From Bloomberg:
World May Be Lucky to Get Worst Recession Since 1983
The world may be heading for its worst recession in a quarter of a century — if it’s lucky.
A steep slump looks likely as the credit squeeze crunches economies from the U.S. to Singapore and panic engulfs global financial markets.
“It’s certainly going to be the worst since the 1980s,” says Bradford DeLong, an economics professor at the University of California at Berkeley who worked at the U.S. Treasury Department from 1993 to 1995. “The hope is that it won’t become the worst unemployment business cycle since the Great Depression.”
Of special concern: The two big bulwarks of the global economy in recent years — U.S. consumer spending and the rapid growth of emerging markets — may be finally giving way in the face of the 14-month-old financial turmoil.
That raises the odds that the coming economic decline will be long and deep, despite U.S. Treasury Secretary Henry Paulson’s $700 billion financial rescue plan, similar efforts by European leaders and the coordinated interest-rate cuts engineered by Federal Reserve Chairman Ben S. Bernanke and other central bankers last week.
“This is the worst crisis I’ve seen in my 50-year career,” William Rhodes, senior vice chairman of Citigroup Inc. in New York, told fellow bankers in Washington yesterday. “We still have to deal with the effects on the real economy here and elsewhere.”
…
Household finances are also being pinched. The steep decline in U.S. stock prices last week alone wiped some $2.16 trillion from investors’ wealth. And banks are getting stingier with credit: Borrowing by U.S. consumers fell in August by the most on record as lenders shut access to loans, according to data from the Fed.The consumer pullback is already sending ripples throughout the economy. Vacancies at U.S. neighborhood and community shopping centers rose to a 14-year-high in the third quarter, New York-based real-estate research firm Reis says.
A sharp reduction in household spending could turn what is shaping up to be the biggest recession since the early 1980s into something worse, Bruce Kasman, chief economist at JPMorgan Chase & Co. told a meeting of the Institute for International Finance in Washington yesterday.
first!
Heard two interesting things this weekend.
1) I have a relative that owns a hearing aid store. He says his business always improves during recessions because people with marginal hearing want to get tested and have their hearing improved to improve their performance at a job interview or the belief it will make them less likely to be laid off (they can hear better so they perform their job/respond to customers and the boss better).
Got my hair cut at some cheap chain place. They told me their business has picked up a lot in the last few months. I guess the $30 men’s haircut is going the way of $300 jeans.
Who’s ready for a sucker’s rally? Dead cat bounce?
Anyone else buying the shiny stuff on the cheap this week?
ps – Apple tanked into the 80s last week; pre-market, it’s up over 100. Victory!
Rally on
http://www.reuters.com/article/marketsNews/idUSLD27516120081013
What are the chances of this happening..
From the Star Ledger:
Polls says New Jerseyans struggle financially, remain optimistic
A poll found a majority of New Jerseyans believe they are doing worse financially than a year ago, but most also continue to manage their credit and remain optimistic that their economic situation will improve.
The poll released today by Fairleigh Dickinson University’s Silberman College of Business found 58 percent of New Jerseyans surveyed said they are now worse off financially than in 2007, a sharp increase since January when just 41 percent of residents gave that response.
However, more than half (53 percent) reported they were not having trouble paying the balance on their credit cards, compared with 30 percent who said keeping up with payments is difficult. And while half of the respondents said the recent crisis in the financial markets has affected their personal finances, 46 percent say they have not been directly affected.
Meanwhile, just 29 percent believe the situation will be worse a year from now, which is down from 36 percent in July, and more than a third (37 percent) say the situation will improve within 12 months.
Nearly 60 percent of people under 30 believe things will be better in a year, while just a quarter of those over 60 think so.
Shore 750 previous thread
The only district I know of that’s cutting is NYC.
Bairen 2 – I remember reading an article once that said high end hair salons know there is an economic pinch when women who normally touch up their color every 8 weeks start stretching their appointments out to every 12.
I guess those of us who were always cheap enough to go every 12 weeks will just have to go gray this time around.
From the Daily Record:
Big, small companies cutting payrolls across Morris County
George Lenar glanced around the parking lot of Roxbury’s Ledgewood Plaza mall. It was about 6 p.m. on a weekday.
“Look at that,” he said. “The lot is half full, even with the restaurant.”
In one corner of the lot the T.G.I. Friday’s was partly surrounded by customers’ cars.
Lenar of Long Valley is owner of Essex Fence Co. Like many companies, his had a tough year. With slow home sales and a credit market being strangled by the problems at major banks, the fall, which is usually his busiest time of the year, has been very slow. Calls are down 50 percent, Lenar said. He’s had to lay off 40 percent of his work force.
It is job loses like those, in combination with job cuts or closings at some of Morris County’s larger, multinational companies, that helped boost the county’s unemployment rate this year to 4.3 percent. That is up 1.3 percent since last year, when the jobless rate was 3 percent, Maggie Peters, executive director of the Morris County Economic Development Corp, told the county freeholders last week.
The jobless rate in Morris is still below the statewide average of 5.7 percent, she said.
The county is feeling the effect of cuts at Novartis in East Hanover, BMW in Mount Olive, Johnson & Johnson in Morris Plains, Alcatel Lucent in Hanover and the Star Ledger in Montville. Alcatel, for example, is closing its facility here and shifting 2,100 jobs to Murray Hill.
(cont)
Other reports show the county’s housing market is still slow.
Home sales dropped 15.8 percent from the second quarter of 2007 to the same quarter this year, the National Association of Realtors reported. In 2007, 1,178 homes were sold in the second quarter, compared to 992 in 2008.
The median sales price also fell, from $511,600 in 2007 to $488,700 this year, the report said.
Morris County is also seeing an increase in the number of filings for home foreclosures, according to the county sheriff’s office.
Through September, 368 foreclosures had been filed, compared to 316 in 2007 and 285 in 2006.
Of the 2008 number, 203 of the foreclosed homes were sold, 99 sales were canceled, and 46 were included in bankruptcy filings.
Steven M. Goldman, state commissioner of banking and insurance, told an Assembly committee last week that, “foreclosure filings in New Jersey have grown from 23,044 in 2006, to 34,457 in 2007, and are on pace to hit approximately 50,000 in 2008. That’s more than double in just two years.”
From CNBC:
Major Central Banks Offer Unlimited Dollars
Major central banks pledged on Monday to pour unlimited amounts of dollars to unblock frozen credit markets, as governments around the world announced measures to prop up ailing banks.
“The BoE, ECB, and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day, and 84-day maturities at fixed interest rates for full allotment,” the Federal Reserve said in a statement.
“Funds will be provided at a fixed interest rate, set in advance of each operation,” it added.
The sizes of the reciprocal currency arrangements (swap lines) between the Fed and the Bank of England, the European Central Bank and the Swiss National Bank will be increased to accommodate whatever quantity of U.S. dollar funding is demanded, the statement also said.
The BoE, the ECB and the SNB will announce simultaneously the rate at which tenders will be conducted, and the same rate will apply to all counterparts of the respective central bank. The rate will be set in advance of the tenders, on the same day the operations are conducted.
The Bank of Japan said it was considering taking measures similar to those adopted by the European Central Bank and other major central banks in boosting the amount of short-term dollar funding available to strained money markets.
“Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets,” the BOJ said in a statement, repeating the line issued in statements by other central banks.
Barien (2) /NGator (8) LOL
I wasn’t the only one washing my own car this weekend…
I started turning gray at 18. My twin decided to color – I went “salt and pepper” for years – Now I’m just gray. I was literally facing a lifetime of salon treatments…Now as others my age decide to go gray – I must appear as though “I’ve never changed.”
8 Gator
12 weeks is a luxury to me.
Gold is up huge!! 930.
Morristown not part of housing decline!
http://tinyurl.com/4d6vgv
From the Daily Record about the Epstein’s Project/40 Park in Morristown:
Steel beams that rise well above the ground are beginning to form the skeleton of a building that will be known as 40 Park and soon will be luxury apartments. A large crane is located in the middle of the construction zone.
Mayor Donald Cresitello said it’s another sign that the town’s real estate market is an exception, given that the real estate market nationwide has gone bad.
Despite the bleak economic conditions, sales have not been hurt and the company has not had to adjust its prices. Signs appear on the scaffolding reading “50 percent sold.” 40 Park, has 73 units, including 13 penthouses. There are one-, two-, and three-bedroom units in the development. Prices range from $400,000 to $2.2 million.
#12 Cindy
That sums up my experience going bald. I started around 15. At 18 my mother (bless her) handed me a can of “Rogain” to try and stop the spread. I looked at the can and then looked at her and politely declined. I have had the same hairstyle since then and when I look at old pictures, I have not changed much.
When I see other peoples old photos, I always notice the fashion statements people make with their hair. How many ladies on the board had the Cindy Lauper/Cher big hair or followed Madd0nna to the peroxide bottle in the 80’s
That said my boss has the worst comb-over I have ever seen. He had to fly to London for a meeting and was obsessing for days if the hotel would have a hair dryer available in the room. In the end, he ordered a special “world traveller” from Amazon, “just in case!”
Vic [14],
Where are you getting your quotes?
(PGC) 15 – A man after my own heart – It’s sort of like – this IS MY REALITY – why not face it now, and be done with it…move on.
On losing your hair.
I started losing my hair in high school. By senior year of college, I was left with the horseshoe. I come from a long line of bald men (and a few women as well). Never really thought too much about it. I use one bottle of shampoo a year and can go three months between haircuts. Funny thing about losing your hair at a young age is that it appears to bother everyone but myself. So be it.
Get it while it’s hot.
http://edition.cnn.com/video/?/video/world/2008/10/12/curnow.sa.gold.fever.cnn
http://www.kitco.com/charts/livegold.html
BC (15) This is what I found…
BC – Where does one check the TED spread???
PGC,
I too was blessed with the receding hairline. Had me all stressed out initially until I realized it made it so much easier to buy beer and get into bars when I was underaged. Started shaving my head before it was cool. Don’t miss hair at all really. One less thing to have to deal with in the morning.
Re the market rally, if you didn’t buy last Friday I wouldn’t bother chasing it, just my personal moronic opinion.
Ben and Hank at work this weekend;
http://3.bp.blogspot.com/_nSTO-vZpSgc/SPL0M-xPXmI/AAAAAAAADgk/nb-MpWrt4aA/s1600-h/paulson-dam.png
Cindy
TED Spread…
http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND
Never ever trust a bald guy in a suit..
Just Saying…….
Cindy,
to put the TED into perspective, imagine that the chart is a chart of an earthquake in your neck of the woods.
Sean 26
really?
http://ioj.com/u/get_file.php?id=403471&file=1223768316176.jpg
“Had me all stressed out initially until I realized it made it so much easier to buy beer and get into bars when I was underaged”
I couldn’t agree more! I was buying the booze at 17 without fake ID. Always bought a lotto ticket as well as it made me appear suave. I have not bought a lottery ticket since I turned 21 ;)
Paul Krugman wins Nobel prize in economics
(27) Kettle – Thanks – So aren’t the moves this W/E supposed to have an affect?
@28
strange coincidence that Terrel Owens is in the background.
Frank Says:
October 12th, 2008 at 10:07 pm
Stan, It took 300 showings and 6 months to sell my place in 2005 for 200K. Now they are selling in weeks for 370K. The RE market is still on fire regardless of what BC Bob and Clotpoll says.
Furts: Where the hell was your unit? Was it in the basement of the Section 8 housing?
Cindy,
yes. What the TED spread is showing so far is that the banks have no faith in the governments ability to fox the issue. The problem is that the governments are trting to get banks to loan money again. But the banks have run out of people to loan money to. They have already loaned to dead people and homeless. Unless they want to start giving new loans that require no debt maintenance. But then thats not a loan, thats a gift.
The only way to restart the loan meat grinder is for governments to start paying off individual loans. Bailing out joe six pack directly. perhaps as a tax credit equal to their personal debt?
Victorian:
This chart you posted late last night was most interesting. Thank you for finding it.
http://2.bp.blogspot.com/_H2DePAZe2gA/SPKbc9n6TxI/AAAAAAAAF-Y/xbxrr4m7u_I/s1600-h/InfDji200_0810.png
Acutally the blog from the source of the chart is a great gloomy read as well.
http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm
kettle1 Says:
October 13th, 2008 at 8:53 am
Cindy, yes. What the TED spread is showing so far is that the banks have no faith in the governments ability to fox the issue.
All hail the Wile E. Coyote of Doom…..
Lovely. Then maybe the government can just start issuing its own credit cards — ones with no monthly minimum payment. Heck, they can have no requirement to EVER pay anything back. THAT should get the wheels of commerce rolling again.
Frank-I know I should just ignore you, after saying 300 showings I am convinced you are somebody playing a joke, however take a look…..
Sold for $490k last week.
http://hudson.fnismls.com/publink/default.aspx?GUID=3a55c485-c33a-4d57-9769-876117920376&Report=Yes
paid $545k….. in 2006.
http://tax1.co.monmouth.nj.us/cgi-bin/m4.cgi?&district=0905&block=66&lot=24&qual=C005B
For this plan to work the gov has to force the banks to lend, welcome to GOSBANK II.
Kettle – again – Pollyanna here – They are beginning to address real issues in a global manner – behind the curve for sure – reacting – I just feel they are bound to catch on/up sooner or later…
Cindy,
They will eventually. The question is how and when. This is not the end of the world, just a very bumpy section of road.
Cindy (5)-
Don’t you think these goofs have done enough damage?
Grim – Rich – Anyone,
Can you help out with an address / history on GSMLS # 2582020?
Thanks!
Stu (18)-
You should see my bills for chest hair dyeing. It’s killing me. The lady at my local salon quit doing it when she found a baby chipmunk in my navel, so now I have to hire h@@kers.
It’s also really hard to find ’70s-style silk disco shirts that open to my sternum. But, I may move away from that look, since I had to sell all my gold medallions. :)
“This is not the end of the world, just a very bumpy section of road”
Unfortunately, quite a few fellow travelers are going to hit a bump that throws them off the road and into a tree.
actually I have a full head of hair and I am hung like horse and I am filthy rich. I do hate everyone comparing me to a taller buffer and better looking version of George Clooney. I am so good looking that next to me Brad Pitt would look like a mongoloid.
Hey Chicago Finance any word on what Sov bonds and Pref stock will be doing on Tuesday after deal.
