thought things were going to get better, then they found out they were losing their jobs.Now out of business and liquidation signs hang like banners across the store ceiling in Spokane Valley.
Mary Anne Edwards has managed the store for four years. She is heartbroken. Edwards says she’s not worried about herself. At 69-years-old she’ll make ends meet, but she worries about her younger employees.
More than 400 people across the state will lost their minimum wage jobs.
I was in the local “Big Lots/Mcfrugals/dollar store (whatever it’s called now) today. It was packed to the gills with inventory. I wonder if remaining such stores are picking up the slack. I also noticed that the aisles had been narrowed to accommodate more shelves.
It’s not good when even the dollar stores are closing.
Time to buy the dip?
* The Wall Street Journal
* ROI
* MAY 25, 2010, 1:09 P.M. ET
Ignore the Panic, Focus on Value
* By BRETT ARENDS
The plunge in markets worldwide is starting to open up some bargains for long-term investors.
As usual, you should ignore the panic around you and look for solid value. Don’t worry what the other guy is doing: Worry about your own money.
I don’t think stock markets overall are cheap yet, so I wouldn’t be an indiscriminate buyer, even in this rout. But there are opportunities. If you stick to quality you should do well over time.
And if you want to get an extra 15% off the price of the shares you buy, take a look at some closed-end funds.
Closed-ends are regulated, professionally-managed mutual funds just like the Vanguard or Fidelity ones everyone knows about, but with one twist: Shares in closed-end funds trade on the stock market, like those in, say, Apple or Exxon.
What that means: You can sometimes buy shares for less than the value of the fund’s underlying holdings. That’s like buying $1 worth of investments for 85 cents.
There are examples right now:
BlackRock S&P Quality Rankings, which invests in blue chip stocks like ExxonMobil, AT&T and Royal Bank of Canada, was 14% below net asset value at Monday’s close (net asset values are only calculated after the close each night).
Cohen & Steers Dividend Majors Fund, which owns real-estate companies and dividend stocks: 17%.
Clough Global Equity, run by veteran hedge fund manager Chuck Clough: 15%.
Royce Value Trust, a well-known conservative small cap equity fund: 17%.
BlackRock Strategic Dividend Achievers Trust: 14%.
Some of these now offer very fat dividend yields, though with closed-ends you need to be aware that the dividends do not always correspond simply to the yield on a regular stock–they can include capital gains and return of capital as well as income.
The yields on the Clough fund and both BlackRock funds are about 7%. The Cohen & Steers fund: 4.5%.
For those looking for an entry point into China’s long-term story, the long-running and well-regarded Greater China Fund is at a 15% discount. (At certain points in the last few years, when the China fad has been at its hottest, the shares have actually traded for more than the net asset value.)
The Templeton Dragon Fund invests across the Asia-Pacific rim (excluding Japan). Right now: a 15% discount.
For understandable reasons, the Ibero-America Fund, formerly known as the Spain Fund, is on sale: a 14% discount. Ditto the Thai Fund, with a 19% discount.
…
What’s the point of this financial reform exercise if at the end of the day everything stays the same? Perhaps, it’s just a political exercise to give the impression things have changed — reloading on the masses. “Come on in. The water is fine,” says Sharky the Suit.
May 25 (Bloomberg) — U.S. Representative Barney Frank, who will lead congressional talks to produce a financial-regulation bill, said Senate language that would require commercial banks to wall off their swaps-trading operations “goes too far.”
Frank’s comments today at a conference in Washington are the latest indication that the contentious swaps-desk provision may not survive final negotiations over the legislation.
Think of financial reform as an attempt by Congress to placate its Wall Street masters while deceiving the American people that change you can believe in has been realized, and you will have the right idea.
Why so cynical?
Surely you believe our government is looking out for the little guy?
I guess Barney just couldn’t swallow what was in that bill.
Bill who?
Did you two collude to set that one up? I hate when I laugh so hard the coffee comes out my nose.
I know an ally-oop when I see one!
Comment by NYCityBoy
2010-05-25 10:39:47
I guess Barney just couldn’t swallow what was in that bill.
Comment by MrBubble
2010-05-25 11:08:23
Bill who?
Holy **** - Post Combo of the Century! LOL.
“Bill who?”
That was Monica, not Barney.
Well if bills rich he might swallow.
