This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From the FDIC:
Metcalf Bank, Lee’s Summit, Missouri, Assumes All of the Deposits of American Sterling Bank, Sugar Creek, Missouri
American Sterling Bank, Sugar Creek, Missouri, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Metcalf Bank, Lee’s Summit, Missouri, to assume all of the deposits of American Sterling Bank.
…
The FDIC estimates that the cost to the Deposit Insurance Fund will be $42 million. Metcalf Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives. American Sterling Bank is the twenty-fourth FDIC-insured institution to fail in the nation this year. The last FDIC-insured institution to be closed in Missouri was Hume Bank, Hume, on March 7, 2008.
From the FDIC:
Nevada State Bank, Las Vegas, Nevada, Assumes All of the Deposits of Great Basin Bank of Nevada, Elko, Nevada
Great Basin Bank of Nevada, Elko, Nevada, was closed today by the Nevada Financial Institutions Division, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Nevada State Bank, Las Vegas, Nevada, to assume all of the deposits of Great Basin Bank of Nevada.
…
The FDIC estimates that the cost to the Deposit Insurance Fund will be $42 million. Nevada State Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives. Great Basin Bank of Nevada is the twenty-fifth FDIC-insured institution to fail in the nation this year, and the second in Nevada. The last FDIC-insured institution to be closed in the state was Security Savings Bank, Henderson, on February 27, 2009.
Wonder if that thing is just a form letter at this point. Plug in some variables, print, distribute, order the pizzas, cue the suits.
It’s a shame about pets.com, how is your JDSU position holding up? Since when does anyone like to talk about their mistakes?
Do where does “not talking about it” fit into Kubler-Ross (Oh god, no, not K-R AGAIN)? Somewhere between Denial and Anger perhaps?
From the NY Times:
Don’t Even Say the Words
IN the past few years, New York City’s frenzied love affair with real estate fueled a veritable geyser of cocktail party/water cooler/diaper circuit chatter. In these circles, who bought what and for how much was far more fascinating than the mating preferences of celebrities or the dark machinations of Dick Cheney.
Flash forward to the winter and now spring of our proliferating discontent: the median sales prices of co-ops have plunged more than 20 percent in six months with no bungee cord in sight, buyers are abandoning six-figure deposits on new condos, and sellers stranded with underwater properties are feeling like victims of a Ponzi scheme. The toupee is off, and in the flat gray light of the morning after, real estate looks a lot like tech stocks in the aftermath of the Internet boom.
So for those who have invested in it, has real estate become the dirtiest pair of words in town?
“From what I see, it’s not that it’s a dirty word, but that it’s not a word anymore,” said David S. Markus, 44, a former hedge fund manager who owns a co-op on the Upper West Side. “Nobody wants to talk about it. In my building a year ago, people would talk about how much someone listed their apartment for. Today nobody wants to talk about the fact that we have three apartments in the B line that are for sale and none have sold. We’re all in this together and everybody’s apartment has come down in value and nobody wants to talk about it.”
It may be that real estate is more persona non grata than public enemy No. 1.
http://www.slate.com/id/2216238/
“When Did Your County’s Jobs Disappear?”
An interactive map of vanishing employment across the country 2007-Feb 09 – from Slate
“Several months before the recession officially began – jobs were already on the decline in southwest Florida; Orange County, Calif.; much of New Jersey; and Detroit, while other areas of the country remained on the uptick.”
VIX down to near 30 and weather will be good this weekend. it is time to get on real ultra shorts.
http://finance.yahoo.com/echarts?s=%5EVIX#chart2:symbol=^vix;range=1y;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
http://www.seattlepi.com/scorecard/mlbnews.asp?articleID=164305
Now here’s some news…
“Gary Sheffield’s 500th career home run tied the game in the seventh inning, and Louis Castillo hit a game-ending infield single to win it in the ninth, as the New York Mets rallied to beat the Milwaukee Brewers, 5-4, at Citi Field.”
Ridgewood Comp Killer!
682 Grove Street
Purchased: 9/12/2005 (Under contract in a few days)
Purchase Price: $466,000 ($7,000 over asking)
Down payment: $46k
First Mortgage: $360k
Second Mortgage: $60k
MLS# 2849208
Listed: 11/9/2009
List Price: $469,000
Reduced to: $419,000
Sold: $405,000
DOM: 159
13.1% under 2005 purchase price
Loss to the seller?
~$81k
Cash to closing?
~$30k?
Oakland Comp Killer:
(I may start a new feature called: Market Chaser!)
11 Hunters Run
Purchased: 10/28/2005
Purchase Price: $800,000
Down payment: $40k (5%)
First Mortgage: $560k
Second Mortgage: $200k
MLS# 2607027
Listed: 2/27/2006
List Price: $919,000
Reduced: $899,000
Reduced: $849,000
Expired
MLS# 2640842
Listed: 10/16/2006
List Price: $849,900
Expired
MLS# 2809128
Listed: 3/5/2008
List Price: $849,900
Reduced: $819,900
Reduced: $769,000
Expired
MLS# 2853570
Listed: 12/16/2008
List Price: $769,000
Reduced $699,000
Sold: 4/6/2009
Sale Price: $685,000
14.4% below 2005 purchase price
on wednesday (4/15), MM was recommending to short some builders, reits and financials. all went up over 10%. SPG is a disaster, up 25%. poor mike. only one you missed is GGP.
http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&ContentRecord_id=90aa4fb4-5056-8059-763a-a45c5849b73b
I know nothing ever happens but they are holding hearings…
Joint Economic Committee Hearings
set for April 21, 2009.
“Too Big to Fail or Too Big to Save?
Examining the Systemic Threats of Large Financial Institutions”
Simon Johnson
Joe Stiglitz
Thomas Hoenig
#11 – Outcome will not be to stop firms from becoming too large to be systemic, but will be to develop a new systemic risk program to proactively bailout or support these “too big” firms.
Unintended consequence? We’ll have an economy consisting of nothing else but “too big” firms. How can anyone compete with this level of government subsidy?
“Parker House rules!”
Sean,
Sunday afternnon on the porch. There were many rough Monday mornings. The wallpaper in that place!
“Wonder if that thing is just a form letter at this point”
Grim,
As I understand it, the FDIC calls up a bank CEO a day or two before it takes over a bank and says something like, “You may not tell anyone this but on Friday we are shutting down X Bank and we have selected your bank to take over.
It must be a 24-houre a day operation from Friday until the reopening on Monday, and would make an interesting film.
Can we get a break now from this pop-culture president and his dog and the styles his wife is wearing and his kids’ action figure dolls and soon-to-be Saturday morning cartoons and the rest of the bullsh*t? And instead of mucking it up with Hugo Chavez, perhaps he should be holed up in a backroom with a bunch of hardcore masterminds in an attempt to give the private sector all the advantages it can to spur investment and job creation. But, then again, why should he… the masses wanted a pacifier, not an opportunity.
“SPG is a disaster, up 25%”
Bi,
One of my best short plays, flat now. Why are you cheering a stock that’s off more than 50% from its high? Somebody needs to blow up your blackbox. I actually hope we can get back to the mid 60’s, get shorty again. At that price it will be a gift.
BC/Sean,
If you want a REAL blast from the past, before Grim was born I bet, The Chatterbox (the one on the boardwalk, not the cheap immitation) in Seaside. Great place to survey thecrowd from the main stage, also greay for after-hours parties.
Morning folks!
Beautiful weather for buying a house! Make sure once you make an offer (over asking of course) on that ranch in a train town, you head over to the local BMW dealership and pick yourself up a shiny new 5 series to park in your shiny new driveway. Nothing says summer like debt on depreciating assets :-)
“$956M in utility projects to add 1,300 jobs”
http://www.nj.com/business/index.ssf/2009/04/956m_in_utility_projects_to_ad.html
-The New Jersey Board of Public Utilities yesterday green-lighted a broad range of infrastructure projects designed to add jobs to the state’s economy, but the approval comes with a $12 increase in yearly electric and gas bills for customers serviced by customers of PSE&G
“Nothing says summer like debt on depreciating assets :-)”
lol
good one.
