Mortgage Rates Plummet!

From Bloomberg:

U.S. Mortgage Rates Drop Most in Seven Years on Fed Debt Plan

U.S. mortgage rates dropped by the most in at least seven years as a Federal Reserve pledge to buy $600 billion of debt succeeded where seven cuts in the central bank’s benchmark rate had failed.

The average rate for a 30-year fixed mortgage fell to about 5.5 percent after starting at 6.38 percent yesterday, according to Bankrate Inc. It was the biggest one-day drop in at least seven years, said Holden Lewis, of the North Palm Beach, Florida, publishing and research firm.

“Home resales have hung up because rates are high and because mortgage money has been scarce,” said Neal Soss, chief economist at Credit Suisse Group in New York. The Fed’s move “may hasten the day when we finally find a bottom in housing.”

Still, stricter mortgage qualifications and growing job losses in a weakening economy will continue to hamper the market, even if the Fed plan manages to keep rates lower in coming days, said Sam Khater, senior economist for First American CoreLogic in Tysons Corner, Virginia.

“The market right now is not about rates, which are affordable, but about a supply of homes that is very high,” Khater said in an interview. “The market won’t turn around and prices won’t stabilize until supply and demand become more normal.”

From Reuters:

US mortgage rates post record 1-day drop

Rates on U.S. 30-year mortgages posted a record drop of 1-1/8 percentage point to 4-7/8 percent on Tuesday, after the Federal Reserve said it would implement a $600 billion plan to support the mortgage securities market.

The decline on the Mortgage Point Monitor is the biggest since the data series began in 1998, according to David Beadle, president of BestInfo. The drop is also a one-day record since at least 1988 using other data, he said.

From the AP:

Mortgage security rates fall after Fed action

Rates on Fannie Mae and Freddie Mac debt fell Tuesday — a promising sign that homeowners’ mortgage rates could decline, too — after the Federal Reserve said it will buy up to $600 billion in mortgage-backed assets.

The latest action by the Fed to prop up the financial system sent the yield on Fannie’s current 30-year mortgage-backed security down 0.58 percentage point Tuesday, according to a note from Miller Tabak & Co. analyst Tony Crescenzi. He said that rate is closely correlated to mortgage rates, which have remained stubbornly high even after huge efforts by the government to loosen the tight credit markets.

Freddie Mac said last week that the average rate for 30-year mortgages was 6.04 percent, Crescenzi pointed out, which means that if the rally holds, “30-year mortgage rates could fall below this year’s low of 5.48 percent, set in January when it was at its lowest since March 2004.”

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245 Responses to Mortgage Rates Plummet!

  1. SG says:

    Hunterdon county sheriff sales from Jan 2008 till now. It’s amazing how many properties have gone back to banks. It seems like Tsunami coming once bank start aggressively cutting asking prices.

    http://www.co.hunterdon.nj.us/sheriff/SALES/Sold2008.pdf

  2. crossroads says:

    im not sure if this was posted on last thread or not but good stuff cant wait to put my roots down in NJ

    http://globaleconomicanalysis.blogspot.com/2008/11/state-of-new-jersey-is-insolvent.html

  3. grim says:

    From the WSJ:

    Fed Aid Sets Off a Rush to Refinance

    The Federal Reserve’s attempt to stabilize the housing market set off a chain reaction across the U.S. on Tuesday, dropping interest rates and quickly spurring a burst of refinancing activity by borrowers eager to lower their mortgage costs.

    Some brokers said it was the most activity they’ve seen in at least one year, although there was no way to determine the volume of refinancing.

    At Bank of America Corp., call volume was roughly twice what was expected at call centers and via the Internet, said Matt Vernon, national sales executive. “It’s the folks who have been sitting on the sideline. They’re jumping in with this news.”

    While the initial flurry of calls came from people seeking to refinance, economists predicted lower rates also will spur some home buying among bargain-seekers. The surge in refinancing will help the overall economy by putting more cash in consumers’ pockets and reducing the pressure on some borrowers struggling to make payments.

    “This is a win-win,” said Susan Wachter, a professor of real estate at the University of Pennsylvania’s Wharton School. “It will directly increase demand for housing and help with the downward spiral in home prices.”

    The government’s latest plans won’t fix all the problems bedeviling the housing and credit markets. And it’s not clear whether the most recent initiative will keep mortgage interest rates down over the long run.

    Mortgage rates had dipped briefly in past weeks following previous government actions, including the takeover of Fannie Mae and Freddie Mac. But then rates creeped upward.

    Tuesday’s lower rates will for now only benefit borrowers who have the cash and credit rating to qualify for mortgages under current lending standards. The Fed’s actions won’t make mortgages any easier to get for homeowners or buyers who haven’t been able to qualify in recent weeks.

    Lower rates also won’t help the roughly 11.8 million borrowers who are unable to refinance because they owe more than their home is worth, said Mark Zandi, chief economist of Moody’s Economy.com

    “I don’t think it changes any of the underlying fundamentals to the mortgage-origination process,” said Mr. Vernon, of Bank of America. “What it does do is help those who have the ability to refinance, because they will get a lower rate and will have some increased cash flow, if they can get through the process.”

  4. grim says:

    (cont)

    Some borrowers moved quickly to take advantage of the lower rates. Michael Menatian, president of Sanborn Mortgage Corp. in West Hartford, Conn., said his mortgage bank arranged for about 15 refinances of mortgages Tuesday as people rushed to lock in lower rates.

    But he said about half-dozen other interested customers couldn’t refinance because they had relatively low credit scores and too little equity in their homes. To get a rate of 5.5% Tuesday, he said, a customer would need a credit score of at least 720, about average, and home equity of 20%.

  5. chicagofinance says:

    lostinny: where are you?

    BOOOOOOOOOOOOOOOYAAAAAAAAAAAA

    http://www.youtube.com/watch?v=5ulRimGGITA&feature=related

  6. lostinny says:

    6Chifi
    I’m here. But I can’t watch youtube at work. :(

  7. grim says:

    From Bloomberg:

    Fed Risks ‘Spitting in the Wind’ With New $800 Billion Pledge

    The Federal Reserve’s new $800 billion effort to combat the financial crisis is designed to make credit more accessible to shaken consumers who aren’t sure they want more debt.

    Households and lenders may not respond much because of the wealth destruction from plunging property and stock values, and the deepening economic slump, economists say. That means banks may end up returning the Fed’s new liquidity through deposits at the central bank.

    “We are sort of spitting in the wind,” said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. “Banks won’t be throwing a lot of loans out there when they fear — rationally — those loans may not be paid back.”

  8. grim says:

    From Bloomberg:

    U.S. Banks May Write Down $44 Billion in Quarter, Whitney Says

    U.S. banks including Citigroup Inc. may post about $44 billion in writedowns and charges on bad loans in the fourth quarter, Oppenheimer & Co.’s Meredith Whitney said.

    Accounting rule changes on how some financial assets are valued may also trigger an extra $25 billion in bad-loan provisions over the next 12 months, New York-based Whitney wrote in a note today.

  9. grim says:

    From the Star Ledger:

    Report says Corzine plans 10 percent cut in N.J. state spending

    Gov. Jon Corzine plans to cut state spending to $30 billion a year, a 10 percent reduction from last year, according to a report in the Record.

    The report said Corzine is preparing the cuts due to the economic downturn, which could reduce state revenue by $1.2 billion this year and possible $5 billion next year. Corzine’s planned cuts would mean fewer state services, smaller property tax rebate checks and reduced benefits for state employees.

  10. subprime man says:

    It’s time S&P cut the AAA rating of US.

  11. cooper says:

    Top article-
    “Home resales have hung up because rates are high and because mortgage money has been scarce,”

    -I thought the big RE selling point has been that rates are historically low… buy now before rates go up is what I hear. Plus- isn’t the primary problem overpricing NOT interest rates???

    The Fed’s move “may hasten the day when we finally find a bottom in housing.”

    Here’s bottom #108! how many bottoms are there? “Bottoms here! Free BOTTOMS! get your bottoms HERE!”

  12. RentinginNJ says:

    “…and reduced benefits for state employees”

    I will believe it when I see it.

  13. Clotpoll says:

    grim (9)-

    But bi said there would be no more writedowns…

  14. Clotpoll says:

    coops (34)-

    It’s all eyewash, my friend. Other than some longtime owners- with good credit and equity- who will refi, all the rest of this money will go straight back to the UST…in return for nice, crisp, new notes and bills.

    The new bubble? Treasuries.

  15. Sideliner says:

    “Home resales have hung up because rates are high and because mortgage money has been scarce…”

    Is this for real? why does nobody talk about the affordability of homes? Is the government really that blind to the problem of affordability? I can see why they’re trying to stop prices from falling but until people can actually afford to buy a home (with a decent down payment which is probably a requirement now), sales are going to continue to stagnate.

  16. John says:

    Too Much Information

    Rates Are Going Down’

    “I was sitting in my underwear getting dressed in the morning when it came on TV, and I told my wife, ‘Rates are going down today,’” said Henry Savage, president of PMC Mortgage Corp. in Alexandria, Virginia. “Instead of buying stocks in stupid banks, the government finally is going to make a move to clear assets from the market.”

    Rates for a fixed rate mortgage with no fees or closing costs tumbled to as low as 5.25 percent from about 6.25 percent, Savage said.

    “The market has been very good to me today,” said Savage, who spoke last night from a bar where he was celebrating the rate drop with friends.

  17. HEHEHE says:

    “It’s time S&P cut the AAA rating of US”

    We are getting there fast.

  18. Clotpoll says:

    Durables crushed.

  19. Clotpoll says:

    liner (17)-

    They really are this stupid. The whole world of asset classes is deflating, yet these dolts think RE values can be artificially stabilized at levels that, even now, remain too high.

    99 out of 100 mortgage brokers and RE agents believe this hogwash, too.

    The only metaphor I keep thinking of are all the people in Jonestown, queueing up for the Kool-Aid.

  20. cooper says:

    Clot- Your right-I think you said it the other day- I’m tired of being mad I’m just tired(something like that) sooo true- how many “New Fixes” are there? I’m numb from all the nonsense… homer need beer and other pharmaceuticals

  21. Clotpoll says:

    HE (19)-

    I don’t think it will ever happen. The gubmint can blackmail the ratings agencies with prosecution for all the frauds they committed in the CDO/MBS bubble.

    The ratings agencies have already demonstrated they will dance for their masters. What more powerful master than the gubmint?

  22. 3b says:

    “Home resales have hung up because rates are high and because mortgage money has been scarce,” said Neal Soss, chief economist at Credit Suisse Group in New York.