Cindy, Kettle, all:
“I just feel they are bound to catch on/up sooner or later…”
I disagree about being able to catch up. From a very simplistic point of view, the problem is primarily due to the fall of residential real estate prices. Until this fall slows significantly for a period of time or stops completely, then any intervention is really a waste of effort unless it can impact this fall. What if a 300 trillion loan is made from the central banks to commercial banks and residential RE prices drop another 30%? Would it encourage lending?
From my vantage point, until the world’s leaders either buy foreclosed homes, force greedy bankers to renegotiate distressed mortgages at terms the homeowners can afford or simply bulldoze the excess inventory, no amount of intervention will help. Everything else is simply treatment of the symptoms and without the antibiotic (dealing with the excess inventory) we will take a lot longer to heal.
How hard is it to realize that it is much more optimal for a bank to take less than premium mortgage payments than to own the home with no payment coming in whatsoever and being forced to pay the property taxes and upkeep on an empty home. I truly think that the decision makers in these banks think that either an Uncle Sam handout is a better strategy than trying to right the ship internally or they think the rebound in home prices is just around the corner.
The solution?
World governments tell the banks, “No bailout if you don’t renegotiate loans to distressed buyers.”
FDIC will still insure the deposits if the bank fails.
I know this is very simplistic, but you can’t force banks with negative balance sheets to make loans. No way, no how!
BC –
Weird about the GLD. I checked pre-market at 8.10 p.m. and the bid was 930. Now, it is back down to 830.
Banco Santander SA added 7.3 percent to 9.73 euros. Spain’s largest lender is in talks to buy Sovereign Bancorp Inc., the largest remaining U.S. savings and loan, in what would be the third acquisition of a troubled lender in three months by the company. Sovereign Bancorp didn’t trade in Europe.
Go Sov go, Interesting enough SOV hit bottom the day its prior headquarters in Brooklyn opened as the worlds largest Trader Joes, that was a sign.
“actually I have a full head of hair and I am hung like horse and I am filthy rich. I do hate everyone comparing me to a taller buffer and better looking version of George Clooney. I am so good looking that next to me Brad Pitt would look like a mongoloid.”
I guess John will never be attending a GTG.
http://www.all4humor.com/images/files/Bumpy%20Road.jpg
http://www.timesonline.co.uk/tol/news/uk/article4935461.ece
I don’t know what will work. But deregulation wasn’t the greatest. Wouldn’t this offer more transparency and conisitency?
(48) Stu – Isn’t the renegotiation of loans part of the TARP as well? This is all going to take years…
doyle,
31 Cornell
No real history, on the market for 20 days, no prior listings, nothing in the tax records.
Stu – Also, banks are doing it here. Of the 3 repos on my block, only the place next to me is left empty.
Selma – A local city just passed a $1,000 fine per day for banks that do not keep up the property (dead lawns etc.)
#48 Stu: IMO renegogiating mtg amounts will destroy the housing market.
No contract will be worth the paper it is written on, and why would a potential buyer buy, knowing that the guy who owns the same house across the street could have a chunk of his mtg amount knocked off?
#55
Thanks Grim!
http://www.fresnobee.com/263/story/931154.html
You Own it Now Clean it up- Eddie Jimenez
Cindy (54): from TARP:
“Section 109. Foreclosure Mitigation Efforts.
For mortgages and mortgage-backed securities acquired through TARP, the Secretary must implement a plan to mitigate
foreclosures and to encourage servicers of mortgages to modify loans through Hope for Homeowners and other
programs. Allows the Secretary to use loan guarantees and credit enhancement to avoid foreclosures. Requires the
Secretary to coordinate with other federal entities that hold troubled assets in order to identify opportunities to modify
loans, considering net present value to the taxpayer.
Section 110. Assistance to Homeowners.
Requires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance
Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work
with servicers to encourage loan modifications, considering net present value to the taxpayer.”
HOPE (one of the plans from earlier this year) is weak as it encourages banks to renegotiate but it has no teeth.
“to encourage loan modifications?” This doesn’t sound terribly strong either.
Enocuragement is not working! Putting a red-hot poker to the behinds of some of these bank vice-presidents is what is really needed.
(60) My point being…This may spur banks move a bit faster….
I was feeling nostalgic for the 2005/2006 go-go real estate era. So today, I fired up my browser and went to the gsmls.com. Ahhhhh, right there for my very own eyes, POS’ capes for sale at 600k.
(61) Stu – There are buyers here. It is the banks that drag their feet. I think $1,000 a day fine might help. They are going to have to settle for the reduced price or its gunna cost em…
Man! Gotta go to work..Have a great day!
3B (58):
When I say renegotiate, I am talking about extending the length of the loan in exchange for a lower monthly payment. Yes, in the long run it will cost the home-buyer more, but these are the same people who probably make the minimum payment on their credit cards or buy furniture rent-to-own.
If we don’t renegotiate, then ‘we’ the taxpayer will end up paying off the mortgage.
Additionally, the government should be offering some incentive for those with cash on the sidelines to purchase second homes. I have not witnessed this whatsoever.
DGL up but GLD down?
stu (61)-
Please don’t make me laugh too hard. It’s still early in the day.
The bailout is not meant to do anything other than provide cover for the biggest daylight bank robbery in the history of man.
The thieves will actually come begging for more…and soon. And, we will once again hand over the loot.
Once it’s all gone and everything collapses, we can start over as hunter/gatherers.
Clot (68):
“Please don’t make me laugh too hard. It’s still early in the day.”
So what you are saying is that you agree with me, but like me, know that our leaders would never act responsibly to help out us lowly peons. Correct?
In case anyone had a question as to how broke the banks are…
http://2.bp.blogspot.com/_9ZzZquaXrR8/SPJEohkP00I/AAAAAAAACR0/KkcEcH-0Xm4/s1600-h/Borrow_reserves_2008_10_11_2jpg
As of 3Q07 US banks basically had to start spending their required reserve deposits to stay afloat. probably for debt servicing. The banks quickly burned through the cash they had on hand that had been their required reserve. As they burnt through that cash they borrowed the required reserves from the FED. The banks , collectively, have no money except for that which has been loaned to them by the FED. They may have assets, but the have no cash. The the question is are their assets when marked to market actually worth more then their liabilities.
Stu (35) –
No Problem. It does put things into perspective. It is difficult to argue with that periodicity.
We have seen the longest and biggest bull market in history from 1980 – 2000. The reason primarily being that the U.S had no real competitor in the world.
I am reading Marc Faber’s book and I am beginning to agree with him that the next leadership is going to come from Asia rather than the U.S. I hope that our leaders recognize this and take steps to ensure that the sun does not set on our empire.
[51] stu
Or I could pass myself off as John, since that pretty much describes me.
[still managing to keep straight face. must not crack smile, must not crack, D’oh!]
Victorian (71):
Could you imagine if those charts included the true M3 inflation numbers? The market probably would have barely shown a drop in 2008. :P
Cindy
FUTILITY OF SOLUTIONS: Few pundits, analysts, Wall Street observers, and banking officials seem to comprehend that solutions are almost all flawed. The solutions fail because they are all debt based, like with new USTreasury Bonds to finance bailouts, like with USTBonds in swaps to banks for cratered mortgage bonds, like with USTBonds to finance household stimulus packages, and with monetization to print money to finance whatever the idiots leave on the table on USTBond sales. The problems from debt collapse due to debt-related ills inside banks cannot be solved by more debt instruments, plain and simple. The solutions must, if they are legitimate, involve new income sources, like manufacturing returned to the US soil, like a national grand initiative for infrastructure betterment, like better agriculture management of ethanol solutions, like broader export successfully landing abroad from US firms. The dumbstruck fools running US bank policy are forced to resort to their own failed toolbag. How effective will lower interest rate be, if only another attraction to a debt device? Not much! And the failure to revive and resuscitate will shock the system very soon.
Make, BC
check this out….
GOLD DEFAULT DEAD AHEAD: The COMEX and London Metal Exchange are living on borrowed time in their corrupt gold game. They sell paper gold, and precious little actual gold metal. See a refreshing straightforward interview aired on CNBC of all places (click here). It is by Jurg Kiener, CEO of Swiss Asia Capital. He points out the dual market for gold, one paper and one metal. He expects soon the US ‘gambling price’ gold market in COMEX and LME to default. By that he means a return suddenly to physical price determination. He is quoted to say THE GOLD PRICE WOULD DOUBLE VERY QUICKLY, LIKE IN DAYS AFTER THE EXPECTED METAL DEFAULT.
http://www.cnbc.com/id/15840232?video=880574352
Silver is the new blonde…
Anecdotal signs of the times:
When I returned home from the cruise and opened my pile of snail mail I received:
1) Credit card closure due to non-use.
2) My most valued NCL credit card which gave us 3% towards a cruise for every dollar charged is now becoming a stinky world points card.
Time to go CC shopping again.
The guy who in charge of TARP for the next 99 days or so is busy talking big picture while Rome burns.
http://www.ft.com/cms/s/0/53d40cf2-9924-11dd-9d48-000077b07658.html
Kneel KashKari is going to outsource the whole gig to a select few so get on with it already and stop auditioning for your next job.
from prudent bear:
US national debt is shortening in maturity. In December 2000, the average length of US public debt held by private investors was 70 months. As at March 2008, the average length had shortened to 53 months (a decline of 24%). 71% of this debt is due in less than 5 years; 39% is due in less than 1 year. In the Clinton/ Rubin years, the Treasury stopped issuing 30 year bonds (the decision was reversed by the Bush administration). The ostensible rationale was that projected US budget surpluses would allow the government debt to be retired. In reality, shorter dated bonds took advantage of lower shorter interest rates to reduce interest cost and boost surpluses (this was the US government’s version of the carry trade). The US must now “roll over” significant amounts of debt in the coming years.
However as Warren Buffett in his 2006 annual letter
to shareholders observed: “Foreigners now earn more
on their U.S. investments than we do on our investments abroad … In effect,
we’ve used up our bank account and turned to our credit card. And, like everyone who gets in hock, the U.S. will now experience ‘reverse compounding’ as we pay ever-increasing amounts of interest on interest. …. no matter how rich you are, borrowing on top of borrowing is not a great long-term financial plan. I believe that at some point in the future, U.S. workers and voters will find this annual ‘tribute’ (of interest payment on the debt) so onerous that there will be a severe political backlash… How that will play out in markets is impossible to predict – but to expect a ‘soft landing’ seems like wishful thinking.”
The Economist magazine wrote that: “…public credit depends on public confidence…The financial crisis in America is really a moral crisis, caused by the series of proofs …that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged…funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit” The words appeared over 100 years ago on 2 November 1907 during the 1907 crash.
#48
“From a very simplistic point of view, the problem is primarily due to the fall of residential real estate prices. Until this fall slows significantly for a period of time or stops completely, then any intervention is really a waste of effort unless it can impact this fall.”
this is why I think the next step in the intervention is going to be something like the following: gov’t guarantees of sub-5.0% mortgages for first time home buyers, coupled with big (refundable) tax credits for the same. Creating massive subsidy of buyers is one way to slow/stop price declines
While SOV common stock is down look at the pref stock. Can’t wait till bonds open on Tuesday.
SOVPRB SOVEREIGN CAP TR V
Last [Tick] 14.80[ + ]
Change 6.60
% Change 80.49%
Whatevery one is missing here is that that systemically swapping bank assets for US Govt assets may not eliminate risk as it only transfers it however, the bigger issue is to get it our of the banks and spread it out. Bank Debt investors provide the fuel that keeps credit flowing. If people can’t lend money to banks or buy their bonds they are dead and whole economy shuts down. I was buying bank bonds and stopped awhile back as I feared the trailor trash did not realize that and they would force govt to make banks fail as they don’t understand the concept of the greater good and collateral damage. Lehman was a mistake. Little old ladies buy investment grade bonds and when you let an investment grade bond freefall into bankruptcy in such a short time it undermines every investment grade company.
From the Star Ledger:
Corzine says N.J. will help protect against foreclosures
Gov. Jon Corzine today said the impact from the recent stock market plunge and credit crisis has yet to be fully realized and will likely bring “rising levels of unemployment,” adding New Jersey may even try to purchase homes to protect residents from foreclosure.
Speaking this morning on NBC’s “Meet the Press,” Corzine proposed the federal government buy the mortgages at market value then restructure them, and possibly buy houses outright.
A short time later, in an appearance on WABC’s “Eyewitness News Up Close,” Corzine indicated he would follow his own advice, suggesting the state would be buying homes.
“We’re going to do some on-the-ground purchases of homes,” he said. He vowed to “protect neighborhoods” from being devastated by large numbers of foreclosures, which lower the values of nearby houses.
MS toad wild ride!
Took a taste on Friday, we’ll see…
Reading the Neel Kashkari plan, I have full trust it is bound to become one of the greatest failure in all rescue plans. The trust the plan puts in such innovative rescue is unimaginable. These are times not to innovate, but to have carrot and stick talk with Banks. They should just follow Buffets lead and tell every bank can get the same deal. The public would be behind it as they trust Buffet for his long term thinking. Also it would take much less time and you don’t need to setup whole new department within Government. IMO Government benefits in long term and People will not complain as plan was originally conceived by Buffet, hence will increase confidence. Why innovate new way, when that innovation only got us in this trouble?
Stu 29,
On friday’s I’d go for the blue collar trifecta: booze, lottery ticket, nudie mag.
Buffet has a fundamentally different motivation than the gov’t. he is out to make money. the gov’t is out to create stability. BTW, buffet’s investments were premised (as he himself said) on gov’t intervention
stu (69)-
Yep. “Responsible” and “gubmint” never belong in the same sentence.
Great summary by Stanley Kurtz in today’s NY Post:
“FOR years, ACORN had combined manipulation of the CRA with intimidation-protest tactics to force banks to lower credit standards. Its crusade, with help from D#emocrats in Congress, to push these high-risk “subprime” loans on banks is at the root of today’s economic meltdown. …
As ACORN ran its campaigns against local banks, it quickly hit a roadblock. Banks would tell ACORN they could afford to reduce their credit standards by only a little – since Fannie Mae and Freddie Mac, the federal mortgage giants, refused to buy up those risky loans for sale on the “secondary market.”
That is, the CRA wasn’t enough. Unless Fannie and Freddie were willing to relax their credit standards as well, local banks would never make home loans to customers with bad credit histories or with too little money for a downpayment.