SAS
http://blogs.wsj.com/privateequity/2009/03/10/the-inner-circle-of-systemic-risk/
(12) Grim
“Outcome will not be to stop firms from becoming too large to be systemic, but will be to develop a new systemic program to proactively bailout or support these “too big” firms.”
Like this?
“The paper calls for banks to pay a “tax” on their systemic risks that would look something like the insurance that commercial banks buy for the deposits with the Federal Deposit Insurance Corp. Banks would be required to buy insurance against potential loss to the financial system caused by their failure, the paper says. If they fail, the payout from insurance companies would go to a federal “systemic crisis fund,” instead of to the institutions themselves.”
and you think you will get lower taxes?
ha ha ha!!
you think some dumb politican of the campaign front saying we need lower taxes can actually do it?
“The real number on New Jersey pensions”
http://blog.nj.com/njv_johnbury/2009/04/figuring_new_jersey_pensions.html
(15) Gary
http://www.huffingtonpost.com/lloyd-chapman/obama-ignores-simple-solu_b_186247.html
“Obama Ignores Simple Solution to Stimulate Economy”
Remember when O got the endorsement of small business because he acknowledged that “they are the backbone of America.”
Jobs, Mr. President – Jobs.
http://www.fresnobee.com/local/story/1338740.html
“Fresno County Jobless Rate Shoots to 17%” – highest in 10 years
16#, i didn’t cheer anything but point out he has been beaten to death in last 3 days.
who cares it goes up to 60 or 100.
Now i count he made 3 big wrong calls
> Why are you cheering a stock that’s off more than 50% from its high?
anyone want a house full of bling near Mitchell?
http://www.allentate.com/CaroleGibbons/DesktopDefault.aspx?pageid=108&pagealias=ATWAgentListingDetail&ListingID=1331194&ListingPosition=5
http://seekingalpha.com/article/131515-open-letter-to-quant-funds-now-s-the-time-to-help-maintain-orderly-markets?source=email
Tyler Durden – Seeking Alpha
“Open Letter to Quant Funds: Now’s the Time to Help Maintain Orderly Markets”
What is going on with all of this????
What is the blazes is a “quant fund” and how are they going to mess with everyone?
http://en.wikipedia.org/wiki/Quantitative_investing
http://www.hedgefundsreview.com/public/showPage.html?page=851026
(29) (30) Well thank you Pat..
I keep reading “quants this…quants that”….Zero Hedge has been all about this in the last day’s posts I’ve read here. Couldn’t figure what in the world was going on…..Makes for some unpredictable markets – that’s for sure.
Everyone keeps thinking they will head down but they go up.
Man vs Food is the perfect euphemism for America’s housing bubble.
An overweight man pigs out on huge quantities of comfort food for no good reason other then to see if he can, while tons of onlookers (rest o the world) look on in awe and cheer.
I actually like the show for some reason.
besides his bin laden stuff, this russell brand cat seems cool
http://www.npr.org/templates/story/story.php?storyId=102777334
grim says:
April 17, 2009 at 2:59 pm
Why does (almost) every discussion here almost immediately drive straight into the mad max, absolutely worst case, nuclear armageddon scenario?
because more than a few people think that’s where we’re headed?
regarding this link from yesterday re: hyperinflation
http://education.wallstreetsurvivor.com/Hyperinflation-Trading-Strategies
i looked up abx
http://www.google.com/finance?q=abx
seems like a good time to buy it in the coming months
ALL DISCLAIMERS
grim 35 IN MOD
(put a couple links in there, but they’re good ones!)
I don’t that people really think we’re headed towards Mad Max Armageddon or Weimar-style hyperinflation or any other kind of doomsday scenario. If they did, they’d be seriously planning for it, instead of flapping their gums about it.
There’s a lot of pain still to come, but this country has seen worse.
“If they did, they’d be seriously planning for it, instead of flapping their gums about it”
multi tasking..
SAS
this is easy. people are in an uproar, the govt comes in to say they will “test it”, claim its safe…when its not… and the dumb saps will think everything is ok.
“Fla. to test air in homes with Chinese drywall”
http://news.yahoo.com/s/ap/20090418/ap_on_re_us/chinese_drywall
-Officials in Florida will soon begin air quality tests in homes to determine whether fumes emitted from Chinese-made drywall can make people sick, the state Health Department said Friday.
Richard Clarke, chief White House counterterrorism adviser:
We had a couple of meetings with the president, and there were detailed discussions and briefings on cyber-security and often terrorism, and on a classified program. With the cyber-security meeting, he seemed—I was disturbed because he seemed to be trying to impress us, the people who were briefing him. It was as though he wanted these experts, these White House staff guys who had been around for a long time before he got there—didn’t want them buying the rumor that he wasn’t too bright. He was trying—sort of overly trying—to show that he could ask good questions, and kind of yukking it up with Cheney.
The contrast with having briefed his father and Clinton and Gore was so marked. And to be told, frankly, early in the administration, by Condi Rice and [her deputy] Steve Hadley, you know, Don’t give the president a lot of long memos, he’s not a big reader—well, shit. I mean, the president of the United States is not a big reader?
Let’s NOT forget our history.
Sir Jeremy Greenstock, British ambassador to the United Nations and later the British special representative in Iraq:
When I arrived in New York, in July 1998, it was quite clear to me that all the members of the Security Council, including the United States, knew well that there was no current work being done on any kind of nuclear-weapons capability in Iraq.
It was, therefore, extraordinary to me that later on in this saga there should have been any kind of hint that Iraq had a current capability. Of course, there were worries that Iraq might try, if the opportunity presented itself, to reconstitute that capability. And therefore we kept a very close eye, as governments do in their various ways, on Iraq trying to get hold of nuclear base materials, such as uranium or uranium yellowcake, or trying to get the machinery that was necessary to develop nuclear-weapons-grade material.
We were watching this the whole time. There was never any proof, never any hard intelligence, that they had succeeded in doing that. And the American system was entirely aware of this.
September 15, 2002 In an interview with The Wall Street Journal, the assistant to the president for economic policy, Lawrence Lindsey, estimates the cost of a war with Iraq to be in the neighborhood of $100 billion to $200 billion. Mitch Daniels, the director of the Office of Management and Budget, quickly revises the figure downward to $50 billion to $60 billion, and Defense Secretary Rumsfeld calls Lindsey’s estimate “baloney.” Lindsey is fired in December. Treasury Secretary Paul O’Neill is dismissed the same day.
Years later, an analysis by Nobel-laureate economist Joseph E. Stiglitz and Harvard professor Linda J. Bilmes will estimate the cost of the Iraq war to be $3 trillion.
Cindy (7)-
Yeah. Sheffield must be back on The Clear.
Shore (14)-
They already made that film; it’s called Boiler Room. Only difference is, this stuff has the veneer of legitimacy.
“It must be a 24-houre a day operation from Friday until the reopening on Monday, and would make an interesting film.”
BC (16)-
You’re talking to a gnat.
Cindy says:
April 18, 2009 at 10:15 am
(29) (30) Well thank you Pat..
I keep reading “quants this…quants that”….Zero Hedge has been all about this in the last day’s posts I’ve read here. Couldn’t figure what in the world was going on….
C: I tried to read that quant post yesterday, and after about 2 minutes I said “wait, I don’t have the French Connection UK’ing time to try and understand this stuff….” so don’t feel as if you aren’t on top of things….
C: To be clear, the reason quant funds blew up and the Black Swan nonsense gained traction was that they assumed investment returns follow the normal distribution (please note…EFFECTIVELY THEY PROVED THIS THROUGH THEIR ACTIONS). I am sure that any quant looking here would call me a blowhard know-nothing, but look at the facts.
Anyway, if you have computers programed to trade in a specific way, and the logic is faulty….you suck
Note definitions:
The Normal
http://en.wikipedia.org/wiki/Probability_distribution
Binomial Tree – useful to discover arbitrage
http://en.wikipedia.org/wiki/Binomial_options_pricing_model#The_binomial_price_tree
grim unmod…I will break up two links..
chicagofinance says:
Your comment is awaiting moderation.