    What are you yabbering on about Neal? Mtg rates with a 6 handle are historically very,very cheap.

  23. BC Bob says:

    “It’s time S&P cut the AAA rating of US.”

    The bond market already has.

  24. Barbara says:

    #17.
    I’ve said it over and over for the last 5 years. Red brick and mortar did not suddenly turn gold plated. Its wood, drywall, brick. Those materials only cost just so much.

  25. Barbara says:

    3b.
    Friends gufffaw when I tell them gently that I paid 10% interest rates when buying a few of my investments in 1990-94. And I still made money because the buying price was low and stagnant.

    “What are you yabbering on about Neal? Mtg rates with a 6 handle are historically very,very cheap.”

  26. 3b says:

    #21 clot:99 out of 100 mortgage brokers and RE agents believe this hogwash, too.

    Maybe if the did not, we could actually speed up the housing price correction.

    I still believe price capitulation starts Spring 2009.

  27. John says:

    CHICAGO, Nov 26 (Reuters) – U.S. short-term rate futures held near the day’s highs on Wednesday, suggesting a big Federal Reserve rate cut in December, after weak economic data lead by a sharp decline in October durable goods orders.

    Futures fully price a 50 basis point rate cut, which would take the fed funds rate to 0.50 percent. The implied prospects for a cut to 0.25 percent held at 38 percent.

  28. cooper says:

    anyone have a break down of the current bailouts compared to other huge spending by the US gov’t? It was posted this week- It had what was spent on the Vietnam war, Great depression, etc.

  29. 3b says:

    #27 Barbara: Yep. it is always the underlying value of the asset that is matters, not the financing mechanism.

  30. 3b says:

    #29 John: They should just cut to ZERO and get it over with.Who cares at this point?

  31. scribe says:

    Clot, #23

    Before the credit crisis hit, S&P’s and Moody’s had issued reports raising flags about how the longer-term liabilities for Social Security and Medicare could compromise the U.S.’s AAA rating.

    Social Security will start running deficits in 2017. S&P’s says it’s more concerned about Medicare.

    Add on the publicity surrounding I.O.U.S.A this summer, and attention was finally being focused on those issues.

    Other than that, S&P has AAA’s on 19 nations, and it considers the US to still be among the strongest.

    One of my sources said: “We’re the best house in a bad neighborhood.”

    But 2017 isn’t that far away anymore.

  32. Sean says:

    re: #30 Cooper in inflation adjusted dollars we have spent double what it cost to wage WWII.

  33. John says:

    I agree, get the mama boys in money markets, savings accounts and CDs to drop trou and man up to bonds and stocks. Now that GS and JPM etc can issue 100 million FDIC Corp bonds straight up for 3.75% who needs Ma and Pa with their peanuts and all the recordkeeping that goes with it. INGDirect Money markets at 1% and 2% CDs will be a Found Jesus moment for many a nancy boy.

    3b Says:
    November 26th, 2008 at 8:53 am
    #29 John: They should just cut to ZERO and get it over with.Who cares at this point?

  34. Clotpoll says:

    3b (24)-

    Another doofus mouthpiece who talks just to reassure himself with the sound of his own voice.

    Credit Suisse? Good analysis of housing? How’s it working out for them so far?

    http://finance.yahoo.com/q/bc?s=CS

  35. Clotpoll says:

    3b (28)-

    Out by me, the capitulation has already begun.

    More and more 50-100K price reductions. The high end is bleeding out.

  36. John says:

    Don’t worry all those big January Wall Street Bonuses will bail out the high end.

    Clotpoll Says:
    November 26th, 2008 at 9:25 am
    3b (28)-

    Out by me, the capitulation has already begun.

    More and more 50-100K price reductions. The high end is bleeding out.

  37. kettle1 says:

    Clot 21

    Many of the people at jonestown drank the coolaid at gun point.

    Isnt our buddy hank strong arming banks to take aid so that you cant tell the insolvent from the almost insolvent?……

  38. Sean says:

    The question is will we be saved by Zero?

    History tells us in Japan it did not work. The Japanese prefer cash over credit, and prefer to invest that cash at home. Japan’s large savings flow drove land and stock prices up to artificially high levels until 1990, when first stock prices and then land prices collapsed. A downward trend that erased about $15 trillion in Japanese wealth.At the time this was the equivalent of three years of income for everyone in Japan. Such a loss scaled to the $15 trillion U.S. economy would be $45 trillion.

  39. kettle1 says:

    Cooper (30)

    This current bailout, calculated only up to $4.6 trillion, has cost more than all of the following government expenditures combined. Are you ready? The Marshall Plan. The Louisiana Purchase. The race to the moon. The S&L crisis. The Korean War. The New Deal. The invasion of Iraq. The Vietnam War. And NASA.

    All of those combined, in inflation-adjusted dollars, equal $3.92 trillion in today’s dollars. This bailout is more than all of those combined. Now, would you like to hear the inflation-adjusted dollar amounts for each of these line items? The Marshall Plan, back when we did it, cost $12.7 billion — and it rebuilt Europe after World War II. If we did the Marshall Plan today, it would cost $115.3 billion. We rebuilt European for $115.3 billion in today’s dollars; and we have just spent, according to these guys, $4.6 trillion on bailouts of the US financial industry. The Louisiana Purchase, in today’s dollars, would cost $217 billion.

    The race to the moon, in today’s dollars, would have cost $237 billion. That’s more than the Marshall Plan and Louisiana Purchase in today’s dollars. The S&L crisis. We bailed out the S&Ls and fixed that. In today’s dollars, it would cost $256 billion. Back then it was $153 billion. The Korean War, $54 billion back in the fifties. Today’s cost would be $454 billion. The New Deal. Today’s dollars, estimated to be $500 billion, if we did the New Deal today. That’s half a trillion. We have spent $4.6 trillion. The New Deal was half a trillion in today’s dollars. We have spent $4.6 trillion, and probably more than that, at least six or seven. The invasion of Iraq, $597 billion in today’s dollars. The Vietnam War. Back in the era of the Vietnam War, it cost $111 billion. To do it today would cost $698 billion. And NASA. This is not the race to moon. This is the whole NASA budget. Over the years, $416.7 billion. In today’s dollars, it’s $851.2 billion. This is an annual cost for NASA.

    So, all of these add up to $3.92 trillion.
    The only thing that comes close is World War II, and even that cost less than what we have spent. Again, I have to emphasize, this is using a figure of $4.6 trillion as the bailout today. It is far, far more than that.

  40. kettle1 says:

    Cooper

    the actual total of all the pledged money so far is now about twice that four trillion in that description. We have now exceeded 8 trillion!

  41. Stu says:

    Volcker, Volcker, Volcker…Yay!

  42. JBJB says:

    Right on queue my RE agent emails me this morning about falling interest rates. I will have to explain to her yet again that interest rates are meaningless to me. Until prices drop another 10-20% and I am convinced of some stability in NJ real estate taxes, I wont even consider buying.

  43. Stu says:

    Personal spending and durable goods orders were attrocious. Are people actually saving?

  44. kettle1 says:

    cooper here is the direct link to the post by ritholtz you asked for

    http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/

  45. kettle1 says:

    JBJB

    “Until prices drop another 10-20% and I am convinced of some stability in NJ real estate taxes

    so you wont buy in NJ until after the state has to declare bankruptcy and restructure?

  46. 3b says:

    #38 John:Don’t worry all those big January Wall Street Bonuses will bail out the high end.

    What planet are you on. Everyone I know on the street is expecting at least a 50% haircut on their bonus this year.

    Some firm’s have already toed their employees that this year bonus =’s ZERO.

    For those that do get a bonus, I believe for most the last thing they will be thinking of is looking to buy high end real estate, as they will be worrying about staying employed for 2009.

  47. make money says:

    It’s time S&P cut the AAA rating of US.

    We got a good 5-7 yrs before anyone is forced to think about cutting our ratings.

    If Ben comezs up with a scheme to suck this money out of the system in 2010 when we turn the corner then he’s brilliant.

    I can’t see how he can do that but then again he’s found new ways to distibute his quantitavive easing.

    I’m betting against Ben but who knows.

  48. kettle1 says:

    clot, make

    how do you quickly and quietly move 156 tons of gold off shore?

  49. kettle1 says:

    correction,

    187.5 short tons

  50. Stu says:

    “how do you quickly and quietly move 156 tons of gold off shore?”

    Ask the Saudi’s?

  51. hughesrep says:

    52

    Military cargo planes.

  52. kettle1 says:

    answer to my own question….

    5 “heavy rated” 20ft shipping containers

  53. Al says:

    Stu Says:
    November 26th, 2008 at 9:52 am
    Personal spending and durable goods orders were attrocious. Are people actually saving?

    Thouse who have jobs are saving…..

    I would say it reflects cascading job losses.

    One person losing his job will lead to his family not going out, so Waitress at the restaurant (still employed) will not get his tips, he won’t buy new TV, etc…

    Consumer spending down just 1% – reflects pure unemployment numbers…

    Durable goods – reflect automotive(no job=no new car, worries about job =no new car, retirement account lopst a lot of money = honey we are keeping the 20 year buik!!!), and Airlines – with higher prices demand for travel drops quite a bit, so they won’t buy as many planes as they did in the past 10 years.

    One again I think riight now it is not about housing or consumer spending anymore, it is about JOBS AND UNEMPLOYMENT NUMBERS.

    Even at the heights of housing bubble easy credit was used as SUPPLEMENT to incomes – not direct replacement. With no income sterams coming in, credit lines and credit cards can only sustain a family of lets say 4 for few month. (at least in NJ where rents/mortgages are high).

  54. Stu says:

    “Consumer spending down just 1%”

    Annualized that’s gotta be close to 14% year over year.

    Think unemployment is bad now?

  55. Al says:

    Any Idea why for the past couple of days Nasdaq is somewhat decoupled from Dow and S@P??

  56. Stu says:

    Yahoo Finance:

    Just hitting the wires, the number of new home sales in October slipped 5.3% month-over-month to a seasonally adjusted annual rate of 433,000. This was worse than the expected reading of 444,000 and the lowest amount of sales since 1991.

    The November University of Michigan Consumer Confidence reading was revised down to 55.3 from 57.9. This was below the consensus estimate of 57.5.

    Reported at 9:45 AM ET, Chicago manufacturing in November contracted the most since since 1982, according to a regional survey. Specifically, November Chicago PMI fell 4.0 to 33.8, which was worse than the expected reading of 37.0. A reading below 50 represents contraction in manufacturing activity in the Chicago region. Chicago manufacturing was holding up well, with an expansion indicated in September, but like other areas of the economy, a steep drop in activity was seen in October.

