This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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September WARN Notices:
2008- SEPTEMBER WARN Notice
COMPANY CITY EFFECTIVE DATE WORKFORCE AFFECTED
ABM ENGINEERING STATEWIDE 8/29/08 63
BURLINGTON RESINS BURLINGTON 11/1/08 122
EBI HOLDINGS PARSIPPANY 11/7/08 111
GMAC MORTGAGE CHERRY HILL 11/26/08 32
EQUITY ONE MARLTON 11/7/08 147
POPULAR MORTGAGE CHERRY HILL 11/7/08 167
SWS WAREHOUSING MONROE 11/10/08 32
VWR INT. BRIDGEPORT 2/28/09 76
WACHOVIA STATEWIDE 10/1/08 56
AMERICAN FUJI SEAL FAIRFIELD 11/21/08 68
NEWARK MORNING LEDGER NEWARK 1/5/09 1657
NJFOP FUNDRAISING OCEAN 9/17/08 99
TIMES OF TRENTON TRENTON 1/5/09 151
From Bloomberg:
U.S. Economy Probably Lost Jobs in September for Ninth Month
The U.S. probably lost jobs in September for a ninth month as the credit crisis deepened the economic slump, economists said before a government report today.
Payrolls fell by 105,000 last month, the biggest decline in five years, according to the median estimate of economists surveyed by Bloomberg News. The Labor Department report, the last before the presidential election, may also show the unemployment rate was unchanged at a five-year high of 6.1 percent.
The world’s largest economy may be headed for bigger job losses as the worst financial meltdown since the Great Depression causes consumers and companies to retrench. A sinking labor market and rising borrowing costs raise the odds Federal Reserve policy makers will cut interest rates by the Oct. 28-29 meeting.
“The domestic economy is in a recession, and things deteriorated during the month,” said Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York. “A bad jobs number would solidify the market’s expectations of a Fed rate cut sooner than the meeting.”
The payroll report is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey of 76 economists ranged from declines of 156,000 to 60,000. The job count dropped by 84,000 in August. Forecasts for the unemployment rate ranged from 6 percent to 6.3 percent.
NJFOP FUNDRAISING OCEAN 9/17/08 99
Does this mean I won’t get a call asking to donate money to the NJ FOP this year?
I could use one less donation solicitation this year…
this is bad, state of CA may not meet payroll soon: http://www.cnbc.com/id/27004463
From the WSJ:
Wells Fargo to Buy Wachovia
Wachovia Corp. agreed to sell itself to Wells Fargo & Co. in a $15.4 billion takeover that will require no government assistance, scrapping a federally backed deal with Citigroup Inc.
The Wells Fargo offer is for $7 a share in stock, based on Thursday’s closing price, 79% above where Wachovia shares finished. Wells Fargo also will assume Wachovia’s preferred stock and debt. In conjunction with the deal, Wells Fargo will issue $20 billion in new securities, mainly common stock. Wachovia shares surged 64% premarket to $6.40 while Wells Fargo rose 1% to $35.50 and Citigroup fell 6% to $21.15.
The Wachovia/Wells Fargo deal comes four days after Wachovia and Citigroup reached a $2.16 billion agreement in principle to sell its banking operations to Citigroup.
A Citigroup spokeswoman wasn’t immediately available to comment.
Under the deal, Wells Fargo will acquire all of Wachovia. The Citigroup deal had excluded the asset-management and brokerage operations and put the Federal Deposit Insurance Corp. on the hook for potential loan losses.
in a single swoop, wells fargo to buy wachovia.
(3)
Of course not.
They’re going to farm some work out of Singapore.
Standard operating procedure.
From the Star Ledger:
Job seekers face bleaker prospects
Nailesh Bhatt said his office is overwhelmed these days by resumes and telephone calls from folks in the pharmaceutical industry looking for work.
“People are really scared and concerned,” said Bhatt, whose Princeton drug consulting company, Proximare, has six employees in New Jersey and 18 in India.
Across the state, indeed, across the nation, the story is the same. The wild swings in the market and the proposed $700 billion bailout of bad debt is getting the attention but on the ground floor of the economy, the mood is getting grimmer.
When the nation’s September job numbers come out today, economists figure layoffs by thousands of businesses will add up to about 100,000 fewer jobs; that’s the consensus of the nation’s economists, according to Bloomberg News. The country has shed about 600,000 jobs this year through August.
…
And here’s the rub: The jobs numbers don’t factor in the coming impact of three weeks of turmoil on Wall Street that includes the bankruptcy of Lehman Brothers and the pending sale of Merrill Lynch to Bank of America. Both employ thousands of people in New Jersey, where the unemployment rate has been creeping up all year to a five-year high of 5.9 percent.
“The worst is yet to come for New Jersey,” said Joel Naroff, chief economist of Commerce Bank. “We will feel the impact of layoffs on Wall Street that we haven’t seen yet.”
That doesn’t bode well for companies like Brantley Brothers Moving and Storage in Newark. It now employs 25 people but expects to cut back to 18 or 20 by November, said Ike King, vice president of marketing.
“Home sales are down, and that directly impacts the moving business,” he said. “Houses are on the market longer, it’s harder to get mortgage loans, and that means fewer people are moving in and out of houses.”
“NEWARK MORNING LEDGER”
I assume this is the official corporate name for the Star Ledger?
From the New York Times:
Waiting for Schadenfreude
A couple of years ago, at the height of the boom, a friend in New York publishing described to me the indignities of being a five-figure employee commuting daily from suburban New Jersey on trains packed with traders, stock brokers and hedge-fund types.
“These were the guys who, in college, I used to step over on Sunday mornings when they were lying in a pool of their own vomit,” he said. “And now they’re earning millions and millions – in bonuses alone.”
The image, as you might imagine, stuck in my mind. For it summed up so well a certain kind of resentment and sense of injustice that a particular class of non-monied professionals in the New York area came to feel sometime in the late 1990s.
The feeling of injustice wasn’t just about money, though it was partly about being more than solidly middle class and still struggling to pay the bills, as New York writer Vince Passaro captured so well in his “Reflections on the Art of Going Broke” (“Who’ll Stop the Drain?”) in Harper’s in 1998.
It was, rather, about a sense that the wrong people had inherited the earth.
They had taken over everything. Their salaries (and bonuses in particular) had pushed real estate costs and living expenses sky-high. Their values had permeated every aspect of life. And their choices seemed to have become the only acceptable — even viable — ones possible.
In the 1970s, even in New York, it had been financially possible for a middle class family to survive if parents — even one parent — built a professional life around something other than purely making money. In the 1980s — even in the “greed is good” (which was of course meant to be a damning phrase) 1980s — it seemed respectable, honorable and, dare I say, valuable to do things other than make a lot of money. But by the late 1990s, in New York, if you weren’t in the financial industry, it was hard to survive.
“sas Says:
October 2nd, 2008 at 10:28 pm
these debates are nothing but WWF wrestling… there to make you think you really have a choice, as to what puppet you will elect, and the outcome has already been selected. (both parties are owned by the SAME corporate interests)
ha ha.. wake up suckers!
you’ve been had brother.
SAS”
SAS,
hear,hear.
(4) House Hunter
Re your CA story – Info @ Mish’s states that CALPERS lost $24.9B in the last 3 months (10.4% loss.)
“If loses continue CA taxpayers could be called upon to make up shortfalls in funding. On Monday alone, the stock markets wiped out $7.8B of the pension’s fund investments.”
A coordinated rate cut on the horizon?
“Oct. 3 (Bloomberg) — Bank of England policy makers may cut the benchmark interest rate next week by the most since 2001 as the British economy hurtles toward a recession, economists say.”
“We’ve got a severe financial crisis that has worsened in the past week and clear signs the economy is falling off a cliff,” Michael Saunders, chief western European economist at Citigroup, said in an interview. “The balance of risks has shifted decisively to the downside.”
http://www.bloomberg.com/apps/news?pid=20601068&sid=a2S7YxHYxxe8&refer=economies
Cindy,
If NJ’s pension plan does not hit its benchmark, I think 8%, taxpayers are on the hook. What a system.
BC – At my card game last night, a friend told me they lost $25,000 on what was touted as a basket of secure (mind you they are risk averse) global stocks etc….at Lehman. As they tracked it down, They found out the products were never even purchased. Fraud?
Was there a lot of fraud? Is this why Lehman was allowed to go down when others were rescued?
There is a web site:
Lehman Brothers Fraud Info Center!
From the AP:
UBS to cut 2,000 jobs at its investment bank
Swiss bank UBS AG will cut 2,000 jobs at its troubled investment banking unit, most of which will be lost in the U.S. and Britain, an official said.
Some cuts will also be made at offices in Switzerland and the Asia-Pacific region, UBS AG spokeswoman Sabine Woessner said.
The layoffs will bring staffing levels at the investment unit to about 17,000 by the end of the year, 6,000 fewer than at its peak in third quarter 2007, UBS said.
Wells edges in on C and takes Wachovia!!!
Sorry, didn’t bother to read upthread.
RE Lehman – With no record of the transaction taking place does this mean Lehman just kept the money on their books to cover something else – (I have no idea how this works…??)
wow Cindy! That is just incredible.
Just a note, sold my house in 2006 because I thought things were going to get bad. I knew the economy was going to contract, and yet I was somewhat shocked when it took until this summer to reveal itself. Even for the prepared, it can be so much more devastating in realty than one’s imagination. I know I could handle a downturn, even a bad one, not sure about others.
Wells edges in on C and takes Wachovia!!!
It’ll be repeated a number of times today, it’s big news, especially since they are doing it without the FDIC backstop.
Hey Grim – Check you email – Time for us to all pony up – payday and all.
Who needs a bailout? Mr. Market took care of Wachovia.
BC (11)-
Watched Duke/Carolina soccer last night and made plans to pull all my cash out of the bank today.
Saw VPILF on the Today show, winking into the camera. Har!
Anyone who votes is complicit in the crime.
#10 – Great article Grim!
BC (13)-
Bell lap, race to the bottom.
It will all go “by the numbers” now.
Hey Grim – Check you email – Time for us to all pony up – payday and all.
Cindy,
Big thanks for the donation!
It’ll go far. I had to dig into my pocket to pay hosting fees for the past two months. Just for reference, hosting costs me roughly $1,550 a year.
15 of us at $100.00 and only $50 for Bi…..
Cindy [15],
I can’t comment on that specific case. Don’t know what happened.
Cindy (15)-
When we all look back, the amount of commingling and use of funds (especially pension funds) that were never supposed to be touched will be staggering. Why there is no outrage that AIG and GE have sucked dry the liquid parts of their companies is appalling.
More alarming will be the realization that much of this activity was encouraged- even demanded- by the gubmint. Patterson and DiNallo should’ve been jailed for what they let AIG pull off.
“It’ll go far. I had to dig into my pocket to pay hosting fees for the past two months. Just for reference, hosting costs me roughly $1,550 a year.”
JB,
That’s horrendous. A prime blog supported by subprime bloggers.
Clot [26],
I’m not sure if it’s a race, a 100 yard dash or a jump out of the 100th floor?
(29) BC
“Can’t comment on that specific case…”
Have you heard any allegations of out-and-out fraud like that?
Grim at 27:
Why does hosting cost you $1550/year? Bandwidth?
This site has always been informative, but lately has only been a repository for news on the economy that is reported elsewhere…can we assume there is no NJ real estate news because there is no NJ real estate market?
(10)
“It was, rather, about a sense that the wrong people had inherited the earth.”
Now I’m embarrased to say I spent 12 years in banking. I used to be so proud. In my day – fiduciary duty was everything…it was all about trust.
Manhattan Apartment Prices Extend Five-Year Gain.
The median price of a condominium and co-op jumped 7.4 percent to $928,263, the second highest on record, they said.
http://www.bloomberg.com/apps/news?pid=20601213&sid=am9ZlNTiWbHs&refer=home
Where’s the gloom and doom?
Clotpoll,
In case you missed the website for my hedge fund, here it is again:
http://strategerycapital.com/index.php?slug=contact
Cindy,
Hate to paint with a broad stroke but this whole fabricated run reeks of fraud; the fed, the sec, ib’s, rating agencies, etc..
No need to elaborate. Kind of tired of repeating myself. Gotta run. Have a great day.
TED @ 3.82. Ugh.
Looks like the Fed is getting ready for a reverse repo this morning. Who are they trying to force out?
No-farm drop of 159k in Sept.
That should be non-farm.
Bandwidth isn’t the big issue, its actually the cpu and ram required to run a high-usage wordpress install and the database back-end. Tried a number of lower cost providers and while they could support the bandwidth, they couldn’t provide me enough cycles and memory to run fast enough. Second most important to me is having a managed system. I don’t do any of the OS administration anymore, their techs take care of that, as well as troubleshooting outages and issues.
Cindy, I guess you friend learned what counterparty risk is. Good life lession that T + 3 your money is at risk of counterparty default. Even worse I think Lehman was marketing principal protected bonds that 100% guarnteed at least your principal back. Fine print sayst they were backed by Lehman. To lose 100% of your investment in a bond that was 100% guarnteed is a kick in the nuts. BTW just got off phone with DC and they are expecting a huge surge today and are making sure BDs can hand the flood of orders.
So, I see that NY is planning on selling or leasing its lottery, highways, beidges, etc. I wonder how long before it comes to NJ and we are traveling on the Lukoil Parkway, the Exxon/Mobile Turnpike, etc. Maybe King John will be able to address the legislature from the Goldman Sachs Assembly Chamber at the Raytheon Capitol building, at the Toyota Capitol complex?
This site has always been informative, but lately has only been a repository for news on the economy that is reported elsewhere…can we assume there is no NJ real estate news because there is no NJ real estate market?
No, you should assume that the proprietor just hasn’t had the time to devote over the past two-three months. The blog doesn’t pay the bills, nor does real estate career, so I’m sure you all understand the need to go off and actually do some work.
The good news is that the project I’ve been working on is now slowly winding down. I’ll have significantly more time to devote in the near future.
From Bloomberg:
U.S. Payrolls Fell 159,000 in September; Jobless Rate at 6.1%
The U.S. lost the most jobs in five years in September and earnings rose less than forecast as the credit crisis deepened the economic slowdown.
Payrolls fell by 159,000, more than anticipated, after a 73,000 decline in August, the Labor Department said today in Washington. The jobless rate, the last one reported before the presidential election, remained at 6.1 percent. Hours worked reached the lowest level since records began in 1964.
The world’s largest economy may be headed for bigger job losses as the worst financial meltdown since the Great Depression causes consumers and companies to retrench. A sinking labor market and rising borrowing costs raise the odds Federal Reserve policy makers will cut interest rates by their Oct. 29 meeting.
“The financial panic is a body blow to business confidence, and companies are now battening down the hatches,” Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We’re in store for very sizable job losses across many industries. A rate cut by the Fed could come before the next meeting.”
Revisions added 4,000 to payroll figures previously reported for August and July. The Labor Department said it was “unlikely” that Hurricane Ike, which struck the Gulf Coast last month, “had substantial effects” on payrolls figures.
After today, the total decline in payrolls so far this year has reached 760,000. The economy created 1.1 million jobs in 2007.
Any word on inventory in varoius places in NJ and the percentage of homes not selling before the expiration of the listing contract?
Grim,
That jobs report is a killer. I suspect that by the time 2008 ends we will have lost more jobs than were created in 07. What is the “natural growth rate for jobs in the US? I seem to recall it being north of a million, so unless the economy produces at least that number of jobs the unemployment rate rises just due to work-age population growth.
(42) John
I was talking to his wife so I didn’t get the real details but the words “100% principle guaranteed” did come up. I’m talking someone who would have said “I want no risk” so I have to figure his broker messed up as well – not just Lehman.
(44) Grim – I’d say you have had “quite a year.”
I guess the Wachovia CEO used his pick a payment merger option.
Grim,
Why am I in moderation (#37)??
Mason Slaine over @ Minyanville was
suggesting that we pay builders not to build – decrease the supply… Like they do with crops.
Figuring gross profits @ $50,000 per house -do it for 12-18 months -and anyone who ignored the ruling and did build a house would pay $50,000 per house in penalties.
As the stroke job/smoke screen continues in DC the economy is falling off a cliff. Don’t worry, Barney and his friends will soon melt the deep freeze. Keep focusing on that while the economy implodes.
Forget about a loss of 159K and an unemployment rate of 6.1%. Believe that and there are a few bridges for sale.
Those working part time increased by 337K to over 6M. Unfortunately, they can not find full time employment.
The real unemployment rate, off balance sheet, is now at 11%.
Can DC pease focus on the real problem and stop the dog and pony show?
http://www.bls.gov/news.release/empsit.t12.htm
Grim,
any chance you could link to that NYT schaudenfreude piece?
“Can DC pease focus on the real problem and stop the dog and pony show?”
Come on BC, there’s no money in the “real problem”.
grim Says:
October 3rd, 2008 at 8:39 am
No, you should assume that the proprietor just hasn’t had the time to devote over the past two-three months. The blog doesn’t pay the bills, nor does real estate career, so I’m sure you all understand the need to go off and actually do some work.
grim: Maybe more focus on our NJ RE Report, and less on your stuff. Someone needs to straighten you out big time. AND BUY SOME TEE-SHIRTS (NO V-NECKS!)
#54 BC Bob:Hear some fellow Wall St guys talking on the train in this morning, about how the “rescue” package must be passed.
Than in the very same breath lashing out at all the added pork the Senate added to the bill. I think that is kind of ironic or rich if you will.
And here we have this morning Wells taking over Wachovia, no hysterics, no screaming that the bill must be passed, just the free market working.
As a former Muni Short term trader/salesmen for many years in a prior life, and someone who is skeptical at best on this “rescue”, I find it pathetic that Wall St types including some on this board are screaming for this package.
Back in the day, you took your lumps, good year you were paid handsomely, bad year you were not.
Made a wrong trading bet, you licked your wounds,and did not do it again. Made a major screw up, you were fired.
Frank (37),
Where’s the gloom and doom?
In the article of the link you posted:
“Declining sales and rising inventory preceded lower home prices nationwide, spurring the nationwide housing recession. The city is bracing for a drop in property values after three of the city’s five largest investment banks collapsed since March.”
…
“This crisis is so big and it’s still sorting itself out,” said Pamela Liebman, chief executive officer of the Corcoran Group, a Manhattan-based real estate brokerage that issued its own market report today.
—
Same as we’ve always seen, slower sales precede lower prices. First in outlying areas moving closer to NYC.
It is very frustrating when all four of our candidates for Pres./VP all parrot the same line about how Israel is an ally of the United States. I would like to hear them defend that claim. The AIPAC is a very strong lobby that has a disproportionate amount of power. It is evident everytime one of our politicians open their mouths. All we hear is how taxpayers are bearing too much burden for the war, for the proposed bailout. What about the taxpayer burden for the billions in aid to Israel since WWII?
#37 frank: It’s over Buddy.
“#54 BC Bob:Hear some fellow Wall St guys talking on the train in this morning, about how the “rescue” package must be passed.”
3b,
They would be better served if they spent their time studying a map of Dubai, Shanghai and Mumbai.
Rich,
I have seen the gloom and doom talk for the last 10 years but prices are up big time.
Talk to me when prices come down.
The wheels are coming off the EUR bus.
European bank rescue plan in tatters amid savings stampede
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4870873.ece
There is a great line here.
There were rumours of large depositors demanding their money, including one German customer wanting an immediate €1.5billion.
I wonder if they asked for $20s
Palin proved last night that our political system is broken. How can this yahoo be one sniff away from the presidency?
This banks failing, that banks failing. How about I just prepay next years taxes by an extra $100,000 and wait for the refund. Will my money be safe there?
60 JF
I take it your handle doesn’t stand for “Jew Friend”?