April 18, 2009 at 2:35 pm
C: To be clear, the reason quant funds blew up and the Black Swan nonsense gained traction was that they assumed investment returns follow the normal distribution (please note…EFFECTIVELY THEY PROVED THIS THROUGH THEIR ACTIONS). I am sure that any quant looking here would call me a blowhard know-nothing, but look at the facts.
Anyway, if you have computers programed to trade in a specific way, and the logic is faulty….you suck
Note definitions:
The Normal
http://en.wikipedia.org/wiki/Probability_distribution
Binomial Tree – useful to discover arbitrage
http://en.wikipedia.org/wiki/Binomial_options_pricing_model#The_binomial_price_tree
Boooya:
Bogus waiter tricks customers at 2 NJ restaurants
HOBOKEN, N.J. – Police say a man posing as a waiter collected $186 in cash from diners at two restaurants in New Jersey and walked out with the money in his pocket.
Diners described the bogus waiter as a spikey-haired 20-something wearing a dark blue or black button-down shirt, yellow tie and khaki pants.
Police say he approached two women dining at Hobson’s Choice in Hoboken, N.J. around 7:20 p.m. on Thursday. He asked if they needed anything else before paying. They said no and handed him $90 in cash.
About two hours later he approached three women dining at Margherita’s Pizza and Cafe. He asked if they were ready to pay, took $96 and never returned with their change.
(44)(46) (47) Chicago –
Thank you…
“….The normal distribution, often called the “bell curve.”
See, I’ve heard of that….
What a bunch of gobbily gook.
BTW – From last night…@ Avenue
I’ll have the roasted heirloom beet salad, trout amandine, and for dessert – the creme custard.
Outofstater says:
April 17, 2009 at 4:56 pm
So, property taxes can go to infinity until the whole thing collapses. Or am I missing something? But hey, it’s Friday and it’s a gorgeous day outside so why worry?!
enter the revolution.
Cindy 24,
“Fresno County Jobless Rate Shoots to 17%” – highest in 10 years
the 17% is calculated using the standard BLS/ILO methods which is essentially U3. So…….. real unemployment is approximately 30%
Announcement!!!!!!!
Kettle1 is now known as Purple Beaver for the rest of the weekend!
#55
I’m afraid to ask
SAS 22
nice, so NJ pensions are broke in 5 years or less unless the market recovers a substantial portion of its former value.
barien
inside joke, but not meant as an adult reference
not characterizing this, just thought it might spark some fun debate.
Barack Obama: Crime Boss
by Stephen Lendman
Since taking office, Obama, wittingly or otherwise, has headed the largest criminal enterprise in history — the mass looting of national wealth to enrich his Wall Street benefactors. He assembled a rogue economic team of Clinton/Robert Rubin retreads — to fix the current crisis they engineered. In a March 13 article, (author and former Republican strategist) Kevin Phillips called them “recycled senior (Clinton administration) Democrats (responsible for the) tech mania, deregulation binge and (1997-2000) stock market bubble and crash. (Obama) extend(ed) the (disastrous) mismanagement and pro-Wall Street bias of the 2008 Bush regime bailout.”
http://dissidentvoice.org/2009/04/barack-obama-crime-boss/
Treasury May Keep U.S. Bank Stakes After Buyback
The Treasury may retain an ownership interest in many U.S. banks even after the lenders buy back preferred stock the government currently holds as part of its rescue effort. The government will continue to hold warrants, attached to every capital injection it has made, even after any share buybacks, Treasury officials said on condition of anonymity. Banks seeking to escape the government’s grip want to retire the warrants — which give the right to buy stock in the future at a preset price — at the same time they acquire the government- owned preferred shares. The government counters that companies must follow the two-step process described in contracts.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a9F3N8vvrHgY&refer=us
Fed Using Currency Swaps To Boost The Dollar
http://www.marketskeptics.com/2009/04/fed-using-currency-swaps-to-boost.html
Fannie Mae CEO Allison Officially Nominated to Run TARP
President Barack Obama nominated Fannie Mae Chief Executive Herb Allison Friday to oversee the Treasury Department’s Troubled Asset Relief Program,
http://online.wsj.com/article/SB124000437105430225.html
some one pointed out that we are in the hole for 60 trillion or so based on SS and medicare liabilities the following wharton professor says double that…..
A Thought for Tax Day: The Real Fiscal Crisis Is Yet to Come
Social Security is a major problem; Medicare is a crisis. You add both of those… shortfalls together and you’re getting something that’s … between $80 and $120 trillion in total present value shortfalls
For taxpayers in America, today is the deadline to pay their federal income taxes for 2008. With that chore behind them, they might now like to think about their future taxes — the ones that will pay for the $787 billion stimulus package, the $2 trillion commitment to prop up collapsing financial firms, and other programs that promise to deepen our $11 trillion national debt. Of course, that doesn’t count the $80 trillion to $100 trillion shortfall in funding for Medicare and Social Security. According to Wharton insurance and risk management professor Kent Smetters, a former deputy assistant Treasury secretary and economist for the Congressional Budget Office, most Americans should not be worrying about having to pay higher taxes. Why? Because even the biggest tax hikes will not raise enough money to pay off the debt and meet coming obligations. Accomplishing the latter would require politicians to do something they fear even more than raising taxes: Cut back on Medicare and Social Security benefits. Smetters described the coming crisis in an interview with Knowledge@Wharton.
An edited transcript of the interview follows:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2209
Knowledge@Wharton: Medicare is tougher, why? Because … people [are reluctant] to give up benefits that have to do with their health care?
Smetters: Medicare is tough for two reasons. One, the shortfall in Medicare is six to seven times larger than in Social Security. Social Security is a major problem; Medicare is a crisis. You add both of those… shortfalls together and you’re getting something that’s … between $80 and $120 trillion in total present value shortfalls. … People can’t even imagine how big that number is. If you took the total value of the United States, except for the people (all the land, houses, buildings, everything that’s non-perishable, your washer and dryer, cars, and so forth), it has about a value of about $50 trillion. So we’re talking about a shortfall of twice the value of the value of the U.S. except for the people. Now, the value of the people is about three times that. We’re just talking about biblically large shortfalls. We’ve never seen this type of problem.
Purple Beaver -#59
I’ll be honest. I’m extremely disappointed in O. I though he was going to take on the Oligarch (W’s side was Energy&Defense) turns out he’s a card carrying member of a different faction (Bankers).
I should have seen it coming as someone that grew up in Hudson County (i expect it there), but I suspended my disbelief. I’ll not vote anymore for anyone of the Demopublican. Only a 3rd,4th&5th party.
I’m glad I rent. Because I promise myself to never ever interest rate again to any of these gangster banks. I’ll use their credit card as convenience, but they will never make any money of me. New car I planning on getting only 0% or no deal. I refuse to participate in the corruption. I’m opting out in my own way. Can’t even get a decent mens electric shaver that is not made in China -have gone back to Gillete disposable blades.
The worse thing I feel, is the upheaval that is coming. In short. Wait till those Chrysler line workers gets booted.
Do you think he’s not going to look at the situation somewhere in Ohio, Michigan and see- Chrysler (helped win WW2 & would help in the next big one) not saved. Non productive (likely to transfer the HQ outside of the country like Halliburton when the going gets tough) Gangster bankers saved. And then look at the names of the idiots involve in the mess – Summers(was Samuelson before change), Geithner, Greenspan, Bernanke, Chuck Prince, Weil, Schwartz, Greenberg, etc..& not see the ethnic commonality of the people that are engage in paying off the gansters. Even if you are not a believer in conspiracy theory. The anger will make you believe it.
I think we are about to have – not so much in the northeast , but in the south & midwest – a lot of Tim McVeighs about to be born.
By the way, can any one tell me. Why no raids, no one being arrested??… Only Madoff & he turned himself in.
shore, Nom,
this one is for you guys:
Knowledge@Wharton: So then what does the result of the crisis — when the crisis arrives, what does it look like in terms of taxes? If we have to raise them to some extent, along with cutting back benefits, what does the tax bill look like for Americans?