Sign the bubble lives on:
MSM cheerleaders still consider higher home prices “good” and lower home prices “bad.”
We will know the bubble era is finally over when MSM writers start cheering for improved housing affordability.
Home prices fell 0.5 percent from February to March
In this photo taken Monday, May 24, 2010, a sold home is shown in Palo Alto, Calif. Home prices fell in March from the previous month, signaling that temporary tax credits for buyers weren’t enough to buoy the housing market.(AP Photo/Paul Sakuma)
By Renae Merle
Washington Post Staff Writer
Tuesday, May 25, 2010; 11:40 AM
Home prices remained weak through the early months of this year, according to a closely watched index that was released Tuesday, an indication that the housing market continues to struggle despite recent improvements.
The Standard & Poor’s/Case-Shiller index showed that prices of single-family homes were down 0.5 percent between February and March, the sixth consecutive month-over-month decline in prices.
Prices in 13 of the 20 cities tracked by the index fell during that period, including the Washington region. On a seasonally adjusted basis, prices were flat, according to the index.
Prices were up about 2.3 percent compared to the same period last year. But the continued weakness in prices is disappointing given record low mortgage rates and a homebuyer tax credit that helped boost sales through the first few months of this year, analysts said. The tax credit expired last month, and home sales are expect to decline in its absence.
“The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in statement.
…
California Democrats unveil tax-increase package
SAN FRANCISCO (Reuters) - Democratic lawmakers in California unveiled a plan on Monday for nearly $5 billion of tax and fee increases to help fill the state government’s $19.1 billion budget gap.
The plan by state Senate Democrats would raise $4.9 billion by raising California’s vehicle registration fee, suspending corporate tax breaks scheduled to begin next year and boosting the state’s tax on alcoholic beverages.
Democrats control both chambers of the state’s legislature and have said they would seek new revenue to help plug the shortfall.
Republican Governor Arnold Schwarzenegger, by contrast, has ruled out tax increases and is relying largely on deep spending cuts in his plan for balancing the state’s books. He has called for $12.4 billion of cuts and would scrap the state’s welfare system, a plan Democrats have rejected.
Republicans in the legislature’s minority immediately criticized the proposed tax increases, signaling they will use their votes to block them. Democrats lack the votes to pass tax measures on their own.
Analysts expect budget negotiations between Schwarzenegger and lawmakers will drag on and press into the state’s next fiscal year, which begins in July.
California’s leaders are facing another year of weak revenue as a result of the recession and the downturns in financial and real estate markets.
I don’t understand the problem here. Why don’t they just sell $25 billion worth of bonds, and use the excess to pay the interest? Then just keep rolling them over until revenues pick up?
They(media)always write these articles as if politicians are doing some kind of herculean task for the little guy. Pure BS, of course the package will be passed, while they sit on their fat asses.
Democrats’ jobs, fund tax bill delayed ~ May 25, 2010
WASHINGTON (Reuters) - Democrats in Congress are racing against the clock to renew unemployment benefits for hundreds of thousands of jobless Americans, in legislation that also raises taxes on investment fund managers and multinational companies.
With the benefits to expire at the end of this month, pushback from fiscally conservative Democrats concerned about the bill’s new taxes and cost, as well as from Republicans, has delayed a vote on a White House-backed $134 billion bill.
Some House Democrats also are reluctant to vote on the bill that still may not have enough backing to pass the Senate, according to congressional sources.
PPT is humping it now, trying to get back over 10,000 in the final hour. The street pimps on the cable channels will be BS pumping hard.
http://www.huffingtonpost.com/2010/05/25/bruce-shore-unemployed-ph_n_588798.html
An unemployed guy had the FBI show up at his door and has now been INDICTED for sending an angry but non-threatening e-mail to Senator Jim Bunning. First Amendment, RIP.
Read the whole story:
He’s particularly alarmed because he’s already got a criminal record: In 1995, he and his girlfriend pleaded guilty to 35 burglaries in Bucks County, Pa. The Philadelphia Daily News dubbed them “Bonnie & Clyde”: “Their last embrace came in their Northeast Philadelphia apartment. Cops with a warrant did some breaking in of their own and caught the couple, well, coupling — surrounded by half the booty they’d burgled.”
How is Shore’s past criminal history in any way relevant? He served his time. Unless he communicated a direct threat to Senator Bunning or his staff, this is a First Amendment issue. Do you understand that?