So ACORN’s D#emocratic friends in Congress moved to force Fannie Mae and Freddie Mac to dispense with normal credit standards. Throughout the early ’90s, they imposed ever-increasing subprime-lending quotas on Fannie and Freddie.
But then the R#epublicans won control of Congress – and Rep. Roukema scheduled her hearing. ACORN went into action to protect its golden goose. …
ACORN’s intimidation tactics, and its alliance with D#emocrats in Congress, triumphed. Despite their 1994 takeover of Congress, R#epublicans’ attempts to pare back the CRA were stymied.
Instead, D#emocrats like Rep. Barney Frank (D-Mass.) and Reps. Kennedy and Waters allied with the C#linton administration to broaden the acceptability of risky subprime loans throughout the financial system, thus precipitating our current crisis. …
WHEN the ACORN-D#emocrats alliance finally succeeded in blocking R#epublicans from restoring fiscal sanity in 1995, the way was open to virtually unlimited lending quotas – and to a whole new way of thinking about credit standards.”
“Great” and “New York Post” never belong in the same sentence.
vodka (74)-
There is a solution to this mess. And, there is only one solution to this mess.
However, no one- in any gubmint- wants to allow that solution, because it runs counter to their self-interest and the interests of the people who have bought their cooperation through bribes and contributions.
Jamil:
http://tinyurl.com/jamilisanass
does Corzine need voter approval to do this plan? ( 82 )
i can’t understand why no plan has tried to reward responsible renters with good credit. why not give those who showed good financial judgement a chance at owning a home? say %20 down to renters with good credit
Croosroads: see Clot’s 87.
skep (80)-
And this won’t work either:
“this is why I think the next step in the intervention is going to be something like the following: gov’t guarantees of sub-5.0% mortgages for first time home buyers, coupled with big (refundable) tax credits for the same.”
I hear this coming from a lot of mortgage broker-types, along with some sort of idea for across-the-board principal writedowns- or buydowns- on existing loans.
This is how I now know that most mortgage people are even dumber than Realtors.
grim (82)-
Maybe I can organize all my neighbors into a giant scheme to stop paying our mortgages. Then, perhaps Commissar Jon will come buy our houses.
Oops, probably not…this is Hunterdon Co after all. We just pay in, so that Trenton can continue to finance the welfare state. Benefit is not supposed to accrue to filthy rich people such as us.
“We’re going to do some on-the-ground purchases of homes,” he said. He vowed to “protect neighborhoods” from being devastated by large numbers of foreclosures, which lower the values of nearby houses.
Can you imagine the damage this guy could do as Sec’y of the Treasury? We’ll be pining for the good old days of Klink.
“this is why I think the next step in the intervention is going to be something like the following: gov’t guarantees of sub-5.0% mortgages for first time home buyers, coupled with big (refundable) tax credits for the same.”
I would take a goverment loan at 1.75% fixed interest rates for First-time home buyers who never ownded a home :)
If banks getting thouse loans why can’t I??
SG (84)-
Cash & Carry looks like- and talks like- a guy whose sum experience leaves him totally overmatched by the pool of shit he’s about to try to swim across.
stu (89)-
You can’t forget “Headless Body Found in Topless Bar”.
If that’s not greatness, I don’t know what is.
jamil (88)-
Thanks for your reliably tedious and irrelevant posts.
On the other note -It seems to me that separation between “better” towns and not so good towns is getting more pronounced in Central Jersey right now.
I am not talking about Top tier towns (with home prices around 700K-1mil).
I am talking of towns like Bridgewater, Watchung, Warren, Metuchen, Cranford, Scotch Plains, Fanwood – and such – the ones with better schools on the direct transportation routes.
Vs. Towns like Piscataway, Middlesex, Dunellen, Manfield, Perth Amboy and such…
In Second tier towns House priced Dropped a lot in the past 2 years for starter homes and fixer-uppers).
It better towns only a little bit if any. In some I feel hat they have raised in he last couple of months?? – Strange effect of Economical turmoil.
So the separation of NJ into Ghettos and Places for Rich people is accelerating – or getting more pronounced.
Am I making it up or anybody else noticed the same???
98 moderated.
Please Unmod post #99??? – it must be Middle$ex which did it.
xroads (92)-
Think of the financial system as a giant con. A pyramid. Ponzi. Organized crime.
Folks like you are the sucker, the mark, the stiff.
Wake up. ABSOLUTELY NOBODY IN GUBMINT CARES ABOUT PEOPLE LIKE YOU…other than to figure out new ways to extract even more money from your pocket.
Nariman Beharvesh on CNBC now, his prediction for unemployment by next spring
low range 1/3 probability upto 7%
high range 1/3 probability upto 9%
In either scenario, unemployment rises, consumption goes down.
I like this house, seriosly.
http://www.realtor.com/search/listingdetail.aspx?ctid=84451&typ=5&sid=5ae10f0102c941d89da1559b5090f439&lid=1103722780&lsn=7&srcnt=58#Detail
MLS ID# 2585922
Too bad I do not want to commute this far.
Al (102)-
The cracks are beginning to show in the “top” towns.
Give it a few more weeks. You’ll see even more. You can’t believe how many house prisoners I meet at the 700K+ level these days.
Al (107)-
It’s a total POS. At 225K, maybe a buy.
stu 93: Uh..The one piece of legislation sponsored by Gramm..B#iden and majority of dems supported it, and it was signed by C#linton.
We are in bipartisan mess, but the housing mess is largely one-party mess (Fannie/Freddie May, acorn).
Enough Jamil.
There was not a single partisan post here today until you arrived. Please go back to reading your so-called news stories in the Post.
clot
I guess I should take out the biggest mortgage I can get and stop paying put my hand out and see what happens? or is it too late?
crossroads. Just keep on renting. Many of us here wish we did!
Crossroads: Or listen to Jamil and vote for the Republicans. They will actually buy you a house and pay for your property taxes as well. Of course, you must make over 500,000 per year. It’s true, I read it in the post.
clot– I think we agree that there are widespread fundamental problems beyond the decline in house prices– this is just the catalyst for the unraveling so far. But I think you know that world gov’ts are on board at this point for doing whatever it takes to stop the unraveling. So unless we are looking at total systemic collapse (and to me, this means worldwide collapse of all currencies), the gov’ts are probably going to accomplish what they intend. Think about it: if the entire world is on board, the U.S. gov’t could buy every single house in America.
Clotpoll Says:
October 13th, 2008 at 11:32 am
Al (107)-
It’s a total POS. At 225K, maybe a buy.
I just like the round tower – alwasy wanted to have a place like this – put a small worktable in the rount part of a room at seat in it surrounded by windows. Of course also depends on the view fromt he windows.
And regarding ym post – I believe that we will see significant cracks in 700K towns, as 700K is very expensive and unaffordable for 95+% of population.
But will we see significant cracks in 350-400K towns with decent schools. So far in thouse towns I do not see significant drops in starter home prices. In fact i saw significant increase in the last 2 month, or I should clarify and say that all lower priced homes sold fast or went off the market.
#96 clot: along with some sort of idea for across-the-board principal writedowns- or buydowns- on existing loans.
As I have said, this IMO would destroy the housing market, and would cause prices to fall even further, as potential buyers will need an insurance premium (in the form of an even lower price), to protect themselves from this.
There is no way in hell that they can inflate the housing bubble again. Mortgage rates are not the issue, the prices are.
Unless there are no doc / no money down loans available, these prices are out of reach at current income levels.
Add 10% unemployment, increasing property taxes and the soon-to-come increase in income taxes (both state and federal), that sounds the death knell for these prices.
You have to look at the magnitude of the approach being offered, the variety of the steps gov’t has shown itself willing to take, the unity with which world gov’ts and central banks are addressing the crisis, and then ask yourself whether you want to be on the opposite side of these coordinated actions. you have to be supremely confident to do so, I think
#102 Al; Where are all these so called rich people coming from? The Wall St job machine has dried up,and will not be back for years.
Victorian (118):
“Mortgage rates are not the issue, the prices are.”
Yup!
prices are way too high, we all agree. but do you think for a second that there wouldn’t be a surge of buyers if the gov’t started offering 2% fixed 30 yr mortgages and downpayment assistance to 1st time buyers? probably everyone on this board would be buying in that environment.
Where are all these so called rich people coming from? The Wall St job machine has dried up,and will not be back for years.
3b,
They’re not dry. They have been exported to Mumbay, Shengay, and Dubay.
#116 Al:But will we see significant cracks in 350-400K towns with decent schools.
No area, no town, or no price range is immune from the decline;it is as simple as that.
Al #102,
Taking your observation further and speaking specifically to what’s happening here in P-way, the differences between the various regions of this town are becoming much more pronounced. The huge drops in property values are limited to certain sections of P-way like the parts bordering Dunellen and Plainfield, and to a smaller extent the section bordering Middlesex.
The parts of P-way within a 5-minute drive of Edison train station are still doing quite well IMO.
So the differentiation you speak of is happening, but it’s more granular than a the municipal level. JMHO.
3b #120,
There is a ton of new residential McMansion construction in Warren. Even today. WTF??? Who’s buying this crap?
National Debt Clock draws worried glances, reactions
http://www.cnn.com/2008/US/10/12/national.debt.clock.ap/index.html
NEW YORK (AP) — A watched clock never moves — unless it’s the National Debt Clock.
The National Debt Clock keeps a running tally of total U.S. debt and what each family owes.
The National Debt Clock keeps a running tally of total U.S. debt and what each family owes.
In fact, the digital counter has been moving so much that it recently ran out of digits to display the ballooning figure: $10,150,603,734,720, or roughly $10.2 trillion, as of Saturday afternoon.
The clock was put up by the late real estate mogul Seymour Durst in 1989 when the U.S. government’s debt was a mere $2.7 trillion, and was even turned off during the 1990s when the debt decreased.
It will be replaced in 2009 with a new clock, said Jordan Barowitz, a spokesman for the Durst Organization. The new clock will be able to track debt up to a quadrillion dollars, which is a ‘1’ followed by 15 zeros.
In the meantime, the ‘1’ from “$10.2” has been moved left to the LCD square once occupied solely by the digital dollar sign. A non-digital, improvised dollar sign has been pasted next to the ‘1.’
The current clock had enough digits to measure the amount of money owed by the U.S. government until debt recently hit $10 trillion. Since then, more eyes have been on the fixture near touristy Times Square.
When Nancy Gurzo spotted the sign one recent afternoon, she came to a halt. Standing in the middle of the sidewalk, Gurzo pointed up at the sign, gesturing for her daughter, son-in-law and three grandchildren, all of whom had left her behind, to walk back and see.
“It’s a shame,” the 60-year-old Manasquan, New Jersey, restaurant manager said, anger and disbelief in her face. “It’s an absolute outrage. It may be the end of the United States as we know it today. We haven’t seen the worst of it. Everybody should stop and look at this clock. It affects all of us. I’m worried.”
Don’t Miss
* National Debt Clock runs out of digits
* The national anxiety index
That afternoon, others glanced at the clock, some of their faces wrinkling with confusion. But most pedestrians seemed not to even notice the clock, which is tucked several stories high on the side of a brick parking garage-office building.
The counter, on West 44th Street near Sixth Avenue, is more visible to those walking west; for those walking east, the sign is already behind them once they walk by the building.
On a shaded block of Broadway theaters, restaurants and high-end retailers, the clock isn’t the most striking sight. Below the clock is a midtown office for the Internal Revenue Service, and at the nearby intersection stands an Ameritrade investment office and a Chase bank branch.
Svet Stauber paused in front of the sign and held his camera up to snap a picture of a key measure of the U.S. economy.
“It’s symbolic,” Stauber, a 40-year-old pilot from Switzerland, said of the counter’s lack of space. “It’s a very big symbol. It’s a complete failure of the system. It’s the most powerful country in the world with a conservative government for the last eight years, and it’s running the biggest debt ever.” Video Watch the National Debt Clock run the numbers »
The reaction of Stauber’s wife, Roberta, to the escalating debt was more pointed: “It’s good for the United States,” the doctor said, adding that maybe the country’s current predicament would deflate its “ego” and “arrogance.”
“You think you are the best country in the world,” she continued. “I hope America reflects about this.”
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Kary Perez, an 18-year-old freshman at Rutgers University, said, “I think it’s sad how bad we’ve fallen as a nation,” as she watched the clock, which features images of $1 bills in the background.
Below the amount of the national debt on the clock is another row of figures: “YOUR Family share.” As of Saturday afternoon, the $86,023 fit properly into the respective LCD squares.
Skep (122):
“but do you think for a second that there wouldn’t be a surge of buyers if the gov’t started offering 2% fixed 30 yr mortgages and downpayment assistance to 1st time buyers?”
People don’t have any downpayment whatsoever and soon many more will be unemployed. Toyota is offering 0% loans on almost every car they sell and they still can’t sell any. The problem isn’t interest rates on loans as much as it is lack of downpayment and the still overvalued home prices.
Victorian
are you saying people should buy a house that is in-line with their income? Not once have I heard any govt. official refer to price:income. it just doesn’t seem to exist in their minds
probably everyone on this board would be buying in that environment.
Most “first time buyer” programs in this area are saddled with such strict income limitations that most who qualify are better off not buying.
Clot..just a curious question on short sales that you see banks accepting, what is the average percentage/$ off the loan amounts? Are banks actually agreeing to these types of sales as well? thanks in advance
#126 syncmaster: I do not know. I know in my area there are lots of McM’s sitting and rotting on the market for months now.
Poorly constructed monstrosities on 50/60 by 100 lots, with 15/16K or more a year in property taxes.
I still read in the local paper about various so called developers who are looking for town approval to build condos, yet we have a brand new condo development that has been sitting empty for a year.
Plus tons of resales for other condos. These people are either totally clueless or insane, or both.
“it just doesn’t seem to exist in their minds”
That’s because they are all rich and never had to worry about their personal finances like we do.
XRoads (129) –
“are you saying people should buy a house that is in-line with their income? Not once have I heard any govt. official refer to price:income.”
– The market is dictating that.The government will have to debase the currency, if it wants to go against the market. Lots of unintended consequences.
stu– gov’t is already providing for 3% down loans (less for low income people, as I understand it), through FHA. Given the trillions they have shown themselves willing to throw at this problem, how big of a deal would it be to allow for zero percent down fixed rate loans for anyone who meets income requirements? I think prices would still fall in many areas, but it would probably prevent them from falling nearly as much as they would otherwise. With a democratically controlled gov’t, I think we will see an equally large stimulus on the individual side as on the institutional side currently.
