Bits Bucket for May 15, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Never trust realtors.
Banner ad atop the HBB now: Join the fight and get a free bumper sticker “I don’t believe the liberal media”
The website it links to, tellthetruth2012 dot org is owned by the Media Research Center, founded by L. Brent Bozell III, formerly of the Parents Television Council and the board of the American Conservative Union. He is also the founder of CNSnews dot com, articles from which are often linked on the Drudge Report.
GOOD for HBB! Brent Bozell rocks!
I clicked on the ad banner to see what it was, so yes it was good for HBB.
I would click on the ad banner, but as it’s for russiancupid.com better not, don’t think the wife would understand
‘it’s for russiancupid’
The ads anyone sees are related to other sites visited or searches associated with the computer user. Hmmm.
LOL!
Ahh the joys of having a teenage son, I suspect.
I don’t believe the conservative media either.
I see a P&G ad.
Seth MacFarlane, the creator of Family Guy, among other shows, has had his fill of cr*p from the Parents Television Council. Vote with your remote and leave people to vote with theirs.
Realtors are Exceedingly Artificial and Totally Out-of-touch with Reality (no tm)
Never ever will I trust realtards but I will verify they are realtards!
RE/MAX is laying on the layers of lies in their latest TV ad campaign. Dripping with falsehoods and outright misrepresentations.
Here is a far more accurate representation of RE/MAX.
http://bp3.blogger.com/_KMlHTyq8qsM/RqOVxNFaUdI/AAAAAAAAAO4/YGk2QP3wmwE/s1600-h/remax+sign.jpg
What do we want, then? A big ad campaign from the NAR that says?:
“Our goal is to sell houses and condos.”
The people still won’t get it, RASU. They’ve conjured the lie in their heads that personal housing is an investment. I explained thoroughly in another posting how personal housing isn’t an investment at all. So that’s our fault, “we” being the general public. We don’t correct friends and family when they pull this B.S. about “investment”. After all, even fairly hard-nosed types on HBB aren’t eager to alienate friends and family, and also make it seem like they’re “anti-wealth”.
I try to get people to take their money out of the stock casino, too, and I’ve been called every likely name but “White male” for my efforts. But it has to be done, since a speculator society is a living hell, for everyone.
WGAF what people think?
Realtors are bottom of the barrel low lifes walking thin line of legal behavior…. huggin’ the white line of criminality. And here you offer a thinly veiled excuse for their BS.
Um, I’m not supporting them. But they are salesmen. Like all salesmen, they want to complete the sale. That’s all they care about. There’s a great movie about that, “sign on the line that is dotted”, “put that coffee down”, remember all that? And yet Americans totally forgot that real-whores are salesmen.
WGAF if they’re salesmen?
I posted this late last night. Thought it was worth reposting today.
If you’re European….
Coming to a theatre near you:
The European Gendarmerie Force (EGF) is an initiative of 5 EU Member States - France, Italy, The Netherlands, Portugal and Spain – aimed at improving the crisis management capability in sensitive areas. Since Wednesday, 17th December 2008, the High Level Interdepartmental Committee Meeting (CIMIN) decided to welcome the Romanian Gendarmerie to become a full member of the EGF. Therefore the EGF consists from that moment of 6 member states.
EGF responds to the need to rapidly conduct all the spectrum of civil security actions, either on its own or in parallel with the military intervention, by providing a multinational and effective tool.
The EGF will facilitate the handling of crisis that require management by police forces, usually in a critical situation, also taking advantage from the experience already gained in the relevant peace-keeping missions.
http://www.eurogendfor.eu/
Seems to be the Euro TSA on steroids and with bayonet. Combine that with the concept that civil disobedience is “Terrorism”.
One person in the comment section noted there was no protocol mentioned regarding receiving an ok from the target nation. Anyone more steeped in European history care to comment how this squares w/sovereign rights?
“sovereign rights”
When the financial powers can remove and install governments, what are sovereign rights?
“you will respect my authoritie!”
Sounds like the Euros are preparing a rapid-reaction force for the coming riots. I would think the Austerians would welcome such a thing. You can’t really rust the Greeks, for instance, to sufficiently beat their own people into submission to the banksters. It may require a foreigner at the handle end of the billy club.
It may require a foreigner at the handle end of the billy club.
So those feeling all superior cuz they’ve stocked up on guns ‘n ammo might want to take note. It’s not gonna be the Keystone Cops if their dark vision comes to fruition.
I doubt the guns-and-ammo crowd would get involved; they’ll just hole up and live off a well-stocked larder. It’s the young unarmed urban rioters that need to take note.
Sounds like the Euros are preparing a rapid-reaction force for the coming riots.
+1 Is it going to be pensions or riots?
Is this a possible weekend topic?
One of gsfixrs other comments yesterday was old cessna 525 bizjets are now going for a million or so, which is going to slaughter the sales of new, slow piston planes that also cost a million bucks. I hit globalplanesearch which is kind of the zillow of airplanes and he was not kidding.
Its hard to believe its 2012 in the bubble and I just noticed that houses in California are/were more expensive than a bizjet. Before the bubble, like when I was a kid, you could buy an entire city block for the cost of a biz jet.
I wonder what other “unobtainable” capital investments are now cheaper than peak-of-bubble houses. CNC machining centers?
This is a kind of interesting topic WRT the next bubbles that are forming. For example, rather than buying into the college-industrial complex to get my son an engineering degree, insane as it sounds, it is cheaper to just buy him a commercial production machine shop and try to either run it or run it into the ground. After four years if the remains sells for anything I’d still come out ahead. Personally I think the next bubble after that will be in food, at which point it might be cheaper to buy a fully stocked turnkey farm than to buy a couple years worth of food. Crazy times we live in.
Oh I’ve got another one. Franchised fast food restaurant. Unobtainable like 10 times the cost of a house I grew up in when I was a kid, now you could buy multiple FF franchised restaurants for the cost of a peak-bubble CA home.
…cheaper to just buy him a commercial production machine shop …
Much cheaper. Much, much, cheaper. Computer Numerical Control at one time was an exotic, super-expensive, proposition. No more. Today, the operation of mills, drills, and lathes is routinely directed by local microprocessors and a laptop running some controller software. A thoroughly automated CNC machine shop can be put together for $15k, including tooling and stock. [Of course, costs scale appropriately with the size of the parts you intend to produce.] grizzly.com is one place that sells the (largely Chinese-made) basic machines, but lots of others do the same.
Complementing CNC machining, which subtracts from pieces of stock to make a part, is the notion of “3D printing”, which adds raw material until the part is fully formed. The economics of precision part manufacturing plus that of small-scale markets has historically restricted the development of such additive methods. In the last couple of years, though, all has changed. The “repeatable, controllable, precise 3D positioning” problem has been solved, and the solution commoditized. [See buildlog.net for the ORDbot, a mechanical marvel.] All you have to do is add a controller board and a business end–something that spits out plastic, laser beams, pancake mix, human embryonic stem cells, or whatever you want to lay down in some precise location. $1k, you are in business.
Now, do you have customers? And can you make money? Is this a techie solution looking for a problem? Tough questions. My sense is that the demand side of the equation is still a bit weak. Some kind of clearinghouse for specialized parts is needed, in order to establish a market. Possibly luxury market segments, like boating and aviation, could lead the way. Customized clothing, shoes, building material, could follow; they’re all doable, no technical obstacles.
I figure the most natural market for 3-d printing is custom bobble head doll kiosks in the mall - scan your head, let the computer run an exageration program on your features, pick an outfit for the body, put in your money and press the button.
You would probably have to put the spring in the neck and put the head on it yourself (they have springs, right?).
You can print that extra fork, when they are all in the dishwasher, or that missing button….
Tea. Earl Grey. Black.
“Is this a possible weekend topic?”
No, no, no. Shhh…We are going to agitate for a blow by blow of Ben’s experience at the state convention to hash over this weekend.
“After four years if the remains sells for anything I’d still come out ahead”
Very interesting thought processes I’m seeing here lately - I’m seeing initial adopters/thinkers beginning to think in a very post-credit world way. UYours is yet another example. (BTW, I think what you say here has considerable merit).
I am thinking the same thing toward housing. I am currently renting, but want a house. Not for investment, but to live in. That said, I’m giving serious thought to purchasing the cheapest FUNCTIONAL abode I can find in a mid-size city or town that also is largely functional.
I figure if I pay $20-40K cash for a FUNCTIONAL abode, I come out ahead in 3-4 years even if the house never sells. Or sells for $1. Maybe I’ll just donate it to the fire department and let them burn it down. I don’t even care.
If I proceed, I plan to put as ittle as possible into the place. The hell with fixing it up - no cabinets, no new carpets, no paint, no cement, no lawn. Nothing. Keep it clean and keep the grass cut, yes, but otherwise I’ll just let it fall apart.
Treat houses like a disposable, durable good. Much like a car.
Does living in the ghetto count as functional? Because that’s probably where you’re going to be for $20 to $40k.
Happily, you are very wrong on that score, alpha!
You no longer need to go to Detroit or Cleveland to find $30K houses. There are dozens of such locations now, thanks to a credit economy run amok. Some locations are pretty bad. Others are much better than you might expect.
Others are much better than you might expect.
Show us some examples.
alpha, zee in phoenix is right. Zillow shows about 50 sub-$50K homes in the Phoenix area, most of them SFH. If Posers plays his/her cards right, is willing to wait for a short sale to go through, is willing to move anywhere in the country to cherry pick the cheapest places, and is willing to take a quick lucky ducky job to pay the electric bill, then yes, it’s probably possible to find a sub-$50K abode, even a single family home, in every state. Even in DC area it’s possible to buy a run-down condo conversion for sub-$90K.
Let’s say Posers moved to a new $30K house every five years. If you account for taxes, that works out to an equivalent of ~$580 or so in rent,which is on par with the lower-rent 1-beds in the outer suburbs of a medium-sized city in flyover. Even with a $500/week lucky ducky job, it’s possible.
Zillow shows about 50 sub-$50K homes in the Phoenix area, most of them SFH.
I didn’t say they didn’t exist. I said most were in ghetto areas. Remember, if you can buy them that cheap, so can slumlords.
Hard to be dirt poor in Phoenix when everyday, 6 mos out of the year, is over 100 degrees, you cant live with out AC and a good car.
LOL @ oxide’s new handle!
cheapest FUNCTIONAL abode I can find in a mid-size city or town that also is largely functional… $20K - $40K..
I don’t harp on the Oil City Plan as a joke, Posers. I think of it as a legitimate lifestyle option. And there are still places where you can find older housing in that price range, especially if you have enough cash stashed away that you don’t need to work a full-time job. For example, Kalamazoo, Michigan seems to have an abundance of hceap housing. Here’s one:
http://www.zillow.com/homedetails/3122-Virginia-Ave-Kalamazoo-MI-49004/74147698_zpid/
Cutie patootie 2/1 on a half acre for $34K. Good lawn, space the grow things. Old kitchen but works fine. Sold at peak in 2006 for $64K.
$40K buys you a meth house.
Poser..
Look up the prices in Phoenix, and it won’t be the ghetto i promise.
You don’t even have to cut the grass - huh.. what grass?
But good land with water is not replaceable like a car.
Bad analogy.
Vince -
Just don’t expect many of those who already have theirs to support your line of thinking. Those with paid-off $300K houses aren’t going to like it, but that’s their problem.
We now live in a semi-permanent (at least) post-credit world. A few people here and there are starting to act like it.
at which point it might be cheaper to buy a fully stocked turnkey farm than to buy a couple years worth of food. Crazy times we live in.
Family of four… let’s say $600 a month in food.
$600 x 12 x 5 years = $36000. Hmmm. In all the Oil City lookups I’ve done, a livable house on 0.5 - 5 acres seems to cost the same $75 - $110K no matter where you go. So we’re not quite at that point yet.
Family of four… let’s say $600 a month in food.
That’s roughly two weeks for our family of four, and we don’t eat red meat or packaged meals.
Plus there are costs associated with raising that food. And the risk of crop failure for any number of reasons. In the Midwest this year, we are going to have scarce and expensive tree fruits such as peaches, apples and pears. Early warm temps and a late-April hard frost wiped out most of these crops. Bummer.
Early warm temps and a late-April hard frost wiped out most of these crops. Bummer.
Yep, I lost about 95% of my peaches, and the entire first harvest of figs, but my blueberries and strawberries shrugged it off.
Franchise whores like Subway made themselves #1, yet others like Little Caesar’s respect and limit proximity.
Starbucks stand-alone in a shopping center that has an existing Starbucks in one of the anchor tenants. Quite common in the Western OC.
Crisis averted.