Foreclosure Alley:
http://andrewsullivan.theatlantic.com/the_daily_dish/2008/10/memories.html
From CNN/Money:
Manhattan real estate prices headed downward
The average price of a Manhattan apartment ranged from $1.4 million to $1.48 million in the third quarter of 2008, according to separate reports released Friday by Brown Harris Stevens, the Corcoran Group, Halstead Property and Prudential Douglas Elliman. That represents an increase of anywhere between 8% and 12% over average apartment prices in the third quarter of 2007.
But the rise in third quarter sale prices was skewed by a large number of deals in new luxury buildings, which went into contract as much as a year or two ago, before economic conditions deteriorated, but only closed recently, according to Corcoran Group CEO Pamela Liebman.
“The average sales price is going to trend down,” Liebman said. After soaring to unprecedented heights in 2007, “we’re going to get back to a more normal range,” she added.
The true responsibility for the mess?
http://www.youtube.com/watch?v=RAuOEdttjZQ
holy crap the dow down 348 to start…eek
Barney Frank –
There’s a guy you want in charge of the Financial Services committee
What a disgrace
o never mind that was yesterday
“o never mind that was yesterday”
Many probably wish they could say the same to their margin clerk.
Frank (63),
I have seen the gloom and doom talk for the last 10 years but prices are up big time.
Ten years? 1998? You SEE talk, not hear it?
You been talking to yourself?
It didn’t start to get bubbly until ~2001.
Talk to me when prices come down.
When prices are down in NYC, you won’t be here.
So far everything has been playing out as expected. Maybe if you just accept it you can learn something.
But since you’re here now I’ll tell you this, prices ARE DOWN (not up “big time”) in NJ.
NJMLS September Bergen COunty Data
Year Med$
2004 $460,000
2005 $520,000
2006 $491,000
2007 $515,000
2008 $465,000
I take it your handle doesn’t stand for “Jew Friend”?
You are totally missing the point. It has nothing to do with a dislike of any group or race. What has the nation of Israel done in it’s entire history to be considered an ally of the US?
Off-Topic:
Has anyone been to the Staten Island Children’s Museum? If so, would you recommend taking a 3 year old there?
Clot,
My 10yr old son’s response was -she keeps changing the subject? My 48 yearold husbands response-when he took a moment to walk in the room we were watching- was “She’s really pretty” They won’t know who’s actually pushing the levers in the voting booth if I send my son in with my husband , right?
KL
Rich [75],
What a complete imbecile. Ten years ago, 1998? I was a screaming bull, at that time. I’ve only been bearish since 2005. This blog did not exist prior to 2005. Maybe he should just sharpen his hedge clippers.
#55 Barbara – Here it is. I think the comments that followed were as good as the essay.
http://warner.blogs.nytimes.com/2008/10/02/waiting-for-schadenfreude/
BC Bob, SAS
the beauty of the system is that the majority of people think that they have a real choice by being offered either a Rep or Dem and fail to notice that they have been politically pavloved.
in case someone isnt familiar with pavlov:
http://en.wikipedia.org/wiki/Classical_conditioning
National City and SOV shares are up 300% since Monday. Guess they think the bail out is passing and Citi now that it lost WB is looking for another bank. NCC would be a brokered deal and for some strange quirk savings bank deposits don’t count as deposits when a CB takes them over so it does not need regulatory approval if Citi, Chase or BOA buys it since all three are already over the deposit limit but magically savings bank deposits don’t count.
#75
Rich in NNJ.
Thanks for Posting, at 2004 median….interesting
@bewm #68. That is the most depressing thing I have ever seen. wow. I’m shocked. just…wow.
Wells Fargo Sneaks Into Wachovia, Steals It From Citi (WFC, WB, C, SOV, NCC, FITB)
Wachovia Corp. (NYSE: WB) is now in play as Wells Fargo (NYSE: WFC) has come out with an alternative merger deal in a stock for stock merger offer for all of Wachovia including all banking operations. Wells Fargo has reached an agreement to acquire all of Wachovia Corporation and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.
The ratio offered is 0.1991 shares of Wells Fargo stock. This is an alternative merger from the Citigroup (NYSE: C) government assisted buyout. Wells Fargo will record Wachovia’s credit-impaired assets at fair value. Wells Fargo claims it needs no financial assistance from the Federal Deposit Insurance Corporation or any other government agency. Wells Fargo will also issue $20 billion in new securities to shore up its liquidity as well.
What is interesting here is that this may actually be a game changer for the banking sector. It has two paths that could come from it. First, the FDIC hasn’t keyed in on this. We do not know if the FDIC will step in yet to say the original Citi deal has already been reached or if either part will make a lawsuit out of this. Second, this could put other troubled banks into play. Sovereign Bancorp (NYSE: SOV), National City Corporation (NYSE: NCC), and Fifth Third Bancorp (NASDAQ: FITB) are all trading higher on this in hopes that Citi or others will step in now and snatch them up. This might even mean there is something left for the common shareholders there too.
Wells Fargo closed at $3.91 yesterday and shares are up above $6.00 in early trading reaction to this announcement. Citigroup is trading down about 6% in early trading on this. You snooze, you lose.
No Article link:
But greece has now follow ireland and backed all bank deposits. If this keeps happening the euro is in a lot of trouble.
Can someone tell me who pays the NTSB for the investigation into Steve Fosset’s deatch? Why do they have to piece together a private plane to find out why it went down? He and his plane were not responsible for any death’s but his own. Will his family be responsible for the bill?
KL
Here’s the video that shows the clip they are talking about as well. http://www.youtube.com/watch?v=rz-d6WPTXa8
Frank doesn’t say it was “their not the best investments long term”, just that he thinks things will get better.
6 years of a republican congress and republican president and they’re blaming the dems for not getting regulation for the GSE’s done in 2005. It’s nuts.
Bob (79),
I think I’m wasting my time. With all that has and is unfolding you’d think the fog would lift from his eyes already (or would it be ears?).
Stan (82),
That’s SFH only. I’ll post more soon.
Credit-default swaps on Hartford jumped 165 basis points to a mid-price of 675 basis points, according to broker Phoenix Partners Group. Contracts on Prudential rose 125 basis points to 617 basis points, while MetLife climbed 97 basis points to 583 basis points, CMA Datavision prices show.
“We don’t have a lot of leeway on time,” Reid told reporters after a luncheon in Washington. “One of the individuals in the caucus today talked about a major insurance company — a major insurance company — one with a name that everyone knows that’s on the verge of going bankrupt. That’s what this is all about.”
http://globaleconomicanalysis.blogspot.com/2008/10/major-insurance-company-on-verge-of.html
Cindy,
Uh-oh
The California Public Employees’ Retirement System, the pension fund used to pay the retirements of millions of government employees, has lost $24.9 billion over the last three months. The 10.4 percent loss is less than the Standard & Poor’s 500, which dropped 13.6 percent in that time.
If the losses continue, California taxpayers could be faced with demands to make up shortfalls in funding the giant pension system. On Monday alone, a dive in the stock markets wiped out $7.8 billion of the pension fund’s investments.
http://www.nctimes.com/articles/2008/09/30/business/z3c8e31e8925b260a882574d0005d1e37.txt
Rich/#75..have you seen the uptick in houses for sale here in NW Bergen?? Prices are varied but more and more I am noticing 2 million and up and several in the 1.+ range. A lot of 2 million dollar homeowners are downsizing to 1 million $ homes to drop their living expenses. In a town like Mahwah you have an advantage because the housing stock ranges so much in price you can really downsize and stay in the same school district.
Article on greece
Greece introduces Irish-style bank deposit guarantee
http://www.belfasttelegraph.co.uk/breaking-news/world/europe/gr.html-introduces-irishstyle-bank-deposit-guarantee-13992712.html
Kettle (90) – Thanks..
Yeah – found it on Mish this AM -see my #12
I should have played Palin bingo instead of doing a shot every time someone said Maverick.
Mitchell 94,
That sounds dangerous.
I’m a maverick, I won’t answer your question I’ll recite the answer to another question that I already memorized.
Laurie,
I’ll do some comparisons for Mahwah but even though it’s a large town the transaction numbers are to small for a true comparison.
Clot, (or anyone else)
Question for you?
Is it legal/ethical/wise to include the most recent case shiller index report and other real estate market commentary, possibly from Meredith Whitney predicting prices coming down another 25%, in a lowball offer? I am working with bank on a short sale and they keep trying to convince me that things arent that bad and prices will stabilize. Instead of arguing with them I would like to simply enclose a couple recent articles so they know why I am offering 20% off their asking price. Is that a bad/good idea? Thanks in advance.
“Why do they have to piece together a private plane to find out why it went down? He and his plane were not responsible for any deaths but his own. ”
KL,
This is easy. There are a limited number of firms that manufacture avionics and other aircraft comppnents. These products find themselves crossing platforms: general aviation (private planes); commercial aviation; and mil-air — especially with the DoDs focus on COTS (commercial off-the-shelf components).
It becomes important for the aviation industry to know whether which, if any, component failed in order to determine whether it could take down a commercial airliner or a stealth bomber.
By the way, here’s an interview with Oxley about the GSE’s. And remember he’s a republican.
The bill the administration wanted would have but the GSE’s under the supervision of the treasury which is under administrative control and not the OFHEO which is under congressional control.
Rich,
Wondering if you got my email? I think it would be good to look at BC numbers broken down by town. From what I’ve been reading, the slow down had been greater in lower income towns and that is possibly contributing to median prices in BC not appearing to fall in line with sales.
#100 Tom:From what I’ve been reading, the slow down had been greater in lower income towns.
I would think that with all that has unfolded,and will continue to unfold, that the upper tier towns are/will be feeling this.
From my quick looks on the mls, there is alot of inventory in Glen Rock, Ridgewood, Upper Saddle River, Saddle River, Wyckoff, and Franklin Lakes.
These are all or were all considered to be desireable Wall St. towns.
Republican clowns just on CNBC, way they were talking made it sound like it’s going to pass. That Boehner jack@ss says thenks to their efforts its a better bill. I guess he means there’s more pork;)
September NJMLS Bergen County Data
Year Med$ #Sold #U/C
1990 $207,000 447 333
1991 $200,000 620 552
1992 $195,000 611 622
1993 $209,750 770 776
1994 $205,000 756 642
1995 $200,000 721 689
1996 $190,000 705 690
1997 $210,000 841 770
1998 $218,500 886 755
1999 $236,599 842 598
2000 $260,000 803 770
2001 $298,250 732 587
2002 $342,000 828 774
2003 $372,000 1039 908
2004 $410,000 952 885
2005 $489,965 951 832
2006 $450,000 681 695
2007 $472,500 590 503
2008 $418,000 535 512
Kettle (85)
How does guaranteeing all deposits in the EU kill the Euro? I thought that would cause people to run to the Euro and kill the dollar.
3b,
As I wrote in one of my posts, some towns in bergen county saw declines in sales as high as 70%. Those were the lower-income towns.
With lower income towns not selling, that should mean lower priced homes not factored into BC’s median which means that BC’s median price does not tell the full story.
Rich in NNJ,
What’s going on with 240 Paramus? Don’t see a lot of activity there…
Thanks in advance
sl
from a contact who created MBS from 2004-2007
Sent: Friday, October 03, 2008 10:19 AM
To: Jordan Celkupa
sure, we can talk about it. what’s your work number?
i’m not sure what the final decision will be, and i’m happy that the wooden arrows are still cheap, but I think the banks that have already mark to marketed themselves and are surviving will be the winners and those that have not done that yet or going to be in a world of hurt. its the banks the choose not to participate in this that you ahve to worry about.
http://www.meettheboss.tv/broadcast/Financial-Services/Nick-Jayanetti-MeetTheBoss.tv
Cindy, head of op risk BOA on Oct 15 doing a webcast on bank risk mgt, good stuff for your poker friends.
Hahaha, they just had Gasparino on talking about the Wachovia/Wells/Citi clusterf*ck. Turns out while the Wells deal is better for everyone the Citi/Bergabe deal had an exclusivity agreement and Citi is going to sue. See what happens when the government gets involved in sh*t they have no business being involved in the first place? See what happens when you swing these secret deals with little or no public documentation? WTF is a board director supposed to do at Wachovia when they are offered a learly better deal for their shareholders and are likely to get sued if they take the Bergabe deal? Way to go Bennie?
Basically regardless of your philosophical take on this bill, it is going to act like sunlight and disinfect. Those roaches that stay in the wall are going to die.
HEHEHE Says:
October 3rd, 2008 at 10:32 am
WTF is a board director supposed to do at Wachovia when they are offered a learly better deal for their shareholders and are likely to get sued if they take the Bergabe deal? Way to go Bennie?
HEHEHE: it just a money grab for C….give them some money and they will go away….just an IQ test…
http://www.henleyonhudson.com/
It is 2006 on this Condo sales site.
Rich [103],
Approx 15% off peak. Well, that’s a start. Thanks as always. Good to see some RE news on this site.
StillLooking (106),
I know the property sold as Baker wants to build 68 townhouses which would require NUMEROUS variances. They have had one town meeting in Ridgewood last week. I believe the next is scheduled for Oct. 23.
You’ve probably seen the signs “Stop the 68 Baker Townhouses” or something to that effect along Paramus/East Saddle River Road from Rt 17 to Wearimus.
Bob (113),
I can’t wait for this election to be over!
I don’t know if the news media have it yet but it looks like there will be a vote before 1 (1ish) today.
Tom (100),
Sorry, didn’t see your email. I replied, but to sum up it’s TOO time consuming.
90 minutes of debate and a vote sometime before 1 p.m.
Rich [117],
While you are at it, can you home brew some Guinness for me?
A typical offer has a mortgage contingency.
Assuming one does not need a mortgage, what are the pitfalls in waiving it in order to beat out a competing offer?
I guess it makes it more difficult to back out of the deal in case of buyers regret.
#95 The Maverick drinking game was going well until Biden tore into the Maverick comments.
Overall I thought she did well and it was a good plan to keep her scripted but try and appear as if she was not scripted with the side remarks. Toward the end she started to get that deer in the headlights look but I actually feel Biden kept her in the debate instead of taking her out.
I don’t hate Palin but her foreign diplomacy just doesn’t exist. Can anyone honestly see her doing her wink and smile with a foreign country that despises women and getting a positive result. I’m all for a woman but some third world countries need to grow up and Palin doesn’t appear to be a strong enough woman to accomplish this.
Chifi(110) -
“Basically regardless of your philosophical take on this bill, it is going to act like sunlight and disinfect. Those roaches that stay in the wall are going to die.”
- This is true under the assumption that the treasury buys these securities at market prices. But the price discovery in this case is at the discretion of the Treasury Secretary. As pointed out by numerous economists, market prices will not help the banks to recapitalize themselves. In fact, Bernanke himself said this in his testimony.
I sure am hoping that this process is entirely transparent, with transactions posted for the public to see, but I am not holding my breath.
The american people are like a five year old boy, you can do what he wants but it does not mean it is the right thing to do. Congress is being forced to choose between what the voter wants and what the voter needs and in DC all they care about is getting re-elected so they might just do what the voter wants instead of what we need.
So I guess they will let the little boy have 15 happy meals and ride the ferris wheel and worry about the vommiting and runs later on.
Bank of America Corp., General Motors Corp. and United Technologies Corp. climbed more than 3 percent as futures traders bet the Fed will lower its benchmark rate by as much as 0.75 percentage point at its next meeting. Wachovia Corp. rallied 77 percent after Wells Fargo & Co., the biggest West Coast bank, agreed to buy the lender for about $15.1 billion. National City Corp. climbed 27 percent and Sovereign Bancorp Inc. added 13 percent.
#4
“California is the biggest of several state governments across the country that are locked out of the bond market by the global credit crunch, the paper said.”
I know I am a broken record here, but everyone who thinks they are insulated from the credit collapse is just not seeing the big picture. even supposedly super safe gov’t employees aren’t safe, so why would you assume you won’t be affected?
#10
“A couple of years ago, at the height of the boom, a friend in New York publishing described to me the indignities of being a five-figure employee commuting daily from suburban New Jersey on trains packed with traders, stock brokers and hedge-fund types.
“These were the guys who, in college, I used to step over on Sunday mornings when they were lying in a pool of their own vomit,” he said. “And now they’re earning millions and millions – in bonuses alone.” ”
typical moronic snob attitude of someone who is not half as smart as he thinks he is
john 123
Unfortunately it is not that simple, and i am sure you are aware of that.
There is some of that certainly. But there are also many other issues. For example some people see the current system as too flawed to save. We can also talk about moral hazard. The bailout in the form that bernanke and paulson wanted was complete BS
Skep, unfortunately or not a lot of incredibly dumb people on Wall Street made a lot of money. That is not to say all of them or most of them are this way but many of the Wall Street people are far, far away from our nations brightest and they were making huge salaries and bonuses.
Did any one catch Brad Sherman’s speech last night?
Can’t find a video of it online but he claims half the bailout will go to foreign investors.
Also told his other congressmen to ignore some of the calls they’ve been getting recently that are pro-bailout. Says that at first calls were 20-1 against. Now only 3-1 against and he claims it’s because of people in the financial sector being told by their bosses to call their reps while at work. Basically paid to call against the bailout.
Thanks Shore guy, for the reason/answer.
Chifi,
That’s a good understandable answer and ever brought a smile to my face when I remembered my first apt. It was 2 aprts above a deli, me and the guy next door who worked nights. I kept my lights on 24/7 he had his always off because he was gone at night and slept during the day. So while I did’nt see the roaches I knew where they were……
KL
Tom,
a sizable chunk of thew bailout could go to foreign banks. Paulson has fought to keep that option open in the bill. The idea is to help European banks since the ECB cannot take action like the FED and treasury have. German, Spanish, Irish banks can sell their bad paper to their american subsidiaries and the subsidiary can then turnaround and sell it to the treasury, there by allowing the US treasury to bailout band paper in foreign banks.
AIG was apparently bailout out because it would have hit germany very hard. They had 300+ billion at stake in AIG
#128
jcer– I have met plenty of people like the publishing snob quoted in the NYTimes above. They choose careers based on intellectual fulfillment/idealism and then blame the world when they do not end up rich. They looked down on everyone who was more practical minded in college, who had no more grandiose goals than having a good time and making a good living. Now these people belatedly realize that they simply fell for their own BS act a long time ago and that the people who they thought were so dumb (the “frat guys”) actually may have had more foresight. The truth is there are very few professions in which one needs to be a genius. Few people on Wall St. are, but so are few people in publishing.
skep[125],
I know I am also a broken record. The fed and world’s cb’s have pumped over $3T into the banking system. For the 1st time ever, the fed’s balance sheet is north of $1T. Despite this, libor and the ted spread continue to rise. Banks continue to hoard cash. Nobody wants to lend in an environment where the attached collateral continues to deteoriate. If your #ss was on the line would you take a leap of faith?
More food for thought. As you are well aware, hedgies are imploding left and right. Current estimates has their ins exposure at approx $14T. Recent estimates indicate the entire industry, hedge, has $2.5B under management. Remember risk is sold out the front door, then beelines through the back door.
Should we halt the proceedings and bring this little tidbit to the table?
Once more, how does a $700B package, loaded with pork, thaw these markets?
Who was posting yesterday on the CNBC talking heads not having a clue what they’re reporting?
Just had a big ROFLMAO with Gasparino reporting that Citi will file a lawsuit for ‘torturous’ interference.
No, Charlie, what Wells did was tortious intereference; ‘torturous interference’ is what those bozos in DC are attempting to do with your cheerleading.
BC Bob,
Dont forget that that so called 700B package is actually a 700B revolving credit line. Paulson could run up a 10 trillion tab as long as he doesnt hold more then 700B at any one time.
They know that they would need 10+ trillion but could never ask for it. instead ask for a tax payer funded credit card!
Once again, this ain’t about stock market, Real Estate, Jobs etc. This is about saving the banks and stopping a credit crisis where even AAA GE bonds are 7.5%. GE pretty much sells everything. They were borrowing at 3.5 now they are borrowing at 7.5% which means in 2009 they will have to raise prices by 4% and lay off people. The million of manufacturers go get GE products will tack on the 4% plus their own 4% for their added credit costs and soon everything will be 8% more, but that is ok you won’t have a job or be able to get a loan anyhow. Our parents were not driving ten year old pintos, vegas, darts, mavericks and novas for fun. That is what you drive when the economy is tight, your job is in jepordy, raises are one percent and you can’t get a loan.