3b #132,
I hear you on the condos. There are brand new “luxury townhomes” in Middlesex Boro (I’m in P-way, right next to it) near Route 28 that have been sitting vacant all year. I drive by it to and from work every day and sometimes see what appears to be a showing (a family following an old guy around) but I’m yet to see any evidence that anyone has actually moved in.
3b (132):
“These people are either totally clueless or insane, or both.”
The profit in the initial sale of condos is so large that they could sell for 1/3rd of original ask price and the builder would still turn a profit.
Christopher Court in Montclair is a perfect example.
They built these monstrosities right on top of each other (shared driveways) and listed them for $1.5 million or higher. One sold at that price. They sat for over a year. Eventually they sold in the high 9’s. I know what they bought the land for and have some decent ideas about what the construction cost. Developer still more than doubled their investment. They could have sold for 600K and the developer still would have profited. The cost to build a house and the land it sits on is still completely out of whack with sale prices. Keep this in mind when questionings developers’ motives.
There appears to be a flood of NJ license plates in Charlotte again. For a while I didn’t see many but these past 2 weeks I am seeing several a day again. There is defiantly another influx of NJ here. I suspect the unemployed are giving it a shot but one might want to keep an eye on the population numbers in the garden state.
#130
“Most “first time buyer” programs in this area are saddled with such strict income limitations that most who qualify are better off not buying.”
grim– as I understand it, FHA has no income limitation (cap). It is a small step to eliminate the 3% down requirement currently in place
Mitchell #138,
Moving to Dixie during an economic downturn sounds suicidal to me.
Skep/Grim….What is the delinquency/default rates on the fha loans?
#139 skeptic; So eliminate the 3% down payment, artifically adjust interest rates down, and on, an on and on.
The housing market will than become such a convoluted mess, that it may never have any real long term value as an investment ever again.
#138 Mitchell: With the BOA and Wachovia situation I cannot see the attraction to Charlotte for those who might be looking to relocate and try to obtain employment in the financial sector.
3b– understand your point and I agree. I am not saying that all of this intervention will fix the long term problems– those remain and will need to be worked out. I am just saying that gov’ts are showing themselves to be willing to do whatever it takes to prevent collapse right now. So to attempt to fight against this seems counterproductive. It is like “don’t fight the fed” times 100
#140 It might but Charlotte housing is still in line with income ratios.
#137 Stu: How are they faring now??
Housing shortage at N.J. colleges prompts costly building boom
Mish on FHA insolvency
http://globaleconomicanalysis.blogspot.com/2008/06/fha-loses-46-billion-denies-insolvency.html
Mitchell #145, maybe but Charlotte sucks as a place to live.
3B (146):
None have been resold as far as I can tell, but either way, the developer made a mint already. I couldn’t believe how long they took to sell too. At one point, they offered a fancy car (maybe a porsche) to the first buyer. Crazy.
#143 I cant see anyone working in the financial sector doing well anywhere except China.
#149 Compared to what? Charlotte rocks or should I say North Carolina rocks.
The only downside to North Carolina is the school system but that all depends on where you live. Plenty of top notch schools here just live in an area with them.
Mitchell #149,
Small parts of North Carolina are acceptable places to live.
Most of it is a primitive and rural backwater.
grim Says:
October 13th, 2008 at 11:56 am
probably everyone on this board would be buying in that environment.
Most “first time buyer” programs in this area are saddled with such strict income limitations that most who qualify are better off not buying.
To follow up on this – in 2006 I was looking at first time home buyer programm:
It was capped at 75K/family income. so I was not qualified. Do you know what was the “MORTAGE AMOUNT” for this programm: 477K. rates were on he order of 5.75%, and downpayment reauired 3%.
How are you suppose to afford 477K home with under 75K salary??
And I just can not spell for the life of me.
“I still read in the local paper about various so called developers who are looking for town approval to build condos, yet we have a brand new condo development that has been sitting empty for a year.
Plus tons of resales for other condos. These people are either totally clueless or insane, or both.”
3b,
Actually, it makes sense, at least from a certain perspective. Lets say you incorporate into 3b partners and you get a town to approve your project, and you are able to get financing. Now, you start paying yourself a hefty salary. You open a sales office and start tking deposits. You may even start construction. All the while you are paying yourself a salary, maybe put the wife, a few others on the payroll, make generous retirement contributions, prepaid life insurance, yadda, yadda. You may even begin construction, perhaps buying supplies from Mrs. 3b’s company. When things blow up, the corporation goes BK and you move on to a new business opportunity.
For those who have connections to a certain element, and that element has bankers who owe them money, there is an even easier time of getting the financing approved.
“Housing shortage at N.J. colleges prompts costly building boom”
THATS IT. For single folks, sell the house, or give up the apartment, take a few classes around your work schedule, and live in a dorm.
From BP. Bear market comparisons;
http://www.nytimes.com/interactive/2008/10/11/business/20081011_BEAR_MARKETS.html
#153 A few years back I could agree with that to a certain extent however over the last couple of years though its changed significantly.
Buddy of mine who was here 3 years back would have said I live at the edge of country but now he thinks I live in the middle of everything.
Nancy Pelosi and O b#ma want all people to be able to take out 401K money without penalties or taxes, an want to move legislation in that direction…can you believe this!!!! we are going down a very bad path…
all of this seems like a gasp of air for lifetime of pain
[138] Mitch,
Don’t let them destroy NC like they destroyed Vermont! An NJ plate should be viewed like a 12 point rack—through crosshairs.
Nancy Pelosi and O b#ma want all people to be able to take out 401K money without penalties or taxes
Note to self, increase 401k and IRA contributions to 100%.
As grim just pointed out, we no longer have to pay income taxes!!!! sweet!
UPDATE 1-Goldman faces limits in Platts oil window-sources
Goldman Sachs, the biggest oil trader on Wall Street, has been restricted from making a market in price assessment agency Platts’ daily oil trading window as counterparty anxiety grows, two sources familiar with the move said on Monday.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/13/afx5542229.html
[160] house,
That cannot be without all taxes, only the addtional 10% penalty. To permit me to redeem my 401k without taxes effectively permits me to avoid all taxation on that money altogether. This cannot be so. Rather, they probably will permit folks to take it out early w/o penalty but be taxed on it. Further, it must have some qualifications, sort of like the hardship exemptions. Otherwise, that giant sucking sound of 401k equity would collapse the entire global system.
If they were daft enough to propose that I could redeem my 401K without current taxation and for any reason, I would vote Comrade Ob-drama in a heartbeat, redeem that money and put it into something that would avoid future taxation.
Free money, come get your free money!!!!!
Fed Announces Unlimited Borrowing
This morning the Fed issued a Press Release On Unlimited Borrowing.
In order to provide broad access to liquidity and funding to financial institutions, the Bank of England (BoE), the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank (SNB) are jointly announcing further measures to improve liquidity in short-term U.S. dollar funding markets.
The BoE, ECB, and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day, and 84-day maturities at fixed interest rates for full allotment. Funds will be provided at a fixed interest rate, set in advance of each operation. Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction. Accordingly, sizes of the reciprocal currency arrangements (swap lines) between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures.
Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets.
Federal Reserve Actions
To assist in the expansion of these operations, the Federal Open Market Committee has authorized increases in the sizes of its temporary swap facilities with the BoE, the ECB, and the SNB, so that these central banks can provide U.S. dollar funding in quantities sufficient to meet demand.
These arrangements have been authorized through April 30, 2009.
http://www.federalreserve.gov/newsevents/press/monetary/20081013a.htm
[163] grim
Actually, I do recommend that–If you don’t qualify for Roths, make nondeductible contribs to traditional IRAs for the maximum, then in 2010, make your 2010 contributions, and then transfer the entire thing to a Roth, which you can do in 2010 without qualification.
If the 401k is low enough, convert what you can to an IRA, then to a Roth.
You pay tax on any money not previously taxed, but all future appreciation avoids tax. If you started in 2008, you could shelter contribs for three years this way (5 years for me). And make sure spouses do this as well.
House Hunter #160,
Source?
Just looking through the September sales in Madison and see that 42 Lorraine Road, which was a bit of a wreck, went for less than the 2003 price. First time I’ve seen that in Madison, where a lot of stuff still seems to go for list or even above.
Seems like a strange rally today. Volume isn’t through the roof. Dead cat bounce?
Fly in the global Ointment….
According to the BBC one of the conditions of the British government bailout program is that the banks involved have to increase their mortgage and commercial lending up to 2007 levels. how do they achieve this without bailing out borrowers on condition that they increase their borrowing up to 2007 levels.
if the UK bailout falls apart and it faces a bank run it cant handle is could remove trust all banks, globally, as a large number of nations have now guaranteed 100% of deposits.
really how does the UK bailout actually happen? what was that? blood from a stone???
http://articles.moneycentral.msn.com/Banking/HomeFinancing/nearly-1-in-6-homeowners-underwater.aspx
1 in 6 owe more than home is worth
link to BBC article
http://news.bbc.co.uk/2/hi/business/7666570.stm
here is a great explanation of how leverage created this mess.
http://www.businessweek.com/magazine/content/08_42/b4104000160047.htm
Extract:
It turns out that Lehman, like other big dealers, was running a perfectly legal but highly risky game moving money from firm to firm. It used the collateral from one trading partner to fund more deals with other firms. The same $100 million collected in one deal can be used for many other transactions. “Firms basically can use [the money] as their own collateral for anything they want,” says Kenneth Kettering, a former derivatives lawyer and currently a professor at New York Law School. But when the contracts terminate as the result of bankruptcy, the extra collateral is supposed to be returned.
Kettle that is the most ridiculous thing I’ve heard. Are they nuts? Let’s get our way out of a Ponzi scheme by adding another layer to the Ponzi scheme. What are they going to do if the plan works in the short term and the chickens come home to roost? Find some interstellar government to back all the banks and national debts?
“ECB is considering to lower the quality of collateral accepted by banks, because the high quality collateral is “getting scarce”.”
HH full of BS about 401K and IRA…
Google news search reveals nothing. Sounds like another case of typical Republican lies and deception.
No source necessary of course.
[163] grim, et al
wow, I just looked at the briefing sheet from the O campaign on the 401(k) proposals, and what I see suggests a cynical way to temporarily increase tax receipts in the guise of helping out those down on their luck. Never mind that this goes against the two bedrock dem principals of restricting individuals from making potentially harmful choices and preventing tax avoidance.
The 401k withdrawal scheme will actually cause people to realize more taxable income in 2008 and 2009. By letting folks tap the 401ks, they get the additional privilege of a higher tax bill. This is a way that the dems can increase tax receipts (which are gonna drop a lot) in 2008-09.
The second provision, revoking the mandatory withdrawal rules, also increases tax receipts by permitting seniors to delay withdrawals until the 401ks increase in value (thus increasing the amount taxable). And if Dad croaks beforehand, it passes to his more highly taxed offspring, so the Fed gets a nice bounce.
This is beautiful. And I thought subprime lenders had managed to game the system in their favor.
[177] Stu,
HH had his facts slightly incorrect. The 401k and IRA withdrawal proposal are on the Ob/bid website.
Also on the Ob briefing sheet (which makes me wonder if it wasn’t hacked) is a provision for zero cap gains on small biz.
Huh? While a brilliant way to target a GOP bastion, it is exactly the sort of giveaway that the Dems would not dare consider unless there was some form of a clawback so that only smaller MBEs qualified. This requires more study, both to see if it is legit, and to figure out a way to exploit it somehow.
Just looking through the September sales in Madison and see that 42 Lorraine Road, which was a bit of a wreck, went for less than the 2003 price. First time I’ve seen that in Madison, where a lot of stuff still seems to go for list or even above.
Anyone paying near 2005/2006 prices please contact me, I have some formerly AAA rated MBS and CDO’s for sale.
[102]
I tend to agree that this seems to be the case. Prices are not dropping significantly in the places where most people want to buy(neighborhoods w/ good schools, near transportation, nightlife, etc). Where I live in Middletown it’s very evident. The nicer nighborhoods with the good schools are as strong as ever (close to train and GSP). There are not as many listings but what gets listed doesn’t sell for much less than 5-10% off the OLP. Soem are sellign at asking price if they are move in ready. The less desirable neighborhoods have a plethora of listings that nobody will touch. Prices have to drop to 20-30% off OLP to sell.
M’s 401k proposal only helps the rich. What is new?
McCane makes new 401k proposal
Posted: 12:00 PM ET
From CNN Associate Editor Rebecca Sinderbrand
McCane has proposed another economic change.
(CNN) – John McCane proposed suspending the requirement that investors begin drawing down their IRAs and 401Ks soon after age 70, his second major economic proposal of the week.
“We must also protect investors especially those relying on their investments for retirement,” McCane told the crowd at a campaign event in La Crosse, Wisconsin Friday.
“Current rules mandate that investors must begin to sell off their IRAs and 401Ks when they reach age 70 and one half. To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended.”
The Dems 401k plan is true, and insane.
Stu [177],
“WASHINGTON (MarketWatch) — Sen. Barack Obama called for allowing tax-free withdraws from IRAs and 401(k)s in 2008 and 2009 on Monday, as well as a new tax credit for companies that create jobs in the U.S. Obama made the proposals as part of what he calls an economic “rescue plan” for the middle class. He would allow a maximum of $10,000 to be taken tax-free out of retirement plans. Obama is also calling for a 90-day foreclosure moratorium for homeowners who are making efforts to pay their mortgages”
Stu [177],
“WASHINGTON (MarketWatch) — Sen. BO called for allowing tax-free withdraws from IRAs and 401(k)s in 2008 and 2009 on Monday, as well as a new tax credit for companies that create jobs in the U.S. O made the proposals as part of what he calls an economic “rescue plan” for the middle class. He would allow a maximum of $10,000 to be taken tax-free out of retirement plans. O is also calling for a 90-day foreclosure moratorium for homeowners who are making efforts to pay their mortgages.
Name edited, moderation.
BC…uggh!
[177] stu
Here is some more about the repub lies re: 401(k)s and O/B
http://mobile.politico.com/story.cfm?id=14523&cat=politics
Can’t wait to see the details. I agree with NOM, this seems less thought out than then M’s choice of Palin for VP.
sniff sniff, sniff, sniff…..