Now get out there to buy some stocks and enjoy the ‘risk-on’ rally!
Index Futures:
S&P 500 1,340.50 6.50 0.49%
DOW 12,704 49.00 0.39%
NASDAQ 2,601 16.25 0.63%
Germany returns to growth as EU avoids recession
Stock futures point higher
U.S. stock futures rise after investors receive some encouraging news about the German economy
Enjoy the eye of the storm while it lasts!
Markets on red alert as Greece teeters on brink of default and euro exit
By Daily Mail Reporter and This Is Money Reporter
PUBLISHED: 03:29 EST, 15 May 2012 | UPDATED: 07:41 EST, 15 May 2012
Financial markets have steadied after yesterday’s share rout but the mood remains febrile as Angela Merkel conceded for the first time that Greece could be forced to quit the euro.
The German chancellor suggested that European support for Greece would ‘end’ unless Athens held to the punishing bail-out terms agreed with Brussels and Berlin.
Her warning came amid mounting speculation that Greece could be forced out of the single currency within weeks – plunging both Athens and the single currency into crisis.
…
If anybody is interested;
Optimistic projections led to dramatic surge in California budget deficit
By Kevin Yamamura
Gov. Jerry Brown announced Monday that the state budget deficit had grown by a remarkable 70 percent since January, but fiscal experts said the economy had little to do with it. - Read More
CA is an unmitigated disaster financially both public and private.
CA is an unmitigated disaster financially both public and private.
And will be forever - until:
They ban all public unions
And kick out all illegals
or
go bankrupt.
kick out all illegals
Give it all back to the Indians, eh? (But where did they come from?)
We’re all illegal outside of the rain forest.
We’re all illegal outside of the rain forest.
It is a nice liberal philosophical argument that NO ONE in the world believes in..
And no county in the WORLD bankrupts themselves providing free food, health care, housing, schooling, etc. for ANY illegals in their county.
They kick them out. Some - after some hard time in jail.
Didn’t Texas just have a $20 billion deficit? That was supposed to be end-of-the-world stuff there too.
I think most cities will go BK as the buck is passed down to them. This is good, it can get them out of those pension scams.
“…but fiscal experts said the economy had little to do with it.”
What caused it? The weather?
Rose colored glasses looking at revenue projections…That ain’t nuttin…If the tax increase fails in June, the SHTF….
Its kind of interesting to watch the public safety unions…When its contract negotiation time, they are a band of brothers…When its layoff time due to unwillingness too give anything back its every-man-for-himself…
“What caused it? The weather?”
Global warming. The moonbats tried to warn us…
Global warming is just a hoax Al Gore made up to sell more movie tickets to fund his hypocritical, carbon intensive, limosuine liberal lifestyle.
Global warming. The moonbats tried to warn us
Scientists! What a bunch of fools.
Scientists! What a bunch of fools.
Anyone remember the global cooling scare in the 1970s…?
That’s why it’s called “climate change” now. So whether it gets warmer or cooler it can still be blamed on the Republicans
Laugh of the day!
That’s why it’s called “climate change” now. So whether it gets warmer or cooler it can still be blamed on the Republicans
The ice caps dont agree with you.
Oh lookie:
California is ranked dead last for it’s business climate:
http://www.bizjournals.com/sanjose/news/2012/05/02/california-last-again-in-ceo-business.html
Socialism fails when you run out of other people’s money…
Socialism fails when you run out of other people’s money…
I don’t think socialism means what you think it means 2banana.
“Norway, Australia and Iceland have the best standards of living in the world and are among the places with the highest levels of human development”, UN
OTOH, California’s economy is one of the world’s largest. ISTR that it ranks 9th overall.
Wow - Western countries with tiny populations that are nearly all homogeneous in race/religion with massive natural resources.
You could have a drunk king run the place and it would still work.
And they still will kick you out in a heart beat if you are illegal.
“Norway, Australia and Iceland have the best standards of living in the world and are among the places with the highest levels of human development”
Wow - Western countries with tiny populations that are nearly all homogeneous in race/religion with massive natural resources.
Fail. Don’t give me the homogeneous “white man” crap excuse. Brazil is half black and has brought 25% of it’s population out of poverty the past 15 years. Why? Because they invest in their people and middle-class lately. They also have universal health-care and don’t have 1/4 of the wealth that the USA does.
Now either USA is “exceptional” or not. The exceptionalism clowns can’t have it both ways. And USA is awash in natural resources too so that point is moot.
Countries who have universal healthcare and much less wealth inequality are eating our lunch right now. And they score as much happier and more economically mobile than the USA too.
Yea right. The USA is socialistic. LOL. I don’t think you know what socialism really is 2banana and that’s why you sound so ignorant half the time.
Yes, the US has natural resources. Too bad most of it is off limits due to insane environmentalists.
Compare that to Brazil where they actually drill for their oil and natural gas.
From an Economist article last year:
“The oil-and-gas supply chain, broadly defined, accounts for 10% of Brazil’s economy now. By 2020 its share should grow to 25%, say analysts.”
You don’t think $100 oil has anything to do with the recent economic success? Nah. Must be the govt run health care.
yeah. let the oil and gas companies just self regulate the fracking… and we’ll try to fix the water supply when your faucet spews a 10 foot flame, or let the kids/grandkids pay the bill. ofcourse the oil company is long gone by than laughing all the way to their swiss bank.
“California is ranked dead last for it’s business climate:”
Strangely enough, of the 22 states where oil is extracted from, 21 of those states impose an “extraction tax”. The one state that doesn’t? California.
Yes, the US has natural resources. Too bad most of it is off limits due to insane environmentalists.
“Off limits”? No. Look at our history and what we’ve extracted and grown and what we continue to extract and grow. Compare it per capita to Japan or Norway. The USA has not been hobbled and is not hobbled. Yea right, I’m sure Norway does not have an EPA. LOL.
And remember, commodities have been in bear markets as much as bull markets the past 200 years so this “natural resources” (along with the “white man”) meme does not ring true.
You don’t think $100 oil has anything to do with the recent economic success? Nah. Must be the govt run health care.
Brazil is energy independent because they stuck with a government run, national energy policy through thick and thin the past 30 years. They invested public money into it when oil was $9 a barrel and when oil was $50 a barrel. This was a government (socialist, lol) run plan that succeeded so don’t give me the BS line that Brazil is only doing well because of expensive oil. Brazil’s middle-class started rising before the price of oil did.
And let’s not forget. Carter pushed for a National Energy plan when Brazil started theirs. Brazil succeeded and “free-market” USA failed. This is why you have public, national energy plans and universal health-care. Because they will do you well when times are bad and they will totally kick a$$ when times are flush.
RioAmericanInBrasil +1
The EPA has overshot its mission by a few thousand light years. We all want clean air and water except for a few Mr. Burns’ in the population. To say they haven’t hindered natural resource extraction shows a lack of current knowledge.
I’ve seen it first hand in Montana, the almost dead lumber and mining industries. The EPA empowered enviro-wackos will sue to let fallen and/or fire damaged timber rot instead of harvesting it and putting it to good use.
To say they (EPA) haven’t hindered natural resource extraction shows a lack of current knowledge.
Of course they “hinder” it somewhat. But this next statement of yours shows a lack of appreciating proportionality.
The EPA has overshot its mission by a few thousand light years.
Greece-A-Fornia. Perhaps we ought to allow Greeceafornia to print its own money.
CA is just another Blue state like NY, that gives back more to the feds than it receives. Those darn welfare Red States are slowing us down. Know your party.
Democrats spend far less; spending breaks down as $35 billion a year under Democratic presidents and $60 billion under Republicans on average. If you assume that it takes a year for a president’s policies to take effect, Democrats have raised spending by $40 billion a year and Republicans by $55 billion. Thus, the GOP is more responsible for the debt that we have amassed, lowering our credit rating. (Source: Washington Post)
Out of 18 states that produce more wealth than what they take in from the Federal Government, 16 are liberal, one swing (FL), and only one Republican (TX). On the other hand, of 32 states that take in more money than what they produce, aka welfare states, 4 (MD, ME, HI, VT) are liberal, one swing (PA), and an astonishing 27 are full-out conservative. (Link) Thus Democratic legislature and fiscal policies have created a better living environment for me, conservative legislatures have failed to do the same for its loyal base. (Source: Tax Foundation)
Since 1932, Democratic Presidents have created 73.4 million new jobs, Republicans have created only 34.8 million. Thus, Democrats created more jobs lifting my standard of living. (Source: International Business Times | Bloomberg)
Very well said… thanks for the post..
Crisis averted.
+1 Recessions were a 20th century thing.
British attorney jailed for tax fraud after helping US family hide and smuggle estate assets of more than $10M overseas.
“In court papers, the US government said Little met Mr Seggerman’s beneficiaries and descendants at a Manhattan hotel in August 2001 and told them that the patriarch had left them about 10 million dollars of a 20 million-plus estate in overseas accounts that had never been declared to US tax authorities.
The government said he transferred some of the money from Switzerland to London, where Seggerman family members could pick up funds during trips there and bring all or part of the money back to the United States as cash, generally in amounts less than 10,000 dollars.
To hide communications, members of the Seggerman family used codewords in which “small” was used to refer to Michael Little, “beef” meant money, “lbs” meant 1,000 dollars and “FDA” referenced the IRS, the government said.”
http://uk.news.yahoo.com/lawyer-accused-us-tax-fraud-023308857.html
Thanks to their implicit free (government-subsidized) bailout insurance policy, too-big-to-fail banks enjoy an ultra-low cost of obtaining funds, tempting them to make foolish gambles. It would be interesting to see whether the same sort of foolish gambles would occur if you handed out free chips at a casino.
“JPMorgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting,” - Barrack Obama
savers are soo screwed.
Yeah, the last thing savers need is stricter regulation of the mega-banks.
the last thing we need is a president that speaks of them as if they were friends.
And one of my buddies who gives big bucks to my campaign…
And they are under investigation by the Justice Department.
And I hope that the Justice Department makes ‘em squirm. Some federal indictments would also be nice.
Squirm, bah, that’s just the cost of doing business, like going in front of congressional committee. Makes for good TV but doesn’t affect much. It’s the regs that come AFTERwards which really bite.
the justice department’s track record on investigating the “top dogs” is soooo stellar.
Greed is God…
Study: 1 in 25 Business Leaders May Be Psychopaths
By Maia Szalavitz
One in 25 bosses may be psychopaths — a rate that’s four times greater than in the general population — according to research by psychologist and executive coach Paul Babiak.
Babiak studied 203 American corporate professionals who had been chosen by their companies to participate in a management training program. He evaluated their psychopathic traits using a version of the standard psychopathy checklist developed by Robert Hare, an expert in psychopathy at the University of British Columbia in Canada.
Psychopaths, who are characterized by being completely amoral and concerned only with their own power and selfish pleasures, may be overrepresented in the business environment because it plays to their strengths. Where greed is considered good and profitmaking is the most important value, psychopaths can thrive.
Read more: http://healthland.time.com/2011/09/20/study-1-in-25-business-leaders-may-be-psychopaths/#ixzz1uwSJrfMz
Having had close encounters with the segment of society known as “bosses” over the past 45 years, I’d say that historically the ratio was probably 1 in 10.
If it is currently 1 in 25, I suspect that there has been a significant migration to politics.
Having spent some years in the Boston area as some of the drastic changes were happening in our work culture, I couldn’t help but notice the publicized mob activity appeared to disippate as this parallel mentality was embraced by the corporate world. Stealing their talent?
There was actually some innuendo in a Boston Globe article in the 90s that told of the background of the people that ran our sister company. There was a suggestion that at least one of them might have had some prior loose ties w/organized crime.
If you’ve ever met some of the “players” on Wall St. you would know it’s more than “a suggestion”.
Heck, I’ve worked at places were all the bosses were like that.
Yeah but they’re “producers” and “job creators”. Free market, bootstraps, rugged individualist, John Galt, et cetera. They need tax cuts so they can trickle down on the Lucky Duckies. It’s worked so well for the past 30 years, hasn’t it?
Actually, the middle management bosses, with their 200K+ “earned incomes” are the ones stuck with the brunt of the tax bill. Now if they were good old 1%’ers whose income is “unearned”, it would be a different story.
That said, the pay gap between low level bosses and individual contributors continues to grow, which is one if the classic signs of a 3rd world economy.
Yes but the 200K’ers think they’ll all be 1%ers someday
How’s that $125/hr. side gig going? Split it in three ways yet, allowing three people to make $40+/hr?
Thought not.
I made 10K off of it last year. It’s pretty much wound down.