The indictment says only that Shore “did utilize a telecommunications device, that is a computer, whether or not communication ensued, without disclosing his identity and with the intent to annoy, abuse, threaten, and harass any person who received the communication.” By the way, he DID write his name on the contact form he used to send his screeds to the Senator. And presumably his e-mail had his name on it as well.
Here’s the central issue: Who decides what constitutes annoying or abusive communication? Joey could come after half the posters in here on the same grounds. Think about that. Unless there’s a lot more to the story than has been reported, this is one of the more flagrant and chilling abuses of government power and Freedom of Expression that I’ve ever seen. And Bunning is supposed to be a conservative Republican.
HBBers, think hard about the potential ramifications of this. If this guy’s only sin was to “blast” his Senator, without communicating a direct or implied threat, then America’s march toward 1984 is a lot further along than most of us would have imagined.
“When Sen. Jim Bunning complained on the Senate floor in February that he’d missed the Kentucky-South Carolina basketball game because of a debate on unemployment benefits — a debate the Kentucky Republican himself prevented from proceeding to a vote — Bruce Shore got angry.
“I was livid. I was just livid,” said Shore, 51, who watched the floor proceedings on C-SPAN from his home in Philadelphia. “I’m on unemployment, so it affects me. I’m in shock.”
Instead of just being angry, Shore took action: He sent several emails to Bunning staffers, blasting the senator for blocking the benefits.
“ARE you’all insane,” said part of one letter Shore sent on Feb. 26 (which he shared with HuffPost). “NO checks equal no food for me. DO YOU GET IT??”
In that letter he signed off as “Brad Shore” from Louisville. He said he did the same thing in several messages sent via the contact form on Bunning’s website. “My assumption was that if he gets an email from Philadelphia, who cares?” he said. “Why would he even care if a guy from Philadelphia gets upset?”
Bunning might not have cared, but the FBI did. Sometime in March, said Shore, agents came calling to ask about the emails. They read from printouts and asked if Shore was the author, which he readily admitted. They asked a few questions, and then, according to Shore, they said, “All right, we just wanted to make sure it wasn’t anything to worry about.”
But on March 13, U.S. Marshals showed up at Shore’s house with a grand jury indictment. Now he’s got to appear in federal court in Covington, Ky. on May 28 to answer for felony email harassment. Specifically, the indictment (PDF) says that on Feb. 26, Shore “did utilize a telecommunications device, that is a computer, whether or not communication ensued, without disclosing his identity and with the intent to annoy, abuse, threaten, and harass any person who received the communication.”
The language of Shore’s indictment is taken directly from the statute — there’s no description of the actual crime. The Kentucky U.S. Attorney’s Office declined to comment, but said it’s a typical indictment.
Shore knows he’s in trouble but he isn’t sure why. He said he thought sending angry letters to Congress was a First Amendment thing. He swears he didn’t intend to make a threat. “If I send 50 letters to Congress, is that illegal or is it just me wasting paper?”
Harvey Silverglate, a prominent civil liberties lawyer and the author of “Three Felonies a Day: How the Feds Target the Innocent”, has long argued that vague laws allow the federal government to prosecute citizens for things most people wouldn’t consider crimes. (The message of his book’s title is that the average person unintentionally commits three felonies a day. “Half of the anonymous Internet comments would” be illegal according to the statute used against Shore, said Silverglate.)
“If nothing else the U.S Attorney has managed to harass a defendant. Now we have to find out if the defendant managed to harass anybody,” said Silverglate, who looked at Shore’s indictment. “When finally the government is forced by a judge’s order to specify what the criminal harassment consisted of, if in fact the words used are quite innocuous and don’t by any standard rise to the level of a real threat, it’s going to be an example of exactly what my complaint is about.”
Bunning’s office is not involved in the prosecution. A staffer said the office received lots of email over the unemployment issue and turned some over to the Capitol Police. It’s up to the Capitol Police whether to involve federal or local law enforcement, and up to those agencies to pursue a case.
“I’m walking around in my head: jail for email, jail for email,” he said. “At this point I’m just looking at my government and going, anything is possible. When do the adults wake up and say, ‘This gentleman is just angry and frustrated?’ I’m just speechless. Shocked. I probably dropped 10 pounds in a week.”
Free speech died a long time ago.