Smetters: We currently have a present value shortfall that’s twice the value of the entire country, except for the human beings. So, obviously, we can’t tax our way out. So the real issue is, what type of hit are we going to give do to benefits? You’re going to see benefits reduced, especially for higher income earners. We got a hint of that in Medicare Part D, the newest part of Medicare that gave us our prescription drug bill. They explicitly have some means testing in there, which basically says higher income people get a smaller benefit. Social Security benefits are now taxed. And in fact, they’ve been taxed since 1983. But it’s taxed on a progressive basis. Higher income workers get more of their benefits taxed. I think you’ll start to see a lot of more of that.
And so what will happen is Medicare and Social Security will become more of a flat system, [with] fewer benefits to higher income people even though they paid in more. But on the [revenue] side, I don’t see a lot of room for continuously increasing taxes. We’ll see, I think, more taxes on higher income individuals. And that will have long run implications because they’re also the ones who create jobs and invest and innovate. We already have the second highest corporate income tax rate in the world, even after you net in things like expensing and so forth. So for us to remain competitive, I just don’t see how… we can really do a lot on the tax side. But I do think we will see taxes go up. The thing I fear the most — and I think it is the most likely outcome — is that the government will print a lot of debt to pay off a lot of these shortfalls. And then the international markets, in particular the fixed income markets, will figure it out.
They will realize the government is basically monetizing that debt through higher inflation. And if you have an inflation rate that’s 25, 3% more per year than the historic average, you can really eat away a lot of debt just through the law of compounding. And so the market should figure that out and adjust the interest rates accordingly. That’s one reason why I believe that 30 year yields right now on Treasury [bonds], especially to non inflation protected Treasuries, is really too low. I believe Treasuries are in a bubble right now because everybody’s flocked to the safety. And there’s just no way that those low yields of 3.5% are going to cover the inflation rate over the next 30 years.
hudson lurker:
I think we are about to have – not so much in the northeast , but in the south & midwest – a lot of Tim McVeighs about to be born.
you arent the only one…
Veterans a Focus of FBI Extremist Probe
http://online.wsj.com/article/SB123992665198727459.html
I don’t even comprehend why the red herring of Social Security insolvency is constantly swung around. While both SS and Medicare are “pay as you go” programs – all the nonsense about socking away SS excess contributions had always been nonsense, stays nonsense and will be nonsense – the actual budget outlays for the Social Security payments could be very precisely calculated. It is well known that if FICA deductions %% for employer and employee are increased by ~2%, SS in its current shape could be funded indefinitely. This will not kill the economy; the equivalent of FICA taxes in most of W. Europe is >20%, and we buy their cars and cheeses, not other way around.
Medicare is a completely different animal; anyone who thinks that the healthcare problems for the 21st century (which include Medicare) could be resolved without limiting the use of services in some way (unless you are the patient that has millions $$ in spare cash and wants to pay this money for say extending your life by 2 months at age 94 via some elaborate treatments – current system forces the society to pay for it). Current progress in our ability to extend human life (or rather extend the length of the eventually terminal disease) combined with inability to say “no” has a potential of growing the share of healthcare in GDP to no end. The later we start fixing it the worse it will get.
Why Credit Lines Are Drying Up
http://www.nytimes.com/2009/04/19/realestate/19mort.html?ref=realestate
“…In New York last week, the average rate for a home equity line of credit was 5.38 percent, according to Bloomberg News. In Connecticut it was 5.07 percent, and in New Jersey, 4.74 percent.
Why the disparity? According to Cameron Findlay, the chief economist at LendingTree, an online mortgage lender and broker, New Jersey’s borrowers have defaulted on credit lines at a lower rate than in many other states, and property values are dropping less sharply. So New Jersey’s residents enjoy better interest rates. (And, no, if you live in New York you cannot jump across the border and get better rates from a New Jersey lender.)…”
“Veterans a Focus of FBI Extremist Probe”
i smell a rat.
false flag, FED provator.
I don’t believe this article.
SAS
“Stiglitz Says Ties to Wall Street Doom Bank Rescue (Update1)”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahnPchOxZMh8&refer=home
“Fannie Mae CEO Allison Nominated to Run Treasury’s TARP Office”
http://www.bloomberg.com/apps/news?pid=20601087&sid=av4Uq7cDUZWM&refer=home
Herb Allison is a major crook and a cut throat piece of trash.
When he worked at TIAA-CREF, he did some major dity tricks.
SAS
[url=http://www.sunglas.ru] Солнцезащитные очки и спортивные очки [/url] в оптовой и розничной продаже, многообразие информации о солнцезащитных очках, спортивных очках, выборе , применении , материалах , обозначениях и уходе. sunglas.ru
sas
inviting your russian buddies onto the blog (infosunglas )?
#58 Not an adult reference – Okay, Ket, I trust you, you’re the best researcher here, but jeeeeeeeeezzzz.
stater,
its a reference to a daycare snafu that would only be funny if you were there. some of the people involved lurk on this blog
$76 Gotcha.
Well first run around with realtor in NYC. Two dumps then tries to strong arm me into a place over in a new building in the Rail Yards. I went so far as to sign the lease with one month free on a one bedroom and was to go back Monday with the deposit and some more documents to finalize things. Then left the building, walked around a few blocks and saw the building was an oasis surrounded by a desert of sh*t, called the agent and said no deal. I am not doing the pioneer thing again. I did that once in Western Hoboken. That was enough. Onto realtor #2.
Dissident HEHEHE,
always go back to a place at night hrs to get a feel for it.
things at daylight can look innocent, but at night… look out.
SAS
Clotpoll says:
April 18, 2009 at 1:59 pm
BC (16)-
“You’re talking to a gnat.”
Clot. That reminds me of Ice Cube, remember him? He played for the Houston Gamblers and when the league folded he went to the Browns, Gerard McNeil. He was my neighbor in a condo shack in Piscatawy. He saw my BC shirt and actually asked me if I ever heard of Doug Flutie.
By the way, Bi is not a gnat. He’s the Energizer Bunny.
JB,
80 in mod. Flutie?
stater
you’re the best researcher here
thanks!
well, we have a treasury bubble currently growing, and it looks like the green bubble is in full effect. just saw a commercial for ziplock bags and the main line of the commercial was that they are made with wind energy and are GREEN!
someone recently pointed out to me a fantastic quote for describing the disconnect between those with the realtor type mindset (that it will all be alright if we think positively) and those who actually base projections off of data and historical trends.
“in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”
-from an unknown bush aide, published by Ron Suskind, NYT
we have discussed how thw overall debt/finance bubble appears to have ignites sometime around 1980. well here are 2 candidates for the ignition:
1)Depository Institutions Deregulation and Monetary Control Act, passed 1980
-It allowed banks to merge.
-It removed the power of the Federal Reserve Board of Governors under the Glass-Steagall Act and Regulation Q to set the interest rates of savings accounts.
-raised the deposit insurance of US banks and credit unions from $40,000 to $100,000.
-Allowed institutions to charge any interest rates they chose.
2)Garn-St. Germain Depository Institutions Act of 1982
-allowed adjustable rate mortgages
note the full title of this bill: An Act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans
65….blame da jews?
let’s not go there. there is enough blame to go around
Want to share with you some rarest mp3s of [url=http://artistvault.net/country/]best country songs[/url] from my scandalous archive. Enjoy! P.S. Wish you all happy easter! :)
Q for the board: How does a family “bounce back” from a 81K loss on a real estate transaction. Are these people coming back into the market months later? Or are they relegated to the rental class for years if not more…
Left and right I hear anectodes or see evidence of people taking 50+ haircuts, some throwing everything at the house in order to keep it… these families are pretty much broke when they finally give up ghost…no?
#89 zieba
They don’t, unless
1) They make 500k a year or are worth a few mill
2) Get lucky with stock options
3) Get bailed out by relatives.
4) Marry well
“Depository Institutions Deregulation and Monetary Control Act, passed 1980”
I’d lean with this one.
and god damn Margrat Thatcher and her union busting… but thats another story.
SAS
“The Obama Deception Full Length”
http://video.google.com/videoplay?docid=7535755025025800195&hl=en
[89] zieba
If the people are willing to sell their principal residence 2 years after buying at 81 K loss (and when their mortgage is not under water yet), they obviously have some very compelling reasons to do it which may or may not be of a family finance nature – loss of a job, change in business fortune, death in a family, illness making it impossible to climb stairs, etc. Many people lost much more than 81K in their 401K and IRAs, I see it as a much bigger and wider problem than the equity loss.