As far as sharing, I paid my share of income tax on it, since it was earned. As for splitting the job with others, that option wasn’t provided to me. Due to my domain expertise I was selected by the lawyers, some who are paid $700/hr.
But thanks for playing.
So psychopath no longer means ‘hannibal lectre’ and now means ‘the guy who denied my vacation request’? Well then.
Well, it says above, “Psychopaths, who are characterized by being completely amoral and concerned only with their own power and selfish pleasures.” If you go read the article, there should be some further definition.
Another thing I’ve noticed is a certan type of person who gets some authority in a workplace, acts like a complete jerk, and has no idea that everyone thinks he or she ias an a–hole.
I think the term they meant to use was “sociopath”. I recall reading that 10% of the general population are sociopaths. That most of them might migrate into management is not surprising.
“Another thing I’ve noticed is a certain type of person who gets some authority in a workplace, acts like a complete jerk, and has no idea that everyone thinks he or she ias an a–hole.”
They may know, but they don’t care. It’s even worse if they have the backing of someone higher up in the organization. And it there’s anyone under them that has any sociopathic tendencies, you’ll get to see those as that person tries to use them to get ahead too. It makes for a horrible working environment.
Is such a high incidence unique to the U.S. currently?
Surprise, surprise, Hollywood hasn’t given us a completely accurate view of what psychopaths are really like.
“Psychopaths, who are characterized by being completely amoral and concerned only with their own power and selfish pleasures”
That just perfectly defined a corporation. And we’re surprised to hear that people who “think like the company” seem to do well in the company’s power structure. However, psychopaths (traditional definition) care nothing for the rules of society; which is certainly NOT what businesses do. They follow the rules to the absolute letter, trying to find ways around them to make the maximum profit with the minimum effort/supplies. Only a rare few actually step outside and break the law.
In a big corporation (I work in one of the largest, so feel that I have some ability to speak to this, although, this in no way reflects/describes my employer) “morality” is the rule of law. If it’s legal, it must by proxy, also be moral. Which, IMHO, is the way that corporations should be run, and, also, is the way that individuals should conduct themselves. Morality lends for extrodinarily bad decision making at the corporate level “Well, so and so is doing 1/2 the work of everyone else, but it’s because she’s dealing with family issues, so we’ll just let it slide”. That’s the MORAL thing to do, but it’s not the right thing to do for the business. Morality would have us hire totally unqualified people based on their need for the job, rather than the best people who happen to also have made 5M bucks off their last deal.
That’s not the way it works. When you are dealing with a company, assume that everyone is amoral and you’ll do just fine. If you want something done, get it in writing. Contracts are what businesses understand; which, IMHO, makes everything far more predictable. In the above example, if I need to fire someone, everyone things I’m going to fire the person who’s doing 1/2 the work. But, because that person really NEEDS the job, I fire I top producer instead? Now everything is very unpredictable and difficult to understand, making the work environment worse for everyone.
So your point is that corporations are by nature amoral, but will (in most cases) follow the law. So by your reasoning, strong regulation of corporations is absolutely necessary, for they will do whatever is legal to advance their own interests, no matter how cruel, destructive, or unfair it may be to others, including society at large.
“they will do whatever is legal to advance their own interests, no matter how cruel, destructive, or unfair it may be to others, including society at large”
When I worked for TARP bank in 2004-2006 we called it “creating shareholder value”
And that’s exactly what we expect corporations to do. Create as much profit with as little energy/capital expended as humanly possible. We even rate them on their effectiveness in doing this, and buy their stock based on their ability to deliver the max revenue with the lowest costs.
Moral goals are diametrically opposed to corporate goals. Morality would tell us that it’s wrong to charge a poor single mom 400 dollars for a phone that cost 40 to make. Or that it’s wrong for a billion dollar company to withhold drugs from a needy patient. Or millions of other examples.
But, when you remove morality from the equation, you’ll suddenly see that all these companies are perfectly rational actors.
“So by your reasoning, strong regulation of corporations is absolutely necessary”
If you want them to behave in a way that mirrors that of a moral society, yes, you need to regulate them heavily.
My argument would be, I don’t really care if they behave in a moral fashion; so long as I understand that they are amoral, I know how to deal with them. Dealing with an amoral institution on moral terms is bound to get you burned, that’s the thing that many people seem to forget. The only thing that they understand is the rule of law; that’s the way you have to deal with any large business. Doing things on a “handshake” over a glass of Scotch went out of the window about 50 years ago; get it on paper and then you’ll get what you want/expect.
Morality is overrated, IMHO. Deal with everyone as if there are no morals and you’ll never be the sucker in the room. Putting your moral code onto others is how people get taken for a “ride” (see, crooked priests, politicians, and money managers for perfect examples).
The only thing that they understand is the rule of law; that’s the way you have to deal with any large business.
Exactly. And ‘rule of law’ for corporations is regulation. So we as a society must make sure the laws/regulations circumscribe them properly, for they will do whatever they can that benefits them, regardless of the consequences for the rest of society.
Morality is overrated, IMHO. Deal with everyone as if there are no morals and you’ll never be the sucker in the room. Putting your moral code onto others is how people get taken for a “ride”
You’re starting to sound a bit like a psychopath yourself.
Alpha,
Having a moral code is one thing, applying it to other people (assuming they are moral) or corporations is something else. If you assume that everyone is moral, you’ll be taken advantage of your entire life. If you assume, until proven otherwise, that all people (and all corporations) are amoral, the world will make a lot more sense to you.
“Morality is overrated, IMHO. Deal with everyone as if there are no morals and you’ll never be the sucker in the room.”
Attorney full-employment guarantee.
Corporations are not by nature amoral. Corporations are made up of people. Some people have a moral compass, some do not. Some people are restrained by rules and laws and some are not. If you allow people or a group of people to be a law unto themselves, you will get mixed results.
I have also worked in some of the largest corps, and some of the smallest.
And yet in B school I kept hearing that corporations only have a moral obligation to shareholders: to maximize their return.
Blue,
“Some people are restrained by rules and laws and some are not. ”
I think you’re mixing “legal” and “moral”. I think that most corporations do follow the rule of law, they do everything they can to remain “legal” in their dealings with others. However, I also think that most corporations do not follow what most of us would consider to be the “moral” code of society. The starkest example of this is probably the medical industry, lifesaving medicine that costs .1c per pill to manufacture and is sold, often to people who cannot afford it, at 25 dollars per pill. I realize that insurance has a lot to do with this (and also the costs of recouping the development) but, still, can you imagine any “moral” person denying another person medicine when they have stacks of it and the ability to make endless more at almost no cost? And yet, they all (pharma companies) do it, they all act the same way; because, that’s how to make massive profits in that industry.
If you personally behaved like most large corporations behave you’d be deemed antisocial and possibly a psychopath. Extracting payment from people at the bottom of the food chain to add to your already in-spendable amount of personal wealth..
I don’t say this to demonize corporations, I work for one of the biggest and, I actually like the way things work in corporate America today; I understand companies that act rationally to maximize profits a lot better than I understand companies that act “morally”. People who claim “strong morals” are, IMHO, most often looking to rip me off.
In any situation I recall that I’ve been in, wrong doing was the brain child of just one person. The problem is that the 98% are whores, and the 1% that are PITAs get vomited. I pretty much have a classic example for every time I changed careers.
I know of an old exception, the Bell System that the government crushed decades ago. I couldn’t find a copy of their publication “The Honest Job” online, but it was real Boy Scout stuff. I work for an honesty cultured company now, but it has no public shareholders.
I actually like the way things work in corporate America today
I don’t. 20 years ago if your employer was healthy you didn’t worry about layoffs. Today, all it takes is barely missing “Wall Street’s Estimates” and they start firing people.
I know of an old exception, the Bell System that the government crushed decades ago. I couldn’t find a copy of their publication “The Honest Job” online, but it was real Boy Scout stuff. I work for an honesty cultured company now, but it has no public shareholders.
A friend of the family worked for the Bell System until the mid-1970s. He was very glad to GTFO of there. For him, it wasn’t a Boy Scout meeting at all.
So much for that example!
What about H-P while the bros were still on this earth?
If it’s legal, it must by proxy, also be moral.
That only makes sense if law-making and enforcing is completely independent of the company no matter how much money they have. That condition doesn’t exist.
And this- is exactly why I disagree so strongly with the sentiment that “corporations are people”. We expect most “people” to act not only in a legal way, but also in a moral way. We expect “people” to have some sense of patriotism and concern for their fellow man. It is foolish and unrealistic to expect corporations to act in similar fashion. Corporations cannot be expected to act as citizens; they honor ONLY the pursuit of the almighty dollar, in a (as described above) psychopathic manner. I find it baffling that we would give such an entity rights on par with those we give a citizen.
“Corporations cannot be expected to act as citizens; they honor ONLY the pursuit of the almighty dollar”
Yup.. That’s exactly my position. Expecting a corporation to deal with you the same way that your neighbor/family/friends to is a critical mistake that many people make. Corporations are Gordon Gecko incarnate, that’s what we DEMAND of them every single day on the stock market. They try to talk out both sides of their mouths, but, in reality, their only motive is to maximize profits and not run afoul of the law. Morality does not enter into the P&L calculation.
If corporations are people, then some terminated person should sue for alimony once their relationship ends. You know: a lifestyle for which I became accustomed to. If one such case was ever won by the betrayed, the Supreme Court would overturn their own decision post haste.
Given that the percentage of psychopaths in the general population is around 1%, I’d say that the business world is a place where you’d best watch your back.
or the police force
What about crazy realtors. I have been a used home salesman for over 25 years and the pychos have taken over the business. They think nothing of stealing your clients, lying to clients and holding offers. The brokers don’t care as long as they are making money.
I’m in Long Beach CA and the cut throat A holes rule. There is a crazy blonde who is a top producer who will have an out of body experience if anyone touches her “farm”.
Hey, toast, it may be heresy to say so here on the HBB, but I know other real estate agents like you. Matter of fact, when it comes time to sell, guess who I will be using? Those agents, that’s who.
And 1 of them is definitely mine.
Does not beat the one in two political leaders are psychopaths and the 99 out of 100 people infatuated with social engineering are psychopaths.
Slob, do you have a tax plan?
99 out of 100 people infatuated with social engineering are psychopaths.
Are YOU not the one totally infatuated with social engineering BillinLA? You’re the one who want’s to totally change human society and historical social organization. And all to get free stuff without paying taxes just to fit in with Ayn Rand’s lunacy.
That will take some pretty heavy social engineering.
‘just to fit in with Ayn Rand’s lunacy’
This person has been dead for decades, like FDR. IMO you might try focusing on today’s politicians and pundits. We’ve got plenty of current scalawags without having to refer to people no one really remembers.
Semantics aside, is there any distinction between ’safe haven’ and ‘too-big-to-fail’?
JPMorgan loss shows risks in safe-haven banks
By Douwe Miedema and Steve Slater
LONDON | Tue May 15, 2012 7:56am EDT
(Reuters) - JPMorgan Chase & Co’s $2 billion-plus trading loss stems from an embarrassment of riches, as like other banks that came out well from the financial crisis it has surplus money burning a hole in its pocket.
Safe-haven banks - a category which also includes Britain’s HSBC Holdings Plc - are few and far between and have attracted a flood of client deposits, saddling them with the task of putting the money to work in a market where interest rates are close to zero.
The job of managing this liquidity is a normally staid function which sits close to a bank’s treasury department.
But in the case of JPMorgan’s Chief Investment Office (CIO) - roughly 40 traders plus support staff - the unit had become an increasingly important money-spinner for the Wall Street bank, possibly blinding management to the vast risks it carried.
…
A way to play J.P Morgan’s debacle
May 15, 2012, 8:50 AM
Charles Rotblut, editor of AAII Journal says that the J.P. Morgan debacle has created some bargains in the financial-services sector and one of them, U.S. Bancorp was his “buy of the week” on MoneyLife with Chuck Jaffe.
Where J.P. Morgan has a big investment-banking and trading operation, U.S. Bancorp is more of a traditional bank, “now that you have this bad news overshadowing this sector … it’s not a bad time to take another look at the sector and say ‘Are there some white knights so to speak in this mix of complete dirt and mud being slung around.
“In that scenario,” he added, “U.S. Bancorp stands out because it has weathered the financial storm pretty well, it has passed the Fed’s stress test and it is attractively valued.”
…
As long as profits can only go up, there is no risk.
Right?
People dealing with Billions of dollars seem to think they will never lose, never make a mistake or maybe never get caught. They forget the risk, they forget it is someone elses money.
they forget it is someone elses money.
Where’d you get that idea?