#103
wow– we are at 1991 sales level. thanks for the data
JF Says:
“You are totally missing the point. It has nothing to do with a dislike of any group or race. What has the nation of Israel done in it’s entire history to be considered an ally of the US?”
Apart from providing intelligence, sharing sophisticated weapons technology and doing the US’s dirty work in the region (bombing Iraqi Nuclear facilities) for instance?
Add in that the vast majority of the money “provided” by the US is actually earmarked to be spent on American made armaments (Jobs for Americans, money that flows back into the US economy, Israel agrees not to purchase from other nations) and mostly loan guarantees – not actual US taxpayer cash.
That said. I would actually prefer Israel not to take US money. Then they wouldn’t be beholden to the US.
And for your information. AIPAC is an AMERICAN lobby group, not Israeli and a huge percentage of their major supporters and members are actually Apocalyptic Evangelical Christians who want to hasten armaggedon.
A “friend” who wants you to burn for eternity is no friend as far as I can see, so feel free to attack the Evangelical Right.
John –
I do not think anybody is arguing about the need for the bailout. I think everybody cannot understand how this is going to work.
If the need is for the banks to be recapitalized, we should go the Buffet route. Inject equity.
Why are the banks not agreeing to the Buffet deal?
132
Perhaps the larger point is that people in professions outside of the financial sector should be able to live a middle class life. People understand that if they go into teaching or pediatrics that they will never be rich. They just didn’t expect to be so squeezed by astronomical rises in housing, health care and education.
#109
“WTF is a board director supposed to do at Wachovia when they are offered a learly better deal for their shareholders and are likely to get sued if they take the Bergabe deal? Way to go Bennie?”
anybody know if there was there a reverse break up fee? if so, should be pretty straightforward– pay the fee and expenses and move on
skeptic–
did you read the whole article? Here’s another snippet:
Schadenfreude is impossible because the fat cats — the ones who bent the rules, the ones who pushed the envelopes, the ones who paid lower taxes because capital gains were most of their income, the ones who opposed regulations on the banking and mortgage industries — are taking us down with them.
The very wealthiest are, as always, likely to do just fine. Real, hard-core Wall Street, as Tom Wolfe reminded us last weekend, long ago decamped for the hedge funds of Greenwich. The political leaders who allowed this mess to develop have turned into the great defenders of “Main Street.” (If I have to hear the juxtaposition of “Main Street” and “Wall Street” one more time, I will be the one drowning in a pool of vomit.). It’s a whole host of other people — vulnerable middle class homeowners and small business owners and, now, universities unable to make payroll — who are hurting.
Still Looking (106),
From a June article on NorthJersey.com
Ridgewood residents oppose townhouse project
kettle [135],
Yes, the granddaddy of exploding arm’s.
Ah, Skep I get it, I know who you are talking about and they too frequently are not super bright. I was friends with a lot of these types of people in college and they had no grasp of the practical, I studied engineering and they had no conception as to how much work and how difficult it is. They though it was easier because the answer is definite as opposed to liberal arts where many times there are no answers. What a joke!
Rep. Brad Sherman explains how the House was threatened with martial law if they didn’t vote for the bailout [video]
http://www.youtube.com/watch?v=HaG9d_4zij8
Got t-boned yesterday by a woman who is just 12 years away from 100. she ran a red light … my car totaled. fun.
hope it isn’t the same woman who drilled John this summer.
i saw someone posted this link recently.
http://portal.hud.gov/portal/page?_pageid=73,3947211&_dad=portal&_schema=PORTAL
anyone call yet? i just passed it on to a relative.
#140
“Perhaps the larger point is that people in professions outside of the financial sector should be able to live a middle class life. People understand that if they go into teaching or pediatrics that they will never be rich. They just didn’t expect to be so squeezed by astronomical rises in housing, health care and education.”
renter, I can accept that and agree. But there is something bigger than this in the NYTimes piece, and it is the sense of many people who believe themselves to be intellectuals that the world simply does not recognize their true worth (which, of course, is very high in their minds). As we say here all the time, the seller does not set the price– the buyer does.
75 Rich In NNJ,
Do you have the monthly breakdown over the same time period?
@[120]
The mortgage contingency usually comes with its own contingencies, like passing inspection and marketable (insurable) title. As long as you’re not waiving the inspection and title clauses, it shouldn’t make a difference to you.
Or offer to waive the mortgage clause for $10,000. how sure is the seller that his other suitor can close the deal? Are they willing to bet $10,000 on it?
Stories like these of house negotiations really shed light on how house buyers get sold a pig in a poke more ofthen than anyone realizes.
The Bailout is now billed as aiding Main Street, yet it really is directed at Wall Street. In the same manner that bailing out AIG directly helped Goldman & company. Paulson needs to specifically show, “who gets the money”, and how that “unfreezes credit”, with no “direct benefit to his buddys”.
NJLifer (149),
I’m putting together a Q1 – Q3 for the same period.
Also, check post 103.
148…I think many people do not want to make a living in the grinding and contentious world of commerce. And now….fewer will. Many people who made very good salaries will have to find work elsewhere. Good luck.
Article from the NY Times. This does not sound at all like the current situation in NYC. /sarcasm off.
After the stock market crash of 1987, it took two years for Manhattan real estate prices to drop, according to Mr. Miller.
When they did drop, the market became more troubled because the slowdown coincided with developers taking advantage of tax incentives to build thousands of new apartments. At the same time, thousands of rentals were being converted into co-ops. Many builders had concentrated on building only smaller apartments that were attractive to investors looking to rent them out. All of this inventory meant that it took until the mid-1990s for prices to recover from overbuilding.
http://www.nytimes.com/2008/10/03/nyregion/03real.html
Investors Rake It In by Shorting New Jersey
This from CNBC: http://www.cnbc.com/id/15837548/cid/97916/sh/3
Explains why my MMMKT fund took off, and why my closed end funds are getting pounded.
“Our parents were not driving ten year old pintos, vegas, darts, mavericks and novas for fun. That is what you drive when the economy is tight, your job is in jepordy, raises are one percent and you can’t get a loan.”
John,
Them the breaks. Nodody is entitled to prosperity, you earn it.
It’s very easy. Time to revamp; needs, wants or desires? Out with bling in with things.
Maybe the masses just won’t be able to lease a new car, that they can not afford, every 2-3 years. That 20K exotic vacation, on the cc? How about a bungaloo at the lake? A $300 handbag? Ask grandma to knit a sack. Pavlov’s dog did it. Can the American consumer stop salivating? Probably, when they discover consumption will be fueled by savings.
So, in other words, the economy is perpetually immune to a recession? Think of the early 90′s, opening act?
By the way, I just bought a 1999 Volvo S70.
oops, wrong link
http://www.cnbc.com/id/27005579
NYC apt market…
Stock market crashing? Check!
Developers taking advantage of 421 incentives? Check!
Rentals converted to condos? Check!
Developers building for people looking for pied a terre? Check!
Excess inventory in Manhattan? Check!
Decline in NYC apt prices? TBD…
#139
“I do not think anybody is arguing about the need for the bailout. I think everybody cannot understand how this is going to work.
If the need is for the banks to be recapitalized, we should go the Buffet route. Inject equity.
Why are the banks not agreeing to the Buffet deal?”
I know that one problem is that there are big regulatory barriers to investing in banks. you are essentially forced to be a minority investor unless you are already a bank due to bank holding company law. obviously, few banks have the funds to do the necessary recapitalizations, so the capital has to come from outside the industry. but people with that kind of money (mainly private equity) want control. there is also a doctrine called the source of strength doctrine which requires investors in banks to act as a sort of backstop. so you are forced to be a minority investor and act as a backstop and it is thus a very risky position to put yourself in as an investor. buffet has gone after the gold standard in goldman sachs, which may not even remain a bank holding company for long after the storm clears (they don’t really have any deposits) and because there are no deposits there is less downside risk for buffet to be forced to act as a source of strength. basically, this is an atypical investment compared to many other institutions in need of outside funds currently.
Anyone know what is the news on TOL. The market is rallying and TOL is down??
Crazy market, everyone is jumping in. There is a lot of cash on sidelines, special situtation trading accounts, hedge funds, retail investors cash on the side and it is going to flow back in, watch it today. Record amount of retail muni bonds bought yesterday, cash was king but you got to jump in. I am still a little chicken. I did just buy a 4 year American Express Bond at 8.75% YTM, but that was just scraps.
I hate those people, problem is the people who saved and saved and thought their money in the bank, money market money, ARS money, pref stock money, muni bond money and investment grade bond money were safe are getting killed. These guys never participated in the boom they sat home and saved. The bail out is to bail out those folks not the deadbeats.
BC Bob Says:
October 3rd, 2008 at 12:03 pm
“Our parents were not driving ten year old pintos, vegas, darts, mavericks and novas for fun. That is what you drive when the economy is tight, your job is in jepordy, raises are one percent and you can’t get a loan.”
Paulson may be thinking like this. Just borrow trillions from chinese and other asians for this bailout and default on them later! Is this a crazy idea?
#159
couple of clarifications to my post above: first, source of strength only applies if you get control of a bank. but it is still a big impediment to making an investment. second, majority of banks in this country have assets of $100M or less (see somewhat dated link below). Lets say the typical distressed bank right now needs $20M in new capital. Seems to me that few investors right now are lining up to do that kind of deal. The diligence is time consuming and expensive and the potential payoff is limited. Most PE funds have limited size of investments they are allowed to make. In short, I do not believe that outside capital is coming to the rescue of most distressed banks a la buffet
http://www.fdic.gov/bank/analytical/working/wp2003_07/index.html#fig04
lisooth [138]
Re: taxpayer burden due to US – Israel alliance
To your list of what Israel has done for the US lately I would add:
* Consistently provides evidence to terrorist groups that a “spoiled” Western society will withstand barrages of rocket and suicide bomber attacks on its civilians and maintain an unfaltering resolution to fight
* Exposed Syria’s role in supporting terror by facilitating the transport of Iranian weapons to Hizbullah and supplying its own long-range weaponry to this terror group
* The US and Israel cooperate extensively on defense, intelligence and economic matters. By doing so, they advance their common interests of promoting freedom, fighting extremism, and seeking peace and prosperity.
* The anti-western, anti-American groups Hamas and Hizbullah are kept in check via Israel’s military strength in the Mediterranean region without the need for American military support. Contrast this with the situation in the Gulf where there is no Israel-equivalent and where are tax money is being spent to support the US troops.
* The Arrow ballistic missile defense system was the result of a joint program with Israel’s high tech military industry. Development costs were shared equally between a country whose population is 7.3 million and its ally the US, population 305 million.
* Real-time intelligence on terrorist groups and expertise in counter-terrorism
* Unmanned aerial vehicle technology
* Radar decoy technology
* Billions of dollars in trade between the countries
NJMLS Q1-Q3 Bergen County Data
Year Med$ #Sold #U/C
2004 $405,500 7,950 8,667
2005 $465,000 8,136 8,785
2006 $480,000 6,528 7,453
2007 $475,000 6,486 7,181
2008 $450,000 4,815 5,667
Laurie (91),
NJMLS Q1-Q3 Mahwah Data
Year Med$ #Sold #U/C #Active
2004 $412,500 325 339 140
2005 $474,900 313 343 149
2006 $477,500 280 314 219
2007 $470,000 263 300 203
2008 $428,000 226 279 174
#128
Hey if you are smart and doing something where you don’t make a lot of dough (say engineering), change it (if that is important to you). If you are so smart, you shouldn’t have a problem getting into the Wall Street industry (or tech, or whatever great gig is next) and bringing home your own big bacon, if that is your objective. I don’t have any sympathy for anyone who choses to complain/resent, not act, on their disatisfaction with personal results. Personally I would rather be selling sodas on the beach in San Diego, but that will not pay the rent.
It is a free country, and chances are that you don’t make the rules, but you are free to play by them.
#163
“Paulson may be thinking like this. Just borrow trillions from chinese and other asians for this bailout and default on them later! Is this a crazy idea?”
don’t leave out the middle east!
BTW – I agree that housing is overpriced, and that regular people in good jobs which require an invesment in education (or just plain work hard) should be able to afford a decent home. This is not necessarily the case these days.
College investment fund frozen
Wachovia Bank says it will liquidate a fund used by about 1,000 colleges and private schools to help pay bills.
NEW HAVEN, Conn. (AP) — An investment fund that serves about 1,000 colleges and private schools partially froze withdrawals this week amid the credit crunch, forcing colleges to develop new plans to pay bills.
Wachovia Bank (WB, Fortune 500), trustee for the $9.3 billion Short Term Fund offered by Commonfund, said Monday it was terminating the fund and establishing a process to ensure the orderly liquidation and distribution of the fund’s assets. Wachovia initially told investors Monday that they could only withdraw 10% of their money, but that figure was increased to 34% by Wednesday and 37% by Thursday.
Commonfund, a Wilton, Conn.-based nonprofit that advises colleges and schools on money management, also said Thursday it put a 30% limit on withdrawals from its Intermediate Term Fund after investors in the Short Term Fund tried to withdraw money from that fund, said Keith Luke, managing director of Commonfund.
About 200 colleges and universities have about $1 billion in the intermediate fund, which is used for long-term needs, such as equipment plant purchases, he said.
“We just didn’t have the liquidity in the fund to do that,” Luke said. “We will relax that as soon as market conditions permit.”
So a couple in buffalo want to buy a house and ask their local news team for an unbiased opionion.
And the news team asks a realtor and mortgage professional.
Guess what! It’s a great time to buy.
Great reporting there.
http://www.wivb.com/Global/story.asp?S=9115012
Interesting, the House will pass the Bill, even though the Majority are against it, and this should make the Public feel they have done the right thing? Dysfunctional?
Rick_nu #168 I do work for a WS bank, because they pay more than engineering. That is not the point the point is practical things like engineering were not in favor in the US which is sad as we at one point led the world in many areas and are at risk of losing this to the Chinese and Indians because americans are lazy.
IT PASSED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
what a joke. we’re f’d
buckle up!!
#175 John: And now all will be well???????????????
veto (97)-
If a bank owns it, it is not a short sale. Banks will not get involved in negotiating a short sale until the borrower has a binding contract that has been submitted with financials and a hardship letter.
If you are negotiating with a bank for an REO, or negotiating with a bank on a short sale in which your contract has already been submitted with appropriate documentation, good luck. It is doubtful anything you furnish will sway someone who may be locked into a price and negotiating position by bank policy. Many of these mitigators and negotiators have no choice but to parrot the party line and hold out for X price. They are not paid to think and make decisions.
The people who get paid to do that are the ones who want the gubmint to buy their worthless MBS. They’re a little tied up right now.
john-
enough with the predictions already, you’re not good at those we’ve seen your recent track record is really bad.
also, enough with the justifications for the bailout already… you sound like trying to convince yourself more than anyone on this board that the bailout is the right move… it’s taking the tone of a madman trying to convince himself he’s not crazy…
it’s obvious you’re just rooting for what’s best for your wallet. well, just leave it at that then.
I actually don’t even understand what an Engineer does, something with a slide rule and little models I imagine.
Anyhow I never had the luxury of doing that type of work. Had to work all through HS and College so no time for all that studying and I needed a higher paying job to support my family.
I guess rich folk are engineers as they are ok with making less money so they can do what they like all day.
House caps momentous week, voting 263-171 to pass $700B bailout – one of the most sweeping financial interventions in U.S. history.
God Bless America, the godless commies who did not want the bill won’t get the great depression.
Clot,
Out of the gulag in 3 days!
We’ll see!
Next up a big rate cut and the tax break for savings banks who bought fannie/freddie pref stock.
Before the vote, Fed Funds futures trading on the Chicago Board of Trade showed a 78 percent chance the central bank will reduce its target rate for overnight bank loans by a half- percentage point to 1.5 percent by its Oct. 29 meeting and 22 percent odds of a 0.75 percentage-point cut.
“We wouldn’t be surprised to see the Fed cut rates 50 points even before the next scheduled meeting,” James Shugg, a senior economist at Westpac Banking Corp. in London, said in an interview on Bloomberg Television. “It actually helps boost, to some extent, bank profitability. An interest-rate cut is an important part of the solution to the current serious problems confronting the U.S. economy.”
john 180
what??????????? did you start the weekend early with a bowl of the gooey green in celebration of the bailout passing?
132 Skep – I work in publishing, and can readily concur that there are very few geniuses in the field.
#180
“I guess rich folk are engineers as they are ok with making less money so they can do what they like all day.”
not sure it applies to engineers, but this is what frustrates me. people who consciously choose a lower paying career for intellectual fulfillment or easier worklife then complain when others who work probably double the number of hrs they do and spend years dealing with mindless crap end up making more money. both people are making trade offs, but the recognition that there is generally a real trade off to gain higher income is not always seen.
Gator– I have friends who work in publishing who are cool. I am not knocking everyone in that industry. FWIW, there are probably a higher percentage of *ssholes in finance.
as usual, market is reacting 180 degrees from what John predicted.
is John channeling Bi?
#181 John: Ahh and to think I used to believe you were one of the old time hardened Wall St guys.
But at the end of the day you were just crying and begging, for something we have no idea will work.
A little skepticism is warranted along with your child like giddiness..
So, now we know.
This is the sound of $700B+ disappearing into a black hole.
Nothing changes here except increased debt and a weaker dollar.
Was it as good for you as it was for me?
[188],
John’s Bi?
Vice Presidents almost always try to run for President after their President’s term is up. Dick Cheney is 5 years younger than McCain, why is he not running?
Nothing left to steal. Or as W might say, Mission Accomplished.
“Was it as good for you as it was for me?”
MJ,
It would have been a blast if I could have laid out some shorts on the announcement.
#186 skeptic: Sales and trading on Wall St did not work overly long hours. When I was in that side of the business, the hours were 7:30 to 5:00 with no lunch.
Public Finance/Banking on the other hand worked incredible amounts of hours,including weekends.
Ok John, basically the various types of engineers have made it possible for you to type on this blog, go to work and make money. Without engineers, electrical, computer, civil, structural, etc nothing I mean literally nothing besides small structures could be built. Engineering used to be a prestigious well paying job, as was medicine not so much any more. Engineers take requirements and then make a design, they model the design using mathematics to ensure when built and put into use they function as desired. It requires a vast amount of knowledge, understanding of concepts, critical thinking, and creativity. There are lots of mediocre engineers out there and there are also a few brilliant ones. Engineering is not for those who want to make boat loads of money but I think America should try to foster an environment where people want to become engineers as it is vital to our growth as a country.
3b– traders have it good with the hrs. short but high stress. I’m a lawyer so I have the downside of banker hrs without the banker bonuses. although the job security is better (so far)
oh yeah, lawyers are frequently d*cks too.
Lawyers have tremendous egos frequently which adds to skeps comment #196.
#194
“Engineering used to be a prestigious well paying job, as was medicine not so much any more.”
I think we are going back to the days where these professions are going to provide a good lifestyle.
basically, everyone in NY is a d*ck and the real swell people live in places like Wasila
One of the most important revenue sources in NYC is tourism. What draws visitors to NYC is not Wall Street, but rather the cultural institutions which are operated and staffed by low-paid liberal arts graduates. If those people cannot afford to live in the city, yet another revenue stream will dry up. Unfortunately, the current (and, I fear, future) mayor has not seen fit to assist those people; instead he’s concentrated on preserving Wall Street firms and luxury developers.
It’s easy to say that anyone who is unhappy with their standard of living should just get another job in a different industry. Easy to say, but not as easy to do as many people here assert. I tried it once in 1995 and wound up earning less than I had in the ’80s.
Personally, I don’t want to live in a world where the only value of a human’s life is the ability to make more and more money, and I find it disheartening that people here can’t manage some shred of sympathy for the folks that made other career choices. After all, they’re bailing out Wall Street, too.