  57. BC Bob says:

    “This current bailout, calculated only up to $4.6 trillion”

    Kettle,

    At this point close to $8T has been earmarked. Would’t it have been much easier to pledge $12T and buy up the entire mortgage market?

  58. Al says:

    Stu Says:
    November 26th, 2008 at 10:08 am
    “Consumer spending down just 1%”
    Annualized that’s gotta be close to 14% year over year.
    Think unemployment is bad now?

    I think it is pretty bad right now – we just do nto see “Real” Numbers now, and we won’t see them untill sometimes next year.

  59. Stu says:

    Al, I noticed it too. I think it is simply the lack of financial companies in the Nasdaq.

  60. kettle1 says:

    Hugh,

    2 C-5 galaxy’s would do. who do you contact to charter one ;)

  61. Stu says:

    “Would’t it have been much easier to pledge $12T and buy up the entire mortgage market?”

    They still might! ;)

  62. Al says:

    Stu Says:
    November 26th, 2008 at 10:12 am
    Al, I noticed it too. I think it is simply the lack of financial companies in the Nasdaq.
    /i>

    I guess it makes sense with all bail-outs going on….

    Will Michrosoft and Intell turn into a bank??? And May be CISCO??

  63. kettle1 says:

    BC,

    Harder to pay off all of you supporters and friends that way

    At this point close to $8T has been earmarked. Would’t it have been much easier to pledge $12T and buy up the entire mortgage market?

  64. grim says:

    From the AP:

    Consumer spending down 1 percent in October

    As the financial crisis was gaining force, Americans cut back on their spending in October by the largest amount since the 2001 terrorist attacks.

    The Commerce Department reported Wednesday that consumer spending plunged by 1 percent last month, even worse than the 0.9 percent decline that had been expected. Personal incomes were up 0.3 percent last month, slightly better than the 0.1 percent gain analysts had expected.

    The big decline in spending in October underscored concerns that the economy is falling into a deep recession. Consumer spending accounts for two-thirds of total economic activity.

    The government had reported Tuesday that the overall economy, as measured by the gross domestic product, was declining at an annual rate of 0.5 percent in the July-September quarter. With October’s big drop in spending, the view is that the GDP decline for this quarter will be much steeper, with some analysts projecting the economy will contract at an annual rate of 4 percent this quarter.

    Many economists believe the current recession will last through the middle of next year and will be the most severe downturn since the 1981-82 slump.

  65. John says:

    Microsoft can’t be a bank they have assets and no liabilities

  66. grim says:

    From MarketWatch:

    U.S. Oct. new-home sales fall 5.3% to 433,000 pace

    Sales of new homes fell an estimated 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since 1991, the Commerce Department reported Wednesday.

    Economists surveyed by MarketWatch had expected a result of 441,500.

    Sales fell 6% in the South, hitting the lowest level since 1992. Sales declined 18% in West, hitting the lowest level since 1982. Sales rose 22.6% in the Northeast, and gained 6% in the Midwest.

    Nationally, sales in October were down 40.1% compared with October 2007.

    The inventory of unsold homes fell a record 8% in October to 381,000. In the past year, inventories have fallen 25.7%, the biggest drop since the government began tracking the data in 1963.

    The median sales price was $218,000, down 7% in the past year.

  67. grim says:

    From MarketWatch:

    U.S. Nov. UMich consumer sentiment 55.3 vs. 57.9 previous

    U.S. consumer sentiment fell in November, according to the University of Michigan/Reuters index released Wednesday. The index fell to 55.3 from an early November reading of 57.9. The survey recorded the largest monthly decline in consumer confidence in its history in October.

  68. comrade nom deplume says:

    Menendez named to new post

    Senate Majority Leader Harry Reid (D-Nev.) Nov. 25 named Sen. Robert Menendez (D-N.J.) to chair the Democratic Senatorial Campaign Committee for the 2010 mid-term election cycle, the committee said.
    Menendez will replace Sen. Charles Schumer (D-N.Y.), who headed up the committee’s efforts in 2006 and 2008. Senate Democrats took control of the Senate in 2006 and enlarged their majority in 2008.
    “Our caucus will be well-served by Bob Menendez, whose mastery of policy is matched only by his mastery of politics. He was a leader in the House, rising to become the third-ranking Democrat there; has already established himself as a leader in the Senate; and will continue to lead us in protecting our incumbents and electing new Democrats in the future,” Reid said in a statement.
    “In 2006 and again this year, under the masterful stewardship of Sen. Schumer, we have made major gains toward bringing change to our country. We face historic challenges and must continue to move in that new direction. I intend to make sure that we build upon the majority in Senate that allows us to affect the change we need,” Menendez said.

    “Mastery of politics”? So DC is going Hudson County on us???

  69. Sybarite says:

    Sales ROSE 22.6% in the northeast???

    You know, I am still surprised at how many $1M+ homes sell on a daily basis when I look at my daily hotsheets.

  70. 3b says:

    #37 clot: there is a house near me that I have been following,it is now down to 350K, the exact same hosue sold 2 years ago for 450K.

    The housefor 350K has a new roof, new siding windows,as opposed to the one that sold 2 years ago for 100k more.

    I have heard people saying we are back to 2004/03 prices in many areas. However, from my point of view those prices reflect the economy of 2004/03, and not the recession we are in now.

  71. yikes says:

    so what if, now that rates are 5.5 or whatever, the housing industry DOESN’T pick up? what if, three months from now, the #’s are still crap?

    then what? 4.5 %? and do asking prices go correspondingly lower?

    not to be greedy, but might the perfect storm be 6 months away – housing selling at 2002 prices and 4% rates.

  72. kettle1 says:

    Stu,

    How long before they get raided for “money laundering”?????

  73. 3b says:

    #76 Yikes:not to be greedy, but might the perfect storm be 6 months away – housing selling at 2002 prices and 4% rates.

    BINGO!!

    During the last housing bust, we had declining prices and falling interest rates.

  74. 3b says:

    #71 grim:Sales rose 22.6% in the Northeast, and gained 6% in the Midwest.

    That seems out of whack does it not??

  75. Stu says:

    “housing selling at 2002 prices and 4% rates.”

    I’ll take 1999 prices and 6% rates, with the option to refinance down during the next recession.

  76. John says:

    I am not so suprised, people who are fence sitting are not always looking for a lower priced home. Lets say you can afford to buy a million dollar home today but think home prices are to fall another 30% in two years. Two years down the road if you job is still good and a million is still affordabe you are not going to buy a house for 700K that was a million you are going to buy a one million dollar home that used to be a 1.4 million dollar home. I for one am fence sitting as I have a set price, I don’t want to spend less on a house I just want to get more house for my money. Same goes all the way up to 100 million dollar homes.

    Sybarite Says:
    November 26th, 2008 at 10:22 am
    Sales ROSE 22.6% in the northeast???

    You know, I am still surprised at how many $1M+ homes sell on a daily basis when I look at my daily hotsheets.

  77. John says:

    I will take 1982 prices and 50% mortgage rates!

  78. chicagofinance says:

    HOLIDAY SHOPPING TIP FROM YOURS TRULY

    As noted on Bloomberg Radio this morning, many retailers out there are staying open during this period to collect as much cash as possible with the intention of declaring bankruptcy after Christmas. As a result, I would strongly advise AGAINST purchasing store gift cards or gift certificates from any retailer large or small, with the exception of maybe Walmart or Target. Any gift certificate to an independent restaurant, spa etc. should be verboten.

    There was an article in the WSJ several weeks ago profiling a customer of the Sharper Image with a $200 gift card. In bankruptcy, the store remains open, but the customer’s gift card is not being honored. The customer stands in line with the rest of the creditors with a financial obligation of the company.

    At this juncture, I would recommend giving American Express or other credit card gift cards. In general, these are sub-optimal solutions, because they charge fees of 2-5% to purchase and also have monthly charges on the balances when the cards go unused, which is outrageous. However, in this environment, they are the safer option. Also, I have seen these guys sensing an opportunity, so you may be able to find card with the fees waived and possibly better conditions.

    At this point you can’t identify any retailer and know which one will go bankrupt on you. So, to some extent one can appreciate how the commercial credit markets have frozen as banks and businesses have no idea who to trust. It has taken the government to step in between transactions and relationships as an intermediary to provide a credit backstop to attempt to restore liquidity.

    I am active attempting to write something that I want to send to my client base, so if any comes across a good information source, please make me aware of it.

  79. HEHEHE says:

    Clot,

    I agree but like BC said the bond market already has lowered. No doubt the gov’t would not allow it though.

  80. JBJB says:

    “so you wont buy in NJ until after the state has to declare bankruptcy and restructure?”

    If that’s what it takes. I am very happy to rent to the end of days.

    That’s why A NJ agent emailing me about interest rates is such a joke. Any savings realized by a rate cut can be immediately eliminated by a hike in re taxes. There is no compelling reason to believe that RE taxes in our fare welfare state are not going to skyrocket in the next five years. Even if you move to a conservative district, you can not avoid the fleecing.

  81. Dink says:

    Chifi # 84

    Along those same lines, should we be cautious of buying anything that may need to be returned, or would stores have to honor their return policy?

  82. NJGator says:

    Nom 73 – Ugh. Naming Menendez to his Senate seat was the first thing (of many) that Corzine did that broke my heart.

    But on the bright side, if DC is going all Hudson County on us, we can expect a lot more prison sentences!

  83. Victorian says:

    “At this juncture, I would recommend giving American Express or other credit card gift cards. In general, these are sub-optimal solutions, because they charge fees of 2-5% to purchase and also have monthly charges on the balances”

    Chi – Got an e-mail from AMEX the other day offering NO FEE gift cards.

  84. HEHEHE says:

    Nom,

    If you want an expert on shady fund raising Menendez is your man.

  85. Dink says:

    AMEX gift cards are a hassle. Not all merchants allow split tender transactions, so you have to spend the last remaining dollars on the cards at stores that allow them.

  86. Stu says:

    Menendez is a crook.

  87. Gman says:

    Now the prices for housing in the NJ just have to drop another 20% and it’ll be time to buy a home!!!

  88. 3b says:

    382 John: one minute you are happy in your POS split, and you are the envy of your Mc Mansion neighbors.

    Now you are looking to buy a 1.4 million dollar house for 1 million.

    You are all over the place.What possible upside is their to purchasing a 1,000,000 house, at this point;who cares. Million dollar Mc Mansions are so 2005/06.

  89. 3b says:

    #81 Stu:I’ll take 1999 prices

    And you just might get 1999 prices. I used to think that was out of the realm of possibility, but now feel it could be a very real out come.