Where are all the house buyers coming from? And with over $200K in cash to buy. Multipule offers on just about any nice house priced near market value. Offer prices 10% above list / comps. Seems like every investor or occupant buyer is hunting a house, all at once.
Nerver seen this happen. It’s too fast to be healthy.
Just be happy it’s the uninformed making that mistake and not you. It’s one they’ll never recover from financially.
True, it’s like a mini-bubble.
I just can’t figure out where all this money is coming from. Buying a cheap condo rental is one thing, but $200K+ cash now a common offer is ALOT of money when you are talking ten thousand houses with pending offers at the moment.
Sure some are occupant buyers getting loans, but still mega cash floating around in the market all of a sudden.
I just can’t figure out where all this money is coming from.
Here in Tucson, I think that some of the money is coming from people of A Certain Age. You know the ones.
They’ve got quite a bit of retirement savings earning next to nothing, they’re worried about what the stock market might do next, and there are allllll of those in-VEST-ment houses for sale.
Not that they’ve ever been landlords before, but they just have to buy now! Because their real estate agent told them that it’s a great time to buy!
I doubt that these rookie landlords will last very long. One bad tenant will be all that’s needed to wipe a lot of them out.
One bad tenant will be all that’s needed to wipe a lot of them out ??
Along with HUD…Very easy to be in violation…If you are one of those “bad A$$e’s” that have the attitude that this is my property and I will do what I want you are ultimately toast..
I suspect some of the people who used to routinely buy stocks on the conferred wisdom that “the stock market always goes up” have thrown in the towel on Wall Street in favor of investments that are “safe as houses.” Of course, this would be a different group than those investors currently piling into Treasurys.
Meanwhile, the stock market has risen sharply off its March 2009 low on ever-shrinking volume. Seasoned bubble-watchers know what comes next after a period of steeply-rising prices on shrinking volume.
Just a hunch!
Editorial
End of the Affair?
Published: May 14, 2012
Investors are shunning the stock market, and who can blame them? As serial bubbles have burst, faith in the market has been rewarded with shattered retirements. At the same time, trust has been destroyed by scandals and — as demonstrated by the reckless trading at JPMorgan Chase — the slow, uncertain pace of financial reform.
There has been less buying and selling of stock, and there have been huge outflows of investor dollars from domestic stock mutual funds, as detailed recently by The Times’s Nathaniel Popper. If the trend continues, the result could be a less robust market, with fewer companies opting to raise money by issuing shares and fewer investors willing to put their retirement savings into stocks.
Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.
American stocks have doubled in price since the market hit bottom three years ago. But trading in the United States stock market has not only failed to recover since the 2008 financial crash, it has continued to fall. In April, average daily trades stood at 6.5 billion, about half their peak four years ago. By comparison, after the market busts of 1987 and 2001, trading recovered within two years. In fact, going back to 1960, trading had never declined for three consecutive years, let alone four and counting.
Investors haven’t just hunkered down, they have headed for the exits. Since the start of 2008, domestic stock mutual funds, a common way for individuals to invest, were drained of more than $400 billion, compared with an inflow of $52 billion in the four years before that.
These investors have increasingly opted for bonds over stocks, with reason. From the peak of the dot-com era in March 2000, stocks have risen about 10 percent, a paltry gain once fees, taxes and risks are factored in. Stocks are still down about 5 percent from the peak in October 2007, even with prices doubling since mid-2009.
…
Restoring trust is crucial to restoring the market.
I’ll trust it a lot more at 5000 than I do at 13000.
I know I shouldn’t get my hopes up, but I’d love it if the bag-holders for a big drop were exactly the people trying to set a trap for the small investor for the last few years.
Policy makers should pay attention. Evidence suggests that investors are not merely reacting to tough conditions, but rather are staying away because they do not trust the market. Restoring trust is crucial to restoring the market.
Last week, the Firedoglake blog had an article about the very same thing.
At the end, the suggestion was made about deserting Wall Street vs. Occupying it. To paraphrase the author, it seems that deserting it might turn out to be more effective.
I don’t think investors sat around, contemplated for a bit, and moved $499B from stocks to bonds. More likely they cashed out that $400B for living expenses when they lost their jobs from 2008-2012.
“Restoring trust is crucial to restoring the market.”
I trust almost any casino more than I trust the stock market. Casino’s have better regulation and enforcement.
How many have rebalanced their portfolios to “safer” investments as they have aged into the 55+ group? I think there would have been some natural decline in market participation even without the lack of trust engendered by the dot bomb and 2008 crisis.
How much is due to younger folks repaying student loans instead of investing in the market?
How many have rebalanced their portfolios to “safer” investments as they have aged into the 55+ group? I think there would have been some natural decline in market participation even without the lack of trust engendered by the dot bomb and 2008 crisis.
I wasn’t 55+ in 2008, but I will be later this year.
However, I pulled most of my long-term money out of stocks in ‘08. That was after I read the advice given on this-here HBB. Thanks guys (and gals)!
FHA, 3.8% borrowing rates and 3-5% downpayment programs are somewhat successful in creating a slight amount of reinflation.
A 45 year old told me he bought a home last week w/100% financing. He mentioned something about being a veteran. I wondered if he did it that way so he can walk if necessary.
I also think most people don’t understand or are in deep denial how the mess in Europe may soon be reflecting on their reality. They don’t have the constant backdrop of doom in their ideas about the future that we have.
Then again I’ve had a few conversations in the last couple of years where people do recognize what may be coming and are rolling the dice that real estate will be one of the areas that holds value better than others. So they believe real estate will lose too but just not as severely as other places to put their accumulated wealth.
Which market are you in?
Phoenix Metro.
Definitely not seeing that level of activity in my neck of the woods. Cheaper houses are selling here, but prices remain tame.
Ditto in my ‘hood. It’s like people have decided on the price they think is fair. When the house drops to that price, buyers jump. But not before.
Save $10K a year, get 3% return on a CD and in 15 years you have $200K.
Don’t take my comment the wrong way. $200K is a good chunk of money. But it’s not that much in the grand scheme of things. It’s not that hard for someone earning a professional income (engineer, architect, lawyer, etc) to accumulate $200K (and more) through simple monthly investments, by the time they’re in their 40s or 50s.
Granted, if people buy a new BMW every two years, that goal is a little harder to achieve. However, despite what many here on HBB think, not everyone lives that kind of lifestyle. There are a lot of people who have a lot of money saved up. The millionaire next door type of thing. They have $1M in the bank and drive a 10 year old Honda.
It’s not that hard for someone earning a professional income (engineer, architect, lawyer, etc) to accumulate $200K (and more) through simple monthly investments, by the time they’re in their 40s or 50s.
And what simply monthly investments might these be? The Wall Street casino, aka the stock market?
Fits me, but my $1.35 million is not all in the bank. Maybe $40,000. Passbook savings earns low interest. I do drive a nine year old “Japanese” economy car, but it is a Toyota.
Vanguard 500 index fund is undervalued compared to Arizona municipal bonds and gold, from the ten year perspective.
The Greek end game is in plain view for all to behold.
Greek government talks fail; president calls for meeting Tuesday
By the CNN Wire Staff
updated 9:00 PM EDT, Mon May 14, 2012
- Monday night’s talks break up without a resolution
- The president calls a new meeting to discuss a possible technocracy
- Greece has until Thursday to come up with a government or call new elections
- Failure to form a government puts Greece at risk of a eurozone exit
Athens, Greece (CNN) — Efforts to form a unity government in Greece failed Monday, moving the country closer to a eurozone exit as the president called for another meeting Tuesday to seek a solution.
Talks between Greek President Karolos Papoulias and the leaders of three main parties ended Monday night without a resolution, the president’s office said.
Papoulias then called a meeting for Tuesday to discuss the possibility of a government run by technocrats with support from political parties, according to the leader of the socialist PASOK party, which attended Monday’s talks.
“We have no choice” but to support the idea of a technocracy, PASOK leader Evangelos Venizelos said.
Papoulias had invited the leaders of the New Democracy, PASOK, Syriza and Democratic Left parties to Monday night’s meeting. Syriza was the only one not to attend; the party’s leader, Alexis Tsipras, said he wanted to talk with all parties or with just the president, and not with a selected group.
The far-left Syriza came in second in parliamentary elections on May 6, and polling since then has suggested it would come in first if the politicians call new elections because they cannot form a government.
The debt-wracked country has until Thursday to either form a government or call new elections.
Absent a government, Greece could run out of money to pay its debts and might crash out of the euro, the currency used by it and 16 other European Union countries.
“If no government is in place before June when the next installment (of loan money) from the European Union and International Monetary Fund is due, we estimate that Greece will run out of money sometime between the end of June and beginning of July, at which point a return to the drachma would seem inevitable,” Bank of America/Merrill Lynch wrote in a report released Friday.
…
gahhhh…the shoe that never drops.
What is the sound of one hand clapping?
‘Sacrificed for a future that never came’: Family tragedy tells the story of Greece
By Irene Chapple, CNN
updated 6:18 AM EDT, Tue May 15, 2012
Aigio, Greece (CNN) — The bank where she died in Athens is still shrouded in green tarpaulin and boarded off with corrugated iron. Graffiti scrawled in black across the front reads: “Traitors” and “killers.”
This is where Angeliki Papathanasopoulou put in 12-hour days as a financial analyst at Marfin Egnatia Bank, working not only for the benefit of her family but also with a desire to contribute to the country she loved.
…
At 8am on May 5, 2010, Angeliki’s husband Christos dropped her at the bank, on Stadiou Street. The couple lived just five kilometers away, in Vyronas, in the small apartment they had purchased a couple of years earlier.
…
Four months pregnant with their first child, Angeliki and Christos were scheduled to learn the sex of their baby at an appointment that afternoon.
The plan was for Christos to pick her up at 3pm for the 4pm appointment, then they would see Sissy later. But, around 2pm, Christos took a call from his 32-year-old wife.
The bank was on fire.
…
Collateral damage. If they’re going to do this kind of thing (not that I’m recommending it), they need to avoid collateral damage and target the head of the snake. This is why the GWOT drone assassination campaign has been so successful. The unblinking eye watches relentlessly until a shot on an organizer presents itself, and only then does it strike.
Also - destroying buildings? Didn’t we ridicule that kind of stupidity during the LA riots, destroying the infrastructure in your own neighborhood?
Also - a purpose of the story is to cast banks and bankers in a more sympathetic light. And to tell protestors to beware of causing collateral damage, which, forget about the dead/injured bystanders, doesn’t help the cause.
“avoid collateral damage and target the head of the snake”
This was the original intent of Occupy Wall Street before it was coopted and hijacked by factions of the looney left. If it had stayed focused on the arrest, prosecution, conviction, and execution of the criminal 1%er Wall Street pigmen it would have retained much more popular support.
After being hijacked by the Free Sh*t Army and framed by the media as an opposition group to the tea party, the core of the intent was lost. And yes, the 1%er PIGS should be executed
“This was the original intent of Occupy Wall Street before it was coopted and hijacked by factions of the looney left.”
You could say the same about the Tea Party and the loony right.
Is there any way around this? We really need an alternative or two.
I’m thinking that Occupy Wall Street is just one part of a larger movement that’s rapidly growing.
Recall the antiwar movement of the 1960s and early 1970s. The Students for a Democratic Society got a lot of press early on, but they were quickly joined by a lot of other groups. And, to put it mildly, those antiwar groups weren’t exactly singing from the same sheet music.
“Court documents allege a series of failings by a bank executive, the bank’s external health and safety consultant and two managers — including asking staff to remain inside and locking the main doors during the riots — that contributed to the tragedy.
The documents say the staff were unable to access an emergency exit, with a door for disabled people that could be used in an emergency blocked by the fire. Further, they said the bank did not have a fire safety certificate, unbreakable windows, or security shutters drawn in readiness for the riots.”
This was the first thought that came to my mind. Could they not evacuate? And we see that, no, they could not. Why? Because of the same mindset that got Greece into trouble in the first place: lack of any sense of responsibility by those in charge.
Why am I reminded of the Triangle Shirtwaist factory fire?
Goldman’s Secret Greece Loan Reveals Sinners
By editor Mar 6, 2012, 1:34 PM Author’s Website
Greece’s secret loan from Goldman Sachs Group Inc. (GS) was a costly mistake from the start.
On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.
Papanicolaou and his predecessor, Christoforos Sardelis, revealing details for the first time of a contract that helped Greece mask its growing sovereign debt to meet European Union requirements, said the country didn’t understand what it was buying and was ill-equipped to judge the risks or costs.
“The Goldman Sachs deal is a very sexy story between two sinners,” Sardelis, who oversaw the swap as head of Greece’s Public Debt Management Agency from 1999 through 2004, said in an interview.