“3b– traders have it good with the hrs. short but high stress.”
skep,
In case you missed the news alert; Markets trade 24 hours a day. The phone is ringing at 3:00 AM? Maybe your margin clerk in London?
The market is doing exactly what I want it to do, I own too much bank bonds and with the credit markets frozen I was in a frozen state. Now I can slowly sell bits and pieces and let others mature. That WAMU bullet I pretty much dodged put the fear of god in me. I still plan on buying a house Dec 2010 to Feb 2011. In the past few weeks I did load up on Callable Munis with a coupon of 5% or greater trading at par or less under the theory they won’t get called as munis can’t get money and when credit markets unfreeze they will start calling them in time for my downpayment plus BO is a tax junkie and he is tonic for tax free bonds.
I have officially entered capital preservation time as I am two years to trade up time and I for once needed to be bailed out.
I actually don’t want to see a big rally here as I need GB to sign it, a rate cut and some other assorted breaks for the banks. Once we are done with all that and finish 4Q next year will be good comparision wise for the banks. However, the first industry to fall is first to recover, this credit crunch will still be hitting the safe places.
I am not alone here, people waiting for a bottom who have been on the sidelines downpayment money keeps rising. By the time the fence sitters jump in they will have a few hundred thousand to put down and not losing your nest egg while still earning good interest or dividends is a tough juggle. Banks are going to want 50% down when they clear inventory so 300K cash will be a requirement not a luxury when we hit bottome.
Clot is this you? Who is this?
http://www.cnbc.com/id/27005579
Peace– not sure if you’re referring to me, but I do have sympathy for people who choose to pursue things other than making money. Most people in my immediately family work for non-profits or in the arts; the difference is that they accept that they made a tradeoff and do not have a grudge against people who have chosen to go a different route. I agree that the world would be a pretty awful place if we lost all of the artists, etc
#201 Yep. I enjoyed it for all the years I did it. It was tough for the Brokers brokers, because they had to spend 3 or 4 nights a week entertaining all of us from the various B/D’s.
The Post House is still my favorite restaurant.
/chuckle/
http://www.paddypower.com/bet?action=go_event&category=SPECIALS&class_sort=–&ev_id=1224857&ev_class_id=45&ev_type_id=10467&force_racing_css=N
#201
“In case you missed the news alert; Markets trade 24 hours a day.”
BC– good point. and yet my trader buddies are home by 6:00 every day. I guess they are not BSDs yet
jcer that sounds like a boring job, Actually my name sake is an engineer and holds numerous patents and is enshrined in the aviation museum for all his engineering feats. I was really bored once and hard up for work and I fudged my manufacturing background a bit and did some aviation engineering consulting in seattle for a week or two, my deliverable was just some powerpoints thank god. When one engineer bozo I was interviewing ask me my qualifications rather than say I have none I said hey I am named after my uncle who is a great engineer. The 50 year old asian aviation engineer was trying to do something for the new dreamliner that my uncle orginally developed and was very impressed. Thank god he did not ask any more questions.
Does that include Ron Artest?
skep-tic Says:
October 3rd, 2008 at 2:03 pm
Peace– not sure if you’re referring to me, but I do have sympathy for people who choose to pursue things other than making money. Most people in my immediately family work for non-profits or in the arts; the difference is that they accept that they made a tradeoff and do not have a grudge against people who have chosen to go a different route. I agree that the world would be a pretty awful place if we lost all of the artists, etc
Skep-tic:
Yes, in part my comment was directed to you. But also, in a general way, it was directed to the many people on this board who assume—and you make this point yourself in #204—that their family/friends are totally different than the people you aimed your original comment at.
If you had read the entire Times article, the author makes a point of saying that schadenfreude has become impossible for the liberal arts graduates to feel in this situation, because bailout or no bailout, they’ve been taken down, too.
kl (78)-
If you vote at all, you are a passive accomplice in the fleecing of our country.
#209
Ron Artest is a musical genius
http://www.amazon.com/My-World-Ron-Artest/dp/B000IHYWBI/ref=pd_bbs_sr_1?ie=UTF8&s=music&qid=1223057938&sr=8-1
vodka (80)-
Skinner Boxed lab rats.
Peace– I read the article, but I find the sentiment unredeeming. The only reason not to feel joy at others’ misfortune is because you are suffering too? To me this is just one more expression of the same narcissism
Seneca Says:
October 3rd, 2008 at 12:37 pm
lisooth [138]
Re: taxpayer burden due to US – Israel alliance
To your list of what Israel has done for the US lately I would add:
* Consistently provides evidence to terrorist groups that a “spoiled” Western society will withstand barrages of rocket and suicide bomber attacks on its civilians and maintain an unfaltering resolution to fight
* Exposed Syria’s role in supporting terror by facilitating the transport of Iranian weapons to Hizbullah and supplying its own long-range weaponry to this terror group
* The US and Israel cooperate extensively on defense, intelligence and economic matters. By doing so, they advance their common interests of promoting freedom, fighting extremism, and seeking peace and prosperity.
* The anti-western, anti-American groups Hamas and Hizbullah are kept in check via Israel’s military strength in the Mediterranean region without the need for American military support. Contrast this with the situation in the Gulf where there is no Israel-equivalent and where are tax money is being spent to support the US troops.
* The Arrow ballistic missile defense system was the result of a joint program with Israel’s high tech military industry. Development costs were shared equally between a country whose population is 7.3 million and its ally the US, population 305 million.
* Real-time intelligence on terrorist groups and expertise in counter-terrorism
* Unmanned aerial vehicle technology
* Radar decoy technology
* Billions of dollars in trade between the countries
…boy, those are all wonderful things that an American-Isreali alliance has produced. Terrorism for one, was never an American problem prior to 1948. The US is an ally of Israel, not the other way around. All four of our candidates stand no chance of being elected if they dare disagree with the blind support of Israel. There is no open debate in this country on the matter. There in lies the reason our political system is broken.
No one is looking at the root cause of all the things you just mentioned. That’s my point. There is this shut up and don’t talk about it mentality.
Hey Peace now, I guess there parents were to blame. I remember back the early 80′s parents used to say, Accountng, Pharmacy, Law, Engineering, Medical school etc. is all I am paying for if you think I am paying for you to study Art History you are nuts.
Oct. 3 (Bloomberg) — The U.S. plans to hire five to 10 asset-management firms as Secretary Henry Paulson establishes the government’s new office for handling the financial bailout, a Treasury official said.
The department will also add about two dozen new employees, a mix of bankers, lawyers, accountants and others, the official said on condition of anonymity. The Treasury’s first attempt to hold an auction to buy troubled assets from financial firms will take at least four weeks to set up, said the official.
Congress passed the Bush administration’s $700 billion financial markets rescue plan today.
John,
Not just 1, GS?
#202 John:Banks are going to want 50% down when they clear inventory so 300K cash will be a requirement not a luxury when we hit bottom.
With a 50% down payment, nobody will be buying.
John (136)-
Fcuk GE. Iran should have no problem handling their price increases on sensitive missile technologies.
Immelt should be jailed, tried for treason, found guilty and hung until dead.
Instead, he is viewed as a great businessman.
“With a 50% down payment, nobody will be buying.”
3b,
Maybe John’s definition regarding the impact of credit markets loosening?
Clot– what is this sensitive missile technology? OFAC is pretty strict on this stuff– I would be surprised if GE wasn’t in compliance
http://www.ustreas.gov/offices/enforcement/ofac/
Clot,
Is that Immelt or I-melt?
#195 skeptic: Yep the hours were good, but the stress was incredibly high.
Nothing like sitting with a 100MM NYC TRANS deal that settles tomorrow with no orders, that you priced, but you got paid.
Or when your desk sold some AAA rated by both Puerto Rico Pre-Re’s,escrowed 100% Treasuries backed by Heinz Tuna,at a premium of 110, only to have Greenpeace complain about dolphins getting caught in the fishing nets, and the issuer calls the entire issue at PAR.
And when things were bad you did not.
The “street” has has gone down in my eyes after the pathetic pleading for a bailout that no one undertands, and no one knows if it will work.
I guess I am for a different era, when crying and pleading on the “street” was unheard of.
Even John Holmes wouldn’t want to go home long this weekend.
John Says:
October 3rd, 2008 at 12:17 pm
“Crazy market, everyone is jumping in.”
Uh, John…looks like they sold the news.
I saw one single good priced deal in the last year. Third highest bid was 40% down and had cash proof and they offered it to me for 10K less if I could do it at 50% down.
They turned down the two highest bids as they were 20% nonsense.
Bank unloading a 1.5 million dollar home for one million and taking a 500K loss ain’t loaning you 800k. Yea you can go elsewhere but good luck. HSBC had an REO near my house and they were doing a 30 year fixed through HSBC where they pay all closing costs and give you the loan if you put down 50%.
skep (223)-
We should have Immelt’s head on a stick:
http://patdollard.com/2008/04/shock-video-ge-selling-parts-to-iranian-military/
White House says that President Bush has signed the historic $700 billion bailout bill into law. More soon.
I love bush
dollar/euro alternative? (from the WSJ)
*******
Mackerel Economics in Prison Leads to Appreciation for Oily Fillets
Packs of Fish Catch On as Currency, Former Inmates Say; Officials Carp By JUSTIN SCHECK
“Prisoners need a proxy for the dollar because they’re not allowed to possess cash. Money they get from prison jobs (which pay a maximum of 40 cents an hour, according to the Federal Bureau of Prisons) or family members goes into commissary accounts that let them buy things such as food and toiletries. After the smokes disappeared, inmates turned to other items on the commissary menu to use as currency.
Books of stamps were one easy alternative. “It was like half a book for a piece of fruit,” says Tony Serra, a well-known San Francisco criminal-defense attorney who last year finished nine months in Lompoc on tax charges. Elsewhere in the West, prisoners use PowerBars or cans of tuna, says Ed Bales, a consultant who advises people who are headed to prison. But in much of the federal prison system, he says, mackerel has become the currency of choice.”
#228 John: There are those of us who will be purchasing but will not be looking at hsuses with such lofty prices.
I would think you should ask yourself why would you?
Had the names of the other bidders, no mystery bidding. pants were dropped and string was tied to rock. I let the younger couple have it who only had 300K to put down. It was near my brothers house and I was going to flip so I figured let the nice young couple have it.
John Says:
October 3rd, 2008 at 2:47 pm
I saw one single good priced deal in the last year. Third highest bid was 40% down and had cash proof and they offered it to me for 10K less if I could do it at 50% down.
They turned down the two highest bids as they were 20% nonsense.
Because a four bedroom house on at least a 80 by 100 plot in a good train town is still a lot of cash.
#229
Clot– Iactually saw that item on fox news but didn’t understand what the issue was. still don’t quite get it
#230 One more item to burnish his legacy I am sure.
BC (192)-
By October 17, I know exactly where the pant-up demand will be:
“It would have been a blast if I could have laid out some shorts on the announcement.”
Get shorty!
Bush signed the bill. You gotta love the crooks they move fast.
#234 John: Because a four bedroom house on at least a 80 by 100 plot in a good train town is still a lot of cash
Becasuse a 4 bed hosue etc, WAS a lot of cash, but is rapidly falling in value every day.
Train town? Train to where NYC?, Gee, I am not so sure that will be such a huge selling item going forward. The “street” and NYC in general is going to be a very, very diffferent place once the dust settles on all of this.
With all due respect you sound like you are getting a little unhinged there John.
First you are crying and pleading, now you are babbling on about train towns.
John (216)-
“…if you think I am paying for you to study Art History you are nuts.”
The only thing I’m telling my son is to take all the damn Art History he can. That’s where you meet all the hot girls.
John (230)-
Do you think he even bothered reading it?
Will be there be a signing statement attached (doubt it)?
Did he even mention all the pork it got wrapped in?
Did he sign it in his secret bunker?
Clot -
Looks like Bob Toll is done selling.
Vic (242)-
Great. Now they can file for bankruptcy.
John [230],
Just a sampling;
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.
Sec. 504. Income averaging for amounts received in connection with the Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 5-year property.
Sec. 506. Modification of penalty on understatement of taxpayer’s liability by tax return preparer.
Subtitle B—Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
Sec. 601. Secure rural schools and community self-determination program.
Sec. 602. Transfer to abandoned mine reclamation fund.
Wait – wasn’t this bailout supposed to protect the retirement money of all the hockey moms?
Did they forget to include the clause in the final version?
Why is the DOW down??
Thanks Rich! and for the article too.
The Dow graph looks like K-2.
Yep. We really are doomed.
I’m going back to bed…
sl
$700,000,000,000
Pretty big looking number, isn’t it? Bonuses on ‘the street’, housing appreciation to resume, lending to loosen… it sucks to be a little POS like us, doesn’t it? Just shut the f*ck up and pay your taxes.
We are certainly and squarely f*&#ed.
SKF…will…not…die.
No disclaimers needed.
SRS is a screaming buy.
All disclaimers. Vic gave you the tip: Toll is done selling.
Clot,
Are they still making shares of srs?
sl
We are being told loudly and repeatedly that the gargantuan mortgage bail-out package is necessary because illiquid mortgage-backed securities are clogging our financial arteries, threatening the economic equivalent of cardiac arrest. The idea of the plan is to transfer these supposedly valuable, but currently unmarketable, assets to the government so that private institutions can freely lend once more. The monumental flaw in this argument is that the mortgage backed securities are in fact highly liquid, just not at the prices the owners would like to receive.
Mortgage bonds are just like houses. They won’t sell if the owners stubbornly refuse to drop the price. However, they can find buyers if they acknowledge reality, and lower their expectations accordingly.
The government tells us that if these assets are held to maturity their full value will eventually be realized, and that it is only because of a lack of current liquidity that their value is not reflected in the market. However, as many private transactions have shown us in recent months, these assets will find buyers at the right price. These are not overly exotic assets but relatively straight forward mortgage obligations. The inability to find buyers is not a function of liquidity but simply of price. The government is seeking to “create liquidity” by overpaying.
The government’s assumptions about the “held to maturity” value of these mortgages completely understate the likelihood of widespread default. Some of the “illiquid” assets represent tranches of mortgage-backed securities that will be completely wiped out. Even the higher quality tranches will suffer severe losses due to mortgages that will inevitably go bad.
For example, take a $500,000 adjustable rate mortgage on a condo in Las Vegas that has a current value of only $250,000. To assume that this asset can be safely held to maturity is absurd, when in all likelihood the borrower will default shortly after the rate re-sets, even if the borrower has not yet shown signs of distress. Of course such a mortgage would be completely illiquid if one tried to sell it anywhere near par, but would be extremely liquid if priced to reflect a more realistic value; say 35 cents on the dollar. But if the government pays prices that fairly factors in likely defaults, it will bankrupt the very institutions it is trying to bail out.
sl (251)-
SRS is trading freely, although my understanding is they are having a tough time tracking, as the mortgage components of SRS are on the no-short list.
I don’t care. SKF and SRS are both lined up against big piles of poop, and they can’t ban shorting forever. I’ll be waiting here when the crooks give it up.
Burn, baby, burn!
my oh my… guess they did not like the bailout.
wait till duncan’s mom and pop get the statements.
SRS had a Red Tag sale the day they banned short selling @68. Wish I had loaded up more on that day.
The CRE shoe is about to drop big time – with unemployment @ 11 %, Christmas has been canceled. Lots of stores are going to cancel their leases in the shopping centers.
Note – Please do not take any investment advice from me. I am a hockey dad from Wasilla.
someone is hiring:
http://www.bloomberg.com/apps/news?pid=20601087&sid=awfT2kVxdPbU&refer=home
Clot, [realizing it's probably a dumb question]
So, if I want to buy SKF I can (I haven’t tried since selling a huge block– all but 2 shares — of it at its last runup)
[I can hear CF bristling all the way up here in Bergen...]
I understand all the disclaimers and have traded securities – profitably — since I was 15, so I don’t need the lecture, thanks.
sl
Here is an interesting chart from another blog I follow. It shows the main banks for each country and how much of their assests are a percentage of GDP. For interest, Bradford and Bingley the UK bank just nationalised came in at 4%. It was a cheap one to bail out.
http://www.ft.com/cms/s/0/61d7e148-8f15-11dd-946c-0000779fd18c.html?nclick_check=1
Country Bank Country GDP Bank Assets Bank Assets to GDP %
(€ billions) (€ billions)
Iceland Kaupthing 8.5 32 623%
Landsbanki 8.5 53 374%
Ireland Bank of Ireland 179.8 183 102%
Allied Irish 179.8 178 99%
France BNP Paribas 1623.7 1694 104%
Spain Santander 692.5 913 132%
UK RBS 1644.7 2079 126%
HSBC 1644.7 1608 98%
Barclays 1644.7 1542 94%
LTSB/HBOS (est) 1644.7 1282 78%
Belgium Fortis 348.9 886 254%
Dexia 348.9 605 173%
KBC 348.9 356 102%
Netherlands ING 473.1 1370 289%
Rabobank 473.1 571 121%
Germany Deutsche Bank 2237.2 1917 86%
Austria Erste Bank 241.6 206 85%
Italy Unicredit 1284.9 1022 80%
Cyprus Bank of Cyprus 12.6 32 253%
Switzerland UBS 294.7 1426 484%
Credit Suisse 294.7 854 290%
Canada BMO 974.8 302.2 31%
RBC 974.8 516.6 53%
TD 974.8 409.4 42%
Scotia 974.8 380.2 39%
US BofA 10657 1321.1 12%
JP Morgan 10657 1202.7 11%
Citi 10657 1684.5 16%
this is kind of awesome… the market is giving the bailout the bird!!!
“But if the government pays prices that fairly factors in likely defaults, it will bankrupt the very institutions it is trying to bail out.”
make,
Why would the govt do that? The market has already priced this crap, .05 Merrill. No, the govt recognizes value in this toxic muck. Maybe we’ll pay .70 or .80 on the dollar. Our reward? Goldman, who sells at inflated prices to us, will happily come back and take it off our books. Oh, at Merrill prices. Thank you taxpayer.
sl (258)-
SKF is locked up (although I have heard that redeemed shares of the float are allowed to trade).
SRS is available for purchase.
Just to clarify, no new shares of SKF are being created by State Street.
They had Wells Fargo CEO on CNBC, according to him there was no signed agreements between Citi and Wachovia. Considering Wells has Wachtel as their counsel I like their odds of this going through. Of course who knows what is what given the fact there’s no agreement to look at since it’s not public. Same sh*t with the JPM/WAMU deal. Get the government involved and everything’s a secret.
Why don’t they just do away with Edgar and Bergabe and Paulson will just tell us what stocks are worth and what the bondholders rights are?
“threatened with martial law ”
Cheney would do it too, and George Herbert Hoover Bush would go along with it so he could get a few more years to put things right and keep hunting bin Laden.
BC 261
I said this last month.
Buy GS and sell America.
“To your list of what Israel has done for the US lately I would add:
* Consistently provides evidence to terrorist groups that a “spoiled” Western society will withstand barrages of rocket and suicide bomber attacks on its civilians and maintain an unfaltering resolution to fight
* Exposed Syria’s role in supporting terror by facilitating the transport of Iranian weapons to Hizbullah and supplying its own long-range weaponry to this terror group
* The US and Israel cooperate extensively on defense, intelligence and economic matters. By doing so, they advance their common interests of promoting freedom, fighting extremism, and seeking peace and prosperity.
* The anti-western, anti-American groups Hamas and Hizbullah are kept in check via Israel’s military strength in the Mediterranean region without the need for American military support. Contrast this with the situation in the Gulf where there is no Israel-equivalent and where are tax money is being spent to support the US troops.
* The Arrow ballistic missile defense system was the result of a joint program with Israel’s high tech military industry. Development costs were shared equally between a country whose population is 7.3 million and its ally the US, population 305 million.
* Real-time intelligence on terrorist groups and expertise in counter-terrorism
* Unmanned aerial vehicle technology
* Radar decoy technology
* Billions of dollars in trade between the countries”
So basically, they helped us with our god awful foreign policy?