  90. comrade nom deplume says:

    [84] chifi,

    I was aware of that, but your point is especially well taken for those unaware of how bankruptcy works.

    With your kind permission, I copied and pasted part of your post for circulation to friends and family in a kind of client alert.

  91. kettle1 says:

    correction to a comment i made yesterday:

    Total bailout pledges to date = 8.5 trillion

    7.7 trillion + 800 billion.

    do we break 13 trillion by the end of 2Q09?

    ————————————–

    Nov. 25 (Bloomberg) — The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion.

    The central bank will purchase as much as $600 billion of debt issued or backed by government-chartered housing-finance companies. It will also set up a $200 billion program to support consumer and small-business loans, the Fed said in statements today in Washington.

    With today’s announcement, the central bank is starting to use some of the unorthodox policy tools that Chairman Ben S. Bernanke outlined as a Fed governor six years ago. Policy makers hope the initiatives will bring down the interest rates on mortgages and consumer loans, offsetting the withdrawal of private-sector financing.
    ————————————–
    Nov. 24 (Bloomberg) — The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

    The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

  92. Stu says:

    ChiFi:

    Here’s an excellent gift card link from Jamil’s favorite source…

    http://www.nytimes.com/2008/11/22/business/22shortcuts.html

  93. kettle1 says:

    Chifi 84

    I second that, excellent advise, will share with my family as well.

  94. make money says:

    Albani #84

    What’s wrong with a Xmass card and a few good old benjamins.

  95. Stu says:

    make money:

    Agreed. Or maybe a U.S. savings bond? (ha ha ha)

  96. scribe says:

    BC,

    I’m trying to understand all of this.

    What in the bond market?

  97. kettle1 says:

    make,

    why not a few 1/10 Oz coins in the stocking?

  98. renter says:

    To Buy Children’s Gifts, Mothers Do Without

    http://www.nytimes.com/2008/11/26/business/yourmoney/26moms.html?em
    “I want her to be able to look back,” Ms. Hunt declared, “and say, ‘Even though they were tough times, my mom was still able to give me stuff.’ ”

    The headline makes you believe someone is sacrificing something real. The content is absurd. This is just wrong! What about my mom spent time with me, cooked me a home made meal, read me stories, laughed with me?

  99. make money says:

    make,

    why not a few 1/10 Oz coins in the stocking?

    Kettle,

    I’ll save those for the rough times ahead. My fam and friends will need them trust me.

    Anyway, it a xmass gift not a xmass bailout.

  100. HEHEHE says:

    “At this juncture, I would recommend giving American Express or other credit card gift cards”

    Plus AMEX is now a “bank holding company” and has TARP funds.

  101. kettle1 says:

    “the government essentially has to take control of Citicorp and become more and more involved with its operations until the bank ultimately is nationalized.”

    http://money.cnn.com/2008/11/21/news/companies/benner_citi.fortune/index.htm?postversion=2008112414

  102. kettle1 says:

    “Analysts at independent research company CreditSights forecast that in a scenario where the commercial and residential real estate markets really tank beyond banks’ expectations, Bank of America would have a Tier-1 capital ratio of 7.15 percent. The minimum that regulators seek to consider a bank “well capitalized” is 6 percent, but any ratio near or below 7 percent tends to spook investors. CreditSights also expressed concern about Wells Fargo & Co, which it said would have a Tier-1 capital ratio of 6.98 percent under its worst case scenario. Wells Fargo recently agreed to buy Wachovia Corp.”

    http://www.reuters.com/article/idUKTRE4AN8FN20081124?virtualBrandChannel=10112&sp=true

  103. Sean says:

    Vulture Hedge Funds and other private equity firms like KKR get a free pass to the slaughter.

    Nov. 26 (Bloomberg) — The Federal Deposit Insurance Corp. is expanding the pool of qualified bidders for deposits and assets of failing banks to include parties that don’t have bank charters.

    The change will help the FDIC ensure “failing institutions are resolved in a matter that will result in the least cost to the Deposit Insurance Fund” by marketing assets to “known, qualified and interested bidders,” the regulator said in a press release today.

  104. kettle1 says:

    Is Britain Going Bankrupt?

    The bond vigilantes are restive. We are not yet facing a replay of the 1970s ‘Gilts Strike’, but we are not that far off either. There is now a palpable fear that global investors may start to shun British debt as the budget deficit rockets to £118bn — 8pc GDP — or charge a much higher price for to cover default risk. The cost of insuring against the bankruptcy of the British state has broken out — upwards — over the last month. Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have.

    Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world. Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49)

    http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2008/11/24/is_britain_going_bankrupt

  105. kettle1 says:

    Make,

    “Anyway, it a xmass gift not a xmass bailout.”

    Sorry, i got confused with all the other bailouts ;)

  106. kettle1 says:

    Can we get this guy on O’s economic team?

    Minister Peer Steinbrück of the left-leaning Social Democrats (SPD) is a man of almost Lutheran conviction. He sees economic stimulus programs as the work of the devil. “No matter how large a package the government launches, it cannot subsidize the economic crisis away,” he told a group of industry leaders in Berlin last Friday, “and I also have no intention of doing so.”

    http://tinyurl.com/6mddzj

  107. BC Bob says:

    OUCH.

    “One of the world’s biggest executive search firms, CTPartners, predicts the financial services industry will shrink much further, and is putting its money where its mouth is by shifting its own resources away from financial-industry searches.”

    “Sullivan said financial services job cuts worldwide will double to about 350,000 by the middle of next year, from about 170,000 announced to date. He called the prospect of ongoing bloodletting “the financial equivalent of World War II.”

    http://bl142w.blu142.mail.live.com/mail/InboxLight.aspx?FolderID=00000000-0000-0000-0000-000000000001&InboxSortAscending=False&InboxSortBy=Date&n=2131769263

  108. HEHEHE says:

    So how is Volcker going to get along with a couple bailout boys like Geithner and Sumners in an Obama White House? You think Tall Paul will be getting O’Neil’d early on?

  109. HEHEHE says:

    So how is Volcker going to get along with a couple bailout boys like Geithner and Sumners in the White House? You think Tall Paul will be getting O’Neil’d early on?

  110. make money says:

    So how is Volcker going to get along with a couple bailout boys like Geithner and Sumners in the White House? You think Tall Paul will be getting O’Neil’d early on?

    Everyone is afraid of Tall Paul and his big stick. I would love for him to interview the big 3 CEO’s.

    Timmy and and summers will piss their pants when Tall Paul looks at them in the eye and says NO.

  111. kettle1 says:

    http://news.bbc.co.uk/today/hi/today/newsid_7749000/7749669.stm

    (Audio)
    The Federal Reserve is to inject another $800bn (£526.8bn) into the US economy in a further effort to stabilise the financial system. Pippa Malmgren, a former adviser to US President George W Bush, and business editor Robert Peston discuss a bail out $100bn bigger than originally announced.

    “Interviewer: Why did 700B cause so much argument, but 800B go through easily?

    US treasury spokesperson: the 800B is not taxpayers money. It will be produced by printing.

    Interviewer: Won’t that cause inflation?

    spokesperson: Yes of course, that is the whole point, we are trying to produce inflation. We can do that by printing. The problem will come later, when we try to tame the inflation monster again.”

    Listen to this program. The guest describes exactly what i have said we will see. Deflation followed by a rapid change to inflation.

  112. John says:

    Not really, on Long Island a four bedroom two bath home in good condition with a decent plot of land in a good neighborhood with a good school district with a good commute to the city still starts at 1.3 million which is insane. Those homes need to go back to 950K, most likely they are not going much below. In the levitown hey day long island mainly built 50 by 100 pos three bedroom 1.5 bath capes and splits which are a dime a dozen. A proper 4 bedroom center hall colonial on a 80×100 lot on a good street is still a rare commodity. LI never had toll brothers banging out mcmansions. A dormer and a granite countertop on a cape is considered trade up in a lot of towns and even those houses in decent towns are running at 700k. For one million you are not getting anything on Long Island remotely looking like a mcmansion, at best it will only need paint and a bathroom or two and you will make do with the 80’s kitchen. You need at least 2 million for a starter mcmansion.

    I hate my POS Split. I only bought it in Dec 1999 as housing was flying up and the guy was near foreclosure. I do love almost no mortgage and low RE taxes as since the house ain’t worth much it ain’t assessed much.

    3b Says:
    November 26th, 2008 at 11:14 am
    382 John: one minute you are happy in your POS split, and you are the envy of your Mc Mansion neighbors.

    Now you are looking to buy a 1.4 million dollar house for 1 million.

    You are all over the place.What possible upside is their to purchasing a 1,000,000 house, at this point;who cares. Million dollar Mc Mansions are so 2005/06.

  113. Hobocondo says:

    The article about “mothers going without” is so unbelievably stupid. My husband and I make very good money and our kid is not getting nearly that much stuff. And it’s not exactly “going without” if your sacrifice is a pair of designer jeans.

    An aggravating article on so many levels…

  114. kettle1 says:

    thoughts?

    From Mish’s blog

    Reading into the bank failure graph mish supplied is very telling because of what it’s not telling. It shines light on the many bank failures for 1988 to 1992, but what it does not show is that those bank failures were a lagging indicator.

    In 1982 the S&Ls were dereregulated. They were now competing with banks for deposits. The S&Ls that paid the highest interest rates, pulled in the most deposits. To be able to pay these high rates, the S&Ls had to make risky, high-interest loans. The practice of “linked financing” was born. Thrifts willingly took bad loans. Junk bond kings, like Michael Milken of Drexel, Burnham and Lambert brokered high interest loans for S&Ls, if the S&Ls, in turn, agreed to invest in the junk bonds of their clients.

    Those well connected, politically, also indulged in the corruption that brought down the S&Ls. As a director of Silverado S&L, Neil Bush, GW’s brother and son of the President, voted to approve $100 million in bad loans to two of his business partners. The fact that these bad loans were going to his partners was hidden from his fellow board members. After getting caught, Bush paid a $50,000 fine and was banned from banking. The crash of Silverado cost taxpayers $1.3 billion. We don’t even need to get into John McCain and the role he played in enabling the criminal activity that ultimately brought down Lincoln S&L.

    On top of all the S&L corruption, we need to recall the 1987 stockmarket crash and the junk bond crash. Bank failures were to be expected. Between 1989 and mid-1995, the Resolution Trust Corporation, which was created to shut down failing S&Ls of the 1980s, closed 747 thrifts. Additionally, Bank of New England and all its sister institutions, as well as the National Bank of Washington, failing in the late 1980s, were finally shut down in 1991. Most of the banks and S&Ls, that were failing in the mid 1980s, were not actually shut down until the very late 1980s and early 1990’s.