The only rights you have are the ones you can afford to pay your lawyer to fight for.
Hope you can afford a good one.
And you just shrug and accept this?
Gee, will I be next ? I’ve sent a lot of unflattering letters to one of my senators and numerous representatives for my state. Now I can send also send them to the justice department.
The guy doesn’t have copies of his emails, so it’s possible there was more threatening language used than he’s admitting to. He was quite a criminal in his ‘youth’.
That said, there is a lot of frightening gray area surrounding email and blogs. Bloggers and their commenters aren’t considered professional journalists, and therefore have fewer legal protections. Someone in my town is being sued by another person who was involved in a highly controversial real estate development disaster. The person being sued, who thus far is unknown (no, it’s not me), blasted the person, using a psuedonym, in comments on a blog. The suer is demanding to be told who the person is, in order to sue that person for slander/libel. It’s working it’s way through the courts now. Kinda scary.
WASHINGTON/NEW YORK (Reuters) - A U.S. lawmaker charged with a key role in hammering out a final financial regulation bill said on Tuesday there is no need to force banks out of the lucrative over-the-counter derivatives business — a potentially big win for Wall Street firms.
Barney Frank, the Democratic congressman named to chair the House-Senate panel that will craft the final bill, said he disagreed with language in the Senate’s bill that could force banks to spin off their derivatives trading desks.
Well we know who this pig works for.
LOLOLOLOLOL.
So let’s see:
- Increased power of the Fed (WS bank tool)
- Lessened power / dismantling of other regulatory agencies
- No change for Fannie and Freddie
- No TBTF size limits
- No salary or bonus limits
- No reinstatement of Glass-Steagall
- And now no breakout of OTC derivatives divisions.
I’d say the Wall Street banks got exactly what they wanted from this bill - the illusion of some kind of regulations panacea, but under the hood just more power and riches to them.
It’s good to be the banksta, and have guys like Frank, Dodd, and Obama working for you.
“It’s good to be the banksta, and have guys like Frank, Dodd, and Obama working for you.”
But they are the Party of the People. They are for the little guy. Bwahahaha. Wolves in wolves’ clothing.
“the illusion of some kind of regulations panacea, but under the hood just more power and riches to them”.
That’s all it’s ever been about, throw the surfs a bone under the illusion that “they” are being looked out for “this” time. The clueless peeps say, see my man is watching out for me. The banksters and their back pocket politicians laugh all the way to the bank and to the up-scale bar to toast their con well done.
Bidness as usual!
surfs = serfs
Yep, it’s good to be the Banksta! (you must use the capital B)
“Cause now I got the world swingin’ from my nutz,
And damn! it feels good to be a Banksta!”
“Green jobs” Barry isn’t concerned, he’s heading off on another vacation.
Obama Pressed on Oil Leak as Democrats Ask ‘Who’s Running Show’
May 25 (Bloomberg) — President Barack Obama faces growing pressure from fellow Democrats who say he should take stronger action to stem the BP Plc oil spill that has been fouling the Gulf of Mexico for more than a month.
“It’s inexplicable,” Louisiana native James Carville, a Democratic consultant who moved to New Orleans after Hurricane Katrina in 2005, said today in an interview. “Why do we still not know how much oil has been pumped out? Why did it take us over 30 days to get the pictures? Who’s running this show?”
It’s the incompetence, stupid!
Even Chrissy “thrill up my leg” Mathews is showing signs that his Bro-mance with Barry is being strained.
I don’t know why everyone is piling on O. On this one, I think he’s getting a unfair bum rap just like Bush got after Katrina.
The gobmint is incable of dealing with anything this big. No amount of money or bureaucracy is going to able to fix it. Sure O and Bush can be blamed for PR disaster but not to me. They are just victims of unwise and unfortunate blind faith in gobmint.
Since most people barely understand the mechanics of a door knob, it’s no surprise they want to blame the President for something he has no more control over than he does right now.
The government does not have better technology than BP. No one does. That’s the bottom line.
And we haven’t had an engineer in the White House for quite some time. Last one was Jimmy Carter (nuclear engineer) and before that, Herbert Hoover (mining engineer who wrote a highly regarded textbook in that field).
The taboo is gone and not one thank you note from wall street to main street. The car detailers will have additional employment now.