You should also add that they attacked the USS Liberty. That’s right, they attacked an American ship and killed American soldiers.
Some one please tell me the “No Review” clause didint stay in the bill!!!!!!!
if the original clause that stated that paulson’s bailout actions were beyond the review of any branch of the government stayed in the document then we now have a dictator running the country.
He who controls the money controls the empire. And it appears that paulson now has uncontestable control of the empire for the next 2 years
From Wikipedia:
Dictator was a political office of the Roman Republic. The dictator was above the three branches of government in the constitution of the Roman Republic as no other body or officer could check his power.
A legal innovation of the Roman Republic, the dictator (Latin for “one who dictates (orders)”) — officially known as the Magister Populi (“Master of the People”), the Praetor Maximus (“The supreme Praetor”), and the Magister Peditum (“Master of the Infantry”) — was an extraordinary magistrate (magistratus extraordinarius) whose function was to perform extraordinary tasks exceeding the authority of any of the ordinary magistrates.
The Roman Senate passed a senatus consultum authorizing the consuls to nominate a dictator, who was the sole exception to the Roman legal principles of collegiality (multiple tenants of the same office) and responsibility (being legally able to be held to answer for actions in office); there could never be more than one dictator at any one time for any reason, and no dictator could ever be held legally responsible for any action during his time in office for any reason. The dictator was the highest magistrate in degree of precedence (Praetor Maximus) and was attended by 24 lictors.
“The monumental flaw in this argument is that the mortgage backed securities are in fact highly liquid, just not at the prices the owners would like to receive.”
THIS is why hearings were necessary and the fact that no hearings were held tells you that they did not care about facts.
How long before the enforce a Bank holiday?
This bailout will do nothing. read the following commentary below. Buckle your seatbelt!
From another blog
<i. If you’d ask around, nearly everyone would say that it’s impossible for a country to go bankrupt. Yet, hard as it may be to imagine, we soon could see a few exceptions to this immovable truth.
After Ireland, under a threat of bank runs, guaranteed all deposits in its banks, which have liabilities that are 300% of the country’s GDP, more events in Europe follow at the speed of light. Greece also gave a 100% guarantee. These are empty promises; if all banks would fail, governments would be incapable of living up to them. These are made to prevent bank failures. But that leaves the cause for those failures unattended. And there lies the rub. The Netherlands, only days after it bought 49% of Fortis with the Belgians for $16 billion, just fully nationalized the bank’s Dutch branches. Price tag: $24 billion.
Iceland is the prime princess of them all. Its banks have liabilities at 800% of GDP. The country bought one of the banks, and the rest are falling. Iceland has been turned into a casino in the past decade, and now the house is broke. It’s just a waiting game by now.
Still, at least Iceland has a central bank. The countries in the European Monetary Union, the ones that use the Euro, do not. And that may have dire consequences. Greece’s example will probably soon be followed by Portugal. That can be managed. But if right afterwards, larger nations like Italy and Spain join the hand-out choir, the ECB will no longer be able to help.
It will be up to the governments, directly, to buy banks left and right, for there is no doubt they will be falling like an avalanche of boulders. To have any chance of success, that will require control over currency and interest rates. Which they no longer have. So now the question is: Will the EU survive till Christmas? Will its member nations start defauling on their debt before then? Can they make a smooth transition back to true nationhood in time?
Along the same line: the US government won’t go broke soon (though we can argue that in theory it already is), but the separate states can. They have no central bank either. California needs $7 billion within days, just to pay state employees’ salaries. Other states have cancelled road building projects, and who knows what else. And we haven’t even started the crisis. Neither will the $700 billion alleviate their problems.
Governments at state, county and town levels face a multifold whammy. They can’t get access to credit, since the bond market died. They have lost billions thorugh faulty investments. Their tax revenues are starting to plummet. And their budgets are all based on insanely positive economic expectations. And this is where we all will first see the crisis turn from a somewhat detached far-away one into a force that hits us smack upside our heads.
We will very soon see widespread cancellations of services, multi-million lay-offs, defaults of pension funds, crumbling roads and even serious challenges to essential provisions such as water treatment. There is no way the federal government can bail out every lower level of government that needs money. It is simply not going to happen. The only remaining option is sharp increases in taxes, but that is a dead end: citizens are already broke, their home values are sinking, they are losing their jobs, and the last thing they’ll accept is rising taxes across the board.
Meanwhile, in dreamland, the Dow is rising, and there are actually people out there who think the Paulson bail-out will restore confidence in the markets. But next week, the next bail-out will be needed. We are in a state of permanent emergency, and there is nothing in sight that can stop the bleeding. We do what we always do, because we are so darn good at it. We make everything worse. Hey, it’s a talent.
gary Says:
October 3rd, 2008 at 3:34 pm
$700,000,000,000
I like the fact it starts with 7 and we were down 777 when it did not pass the first time.
If we lay off do nothing civil servants how will we know the effects, will less of nothing not get done?
Shore –
You were looking for the DOW figures during the Chimp-in-Chief’s tenure?
January 20, 2001: 10,659
October 03, 2008: 10,325
% Change = -3.1
There apparently is talk again about reducing loan amounts for struggling homeowners, once Obama takes office.
civil servants lay off? they will go down with the ship..
always remember as the titanic went down
the band continued to play
vic [273],
What’s real losses?
How they voted:
NEW JERSEY
Y: Yes
N: No
Democrats — Andrews, Y; Holt, Y; Pallone, Y; Pascrell, Y; Payne, N; Rothman, N; Sires, Y.
Republicans — Ferguson, Y; Frelinghuysen, Y; Garrett, N; LoBiondo, N; Saxton, Y; Smith, N.
BC Bob (275) -
True. Gold went up 300%?
Pretty scary stuff from Roubster..
http://www.rgemonitor.com/roubini-monitor/253853/financial_and_corporate_system_is_in_cardiac_arrest_the_risk_of_the_mother_of_all_bank_runs
I hope my paycheck doesn’t bounce..
# JF Says:
October 3rd, 2008 at 2:25 pm
“…boy, those are all wonderful things that an American-Isreali alliance has produced. Terrorism for one, was never an American problem prior to 1948. ……
There is no open debate in this country on the matter. There in lies the reason our political system is broken.
No one is looking at the root cause of all the things you just mentioned. That’s my point. There is this shut up and don’t talk about it mentality.”
No open debate? Really? I just offered you some and like Palin you refused to respond directly. Instead you made up an answer to the question in your head.
No terrorism pre-1948? Really? So Pearl Harbour in your opinion wasn’t in many ways a terroristic attack? Cross border attacks from Mexico early in the States history? Many acts of violence against civilians and homes during the Civil War? Kamikaze pilots were suicide bombers, or didn’t you know that?
Terrorism – or controlling a population with fear has been a tactic used since time immemorial.
Israel doing the US’s dirty work in the region and putting itself on the front lines isn’t in Americans interest? Really?
How about Israel dumps the US and America has to send out tens of thousands of troops to deal with assorted issues it has across the region? Are you going to volunteer for it.
You want to debate? I am a left wing Israeli. I would be more than happy for Israel to NOT be an issue at all in this election. I would prefer it even more for it not to be the pet project of a bunch of Right Wing American nuts using it for their own ends. I don’t really want my familiy members dying for someone elses war.
When you blame Israel, a foreign sovereign nation 6,000 miles away for domestic issues you are doing nothing more than looking for a scapegoat due to your own paranioa, fear and lack of education. See the previous post where it was discussed who would be the scapegoated ethnicity during bad economic time. BC Bob suggested the Arabs or Mexicans. I said it would be the Jews because it always is – anti-Semitism is a lazy disease. You talk Israel and AIPAC but you are just an anti-Semite who doesn’t have the guts to be honest about it.
Amazing,
Bid of $1.75 on eBay gets abandoned Saginaw home
“BC Bob suggested the Arabs or Mexicans.”
Lisoosh,
Not I. Didn’t even read the posts pertaining to this subject.
# ben Says:
October 3rd, 2008 at 4:03 pm
“You should also add that they attacked the USS Liberty. That’s right, they attacked an American ship and killed American soldiers.”
Over the years so did the British, Japanese, Mexicans, Italians and Germans to name a few. And WAY more soldiers.
Are they our allies now?
Futures on the Chicago Board of Trade show an 84 percent probability the Fed will lower its 2 percent target rate for overnight lending between banks by a half-percentage point at its Oct. 29 meeting,
vic,
1/01/01- $275
John [283],
Another rally to sell. Next.
I am suprised no rally after $700B bailout package. Instead down 150. wtf
I won’t be surprised if Hank asks for another 700B in the coming weeks.
What is the ticket symbol for Ramen?
#280 lisoosh: To which I would add, the only people (Jewish), who took a barren waste land,and turned it into a viable functioning country.
Not to mention that it gurantees access to the holy sites for all 3 of the religions that have ties to Jerusalem. That also pays to maintain these sites, even the non-Jewish ones.
The Palestinians had a chance to show the world that they were capable of developing some kind of functioning government and quality of life for their people, once Israel withdrew from Gaza.
And Hamas’s response was lets continue to lob rockets into Israel.
They have no desire to improve the lives of ordinary Palestinians.
Sorry BC. It was kettle, from yesterdays late night piece on 1873.My apologies.
I shouldn’t even touch this cr@p with a barge pole but I am cranky and in no mood to be painted as some kind of fifth column secret cabal member due to the fact that I don’t believe in the New Testament.
#284 John: And??
Wow. A selloff of over 100 points on the dow after the bailout?
I reiterate my strong buy rating on guns and upgrade canned food to speculative buy.
Step back a year;
“I have no interest in bailing out lenders or property speculators.” Paulson said in prepared remarks for a speech given Tuesday at Georgetown University.
“Referring to HopeNow, he said, “This is a 100 percent market-based solution. I believe in markets. The government is doing nothing here but facilitating people coming together.”
“Paulson also downplayed the possibility that the housing crisis could plunge the nation into recession. “I’ve seen turbulence in the market a number of times and I can’t think of any situation where the backdrop of the global economy was as healthy as it is today,” he said.
http://money.cnn.com/2007/10/16/real_estate/Paulson_leaning_on_lenders/index.htm
3b – I’m actually pretty left wing in Israeli circles. I’d be more than happy for the Pals to have their own state (would prefer it to be friendly) and don’t view Israel as some perfect paragon. It has its good side and its flaws, like any other country.
I just get tired with the disguised anti-Semitism of jf and the silly “Israel is a pariah in an oasis of peace” BS of Ben. I’d be willing to bet I know a ton more about the history of EVERY nation and people in the region than either one – and a h*ll of lot more personal experience.
And now I am done with this topic.
Sorry Grim. Lot of tension out there these days.
Wish I had thought of this one;
“… having read the latest Paulson bill, we fear we are back to training Pavlov’s banker dogs to piss on the carpet of capitalism. We shall live with the stink and stain for a long time”.
Independent Strategy, investment research house.
#294 lisoosh: Agreed.
They are flying on a Friday afternoon;
“A new acronym: BABOONS… baby boomers with no savings”
Lisoosh and 3b, my sentiments exactly. The Palestinians claim unfair treatment from the US, etc. They should realize if they were not essentially a terrorist government that behaved in a civil manner perhaps some kind of agreement can be made. Until that point there is no talking to them and no chance to improve the people’s lives. Your point with #280 though is a little skewed as while the country is a success and natural resources do not abound the resources to start the country were brought in from other countries by people principally wealthy zionists from the US and Britain. So they really didn’t start from zero, if they started from zero chances are they would have been killed by their neighbors early on. Israel has not hurt the US in any material way from my perspective. The arabs have hated america for a long time and Israel is just the tip of the iceberg. Both WTC attacks were in response to military bases in the Middle East specifically Saudi Arabia. Also we have had problems with Iraq and Iran due to our playing in the region since the 50′s and the anger over what we did to the people illicit an extremist muslim response. So our issues in the Middle East are way more complicated than our relationship with Israel.
All this j talk is making me hungry for bagels and lox
Well, I went home with the waitress
The way I always do
How was I to know
She was with the Russians, too
I was gambling in Havana
I took a little risk
Send lawyers, guns and money
Dad, get me out of this
I’m the innocent bystander
Somehow I got stuck
Between the rock and the hard place
And I’m down on my luck
And I’m down on my luck
And I’m down on my luck
Now I’m hiding in Honduras
I’m a desperate man
Send lawyers, guns and money
The sh*t has hit the fan
Everything that dies, someday comes back;
SAN FRANCISCO (MarketWatch) — The Securities and Exchange Commission ban on short selling of financial stocks will be lifted just before midnight on Wednesday. That means investors can put new bearish bets on shares of financial-services companies starting Thursday. The SEC said earlier this week that the ban would expire three trading days after the $700 billion government bailout became law. President George Bush signed the legislation into law on Friday, after the House of Representatives voted for the plan earlier in the day.
Why are realtors getting off blame free?? Palin was quick to blast the mortgage lenders but what about predatory realtors that KNEW their buyers could not and should not be able to afford these houses they were selling them. Ethics was completely thrown out the window for a quick buck…sorry to say it but I believe it true
[264] HEHEHE
Yikes, Rodgin Cohen for Wachovia and Richard Kim for Wells. That is the sound of about 20K an hour with associate time included. I would bet on them versus their counterparts at Skadden and DPW.
[300] skep,
sounds like my house.
[291] Comrade zieba1
Way ahead of you.
Comrade Kettle, d’ya think the compound is looking a lot more attractive these days???
#298 jcer
“…while the country is a success and natural resources do not abound the resources to start the country were brought in from other countries by people principally wealthy zionists from the US and Britain.”
Hmmmm…. if only the the Palestinians had some wealthy fellow practioners of the Islamic faith who could supply them with the startup capital to get them going down the right pat.
* practitioners
this video is something else. It is about the company in charge of trashing everything left behind in a foreclosure. I’m glad that they didn’t actually interviewed the people. it would had made it too hard to watch.
http://andrewsullivan.theatlantic.com/the_daily_dish/2008/10/memories.html
HC
oy vey!
* practitioners of the Islamic faith who could supply them with the startup capital to get them going down the right *path.
I use the 1 suffix because my original nick zieba always ends up in moderation. At any rate, I know a few architects who owe some favors, who in turn know everyone down the line to the guy mixing the cement… we can make this happen on the cheap.
Does anyone have any land to donate?
press release from congresswoman Diane Watson today:
I also share my colleagues’ concerns about the massive failures of the markets as well as government sponsored enterprises Fannie Mae and Freddie Mac. My colleagues and I have vowed to work hard to get to the bottom of this mess. I am therefore pleased that Speaker Pelosi has tasked Henry Waxman, Chairman of the Committee on Oversight and Government Reform, to convene a series of hearings, beginning next Monday.
now watch this: http://www.youtube.com/watch?v=_MGT_cSi7Rs
still_looking Says:
October 3rd, 2008 at 3:52 pm
Clot, [realizing it's probably a dumb question]
So, if I want to buy SKF I can (I haven’t tried since selling a huge block– all but 2 shares — of it at its last runup)
[I can hear CF bristling all the way up here in Bergen...]
I understand all the disclaimers and have traded securities – profitably — since I was 15, so I don’t need the lecture, thanks.sl
STILL: There is an article in Bloomberg Wealth Manager, the Ocotber 2008 issue titled “Volatility Surprises” by James Picerno that warns about the viability in returns for leveraged ETFs. The result of the dramatic shift in implied volatility would cause returns to deviate significantly from advertised. A simplistic description would just call it “tracking error”. However, in reality, the sponsor of the fund would likely respond that the mechanisms were functioning as they were designed. At the end of the day, you should be informed consumers and know what you are buying. As an example, they showed instances of regative returns for a 2x fund that was supposed to be positively correlated with an index.
Caveat Emptor
viability = variability
regative = negative
I can see Jon boy now….
“California may need a $7 billion emergency loan from the Federal government for day-to-day operations and to pay teachers’ salaries, nursing homes, law enforcement and every other State-funded service this month, Gov. Arnold Schwarzenegger warned in a letter sent Thursday to the U.S. Treasury secretary.”
308 HC
WOW. 74 employees firm with a trash out business model.
Any one want to start something like this here.
I’m down.
zieba1, give me a couple of months. I’ll have acres and acres for you.
/scratches head/
aha, I see we need to scale up the plan. I’ll pass it along to the squares.
I’ll be taking requests, within reason, for customized living quarters until October 26th at which point the plan will move into its second and penultimate stage.
http://www.cic.gc.ca/english/index.asp
I’ve been spending more and more time perusing this link…..
#308 HC
Let me guess, the pols will say to solve this we need less regulations.
That video was incredible.
Hey! Some good news from NJ!!
“Regulators in New Jersey on Friday awarded rights to build a huge offshore wind farm in the southern part of the state to Garden State Offshore Energy, a joint venture that includes P.S.E.G. Renewable Generation, a subsidiary of P.S.E.G. Global, a sister company of the state’s largest utility.”
http://cityroom.blogs.nytimes.com/2008/10/03/new-jersey-approves-offshore-wind-farm/index.html?hp
Is this all you have to do to get your mortgage forgiven?
http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html
SP debate FlowChart!
http://andrewsullivan.theatlantic.com/.shared/image.html?/photos/uncategorized/2008/10/03/palinflow.jpg
I love the down market, let them cut rates and give a whole bunch of other banking perks to the big three of banking, well now big four and lets rock on. 1% fed funds before I get in office, btw my last name is mcain.
REPUBLICANS who switched:
Rodney Alexander (La.)
Gresham Barrett (SC)
Judy Biggert (Ill.)
Charles Boustany (La.)
Vern Buchanan (Fla.)
Howard Coble (N.C.)
Mike Conaway (Texas.)
Charles Dent (Pa.)
Mary Fallin (Okla.)
Rodney Frelinghuysen (N.J.)
Jim Gerlach (Pa.)
Peter Hoekstra (Mich.)
Joseph Knollenberg (Mich.)
Randy Kuhl (N.Y.)
Sue Myrick (N.C.)
Jim Ramstad (Minn.)
Ileana Ros-Lehtinen (Fla.)
Jean s****** (Ohio)
John Shadegg (Ariz.)
Bill Shuster (Pa.)
John Sullivan (Okla.)
Lee Terry (Neb.)
William “Mac” Thornberry (Texas)
Patrick Tiberi (Ohio)
Zach Wamp (Tenn.)
DEMOCRATS who switched:
Neil Abercrombie (Hawaii)
Joe Baca (Calif.)
Shelley Berkely (Nev.)
Bruce Braley (Iowa)
Andre Carson (Ind.)
Emanuel Cleaver (Mo.)
Henry Cueller (Texas)
Elijah Cummings (Md.)
Donna Edwards (Md.)
Gabrielle Giffords (Ariz.)
Al Green (Texas)
Mazie Hirono (Hawaii)
Jesse Jackson Jr. (Ill.)
Sheila Jackson Lee (Texas)
Carolyn Kilpatrick (Mich.)
Barbara Lee (Calif.)
John Lewis (Georgia)
Harry Mitchell (Ariz.)
Solomon Ortiz (Texas)
Bill Pascrell (N.J.)
Ed Pastor (Ariz.)
Bobby Rush (Ill.)
Adam Schiff (Calif.)
David Scott (Georgia)
Hilda Solis (Calif.)
Betty Sutton (Ohio)
Mike Thompson (Calif.)
John Tierney (Mass.)
Diane Watson (Calif.)
Peter Welch (Vt.)
Lynne Woolsey (Calif.)
@ADA
How does someone get a 30 year mortgage at 86 years of age?
“Goldman Sachs Bribed Senate To Pass Bailout Bill”
http://tinyurl.com/4drvnn
How much bribe money does it take to transfer $700 Billion taxpayer dollars to Wall Street’s elite?