    The point I’m trying to make is that the failed bank assets of the early 1990s came at the end of America’s economic problems. It was a lagging indicator. Consequently, what appears to be an unfathomly large number of failed bank assets recorded in 2008, may only turn out to be concomitant to what is yet to come in the future.

  115. John says:

    119 maybe mommie is turning tricks or dealing, nothing is too good for their kids.

  116. make money says:

    Kettle1,

    I have to give it to you. You have had thi dead right for months. You have called this deflationary period and were dead right. Now lets hope you’re right about the hyper inflation that’s peaking around the corner.

    This board is amazing. We’ve correctly called the Bear dead on thursday. Citi was Clots call a month before the bailout. so was Fanny and Freddy but that was a layup for anyone that read Peter Schiff’s book. I made 60% return on BoA picking up CFC, Lehman and AIG calls were also easy and Ben’s shalacking of the FFR was mentined here with the Helicopter references.

    Not to mention the correct calls on the $300 jeans and consumer being tapped out. The recession calls were here at least 12 months before we dipped in. BC said we have systemic risks at the begining of the year and predicted Japan.

    Bi has predicted oil will crash(had to give him that).

    The Housing bubble call by Grim, BC, 3B, ChiFi, and the likes (purpose of teh site) was a slam dunk.

    It’s like the scene from White man can’t jump when Wesley teaches Woody how to say

    “Too easy”

    If Obama reads this blog during his Administration he’ll be the best President ever.

  117. make money says:

    Kettle1,

    I have to give it to you. You have had thi dead right for months. You have called this deflationary period and were dead right. Now lets hope you’re right about the hyper inflation that’s peaking around the corner.

    This board is amazing. We’ve correctly called the Bear dead on thursday. Citi was Clots call a month before the bailout. so was Fanny and Freddy but that was a layup for anyone that read Peter Schiff’s book. I made 60% return on BoA picking up CFC, Lehman and AIG calls were also easy and Ben’s shalacking of the FFR was mentined here with the Helicopter references.

    Not to mention the correct calls on the $300 jeans and consumer being tapped out. The recession calls were here at least 12 months before we dipped in. BC said we have systemic risks at the begining of the year and predicted Japan.

    Bi has predicted oil will crash(had to give him that).

    The Housing bubble call by Grim, BC, 3B, ChiFi, and the likes (purpose of teh site) was a slam dunk.

    It’s like the scene from White man can’t jump when Wesley teaches Woody how to say

    “Too easy”

    If O reads this blog during his Administration he’ll be the best President ever.

  118. stu says:

    Clot,
    I have reentered the shorting game. Opened a small position in FXP at 54.50. IMO, there is no way a credit rate cut in China is gonna turn the Chinese into wasteful Americans circa 2004. Was hoping the DJIA would be closer to 10K when I made the purchase, but FXP hasn’t been down to these levels ever. I’m hoping the anecdotal negative black Friday sales reports will shock the system on light volume and I’ll be out. Still waiting for my price on SRS. Won’t touch SKF with a ten-foot poll anymore.

  119. 3b says:

    #118 Not really, on Long Island a four bedroom two bath home in good condition with a decent plot of land in a good neighborhood with a good school district with a good commute to the city still starts at 1.3 million which is insane. Those homes need to go back to 950K, most likely they are not going much below. In the levitown hey day long island mainly built 50 by 100 pos three bedroom 1.5 bath capes and splits which are a dime a dozen. A proper 4 bedroom center hall colonial on a 80×100 lot on a good street is still a rare commodity. LI never had toll brothers banging out mcmansions. A dormer and a granite countertop on a cape is considered trade up in a lot of towns and even those houses in decent towns are running at 700k. For one million you are not getting anything on Long Island remotely looking like a mcmansion, at best it will only need paint and a bathroom or two and you will make do with the 80’s kitchen. You need at least 2 million for a starter mcmansion.

    John at the nd of the day howver, who is left to buy all these 700k, 900K 1,000,000,00, 2,000,000.00 houses? I would easily say very few.

    Have you looked at the realtor sites for LI lately, tons of inventory in all towns in all price ranges, just sitting, stagnating, dying on the market place.

    Not that it matters, but it is very difficult to ascertain from your postings, whether you are a real estate bull or bear.

    That being said the Wall St job/pay bonus machine is over for the NYC metro area.

    The street as we know it is gone,and real estate as any kind of investment is dead;for years in this area.

  120. John says:

    GM up 63% Fannie up 50% TMA up 60% C up 13%. I think Kettle, Grim and BC Bob were sleeping last Friday when they forgot to tell the bears to grow some horns and become bulls.

  121. BC Bob says:

    John [126],

    Don’t fall off your chair, I’m long Citi.

  122. 3b says:

    #26 John: You are joking right??

    Bulls?? Too funny. A bull relying hoping depending on gov’t bailouts?

    That does not sound bullish to me, in fact it is the exact opposite.

  123. HEHEHE says:

    This week was all window dressing by the government. Trying to get the Lowest Common Denominators vegged out again so they can enjoy the holiday and hopefully spend more money they don’t have to spend.

    HOPE IS ON THE WAY!!! – SOON TO BE FOLLOWED BY THE CURRENCY COLLAPSE WHEN THE BILL FOR THE HOPE ARRIVES!!!!

  124. Al says:

    Wow – I just came back from actually working :)

    Obama Piks Voclker!!!

    Mya be goverment will be able to comtrol Inflation ?? and Not let it slide3 into a hyper-inflation… I’d say if USA can keep inflation under 20%/year we are good…. We need High inflation to erode national debt/SS, Medicare obligation/pension funds troubles… Just not let it become hyper-inflation. How to do it – this would be the 100 Trillion $ question…

  125. Victorian says:

    John –

    The 10 year is below 3%. What can be more bullish?
    I am building my short positions up again.
    I am not that much of a gambler to play the countertrend. The trend is down and this is just an opportunity to reload.

  126. Outofstater says:

    #84 ChiFi – How about fresh, crisp, newly printed hundred dollar bills? Cash is not tacky – it’s cool.

  127. Hard Place says:

    Don’t fall off your chair, I’m long Citi.

    You, The Prince & Carlos Slim. Big swingers.

  128. John says:

    3b the street is not dead, get real, junk bonds, limited partnerships, internet stocks, penny stocks, russian bond crisis, China bubble, Latin America Collaspe, LTCM, solar power etc. You name it I have seen it and always some new thing pops up. Your kids will be trading some idiotic hedge or swap bubble in 20 years and they will be telling you it is all different this time just like back in the days of the tulip bubble. Right now I am seeing CDS exchanges, FX Options, Carbon Credits, FDIC Corp Bonds, Tax Loss trading, Bankruptcy folks, Venture Caps, Parimutual Trading tools, black box strategies, Dark Pools Private Equity etc. all circling looking for the next big thing. My favorite most promising thing in the works is a long term parimutual betting system based on case schiller to hedge home prices right down to type and city. Lets say you paid one million for a home today that you plan to sell in ten years you can hedge right down to the month you plan on selling it on the moment you bought the house to protect your investment. I also see some long term weather trading tools and commerical real estate tools that are cool. Wall Street will become futures, options, stocks, derivatives, exotics, physcial etc. They will figure how to slap a cusip on anything and make it OCC/DTCC/CFTC eligible and automated and trade away baby. Wall street folks are smart they will figure it out. The million kids in HS, College and MBA programs are itching for a upper saddle river home, S class and a trophy wife and they will think up the next new great things to bring home the bacon, take that to the bank.

  129. Al says:

    My post 1230 in moderation… I said O5ama in it.

    How do you have high inflation without the risk of hyper-inflation?? – Could it be dome by 1: Keeping interest rate very high (lets say 20%/year) and inject 18% pruinted money into economy every year??

  130. John says:

    BC I Stand up and Salute you. My theory is any body can tell you when to buy and when to sell, the harder part is when to get back in. You played this great. I went long on Friday some Suntrust Pref Stock at 20% dividend myself. There is going to be a 100 day honeymoon period with the new admin. If they even thow a plug nickle at GM,give me 75bps and open up the asset backed market for credit cards, consumer loans, student loans and cars hold onto your hat, faster than you can say deflation we will have inflation and the dopes long treasuries will be sucking wind. .

    BC Bob Says:
    November 26th, 2008 at 1:09 pm
    John [126],

    Don’t fall off your chair, I’m long Citi.

  131. John says:

    Don’t fall off your chair BC in the past few weeks I bought CITI, COF, BAC, SOV, NCC, CIT, JPM, AMEX and GENWORTH bonds and SOV, BAC and STI Pref Stock as well as UYG 2X long. The way I see it is the water is cold and deep but at some point you gotta stick it in.

  132. Clotpoll says:

    Stu (124)-

    Yeah, SKF is still too pumped for my taste. Have been laying in SRS today, though.

    More REITs and mall operators will be hiring bankruptcy attorneys after Black Friday proves to be exactly that.

    Also got nice odds on Liverpool winning EPL and Champions’ League today too…

  133. Outofstater says:

    #105 NYTimes article on moms and gifts. Did you see the photo of all those presents?? For one kid?? My kids got one present from us and one from Santa (plus full stockings of little stuff). They received gifts from other relatives too and it was always too much. Sensory overload!

  134. Clotpoll says:

    Didn’t Bill Gross begin ’08 by calling the 10 yr. going to 3% or lower?

  135. Clotpoll says:

    ARMs, I/Os, other variable rate mortgage product?

    Don’t even bother to ask. Punitive rates/terms; procto-exam qualification standards.

    In other words, no help available for those who are shaky or underwater.

    I give the current good feelings until about Monday to subside.

  136. Clotpoll says:

    John (136)-

    “The way I see it is the water is cold and deep but at some point you gotta stick it in.”

    You’d be better off sticking it into a warm, baked onion.

  137. stu says:

    A blooming onion?

  138. Outofstater says:

    Yuck. Trying to have lunch over here and you guys aren’t helping!

  139. 3b says:

    #133 John: I think you are way off base IMO.

    The street is a different animal, the big boys (the coupel that are left) are now bank holding companies, and will be highly regualted;no more big risks for big payoffs.

    Some of the things you mention are/ and will occur, but they are years away.

    The street has to finish deleveraging and that includes deleveraging itself of many of its employees.

    As I said, the street is dead, the MBA’s will have to turn their attention elsewhere for the next few years at least.

    I do believe that going forward, we sill start to see a return to a lot of speciality/boutique Wall Street firms, like we had years ago.