SAS, yeah everyone could just be rich sitting around destroying economic value working for a failed state owned company and running up the public debt, with a union to protect them. The UK before Thatcher was literally a basket case, needing help from the IMF. Probably a lot like what NJ will be like in another ten years.
SAS
I actually think both Bills acted as the initial base for the inflationary period.
I think that the Garn-St. Germain Depository Institutions Act of 1982 enhanced the inflationary effects of the Depository Institutions Deregulation and Monetary Control Act, passed 1980
Make Money
check this out
NYSE Runs Out of Gold Bars: What Happens Next?
http://seekingalpha.com/article/128150-nyse-runs-out-of-gold-bars-what-happens-next
Great Video SAS.
RE: “The Obama Deception Full Length”
Much as I think Obama is little more than a smooth-talking empty suit, the producer of this video is nutball Alex Jones, a 9-11 “Truther.”
Here’s video of this kook shouting “9-11 was an inside job!” at Ground Zero:
http://www.youtube.com/watch?v=4ikRc4ER2xY
Yeah man. It is so tough to see the truth sometimes….especially in the face of so much crap.
http://blogs.wsj.com/economics/2009/04/18/feds-lockhartcommercial-real-estate-trouble-risk-to-economy/?mod=rss_WSJBlog?mod=marketbeat
WSJ – “Fed’s Lockhart: Commercial Real Estate Trouble Risk to Economy”
“Fed policymakers are still considering whether to include sponsorship for commercial property loans under its Term-Backed Securities Loan Facility, or TALF, Mr. Lockhart said, adding that there’s been no official decision.”
http://www.bloomberg.com/apps/news?pid=20601070&sid=aYf8xFWjf5L8&refer=home
“Obama Pledges to Fight Poverty, Fens Off Criticism on Cuba”
“Earlier in the day, leaders from Venezuela, Argentina, Brazil, Bolivia, Chile, Columbia and Ecuador who participated in today’s morning session pushed Obama on the U.S. role in the global economic recession.”
BC – Does all of this “make nice” by O have anything to do with the $70B Yuan swap Argentina did on 3/31? Are we worried that other SA nations will follow suit skipping the dollar and dealing directly with China?
http://www.businessinsider.com/henry-blodget-americas-2009-4
“Home Equity ATMs Run Out of Cash”
“The housing boom didn’t just make Americans rich on paper. It padded our expense accounts. In the process, it goosed economic growth.”
“Goodbye to about 3% of GDP.”
Call me crazy but I can’t help but see this as a great thing for our country. A nation of spenders has figured out you have to make money the good old-fashioned way – you earn it.
All we have to do now is increase GDP through productivity…Oh wait…How are we going to do that?
I have read a few articles that say if we had single-pay national health care we could increase American productivity because enough Americans would be able to switch jobs and careers to make better use of their marketable skills. Innovation could flourish because one’s primary motivation for job security would no longer be health insurance.
May you live in interesting times…
purp (62)-
Thus concludes another episode of “Fcuk Up, Move Up”.
I figured it would be another 9-12 months before the Jew-baiting started here.
Guess we’re on the accelerated timeline.
Really, I don’t find any comments related to such a topic acceptable, even in this forum.
http://online.wsj.com/article/SB124000593149930309.html
Clot – Did you see this one? I thought of you and the “It’s trading time” mantra @ 3:45.
“Will Leveraged ETFs Put Cracks in Market Close?”
“At 3p.m., do you get queasy just thinking about the toll that final hour of trading might take on your portfolio?”
It was argued in the comments section that you should discount quite a bit of what they had to say because the report they cite was done by Barclay’s Madharan and they are affiliated with ishares that competes with leveraged funds for market share.
(105) House Whine – I’m with you – totally unacceptable.
I am occasionally prodded by Frank to make racist comments – I found ignoring him worked best. But you are right. Better to say “no way” – STFU.
Timmy G announced in Asia yesterday bank crisis is over, the 19 banks will not fail as they can get private capital and even if they can he will back stop with capital. He is doing his best to create a bank bond rally god bless his soul. He is a true american. I love that my 14% BANK BONDS ARE NOT RISK FREE!!!!! Thank God I bought every insurance bond I could get my hand on in March as he is moving on to that. This is the great chance in history to save for a house. Bonds at 10% and houses falling 10%, with that kind of savings opportunity you can be in a mcmansion by 2010!!! Trouble is housing at best has a year or two to go before bottom, it won’t last long.
Bi is mad cause the recession is ending. Even BMW of Greenwich stopped dumping 3, 5 and 7 series at auction.
The next buying opportunity will be in 2010 when banks finally start cleaning house of REO’s. When they are strong and don’t need TARP bombs away. Put the deadbeats on the street and let capitalists buy their homes, raise their families and pay their taxes.
Anyone have any info on mls 2595418? It’s off the mls. U/C or Withdrawn? How much?
Thanks!
#93 cobbler – I agree. Absent a massive market rally, the only way to make up for losses in the 401k is to cut back on spending and save more. If the consumer really is 70% of the economy, that doesn’t bode well for a recovery, does it?
About religion – any way you slice society, by race, religion, gender, or whether one prefers coffee with or without milk, there is going to be the same percentage of good decent people and the same percentage of a##holes. It just doesn’t matter.
John @ 108 – Did you mean to say “I love that my 14% BANK BONDS ARE NOT RISK FREE!!!!!” OR “now” risk free???
Trying to follow your thoughts there…
Stater
70% consumer economy, increasing unemployment, increased savings,decreased spending by consumers, and what looks like the beginning in a drop in wages….
stater,
I thnk the % of a holes can fluctuate, but not depending so much on the particular religion, or coffee preferences, so much as who the leader of the group is and what % a hole they may be. the sheep follow the leader
http://www.doctorhousingbubble.com/
From Dr. Housing Bubble –
The more money you have, the less you depend on wages.
“90% of Americans depend on their wages for 70% of their income or higher, the top 10% of wage earners only depend on wages for 46% of their income, a drop from 53% in 2004.”
Well that explains a lot – wages are not going up but those with money to invest can increase income outside of wages more readily.
http://www.youtube.com/watch?v=hAqfl1ZzZaw
A little song from Market Ticker Forums
“Tax Cheat”
Open House – 34 Riverview Drive, Little Falls – 4BD, 1BTH, listed at $175,000, needs TLC and I believe it’s in the flood zone. Just FYI…
http://www.allbusiness.com/banking-finance/banking-lending-credit-services-cash/12269091-1.html
Chase has started up a huge ad campaign here all over TV these days…
“Chase – New to California but not new to banking”
#111
Sorry Out. Used to be that the US could pride itself on having the fewest a$$holes of any race, religion, gender, and creed. Now we are vying for the top spot as represented by our elected leaders. Entire societies can become corrupt.
I have to give props to John for designing and implementing his strategy of jumping in before the govt bails out a certain sector. Excellent reading of the tea leaves.
http://www.ft.com/cms/s/0/12f16208-2ae6-11de-8415-00144feabdc0.html
Well isn’t this just messed up.
“CDS derivatives are blamed for role in bankruptcy filings”
“Banks and lawyers involved in restructuring efforts say they are concerned some lenders to troubled companies, such as newsprint producer AbitiBowater and mall owner General Growth Properties, stand to benefit from a default because they also hold default swaps, which entitle them to payments in such events.”
Cindy[121],
9-5, every day, at GS.
BC (122) – Well that is just messed up.
– Did you catch my question @101?
Cindy – GGP, what a mess and now they want to change the rules of the game in bankruptcy.
I have been saying for over a year now that this will all end in a champagne supernova of lawsuits, and we are just getting warmed up.
108#, john, you are right. no more banking crisis. this is a link to back up your post:
http://news.yahoo.com/s/nm/20090419/ts_nm/us_financial_geithner_banking_4
“30% to 50% off peak prices”
In 2005 and 2006, this forecast was decreed by many regular posters here. Later, it was reiterated over and over again.