GOLDMAN SACHS CONTRIBUTIONS:
Obama, Barack (D-IL) $691,930
Clinton, Hillary (D-NY) $468,200
Romney, Mitt (R) $229,675
McCain, John (R-AZ) $208,395
Himes, Jim (D-CT) $114,748
Giuliani, Rudolph W (R) $111,750
Dodd, Christopher J (D-CT) $105,400
Edwards, John (D) $66,450
Specter, Arlen (R-PA) $47,600
Emanuel, Rahm (D-IL) $32,950
Reed, Jack (D-RI) $30,100
How much money did your Represenative get from Big Bankers to look the other way and pass a bill that the American people clearly do not want?
HELP SPREAD THE WORD…
http://www.WashingtonYoureFired.com
“The unemployment trend by state”
http://tinyurl.com/4mqx6f
“Fear Mongering exposed by Mr. Sherman on CSPAN”
http://tinyurl.com/4tbg6n
JF (60):
First of all, I’m betting you have never been here before. Number two, do you work for WRMEA?
Get out of here you anti-semetic pig!
RE #308..WOW what a moving video. Seeing what people leave behind was mind boggling.. But like the guy said…they don’t have $$ for a moving van and they just take what they can fit in their car. Yikes. Poor kids. Mine go to pieces if I forget a stuffed animal
“The Bailout is for China?”
http://tinyurl.com/4hf993
re #308..Lisa Ling? Long time no see..
BC (301)-
Just circled Wednesday in red Sharpie on the little calendar in my bunker.
Gonna pick me up some shiny new toys (sorry, Booyah)…
This bailout thing is going too far…forgiving mortgages. Come on!
http://blogs.usatoday.com/ondeadline/2008/10/ohio-woman-90-s.html
An article in the NY Times from September 30th, 1999. I believe this was under the (ahem) Clinton Administration:
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1
ahhh. I see ADA beat me to the punch.
Ok, on a side note… who wants to meet for a beer or two tonight? Anyone? I’ll meet half way, what say you?
Chi (312)-
The tracking issues are well-known and well-documented now. State Street has actually done a tremendous job of making SKF perform, under the most onerous of conditions. I am extremely satisfied with their disclosures and the way they have handled a near-impossible task. Once the markets return to something resembling normal, I look forward to pursuing opportunities to take more of my business to them.
BTW, these issues were all caused by the reckless, criminal racketeering of the cabal of thieves and liars known as the SEC.
These thugs- and everyone else on Wall St- should emptor up to the fact that in three business days, they’re gonna get smacked with a shitstorm of Biblical proportions.
Wait ’til Wednesday.
http://www.cnbc.com/id/26983791
California runs out of money on October 29th and I get paid on the 31st…Maannn.
Cindy (340)-
When you’re ready for some anarchy, drop me an e-mail.
I can show you how to get sick wit it, Rodney King-style.
“Wait ’til Wednesday.”
- Black Wednesday? I sure hope not coz they can blame it on the short sellers.
Wonder how nobody commented on short selling this Monday. Idiots!
BTW, picked up some Oct 140 calls on SKF – they sure are on sale.
Good Luck Clot! I want some of my bailout money back!
“How does someone get a 30 year mortgage at 86 years of age?”
John McCane was approved for another mortgage?
Shouldn’t one know how many homes he has before he tries to buy another?
Can someone let me know when the recession finally arrive in NJ?
Because so far I don’t see it, the traffic is horrific, lines at the supermarket are long,
my mailbox is full of job offers, rents keep going up and it takes me an hour to get my lunch. Where’s the recession?? Someone?? anyone?
Gary: “Ok, on a side note… who wants to meet for a beer or two tonight? Anyone? I’ll meet half way, what say you?”
That would probably be a state slightly north of Texas. Got plane tickets Gary?
The US has Pelosi, Frank, Klink, et al.
My beloved Magpies? Well, we’re sort of the BPL version of subprime. Here’s our new manager:
“Newcastle United’s interim manager Joe Kinnear has launched an astonishing expletive-laden attack on his critics over the press coverage of his arrival on Tyneside.
Kinnear, the surprise choice to fill the void left by Kevin Keegan’s departure, swore more than 50 times during his first official press conference as manager of the Magpies and bombarded a number of journalists with a verbal tirade.
• To read an edited transcript of Kinnear’s x-rated rant click here. WARNING: Contains expletives.
The 61-year-old, who was last involved in football management at Nottingham Forest four years ago, claimed the media had already attempted to undermine his influence at Newcastle and that his first press conference would also be the last for many of the journalists there.
The former Wimbledon and Luton Town boss came out fighting with an onslaught against those who he believed have ridiculed him, insisting they would not be welcome at further meetings and that in future he would only talk to two local papers that he would hand pick.
Although his press conference was littered with four-letter words Kinnear insisted that the pressure of the job had not got to him and that he was simply defending himself.
Edited, Kinnear said: “I will stand up and fight for myself in any corner. You’re not going to frighten me in any manner.
“Whatever you do, or whatever headlines you run, you’re not going to embarrass me.
“I’m not going to stand for it. I’ve come up here for a simple chance to prove myself. Get off my back and let me get on with my job. That’s all I ask.”
Gary: NYTimes article was posted a few days ago. I pointed out the paragraph in the article that stated…
“In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.”
Stu,
I’ll meet you in an hour! ;)
Gary ha ha!
Morgan, from a little earlier tonight. BTW, there are still free conference call spots open for Sunday PM:
“Fraud or Ignorance – The talking heads are really pumping this market. The guys on Fast Money and other programs that use active traders as their guest and hosts, are scrambling to put a good shine on how undervalued this market is, and what a steal it is now. That’s because they are stuck with stocks on the downside, and they need to either sell them to suckers or pump the market up artificially. If you followed their advice over the last few months, you have lost a pile of money. A big, huge pile.
Global Markets Booming – The yappie-yakkers don’t stop with touting the US market. The Global Bugs are still talking about how great things are globally . . . that’s like listening to Osama bin Laden tell you he loves you and wants to give you a hug and a wet kiss, when he really wants to squeeze the life out of you and bite out your tongue. These guys on TV are truly demonstrating just how desperate they are, and you can hear it in their voices. It’s funny how they refer to this as panic, desperation and market manipulation. Whhhhhhatttt? Who do they think they are kidding? They just got what they wanted, and the markets still went down. If they can’t figure it out by now, they need a map, a guide, and someone to hold their hand. The yappie-yakkers got scammed by the Big Boys on Wall Street.
What’s Next? – I could write about what has transpired this week, but I would be writing for three days. As my clients know, I have been working 20 hours a day for two weeks now. They’ve heard it in my voice. It’s not the desperation you hear in the voices of guys like Buffet, Wilbur Ross, Bill Gross, the Fast Money bongo-boys, Ka-Ka Cramer or any of the other con artists. So instead of writing this month’s usual report, I have been holding additional conference calls, and I will hold another big one on Sunday night at 9:30PM Eastern. It will be open to the public but limited to the first 200 to register. There is no charge to the first 100 to register. Beyond the first 100, there will be a $50 fee. On Monday, I will hold two early morning calls before the market opens. One call for General Clients and one call for Trading Clients. Of course, Trading Clients are invited to the General Client call as well.
What Do You Do Now? – If you’re a client, you are having a very good week. In fact, if you’re a client, and you’re not smiling, you didn’t listen to me. My clients are up over 50% since June 27th, when we launched the public portion of my services. My Trading Clients are up triple digits over the last 30 days alone.
If you are not a client, you should have followed my advice that was public in my blogs. I’ve told everyone to sell stocks since August of 2007. I’ve been short stocks since then and long PUTs. We have made a lot of money, while the folks that left their money in mutual funds are down 25% or more. Think about that. If you had $500,000 in an IRA invested in mutual funds in August of 2006, you now have less than $375,000. You lost $125,000. Gone. Where? In the pockets of the Big Boys on Wall Street . . . and my clients. If you would have sat in cash and then followed our model portfolio, you have $750,000 right now. Let’s see . . . $375,000 or $750,000? Dirt Pies or Ice Cream? Ka-Ka Cramer or Captain Mike?
So What Do You Do Now? At the very least, you sell all stocks on Monday. If you want guaranteed return OF capital, put it in Treasuries. After all, that’s part of Paulson’s plan. If you want to invest and earn a better return, you need to invest wisely. You can join our client roster and learn more about investing and how to deal with the financial crisis.
We’re At The Bottom – Big Rally Coming – You also believe in the Tooth Fairy, right? We are still a long way from the bottom. The yappie yakkers on TV want you to believe that Paulson’s plan of pumping your money into the pockets of Wall Street is going to help things. Nonsense. The yappie-yakkers also want you to believe the coming rate cuts will help things. NOT AT CHANCE. Read that again and again. If you buy into that, you will be sucker-scammed. You will be buying into a short rally, just like the folks did when the bail-out Bill passed on Friday. Rates ARE going down, but just like in Japan . . . even with free money, we are in deep trouble. We are in way over our heads. We have banks that are busted. We have debt that we absolutely refuse to admit. Hey, wake up Washington. We’re broke. We can’t borrow from anyone, anywhere.
So What? – So we are in a heap of trouble and if you have not planned properly, you know it. Just take a look at your portfolio. If you want to start preparing for what is still coming, join the conference call on Sunday night.
Surprises? – Absolutely. But not really surprises anymore. I now expect King Henry to change the rules, as he did this week by pressuring the IRS to change rules so his buddy Bob Steel could recoup his losses at Wachovia. Surprises? How about the fact that King Henry has already spent one trillion dollars. That will probably come as a surprise to many of Paulson’s zombies when the media figures it out. Surprises? This weekend you can expect a plethora of surprises from King Henry. And we might see a market rally on Monday. But that market rally serves two purposes. First, it gives King Henry’s men on Wall Street more opportunity to rip off the commoners and the pension funds. Second, it gives my clients another chance to put more capital to work in shorts and PUTs. The week before last I told my clients to go ALL IN. For those that did, they were handsomely rewarded. For those that did not, if we get a rally on Monday . . . push it all in.
Regards,
Mike
P.S. I heard Cramer pulled a flip-flop on Bob Steel and Wachovia. Now he thinks Bob Steel is some kind of god. Cramer really needs to be locked up along with Paulson. What Cramer doesn’t realize about Wachovia is this . . . it is toxic. It is dead. The only reason the Wells Fargo deal emerged, was Warren Buffet and his relationship with Paulson. Think about it. Buffet gets a private call from Paulson on a Sunday afternoon. Yes, he actually shared that information with the world in an interview. Buffet bails out Goldman Sachs with a special buy-in to stop the slide. Buffet gives GE mouth-to-mouth. Wells Fargo end-runs Citi, even though the FDIC favors the Citi deal, but Paulson wants the Wells Fargo deal. And you thought the Fed and the FDIC were on the same team. Silly you. There is only one team now. King Henry’s Raiders. But enough of that for now. I’ll talk about it on the Sunday evening Conference Call if you want to hear all the dirty details.”
Morgan link:
http://realestateandhousing2.blogspot.com/
ChiFi, 312
Thanks… I appreciate your concern and I can promise you that I am not nearly as cavalier as others.
This will mark the first year I have ever produced short term capital gains.
I’ve been fortunate to have had most of my mistakes early on (at smaller amounts) thankfully.
I do need to find out about tax implications – all I know is Short term CG is taxed at 50%… what about state?
And.. is it worthwhile selling off 1 of the 2 dogs in my portfolio to balance some of those gains?
Just wondering…
sl
I just read the latest Roubini. Makes me want to cancel my cruise and move all my assets in to gold. His solution does appear to be the best option I’ve read so far.
http://www.rgemonitor.com/roubini-monitor/253853/financial_and_corporate_system_is_in_cardiac_arrest_the_risk_of_the_mother_of_all_bank_runs
I suppose what scares me is that we all might not be getting our next paychecks, yet so few of us are even paying attention. I’ll tell you, the muted market reaction to the passing of TARP has really surprised me. I certainly like the fact that my SRS closed near 100, but the implications scare the bejeezus out of me.
So far, Los Angeles has rocked. I can’t wait to do dinner with my old friends from Jersey later tonight.
Have a great weekend ya’all.
#346 What kind of job offers come in your mail box. You know you used to be amusing, now you are just a complete moron.
Oh and I was in my Supermarket tonight and it was empty.
#355 stu: I’ll tell you, the muted market reaction to the passing of TARP has really surprised me.
Muted? More likely negative.
And just in case you are curious… [all the usual disclaimers...]
I had been tracking a bunch of energy stocks. One of them was CEG. Constellation Energy Gp.
I had target purchase prices for under 45. I had been tracking it for about 8 mos or so. One day I look and it’s under 40… I’m ecstatic… I’m looking for a 5-10 yr outlook on it… So, I buy a bit at 39… it drops to 25 I buy more…. then 21 — yup… more… then go to take a shower… in the hour that I took a shower, got dressed, farted around and came back to my computer it had dropped to 13 and immediately popped up to 32.
I never set trade triggers before leaving the computer… So… I’m crying. Missed the bargain… in an hour!!
Next day I hear Warren Buffett’s company bought 4.7 billion of CEG at 26.50/shr.
Such is life.
I’d been praying for the day I would make a stock pick like Buffett…even if it was simply and purely coincidental.
sl
“The burden of outsourcing
U.S. non-oil trade deficit costs more than 5 million jobs”
http://www.epi.org/briefingpapers/222/bp222.pdf
“Non-oil trade deficit costs jobs in every state”
http://tinyurl.com/498t6y
Check out this asking price
http://www.realtor.com/search/listingdetail.aspx?ctid=45426&typ=7&sid=9ff14be1b84546c1ae182162b2d42d51&pg=11&lid=1100927396&lsn=110&srcnt=134#Detail
http://www.washingtonyourefired.com/
Fannie forgives loan for woman who shot herself as she was about to get foreclosed and evicted.
http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html
Hoboken is seeing some foreclosures but prices are not dropping.
http://www.realtytrac.com/MapSearch/MapSearch/MapSearch.aspx?txtZip=07030#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
Frank,
When the hole damn thing collapses like black matter, will you finally shut your pie hole?
I wonder why no-one here posts stuff from Mr. Mortgage. He is awesome. Maybe because he is largely West Coast, but still . . .
Here is the start of what he posted today (you need to go to his site for the actual charts):
Wells Fargo Absolutely Did Subprime, Stated, Interest Only, No Ratio Etc
Posted on October 3rd, 2008 in Daily Mortgage/Housing News – The Real Story, Mr Mortgage’s Personal Opinions/Research
**NOTE – Mortgage/Real Estate professionals…feel free to share your experiences in the comments section below. Due to a consistent denial by Wells management, there is a belief that Wells was the safest out there through the bubble years and took very little risk. Tell us about your Wells deals…did they really do things so much safer than everyone else? From my experiences, they were one of the busiest and ‘best’ lenders out there during the bubble years, that’s for sure. But in the mortgage business ‘best’ means easiest and most risky. That like saying ’she is a great appraiser’ – wink-wink.
The CEO of Wells was just on CNBC in a lengthy interview with Maria Bartaromo and he said “we never did stated income, low document, no document, interest only or subprime loans.” That is not accurate. I have covered Wells to death but here are a couple of documents I think the CEO might like to see. I don’t want to sound like I am coming down on Wells, but it is this type of deception that has turned a crisis of confidence into a full-blown global financial system meltdown.
The first page below is their portfolio intermediate-term ARM products that were their top sellers from 2003-2007. Wells Fargo led the market in these. I believe they still have $75 billion in “Prime” first mortgages, including “Jumbo Prime” on their balance sheet of which much is likely this product type. With values down 40% to 70% across CA where Wells has the greatest exposure, these loan types are likely to perform much closer to Alt-A and Subprime vs. Prime, as they currently have them categorized.
Remember folks, throughout the bubble years Wells considered an ‘A’ paper or “Prime” loan to be a full-doc, 620 score, 95% combined loan to value, Jumbo 5/1 interest only with 50% debt to income ratios. This person could not get financing anywhere today or even six months ago. Much of this is on their best selling 5/1 interest only with initial 5-year rates at 4% to 5.5%.
Below is their stated income product guidelines for the same “Prime” program line; it just required slightly higher credit score and slightly lower loan to value ratios. These hybrid ARMs will adjust over the next 5-years to 10-years.
These loans are anything but “Prime” — especially with values down so much and still crashing. As a consumer with half of your income going out to pay a mortgage on a home that is worth half of its value from two-years ago and that you are upside down in by 35%, what is the fastest way to de-lever? Getting rid of the home and renting for half the price enables you to keep up your lifestyle and get your balance sheet back in line overnight.
On top of Wells $75bb in “Prime” loans they have $84 billion in second mortgages, much of which are also underwater and thereby unsecured given how much values are down. This is the same stuff Bernanke was saying was worth 5 cents on the dollar in his testimony the House a few weeks back.
Lastly, if I remember correctly they had $25B in subprime still, but don’t hold me to that…hey, maybe that is why they have $33 billion in Level 3 “assets” now.
At my research business, Field Check Group Real Estate & Finance, we track every single loan default, foreclosure and loss and categorize them by lender, originator etc. I can assure you that Wells has its share of loan defaults. As a matter of fact, Wachovia’s CA originations are performing better at least in CA. If you are an investment fund looking for in-depth, granular research not available anywhere else, shoot me an email. Sorry guys, had to pay the bills.
Below is Wells Fargo ‘Prime’ ARM program guidelines from 2006. YES, they did Stated Income, interest only etc. See for yourself. VOA = Stated Income/Verification of Assets. SISA = Stated Income/Stated Assets.
clot: ’til wednesday sounds like an 80′s band….you are f—ing delusional. You sound as if you are fried to a crisp. I think you are turning Bruce Dern on us :(
You are the Freeman Lowell of the NJ RE Report.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100302844.html
“…Barclays and State Street had begun making purchases but she refused to say how much had been spent so far. She said the government would give an accounting of that amount in the Treasury Department’s monthly report on the federal budget. “
Larry’s back at it, i’m amazed that NJAR is still pushing the s*it… no i’m not
From NJAR week in review-
Emergency Economic Stabilization Act Signed into Law
Emergency Economic Stabilization Act Signed into Law
President George W. Bush signed the Emergency Economic Stabilization Act of 2008 (EESA) today after it was passed by the House of Representatives. The same version was passed by the U.S. Senate on Wednesday evening, October 1, 2008.
Despite what you may have heard, the legislation will directly benefit our business by making financing more available and helping to stabilize home sales and prices. The NATIONAL ASSOCIATION OF REALTORS® (NAR) Chief Economist, Lawrence Yun, believes taxpayers are likely to reap a positive return on this investment over the long term.
Yun your an ASS*OLE!
Chi (370)-
Delusional? I’m not the racketeer here. My head is screwed on straight.
The criminals have done everything they can to kill legitimate markets. They have not- and will not- succeed.
Looking for a recommendation for the best online broker.
Most interested in option trading costs, but would also be interested if any one offers any good analytics or data with their platform.
Looking for a recommendation for the best online broker.
Most interested in option trading costs, but would also be interested if any one offers any good analytics or data with their platform.
EDIT: Also, since i’ll be keeping cash balances in there as well one that will actually be around tomorrow, ie. no principal positions in the toxic stuff.
Chart of DJIA after bail-out to no where was passed, a vision of stability.
http://2.bp.blogspot.com/_nSTO-vZpSgc/SOcIM8YB8CI/AAAAAAAADak/a0hwkYC7iAE/s1600-h/%24indu-bailout.png
Grim,
This week’s report from the hinterlands…
Hunterdon County Comp Killers
GSMLS recorded 26 sales in Hunterdon County this week. Three made this list:
MLS#: 2504393
10 ALEXANDRA WAY
Clinton Town
SLD: 10/18/04 $310,000
OLP: 04/03/08 $318,000
SLD: 10/01/08 $273,000
DOM: 153
MLS#: 2561354
28 FAIRVIEW AVE
Clinton Twp
SLD: 08/05/04 $340,000
OLP: 07/31/08 $319,000
SLD: 09/29/08 $300,000
DOM: 15
MLS#: 2566921
426 WILLOW COURT
Raritan Twp
SLD: 12/29/05 $269,000
OLP: 08/15/08 $252,900
SLD: 10/03/08 $245,000
DOM: 14
Chi,
Just this past week; Russell 200 down 12%, S&P 500, down 9%, Nasadaq, down 10% the Dow down over 7%.