    Speaking of Saddle River, there are 74 single family homes for sale there right now,and an additional 126 in Upper Saddle River.

    Lots of trophy homes for trpphy wives, not to many buyer apparently.

  140. stu says:

    My prediction for the black Friday retail sales reports. Volume of sales will be way up. Profit margins will be next to zero. Of course, you won’t here about the margins until later in December. This is what happened last year, and I expect it to happen again this year, only amplified.

  141. BC Bob says:

    John,

    Disclaimer about being long; just looking for a 1929-30 type rally. Hopefully, one can last longer than a day or two. Then looking to get aggressively short.

  142. kettle1 says:

    Stu,

    I think we see a wave of businesses crumble 1Q09, after the Xmas selling season fails to materialize.

    Long walmart?

    It’s do-or-die time for malls :
    In five short days, it could be the beginning of the end for some of the nation’s malls. “Certainly malls are going to be very damaged by Christmas. It could be all over for some of them very soon,” said Britt Beemer, founder and chairman of America’s Research Group. Black Friday – or the day after Thanksgiving – is traditionally one of the busiest shopping days of the year.

    Beemer said his surveys of consumers going into the holiday shopping season indicate that there’s not much respite ahead for malls or their retail tenants. He expects holiday sales for November and December combined will fall 1% or more this year. The two-month period can account for as much as 50% of retailers’ annual profit and sales. “I predict that no more than 38% of Americans will walk into a mall over the coming weeks. But that doesn’t mean they will buy something,” he said. Instead, he said he’s confident saying that another 40% of Americans will go to Wal-Mart where “90% of them will complete their Christmas shopping.”
    http://money.cnn.com/2008/11/24/news/economy/malls_blackfriday/index.htm

    ————————————-

    Make,

    Its a pretty impressive community that grim has pulled together here.

  143. kettle1 says:

    Short best buy?

  144. Clotpoll says:

    BC (146)-

    Don’t forget the Vi@gra metric.

  145. Sybarite says:

    I’m long WMT, CSCO, MCD

  146. Clotpoll says:

    vodka (148)-

    Short everything other than the shiny stuff.

    The next leg down is going to be especially brutal. This wave is going to smash the “it’s different here” set.

  147. Sybarite says:

    should have read COST, not CSCO

  148. Clotpoll says:

    Syb (150)-

    Love that MCD. Jacking the double cheeseburger over $1 shows pricing power.

    I’m not joking.

  149. John says:

    Other than to give bored housewives, teenagers, and old people a place to hang out exactly what do we need a mall for in the first place. I rather be seen on a moped than be seen in a mall.

  150. stu says:

    Didn’t MCD just have two triple cheeseburgers for $3. Not that I have stepped into a Mickey D’s in the last 10 years.

  151. kettle1 says:

    Clot,

    my micro timing sucks, but i dont think we will see the next brutal leg down until after O takes office. I think that there is a hope factor that is helping to float the market and that the hope factor will play out until shortly after inauguration. We may still see the crazy swings like the last few weeks, but with King Henry throwing trillions in bailouts around and Bergabe in his B52, i think that any brutal swings will be delayed of a little while yet.

    On another note, The real danger of a Wiemar or Zimbabwe type inflation comes once the government starts handing the cash directly to the people.

  152. John says:

    Good Bull sign is the Indian Bombings did not turn the stock market down. A Bear sign is they grab every little piece of bad new. Thought I want to get one of the dollar double cheeseburgers while they still have them and wash it down Malt Liquir. What pisses me off is I have to go to BK to get my onion rings and dairy barn for my tall boy just to complete my meal. McD’s should sell beer and onion rings as unless I ma mistaken this is still america.

  153. John says:

    Well the good news is with the dark background on the bills our new prez won’t be able to print new money with his picture on it.

  154. Clotpoll says:

    ket (156)-

    1/20/08 feels like tomorrow for me.

  155. Sean says:

    I would love to go long on banks but the simple fact remains that the debt must be deflated entirely before recovery can begin.Just take a look at the Japanese banks. All efforts here have failed to reinflate so far. Right now there is more bailing going on than a life boat that has been strafed by the Luftwaffe. It has been at least 16 months of this grand Bernake experiment to save the banks at all costs. By now we should all realize that there is no way that the Fed & Treasury can export our debt anymore and there is no way the Zombie banks on life support even matter anymore. Might as well buy Pets.com and pray that on-line shopping for dog collars takes off again.

    Private equity is now making plays for any bank asset that can be bought worldwide, and the FDIC just opened the door for anyone else willing to play the game here in the USA.

    Money may be circling like vultures right now and the average Joe day trader has an itchy finger but be wary of dead banks, especially when the FDIC will now hand over deposits to anyone and the Tarp money ends up in the hands of anyone that applies for a bank charter including foreign companies.

    The Sovereign wealth of China, Japan, the Middle East, and some of the large private equity firms like Carlyle Group and KKR are going to own everything. They are already wheeling and dealing for assets in the USA and European banks and none of us can even buy a ticket to that game.

    I am bullish on Walmart, I expect them to now get what they wished for a bank charter, and when KKR has their IPO then I want to be in on it. The rest of the banks can sit and spin.

  156. kettle1 says:

    Just looked and saw that on the day of the Citi bailout, the USD dropped 4% against EUR. isnt that a very large move?

    BC?

  157. BC Bob says:

    “Good Bull sign is the Indian Bombings did not turn the stock market down.”

    John,

    All the bears are long gone, sipping champagne on the beach/slopes.

  158. kettle1 says:

    BC,

    Re USDEUR drop,

    is that the bond market getting a little nervous?

  159. Clotpoll says:

    Sean (160)-

    Word.

    “Money may be circling like vultures right now and the average Joe day trader has an itchy finger but be wary of dead banks, especially when the FDIC will now hand over deposits to anyone and the Tarp money ends up in the hands of anyone that applies for a bank charter including foreign companies.

    The Sovereign wealth of China, Japan, the Middle East, and some of the large private equity firms like Carlyle Group and KKR are going to own everything. They are already wheeling and dealing for assets in the USA and European banks and none of us can even buy a ticket to that game.

    I am bullish on Walmart, I expect them to now get what they wished for a bank charter, and when KKR has their IPO then I want to be in on it. The rest of the banks can sit and spin.”

  160. John says:

    cnn.com has pictures of dead bodies everwhere, happy thanksgiving.

    KKR is a train wreck, up to last year they were writting checks by hand and did not even have an AP/AR system in place, sloppy sloppy 1980s type controls.Good luck with that IPO, not.

  161. BC Bob says:

    kettle [161],

    In normal markets, that would be a huge intraday move.

    The dollar is being supported by deleveraging and repressed by the never ending liquidity/bailout vehicles.

  162. yikes says:

    kettle1 Says:
    November 26th, 2008 at 12:08 pm
    http://news.bbc.co.uk/today/hi/today/newsid_7749000/7749669.stm

    (Audio)
    The Federal Reserve is to inject another $800bn (£526.8bn) into the US economy in a further effort to stabilise the financial system. Pippa Malmgren, a former adviser to US President George W Bush, and business editor Robert Peston discuss a bail out $100bn bigger than originally announced.

    “Interviewer: Why did 700B cause so much argument, but 800B go through easily?

    US treasury spokesperson: the 800B is not taxpayers money. It will be produced by printing.

    Interviewer: Won’t that cause inflation?

    spokesperson: Yes of course, that is the whole point, we are trying to produce inflation. We can do that by printing. The problem will come later, when we try to tame the inflation monster again.”

    i will listen when i get home, but this can’t be right, can it? this is absurd. how long till the inflation kicks in and a loaf of bread is $10?

  163. Sean says:

    Signs of Deflation.

    Just got an email from my Chevy dealer.

    40% off MSRP.

    New 09 Impala , MSRP is $24,215 selling price to YOU is $14,529 plus tax and tags and 100% guaranteed auto financing.

    http://www.multichevrolet.com/MiscPage

    Just last April I had to have a convo with the manager and some guy who was like a dejected pit boss just to get 100 basis points off the damm car loan.

    I will wait until the Corvette is 40% off and flip my Hybrid.

  164. yikes says:

    Guys – While many on this board were out front a year or two years ago, some of the recent calls have happened … quickly.

    (ie – deflation followed by inflation; citi falling)

    Has the cycle rapidly sped up? Is January going to be a horrendous month for the US when everyone who ignored the economy in favor of Christmas wakes up and realizes we’re F’d?

    Will there be a point where Obama’s team says they wont print anymore money and they need to just let the chips fall where they may?

    we saw Oil soar this summer; can anyone see a gallon of milk for $10? if that happens, chaos will be upon us because not a lot of people can afford that.

  165. HEHEHE says:

    I think there is something to dipping your toe into commodities given the money the Feds have been throwing around and the inflation that is sure to arise.

    I have a hard time getting long any type of stocks right now as I don’t see how you can value any of them. Other than dollar cost averaging via my 401-k I don’t see any typw of bull case right now other than technically the market is oversold. I don’t think we’re anyplace near a true market bottom.

    As far as banks all I see is the government saying we won’t let the big boys go to zero. That’s a long way from having a profitable future.

  166. SG says:

    Malls Bracing for a Frigid Holiday Shopping Season

    Retailers across the nation are reporting their worst sales in decades, and even New Jersey’s large and affluent population is no exception to this consumer retrenchment. But experts said the state has a key advantage: the wild overbuilding seen in other states during the good times didn’t happen here, so it’s unlikely that highways will be lined with dark, vacant strip malls as the slump deepens.

    “New Jersey’s real estate market never hit the highs that some places [like California and Florida] did, so to date we’ve been spared the worst of the downturn,” said Joel Naroff, president of Naroff Economic Advisors. But since personal income drives consumer spending, New Jersey retailers will suffer as the finance industry lays off workers.

    “The financial sector, which has provided many New Jersey residents with high-paying jobs, has collapsed, and I don’t think we’ve seen the full effect of that yet,” Naroff said.

  167. kettle1 says:

    Yikes,

    inflation kicks in when deflation in the form of debt destruction starts to slow down. My guess is the end of 2011.

    You probably will see inflation in some isolated sectors before then. But not system wide while deflation is the primary driving force.

  168. SG says:

    Bill Would Reform Affordable Housing

    State Sen. Christopher Bateman (R-Somerset), who is sponsoring his own bill, S-2292, to reform the state’s affordable housing program, said New Jersey municipalities would find it impossible to shoulder the costs of building such units. “This is a crushing burden on towns already reeling from the economic downturn,” he said. “They simply can’t afford this unfunded mandate.”