Aye matey, I be smelling the foul stench of of a grog soaked landluber that just got keelhauled to the docks….. or is that desperation?
Ugh again!
What could O man be thinking? As soon as he stops comparing M to W, he turns retarded. Can we please get a third party started already?
BC Bob Says:
October 13th, 2008 at 1:39 pm
Stu [177],
“WASHINGTON (MarketWatch) — Sen. BO called for allowing tax-free withdraws from IRAs and 401(k)s in 2008 and 2009 on Monday, as well as a new tax credit for companies that create jobs in the U.S. O made the proposals as part of what he calls an economic “rescue plan” for the middle class. He would allow a maximum of $10,000 to be taken tax-free out of retirement plans. O is also calling for a 90-day foreclosure moratorium for homeowners who are making efforts to pay their mortgages.
doh!
All I am saying is they both should get their hands out of my 401K. They already have it deep enough in my wallet with the taxes.
Mr. O is going to rain money down on the USA. 2009 might be a good time to take on a big mortgage
[180] redux
And I confirmed from the OB website that O has proposed eliminating cap gains on start-ups and small biz. Wow. Gotta figure out a way to game this puppy.
This furthers my long-held thesis that the number of U.S. based C corps will decline dramatically, and mid-sized businesses will devolve into a series of smaller businesses in a “keiretsu” structure. Meanwhile, more american brands (and their large-cap owners) will become foreign-owned entities.
Stu, it has been my general assessment that we are fundamentally dealing with two clueless idiots who only know one thing, and that is they want to be president. The root of the problem is Republican or Democrat there are no leaders. No one who will take the facts at hand and be pragmatic, it is all ideology or pandering, not exactly a solution.
skep [197],
Probably a better idea; a bigger vault.
Jesus when is this stupidity going to end?!
Gotta figure out a way to game this puppy.
Well said.
Agreed. The question I then often wonder about is if a candidate could ever make it to the white house without pandering. Are there enough intelligent people out there who would realize this?
Probably not.
We are so screwed, although I remain confident that nothing of what any politician ever promises when campaigning ever seems to come to fruition.
If M does get elected, I will want my damn gas holiday next Summer regardless if unleaded is under $2 or not!
The details of the O/B 401k proposal are pretty straighforward–the dems will simply mandate that the existing ability of plans to incorporate a hardship withdrawal, which is now optional, be made mandatory. It is a cost to businesses, so that hurts them somewhat, but the really cynical thing is that the dems are permitting Joe Sixpack to blow his 401K money on lottery tickets and current taxes.
Surely the dems know that tax money they take now won’t be there later, and when Joe and Suzy Sixpack have no money when they retire, what do you think will be the result. The eyes of the feds will turn to the piles of money left in everyone else’s 401ks and Roths, and their hands will rub together, and they may drool a bit, and mutter “mmmmmmmm” . . . .
Perhaps it is a good idea to take that money out now, buy a new suitcase, and book a cruise to Grand Cayman.
“Perhaps it is a good idea to take that money out now, buy a new suitcase, and book a cruise to Grand Cayman.”
It sure appears that this may be the wisest strategy. Believe me…when we were cruising past the desolate hills of Baja Mexico, the thought of finding a place to bury some gold did cross my mind.
“• Allow penalty-free hardship withdrawals from retirement accounts and 401(k) accounts this year and next. The plan would call for withdrawals of up to 15% of an account up to $10,000 without penalty. It could also be applied retroactively.”
I call hardship. I really need a vacation. Can I have the money now?
[195] chifi
I know you know better, but the reporter suggested that withdrawals are tax free. Ob’s website says differently.
Another reason not to believe everything you read in the MSM. (FWIW, there was a story done about me once that ran on AP about 25 years ago, and they made me out to be an amazingly nice guy and the leader of a large organization. The large organization part wasn’t true, and there was never even a small organization, let alone a large one.)
[191] stu,
Can one go into negative thinking out???
nobody who told the truth would ever get elected because Americans will not accept the truth, which is that their standard of living is going down significantly and permanently. most americans do not think that their standard of living is so great to begin with, so they do not want to hear that it must get worse. Mr. O will hide the ball by taking from the rich and giving to the poor for a while and maybe inflating the hell out of the dollar. just like rolling over car debt– americans prefer this approach
Gotta figure out a way to game this puppy.
Start an incubator.
#131
Most “first time buyer” programs in this area are saddled with such strict income limitations that most who qualify are better off not buying.
Ain’t that the truth! We didn’t qualify for ANY first time buyer incentives because “we make too much money”. So we get a higher interest rate because we can afford the house over someone that possibly can’t.
skep (115)-
Keep on thinking that. All the world’s gubmints together, fighting stupid with more stupid…yet there will be a positive outcome?
Yeah, right.
From Bloomberg:
Gates Predicts `Significant Recession,’ More Job Loss
Microsoft Corp. co-founder Bill Gates said the U.S. economy is headed for a “fairly significant recession,” and that the unemployment rate may peak at more than 9 percent.
Higher personal and governmental debt are contributing to the U.S. economic slowdown, Gates said today in comments at Harvard Business School in Boston. The U.S. unemployment rate climbed to 6.1 percent in August and stayed at that level in September.
Alumni gathering at the business school’s centennial celebration responded to questions about the worst U.S. financial crisis since the Great Depression. The perception of a strong economy led many investors to have unrealistic expectations of high, stable market returns while there were few defaults and other signs of trouble, Gates said.
“That encourages people to get leveraged and take risks,” Gates said. “The danger of leverage is pretty incredible.”
skep (122)-
Wrong. Only the deadbeats and losers would take that sucker bet.
Can’t re-inflate a bubble that’s been punched full of holes.
Clot, I prefer the we are trying to keep a sinking ship afloat without patching the holes, metaphor. It can work for a while but if the seas get rough you are royally screwed!
xroads (129)-
“Not once have I heard any govt. official refer to price:income.”
That’s because if prices are allowed to adjust relative to actual income, their 700 bn MBS fraud will be revealed for what it is. The crooks still need more time to completely loot the public till. They’re not done yet.
As BC said, the asset depreciates; only the debt remains. No plan out there will work, because no amount of jury-rigging can change this fact. Until the market is allowed to clear itself, things will continually worsen.
clot– the reckoning was delayed post-internet bubble, so maybe it can be delayed again. I am not saying that there aren’t fundamental problems that must be felt at some point; I’m just saying that the world gov’ts have proven their unwillingness to face reality at present and are willing to do whatever they can to prevent this. If they delay the pain for 5 more years, do you want to wait on the sidelines for that amount of time, or does it make more sense on a personal level to participate in the next bubble?
Here’s my short take on the “English plan”:
We will give you, Mr. Bank, all the money you want…as long as you promise to mortgage-lend it all out as fast as you can (2007 levels) to anyone and everyone who will borrow it. Figure it out. Ready, steady, go!”
xroads (112)-
Sadly, I don’t think it will ever be too late to try this.
I have actually advised several people to do it, and they have taken me up on it. Other than a hit to FICO, none of them have suffered any real adverse consequences.
I suspect it may end up that these people stay in their homes, get bailed with some sort of jury-rigged workout and will be able to jack their credit scores within 24 months of the enactment of whatever panacea ends up coming out of this morass.
skep (119)-
Call me confident:
“…then ask yourself whether you want to be on the opposite side of these coordinated actions. you have to be supremely confident to do so, I think.”
Hunter (132)-
I’ve seen shortfalls accepted as high as 35% of the payoff on the first. On the second, acceptance of virtually total loss is common.
And, yes, banks do accept these deals, when presented properly. Anything beats foreclosing.
“Keep on thinking that. All the world’s gubmints together, fighting stupid with more stupid…yet there will be a positive outcome?”
Clot,
Akin to a desperate trader doubling down on a losing position. Have they focused on the demand side of the equation? Oh, 1 out of 6, presently, underwater.
“…then ask yourself whether you want to be on the opposite side of these coordinated actions. you have to be supremely confident to do so, I think.”
skep,
It’s been working, for me, over the last 5 years.
skep (145)-
Don’t have to fight the Fed. They’re killing themselves (and, of course, us):
‘So to attempt to fight against this seems counterproductive. It is like “don’t fight the fed” times 100’
It’s been working, for me, over the last 5 years.
me too.
Ps. Have you cashed out on thid rally or are you waiting to see what happens. I rang the register at high noon.
clot and BC (since you are the ones who continue to respond to my provocation)– you have been correct all along in your calls and have apparently made some good money in the process. my question is how will you know when to change direction? just like chicagofinance said last week, what does capitulation look like? and maybe I overestimate the power of gov’t, but the gov’t operates in a very diff’t way than it did in the 1930s. they are trying to be proactive, rather than reactive. Not clear how well they are succeeding, but the simple fact that they are trying to head this off now is a very significant difference from the early 1930s
From the Record:
Financial crisis hits Rutgers endowment
The global financial crisis is taking its toll at Rutgers University where officials today said endowment income could be down by as much as 30 percent and the credit crunch threatens the viability of some building projects — including the expansion of the football stadium.
President Richard McCormick said more state aid cuts also could be looming for Rutgers, prompting his administration to warn of mid-year reductions in the university’s operating budget.
“The financial crisis will cause serious problems for Rutgers on several fronts,” McCormick said. The credit crunch — which has increased the cost of borrowing money — will force the university to take a “hard look” at all building projects, said McCormick. Perhaps the most high-profile of those projects is the $102 million plan to expand the football stadium by 14,000 seats.
jcer @ 1:49PM — Stu is a True Believer, only “Republican” politicians lie and pander.
In a very round about way Skep, you are asking Clot and BC where the bottom is?
“Ps. Have you cashed out on thid rally or are you waiting to see what happens. I rang the register at high noon.”
Make,
Got rid of the tramp. Just a weekend fling.
Qwerty:
Not true at all. I know that both parties pander and lie. You forget that I am a registered Republican and I did not vote for Gore nor Bush in 2000. I can not possibly pull the lever for M, for more reasons than I currently have time to list. The truly sad issue is that I can objectively look at both parties candidates and platforms, but it is YOU who can not. With a straight face you can not state that SP is fit to run anything more than a local PTA (and even that is pushing it). If McCane had won the primary in 2000, I would have voted for him. His positions have turned a full 180 degrees since then. Of course, you don’t realize this as you are blinded by your party alliance. Watch who you call a ‘true believer’.
The next bubble? Possibly, it may be in reverse mortgages.
From Hartford Business:
http://www.hartfordbusiness.com/news6851.html
dow up 700!
whee!!
Hope nobody went all cash late last week.
the result on the field this season has more to do with the stadium not being expanded than any credit crunch could ever do.
we hit the bottom! next up will be real estate! all is well in America!
we’re fine, everyone back to their ordinary shopping habits.
nothing to worry about! american idol starts in a few months, life is good!
[234]
Nope, starting today, for what was still in play when I capitulated. Will sell incrementally into rallies as I believe these to be dead cat bounces. Tomorrow, we are three digits to the downside.
My arms are in the air waiting for the next wheeee!
From NJBIZ:
Maxing Out Unemployment
Nearly one in two New Jersey residents receiving unemployment benefits over the past 12 months reached their benefit limits without finding a new job, according to David J. Socolow, commissioner of the New Jersey Department of Labor and Workforce Development. That’s the highest level in three years, he said.
New Jersey’s unemployment exhaustion rate was 46.6 percent in August, compared to 43.9 percent a year earlier, Socolow told the Assembly Commerce and Economic Development Committee last week.
Got rid of the tramp. Just a weekend fling.
BC,
No hateration on my end.
CNBC has ordered Dow 10,000 hats be kept ready.
[241]
“CNBC has ordered Dow 10,000 hats be kept ready”
$20 says it doesn’t happen this year.
(mind you, that will be $20 I would be happy to lose)
Come on people, put that cash into paper, or better yet buy something you can’t afford with a credit card.
Comrade Nom Deplume #180…I see you researched and found the source for the 401k garbage…remarkable isn’t it?
This is just amusing at this point. a few headlines today….
-France, Germany, Britain and Spain Pledge $2.2 Trillion to Bail Out Banks
-U.S. aims to buy equity in ‘healthy’ banks
-Spain guarantees $135 billion in bank credits
-France to provide $490 billion in bank guarantees
-Germany Pledges $680 Billion in Bank Rescue Plan
HH: Shoot me.
re: #242 – Nom I will sell you a put instead how is that?
[244] Comrade House,
The IRC already permits plans to allow something similar; all this proposal would do is to make it mandatory (and restrict it in a new way). It also may permit employees to draw down employer contributions—something the current optional provision doesn’t allow.
So it is not such a remarkable proposal. Rather, it was the fact that it was misreported that made it so.
“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.” Vladimir Lenin
[247]
Sean,
I said I wouldn’t mind losing $20. I do mind losing my shirt.
Nice rally in the markets.
My favorites are all up today….including a 10% bounce for my wealthy Swiss Uncle.
SAS
this one is for you…. Deal with the devil.
Crisis may set back poorest: World Bank panel
http://www.reuters.com/article/worldNews/idUSTRE49B3RA20081012?sp=true
World finance and development ministers warned on Sunday that developing countries risked serious and lasting setbacks from the global financial crisis and urged major economies to deliver on aid pledges. “This is a man-made catastrophe,” World Bank President Robert Zoellick told a news conference after a development committee meeting of IMF and World Bank member countries.
The World Bank said it has the capacity to “comfortably double” lending to developing countries in need. IMF Managing Director Dominique Strauss-Kahn repeated that the Fund stood ready to respond with a $200 billion war chest. Ministers also urged the World Bank to explore all options to help recapitalize banks in developing countries affected by the global liquidity crunch.
The bank’s private-sector lender, the International Finance Corp, said on Saturday it planned a $3 billion fund to help small banks hit by the financial crisis. But ministers said big donor nations should not use the turmoil in markets as an excuse to pull back on aid promises to the poor. African finance leaders pointed to the speed with which the U.S. and Europe have raised billions of dollars for faltering banks but are behind in aid commitments to poor countries.
Holy Christmas. This is nuts!
[246]
Now, now, comrade Stu. You are simply a victim of the bourgeoise, reactionary thinking caused by the pernicious effects of short term profiteering by the capitalists that control the main stream media and pervert it against the will of the people by reporting lies and half truths. Not your fault.