But 3 years into a nationwide housing crash of a scale we’ve never seen before, house prices in most parts of the New York City area have fallen by significantly less than predicted by this site’s pundits.
So are the self-proclaimed experts wrong? Or do they maintain their forecasts and insist they will eventually come to pass?
Hubba says:
April 19, 2009 at 10:33 am
#111
“Used to be that the US could pride itself on having the fewest a$$holes of any race, religion, gender, and creed. ”
Bull-hicky. US has always had as many a$$holes as anybody else. The problem is in not realizing what they are until it is too late.
Victorian says:
April 19, 2009 at 11:21 am
“I have to give props to John for designing and implementing his strategy of jumping in before the govt bails out a certain sector. Excellent reading of the tea leaves.”
How was it put? Short the equity, long the debt.
Grim – in Mod.
Bi -No more banking crisis?
Not According to Bank of America/Merrill Lynch, here is their latest commentary.
Economic Commentary
17 April 2009
David A. Rosenberg +1 646 855 1389
North American Economist
MLPF&S
david_rosenberg@ml.com
Economic Commentary
Deflation realities …
don’t ignore them
Deflation risks have actually intensified
The market is beginning to price in reflation across a fairly broad front. This is most evident in the 120 basis point run-up in 10-year TIPS breakeven levels since
the start of the year. This is rather amazing since even with ‘green shoots’
emerging as the new macro mantra, from our vantage point, deflation risks have
actually intensified of late.
1) Consumer price index is already deflating
The CPI is already in deflation mode, having fallen 0.4% on a year-over-year
basis, the first such negative trend since 1955. It is not just the actual deflation
rate, but the extent of the deceleration, since this time last year the pace was
running at +4.0%.
2) Pricing power is fading across a very broad front
This is not just a case of energy prices sliding from their lofty year-ago levels.
Looking at the CPI data sequentially and by sector, it is increasingly obvious that
pricing power is fading across a very broad front. Appliance prices fell 0.3% MoM
in March, apparel prices also dropped 0.3%, hotel rates sagged 2.4% and are
down six months in a row, airline fares also slipped 2.3% and have now deflated
seven months in a row, and home improvement materials fell 0.3%. In addition,
autos, communication services, restaurants and recreation were all basically flat.
3) More deflation coming down the road
Producer prices in March sank 1.2% sequentially and a record -3.5% year-overyear.
This time last year, the YoY rate was +6.7%, for a compression of over
1,000 basis points. The sustained deflation in the core crude and intermediate
price pipeline is probably a sign of what is still coming down the road in terms of
final goods prices.
4) Home prices declining at an accelerating rate
Case-Shiller home prices are actually declining at an accelerating rate and are
down a record 19% year-over-year. The pace of decline is accelerating with the
three-month trend running at a -26.5% annual rate.
5) Real estate values of all types deflating at a record rate
Real estate values of all types are now deflating at a record rate: -11.5% YoY for
apartment buildings, -3.3% for industrial properties, -6.1% for office buildings, and
-2% for retail complexes.
6) Record amount of spare capacity
The capacity utilization rate in manufacturing has declined to an all-time low of
65.8% from 66.9% in February and 77.7% a year ago. Only one other time in
recorded history has the CAPU rate fallen so far so fast.
7) Slack in the labor market at a lifetime high
The broadest measure of resource slack in the labor market is the U-6
unemployment rate and it rose to a lifetime high in March as well to 15.6% from
14.8% in February and 9.1% a year ago. Never before has the jobless rate risen
so fast.
8) Bank credit has contracted for three straight months
Bank credit contracted at a 2.9% annual rate in March and has declined now for
three months in a row. Data into early April point to a fourth monthly decline,
which would be unprecedented.
9) Record decline in household incomes
Nominal personal incomes less government transfers deflated 0.5% in March and
have now fallen for six months in a row. Since last August, the personal sector
has lost $234 billion of organic income (wages/salaries, rent, interest, dividends,
and proprietary). Take it from us that such a decline in household incomes has
never happened before.
10) Household net worth has contracted $20 trillion
Household net worth has contracted $20 trillion or by 30% since the third quarter
of 2007. The lags on consumer spending and the savings rate can last as long
as three years.
We fail to see how stimulus will offset private contraction
Since the credit collapse began in late 2007, the Fed’s actions have expanded
the money supply by $1 trillion. We also have around $800 billion of federal fiscal
relief, though at least one-third of that is being offset by restraint at the state and
local government level. We still fail to see how all of this “stimulus” is offsetting
the combination of declining bank credit, declining organic incomes and declining
personal wealth.
We remain on the sidelines
We have remained on the sidelines during this speculative bear market rally and
continue to advocate a cautious income-oriented investment posture that includes
buying Treasuries on their periodic dips. Nothing we see today resembles 1975,
1982, 1990 or 2003 when bear markets ended on the cusp of a durable
expansion in economic activity and corporate earnings. All we have learned from
the last month is to cover shorts when new lows are achieved and that nothing
moves in a straight line. As painful as it has been over the short-term, we are still
not believers in the sustainability of this rally and as such remain on the sidelines.
“ESCAPE FROM NEW YORK
RESIDENTS FLEE AS NY RANKS LAST FOR 2009 ECONOMIC OUTLOOK”
http://www.nypost.com/seven/04192009/postopinion/opedcolumnists/escape_from_new_york_165198.htm
Sean,
Do you have a link to that? I can’t cut and paste it on Blackberry and want to share it.
shore… from the other day re dining near the bergen pac
went to nisi on grand ave. prior to a bergen pac show last night.. certainly on the pricey side but well worth it
130#, first put record straight. a few weeks ago, when former citi chief economist was named to join geithner team, people heremocked him as “a guy from a failed bank”. now why should we take every words from another “failed bank”?
rosenberg’s position is well known in the circle just as cohen at GS.
Sas, Good piece from the Post. What a bunch of morons. Keep it up NY. We need more wealthy taxpayers in FL.
reinvestor101 says:
April 17, 2009 at 9:01 pm
I can’t stand people like this. They’re nothing but vultures taking advantage of good people. Someone needs to reign these dirtbags in.
oh clueless one … what should happen? you say vulture… i say bargain seeker.
Cindy says:
April 18, 2009 at 7:06 am
http://www.slate.com/id/2216238/
“When Did Your County’s Jobs Disappear?”
jaw-dropping.
Clotpoll says:
April 19, 2009 at 9:15 am
I figured it would be another 9-12 months before the Jew-baiting started here.
clot: What is Jew-baiting? Is that pleasuring yourselves by rubbing a shankbone?
Cindy says:
April 19, 2009 at 10:03 am
John @ 108 – Did you mean to say “I love that my 14% BANK BONDS ARE NOT RISK FREE!!!!!” OR “now” risk free???
Trying to follow your thoughts there…
C: Regardless, you need to insert the word “credit” with now. There are many other fixed income market risks aside from credit.
bi[125],
Do you even read the article that you post? From the article;
“So in some ways what we’re saying is we’re going to backstop the amount of capital-raising that’s necessary,”
John says:
April 19, 2009 at 9:42 am
Timmy G announced in Asia yesterday bank crisis is over, the 19 banks will not fail as they can get private capital and even if they can he will back stop with capital. He is doing his best to create a bank bond rally god bless his soul. He is a true american. I love that my 14% BANK BONDS ARE NOT RISK FREE!!!!! Thank God I bought every insurance bond I could get my hand on in March as he is moving on to that. This is the great chance in history to save for a house. Bonds at 10% and houses falling 10%, with that kind of savings opportunity you can be in a mcmansion by 2010!!! Trouble is housing at best has a year or two to go before bottom, it won’t last long.
it’d be much appreciated if you could summarize this in a tiny, neat, coherent sentence.
it almost sounds like you think all is well and housing will be the last leg to fall. i hear no deflation/inflation/jobs concerns.
Guys,
You have to watch this Jim Grant interview on CNBS. According to his calculations, the FED has poured in Stimulus, equivalent to 29% of GDP!!!