Goldman Sachs’s instant gain on the transaction illustrates the dangers to clients who engage in complex, tailored trades that lack comparable market prices and whose fees aren’t disclosed. Harvard University, Alabama’s Jefferson County and the German city of Pforzheim all have found themselves on the losing end of the one-of-a-kind private deals typically pitched to them by securities firms as means to improve their finances.
…
Blankfein got the CEO job as a result of the Greek hustle.
It occurs to me that if Goldman Sachs is, in Blankfein’s words, doing “God’s work”, then God must not like GS clients very much.
He didn’t say which god.
Their god is Mammon.
So yes, they are doing “god’s work”.
Damn lazy overpaid government workers and way too generous pensions!
Oh wait…
Public employee pensions were retroactively enhanced, and CEO pay was massively inflated, during the stock market bubble. After all, with all that wealth being created, neither really cost anything, they said.
No one is giving anything back. It is as if it is still March 2000. After all, they’ve got contracts.
They are using the federal, state and local governments to force the serfs, who got nothing, to pay.
Then why do I keep reading stories about state and muni employees being laid off?
You’ve seen those stories too? I thought it was just my imagination.
reading stories about state and muni employees being laid off ??
Well sure they are getting laid off…There is to much month left when the money has run out…No new source for funds, the layoffs must occur…Does not change the fact that the ones that remain are still receiving ridicules pay and benefits…
Thats what I meant when I said earlier on the board that its every-man-for-himelf right now with these band of brothers…Take a pay & benefit cut in return for saving your brothers with no layoffs…No fricken way…I got mine & seniority…Bye-Bye newbie…
A data point: Our local school district has done away with pensions. And all of our muni employees, except for cops and firefighters, receive no pensions.
Are you happy now?
Are you happy now ??
If that was meant for me Colorado the answer is NO…
except for cops and firefighters ??
And there is the answer why….
house around the corner was on the market at 335K, probably overpriced by 60k-80k and did not sell. Now on the rental market at $2200 a month, about $600 a month more than we currently pay A similar house right next door to them rents for 1800, so good luck renting that out quickly.
They bought in 2005 for 420k, so I figure they are underwater and getting desperate. Nice enough folks, stinks to see them struggling like this. I am SOOO glad we didn’t buy in the bubble, so glad.
They probably set the rent to cover their costs, not market rents using comps. So it will sit there vacant as they pour money into it every month. After several months of no tenant they might drop the rent to market - but you can’t make up the vacancy loss.
Better to price it at market and get something coming in to help cover costs.
Losses are best realized early.
Now on the rental market at $2200 a month…
Wow, $2200 every 30-days.
In DC, that’s typical for a 3/2 old townhouse or a shiny new 3/2 in a high rise.
LOL! It’s OK, you can come out now. The cat’s away.
My boss stopped off to look at one of the rental buildings not too far from our new office. This is in a part of the city that is still…umm…getting there. They were asking $1800 a month for studios.
From Bloomberg - Another Earth Needed to Meet Humans’ Demand for Resources:
“Humans are using resources at such a pace they need another world to meet demand for land to grow crops and forests and raise animals, WWF International said.
People required 18.2 billion hectares of land by 2008, witwith billion productive hectares available … About 55 percent of land needed was for forest to absorb carbon dioxide emissions.
“Similar to overdrawing a bank account, eventually the resources will be depleted,” the study’s authors wrote. “At current consumption rates some ecosystems will collapse even before the resource is completely gone.”
Visions of Earth as Trantor or Coruscant.
I’m thinking some plague will hit us first. Over population will get us there.
Bloomberg reports that this rampant use of antibiotics is leading to India becoming a hotbed for drug-resistant super-bugs, organizms that are virtually unstoppable, and that have no cure, including the so-called last resort of high-powered antibiotics.
Read more at http://www.inquisitr.com/232516/india-may-foster-drug-resistant-bubonic-plague/#4HIUOMCytjL1527Y.99
Or we are paying such a high price for oil we can’t afford food.
That’s usually how it work.
The 4 Horsemen always ride when we get out of control.
Should be an interesting next few hundred years for testing the capitalist theory of infinite growth in a finite ecosystem. Al Gore and spotted owls aside, how pleasant of a world to live in will it be when there are 10, 15, 20 billion humanoids living in it?
Hundred?
Try the next 20 if not sooner.
Should be an interesting next few hundred years for testing the capitalist theory of infinite growth in a finite ecosystem.
Not a problem as there are “infinite” resources and space available with the right technology… it’s called expansion into the solar system.
We already have a foothold in space with the International Space Station. Next step is a lunar colony. The technology exists, rather it is cost and risk that need to be addressed. After the moon comes Mars colonization and resource exploitation. Along the way, we’ll have asteroid mining operations in the asteroid belt. At some point, I’m sure the outer planets’ moons will also be exploited.
By the time we’ve begun to outgrow our solar system, we’ll have to invent the technology to travel faster than light in order to expand beyond Sol.
“infinite” resources…..expansion into the solar system….We already have a foothold in space with the International Space Station
Isn’t this like saying Europe can exploit Alaskan Oil because an English dude has a kayak in Bermuda?
You didn’t address the concern of sharing the finite global space with 20 billion other eaters/sh*tters. Doesn’t sound like an earthly paradise regardless of mining the moon…
Problem is it takes a LOT of energy to get anything into orbit. Something we are kind of short on.
The IIS is already scheduled for decommissioning and there are no plans to replace it, because … it’s expensive as hades.
By the time we’ve begun to outgrow our solar system, we’ll have to invent the technology to travel faster than light in order to expand beyond Sol.
I think we need to discover the science first. According to current science it isn’t possible.
As for colonizing the solar system, outside of good old Terra, it’s pretty hostile and uninhabitable. Apollo astronauts would have perished has the been caught in a solar storm outside of the protective safety of the Van Allen belts. Even in low orbit the crew of the ISS is subject to all sorts of nasty radiation.
I love the idea of space exploration, but there are reasons we send robots and not people into interplanetary space.
Problem is it takes a LOT of energy to get anything into orbit.
The moon is the logical stepping stone for further colonization of the solar system: It is much cheaper to escape our gravity well from the moon (once we have a permanent base there).
I think we need to discover the science first.
The latest theories on FTL travel are based on Einstein-Rosen Bridges, aka wormholes. Agreed that we still need to come up with much of the science around it, but it is theoretically possible, which is a start. It also means that travel on an astronomical scale will not be time-dependent (aka time-dilation as one approaches the speed of light), nor are the issues of time in space travel brought up in “The Forever War” as relevant.
it’s pretty hostile and uninhabitable.
I fully expect robots to do much of the heavy lifting in the near future due to the hostile nature of space. But manned colonization and exploitation is inevitable.
Here’s an excerpt from wikipedia about moon colonization plans from 1966: Project Horizon was a 1959 study regarding the U.S. Army’s plan to establish a fort on the Moon by 1967.
There are current plans in the works by China, Japan, India, and Russia to build permanent structures on the moon and rotate astronauts through, similar to the ISS now.
“It is much cheaper to escape our gravity well from the moon”
Don’t you have to get that payload to the moon first?
“The latest theories on FTL travel are based on Einstein-Rosen Bridges, aka wormholes.”
I would be more optimistic if they were observed in nature. So far they only exist on paper. Doesn’t mean they’re impossible, but are they plausible? Could we muster and control the kind of energy needed to create them?
“But manned colonization and exploitation is inevitable.”
Judging from the lack of progress in the last few decades, I’m less than optimistic. I used to be more optimistic, but as I saw the costs skyrocket and the technology fail repeatedly, I began to doubt that it would happen anytime soon.
“Next step is a lunar colony. The technology exists, rather it is cost and risk that need to be addressed. After the moon comes Mars colonization and resource exploitation. Along the way, we’ll have asteroid mining operations in the asteroid belt. At some point, I’m sure the outer planets’ moons will also be exploited. “
Colonization of space will not relieve population pressure on this planet. We can’t send people into space fast enough. Current calculation of Crude Birth Rate (CBR) - Crude Death Rate (CDR) is about 11.1 per 1000, giving us a population expansion of 77 million people per year. Based on projections out to 2050, the CBR - CDR is about 3.4 per 1000. If the population at that point is about 9B, then that will mean an increase of about 30 million people per year.
Birth/death rates are from Wikipedia.
http://en.wikipedia.org/wiki/Birth_rate
http://en.wikipedia.org/wiki/Death_rate
IMHO, colonization of space provides a means of species survival in case some disaster would annihilate Earth. It is worth doing if we decide that species preservation is worth more than other uses of our resources. But it is not a good way to control population.
“Another Earth Needed”
And since we still don’t have warp drive, we can forget about that.
And a little something I overheard at the office the other day:
We have an office in Beijing. When one of the Beijing managers was in town (suburban Denver) she commented that the air here was “unnaturally clean”. I was immediately reminded of the scene in the movie Spaceballs where the Spaceball president (Mel Brooks) opens a soda can of “Perrie-Air” and takes a whiff from the can.
OMG, and Denver has so much pollution. LOL.
Or has it been cleaned up?
Compared to China, the air is cleaner. But it’s not that clean compared to many other US metros.
“Compared to China, the air is cleaner. But it’s not that clean compared to many other US metros.”
According to this article, Denver is the 6th cleanest metro area in the US.
http://www.rd.com/travel/50-cleanest-dirtiest-cities-in-america/
That is a composite ranking, including water and other factors. Denver’s air score was middle of the road. It can get bad in Denver in the winter with thermal inversion, and I’m guessing that’s what pulls Denver into the “average” rank.
the air here was “unnaturally clean”
Unnaturally clean air. That’s classic. Makes you appreciate the EPA.
I know, I laughed at the oxymoron that wasn’t a contradiction to our visiting dignitary.
I don’t even want to think about what their tap water must be like. I suppose the color, taste and smell can vary by day of the month.
I had a couple of visitors from our China branch last year. We were staying in the North part of Chester County PA, where some famous bottled water with a French label is pumped out of the ground. Really clean water. They wouldn’t drink anything that didn’t come out of a plastic bottle.
Did anybody watch Mad Men on Sunday? It ended with killer smog outside Don’s window. Apparently, it was based on a real incident where 400 New Yorkers died from smog in one day in 1966.
But according to Romney, we don’t need no stinkin’ EPA and their regulations.
The EPA has done a lot of good. That doesn’t mean it will be to our benefit for it to be used as an extra legal tool to further political agendas. Is Romney against the EPA in general or against its new agenda of war on coal?
Oh the poor innocent little lumps of coal. My understanding is that there’s enough technology to scrub and clean the fumes, and mine without taking down the mountains. But it’s cheaper to buy senators.
Too bad some people will only appreciate the EPA after it’s gone, or rendered toothless. The same people who don’t learn from history.
Back in the 70’s one of my teachers told us that living in Beijing was the equivalent of a 3 pack a day habit…
Have some former co-workers who are working in Kowloon (Hong Kong) and they all have problems with the pollution, and plan to get out as soon as their contracts are up.
That reminds me of Mexico City in the 80’s. I wasn’t living there at the time, but I went down during Christmas in 87. The air was so bad that my wife and I got sick.
The air pollution en el DF is what motivated my mother to stop taking her annual summer vacation in Mexico.
… living in Beijing was the equivalent of a 3 pack a day habit…
I was there a few years ago, just prior to the Olympics. They euphemistically refer to the persistent haze as “fog”. It’s a bit improved from the 70’s, but it is still not particularly healthy. But what a place! 20 million people, half under 30. It is Party Central for the world’s young people. Definitely worth a visit. The food is delicious; the women are beautiful; the rapid transit system is world-class. You do boil your tap water, though.
I’m thinking a plague will get us first. Over population, easy world wide travel.
Bloomberg reports that this rampant use of antibiotics is leading to India becoming a hotbed for drug-resistant super-bugs, organizms that are virtually unstoppable, and that have no cure, including the so-called last resort of high-powered antibiotics.
Read more at http://www.inquisitr.com/232516/india-may-foster-drug-resistant-bubonic-plague/#kKOdlkA98q6QfK7R.99
It would be interesting to observe word trade grind to a halt in such a scenario.
Thanks for the laugh! The psycho who came up with the greenhouse theory figured that increased CO2 would be a tremendous boost to agriculture, and was therefore a good thing.
Here’s a brain teaser: What plant “sequesters” more CO2 than all the trees on the planet?
What plant? Is it algae?
Yes. But it’s hard to commercialize. It’s hard to get people to donate money for algae, or to recognize its decay products as biofuels.