HH (244):
Call me ‘the boy who cried wolf’, but I have witnessed so many false allegations from the M party that I frequently do not trust what I hear until I can find some verification from a reliable source. In this case, I searched and could not find it. I suppose it is safe to assume that this info first surfaced on right-wing web sites.
The Messiah in February:
In San Antonio on Tuesday, [The Messiah] said that Clinton’s [90-day] foreclosure freeze was potentially “disastrous,” rewarding “people who made this problem worse” by benefiting banks that profit from high mortgage rates.
http://articles.latimes.com/2008/feb/21/nation/na-foreclosures21
The Messiah in October:
[Messiah] calls for 90-day moratorium on foreclosures
TOLEDO, Ohio (AP) – [The Messiah] is calling for a 90-day moratorium on foreclosures and a two-year tax break for businesses that create jobs as part of a plan to heal the nation’s ailing economy.
http://www.breitbart.com/article.php?id=D93POE7O0&show_article=1
jcer (199)-
This further cements my desire to never, ever vote again. To do so is to be complicit with fools and criminals.
Just gotta figure out how to game this brave new world…
Anybody else have any issue with short sell orders today? Ameritrade would not allow me to short anything :(.
How does the volume compare today?
#221 Clot…thanks so much for your input. I really appreciate it!
skep (226)-
The 30s? The current gubmint makes Herb Hoover look like a friggin’ genius.
Proactive? Hah! Their “proactive” is a smokescreen, behind which Congress rakes in massive bribes in order to run interference for a handful of individuals and corporations who will not cease until they have robbed this country of every last penny and saddled a Biblical generation to come with unsustainable debt.
So, how does one short this? Easy. Fade every f*&king hope-and-sucker rally that comes on each new announcement of sheer idiocy that passes for actual planning.
I start with the premise that everything’s going to zero. The only variable is how fast it will happen.
[210] hard,
Better yet, if the regs haven’t been drafted, everyone with a qualifying small business will sell out and pocket gains tax free. They may even sell to themselves, thus keeping their business and getting a nice high new basis. Then, if the biz makes more money, do it again, and if it doesn’t, deduct the losses.
My guess is that, if it ever passes (and I am betting no), the regs will be so onerous that few businesses will qualify. Further, it is an invitation to invite the feds up your backside with a microscope—-small biz is the biggest contributor to the tax gap, and don’t think the feds don’t want a reason to get you to turn over all your financial data. They absolutely do.
Recession is over and now housing in up, up and away..
hehe
vodka (252)-
F*&k poor people. Let ’em die.
Being poor is a sin.
Stu, I post on this site here and there, but mostly listen. I usually do not say anything unless I heard it from my husband(reliable source), saw it on the news…which is not necessarily accurate, or it is a real life story. There is a lot of information out there to think critically about, and neither side has it right all the time, I for one have finally given up the fight for now and go with Clot…no vote from me for either criminal
255 Stu, it was actually Bloomberg radio
264 Clot
Yes let them eat cake.
Thanks HH. It’s the intent to spread misinformation that really bothers me for some reason.
I appreciate your explanation.
Stu @ 3:09 pm — It’s telling that you must compare the presidential hopeful, against the opposition’s VP pick. (And Hope, Change, Joe Biden?)
Give The Messiah another decade, and he might — might — have the experience needed to lead this nation. I don’t think JM has the perfect experience needed (senators are generally ill-suited for the office), however the lesser of two evils is the only option on the table.
Victorian Says:
October 13th, 2008 at 4:14 pm
Anybody else have any issue with short sell orders today? Ameritrade would not allow me to short anything :(.
Vic: Do you recall what I said to Bost over the weekend? Case in point……banks closed today? maybe they just wouldn’t front you the money….check all disclosures, they may have changed some of the guidelines on your account….
chi (270)-
Somehow, I think an investor wanting to get long on margin today would’ve had no problem at all.
But, hey, that’s just my opinion…
Chifi,
I am almost 90% in cash. Margin should not have been an issue.
I could be mistaken but isn’t the $700B rescue fund much smaller? I thought they only got some of the money up front with the rest to come later?
HE (273)-
What’s a few hundred billion? Details…
De minimus.
I am just saying they keep tossing around $700B in the media as if Paulson has $700B on hand at this moment to invest in these banks when in fact, if I remember correctly, he only got like $250B of it up front. So any sort of market rally based on a $700B number is bunk.
the rescue fund is basically unlimited since it is revolving. more fundamentally, the fact that world gov’ts have flat out said they will do whatever it takes to restore confidence indicates that the dollar amount is unlimited.
“Leaders of the 15 eurozone countries agreed to a plan that will guarantee loans between banks through 2009 and allow governments to buy stock in distressed financial companies. Australia guaranteed wholesale funding for banks. Britain said it would inject as much as $63 billion into three banks; Germany made its own announcement of a $107 billion recapitalization plan. The ECB, the Bank of England and the Swiss National Bank announced they would lend unlimited amounts of dollars to banks.”
this is a lot of firepower to resist
The fact it is revolving is irrelevant, once the purchases are made a certain portion of the money is no longer available, just like if I put $3K on a credit card with a 10K limit, I only have $7K available.
So he only has $250 billion to buy preferred shares. How many banks does that even save. Does all this just go to the chosen five JPM, BAC, C, GS and MS? What about the regionals?
#277 – skep-tic this is a lot of firepower to resist
It won’t replace earnings, which were largely illusory.
It won’t years of decreasing wages in the middle/working class.
It can’t force banks to purchase dubious debt instruments.
The engines of credit have been beaten down. Unless they pull one hell of a rabbit out of their hats I think the far end of the path we are on is a certainty.
skep (277)-
You keep calling it firepower. However, all that firepower is actually a weapon that these morons have turned on themselves.
skep (277)-
As an analogy, think of Wil E Coyote, opening up his new box of tricks from Acme.
world gov’ts are basically saying we won’t allow any large banks or other to big to fail companies (like the Big 3 automakers) to collapse. it seems to me that most of the ultimate doomsday scenarios are based on a total freeze of credit like what developed in the last few weeks. well, given that interbank lending is now guaranteed worldwide, I do not think that is going to happen. there will still be a recession, but we will not get into depression type territory without massive bank failures. so my point is that if your outlook assumes another great depression, you may be disappointed
I think it is clear that any dollar figures that are being thrown around were just guesses. What everyone has been waiting for, and what happened over the weekend, was a commitment that gov’ts will do whatever it takes in a coordinated manner to prevent systemic collapse. So if the first $250B of the U.S., the $63B of the UK and the various other initial amounts are not enough, they will just drop more money out of the sky.
skep (282)-
I think it’s much more likely that at some point, the hyperinflation and massive gubmint-backed mandate to banks to make any loan- at any terms and at any cost- will begin to create the illusion of unstuck credit, then growth…followed soon thereafter by the realization that it’s all a sham, followed by the complete collapse of the world financial system.
skep (282)-
When it finally gets flung through the propellers, a Depression will be the best-case scenario.
Me, I see a worldwide breakdown of the social, political and financial order. Just pure, absolute mayhem.
We’re sowing the seeds of our own destruction.
Happy Monday!
#284
Clot– I don’t disagree with what you are saying. If the fundmamental problems aren’t addressed at some point, there will be a collapse. this massive money dump can only really be productive in the long run as a bridge out of the current crisis into something more responsible.
Clotpoll Says:
October 13th, 2008 at 4:11 pm
Just gotta figure out how to game this brave new world…
will you keep us posted?
Clot, let’s say you took over the Bernanke’s spot TONIGHT. what’s your three first steps of action?
regarding NOT VOTING …
wouldn’t it make more sense to give your vote to the 3rd party? I know, i know, it is a waste … still, let’s say 3rd party votes are up 25% or 100% from 2004.
that’s how movements start.
“if I remember correctly, he only got like $250B of it up front.”
Hehe,
In the first bill passed by the House, there was an immediate $250B with an additional $100B whenever the Sec. Treas. said he needed it, and, I believe, wrote a report saying ” I really needed it.” The other $350B required further action by congress. I seem to recall those provisions being stripped in the Senate bill that the House ultimately passed. If someone has a copy of the bill handy, it should be easy to verify whether the requirement for extra congressional action remains.
Banco Santander, S.A. to Acquire Sovereign Bancorp
Banco Santander to Acquire 75.65% of Sovereign Bancorp it Does Not Currently Own
for Approximately US$1.9 billion (euro 1.4 billion)
MADRID, Spain and PHILADELPHIA, Oct. 13 /PRNewswire-FirstCall/ — Banco
Santander, S.A. (NYSE: STD) and Sovereign Bancorp Inc., (“Sovereign”)
(NYSE: SOV), parent company of Sovereign Bank (“Bank”), announced today
that Banco Santander will acquire Sovereign in a stock-for-stock
transaction. Santander currently owns 24.35% of Sovereign’s ordinary
outstanding shares. The Capital and Finance Committee composed of
independent directors of Sovereign requested that Santander consider
acquiring the 75.65% of the Company it did not currently own. The Capital
and Finance Committee evaluated the transaction and recommended the
transaction to the full Board.
Under the terms of the definitive transaction agreement, which was
approved by the Executive Committee of Santander and unanimously approved
by the non-Santander directors of Sovereign, Sovereign shareholders will
receive 0.2924 Banco Santander American Depository Shares (ADSs) for every
1 share of Sovereign common stock they own (or 1 Banco Santander ADS for
3.42 Sovereign shares). Based on the closing stock price for Santander
ADSs on Friday, October 10, 2008, the transaction has an aggregate value
of approximately US$1.9 billion (euro 1.4 billion), or US$3.81 per share.
so if i lost $15,000 in my 401k, and then i pull out 15k from my 401k (for whatever), i get to retire … at 81?
awesome.
america is dumb. they’ll lap it up.
skep (287)-
So, the short-term solution to the disease is to introduce more disease into the patient?
Sorry. I still think your idea of a solution is just a taste of hair of the dog to avoid the first pangs of a monumental hangover. Every drink taken the day after a binge just exacerbates the eventual horrible outcome.
The only responsible thing to do is let markets clear themselves. Every day this is not allowed to happen, the looming and attendant disaster grows exponentially.
Yikes (288)-
“Clot, let’s say you took over the Bernanke’s spot TONIGHT. what’s your three first steps of action?”
My first impulse would be to step in front of a train. Once I got over that, here’s what I would do:
1. Immediately draft legislation to place the US back on the gold standard. As an adjunct, would also look to engage allies in convening a conference to reverse and/or update the Bretton Woods agreement.
2. Urge the DOT to declare force majeure across all financial functions, and move to repudiate the entire debt of the US. Sorry…things are just too far gone to sink the country in the futile service of a number that- in all mathematical probability- cannot be retired.
3. Immediately move to reverse all gov’t intervention in banks, financial markets and the disposition of MBS. Would insist upon immediate marking-to-market, then disclosure of balance sheet impact, of all Level 3 assets currently held by all US banks. Would finally order an immediate and public disposition of all such securities at whatever price the market will bear.
OK gang, fire away.
yikes (289)-
Most days, my movements start with a fart.
John (291)-
Will Sovreign branches now have tapas bars? Will they close in the afternoon for siesta?
Might as well.
An indicator why the bottom is in –
Watching Channel 4 and I still see no capitulation. “Experts” still advising people not to panic and keep putting money in the market for the long term. Guess they never heard about Japan or business cycles.
“why the bottom is NOT in -“
vic (297)-
Nope. But they know who the daddy of Jamie Lynn’s second bastard child is.
Can I win Real Madrid tickets at Banco Santander?
Clot – Did you watch the Marc Faber video on Bloomberg?
According to him, the next shoes to drop – Commercial RE and Treasuries. And he ends with – The US will be bankrupt, it is just a matter of when.
I disagree with the latter view – the US is too big and militarily too powerful for that to happen anytime soon.
Shore – for the next time you are in Montclair:
Greek Taverna
Sunday, October 12, 2008
You don’t need to know how to read coffee grounds to know there’s some good Greek food in your future.
When I first moved to Montclair, I bemoaned the dearth of good Greek food. What a difference a few years can make. Now Baristaville has a burgeoning Greek cuisine scene, what with the excellent Stamna in Bloomfield and a much awaited expansion of Greek Delights soon to occur. Meanwhile, Greek Taverna quietly opened several weeks ago in the space vacated by Noodle Heaven. This Greek, which has ties to the Greek Taverna in Edgewater, was buzzing with diners on a recent Saturday night. If you ever stepped in Noodle Heaven, you won’t recognize the space, which has been transformed into a warm, welcoming taverna-inspired space. Lots of brick, stone, curved archways and rustic accoutrements, including a 700-year-old door have combined to create a hellenic-infused experience.
The main event, is of course the food. While waiting for our table, we were invited to wait by the bar area (no, there’s not a liquor license) overlooking the open kitchen. Our BYOB wine was opened and we were given wine glasses; it’s a nice touch that made the short wait fun, as we perused the menu and anticipated our meal.
One of the best things about Greek cuisine is the wide array of appetizers that when combined with a salad create a feast-like meal that dispenses with any need for an entree. That was what we did that night — enjoyed plate after plate of appetizers, such as the ouzo keftedes, meatballs made with the signature Greek liqueur, and kalamari gemisto, a fabulous calamari stuffed with cheese and spinach. The grilled octopus was tender and the spanakopita, light, flaky and aromatic. The Greek taverna chips — crisply fried zucchini and eggplant discs with garlicky skordalia — were addictive. The menu is varied and extensive — not just standards like the homestyle pastitsio (shown above, before it went in the oven), but a wide selection of seafood, including whole fish on display, lamb, chicken and beef dishes and loads of vegetables. When you’re finished, save room for some coffee or frappe, and the excellent Greek desserts including baklava (shown below).
Greek Taverna, 292 Bloomfield Ave., Montclair, (973) 746-2280; http://www.greektavernausa.com.
i still dont understand what you people are looking for? you complain when its bad then you complain when its good?? which is it?
vic (301)-
The gubmint will blackmail the ratings agencies into propping up the AAA rating.
Gator (302)-
Can you smash plates there?
anarchy (303)-
People like you are, by far, our biggest complaint.
Start living up to your handle.
Marc Faber is God.
Gator,
Cool!
(74) Kettle – Re: Futility of Debt-based solutions…I’m hoping – of course – it is short term. The folks around here don’t want to be in debt anyway. We shall see.