No wonder, we are getting this rally of epic proportions.
http://www.cnbc.com/id/15840232?video=1094355477&play=1
re: all this BANKS ARE OK!!!!!! junk …
nobody is asking how or why this SUDDENLY happened overnight. how did the mess get cleaned up so quickly?
is everyone REALLY buying this?
wasn’t there talk of ANOTHER bailout just two months back?
Something doesn’t seem right. i’ll wait for brighter guys like BC and Clot to weigh in before i start believing the hype …
I’m kh,
Thanks for mentioning Nisi. It looks like it might have potential
http://offthebroiler.wordpress.com/2009/01/24/nj-dining-nisi-estiatorio/
Stu/Gatorz,
How is NOLA?
Yikes,
re John at 108
The massive expansion of US bonds (treasuries) is increasing the supply dramatically, leaving less capital to absorb the sudden burst in selling of US Bonds when it starts.
Foreign governments needing capital will turn to their reserves and begin liquidating US-bonds to raise funds (already happening, russia, saudi arabia and others have begun seeling US bonds to raise capital). US-bond traders/holders begin to sell because the risk in holding these assets increase substantially.
bond market dislocations have happened before during the Japanese housing crash and during the great depression. During the 30’s the Fed started to jack up rates in 1931.
In the 30’s Governments around the world began to default on their debt. Every time a anpther nation defaulted, bond traders demanded additional risj premium. They started saying, Fed your going to have to pay me a higher return for this kind of risk.
a great depression level credit crisis has three main components; a burst in homeowner defaults, a large number of banks become insolvent (or a substantial portion of the banking industry), and normally stable governments begin to default on their debt
If/When the stock market starts to decline, and theres a simultaneous flight out of bonds as well, you are looking at a bond dislocation.
as the supply of debt rises relative to demand, the price falls. As price falls, yields rise, making that debt more expensive (to the borrower/issuer). When this happens with US Treasuries, the risk-free rate of return, it pushes up the yields on all other debt, rising interest rates and cost of borrowing across the board.
Additionally, there have been significant movement to Treasuries recently. If that money is coming from selling other debt such as corporate bonds, then the demand for riskier corporate debt is falling as supply increases, hence prices on it are falling and yields rising. Rising yields are driving up the cost of corporate financing.
the banks can There have been numerous examples of corporations having problems floating new bonds and. The question is when do we hit a critical point.
The point of all of this in reference to johns post is that pump their numbers all day, but until and unless individuals and corporations have access to a stable credit market the system is not fixed. Now the catch is that those with money, the bond traders, and creditors in general dont know who is solvent and who is not and hence are locking down debt markets.
just a janotiors 2 cents.
cheers
interesting kettle. so really, this is all just a smokescreen. keys:
1) job losses are mounting. there’s no abetting in sight.
2) no jobs = more people on unemployment = more of a drain on states.
no jobs = people defaulting on their houses
no jobs = no money to spend in our consumer-driven economy
3) ok, the banks claim to be stable. does this mean they are now going to loan money to … the same people who defaulted the first time around and are being given a 2nd chance?
lastly, i really am looking for a solution/answer because we’ve been at gatherings with other couples and when i strike with a lot of the links/ideas culled here, i get blank stares and (i feel) a stamp of gloom and doom. it usually devolves to the other person asking, ‘well, what do you suspect we do?’
and i say, ‘save, save, save.’ not really a solution.
(139) Chicago. Thanks again. John makes bonds sound so “safe.” Not knowing what to do….I do nothing.
Like Victorian’s post @ 142 with James Grant, I think the government interventions are “frightening money under the bed.”
(147) Yikes
“…save,save,save…” Why not? Then when the inflation hits, you can earn 12% in a CD at whatever bank is still in business.
Zieba,
I think this is why there is such buyer fear now (myself included). Your question highlights why so many flock to boards like this looking for advice. I’m sure I’m not the only one that has dedicated a good part of the last decade trying to save for a house, and despite the musings of some here, I WILL buy. Just don’t want to buy if there are big drops yet to come. Am I timing the market? No. What if I have lose my job and have to move in 3 years? I can eat the transaction costs, but 10 or 15% equity loss? Heck no. There’s alot of legit criticism toward reckless, thoughtless, and ill-advised buyers of recent years, and many of us are trying not to be the second wave.
“89.zieba says:
April 18, 2009 at 10:14 pm
Q for the board: How does a family “bounce back” from a 81K loss on a real estate transaction. Are these people coming back into the market months later? Or are they relegated to the rental class for years if not more…
Left and right I hear anectodes or see evidence of people taking 50+ haircuts, some throwing everything at the house in order to keep it… these families are pretty much broke when they finally give up ghost…no?”
Sean @130,
#s 4 & 5 annoy me. I think it’s accurate, of course. But I don’t recall anyone of influence in banking or gov’t complaining about inflation in home prices. The CPI didn’t show it, b/c it doesn’t look at them directly. But now home prices are used to warn of deflation… It’s inconsistent, and I think any meaningful discussion of inflation/deflation has to begin with pointing out problems with the gov’t measure. Either home prices are a factor, or they are not. I think they should be, but they have not been in the past decade.
Yikes 147,
Sorry, my post at 146 was a little disjointed.
How do we solve the problem? Easy, clear bad debt from the system and return to a production based economy.
First, clearing the debt; we already have the tools we need. they are called bankruptcy and RTC. Until the bad debt is wiped from the system and debt levels return to levels that are long term sustainable then nothing else will be effective except as a temporary smoke screen/bandaide covering up the gangrene underneath. As numerous people has suggested, take the insolvent banks into receivership and use the TARP money to fund a set of good banks while guaranteeing deposits through the good banks with standard FDIC procedures.
A production economy; the so called service economy is essentially an economic ponzi scheme. we dont have to build toys or toaster, but we must be able to sell the world a product of value in exchange for their goods. perhaps we cannot compete with the rest of the world in the toaster market, but we could certainly be the main producers of nuclear power generators or other advanced tech and you then sell them service contracts along with it, as high tech generally requires substantial servicing.
One catch is the american standard of living must and will be reduced, whether we like it or not. The wealth that has allowed the US to live like kings was largely derived from our preeminent position as the global currency which was itself based on the US’s former position of the #1 creditor in the world.
We have now become the #1 debtor in the world and have sustained that debt expansion by exporting our inflation.
The special status that allowed us to leverage our standard of living so high is now being revoked and not matter how this all works out, we will not maintain that special status that came into existence as a result of our unique position in WWII .
#132 shore – The BOA/Merrill commentary came to me in an Adobe pdf file, I copied it from there and pasted it here.
Yikes, Re101
vultures fill a special niche in an ecosystem, they remove the dead and diseased and prevent the spread of sickness through the system. just because some may find their work tasteless does not take away its importance.
yikes says:
April 19, 2009 at 1:14 pm
reinvestor101 says:
April 17, 2009 at 9:01 pm
I can’t stand people like this. They’re nothing but vultures taking advantage of good people. Someone needs to reign these dirtbags in.
oh clueless one … what should happen? you say vulture… i say bargain seeker.
Does anyone know whether the Bergen County Clerk’s office has deed and mortgage info online?
I went to the site but can’t find any online search option.
If not, any idea on where to get it other than shuffling off to Hackensack?
Можно и подискутировать по этому поводу …
re#134 – bi – I am sure you can find one economist (not politician) to support your theory that the recession is over as of 1st quarter. Why don’t you go and find that one credible economist and post their commentary?
Just so you know, David Rosenberg from Merrill predicted the recession and has been calling for great depression II and is only one of many sources I look at for guidance.
Sean,
Is it something that can be emailed via Grim?
http://www.nytimes.com/2009/04/19/business/economy/19view.html?em
We joked about negative interest rates last year.
Shore send me an email to seanm123@yahoo.com
and I will send you the BOA PDF file.
Anyone else who wants it too.
поздравления,
What is now possible?
Follow-up on my 150.
When I say I’m not timing the market, I mean I’m not trying to catch the ‘bottom’. Some here say, don’t try to time it, “buy a house as a home”. Well, I rather buy “a home” in a healthier, more stable market. All the house hunters I know feel the same. We’re not looking for investment gains, just looking for a home whose purchase won’t jeopardize our families’ future.