I’m very confused. Why is Clot delusional? He’s been playing the short side until the criminals took that option away. Why is one delusional, when selling in the midst of a major bear?
“Paulson may be thinking like this. Just borrow trillions from chinese and other asians for this bailout and default on them later! Is this a crazy idea?”
Asian Creditor:That is ok America. We understand you cant pay. You got in a bit over your head and lack the cash to pay us back. I understand. But, you know, we can call it even by trading a little land for your bad debt. Lets seee, humm. Oh, yea theis wil do the trick: Guam, Samoa, kingman reef, Hawaii, and whatever other specks of land you happen to occupy in our neck of the woods.
Ran across this video this morning. It’s from back in march and the guy has some others talking about financial problems we could face. Again, this is from back in march. Haven’t seen all of them to know if he’s a nutjob or not.
But in this one, he talks about Godlman Sachs creating an wholesale investment product that essentially is betting against the banks. Goldman wins big if a large number of banks lose 50% of their value.
They created it end of last year.
http://www.youtube.com/watch?v=-AXdjfdi6Rg
Not sure how true it is but Goldman, after investing in subprime for a while, made big money after the market turned south by shorting subprime, so I wouldn’t be surprised.
Victorian Says:
“October 3rd, 2008 at 4:25 pm
Shore -
You were looking for the DOW figures during the Chimp-in-Chief’s tenure?
January 20, 2001: 10,659
October 03, 2008: 10,325
% Change = -3.1″
THANKS! George herbert Hoover Bush strikes again. Does anyone have the yearly or compounded inflation rate over that same period?
“Why are realtors getting off blame free?? Palin was quick to blast the mortgage lenders but what about predatory realtors that KNEW their buyers could not and should not be able to afford these houses they were selling them.”
Enough already. Really, enough. If I go into a furniture store and the couch is overpriced and the salesman pushes me to buy it anyway, if I purchase it, it is my own d@mned fault. If I go the the butcher and steak is out of my price range and the butcher agrees to allow me to pay it off over 5 weeks and I somehow think “humm great deal I can pay 1/5 the cost each week — without wondering how I will pay for food next week withthat existing food debt burden hanging over me” then it is my own d@mned fault.
There are heroine dealers who are willing to supply anyone who wants to buy the stuff, and bar tenders willing to serve any alcoholic, and aids-infested prostitutes willing to serve anyone who wants to pay the price of admission. Anyone who takes advantage of such offers brings upon themselves whatever befalls them.
OOPS, The same holds true for money borrowers. Once one is 18 and able to enter a contract, one needs to be careful. If one does not understand the contract see a bloody lawyer.
Grim,
Hinterlands report part 2…
Hunterdon County FUTURE Comp Killers
GSMLS listed 51 new actives this week. Only two made this list. (Somebody please pass the KoolAid…)
MLS#: 2586052
14 HORSESHOE DR
Raritan Twp
SLD: 07/24/06 $598,000
OLP: 10/03/08 $499,500
DOM: 1
MLS#: 2583863
61 ALBERT DR
Union Twp
SLD: 04/12/07 $770,327
OLP: 09/27/08 $720,000
DOM: 7
beer (377)-
Glad to have had one of my agents make that comp killer at 426 Willow Ct.
BTW, it barely appraised at the selling price.
I concur Shore[382-383]
Beer 384- Carnac the Magnificent, what properties will reduce their price in the next week?
What is 14 HORSESHOE DR
Raritan Twp & 61 ALBERT DR
Union Twp
beer (384)-
It should help Toll a lot to see their first buyers in the Albert Dr development already selling for less than they paid…plus undercutting Toll’s prices on houses they’re still trying to unload there.
oops i think i confused Carnac with Alex Trebek
384-Beer- any idea what they owe?
I have empathy for people who made some of these mistakes. I think a lot of people did not understand what they were signing.
People were bidding like they were at an auction at the height of the market. The winner of an auction always pays too much because they are an outlier. Look at the junk… oh I mean collectibles that they sell on e-bay.
It is hard to resist the pressure to buy a house when everyone around you is telling you to do it. There really is a “herd mentality.”
Renter[390]- Shore nailed it…”If one does not understand the contract see a bloody lawyer.”
If they folded & bought due to peer pressure I’d bet owning a crappy mortgage isn’t their only bad decision. Buyer Beware.
Shore,
Shouldn’t that also apply to banks, pension funds, and other inestors that are now being bailed out?
The $300 bailout at least wasn’t so one sided. Lenders were encouraged to modify mortgages. If they did, they both benefit, the borrowers and the lenders because borrowers get to stay in their home and banks continue to receive payments, albeit less. The alternative, foreclosure is much more costly. Investors would also get a benefit as the assets they purchased wouldn’t completely tank.
The new bailout is completely one sided. It bails out the banks and investors but does nothing for borrowers.
The treasury might as well buy up a percentage of homes in trouble and rent them to the borrowers with a 5 year lease. That way homeowners get some relief and the non performing assets are now performing assets.
Pay for it by taxing the lenders and investment banks that made the bad deals with borrowers and investors.
This may have already been posted, if so sorry: http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aMaWyNFImi4o
Jim [393],
Yeah, the timing of Paulson’s plan, along with the short sale ban, was impeccable. Right at the same time, Goldman was about to be scorched. Nothing to see here, probably just a coincidence.
“The unblinkable fact is that Americans own too much house. We overpaid and overborrowed, and many of us are “upside down,” as the car dealers say. What to do? Recognize the losses and write them off. What not to do? Inflate the currency and debase accounting standards.”
“When the Fed insists it has no choice but to print up hundreds of billions of new dollars and when the keepers of accounting standards bend in the face of criticism that market prices hurt, what they are really saying is the that financial truth is too awful to bear. Heaven help us all if they’re right.”
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303309.html
#395 BC Bob: So true. I guess we just have to sit back and watch it all unfold.
I think we will see house prices go back to late 90′s. Unless money is absolutley no concern,anybody looking to buy in this market is insane IMO.
Neither candidate wants to address the National Debt Issue. It’s hard to deal with the Fact that the US is effectively Bankrupt. The Bailout would be more realistic if it funded Soup Kitchens and Apple Carts.
http://www.youtube.com/watch?v=trXUbBuhs7s
This could be the them song for our current crisis.
#398 them=theme
Fun Fact picked up from CR..
Everyone who bought an S&P 500 fund for the last 4 years to the day are in a losing position. Everyone who dollar cost averaged into an S&P 500 fund every week for the last 10 years is down by 10.7% – for the full 10 years.
“Neither candidate wants to address the National Debt Issue”
And except for a passing comment by P during her debate with B, the candidates are not talking about overspending or debt by consumers.
WHAT? you gotta be kiding.
‘Air Carriers’ Outsourcing of Aircraft Maintenance”
http://tinyurl.com/3ezoak
I repeat:
“these debates are nothing but WWF wrestling… there to make you think you really have a choice, as to what puppet you will elect, and the outcome has already been selected. (both parties are owned by the SAME corporate interests)
ha ha.. wake up suckers!
you’ve been had brother.”
SAS
“Shouldn’t that also apply to banks, pension funds, and other inestors that are now being bailed out?”
Yes.
Obama may solve the Debt Crisis when he outsources the military to China. That’s 50% of the Budget that would drop to 1%.
““Shouldn’t that also apply to banks, pension funds, and other inestors that are now being bailed out?”
Yes.”
Well then tell those bums down there to stop chasing interns and do something :)
sas402-
‘Air Carriers’ Outsourcing of Aircraft Maintenance”
that will do wonders for homeland security, i feel safer already
SAS,
This has been going on for awhile. It sure doesn’t make me happy. The other thing that should make fliers queezy is the ability of a computer virus to bring down a plane.
Cooper,
Don’t get me started on the DHS. From an up-front-and-personal view, we should not have great faith in their ability to do much beyond spend money.
BC (394)-
GS and MS were well on the way to Patterson-land (toast). GS had busted under 100 with no bid in sight. After MER had been wiped out, all the buzzards turned on MS…and they probably wouldn’t have made the weekend. If MS had merged with Wachovia, both outfits would’ve gone down in flames.
The killer is, both those companies deserved to be wiped out…and the criminal short sale ban allowed MS and GS time to reconstitute in the form of kinder, gentler criminal enterprises.
However, I suspect Roubini was right. Even as bank holding companies, they are still broken entities, now having neither actual commercial banking expertise nor a deposit base.
Before long, I think Mr. Market may be nipping at their heels again.
(409)-
BTW, all disclaimers. GS and MS are known to be criminal enterprises, run by gangsters.
#395
That’s not reasoned analysis or asking pointed questions about the viability of the “plan”.
He is obviously just a poor bitter uneducated saver and grandstander experiencing schadenfreude who doesn’t understand the consequences of not passing the bill.
He just isn’t in the trenches. He is an anarchist. He isn’t considering the social turmoil to come if we don’t print cash over and over.
lisoosh,
Soon we may be able to print our own at home, since the value of the currency seems not to be a concern of anyone in power.
from the Asbury Park Press:
“Shore-area residents grudgingly gave their approval to the $700 billion bailout package passed Friday by the House of Representatives and signed by President Bush, but were left looking for answers to an even more important question: Will it work?”
Will it work? WILL IT WORK!!!!?????????!!!!!!!!1
This is the question to ask BEFORE voting, not after.
http://seekingalpha.com/article/98471-credit-crisis-reality-tv-upcoming-hearings?source=email
The next few weeks of C-Span will be like a new credit crisis reality TV show.
10/8/08 Causes and Effects of Lehman (Leh) Brothers Bankruptcy
10/9/08 Causes and Effects of the AIG Bailout
10/16/08 The Regulation of Hedge Funds
10/22/08 The Breakdown of the Credit Rating Agencies
10/23/08 The Role of Federal Regulators on Meltdown
House Committee on Oversight and Government Reform
Shore – 413 – Like this maybe? Isn’t this what you first?
“The next few weeks of C-Span will be like a new credit crisis reality TV show”
should be one hell of a week.
I have my DVR all ready.
SAS
Well, then, I guess we spent $700B for nothing.
yahoo.com/raw?dp=rssnews&u=ap/20081004/ap_on_bi_ge/financial_meltdown_credit&rn=topstories
snip
Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it’s safe to start doling out money again.
snip
“Omama truth squad”
http://www.kmov.com/video/index.html?nvid=285793&shu=1
another shot against the first amaendment.
and some of you think Omama is going to bring “change”.
lol, oh man. you’ve been had!
no, I’m not a Songbird McStain fan neither.
Both candidates work for the same central banks & corporate interests. not you the brainwashed consumer.
SAS
Grim mentioned the fact that WFC went after WB was evidence that the Gov didn’t have to bail anyone out, as the private sector was fully capable of setting things right. Well, we learned from reading the bailout bill that WFC has great tax incentives to go after WB as the GOV will yet subsidize this WFC venture by allowing WFC to carry back WB’s losses to offset prior years WFC profits. LOL, our gov just can’t help itself but subsidize the banksters, Buffett & Paulson’s friends.
Clot [409],
Funny you should bring up Elvis P. There will be some burnt toast this weekend. Watch for some major European banks to either be forced to merge, nationalized or TARPED [if they have a US affiliate].
Just another Manic Monday.
#402 SAS
Some international airlines are outsourcing their maintenance to China. I think that will end just as well as the toys, gluten, and milk from china did.
bai-ren…sounds a bit weixian!
shore guy i totally disagree with you. I am a pharmacist and if a patient brought me a script for a drug they did not need I would call the doctor…switch the drug or discontinue it…ure full of shit
i question all of your morals
shore guys answer left me feeling so dirty i’m off to another blog….a blog that doesn’t make me feel that most Americans are greedy noncompassionate dirt balls
Cindy,
Oregon State put a hurting on USC, I see.
See Ya, Woody.
Shore guy I do hope you get drunk and pick up an Atlantic City prostitute with AIDS…contract it and die…As your house goes into foreclosure you scumbag
(425) Shore
“Oregon State put a hurting on USC”
Can you believe that! My brother said it was a very close game. (He lives in Corvallis.)
Today, UofO Ducks play USC 5:00 my time. I don’t know what they are ranked now but it isn’t #1.
Those Oregon boys LOVE to mess with Californians.
Woody. The thing is that I am responsible not to do that. I take contracts seriously and I do not expect anyone to protect me from myself. Clearly, you see the world differently. I suspect you prefer a more intrusive government than am I.
I regret that one in your profession seems to lack the ability to have an exchange of divergent viewpoints without devolving into name calling and pettiness. We see the world and the role of personal responsibility, big deal. That is what places like this are about, talking things out.
Wheras you wish I contract a deadly illness, just because I lack your bleeding-heart outlook, I wish you well and hope you someday develop the ability to constructively engage with those who differ from you.
The parallels between the bailout and the Bush family Iraq Wars (of 1991 and 2003) are startling.
In both cases, the Federal Government created a legal framework of permissive behavior and actively pursued policies that, to many observers, seemed destined to create disasters: just as we supported Saddam Hussein and armed him to the teeth in an effort to thwart Iran, citizens who had no business taking on long-term debts were encouraged to sign-up for a variety of winked-at loans in an effort to create an Ownership Society.
Just as the Government obscured the warning signs that Hussein was unreliable (gassing the Kurds), it created (sometimes through deregulation) additional regulatory structures to obscure the true nature of the debt being generated. Hussein is sold to the population as an ally against Iran; homeownership is sold as a veritable civic duty.
Finally, when the disaster broke, the naked evidence of our aiding and abetting of the prior several years was effectively forgotten, and the events that many had predicted for years was treated as an unforeseen existential crisis.
In the case of Iraq, we have a case study of two types of crises response. Bush the Elder’s was more tempered – Iraq certainly lost blood and treasure in Gulf War I, but the toll to the United States was light. We left with our favorite dictator securely in place, the bear back in its lair.
Bush the Younger, an incompetent of unprecedented magnitude, created the second Iraq War on the back of our useful dictator, using him as a ruse for his reluctance to go after our dear Saudi friends.
For this the Iraqi’s have paid dearly, and the true scope of our bill, as graphic and tragic as it has been to date, will ripple down several generations in a waterfall of blood and treasure.
That said, those in the business of destroying and rebuilding Iraq have done very well under these circumstances – the profits to defense manufacturers and infrastructure firms such as Haliburton, plugged into no-bid contracts awarded in a time of War (while we’re encouraged to sleep tight and shop) have provided them with unprecedented profits.
So now we have a nearly trillion dollar bailout, coming on the heals of the largest Ponzi scheme the world has ever seen, like Shock and Awe rolling into the presidential compound of the ownership society.
And in the same way we’ve farmed out civil jobs in Iraq to Halliburton, we’re handing this bailout cash over to private enterprise, to the very same people who sold the CDOs and other sliced & diced bonds that got us to this moment.
So in a similar way that military families and their patriotism have been exploited to carry the terrible costs of the Iraq war, the citizens of the USA who’ve bothered to live within their means for the past decade are having their treasure extracted to serve the ruling class of the country, lining the pockets of those who’s fortune is sufficient to garner the sympathy of Washington.
As I wrote in an earlier post, our ship is being stripped by the crew, the looters are extracting every bit of value from the hull before they abandon ship.
They stand on the prow directing these activities because they, like they ocean, have capital great, wide and fluid, and apparently not an ounce of concern for the future of our land and people.
When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another…
Oh, one more thing, Woody. One cannot have foreclosed property that lacks a mortgage.
@430
people voted for the Younger TWICE. Maybe they will pay more attention next time. If they don’t, then it serves us well.
go people, go vote for Folksy.
HC
@139 – lishoosh, you’re dishonest
The Lobby
By Paul Craig Roberts – VDARE.com
Experts in the West and ordinary people in Arab lands have understood for many years that the United States does not have an independent policy toward the Middle East. President Jimmy Carter, a man of good will, tried to use American influence to settle the Israeli-Palestinian conflict, the source of dangerous instability in the Middle East. However, Israel was able to block Carter’s attempt, while blaming Yasser Arafat. Carter’s plan would have given rise to a Palestinian state. Israel did not want any such state, because obvious military aggression is necessary in order to steal the territory of an official state with defined borders. It is much easier to steal land from a non-state.
By preventing the rise of a Palestinian state, Israel has been able to continue with its theft of the West Bank. Palestinians who have not been driven out have been forced into ghettos, cut off from schools, hospitals, water, and their olive groves and farmlands. In a recent book, President Carter called the existing situation “apartheid.” Carter was demonized by the Israel Lobby for his use of this word, but some experts consider Carter’s choice of words to be an euphemism for the continuation of what I. Pappe and N. G. Finkelstein call “the ethnic cleansing of Palestine.”
That the vast majority of Americans know nothing of this is testimony to the power of the Israel Lobby.
A number of writers have exposed Israel’s misbehavior and the power of the Lobby, but until now, the Lobby has been able to marginalize its critics by smearing them as “anti-Semites,” “Nazis,” and “Jew-haters.” In a new book, John J. Mearsheimer and Stephen M. Walt have broken the Israel Lobby’s power to suppress truth by demonizing and intimidating all who would criticize Israel.
Mearsheimer and Walt are distinguished scholars holding distinguished appointments at the University of Chicago and Harvard University, two of America’s most distinguished universities. Their book, The Israel Lobby and U.S. Foreign Policy, published by the distinguished American publisher, Farrar, Straus and Giroux, is a masterpiece of scholarship and documentation. Footnotes comprise 23 percent of the book’s pages.
Mearsheimer and Walt easily succeed in making their case that neither strategic nor moral grounds can explain U.S. support for Israel. Only the power of the Israel Lobby can explain the juxtaposition of a dwindling moral and strategic case with ever-increasing U.S. backing for Israel, even to the disadvantage of U.S. national and strategic interests. Indeed, both executive and legislative branches are so completely compromised by the Lobby that the different elements of U.S. Middle East policy “have been designed in whole or part to benefit Israel vis-à-vis its various rivals.”
Chapter by chapter, Mearsheimer and Walt demonstrate the deleterious effects the Lobby has had on U.S. relations with Palestinians, Iraq, Syria, Iran, and Lebanon. The two scholars conclude:
“The lobby’s influence helped lead the United States into a disastrous war in Iraq and has hamstrung efforts to deal with Syria and Iran. It also encouraged the United States to back Israel’s ill-conceived assault on Lebanon, a campaign that strengthened Hezbollah, drove Syria and Iran closer together, and further tarnished America’s global image. The lobby bears considerable, though not complete, responsibility for each of these developments, and none of them was good for the United States. The bottom line is hard to escape, although America’s problems in the Middle East would not disappear if the lobby were less influential, U.S. leaders would find it easier to explore alternative approaches and be more likely to adopt policies more in line with American interests.”
There is nothing anti-Semitic about this book. Mearsheimer and Walt do not challenge Israel’s right to exist or the legitimacy of the Israeli state. They believe the U.S. must defend Israel from threats to its survival. They even regard AIPAC, the American Israel Public Affairs Committee, as a legitimate American lobby and not as an unregistered agent of a foreign state.
The motives of the two scholars, apart from respect for truth and the obligation to speak it, are to further Israel’s and America’s legitimate interests. Mearsheimer and Walt agree with numerous Israeli historians and commentators that Israel’s policy toward Palestine and the Arabs, together with the Lobby’s suppression of critics, have been “directly harmful to Israel.” The inflexibility that Israel has imposed on U.S. foreign policy has America mired in wars—now a half decade or more old—in Iraq and Afghanistan. Even as Muslim rage threatens to engulf America’s puppet in Pakistan, vice president Dick Cheney, Israel and its neoconservative allies strive to initiate war with Iran.