What does worry me is that all banks are included – as I understand it. Roubini said we needed to do triage first and let the bad players fail. By offering up the funds to everyone, won’t it just get sucked up and disappear in some cases.
This – I still think – will take private money to succeed. These bailout funds should only be a stop gap. They need to find a way to make it attractive to save. – taxes -rates – some advantage.
Folks know how to gravitate to good banks. But if they plan to prop them all up with no transparency first…that just doesn’t sound good to me.
“i still dont understand what you people are looking for?”
I am looking for a really good Pinot. Beyond that, I want government at all levels to stop spending more than they take in, and to stop taking in so much, and then to get serious about paying down existing debt. I want people who rent from their bank to stop thinking that people who actually own their homes should come and rescue them from their own poor choices. I want scoundrels, rapscallions, and other ne’re-do-wells from the banking, mortgage, and investment industries to go to prison for many years for the he-ll they are visiting upon the population of this country right now and the debt they are imposing on my children, Little Gator, and others too young to have had a say in allowing the SOBs who caused this mess to cause the mess in the first place. I want executives who rap-ed companies and robbed them bling before leaving to lose the money they took, and for the board members who allowed it to never serve again on another board. I would take my missing hair, but easily live without the small bit that is missing. I want people to take responsibility for their own poor decision making and for the government to stop encouraging poor decision making by hauling everyone’s chestnuts out of the fire when they scre-w up badly. I want bush to resign, and, although I want M to win, I want O to be a really really good president if (when, lets not kid ourselves) he wins, because, if he is not, our kids are going to be seriously scre-wed.
Gator –
The dosas at Udupi Village are barely passable, IMO. The closest place to get good vegetarian Indian food is on Newark Ave (aka Indian Street), JC.
There is a relatively new South Indian restaurant on that street – Sapthagiri, which is by far the best.
http://www.sapthagiri.biz/
“Marc Faber is God.”
– Tru dat!
http://www.marketwatch.com/news/story/treasury-buy-preferred-stock-nine/story.aspx?guid=%7B164D05E1-DBC5-49CC-A974-1484DBCE73AA%7D&dist=hpmp
Was this posted yet?
Nine banks – Treasury buys preferred stock..
“as I understand it. Roubini said we needed to do triage first and let the bad players fail.”
Cindy, Cindy, Cindy. Here in Lake Woebegone, every business is above average, as is its executive compensation, and none is ever allowed to fail.
Cindy (313)-
Does that dilute the common?
How about good makhani chicken?
302 Gator
I may have to take a ride over there. THanks for the info.
(310) Shore
“I am lookin for a really good pinot”
Well, I can recommend two from Saturday night. The rest – no help at all.
Donum
Carneros
Edna Ranch
2005
Robert Stemmler
Russian River
2004
“So, the short-term solution to the disease is to introduce more disease into the patient?”
Hair of the dog that bit ya?
Shore (316) –
Moghul, Edison. A bit on the pricey side, but great food.
http://www.moghul.com/edison/index.html
Cindy,
Noir?
(315) Victorian
“Does this dilute the common?”
I don’t know anything about the deal – I just pulled it off of the MarketWatch streamer…
(321) Noir? Si!
These guys are the ones who are headed to the Pinot World – Central Coast next month. They like their pinot.
Unable to keep up with the posts today. What exactly is this 401k proposal that has been attributed to Obama?
Victorian,
Thanks. I just looked over the menue and the prices are just fine.
Thanks, Cindy. The one I often have with any old meal, or pita and hummus, is Estancia. It is not fancy but I like it. Still, I am looking for some wines that are a few steps above. I will look to try the two you recomended.
Menu, even.
http://www.worldofpinotnoir.com/
Shore – I was wrong -It is in March 2009 – They have been going for several years.
The way they were talking about it Sat., I figured it was next month.
I am always invited but do not partake in such extravagancies..
Stu – They sent me home with a LaGarto Vina Cobos Merlot – 2006 from Argentina the last time we dined…I just save my gifts until it is my night for cards…Then the ladies get to drink their husband’s wine!
I just returned from the ‘World” Web site to see your link.
Stu,
I detect that you are a bit of an oenophile. What are your recomendations?
Cindy,
We cannot fix anything until we look at the core problem….
The core problem is that the global economy, US economy and Euro economy, have for the last 10 years (and longer) been based purely on debt expansion. That is these economies have been based on people spending more then they save and continually taking n more debt. The base consumer is the foundation for the entire global economy. Once the base consumer stops spending money the system shudders to a screeching halt (what you are seeing now).
Banks that were traditionally primarily depositories have become noting more then clearing houses for the generation of consumer debt.
The current banking structure CANNOT be saved. This is the one of the first points that we as a nation and as a people must come to terms with. The banking system we have now is not what we had 50 years ago. We must return to what we had 50, 100 years ago; primarily depository institutions.
What all of the bailout plans that have been put forth so far have in common, is that they are all an attempt to maintain the status quo. The idea is that if you provide enough money to the right people (bank/corporation, then everyone will start to loan money again. This will not work.
The system that has just crashed functioned on the basis that you could treat a debt the same as cash. That worked only as long as people has money to take on more, and maintain ( make minimum payments) existing debt. Once people are maxed out and can take on no more debt the chain is broken and all debt becomes worthless.
I understand your take on the situation and it is a noble one. But with all respect it may be misdirected. We should be focusing on how to save the people, not the banks. I will save my solutions for a later post…..
steps off of soap box—-
FYI:
Can We Save the World Economy? A Conversation with George Soros, Nouriel Roubini, and Jeffrey Sachs
Speakers: George Soros, Founder and Chairman, Open Society Institute; Chairman, Soros Fund Management, LLC; Nouriel Roubini, Professor of Economics and International Business, Stern School of Business, New York University; Jeffrey D. Sachs, Director, The Earth Institute at Columbia University; Special Advisor to United Nations Secretary-General Ban Ki-moon; John Roberts, Anchor, American Morning, CNN
October 20, 2008 from 3:30 pm to 5:00 pm EDT
Columbia University, Morningside Campus, Miller Theater, 2960 Broadway (at 116th Street)
Directions: http://www.columbia.edu/about_columbia/directions.html
For more information email: events@ei.columbia.edu
Event seating will be available on a first-come first-serve basis.
This event is free and open to the registered public.
(331) Kettle – “We should save the people…” Agreed – I see major unemployment and that scares me.
“…then everyone will start to loan money”…? To Whom? No one I know wants a loan…
What if the hedge funds and IBs disappear? Any better?
296, clot
there were two sovereign bank-branded people scooting down the street on Segways last week. i am now imagining them swapping their baseball caps for bullfighting regalia. (them vs nyc taxis… i would watch that…)
299, clot
i thought she was still pregnant with the first one?
well, there goes my spot in the compound. (i am assuming spaces are handed out based on how well you do in Trivial Pursuit, right?)
314 shore
garrison for president!
[330]
“I’m not drinking any stinkin’ merlot.”
Words to live by.
Nom’s wine tip.
When you attend charity silent auctions, bid on the wines, and follow the bidding. If you know your vinos, you can get some sweet deals. Always scope the signup boards just before the auction closes. I have scored more cheap wine that way. Helps offset the gagging check you wrote to attend the auction.
Do inspect the merch before bidding. I found one auction where the contributor cleared out all of his 9 year old bottles of chardonnay. Yecch. He gets a tax deduction on something he would have thrown out. Poor form–let the auctioneer know when that happens. I also just bought an eight bottle bucket and one was a 2002 prosecco. Doubt it is any good, but the cost overall made it a good deal on the other seven bottles.
Will try it out over monday night football since I ran out of beer.
Nikkei blasting through the sky!
Up 900!! Today is CNBC’s wet dream come true.
Ket,
One of the things that just gets me is how people buy into the idea that their assets are suddenly worth much more, just because somebody eles with a similar asset was able to sell that asset to a third party AND then, when they themselves are unable to sell their asset for a similar price they feel like they have lost something.
If I have a 1965 penny, and I get someone to pay $10 for it, it does not suddenly make every other 1965 penny worth $10, although folks seem to think it does. Once nobody else can sell their 1965 pennies for anything more than $.01, they feel like they have lost $9.99 AND the economy has lost $9.99 times the number of 1965 pennies. This is madness. If we viewed the initial purchaser as a moron, rather than as a market price setter, we would all be better. Those of us who saw people over paying for RE have not lost anything because of the inability of people to, in essence, get financing for their 1965 pennies. They were never worth $10, and houses were never worth what some fools were willing to pay for them. Nothing has been lost.
[327] Cindy,
And you don’t even get a tax deduction—it’s a 501(c)(6).
337 – vic,
looking forward to selling into more strenght tomorrow.
“We should be focusing on how to save the people, not the banks…”
Kettle – I AM thinking of the folks. I would love to save in a bank I could trust and earn a recent return. For YEARS that has not been possible. That contributed to the bubbles – I believe – People trying to make a buck in R/E -Tech stocks…
Cindy
What if the hedge funds and IBs disappear? Any better?
Like getting work done at the dentist; It will hurt while the work is done, but you will feel better afterward. if you dont, the rot will spread.
I am not saying that such entities have no place. They can play an important role, but our current system is so heavily corrupt and bloated and we are better off letting die what may and rebuilding from the ground up. You dont ask the man who robbed your house to then house sit for you.
All financial support for banks and corporations should immediately cease. All such monies should be diverted to preparing for the coming humanitarian crisis here in the USA. Public works corps to rebuild american infrastructure and provide employment. The repudiation of all foreign debt………
Cindy, please realize that the US is now so far in debt that it is most likely impossible to pay it off. Once a nation is in such a position you are left with 2 choices in general. 1: Become a debt slave to your creditors as they rape your nation of natural and human resources 2: repudiate foreign debt and begin the long slow and difficult process of rebuilding your nation from the inside out.
The US knows these choices well as we have played this game with many a developing nation. The difference is that anytime a leader didnt accept the debt slave status, they were bribed, “removed” from power, or regime change was initiated.
Cindy,
We cannot have banks that we trust until we let the diseased ones fail. A bank is nothing but an institution built by people, but the bank is only as good as the system is functions in. If the system is corrupt then then banks will be. if a bank tries to compete by not being corrupt then it will lose. unfortunate but true, at least in our current system. And while it may be inconvenient and unpleasant, people can function without banks for a time. if nothing else, the government could offer depository services while the banking system is restructured. not loans, but strictly depository services.
lol
these idiots think the worse is behind us.
today was one of the biggest propped ups I’ve seen in a long, long time.
only gonna make things worse.
SAS
“Once a nation is in such a position you are left with 2 choices in general. 1: Become a debt slave to your creditors as they rape your nation of natural and human resources”
yup, and thats going on right now, in your ears!
SAS
When is the Montclair GTG? I vote this Friday – while Lil Gator’s day care runs a late night and mass transit is running (no trains here on Sat).
like I’ve said before:
they ain’t building that wall to keep the mexicans out..no..they are building it to keep you in.
SAS
SAS,
Does it make you sick to see whats going on when we have done this to numerous other nations in the name of “free markets”?
We have finally drank our own snake oil
I am the worst kind of wino. I don’t really partake so much in the culture. I taste as many as I can and buy what I like the best. If something is good when it is young, I’ll buy four and try ’em over time. When I find one that rocks at a good value (under $35 for a cab or merlot) I’ll buy a case and will wait a minimum of 4 years before I open them. I do not read reviews, but love to take advice from friends. I am actually partial to merlot as many cabs are too overpowering lately. It seems all of the Napa producers are going for a flavor explosion and I prefer something tasty which I don’t need to counterbalance with cheese or a smoke. I also don’t necessarily do the red for meat/white for fish thing.
On our latest trip we picked up a few pinots from Anderson Conn Valley (one of my new favorite vineyards. They were in the 40’s I think. Don’t give up on the merlot until you try the twomey. And I did see ‘Sideways’.
I need to venture more to foreign regions as my knowledge of foreign wines accept for a few French, Spanish and New Zealand is more limited.
For a great cheaper bottle, the Coppola’s are surprisingly good as is the true Napa Mondavi’s. You can always find these at restaurants and due to their larger vintages, they won’t set you back nearly as much as the good stuff. There is nothing worse than paying $80 for a good $35 wine. For whatever reason, it seems restaurants like to double the price which is criminal. Why should they get a $50 margin for a bottle that costs the same to stock and serve as a $15 margin on a Coppola? Beware of Mondavi though, as they seem to have vineyards all over Cali and the further north you go, the cheaper they taste (i.e. coastal or reserve). I think their better winemakers all want to work in their Napa fortress.
Happy drinking.
I like a good beer and vodka as well, but never caught onto the whiskey and/or bourbon thang. I’ll enjoy one after I eat a really heavy fine meal, but I just don’t enjoy it like a fine wine, although I can certainly distinguish the difference between good and bad there.
Nom…Merlots will be back before the dow hits 14K again!
Ahh. Another credit to the congress.
http://voices.washingtonpost.com/thefix/2008/10/a_florida_bombshell.html
“Two years after he won the seat held by former Rep. Mark Foley, Rep. Tim Mahoney (D-Fla.) may be on the other end of a scandal-sparked seat loss.
The report from ABC News that Florida Democratic Rep. Tim Mahoney paid a former mistress more than $100,000 to settle a lawsuit she was planning to bring against him badly imperils a seat that was already high on Republicans’ target list.”
Snip
“Does it make you sick to see whats going on when we have done this to numerous other nations in the name of “free markets”?
yup, sure does. the rug is getting pulled out right from underneath people.
but, I ain’t going to worry until the day I see foreign troops pull ashore to protect their assets.
thats the day, I’m off to never to be found again.
then again…if I keep running my mouth and spilling all I know and seen over the years.
I may end up floating in the meadowlands.
:)
SAS
U.S. Treasury Said to Invest in Nine Major U.S. Banks
The Bush administration will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for preferred shares of nine major banks, people briefed on the matter said.
The companies are Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp., and Bank of New York Mellon Corp., the people said. One of the people also said Merrill Lynch & Co. will receive an investment.
http://www.bloomberg.com/apps/news?pid=20601087&sid=adm0lax5u714&refer=home
gator, i was about to ask that very question. :) friday night would work, except that the baby just hit the “omg you’re not the momma AAAAA Zombies!” stage, so must take him with me wherever i go… was hoping for a family-friendly venue some sunday afternoon. ah well. hopefully there will still be time to prepare for the coming breakdown of society/drink beer after the baby gets through this stage…
Wells Fargo? Are they not healthy enough to be going around buying up othert banks?
sas (344)-
Propped up. I like that term.