    Bateman asked for support for various measures, including urging Gov. Jon S. Corzine to issue an executive order that would impose a six-month delay in the implementation of the amended COAH rules, adopted in September. The delay would allow legislators enough time to come up with a more realistic affordable housing plan and funding mechanism for the cash-strapped state, he said.

  169. SG says:

    Foreclosures Tumble, but Worst May Be on Horizon

    New Jersey foreclosures fell by 25 percent in October, according to a new report from the real estate research firm PropertyShark, but local economists said the numbers didn’t necessarily reflect the current state of New Jersey’s housing market.

    The state had 785 foreclosures — defined as properties scheduled to have foreclosure auctions during October for the first time — during the month, compared to 1,046 in September. The number was at its lowest level since December 2007, when 522 foreclosures were recorded.

    Joseph Seneca, an economist at Rutgers University in New Brunswick, said even if foreclosures have been trending downward in New Jersey, that trend is likely to change. He said housing prices have continued to fall, which will result in more households seeing their home values fall below the value they owe on those properties. Also, with rising unemployment in the state, households will find it increasingly difficult to pay their mortgages, Seneca said.

  170. BC Bob says:

    Happy Turkey Day to all!!

  171. 3b says:

    #151 clot:it’s different here” set.

    It is astounding to me that even after all that has transpired, we still have some of that talk around here.

    I guess it is like whistling when walking past a grave yard at night.

  172. John says:

    HOV UP 90%

    HOVNP – HOVNANIAN ENTERPRISES INC – 1.05 [-] (Real-Time Quote) 11/26/2008 03:17pm
    Change: 0.50 90.91%

  173. John says:

    3 Month Bill 0.02 0.10 -0.08 -80.00

    Even crazier 3 month interest rates down 80% today

  174. Sean says:

    Is this code orange or code red according to Homeland Security?

    http://wcbstv.com/breakingnewsalerts/subway.terror.plot.2.874410.html

  175. Al says:

    The state had 785 foreclosures — defined as properties scheduled to have foreclosure auctions during October for the first time — during the month, compared to 1,046 in September. The number was at its lowest level since December 2007, when 522 foreclosures were recorded.

    So wait – in the whole state of NJ we have what – 785 “Scheduled” – not even completed yet FK?? How many of thouse will never go to the auction doe to either Homeowner declaring BK or some other abatement? So we are well under 10,000 for a year??

    NJ it still holding very firm…. NJ will; not crush untill 40-50% of all sales are FK – just like CA. So what are the total number of sales for the month of october, anybody??

  176. grim says:

    #178 – SG

    From PropertyShark:

    New Jersey Foreclosure Report – October 2008 (PDF)

  177. RayC says:

    Why would banks foreclose now when at any given moment the Fed may announce a plan to pay off those mortgages, or a percent, or whatever they feel like?

    I propose there is a lot of pant up demand in the banks, when they can’t get anything from the govt for the mortgages they hold – they will then foreclose. Get outta the way.

  178. John says:

    I love the smell of a bull market in the morning.

  179. chicagofinance says:

    clot: what a stupid day on the market…..

  180. BC Bob says:

    “I love the smell of a bull market in the morning.”

    John,

    Hopefully, you don’t have to bend over too far to smell that bull.

  181. BC Bob says:

    “clot: what a stupid day on the market…..”

    Chi,

    Many I know, are calling it a stupid year. Go figure.

  182. chicagofinance says:

    second iteration on this one….

    nom….when you stick it on the Internet, it no longer belongs to you, so go nuts….

    stu…thx for the NYT…

    This communication is informal, so it needs to be fact checked and fleshed out. However, for the people on this distribution list, you are people I know, so I thought it better to just shoot it out now before Black Friday. I originally listed several retailers, but I think we need to be careful here to not do anything libelous or to not rumor monger.

    HOLIDAY SHOPPING TIP

    As noted on Bloomberg Radio this morning, many retailers out there are staying open during this period to collect as much cash as possible with the intention of declaring bankruptcy after Christmas. As a result, I would strongly advise AGAINST purchasing store gift cards or gift certificates from any retailer large or small, with the exception of the biggest and most clearly financially robust names. Any gift certificate to an independent restaurant, spa etc. should be verboten. I’m sure you can think of some exceptions, but really anything is possible in this environment.

    There was an article in the WSJ a couple of months ago profiling a customer of a retailer with a $200 gift card. In bankruptcy, the store remains open, but the customer’s gift card is not being honored. The customer stands in line with the rest of the creditors with a financial obligation of the company. Obviously each business is going to have different circumstances, so it is probably not appropriate to generalize.

    At this juncture, I would recommend giving credit card gift cards. In general, these are sub-optimal solutions, because they charge fees of 1-5% to purchase and also have monthly charges on the balances when the cards go unused, which is outrageous. However, in this environment, they are the safer option. Also, I have seen these guys sensing an opportunity, so you may be able to find card with the fees waived and possibly better conditions.

    At this point you can’t simply identify any retailer and obviously know which one will go bankrupt on you. So, to some extent, you can appreciate how the credit markets have frozen as banks and businesses have no idea who to trust. It has taken the government to step in between transactions and relationships as an intermediary to provide a credit backstop to attempt to restore liquidity.

    I am actively attempting to write something official that I want to send to my client base, so if anyone comes across a good information source, please make me aware of it.

    The worst case scenario is that the gift card is worthless. I think that there might be a fair chance that the Federal Government gets involved with this issue in 2009.

    Happy Holiday ;-)

  183. stu says:

    Now this is a bear market rally! Heard some dudes on Bloomberg saying that it appears that people are getting back into the market. Will they ever learn? Since the first panic, I announced that I expect the DJIA to range from 7.5 to 10.5. So far, the call has held amazingly true although 10.5 might appear to have been a lofty call and 7.5 might end up not being low enough. Time will tell. I plan to continue adding to my shorts on Friday and into next week. Just as bear market rallies tend to be swift, so is the race to retest market lows typically. Still waiting for the ‘black’ day to signal a potential market bottom in the making. Could still be a ways away, but really doubt O or W will have anything to do with it. Happy Thanksgiving ya ‘all.

  184. chicagofinance says:

    Dink Says:
    November 26th, 2008 at 10:49 am
    Chifi # 84 Along those same lines, should we be cautious of buying anything that may need to be returned, or would stores have to honor their return policy?

    Dink: I don’t think there is any way to answer that one. I would probably assume the worst and as a result, avoid giving such a gift or stick with credit card gift cards….buy a Gold Amex One if you want to make a good impression :-P

  185. John says:

    Don’t hate the playa hate the game, Happy T-Day Peace Out.

  186. stu says:

    Still think a donation into someone’s 529 is the best thing one can do for a gift or to give to a charity in lieu of a gift.

    Believe me, at my son’s baby shower, I really wanted to make this suggestion in the invitation. Gator wouldn’t let me though. I’ll have to wait for my second marriage I suppose.

  187. John says:

    Actually Friday is a choppy market day, got for thinly traded closed ends, ETFs, Pref Stock, munis or corps and with market out of balance may be a buy, going short Friday is nuts on a weekend lately we have either great news or terrible news, not good dice rolling on a shortened trading day.

  188. chicagofinance says:

    stu Says:
    November 26th, 2008 at 4:26 pm
    Now this is a bear market rally!

    stu: Something tells me that this market will mirror some of the past experience, but as soon as you get comfortable, it is going to move in a direction that will really shock you.

    If you are going to screw around with shorts, short-product and leveraged product, YOU MUST MONITOR; USE STOPS; AVOID BETS OUT OF PROPORTION TO YOUR OTHERS.

    If you get a rip-your-face-off bear market rally (e.g., not moving, but rather jumping in a non-continguous fashion) and you have lots of black chips on the table, maybe even a purple, you are going to not only lose your anus, rectum, and most of your large intestine, but possibly pieces of your small intestine too.

  189. John says:

    FDIC Debt Guarantee Program
    The Floodgates Open
     GS and MS inaugural issues — Goldman Sachs and Morgan Stanley have
    launched the inaugural issues under the FDIC’s debt guarantee program. In our
    opinion, this program should re-open the intermediate term bond market to
    eligible financial institutions, and we expect a significant amount of guaranteed
    debt issuance from financial institutions.
     June 30, 2009 deadline for issuing — Eligible financial institutions can issue debt
    under the program through June 30, 2009, and the debt guarantee will remain in
    effect until June 30, 2012. We expect the institutions to issue two and three-year
    debt, so that the debt falls within the guarantee period.
     Attractive pricing — The economics of the program should be attractive for most
    issuers, we believe; the Goldman deal was priced at Treasuries + 200 bp
    compared to Treasuries + 645 bp for non-guaranteed debt.
     $700 billion of capacity — We estimate that large US financial institutions have
    $700 billion of capacity under the FDIC’s rules.
     Refi risk eliminated through June 2009 — The scale of the program should allow
    eligible institutions to meet their re-financing needs at least through June 30,
    2009, we believe. Furthermore, if the markets should remain dislocated through
    next summer, we would think it is likely that the FDIC would extend the program.

  190. John says:

    Stu is going to need teepee for his bunghole.

  191. John says:

    Depends on what the baby looks like, in some cases the best gift can be a sperm donation

    stu Says:
    November 26th, 2008 at 4:35 pm
    Still think a donation into someone’s 529 is the best thing one can do for a gift or to give to a charity in lieu of a gift.

    Believe me, at my son’s baby shower, I really wanted to make this suggestion in the invitation. Gator wouldn’t let me though. I’ll have to wait for my second marriage I suppose.

  192. chicagofinance says:

    Just to point out….none of us are rocket scientists…anything that you are positing is being thought by many others. If it obvious or allure to you, it is going to be obvious and alluring to others.

    There has already been published opinions (one for example by Lazlo Birinyi) that the heightened use of leveraged product is causing a good amount of the wild closing swings we are seeing at the closes of the market each day.

    The reason technical analysis breaks down is that it works maybe 75-80% of the time and lulls you into a sense of security as if you have any clue what the $&%& you are doing. Then you will sectioned off and made available for the castrati…

  193. chicagofinance says:

    John Says:
    November 26th, 2008 at 4:43 pm
    Stu is going to need teepee for his bunghole.

    at Lake Titacaca…

  194. stu says:

    ChiFi:

    Am completely aware, but appreciate the advice as always. You now how risk adverse I am so don’t worry. I said earlier, it was a small position. Clot is the one you should be concerned about. He is just stark crazy!!! I am half long in 401K. This is a bit of a minor hedge to cover me so I don’t get round tripped from Fidelity for bailing out too early. This volatility is just crazy. Remember when any move over 1% was considered a huge market moving day?