The hotel I stayed at in Santa Cruz last week had a poster in the elevator bragging about how many acres of trees sequestration equavilants it was crediting itself with for buying alt electricity. I found it ironic, in that when trees mature, we do not bury them. They were pretty proud of their low water flush toilets too, while spraying hundreds of gallons of water at their desert lawn. California logic.
“California logic”
There’s a phrase I haven’t heard in a while.
Says it all.
while spraying hundreds of gallons of water at their desert lawn.
Point taken but Santa Cruz CA is not a desert. It gets 31 inches of rain per year, compared to Phoenix’s 8.
while spraying hundreds of gallons of water at their desert lawn.
Could have been grey water, too.
Sorry for the slip, I was in Santa Clara. It seemed quite arid. Santa Cruz is where the nice beach is. Must have subconciously wished I was in Santa Cruz. I drove up to Santa Rosa to visit kin. Santas everywhere.
Santas everywhere.
I’ve traded my Santas for Sãos. (for now)
At least you have a nice beach.
I know this is an unpopular view, but, the first thing we have to stop doing is subsidizing/encouraging more children. Overpopulation is directly related to the relative incentives for bearing children (in 1st/2nd world countries) and lack of birth control (in 3rd world countries).
And yet, much like our clueless Fed, we go forth with our foot pinned to the accelerator. There’s no more polluting action any human can ever take than having children; you could drive an H2 Hummer to work 100 miles each way every day for the next 30 years and not come close to the environmental impact of one child.
Something that the greenies don’t want to talk about, but voluntary birth reductions would be a wonderful thing for the environment (and likely the country/planet as a whole). The days of “he with the most people wins” in war/production/etc are over. What we need now are the most highly trained people.
Something that the greenies don’t want to talk about, but voluntary birth reductions would be a wonderful thing for the environment (and likely the country/planet as a whole). The days of “he with the most people wins” in war/production/etc are over. What we need now are the most highly trained people.
I’m one of those greenies. And I agree with you on the voluntary birth reductions idea.
Not only is it unpopular, it’s also untrue.
We do not “subsidize having more children”. You ever tried to get WIC? Look up the requirements for qualification some time. The first thing you should notice is that it isn’t indefinite.
No, people are going to have children no matter what. They really don’t care about the quality of life for them because they honestly think everything is “just going to work out”.
How do I know this? I grew up poor and the mindset is almost universal among the poor.
The well off have them because they can afford them and are looking to create a dynasty.
In fact, the only people with enough sense to know when to have or not have children are those with high IQs who aren’t wealthy. Even then, fortunes change.
You see, everybody wants their genes to survive into the future. We’re wired that way and until we can overcome that, nothing will change it except the historical visits by the 4 Horsemen.
…and you can take that to the bank.
This has been discussed here before. And the reality is that those most conscious of their decision not to breed (or breed less) are being outbred by the People of Walmart / L.A. Ink types leading to an inevitable Idiocracy outcome.
The squad welcomes overpopulation and ecological collapse, even though we won’t be here to witness it, it will be a nice told-you-so centuries beyond the grave
Overpopulation has always been self correcting, no?
“We do not “subsidize having more children”.”
This is patently untrue (at least in the US). Just change your withholding to reflect having a child and let us know what happens. Or let me know how much you have to pay to send your child to public school.
Both of these are direct, non-income limited, subsidies to having more children. There are plenty of other examples, but, IMHO, just with those 2 it’s clear that we do, in fact, subsidize having more children. A better approach (and one more in keeping with the resource requirements) would be to tax parents at a higher level than non-parents (because they are using fewer public resources).
Forwarded from yesterdays BB (to answer the question):
Comment by Ol’Bubba
2012-05-14 16:22:36
Which Tampa suburb did your parents buy in? $80k for 1500 sqft sounds like the real sweet spot.
Reply to this comment
Comment by Muggy
2012-05-14 17:21:31
I tried asking Overtaxed this before, but got a “it’s all true / read it and weep” response which means it’s in the ‘hood.
(Comments wont nest below this level)
The house is in Lakeland, IIRC.
I’m not trying to tell people to read it an weep. That’s just the facts of the situation. Doesn’t mean that 80K is a good deal, doesn’t mean its in a great neighborhood (I don’t know, I’ve never been there before, just seen the MLS listing). It was certainly livable at that price; they’ve been in the house for a few months already.
It’s a big gated community, IIRC.
O.k., Lakeland and Tampa are two entirely different areas.
I paid $5.09 for gas ( premium ) this morning. Why is it going up?
“Refinery issues” in CA is what the radio man said…
As in, they closed all the majors at around the same time for, ahem, routine maintenance.
Sounds positively Enron-esque. No one could have foreseen that taking refineries offline at the same time would affect gas prices. Let me guess - this has nothing to do with the upcoming election. Just a big ol’ coincidence, yessiree.
California requires refineries to switch over to summer gas all at the same time in each air quality region. Summer gas vaporizes at a higher temperature than winter gas to reduce pollution and prevent vapor lock.
The refineries have to pull their storage down to practically nothing throughout the whole system to replace the winter gas with summer gas and they take this as an opportunity to do maintenance.
There are HUGE fines involved if the gas is tested and doesn’t meet the vaporization standards. Before it was a government requirement, the refineries would do the same thing but would stagger the shutdowns which mitigated the problems.
Doesn’t California require a special “blend” of refined gasoline to meet it’s strict environmental/pollution standards that no other state requires?
Looks to me like it’s Cali’s problem, as I’m still paying $3.85 regular unleaded in MA.
Holding pretty steady at $3.99 - $4.10 here in NYC.
I paid $3.56 for regular yesterday. It’s dropped 20 cents in the last month here in the nation’s fourth largest city.
It’s in the mid 3.60’s in my next of the woods, down about 10 cents,
Seems like solar panels and a chevy Volt might be a great way to avoid this scam.
Renewable energy is part of the socialist, militant homosexual agenda!
American exceptionalism means that Real Men burn oil and coal, not fart around in a oversized golf cart with a “coexist” sticker on its bumper…
I think I made up for many months of conservation by driving a Uhaul from Colorado to NY. 8mpg. No solar panels, but the panel decal on the side was rather gay.
Cause you live in California, where a lack of refinery capacity poses an ever-present threat of a short-term gasoline supply shortage.
California gasoline prices jump average of 15.4 cents in one week
Analysts blame the increase on low supplies caused by temporary West Coast refinery shutdowns.
In California, the price for regular gas reached an average of $4.367 a gallon on Monday, up 15.4 cents from a week earlier, the Energy Department said. Above, motorists at a gas station in Boyle Heights in February. (Luis Sinco, Los Angeles Times / February 20, 2012)
May 14, 2012, 8:48 p.m.
Average gasoline prices in California jumped 15.4 cents in just a week, according to the Energy Department.
Analysts blame the rise on the lowest gasoline supplies for May in the western U.S. in 20 years. In California, the price for regular gas reached an average of $4.367 a gallon on Monday, up 15.4 cents from a week earlier, the Energy Department said.
Meanwhile, the national average for gasoline continued to fall. It dropped 3.6 cents in the last week to $3.754 a gallon.
…
“Cause you live in California, where a lack of refinery capacity poses an ever-present threat of a short-term gasoline supply shortage.”
Ah, but we’ll have the last laugh. When none of us here have a job, we won’t need their friggin’ gas!
California faces a $15 bn budget gap, and this one California-based firm is looking at a post-IPO market cap above $100 bn. Seems like a match made in tax heaven!
What California really needs is more Facebooks…
May 15, 2012, 10:53 a.m. EDT
Facebook market cap may top $100 billion
Social network hikes IPO price range as Nasdaq debut nears
By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) — Facebook Inc. hiked the expected price range of its initial public offering Tuesday morning, with the latest terms likely to raise at least $6.4 billion for the social network when the deal prices later this week.
…
Yeah, more industries that actually produce nothing. That’s what they need.
They don’t produce “nothing”, facebook produces alienation, narcissism, depression. Been a handful of interesting articles around the interwebs lately documenting that…
I’m one of those Luddites who has never signed up for Facebook. Oh, yes, I’m on LinkedIn, but I can’t say that I spend a lot of time there.
When it comes to being social, I enjoy hanging out with the rest of you. Even when I don’t agree with what you’re saying.
And do you know what? Meeting HBB-ers in person or over the phone is even more delightful. I recently did business with another HBB-er and what an interesting experience! A real stretcher, motivator, and a lot of other good things for Slim.
So, when it comes to being social and networking, oh, do we have that here. Do we ever.
“Facebook”
I’m with you, Slim.
My deepest fear is that my daughter, not a Facebook Luddite, will spend her college years frequently updating her status, rather than hitting the books. A higher-than-desired future student debt load would be a logical consequence.
FB lures those who are already alienated, narcissistic or depressed to post incessant status updates. In the months after I joined, I had to ‘hide’ several of those people (not wishing to offend by actually un-friending them). Increasingly, the only reason I check Facebook is to read George Takei’s hilarious posts, which are often just a cartoon or an image with a pithy comment.
NEED…MORE…FACEBOOKS. A string of Avenger sequels wouldn’t hurt, either.
Facebook IPO promises needed revenue for California
An employee works on a computer at the new headquarters of Facebook in Menlo Park, California January 11, 2012. REUTERS/Robert Galbraith
SAN FRANCISCO | Tue May 15, 2012 4:09pm EDT
(Reuters) - Facebook Inc’s initial public offering, in addition to minting a number of billionaires and millionaires, will offer something of a financial lifeline to cash-strapped California - generating more than $2 billion in revenue for the state.
The state’s budget watchdog said on Tuesday it expects the IPO will generate $2.1 billion in revenue for California through the 2013 fiscal year.
The outlook comes a day after Governor Jerry Brown proposed a revised budget plan to address a swelling deficit for the tarnished Golden State.
Facebook, the No. 1 social network, expects to raise $12.1 billion in what would be Silicon Valley’s largest-ever initial public offering, dwarfing Google Inc’s 2004 market debut.
Facebook, based in Menlo Park California, on Tuesday raised its target price range for the IPO to between $34 and $38 per share.
With enthusiasm for the historic offering running high, investors stand to reap capital gains while the company’s 3,500-plus workers could grow wealthy through stock units and options - all of which would translate into tax revenue for the state.
If Facebook’s shares debut this week at $38 a share, rise to $45 in six months and later rise further, California’s general fund would receive $2.1 billion over the next 13 months from taxes on their sale, the state’s Legislative Analyst’s Office said in a report.
…
No one could have seen it coming.
Spain Underplaying Bank Losses Faces Ireland Fate
By Yalman Onaran - May 10, 2012 11:50 AM ET
Bloomberg
Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system.
The government has asked lenders to increase provisions for bad debt by 54 billion euros ($70 billion) to 166 billion euros. That’s enough to cover losses of about 50 percent on loans to property developers and construction firms, according to the Bank of Spain. There wouldn’t be anything left for defaults on more than 1.4 trillion euros of home loans and corporate debt.
Taking those into account, banks would need to increase provisions by as much as five times what the government says, or 270 billion euros, according to estimates by the Centre for European Policy Studies, a Brussels-based research group. Plugging that hole would increase Spain’s public debt by almost 50 percent or force it to seek a bailout, following in the footsteps of Ireland, Greece and Portugal.
http://www.bloomberg.com/news/2012-05-09/spain-underplaying-bank-losses-faces-ireland-fate.html
May 15, 2012, 11:47 a.m. EDT
Justice Dept. launches J.P. Morgan probe: WSJ
CHICAGO (MarketWatch) — The U.S. Justice Department has begun a probe into the $2 billion-plus trading loss J.P. Morgan Chase disclosed late last week, the Wall Street Journal reported Tuesday, citing an unnamed source familiar with the situation. The investigation has yet to zero in on what legal violation may have been committed, the Journal said.
…
Halah Touryalai, Forbes Staff
I stalk Wall Street. Stopping short of phone hacking, of course.
5/15/2012 @ 2:44PM |683 views
More Bad News For JPMorgan As FBI Gets Involved
Everyone wants a piece of Jamie Dimon. The Justice Department is investigating JPMorgan Chase over its now infamous $2 billion trading loss.
The news comes just hours after Dimon and his fellow executives met in Tampa, Fla. for an annual shareholder meeting.
The FBI investigation is in its preliminary stage and authorities are looking into the incident because the size of the loss and the bank involved, according to Reuters.
…
The F&F principal write down story seems to have recently taken somewhat of a back seat to all the excitement generated by the Greek debt crisis end game.
It seems the Democrats are vocally in favor of principal write-downs, but the Republicans are largely silent on the subject.