Traders Rev Up Aston Martins, Maseratis as Supercar Taboo Fades
May 25 (Bloomberg) — Trader Craig Poler couldn’t hold out any longer. Browsing at the Miller Motorcars dealership in Greenwich, Connecticut, he spotted the $130,000 Aston Martin Vantage Coupe he had been dreaming about for months.
“The second I saw it I knew I was going to buy it,” said Poler, 48, who trades oil and petroleum products. “I’ve wanted one for a long time, since I started seeing them in London when I went on business.”
Super-luxury cars, whose sales plunged after Lehman Brothers Inc.’s collapse and the ensuing financial crisis, are making a comeback. Fiat SpA’s Maserati and Ferrari brands, Bayerische Motoren Werke AG’s Rolls-Royce and Daimler AG’s Maybach are moving out of the lots again as taboos over conspicuous consumption fade with the recovering economy.
U.S. sales this year of cars priced at more than $100,000 may jump 42 percent after falling 30 percent in 2009.
Yep. “Up yours I got mine” is recovering quite nicely.
Did Martin Wolf steal a page from the Fed’s play book?
Martin Wolf
How likely is financial repression?
May 24, 2010 3:28pm | Share
First comes financial crisis; then comes sovereign debt crisis; then comes financial repression. This is the view of Carmen Reinhart, co-author of This Time is Different, the masterly study of financial crises through the ages. I recently had a fascinating conversation on this topic with her, here in New York, where I have been living since the beginning of April.
So the question for the exchange is: how likely is financial repression? What forms might it take? Might this even be the end of the era of globalised finance?
Her argument is very plausible. It is also supported by the history of both advanced and emerging countries. First, governments encourage credit expansion by the financial sector. As a result, a mountain of bad debt is piled up. Then, at some point, comes panic. At this stage, governments nationalise the liabilities of their financial sector and, more important, find their revenues collapsing, along with the economy. Huge fiscal deficits then emerge and public debt starts to soar. Of course, frequently, governments short-circuit this financial route and simply run huge and unsustainable fiscal deficits in good times. Either way, an unsustainable fiscal position leads, sooner or later, to a sovereign debt crisis, particularly if governments borrow in foreign currencies, short term, or both (as often happens, in such situations).
What do governments do when it becomes expensive to borrow? They promise to mend their ways, of course. But, by now, it is often too late: nobody believes them. So they tell the central bank to buy their bonds, which starts a run on the currency. Pegged exchange rates collapse and floating exchange rates fall. Inflation becomes an imminent threat.
At this point, desperate governments look for ways to force institutions to hold their bonds, willy nilly. This is the point at which financial repression begins: banks are forced to hold government bonds, for “liquidity”; pension funds are forced to hold government bonds, for “safety”; interest rate ceilings are imposed on private lending, to prevent “usury”; and, if all else fails, exchange controls are imposed, to ensure nobody can easily escape from such regulations.
So how likely are such measures in the advanced countries that are now in difficulty? How easily would financial markets find it to evade them? What might governments do in response? Could financial globalisation even disintegrate? This is a subject on which I plan to write a column soon. I look for comments on this theme.
The Economist
Buttonwood’s notebook
Financial markets
Down, down, deeper and down
May 25th 2010, 17:56 by Buttonwood
WITH the FTSE 100 below 5,000 and the Dow dropping under 10,000 (at the time of writing), this correction raises serious questions about whether the rebound from March 2009 was the start of a new bull run, or simply a sucker’s rally in the bear market.
Leaving aside the Korean tensions, which are unfathomable except for those who claim to understand the mind of Kim Jong Il, there are four factors driving the setback.
1. The sovereign debt crisis. Governments face a damned if they do, damned if they don’t problem. If they fail to cut deficits, their funding costs will rise but if they all cut deficits, the economy will slow.
2. How exposed are the banks? The recent rise in Libor continued today. Banks are at risk from a sovereign default and also from their exposure to commercial property, the risk that is finally causing consolidation in the Spanish cajas.
3. Political/regulatory risk. There is a clear temptation to lash out at the finance sector. This may be understandable, given its excesses, but unfortunately the same sector is required to fund governments and indeed lend money to businesses.
4. Global growth. Does the sell-off in emerging markets, mining stocks and commodities indicate that the economy is slowing? Have the Chinese done too much in an effort to restrain their housing boom?