    John,

    TeePee or T.P.? Can’t figure out what a native american shelter has to do with my backside.

  195. BC Bob says:

    “Just to point out….none of us are rocket scientists”

    Chi,

    True. They are the dolts that got us into this mess.

  196. John says:

    The folks who went 3x short earlier this week are going to need a butt plug and a box of depends just to make it through Turkey day. Better pray for a 1,000 point down day before T+3 when Mom is saying Grace.

  197. stu says:

    Yes, saw the Lazlo opinion. Clot was well ahead of the curve on playing that one.

    I’m really not into FXP based on TA. It’s pretty much complete BS. If it wasn’t, all of the guys in IT over at the IBs would be receiving the big bonuses.

    I could be completely wrong of course, but I find it hard to believe that China markets will not get destroyed by the lack of discretionary spending in the world. Their economy is so far from being self-sufficient that it is no joke. I know there is some decay in these ultra etfs as well as counter party risk (although I think the tarps reduce it somewhat), but how the hell can this ETF be 20% below where it originally priced in October of 2007. No way, no how. Fundamentally, this ETF should be around 130. It recently spiked to 180. The risk down in the 50s seem appropriate to me.

    Disclaimer: The truth is that I received a tip from my dry cleaner.

  198. HEHEHE says:

    John,

    3X shorts will be very happy in by the end of next week. I am not one of them, but this is a bs rally if there ever was a bs rally.

  199. chicagofinance says:

    Critically important information about the origins of a mantra for a generation…..

    Beavis and Butt-Head’s creator Mike Judge has explained that Cornholio is quite similar to himself when he was a kid and followed his sister around the house. The accent is inspired by Hindi and Nepali and it is also influenced by Harry Belafonte. Cornholio’s “Are you threatening me?” comes from when Judge worked in a movie theater and ended up arguing with a man of Middle Eastern origin.

  200. stu says:

    Question about the 3x and ultra shorts. How the heck do they decide where to price the original offering of the products? Why not price FSV at 10 or a 1,000 rather than 100? If the market returns to the path of long term growth, will these ultra bears continue to trade into the 1,000s of a cent range as there will still be demand for them?

  201. Clotpoll says:

    chi (189)-

    Stupid? I love it. Load up the truck one more time.

    When the latest round of bailouts is exposed as just another sham, it’s back on the chain gang (to quote the Pretenders).

  202. chicagofinance says:

    stu: re FXP….if you looked into this, then I’m sure you know this…..

    NOTE…ETN have counterparty issues, ETF’s should not although the leverage could potentially introduce some…..again, I get the feeling you know all of this….

    http://www.investingminds.com/social/blogs/gary/index.php?pst_id=100126

  203. Clotpoll says:

    To anyone dining at John’s on Turkey Day:

    Don’t eat the creamed onions.

  204. Clotpoll says:

    Stu (203)-

    “Clot is the one you should be concerned about. He is just stark crazy!!!”

    Nah. This load-up at the trough of SRS is mostly on the house’s dime. Even if it gets beat down to $100, I won’t blink.

    If my office is besieged in the coming weeks by buyers in queues, then I’m happy to sacrifice 100% of what I’ll lose.

    From what I saw on the mortgage side today, a few folks will be able to refi nicely…and all the underwater borrowers will continue to circle the drain. Toss in some more commercial RE/mall failures and a few retailers delinquent/defaulting on leases in early ’09, and you have a recipe for barf soup.

  205. stu says:

    Then barf soup for all :)

  206. lostinny says:

    212 Clot
    Thanks for the visual.

  207. BC Bob says:

    Clot [213],

    The boats have sunk, malls are/have been my fav short. They will follow the path led by dinosaurs.

  208. lostinny says:

    Who wants to go to the Loop?! :)

  209. Mikeinwaiting says:

    Lost 217 What is a Loop?

  210. 3b says:

    #184 Al: Are you forgetting the recession? NJ is.will getting crushed just like everywhere else.

  211. 3b says:

    Happy Thanksgiving to all and your families.

  212. 3b says:

    #188 John:I love the smell of a bull market in the morning.

    It is a turkey rally in a Bear market. No offense, but are you going to be begging and pleading anew when the market breaks again below 8000?

  213. yikes says:

    Clotpoll Says:
    November 26th, 2008 at 5:19 pm
    chi (189)-

    Stupid? I love it. Load up the truck one more time.

    When the latest round of bailouts is exposed as just another sham, it’s back on the chain gang (to quote the Pretenders).

    funny stuff, Clot. just notified the financial advisor that im stopping contributing to the market for 6 months. wife will continue to do her $500 a month (independent of 401k), but i’ll pass for now.

  214. Stu says:

    The Loop.

    Now that takes me back a few years. Are there still enough goth chicks to support the Loop?

  215. 3b says:

    #195 John:Don’t hate the playa hate the game, Happy T-Day Peace Out.

    We dont hate you dude, we just cannot, or I cannot follow your chain of thought. One minuite your crying, the next minute your estatic.

  216. kettle1 says:

    The loop Inn??? I thought that was an hourly motel with a reputation of sorts out on RT 1….

  217. kettle1 says:

    3b

    Bankruptcy update, Britain plus California

    The CDS spreads on British debt jumped even higher on Tuesday, touching 100 at one stage. This is a little frightening. I suspect it reflects fear that the liabilities of the British-based banks — which include HSBC and Standard Chartered, with all their global exposure, as well as RBS, Barclays, Lloyds TSB, HBOS, and Northern Rock — are disturbingly large for the size of the UK economy. Britain has no real debt in foreign currencies. Like other AAA states, it borrows in its own currency. This is a lifesaver.

    However, and here is the awful catch, some of these private banks have vast dollar positions, so as more of them fall into the hands of the British state (partially or fully) the dollar debt implicitly moves across onto the sovereign balance sheet. This is not a subject that I have seen discussed anywhere, but it is worth pondering. What killed Iceland was the dollar/euro debts of its three big banks, not its own sovereign debt in Krona. It is the dollar liabilities of Russia’s banks and companies that is now causing a run on the rouble. Here lies the real danger of taking over all these banks so nonchalantly.

    I suspect that some hedge funds have already spotted this Achilles Heel and are now testing the trade. (Although a US hedge fund told me last weekend he was targeting the default risk in five other countries in Europe — and the EIB — but not British debt because he thought that the UK’s role as a military power and a permanent UN Security Council member provided an extra shield, ie the global order has too much political investment in Britain to let it happen. I have no idea whether this is a good judgement, but I pass it on).

    By the way, my colleague Yvette Essen showed me the CDS data on some of the US states. These are quite revealing too: Michigan -192; California -165; Nevada – 164; New Jersey – 150; Ohio -104. So, California is now priced as a greater bankruptcy risk than Slovakia, 150.

    http://tinyurl.com/5cbpnf

  218. kettle1 says:

    The Next Bubble: Treasuries

    In the last ten years we’ve had three bubbles: the stock market bubble; the housing bubble and the commodities and oil bubble. The next bubble is on its way, and it’s the Treasuries bubble. As Bloomberg noted, the bill for the financial crisis is now up to 7.7 trillion. Most of that hasn’t actually been paid for yet, and paying for it means issuing treasuries to expand the Fed’s balance sheet to meet the size of its obligations, as well as money for Treasury, the FDIC and so on.
    It won’t be the full 7.7 trillion, but it’s in excess of 5 trillion still to be issued. That’s one hell of a lot of treasuries. The influx of money into the US to buy treasuries has been the cause of the dollar soaring. Money will have to continue to flood into the United States to fund this, and will likewise need to gush over to Europe, Japan, Korea and other countries who are throwing money at the financial crisis.

    This is going to be a very Darwinian period, and it’s going to cause a lot of countries on the periphery, including most of Africa, South America and good chunks of Asia, to shake apart. All that money coming into the 1st world will mean no money for them. Combine that with a complete crash in commodities prices and they will be starved for hard currency. Since most of these nations are not able to feed themselves, this will mean famines, starvation, food riots and fallen governments. Of immediate concern to the US, barring massive US help, I would expect that Mexico will slip into indisputable anarchy in large areas of the country within a year or so.

    http://tinyurl.com/5hz676

  219. lostinny says:

    218 Mike
    The Loop bar. You won’t be able to move but I can entertain you with the mood I’m in.

  220. lostinny says:

    223 Stu
    No. The new owner’s gf and me are a real far stretch for goth chicks at the Loop.

  221. lostinny says:

    225 Kettle
    No. Not the hotel, the bar. North- I think Clifton.

  222. yikes says:

    kettle – what a great, upbeat story on the night prior to thanksgiving! i’ll make sure to bring that one up at the table tomorrow.

    question – what if some of these countries simply decide to NOT buy up treasuries? then what?

  223. Rich says:

    This is great news. This may stabalize the markets, or start bringing an end soon.

  224. Rich says:

    This is great news. This may stabalize the markets, or start bringing an end soon.

  225. Clotpoll says:

    BC (217)-

    That’s an insult to dinosaurs.

  226. Clotpoll says:

    vodka (228)-

    I’ll take credit and pat myself on the back for calling a new bubble in Treasuries last week.

    I’ll also now make the call that the dotbomb bubble offered people more of a chance to make an investment of real value.

  227. Clotpoll says:

    yikes (233)-

    Japan has indicated it wants its Treasuries customized.

    By being denominated in yen.

    Don’t look now, but our mighty USD can’t break out of the .95 range vs. the yen.

  228. Clotpoll says:

    Unwind the carry? Reignite the carry?

    Decisions, decisions.

  229. kettle1 says:

    CLOT 239,

    THERE IS A CHOICE IN THE MATTER???

  230. Mikeinwaiting says:

    Lost Loop bar in NJ. I got it. Sorry to late for this old bird up at 430 work tomorrow.
    Clot picked up some SRS today also,we shall see.

  231. Mikeinwaiting says:

    Happy Thanksgiving to all!

  232. BC Bob says:

    Clot [237],

    ???

    I’ve been calling for the next bubble, supply, for the last 4-6 months.

  233. BC Bob says:

    Kettle/Clot,

    World monetary growth has gone to the moon, yet govt sponsored bailouts are not close to being finished. Within a year, every major US bank will be Citicized.

    Once the great currency war heats up, our securities will be dumped, to bolster respective foreign currencies. The goal is to inflate, beware of unintended consequences.

  234. 3b says:

    #244 BC Bob:The goal is to inflate, beware of unintended consequences.

    Should not our fearless leaders know that, or are they just hoping for the best?

Comments are closed.