May 10, 2012, 8:43 AM
Outgoing Fannie Mae CEO Doesn’t Support Principal Write-Downs
By Nick Timiraos
Fannie Mae’s chief executive said in an interview Wednesday that he doesn’t think the company should participate in programs to write down principal for homeowners who owe more than their homes are worth.
The Obama administration has offered to subsidize the cost of those write-downs, and Fannie’s federal regulator has weathered heavy criticism from Democrats in recent months for resisting modifications that forgive debt.
“Candidly, I think we’ve got the right tools now. Principal reduction is not part of it,” said Michael Williams, who has served as CEO since 2009. “What we have found from the very beginning is what you do for homeowners in distress is to help them get into a payment that they can afford.”
…
Up the street from me is a house that was sold for $200k not once, but twice, during the bubble years. No way was it ever worth that much.
I noticed that it was abandoned late last year. Tenants had moved out, and the place was falling into disrepair.
I reported the property to the city code inspectors, and that sure got some action. A few days ago, I saw the yard being tidied up. Now there’s a sign on the front door, courtesy of Phoney Mae, saying that there’s an offer of move-out money to whoever’s living there.
Well, Earth to Phoney Mae: The tenants and the in-VEST-or owner are long gone. Can’t you see that it’s an abandoned house?
Hey - it is only free obama money. It is not like it is real or anything.
Have one of your friends “move in” and collect the “move out” money…
The house isn’t in what one would call livable condition. Even the squatters have avoided it.
“free obama money … not like it is real”
Isn’t this talking point incomplete? Thought all that free obama money was stolen from the Producers, the rugged individualist John Galt types…
How that COLA thing working out for you?
COLA what?
“Now there’s a sign on the front door, courtesy of Phoney Mae, saying that there’s an offer of move-out money to whoever’s living there.”
Could someone now claim to be living there and take the money being offered to leave?
Nope! Because there are a bunch of busybody neighbors (including me) who are keeping an eye on this property. If someone tries to bust in and set up housekeeping, we’ll be dialing the magic number — 911 — to report.
“What we have found from the very beginning is what you do for homeowners in distress is to help them get into a payment that they can afford.”
This may be the most masterful piece of corporate/government executive speak I have every read or heard. It could mean a lower rate. It could mean a principle reduction (if not for the context of the rest of the quote). It could mean an extension of the term. And, most importantly, it could mean a foreclosure and them moving out to live for free with relatives if they have no income.
Very, very well done indeed.
If the payment makers go on strike, then there’s a problem.
May 15, 2012, 12:45 a.m. ET
Hazardous Greek-Exit Scenario
By GEOFFREY T. SMITH, MATINA STEVIS AND STELIOS BOURAS
There is no legal provision in European Union treaties for a country to exit the euro zone, putting experts in uncharted waters when trying to assess method and the repercussions. But if Greece were forced to leave after losing financial support, it would show that Europe’s historic currency project can disintegrate as well as integrate. Here are some possible answers.
Q: How does Greece leave the euro?
A: In one scenario, a Greek authority would have to agree on a date with the rest of the euro zone for its departure and for the introduction of a new currency (let’s call it the new drachma). It would say that from that date, all public salaries, contracts and pensions would be paid in drachma. Bank deposits would also be redenominated. The authority would likely decide an initial conversion rate on domestic contracts from euros to new drachma — say one-to-one — then it would likely let the exchange rate of the new drachma be decided by the currency market. This would likely result in a sharp devaluation. If Greeks anticipate that, there is a risk of increased bank withdrawals and capital flight. This could trigger capital controls, making an orderly exit unlikely.
Q: Could the drachma ever recover?
A: Ultimately, it would find a level that made Greek products and services internationally attractive again.
…
This thing seems like just so much drama. It doesn’t matter to the Greeks what currency they are broke in. It won’t matter to their creditors what currency they don’t pay their debts with. The only thing that should matter is how long the creditors can pretend that the loans on their books do not stink.
Containment plan noted:
Capital Controls Loom in Greece
Published: Monday, 14 May 2012 | 3:15 PM ET
By: John Carney
Senior Editor, CNBC.com
It looks increasingly likely that Greece will have to implement controls to prevent capital flight and a banking collapse. To my mind, the only real question is when this will occur.
The widespread talk about Greece possibly leaving the euro zone is likely to trigger withdrawal of bank deposits and other financial assets, by those who fear they might be redenominated into a drachma that would be worth far less than the euro.
Foreigners have around 46.7 billion in deposits in major financial institutions in Greece. According to the latest data, there were around 1.3 billion of euros belonging to non-Greek euro-zone residents as of March 2012. In addition, there were deposits of 45.4 billion euros belonging to non-euro-zone residents.
Corporations and households of Greece had around 153 billion euros on deposit in Greece as of March 2012. By far the largest portion of that—nearly 140 billion—is owned by Greek households. Forty-nine billion of that is in savings deposits, which could easily be withdrawn. Another 84 billion is in time deposits, many of which may include penalties for early withdrawal.
…
Too little, too late?
EUROPE NEWS
Updated May 15, 2012, 2:55 p.m. ET
Greek Depositors Withdrew $898 Million From Banks Monday
By NEKTARIA STAMOULI
ATHENS—Greek depositors withdrew €700 million ($898 million) from local banks Monday, the country’s president said, as he warned that the situation facing Greece’s lenders was very difficult.
In a transcript of remarks by President Karolos Papoulias to Greek political leaders that was released Tuesday, Mr. Papoulias said that withdrawals plus buy orders received by Greek banks for German bunds totalled some 800 million.
Citing a conversation he had with Greek Central Bank Governor George Provopoulos, Mr. Papoulias said “that the strength of banks is very weak right now.”
…
No Drachma: When Will Greece Leave the Euro?
By Matthew O’Brien
May 15 2012, 9:08 AM ET
Before the Greeks say goodbye to the great European experiment, both Athens and the EU need to gird themselves for the mother of all economic fall-outs.
Is Greece ready to go it alone?
That’s become the guessing game du jour after anti-austerity parties captured a shocking share of the vote in the latest Greek elections. But don’t expect the drachma to return any time soon.
It won’t be easy for either Greece or Europe to prepare for a divorce. If it was, they’d have already done so. Greece needs to get its budget ready, and Europe needs to get its firewall ready. The politics are terrible for both.
…
charles hugh smith suggested they adopt the u.s. dollar for a period of time.
it
They are going to get tossed out of the EU, then debase their currency to compete, then get bailed out by the IMF.
or
They stay with the EU and get bailed out by the EU.
Pick your poison.
Why is the Iceland option impossible?
Iceland had their own currency at the time.
If Greece withdraws from the EU, they will have their own currency too.
However, remember that Iceland itself (the government) was never actually on the hook for its debts. The banks went under. England (plus a few others?) bailed out their people/institutions that held the debt of the Icelandic banks. Those other governments then looked to Iceland to pay them back. Iceland said thanks, but no thanks.
That is a little different than actually defaulting on your own foreign sovreign debt.
Because Iceland’s population is the same as a small city and it’s debts equivelent to that. Greece has 11m people and debts equivelent to that.
It’s not impossible, just very unlikely.
“…help them get into a payment that they can afford.”
You mean like at the used car lot?
Yup, just like the used car lot. Call it the used house lot.
In, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, Edward Conard sets out to provide “a prescription for how to grow the economy.”
Thanks to a recent NY Times Magazine article, and because he worked closely with GOP presidential hopeful Mitt Romney at Bain Capital, Conard has become a lightning rod for controversy — described by some as a champion of income inequality.
There are elements of this in Conard’s book — such as when he argues the societal benefits of economic competition is closer to 20-to-1 — meaning society gets $20 of value for every $1 an investor earns — vs. the 5-to-1 level commonly cited. But, in reality, Conard’s book is pretty standard conservative economic fare wrapped with a philosophical view that is unique, at least in its public expression.
“Underneath the book is a moral argument,” he says. “Talented people have a responsibility to get the training they need to be successful risk takers and go out there to take risks. What I see is surplus of talented people and a shortage of people willing to take the risks.”
As a result, policymakers ought to “be cautious about lowering the payouts for successful risk taking,” he says. “If we do that, we can slow down the growth rate of the economy.”
In, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, Edward Conard sets out to provide “a prescription for how to grow the economy.”
Thanks to a recent NY Times Magazine article, and because he worked closely with GOP presidential hopeful Mitt Romney at Bain Capital, Conard has become a lightning rod for controversy — described by some as a champion of income inequality.
There are elements of this in Conard’s book — such as when he argues the societal benefits of economic competition is closer to 20-to-1 — meaning society gets $20 of value for every $1 an investor earns — vs. the 5-to-1 level commonly cited. But, in reality, Conard’s book is pretty standard conservative economic fare wrapped with a philosophical view that is unique, at least in its public expression.
“Underneath the book is a moral argument,” he says. “Talented people have a responsibility to get the training they need to be successful risk takers and go out there to take risks. What I see is surplus of talented people and a shortage of people willing to take the risks.”
As a result, policymakers ought to “be cautious about lowering the payouts for successful risk taking,” he says. “If we do that, we can slow down the growth rate of the economy.”
In, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, Edward Conard sets out to provide “a prescription for how to grow the economy.”
Thanks to a recent NY Times Magazine article, and because he worked closely with GOP presidential hopeful Mitt Romney at Bain Capital, Conard has become a lightning rod for controversy — described by some as a champion of income inequality.
There are elements of this in Conard’s book — such as when he argues the societal benefits of economic competition is closer to 20-to-1 — meaning society gets $20 of value for every $1 an investor earns — vs. the 5-to-1 level commonly cited. But, in reality, Conard’s book is pretty standard conservative economic fare wrapped with a philosophical view that is unique, at least in its public expression.
“Underneath the book is a moral argument,” he says. “Talented people have a responsibility to get the training they need to be successful risk takers and go out there to take risks. What I see is surplus of talented people and a shortage of people willing to take the risks.”
As a result, policymakers ought to “be cautious about lowering the payouts for successful risk taking,” he says. “If we do that, we can slow down the growth rate of the economy.”
In, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, Edward Conard sets out to provide “a prescription for how to grow the economy.”
Thanks to a recent NY Times Magazine article, and because he worked closely with GOP presidential hopeful Mitt Romney at Bain Capital, Conard has become a lightning rod for controversy — described by some as a champion of income inequality.
There are elements of this in Conard’s book — such as when he argues the societal benefits of economic competition is closer to 20-to-1 — meaning society gets $20 of value for every $1 an investor earns — vs. the 5-to-1 level commonly cited. But, in reality, Conard’s book is pretty standard conservative economic fare wrapped with a philosophical view that is unique, at least in its public expression.
“Underneath the book is a moral argument,” he says. “Talented people have a responsibility to get the training they need to be successful risk takers and go out there to take risks. What I see is surplus of talented people and a shortage of people willing to take the risks.”
As a result, policymakers ought to “be cautious about lowering the payouts for successful risk taking,” he says. “If we do that, we can slow down the growth rate of the economy.”
finance.yahoo.com/blogs/daily-ticker/u-fiscal-cliff-looms-lawmakers-heed-bernanke-warnings-123727473.html
Gee, we’ve been increasing regulation and raising taxes on the rich for 30 years when we should have been doing the reverse!
Actually, we’ve been doing exactly what Conrad recommends for 30 years, we’re sunk, and he wants to do more of it.
Who are you going to sell to? That’s the flaw in the thinking. He wants more to go to those at the top who will then be incentivized to produce and sell more to the rest who earn less?
Actually, we’ve been doing exactly what Conrad recommends for 30 years, we’re sunk, and he wants to do more of it.
Insanity is doing the same thing and expecting different results.
It’s not insanity. It’s working great for him. What is insanity is to care that he cares about anyone else.
“… more to go to those at the top who will then be incentivized to produce and sell more to the rest who earn less?”
Crazy talk.
Where taxes higher under Reagan or Bush 2?
Hmmmm…. raising???
Smart regulations are good, do you want more Enron? Lead paint? Asbestos?
He’s spouting canards.
As long as there is a move to revisit old laws, why not see whether the Sherman Antitrust Act could be invoked to break up the Wall Street Megabank cartel? If competition was increased by breaking up airlines and phone companies, why not try it out in the banking sector?
Jamie Dimon nobody’s fool
J.P. Morgan boss is right: Regulations will never prevent stupidity. It’s time to bring back Glass-Steagall and separate traditional Main Street banking from the casinos of Wall Street (First Take)
What’s eating the gold bugs?
That cliff dive at the end of the day was quite spectacular.
Gold - Electronic (COMEX) Jun 2012
CNS: GCM2
$1,542.80
Change -$18.20 -1.17%
Volume 152,861
May 15, 2012, 4:35 p.m.