As a naturally gloomy soul, it is always good to hear the other side of the argument. I talked to a big hedge fund today, with $15 billion under management. It thought the fears were overblown. Companies were generating good profits and cashflow. There was plenty of liquidity sloshing around and where was it likely to go? Not into government bonds at current yields, nor into property where there is excess supply, Equities, now back at levels seen in 1998, were the obvious beneficiary, they believed.
WSJ noted that the “Amityville Horror” house is back on the market:
http://blogs.wsj.com/developments/2010/05/25/amityville-horror-house-listed-at-115-million/
And now a blast from the past the last post of “Taco Bell Jeff” from SDICA
I have been ill…
I can’t sleep, I can’t eat, when I do eat it comes up. This morning I started the day with a shower and threw up in the shower…
I am barely functioning, I try to read everyone’s posts…
To those of you that insist that these houses were a mistake, you were right.
To those of you offering constructive advice and support, thank you.
I try to read everything but the words are just swimming, I’ll try again later…
__________________
The first million is the hardest…
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“He who will not reason is a bigot; he who cannot is a fool; he who dares not is a slave.”
~Wm. Drummond
+1
He who does reason will get labeled a tinfoil hat wearing conspiracy theorist.
He who stands on toilet, high on pot.
-Confucius
Governor orders 9 percent cuts across all departments
No special session as governor uses ‘allotment authority’
The East Oregonian
Oregon’s governor has ordered all state departments to make 9 percent cuts to meet a nearly $600 million gap in the current two-year budget.
This morning, state economist Tom Potiowsky told lawmakers in Salem sobering news - lagging revenues have left Oregon $562 million in the hole for the biennium that ends June 30, 2011.
Soon afterward, Gov. Ted Kulongoski announced he wouldn’t call the Legislature into a special session to rebalance the budget. Doing so, he said, would make for “an uncertain process with no guarantee of success and the unfortunate potential for partisan gridlock in an election year.” Rather, Kulongoski said, Oregon law allows him to use “allotment authority” to deal with the problem. But that law also mandates “across-the-board reductions in equal proportions in all programs.”
“This is the authority I am exercising today,” he said, “… That is why today, I am directing all state agencies to prepare plans to implement the cuts needed to rebalance the budget for the remainder of this biennium.”
With revenues down more than half-a-billion dollars, Kulongoski said no program can be immune from cuts, including the critical areas of education, human services and public safety.
Gollum wants to take over California. Let’s stop them!
Tuesday, May 25, 2010
Biz resumes may hurt Cali politicians
California gubernatorial candidate Meg Whitman
In California, former executives from Hewlett-Packard, eBay and Facebook are running for office. But in some cases, that business-world background can backfire. Jeff Tyler reports.
California Republican gubernatorial candidate and former eBay CEO Meg Whitman at a roundtable discussion following a tour of the Union Pacific rail terminal at the Port of Oakland in Oakland, Calif. (Justin Sullivan/Getty Images)
Kai Ryssdal: President Obama will be in San Francisco tonight. He’s headlining a campaign fundraiser for Democratic Senator Barbara Boxer there. One reason Boxer needs the money? One of her possible opponents this fall is former Hewlett-Packard CEO Carly Fiorina. After piling up personal fortunes in the private sector, it’s not uncommon for corporate bigwigs to give politics a go. Here in California, besides Fiorina, former executives from eBay and Facebook are running. But a business-world resume can sometimes backfire.
Marketplace’s Jeff Tyler reports.
JEFF TYLER: Once upon a time, Meg Whitman ran eBay and sat on the board of Goldman Sachs. Now, in the race to become California’s governor, Republican opponents are using Whitman’s business connections against her.
AD: Whitman’s entire fortune is intertwined with Goldman Sachs. She helped manage Goldman and received sweetheart stock deals so unethical, they were outlawed.
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I have a copy of Glenn Hubbard’s undergrad text book on money and banking on my book shelf. The banking industry described in that book, as it existed in early-1990s America, bears no resemblance whatever to the lawless bailout-seeking piracy operation currently ensconced on Wall Street, with the help of political support from K Street.
Tuesday, May 25, 2010
Letters: Plenitude, financial reform, etc.
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From floods we’re going to turn to financial reform. In a commentary yesterday former Bush administration economist Glenn Hubbard criticized the overhaul bill that Congress is working on. He said it doesn’t do enough to stop “too big to fail,” that it just encourages government bailouts.