This is a high price to pay for Israeli territorial expansion even if the U.S.-Israeli policy of war and coercion succeed. If military aggression fails to bring the Middle East under the hegemony of the U.S. and Israel, the dangers to energy flows and Israel’s existence could result in the use of nuclear weapons.
It is literally insane for the United States to expose the world to such risks for the sake of Israel’s misguided policy toward Palestine.
Other scholars, especially those whose sense of justice is offended by the cruel oppression Palestinians suffer at the hands of Israel, are more critical than Mearsheimer and Walt. The latter do Israel and the Lobby a service by defining the issue as one of U.S. and Israeli legitimate national interests rather than casting it as a case of crimes, inhumanity, and injustice.
Instead of legitimate national interests, James Petras, Bartle Professor Emeritus of Sociology at Binghamton University in New York, sees “a level of crimes parallel to those of the Nazis in World War II.” (The Power of Israel in the United States, 2006). Petras writes that
“the architects of the Iraqi war planned a series of aggressive wars of conquest based on the principle of domination by violence, torture, collective punishment, total war on civilian populations, their homes, hospitals, cultural heritage, churches and mosques, means of livelihood and educational institutions. These are the highest crimes against humanity.”
“The worst crimes,” Petras writes, “are committed by those who claim to be a divinely chosen people, a people with ‘righteous’ claims of supreme victimhood.”
It remains to be seen how much more blood and treasure Zionist fanaticism will extract from Americans. But one thing is certain: the Israel Lobby is far too powerful for America’s good and Israel’s.
Forty years ago the Lobby was sufficiently powerful to force President Lyndon Johnson to cover up the intentional Israeli attack on the USS Liberty that resulted in 34 Americans dead and 174 wounded. Admiral Thomas Moorer, Chief of Naval Operations and Chairman of the Joint Chiefs of Staff declared: “No American President can stand up to Israel.”
Forty years later the Israel Lobby is able to reach into Catholic universities and to overturn tenure decisions. The courageous scholar Norman Finkelstein was denied tenure at DePaul University in Chicago, Illinois, because he is an effective critic of Israeli policies.
In America today academics and intellectuals who fail to toe the Lobby’s line are unlikely to receive support from conservative or liberal foundations. Even Mearsheimer and Walt’s article, “The Israel Lobby,” commissioned by the Atlantic Monthly and from which their book evolved, had to be published overseas in The London Review of Books when the Atlantic Monthly’s editors’ courage failed them.
American patriots who glorify in their country’s status as the “sole superpower” have much to learn about the subservience of their country’s foreign policy to a tiny state of five million people.
There is no better place to begin than with Mearsheimer and Walt’s The Israel Lobby.
433…..^^there is much you do not understand young jedi….
434- Everybody knows whatever you get online is automatically gospel.
U. of Chicago and Harvard – flakes!
Actually, Mearsheimer and Walt have written a definitive study on the power of the Isreali lobby on the American political scene and why is it that it can’t even be discussed? Loan guarantees or not, we have given billions to Israel and have gotten mostly grief in return as we promote policies not in alignment with the interests of the American people. Since when it is that we can’t openly question this relationship and whether or not it is working for the benefit of the US? It’s almost as if one can’t even raise the issue for examination.
America is good country ,you don’t have to own a home ,to share in the joy of owning a mortgage …Good country this America
http://www.bloomberg.com/apps/news?pid=20601109&sid=a.o1tHRJoe.k&refer=home
Credit-default swap fears – Bloomberg
Sorry – thought it would show the title: #439
Credit Swaps Show Fear, Not Reality, Executives Say
So are the swaps causing some equities to go down unnecessarily? I know you all say it isn’t the short-selling.
RE101: WTF are you doing? Any vilification of Israel is, by definition, taking the country’s actions out of context. If you physically reviewed the terrain in size and strategic positioning, as well as the behavior of all parties involved, the is no rational discussion that can be defended. You think that the judgements of two academics that are 8000 miles away has any bearing here? You embarrass yourself with your series of aliases…
L: still waiting for your Schiff references. I want to make a good faith effort to state my position.
Hey Chicago – Maybe you could help me with this…
So the speculators do these swaps – then the company goes down a bit in troubled times and a new cost to them kicks in causing them more financial problems…then they fail to meet their debt agreement..something like that -
Where are the speculators making their money? On the increase once they fall that percentage behind?
#437 re101
Did i get another head injury or am being secretly medicated? 101 seems to have become more logical, even if you disagree with his/her opinions.
Lot a love in here…….Lot a love…..
Can’t we all just get along?
444 – Bairen – Because of the expanded vocabulary, I figured he read it somewhere.
I appreciate Rich and beer’s comp killers.
Good work guys.
#447 Cindy,
That explains it.
Chi,
To raise the question doesn’t equate to vilification. The question is simply being raised. The fact that Mearsheimer and Walt aren’t located right in the “neighborhood” doesn’t mean that the question can’t be raised. They don’t berate Israel nor do they suggest that the US abandon Israel as an ally, they simply raise the question whether the relationship as constituted is in the interests of the US or Israel itself for that matter. If we can talk about whether it’s prudent to spend 700 billion dollars of taxpayer money in the financial crisis, then surely we can talk about any budget item involving taxpayer dollars–including Israel and whether those dollars are being spent effectively.
RE101: WTF are you doing? Any vilification of Israel is, by definition, taking the country’s actions out of context. If you physically reviewed the terrain in size and strategic positioning, as well as the behavior of all parties involved, the is no rational discussion that can be defended. You think that the judgements of two academics that are 8000 miles away has any bearing here? You embarrass yourself with your series of aliases…
I’m having a liquidity crisis. I’m all out of beer.
My opinion is that Israel is supported due to the American Jewish lobby. Powerful, influential, and realize that a Jewish homeland…even one as contentious as Israel is key to the survival of the Jewish people. Live through a systematic extermination and then tell me how comfortable you feel about life on Earth. No one has suffered more than the Jews — no one.
BC Bob Says:
October 4th, 2008 at 8:36 am
Chi, Just this past week; Russell 200 down 12%, S&P 500, down 9%, Nasadaq, down 10% the Dow down over 7%. I’m very confused. Why is Clot delusional? He’s been playing the short side until the criminals took that option away. Why is one delusional, when selling in the midst of a major bear?
Bost: There is investing and there is nihilism. Nihilism implies emotion to me. When you cease to remain objective, you can make fundamental strategic investment errors.
What I am observing is not something that I find constructive for people who are striving to acheive goals. Clot has a natural hedge relative to his business, so I respect his overall strategy as shrewd and opportunistic, and ultimately rather prudent. That said, there should not be such a paranoid sounding mania that suggests that the blood means more than the money…..and I don’t think that to espouse such a viewpoint here is constructive.
No one is arguing whether or not the Jews have suffered.
The question is whether the relationship, as currently constituted between our two nations is an optimal one for the US.
Essex Says:
October 4th, 2008 at 8:21 pm
My opinion is that Israel is supported due to the American Jewish lobby. Powerful, influential, and realize that a Jewish homeland…even one as contentious as Israel is key to the survival of the Jewish people. Live through a systematic extermination and then tell me how comfortable you feel about life on Earth. No one has suffered more than the Jews — no one.
A point of clarification here. I think Mearsheimer and Walt has raised a legitimate point of inquiry. Inquiry forms the very basis of the acquisition of knowledge. If we don’t allow questions to be raised and answered, how can new knowledge be acquired?
Re 101 Making to much sense kinda scary.
I think 101′s been reading Socrates.
“No one has suffered more than the Jews — no one”
I’ll remember that one next time I am in
Rwanda, sierra leone, sudan, afghanistan, North Korea.
SAS
(ps. never been to N. Korea)
Eh, the US is so screwed up right now….that Israel is really the least of our worries.
458..SAS….I am sure you had a point there somewhere though.
Not to worry, I’ll slap myself here eventually and get back to calling you a commie and a terrorist! There’s a lot of material that lends itself to that, but I just want to take a break from that for a moment and be serious.
Mikeinwaiting Says:
October 4th, 2008 at 8:33 pm
Re 101 Making to much sense kinda scary.
I kind of miss the old 101.
Wish Booya Bob would come back.
“SAS….I am sure you had a point there somewhere though”
sure thing bloke.
I disagree when I hear statements like:
“No one has suffered more than the Jews — no one”.
I’ve been all over the globe, and fought in a war. People in many countries have been suffered, killed, and destroyed in many countries (like the ones I mentioned above).
Just because they were not Jewish, doesn’t make this suffering any less.
SAS
I think I just opened a can of worms.
yikes!
SAS
“I do hope you get drunk and pick up an Atlantic City prostitute”
If I had all my money back for each time I did this back in the early 70s.. wow, I would have some serious jack!
Also, the money back from the cities of Vegas, Bangkok, montevideo.
SAS
That’s it Re 101 stay the course. By the way I’m a righty. A rare bird on this board.
SAS Yep.
Anyone who criticizes Jews or a Jewish cause is by definition irrational. End of discussion.
As for Reinvestor … You, Sir, are worse than Hitler.
“Automatically Irrational”
bloke, whatever your on.. I would like some before I goto work on Mon.
or the next time I have to hand over another check to ex-wives (yup, plural)
SAS
took me 5 times to get it right.
Try having your wife being younger than your oldest daughter.
I am walking the freak show.
:)
SAS
412#, shore, don’t worry too much about USD. it is moving back quickly.
http://finance.yahoo.com/echarts?s=usdeur%3Dx#chart2:symbol=usdeur=x;range=1y;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Does that apply to any other group? Does that apply to any other situation? Should we just cut off inquiry and just rollover and spend another $ 700 billion if the first $ 700 billion rescue plan doesn’t work?
The fact of the matter is that inquiry is the most rational act that one can engage in, particularly when questioning past practices. It is through inquiry that we can obtain better knowledge and certainly better policies. Using your definition, this entire blog should have never existed as it raised questions about real estate markets and related finance.
If the policy is correct and appropriate, it can withstand inquiry.
Anyone who criticizes Jews or a Jewish cause is by definition irrational. End of discussion.
As for Reinvestor … You, Sir, are worse than Hitler.
grab some popcorn .. sit back .. watch a great video! .. how Our Dear Omama is inspiring Omama Youth ..
One fun puzzle question, See if you can guess what’s missing from this video.
Hint: Contains the letters and numbers a, k, 4 and 7.
http://www.youtube. com/watch? v=rUEQz5dltmI
http://www.youtube.com/watch?v=rUEQz5dltmI
You know, I’m starting to take umbrage at being called Hitler. I’m the one who’s in charge of calling the names here. Just remember that.
If you think Mearsheimer and Walt pose a legitimate argument, and you don’t consider yourself an Anti-Semite, you owe it to yourself to read the counter-argument.
http://www.hks.harvard.edu/research/working_papers/dershowitzreply.pdf
I don’t know many Jews looking to win the “most victimized people” award but their take on most of their holidays is amusing (cause its sort of true): “They tried to kill us, we won, let’s eat.” – Jackie Mason
“reinvestor101″
are you sure you didn’t go down to AC or Vegas and get yourself a call girl?
you seem pretty tame as of late.
SAS
sas,
I made a resolution to hold my temper and not let anyone get under my skin, although “automatically irrational” almost pushed my button by calling me a terrorist.
Jamie Gorelick was one of the Fannie executives who benefited from inflated bonuses based on Enron-style accounting.
She was Vice Chairman of Fannie Mae from 1997 to 2003 (Fannie’s fraudulent accounting scheme was made public in 2004).
This is the same Jamie Gorelick who was Deputy Attorney General in the mid 1990s and was reported to have been the author of the Clinton Administration’s WALL against sharing intelligence data between foreign and domestic agencies.
“Jamie Gorelick’s wall”
http://tinyurl.com/3v5swm
SAS
Why is it that a mere reference or belief that Mearsheimer and Walt raised a legitimate point of inquiry make me an Anti-Semite? I said nothing against Jews or the nation of Israel. I proposed no specific policy or policy change nor was I looking to pick a fight with anyone. I just said that they raised a legitimate point of inquiry.
I’ll read Dershowitz’s treatise later, but it’s well known that he’s not the most unbaised source.
Seneca Says:
October 4th, 2008 at 9:25 pm
If you think Mearsheimer and Walt pose a legitimate argument, and you don’t consider yourself an Anti-Semite, you owe it to yourself to read the counter-argument.
“MindBox, Inc., the worldwide leader in providing artificial intelligence applications to automate complex business and operations processes for the financial services industry, today announced an impressive client roster consisting of many of the top lenders and financial institutions in the country.
Customers include industry leaders such as Countrywide Home Loans, Fannie Mae, Freddie Mac, HomeSide Lending, Mortgage.com, GE Capital Corporation, and Upland Mortgage. MindBox expects to add to this list in the coming months, resulting in revenues forecasted to exceed $20 million in its first fiscal year.”
http://tinyurl.com/3mcfar
SAS
Any criticism of Israel is by definition irrational. As Chicago Finance instructs. (I concur.)
Anti-Semitism, by its very nature, is completely irrational. There is usually no logical reason for anyone to criticize a Jewish cause. If they do – they’re crazy.
They’re nuts.
Alan Dershowitz is a model of reasoned, unbiased thought who has never been known to take a pro-Israel stance in his career.
Prejudice – in any form – is irrational.
However, Jews are allowed call non-Jews goyim, shiksas, and gentiles. This is a privilege afforded to the “Chosen People.”
479#, forget about Alan Dershowitz’s spin. his #1 client just got convicted today.
http://www.time.com/time/community/transcripts/1999/060999dershowitz.html
http://www.mindbox.com/
This is one of the most cogent explanation I have read, which details why this Bail-Out wont work.
BC Bob/ Chifi – Would love your inputs on this.
“I’ve been thinking mostly about the durations issue, mostly because it’s really obvious something is going badly wrong in the commercial paper market. If you look at the volume report http://www.federalreserve.gov/releases/CP/volumestats.htm overall paper is actually *up* but the longer durations (20+ days) are way down. For example: the overall market average for the week of Oct 3 is 183,610, up from 2008 average of 148,710. But 20-40 day paper is only 6,778, *way* down from the yearly average of 15,864.
So the market has lost about 2/3s of its ability to convert liquidity to 30-day loans. 90-day is probably similar although there are technical issues with analyzing the chart because 90-day would expire during the end of year crunch so there probably isn’t much demand. Next week we’ll be able to look at 90-days again.
One of the most critical functions of the banking system is converting short-term deposits into longer-term loans for businesses. Much of the working capital market, for decades has come via money market funds (MM). Joe public or Joe CFO deposits money into a MM. That MM loans it to a bank (usually by buying paper, and usually at a medium duration) and then that bank loans it out to business for inventory, payroll or whatever. The MM has converted Joe’s demand deposit into a fixed-duration loan.
The problem we’re having is that people are fleeing commercial MM for treasury MM. Those are buying treasuries and thus converting the money to the desirable medium duration BUT that money is loaned to the Fed, and the Fed doesn’t make working capital loans. So the deposited money that had been made into working capital has been diverted into the Fed and lost to working capital.
The Fed is kind of trying to address this by loaning out money via various auction/discount windows. BUT, those loans have been overwhelmingly overnight – a particularly nasty demand deposit because it goes back so fast. For a bank to convert that to a 90-day loan it’s got to win 90 auctions in a row – a very risky deal with a crunch on. So the Fed undoes the duration conversion, and then some, converting the liquidity into a form that the banks can’t make into useful-duration loans.
Right now we have both commercial and treasury MMs. Deposits have shifted from commercial MMs to treasury MMs, and consequently we have less working capital (a commercial MM product) and better credit for the Fed (a treasury MM product). But, treasury MM rates are now very low and the gap between treasury and commercial fairly high, which creates an incentive for depositors to put money into commercial funds, producing some working capital.
When Paulson dumps out his 700 billion in treasuries it’s going to be at the short end. That will drive up rates for short-term treasuries. This will obviously draw even *more* deposits into the treasury MMs. That means even less in the commercial MMs and thus less working credit, the eventual commercial MM product. Hence Paulson’s billions remove working capital by competing for the deposits that could get used to make working capital loans. That 700 billion is going to go to fairly long-term mortgage securities. So Paulson’s billions divert credit from working capital to long-term mortgages – from where it’s most needed to where it’s most wasted.
Even if the giveaway adequately props up the banks, which I doubt, they still can’t make working capital loans, because the raw material they used (commercial MM deposits) will be desperately short.
I think it’s very telling that in two days of hearings and two weeks of discussion we have yet to see *any* detailed mechanism for how Paulson’s plan will increase the supply of, say, inventory loans. It’s not that every economist in the world is an idiot, it’s just not going to help. I think people have fallen into the fallacy that if it costs a lot it must be valuable. Paulson’s plan falls into the category of very expensive way to hurt ourselves.”
http://www.nakedcapitalism.com/2008/10/more-discussion-of-why-bailout-bill.html
This is one of the most cogent explanation I have read, which details why this Bail-Out wont work.
BC Bob/ Chifi – Would love your inputs on this.
“I’ve been thinking mostly about the durations issue, mostly because it’s really obvious something is going badly wrong in the commercial paper market. If you look at the volume report http://www.federalreserve.gov/releases/CP/volumestats.htm overall paper is actually *up* but the longer durations (20+ days) are way down. For example: the overall market average for the week of Oct 3 is 183,610, up from 2008 average of 148,710. But 20-40 day paper is only 6,778, *way* down from the yearly average of 15,864.
So the market has lost about 2/3s of its ability to convert liquidity to 30-day loans. 90-day is probably similar although there are technical issues with analyzing the chart because 90-day would expire during the end of year crunch so there probably isn’t much demand. Next week we’ll be able to look at 90-days again.
One of the most critical functions of the banking system is converting short-term deposits into longer-term loans for businesses. Much of the working capital market, for decades has come via money market funds (MM). Joe public or Joe CFO deposits money into a MM. That MM loans it to a bank (usually by buying paper, and usually at a medium duration) and then that bank loans it out to business for inventory, payroll or whatever. The MM has converted Joe’s demand deposit into a fixed-duration loan.
The problem we’re having is that people are fleeing commercial MM for treasury MM. Those are buying treasuries and thus converting the money to the desirable medium duration BUT that money is loaned to the Fed, and the Fed doesn’t make working capital loans. So the deposited money that had been made into working capital has been diverted into the Fed and lost to working capital.
The Fed is kind of trying to address this by loaning out money via various auction/discount windows. BUT, those loans have been overwhelmingly overnight – a particularly nasty demand deposit because it goes back so fast. For a bank to convert that to a 90-day loan it’s got to win 90 auctions in a row – a very risky deal with a crunch on. So the Fed undoes the duration conversion, and then some, converting the liquidity into a form that the banks can’t make into useful-duration loans.
Right now we have both commercial and treasury MMs. Deposits have shifted from commercial MMs to treasury MMs, and consequently we have less working capital (a commercial MM product) and better credit for the Fed (a treasury MM product). But, treasury MM rates are now very low and the gap between treasury and commercial fairly high, which creates an incentive for depositors to put money into commercial funds, producing some working capital.
When Paulson dumps out his 700 billion in treasuries it’s going to be at the short end. That will drive up rates for short-term treasuries. This will obviously draw even *more* deposits into the treasury MMs. That means even less in the commercial MMs and thus less working credit, the eventual commercial MM product. Hence Paulson’s billions remove working capital by competing for the deposits that could get used to make working capital loans. That 700 billion is going to go to fairly long-term mortgage securities. So Paulson’s billions divert credit from working capital to long-term mortgages – from where it’s most needed to where it’s most wasted.
Even if the giveaway adequately props up the banks, which I doubt, they still can’t make working capital loans, because the raw material they used (commercial MM deposits) will be desperately short.
I think it’s very telling that in two days of hearings and two weeks of discussion we have yet to see *any* detailed mechanism for how Paulson’s plan will increase the supply of, say, inventory loans. It’s not that every economist in the world is an idiot, it’s just not going to help. I think people have fallen into the fallacy that if it costs a lot it must be valuable. Paulson’s plan falls into the category of very expensive way to hurt ourselves.”
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