Previous close $ 1,561.00
Day low $1,541
Day high $1,564
$1,542.80
Change -$18.20 -1.17%
Gold is off more that $350 from its all time high in dollars but still approaching its all time high in Brazilian Reals.
It’s a complicated world out there.
Five-year Treasurys are pricing in five more lean years.
May 15, 2012, 3:51 p.m. EDT
Treasurys turn up; 5-year yields near record lows
Longer-dated securities’ yields give back some recent declines
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Prices on 5-year Treasury notes rose on Tuesday, pushing yields to their lowest levels ever, as worries about Greece drew investors’ interest in shorter-dated debt.
Yields on longer-dated maturities, which move inversely to prices, erased losses late in the session as stocks fell, leaving yields back near their lowest level since October.
…
A couple more days of triple-digit losses on the Dow would erase all gains so far in 2012. And some grim bottom callers have prognosticated this correction will not end before August.
Booyah!
Stocks slide on Greek woes
By Hibah Yousuf @CNNMoneyInvest May 15, 2012: 4:29 PM ET
NEW YORK (CNNMoney) — U.S. stocks closed at three-month lows Tuesday, sliding during the final hour of trade, as investors faced worrisome signs out of Greece.
Stocks started the day under mild pressure after politicians in Athens failed to agree on a coalition government, and President Karolos Papoulias’ office said the debt-wracked country will hold new elections in June in response to the political stalemate.
Selling picked up steam in the afternoon following news that Greek depositors withdrew €700 million from local banks on Monday, according reports citing a transcript of Papoulias’ remarks to Greek political leaders that was released on Tuesday.
The Dow Jones industrial average (INDU) lost 63 points, closing at the lowest level since Jan. 19.
..
Out of 18 states that produce more wealth than what they take in from the Federal Government, 16 are liberal, one swing (FL), and only one Republican (TX). On the other hand, of 32 states that take in more money than what they produce, aka welfare states, 4 (MD, ME, HI, VT) are liberal, one swing (PA), and an astonishing 27 are full-out conservative. (Link) Thus Democratic legislature and fiscal policies have created a better living environment for me, conservative legislatures have failed to do the same for its loyal base. (Source: Tax Foundation)
Read more here: http://www.sanluisobispo.com/2012/05/15/2066975/calif-gov-urges-budget-cuts-amid.html#storylink=cpy
All Florida fence-sitters heed my warning: do not buy until Gov. Scott is no longer Governor of Florida. There is no amount of FB meat to stuff into the gaping insurance maw.
TALLAHASSEE — If Citizens Property Insurance Corp. moves forward with a controversial plan to uncap rates for new customers, the price to join state-run insurance will increase by an average of 30 percent next year.
http://www.tampabay.com/news/business/banking/citizens-plan-could-send-rates-soaring-for-new-customers/1230215
It is convenient to blame Scott for the Citizens debacle but it ain’t so. Citizens is a political football originated well before Scott’s time to provide cheaper rates to Fla homeowner’s regardless of the potential risk and has been managed to provide political cover, not adequate insurance coverage.
Rates have been aribitrarily set without regard to market risk; private insurers left the state and/or bowed out. Citizens also has ability (legislatively given) to assess auto insurance policyholders along with private homeowners insurance and business insurance policyholders for any funding overruns due to any natural risks, i.e. hurricanes.
The free market should assess the risk for such insurance; not government mandates for specific (politically acceptable) premium targets.
We are on borrowed (kick the can down the road, sound familiar) time here in Florida and the next major hurricane sequence will make clear what a mess it is.
I’m not saying he started it - I am saying I am confident he won’t make anything better for the citizens of Florida.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9263196/World-edges-closer-to-deflationary-slump-as-money-contracts-in-China.html
Housing sales slumped 25pc in the first quarter, testimony to the zeal of regulators. This has since fed into a drastic fall in new building. Mr Thornton said floor place under construction fell 28.3pc in April.
This is hardly a sideshow. The sector employs 10pc of the Chinese work-force, and a further 20pc indirectly. Land sales provide 70pc of tax revenue to local authorities and 30pc to the central government. It is the “fair weather” financing illusion, as
we saw in Ireland. China’s scope for fiscal stimulus may be constrained if property goes into a long slump.
Oh dear I think we have been here before
P.S The eurozone has narrowly avoided returning to recession after recording zero growth in the first three months of the year, figures have shown.
The stronger-than-expected performance was in large part due to growth of 0.5% in the German economy.
http://www.bbc.co.uk/news/business-18068747
Well this is comforting — sort of…
…
Narrow M1 data for April is the weakest since modern records began. Real M1 deposits – a leading indicator of economic growth six months or so ahead – have contracted since November.
They are shrinking faster that at any time during the 2008-2009 crisis, and faster than in Spain right now, according to Simon Ward at Henderson Global Investors.
If China were a normal country, it would be hurtling into a brick wall. A “hard-landing” later this year would already be baked into the pie.
Whether this hybrid system of market Leninism – with banks run by Party bosses – conforms to Western monetary theory is a hotly contested point. The issue will be settled one way or the other soon.
…
This is a hoot. I just heard a NAR spokesman on DC news radio talking about how this is the best time to buy because of low interest rates, high affordability, etc. They’ve been reciting this mantra throughout the bubble. Here’s a “Now is the best time to buy” article from 2008. Seems eerily familiar
The Best Time To Buy Real Estate Is Now
Published: Thursday, 24 Jul 2008 | 3:44 PM ET
By Jim Gillespie, President & CEO, Coldwell Banker
The real estate market is the best I have seen in my 33+ years in real estate for buyers, whether they are buying for lifestyle to move in with their families or for buying for investment. There are four main reasons why I say this:
First - The interest rates are still near 40 year historic lows. Rates continue to be well under 7%.
Second - There are more homes for sale than we have had for decades – therefore there is much more to choose from as a buyer.
Third - Prices are stable in the heartland of the USA and in several states, California, Florida, Nevada and Arizona as well as the rust belt of Michigan, Indiana and Ohio the prices have dropped enough that the smart buyers are beginning to jump back in the market to take advantage of the lower prices.
The fourth and final reason that now is the best time to buy is - affordability. According to the National Association of Realtors, the trade organization for Realtors, we are at near a 5 year low in affordability. In addition, Wachovia published a paper on real estate on July 14 of this year comparing the median price of homes in the USA with the disposable income our citizens have, according to the US Department of Commerce. They found that the worst affordability was three years ago and the best was August, 1980. Today they report that we are near that 28 year low. Now is the best time to buy real estate!!!!!
http://www.cnbc.com/id/25837067/The_Best_Time_To_Buy_Real_Estate_Is_Now
David Weidner’s Writing on the Wall
May 15, 2012, 2:16 p.m. EDT
Dimon may be ‘stupid,’ but he’s right on banks
Commentary: Regulation will never stop stupid trades and big losses
By David Weidner, MarketWatch
NEW YORK (MarketWatch) — Jamie Dimon is right: Regulation is making things worse on Wall Street.
The Dodd-Frank Act has cost banks hundreds of millions in profits and has done nothing to prevent:
• J.P. Morgan Chase & Co.’s big trading loss.
• MF Global’s implosion and $1.6 billion in lost customer funds.
• Goldman Sachs Group Inc.’ s scandal-a-quarter pace.
Let’s stop the foolishness and let Wall Street be. Let the free markets be free. Let J.P. Morgan Chase lose $2 billion on what Dimon has called a “stupid” trade. Let it make $2 billion on a good trade.
This, after all, is exactly what Wall Street wants. It wants a supercharged high-risk/high-reward market system where banks can blow billions in a morning trade and make it back in the afternoon.
There’s no point in fighting the powers that be. No matter how many rules we slap on the industry, it will always find a way around them. The incentive of greed, creating wealth without work, is just too powerful.
So, rather than slap more ineffective and easily gamed rules into the system, let’s just divide the system. We the people will keep our traditional banking — the monetary and economic side of the equation. We’ll let casino capitalism run wild on the other side.
Let’s bring back Glass-Steagall.
You remember Glass-Steagall. It was the Depression-era law that separated investment banking and trading activities from retail and commercial banking. It split, for example, J.P. Morgan’s empire into a bank, J.P. Morgan & Co., and a brokerage, Morgan Stanley.
When the law was repealed in 1999, the brokerages and banks were allowed to come together again. And, of course, that’s when the problems began, the biggest of which was the use of traditional banking assets as chips in the casino, mortgages as mortgage-backed securities, for instance.
…
When the law was repealed in 1999, the brokerages and banks were allowed to come together again. And, of course, that’s when the problems began, the biggest of which was the use of traditional banking assets as chips in the casino, mortgages as mortgage-backed securities, for instance.
After the repeal, Sen. Byron Dorgan predicted that in 10 years, that major problems would result. That was in 1999. And he was right.
When you have a 2300 page bill, it’s going to be rife with loopholes. It’s an attempt to pick every last piece of corn out of the sh-t that Wall Street left. It’s time to flush it and reinstate some basic, clear rules that protect bank deposits, break up systemically risky firms, and give regulators tools to prevent excessive leverage.
It’s not going to be possible with this bought Congress that hasn’t done anything of significance on financial reform.There’s been window dressing, but nothing of significance. The fact that JP Morgan can do this kind of thing even today is an indicator that government is derelict in its duty.
Here’s the problem.
The 2,300 page bill is not 2,300 pages of law. Included in that bill are guidelines set forth for the SEC to write new rules (a couple of hundred of new rules to my understanding).
The draft Volcker rule is at the following link:
http://online.wsj.com/public/resources/documents/093011volcker_draft.pdf
This rule alone is 205 pages.
Here is the SEC website on the law:
http://www.sec.gov/spotlight/dodd-frank.shtml
Without going into gory details: “That Act contains more than 90 provisions that require SEC rulemaking, and dozens of other provisions that give the SEC discretionary rulemaking authority.”
So, figure at least 90, and upwards of 150/200 new rules to be written by the SEC, one of which is the Volcker rule (205 pages).
Let’s just say that on average, a rule is 50-75 pages, not 205. So, on top of the 2,300 pages of the Act itself, there are another 4,500-15,000 pages of SEC rules to wade through.
For comparison, the 1933 Banking Act (Glass Steagall) was less than 100 pages:
http://ia600308.us.archive.org/31/items/FullTextTheGlass-steagallActA.k.a.TheBankingActOf1933/1933_01248.pdf
While the world is more complicated today, they didn’t need to made Dodd Frank so complicated to fix the problem.
All they did was ensure that the only banking institutions that are capable of wading through the mire of regulation are the large banks.
They should rename it the “Legal and Accounting Full Employment Act”.
Two words. Counterparty risk. If the banks lend enough to the securities firms, it’s no different than if they owned them.
Neither Bear Stearns nor Lehman nor AIG were enable by Glass Steagal repeal. Citigroup got in trouble in its regular banking division.
Volker was right — no trading for their own account. And break them up until none is too big to fail. JP Morgan Chase used to be JP Morgan, Chase, Chemical, Manufacturers Hanover, Wamu, Bear Stearns, what else?
JP Morgan Chase used to be JP Morgan, Chase, Chemical, Manufacturers Hanover, Wamu, Bear Stearns, what else?
lol, no kidding.
Anyone remember “When E.F. Hutton talks, people listen.”?
When they were bought in the late 80’s, I used to joke, “When E.F. Hutton talks, Shearson Lehman tells them what to say.”
A public service reminder…
David Stockman on Crony Capitalism
http://www.youtube.com/watch?v=vb92Thfq41Q
Yuan a loan?
Too bad.
Asia stock markets get ugly
Hong Kong, Seoul, Sydney all fall more than 2%
Asia’s stock markets tumble hard after Greece fails to form a unity government, raising euro jitters.
• China joins shale-gas game (Caixin Online)
• Some 45% of China companies see slowdown
• Japan’s top 3 banks profit, dodging euro crisis
• Gold melts lower | Oil futures slide | Dollar rises
China loans grind to halt
China’s big four banks barely issue any new yuan loans in the first half of May despite some easing, according to a state-media report.
• Foreigners drive Japan stock losses: report
Caretaker government will take Greece to risky repeat vote
ATHENS | Wed May 16, 2012 1:22am EDT
(Reuters) - Greek political leaders meet on Wednesday to form a caretaker government that will lead the country into its second election in just over a month, with Greece’s euro membership at stake in a mounting crisis rocking world markets.
Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month.
Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.
Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery.
But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.
“There is a bit of schizophrenia in our society right now. People want to stay in Europe - have the cake - but they also want to eat it - by attacking the creditors,” said Theodore Couloumbis at Athens-based think-tank ELIAMEP.
…