Senator Mark Warner, Democrat of Virginia and a member of the Banking Committee that wrote that bill, heard that and got in touch. He sent us a statement that said, in part, Mr. Hubbard ignores the fact that the Senate’s bill limits leverage, it imposes increasingly strict capital requirements and requires regulators to either sign off on a funeral plan or break up the company. And Hubbard’s claim that the bill establishes a permanent bailout authority, Senator Warner says, is simply wrong.
On our Weekly Wrap this past Friday one of our contributors noted that economic crises and bubbles happen because investors underestimate risk and over value assets. But that that kind of human behavior is just hard to regulate.
Adam Feerst of Denver, Colo., says you can indeed reform bad investment behavior.
ADAM FEERST: There is a misalignment between the risks and rewards. The people making the bets — stock/bond traders, fund managers, etc. — don’t have any skin in the game, at least not nearly enough. Would they have made the same investment decisions if they were playing with their own money?
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I’m thinking California is going to make a renewed push for bailouts over the coming months. The nuclear alternative, of outright default on their debt, is too horrible to ponder.
California budget woes could lead to default
by Bob Morris
Tue, May 25th 2010
The California budget for the fiscal year starting in July is $19 billion short and the dire truth is no one has a clue where the money will come from, if indeed it can be found at all. That’s what no one is talking about - not commentators, not politicians, and most especially not even the major candidates for governor. What happens if (or is it ‘when’) California can no longer meet its current obligations and then defaults?
This could easily happen. After all, if you’ve already slashed budgets to the bone and still need billions more, then bankruptcy becomes a distinct possibility. But states can’t file bankruptcy. There is no provision in the law that allows them to do so.
But if California stops paying its bills, then that would effectively be bankruptcy even if not legally recognized as such. It would also be an immense legal and financial black hole that would unquestionably lead to further chaos.
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Is it OK for Californians to just bury our heads in the sand rather than grapple with the unpalatable choices for resolving the budget conundrum? Don’t mind if I do so myself…
Tuesday May 25th
The mess known as California’s budget
2:59 p.m. | By Larry Mantle
It’s that time of year for competing state budget proposals, and all the exaggerations that come with them. Monday, Senate Democrats released their proposal. That followed the Governor’s May revision, which proposed serious cuts and elimination of state services.
Tuesday, Assembly Democrats put out their version, which includes a tax on oil that’s extracted here in California. Though many Democrats have proposed an oil severance tax in recent years, they may feel emboldened by the BP disaster in the Gulf. If oil companies were disliked before, they’re probably reviled today.
If you could craft your own budget for California, what would it include? Should business taxes be increased? What about personal income taxes? Should all the balancing come from cuts?
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America has a right to know how the Fed chooses to reallocate its collective wealth, especially when so much of it is loaned at zero interest rates to Wall Street Megabanks, so they can loan it to Main Street consumers at “market rates” and pocket the spread. Doesn’t this patently illegal lending discrimination to facilitate systemic theft from the American people?
And the claim that “political interference in monetary policy can generate undesirable boom-bust cycles” is a red herring, as we already have undesirable boom-bust cycles, thanks to the Fed’s hair-of-the-dog easy money stimulus policy regime.
Further, the question of whether the Fed is or isn’t an independent central bank merits scrutiny. How close are they to Treasury and to Wall Street Megabanks? Aren’t these questions easily answerable if the audit is allowed to proceed?
Why can’t the Fed provide a list of questions it would consider too politically sensitive for the Congressional auditors to ask, then let the GAO carve out questions around these off-limit areas?
Every other government entity or private corporation around the U.S. is subject to accounting standards; why should the Fed enjoy carte blanche to operate above a rule of law or accountability?
Bernanke Fights More Fed Scrutiny
With Congress getting close to finalizing an overhaul of the nation’s financial-regulatory system, the Fed chairman weighed in against provisions in the proposed legislation that would subject the central bank to more political scrutiny.
—————————————————————————–
* ECONOMY
* MAY 26, 2010
Bernanke Continues Fight Against More Fed Scrutiny
By LUCA DI LEO
Associated Press
Fed Chairman Ben Bernanke in Beijing Monday for U.S.-China talks. He was to speak in Tokyo Wednesday.
With Congress getting close to finalizing an overhaul of the nation’s financial-regulatory system, Federal Reserve Chairman Ben Bernanke weighed in against provisions in the proposed legislation that would subject the central bank to more political scrutiny.