Like Bernie…”Weekend at Bernie’s”.
Wemay be about to witness a global paradigm shift of never-before-seen proportions. Economies laid bare and failing, new nation-states born, civil unrest, an age of warlordism in a most post-modern sense.
its not one nation bankrupt. Its the globe
Shore (350)-
That district should be denied all representation for at least two terms.
Maybe the dopes there could then be persuaded to put up people for office who are slightly more noble than Satan.
Alia, gator
Turtle back zoo for a munchkin friendly venue?
350 Shore – Classy. That was Mark Foley’s seat. I think being some sort of a deviant is a requirement for holding it.
ket – Would love to go back to Turtleback. Lil Gator loves the train there and he has not yet tried the carousel.
And Stu loves the penguins.
Clot – can we deny representation to half of Florida?
reminds me.. when I worked with the Russian military during the Cold War back in the early 80s.
let me tell you something.. they were everywhere.
and they had plenty of people here in metro area on the DOL.
whew…glad those days are over…for now!
SAS
Gator (361)-
Why stop at half?
Make it a territory, like Samoa…and just r@pe it for tribute and jam it full of old people.
(363) Clot
“Make it a territory, like Samoa…”
I am actually surprised I haven’t heard talk (yet) of cutting California loose…seriously.
I’d like to make the Panhandle a Debtor’s prison.
kettle,
oil dipped to 77, not too far off from Hal Lindsey’s call.
SAS
“The government will purchase perpectual preferred shares in all the largest U.S. banking companies. The shares will not be dilutive to current shareholders, a concern to banking chie executives, because perpetual preferred stock holders are paid a dividend, not a portion of earnings”
Great. We are now bailing out the shareholders as well. The stock market will now always go up.
http://www.nytimes.com/2008/10/14/business/economy/14treasury.html
In my version of the brave new world, I am the supreme ruler.
And rule #1 is, don’t sell me debt.
California? Prison colony. Ringed with moats full of alligators.
Actually, the moat wouldn’t be very long. Ocean to the west, desert to the east, the open sewer of Lake Havasu to the south.
Rule #2: Guv Arnold has to play the action movie version of himself and attempt to escape.
I mean.. “lindsey williams”
sorry.
SAS
I think that district would be better served by going into their equivalent of Satin Dolls and picking one of the dancers at random. Clearly, the upstanding men of the district are not worthy of the post.
368 CLot
Why waste nice weather on prisoners? Why don’t you put them somewhere where the weather sucks regularly?
“I’d like to make the Panhandle a Debtor’s prison”
Use Ben Hill Griffin for gladiatorial games?
I miss the Swamp. One day I will take Lil Gator there. Sigh…
If CA is a prison colony, what does that make NJ?
Hell?
ok, blokes.
I’m off to bed.
don’t get too excited about the market.
its a mirage.
SAS
lost (371)-
Death Valley for the worst of the scurvy lot.
Mahoney Asks For Ethics Investigation into Allegations Over Former Mistress
By Kate Klonick – October 13, 2008, 5:45PM
Just hours after ABCNews.com reported that he had agree to pay $121,000 to a former staffer and mistress, Rep. Tim Mahoney issued a statement asking the House Ethics Committee to conduct an investigation, The Hill reports.
The Democrat who won the infamous Mark Foley’s seat in Florida, didn’t exactly deny the charges.
“I am confident that when the facts are presented that I will be vindicated,” Mahoney said in a statement released this afternoon.
“I was notified this afternoon about a story that ran on ABC News’ website reporting allegations about a former employee,” Mahoney stated. “While these allegations are based on hearsay, I believe that my constituents need a full accounting. As such, I have requested the House Ethics Committee review these allegations.”
sas (375)-
A guy like you hits the sack at 9:54?
(368) Clot “Rule #2 Guv Arnold has to play the action movie version of himself and attempt to escape.”Oh for sure I lost it on that one..Lost – Nice weather…and….food!We grow a lot of food in the Valley.
376 Clot
Death Valley with a giant electrical fence around it. You never know what they could rig together to survive.
http://en.wikipedia.org/wiki/San_Joaquin_Valley
No Lost – This Valley – Food, we grow food.
No Cindy- Clot mentioned putting prisoners in Death Valley. Your Valley is too nice to waste on them.
Clot ,
how about hanford WA for all politicians?
# Clotpoll Says:
October 13th, 2008 at 9:53 pm
If CA is a prison colony, what does that make NJ?
Hell?
After living for 8 years in Colorado, Utah and WA (around Spokane valley area) I moved here.
Quality of life in NJ really reminded me of life in Soviet Union.
But, for me quality of life is more about people around you, that what you have in life.
From pure materialistic point of view my quality of life (money) went up quite a bit.
But I am not nearly as happy as before. All these angry/grumpy/stressed people around me
really bring you down.
I go to a grocery store and NOBODY smiles at you. Or smile in general. Seems like not a big deal, but when I visit out-west I enjoy it quite a bit. Simple smile can really brighten up your day.
But again I know that some here will come up with a comment with regards to my inferiority and such…
Anyways, just a comment….
I guess Kruschev was right, “We will bury you from within”.
Get to work you sluggards. You’ve got bills to pay.
Dear Friends,
Thanks for taking the time to read. It seems like there is a knowledgeable and intelligent following here so I would like to pose the following question and scenario.
My wife and I moved from Florida over a year ago to New Jersey and witnessed firsthand how brutal a RE market downturn can be. After shopping for over 7 months and being in multiple bid situations many times we finally got a contract on a house in Livingston for 615 on an original price of 698 (over priced). After the market meltdown last week we balked and canceled the contract under attorney review. The financing at 6.25 30 year fixed and everything was lined up.
My question is simple. Did I panic last week like people who sold stocks on the cheap? Should we have gone through with the contract because a nice redone property in Livingston will maintain value? Will the house market be propped up by some machination like the stock market and make home ownership for my wife and me patient renters with money down and good credit impossible? I look forward to your input. Thanks for the time.
indy, please realize that the US is now so far in debt that it is most likely impossible to pay it off. Once a nation is in such a position you are left with 2 choices in general. 1: Become a debt slave to your creditors as they rape your nation of natural and human resources 2: repudiate foreign debt and begin the long slow and difficult process of rebuilding your nation from the inside out.
Kettle how about the obvious one: INFLATE, INFLATE, INFLATE and than INFLATE SOME MORE.
In effect it is the same as your #2, but legal and doesn’t involve any default.
I do not know what is average US debt maturity date – somewhere I saw a number of 56 month (can’t vouch for the number).
So if it is at 6% and we inflate at 20+% in effect we will cut our debt in half in 5 years. I’d even say – we need to refinance our debt to 30 years, and than it is a slam dunk. If some won’t want to all we need to do is to threaten our debtors with “WORLDS COLLAPSE”.
One problem with it might cause hyper-inflation, but “inflation seems to be moderating”, despite all the money world’s governments just pulled out of thin air so no worries here.
This way poor people everywhere gets poorer and rich will stay rich – all good.
Al,
Any attempt at inflating our way out is an almost certain collapse of the US dollar and perhaps the US government. The easiest example is the Wiemar republic, but there are many more besides.
The other issue with that is that wile the US government IS going to try it. It wont work. It is going to be a race to the bottom. inflation(hyper) only works (potentially) if none of your economic peers are doing the same thing.
AL,
One problem with it might cause hyper-inflation, but “inflation seems to be moderating”, despite all the money world’s governments just pulled out of thin air so no worries here.
Look at M3. Its falling through the floor even though the government is handing out cash to anyone with a pulse. Debt destruction is wiping out more wealth then the government can create.
Notice that M1 is increasing rapidly. This is where the money that the government is handing out is going.
What you see is the amount of cash in the market increasing while the total money supply is shrinking (the whole mark to market issue)
See here: http://shadowstats.com/imgs/sgs-m3.gif?hl=1
# M0: Physical currency. A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. M0 is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency.
# M1: Physical currency circulating in the economy + demand deposits (i.e. checking account deposits). This is a measure used by economists trying to quantify the amount of money in circulation. M1 is a very liquid measure of the money supply, as it only contains cash and assets that can also be used for payments.
# M2: M1 + time deposits, savings deposits, and non-institutional money-market funds. M2 is a broader classification of money than M1. Economists also use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions. [8] M2 is a key economic indicator used to forecast inflation.
# M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets. This is the broadest measure of money commonly used and is used by economists to estimate the entire supply of money within an economy.
387.Mr. D Says:
October 13th, 2008 at 10:16 pm
Dear Friends,
Thanks for taking the time to read. It seems like there is a knowledgeable and intelligent following here so I would like to pose the following question and scenario.
My wife and I moved from Florida over a year ago to New Jersey and witnessed firsthand how brutal a RE market downturn can be. After shopping for over 7 months and being in multiple bid situations many times we finally got a contract on a house in Livingston for 615 on an original price of 698 (over priced). After the market meltdown last week we balked and canceled the contract under attorney review. The financing at 6.25 30 year fixed and everything was lined up.
My question is simple. Did I panic last week like people who sold stocks on the cheap? Should we have gone through with the contract because a nice redone property in Livingston will maintain value? Will the house market be propped up by some machination like the stock market and make home ownership for my wife and me patient renters with money down and good credit impossible? I look forward to your input. Thanks for the time.
I bought a house Aug 06 for $365K O.L. $389K. Comparable homes are currently listed Oct 08 for $305K. That is an $85K drop in list price. The place I sold for $570K O.L. $595K, and has comparable listings right now of $510K, although none are selling. That was also an $85K drop in list price. My own opinion is wait to buy. The Livingston property is probably better priced at $500K which would bring it to 2003 prices.
Question For IT folks here:
Amount of video-DVDs are getting to be too much too fast (first baby), plus first one (dvd, not the baby) finally died (only after about a year of storage). So I need to back up my pictures and videos some more.
I looked up external hard drives and it seems that external ones very often plagued by motor burning out, or circuit-board burning out due to excessive heat/vibration/??
I was also looking at some 3.5″ Dual Fans HDD External Enclosures – and buying internal HDD and plugging it in it. It seems that even if this external enclosure burns out you can often just swap the enclosure and keep the hard drive. Pluses are also a lot bigger choice of internal hard drives with a lot more data on reliability. and ability to plug the hard drive directly into your PC if needed.
Price will be abut the same if you buy quality enclosure and quality hard drive compared to cheaper external hard drives such as WD My Book home edition or MAXTOR one tough 4 plus. (I am looking at 750GB to 1TB).
Any comments/advice. Also how much will it cost for online storage – per GB/month(year)? As I believe I will always have at least a cable with 1-5mb/sec download speed.
Al needs some smiles.
http://nl.ijs.si/~damjan/images/smiles/big-smile.jpg
http://nl.ijs.si/~damjan/images/smiles/smiles.jpg
You see, ask and ye shall receive.
Al, we still have our old stuff on those tiny VHS-C tapes.
When we bought a new dell, we were offered a deal here:
http://www.dell.com/content/topics/topic.aspx/global/shared/services/datasafe/datasafe?c=us&l=en&s=dhs
But we need to convert a bunch of stuff first.
Pat – I knew somebody will come through for me!!!
Thanks!!! Scary – I have seen smiles like this in my life quite a few times.
MR D
You did not panic. Wait. Rent for 1 year and then reassess.
My question is simple. Did I panic last week like people who sold stocks on the cheap? Should we have gone through with the contract because a nice redone property in Livingston will maintain value? Will the house market be propped up by some machination like the stock market and make home ownership for my wife and me patient renters with money down and good credit impossible? I look forward to your input. Thanks for the time.
100 gb should be about enough right now.. but in couple of years….
As far as those video-tapes conversion – look into buying one of the DVD-Direct external DVD-writers. Wildly differ in price, quality and media uses.
I use VRD-VC20 for over 2 years now and loving it (after drivers and firmware upgrade by Sony). Even used it few times as TIVO :)
What I found is Blank-DVD quality is crucial – doesn’t work well with most of Sony’s brand disks. Had to go experiment with few and ended up with Memorex – worked pretty good.
I think you can pick up decent unit for under 100$. Problem – DVD’s are not very durable. At least the ones I can buy at the store. And you can only write about 1 hours of digital stream from my video camera on one. I already had one failed – still somewhat readable on dvd-player, but on the computer it is corrupted and I had to use repair software to copy it into a hard drive.
With over 50 DVD’s so far I am sure to see some more of that.
“We will bury you from within.”
Confused,
You left out the other part: “We will bury you from within, after lending you the money to buy from us the rope we use to hang you. “
Gator,
I hear Mahoney is looking to team up with OJ so they can search for: the real killer, the real person responsible for paying off Mahoney’s ex mistress, and the people who actually stole the things in Vegas.
kettle1 Says:
October 13th, 2008 at 9:08 pm
What if the hedge funds and IBs disappear? Any better? Like getting work done at the dentist; It will hurt while the work is done, but you will feel better afterward. if you dont, the rot will spread.
I am not saying that such entities have no place. They can play an important role, but our current system is so heavily corrupt and bloated and we are better off letting die what may and rebuilding from the ground up. You dont ask the man who robbed your house to then house sit for you.
All financial support for banks and corporations should immediately cease. All such monies should be diverted to preparing for the coming humanitarian crisis here in the USA. Public works corps to rebuild american infrastructure and provide employment. The repudiation of all foreign debt………
ket: You post like clot except remove any wisdom, insight and humor…..you have the lowest percentage of content to original thought……somehow you seemed to have the demeanor of a cholera epidemic….
clot: lighten up….go make an omlette….or put a small animal in a food processor…anything to lighten the mood….
Chi (403)-
Would a hedge fund manager qualify as a small animal?
If so, I think I’d have to use a wood chipper, not a food processor.
Chi (402)-
Hate to say it, but I think vodka’s got the future social crisis pegged.
Pretty soon, helping ourselves will be the last- and only- thing we may be able to pay for. The only thing that drags us out of the muck could be public works programs, a la WPA.
A hyper-inflated currency and repudiated debt are a bitch of a combo.
As economy sinks, officials fear violent solutions
http://www.cnn.com/2008/US/10/13/economy.violence.ap/index.html
Chi called this one a week or 2 ago.