In a speech at the Bank of Japan on Wednesday, the Fed chief argued before an international audience that central banks independent from politics were better at managing the economy. He also detailed the steps the Fed had taken to become more transparent and accountable to the public, two conditions he said were needed in return for greater independence.
The Fed is waging a battle against a proposal approved by the House in December that would subject the U.S. central bank’s decisions to audits by the Government Accountability Office, an investigative arm of Congress.
Mr. Bernanke is strongly opposed to the measure, which is part of the government’s broader efforts to overhaul financial regulation.
A central bank subject to political influence could be pressed to keep interest rates low in order to boost the economy and employment, Mr. Bernanke said. While that could be popular at first—and helpful in an election campaign—it will lead to higher inflation in the future, hurting the economy’s long-term prospects.
“Thus, political interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less stable economy and higher inflation,” the Fed chief said.
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Could anyone who thinks they understand accounting better than I do please explain why this practice does not constitute fraud?
* The Wall Street Journal
* MARKETS
* MAY 25, 2010
Banks Trim Debt, Obscuring Risks
By MICHAEL RAPOPORT And TOM MCGINTY
Three big banks—Bank of America Corp., Deutsche Bank AG and Citigroup Inc.—are among the most active at temporarily shedding debt just before reporting their finances to the public, a Wall Street Journal analysis shows.
The practice, known as end-of-quarter “window dressing” on Wall Street, suggests that the banks are carrying more risk most of the time than their investors or customers can easily see. This activity has accelerated since 2008, when the financial crisis brought actions like these under greater scrutiny, according to the analysis.
The Journal reported last month that 18 large banks, as a group, had routinely reduced their short-term borrowings in this way. The new analysis looks at individual banks.
Over the past 10 quarters, the three banks have lowered their net borrowings in the “repurchase,” or repo, market by an average of 41% at the ends of the quarters, compared with their average net repo borrowings for the entire quarter, according to an analysis of Federal Reserve data. Once a new quarter begins, they boost those levels.
The banks’ overall “leverage”—that is, their use of borrowed funds to boost returns—frequently has declined at the end of quarterly periods as well, the analysis shows.
The data suggest “conscious balance-sheet management,” said Robert Willens, an accounting specialist who heads Robert Willens LLC. If there are big gaps between average quarterly and quarter-end data, he said, the quarter-end numbers “are at best meaningless and at worst misleading and disingenuous.”
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These actions are not fraud in that they are not illegal. But they do reveal the mentality that drives the thinking of those who run the banks, something that may be more important to an investor than just the numbers.
There’s never just one cockroach.
* The Wall Street Journal
* POLITICS
* MAY 26, 2010
GOP Rivals Bash California Icon
By STU WOO
California’s major GOP gubernatorial hopefuls, Meg Whitman and Steve Poizner, aren’t just running against each other in the June 8 primary. They are also running against the Republican they want to succeed, Gov. Arnold Schwarzenegger.
The Whitman and Poizner campaigns are so eager to distance themselves from Mr. Schwarzenegger that they use the former movie star’s name to attack their opponents. They have taken turns labeling each other a “Schwarzenegger,” which in this race has come to mean “bad Republican.”
The race features two former Silicon Valley executives in Ms. Whitman, who was eBay Inc.’s chief executive, and Mr. Poizner, currently the state’s insurance commissioner. The campaign so far has been fierce, with each multimillionaire candidate trying to paint the other as an insincere conservative.
A poll last week showed Ms. Whitman leading Mr. Poizner, 38% to 29%. The winner is expected to face Democrat Jerry Brown, the state’s attorney general and a former governor, in November.
The two Republicans’ low views of Mr. Schwarzenegger, the former pride of the California Republican Party, stems from his falling popularity and his moderate stances—in an election cycle where moderation isn’t sitting well with many conservative voters.
Mr. Poizner has run three television ads comparing Ms. Whitman with Mr. Schwarzenegger, who is subject to term limits.
One particularly memorable ad shows Mr. Schwarzenegger’s face morphing into Ms. Whitman’s face. After the transformation, U.S. Rep. Tom McClintock, a Poizner endorser, appears onscreen with this message: “California can’t afford Arnold Schwarzenegger’s third term, and that’s Meg Whitman.”
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