Lol. I’m a bit non sequitur today. Back to my chores.
Yikes the US had a “mini” bond dislocation in the 80’s when vokler had to jack rates to control inflation. unemployment was decreasing going into that event. This time around unemployment is leading due to the governments massive manipulation. What happens to unemployment if/when a bond dislocation hits? can we go any more parabolic? or does obama put a moratorium on layoffs?
http://4.bp.blogspot.com/_lsF4HSdqo04/SeuNz6Nr9tI/AAAAAAAABAo/f8s07VWtJzM/s1600-h/10+yr+treasury+rate+vs+U3.PNG
Revelations,
I think that many would rather miss a percent or two of possible savings as values start to rise at some point than to buy and have values continue to fall.
Here is a man-bites-dog story. Imagine, a legislator being robbed by a constituant.
http://www.app.com/article/20090419/NEWS/90419026
Speaking of additional bailouts for banks:
http://www.app.com/article/20090419/BUSINESS/90419025/1003
Nice place just a short ferry trip from Manhattan:
http://www.app.com/article/20090419/NEWS01/904190355
165 Shore,
Right! (so I wasn’t just having a rhetorical conversation with myself :)
And I don’t even require values to rise; keeping pace with inflation would be nice though.
It’s like if everyone decided that owning a car was the path to wealth and car values rise 150%. When the fad passes and values start to drop, would the statement “you’re just buying a car for transportation, not an investment” make you feel better about paying a 50% or even 15% premium?
Rev,
I also don’t care if prices rise, even enough to keep up with inflation, as we buy to use. I do, on the otherhand, do not want to pay a dollar today for something I will be able to pay 95 cents for tomorrow.
Who was talking about college cost/ student loan bubble recently?
http://www.nytimes.com/2009/04/18/your-money/student-loans/18student.html?_r=1&em
162 – rev
I’m not trying to time the bottom either. I look at the current prices though and think can the median income support house prices w/ %20 down. is it a 3.5-1 ratio? it doesn’t seem there yet in my area getting close though.
3-1 ratio. when this was the rule of thumb were taxes more of the monthly payment then the mortgage? and if not shouldn’t this have an effect on affordability?
Shore 145 – We leave for NOLA on Thursday AM. Will definitely send updates while we are out there.
Sounds like a plan. If you identify any nice dining spots, feel free to share. Also, if you have a chance, take a peek at the courtyard at Hotel Maison de Ville at727 Rue Toulouse and say hello to the turtles for us.
Revelations/Shore – I have got to believe houses are still a depreciating asset. They will probably still take another leg down around here now that the moratorium is over. Even though we are clearing our inventory as foreclosed homes come on the market, with the sort of unemployment we have, the problem isn’t over yet.
Sean – Friday (205)
“If you are going to buy, make sure you buy in a place that you want to live for a long time and then you will not have to worry about inflation and deflation – after all – we all need roofs over our heads.
Clot says: “You can’t buy at tomorrow’s prices today.”
Many have said before and I’ll add my two cents worth: Buy @ 2-3 times your income.
I bought in 1999 @ 2x income in a neighborhood I find charming and close to all my needs and I felt no compunction to sell at the highs of 2006 because I already had what I wanted and could afford. No regrets.
shore,
re college bubble; that was me (aka kettle 1)
A buddy oif mine once told me to be wary of purple beavers.
““When Did Your County’s Jobs Disappear?”
wow, what a graph!
for a minute, i thought i was back in the 60s doing a little LSD before I got shipped off to asia.
SAS
Corzine wins in court over unpaid furloughs, calls for additional 12 days unpaid leave and rescinding 3.5% raises.
http://abclocal.go.com/wabc/story?id=6707196§ion=news/politics
“Who was talking about college cost/ student loan bubble recently?”
yup, kettle & I think that we are looking down a barrel on a huge college student loan bubble.
dumb parents fight tooth & nail to get kids into a “good” public school, to try to get into a “good” college, work & study hard so you can get a “good” job, so you can buy sh*t from China while your kids end up on Ritalin.
lol, pull the party line baby!
you have just been molded to do one trait/task in a controlled assembly line.
SAS
Rev et al,
I thought so. The average family drives a beat up for explorer or toyota and has $5K in the bank. The elderly supplement with social security, most are banking on pensions and living check to check. Fair assesment? Ok, let’s bump the savings account to 25K and make it a five year old car.
Everyone is riding such tight margins with this housing thing (result of higher leverage) that the slightest bump in the road and they are behind and on their way to being out of the game. If these people can’t even pay their bills how are they ever going to be able to get back in the game? Time flies fast, they’ll find themselves struggling for years to come…I’m not even talking about the subprime crowd hopelessly chasing the bottom rung via funny money. I’m talking about regualar middle income NJ families, the ones with the Ford Explorer, WalMart bags in the back and a dog. One medical mishap, one unforseen expense or income cutback and they’re out… for good!
I mentioned a while back that I thought the RE market has its regular migration patterns. When you have thousands of people defaulting, losing jobs and being wiped out, that migration pattern gets disrputed and the market further grinds to a halt. The first times can’t trade up, the retirees or soon to be can’t trade up, etc, etc…
BTW, reading that T2 report gave me a good ol’ fashioned boner. If you haven’t read it you should, I welcome the coming wave of ALT-A resets. A lot of state workers and the median income crowd would be included in this. Time has come to pay the piper for that Hummer and matching jetskis. Tick, tock, tick, tock…bytches.
Property taxes SHOULD most definitely be included in the affordability equation but so many are approaching the biggest purchase of their life with little or no strategy or information.
Stu,
It looks like my favorite NOLA hotel may be on the financial rocks. It breaks my heart. It is such a charming place.
http://blog.nola.com/tpmoney/2009/03/hotel_maison_de_ville_reopens.html
181…well it is a shake out pure and simple. I cannot claim to believe that it was ‘planned’. Think it is more of a cyclical thing. But what do I know.
“Property taxes SHOULD most definitely be included in the affordability equation but so many are approaching the biggest purchase of their life with little or no strategy or information.”
And in a place like NJ, they turn nearly any mortgage into, essentially, ARMS. How much will the ta\xes be next year? The year after? Who friggen knows. It is one heck of an “X” factor.
If one’s affoirdability depends on costs staying the same over the next few years, one better look to a less expensive property because it seems there is little chance NJ property taxes will cooperate.
” I cannot claim to believe that it was ‘planned’”
Dept of Education models were formed & designed for students to fit in an industrial/assembly line world.
planned to a degree, maybe not sinister.
but in any case, it was designed to give people one trait/task.
you take them away from that one trait/task… they bumble.. can’t think, and give you the deer in the head lights look.
I might not be to clear with my typing, enjoying a glass of wine right now:)
SAS
off topic, watch this weekend on Histroy channel. very interesting.
“Black Blizzard”
http://www.history.com/genericContent.do?id=60648
SAS
I originally asked this question to make sure that I understand the situation. The way things are unfolding it would thing that there’s some hidden safety net that I did not know about. People were just rolling the dice and living the high life. A lot of families/individuals are already “out of the game” or close to it and their standard of living will change. Some may not know this yet, but for most this change will be permanent.
I can’t see anytone getting back into the swing of things without a helping dose of funny money as credit lines propelled such a large portion of this party.
Also, whoever thinks new car sales will pick up is a fool. There is a marked plateau shift in volume underway and the lost volume ain’t coming back!
Carleton Sheets runs that no money down RE investment system scam that is plugged so heavily on late night TV and marketed to the gullible, poor and uneducated.
I just stumbled accross this site, which basically prays on people that find Carletons already simplified part with your money system difficult to understand.
Can’t understand that scheme? Well here’s an even easier way to part with your money:
http://www.clarksmarketing.com/home.htm
BTW, last update was 6/08 and the address points to some small shack deep in the woods…
http://maps.live.com/default.aspx?v=2&FORM=LMLTCP&cp=36.771772~-80.039434&style=h&lvl=15&tilt=-90&dir=0&alt=-1000&phx=0&phy=0&phscl=1&encType=1
Yikes,
here is another quick chart for you. look at our debt level (in 09$ per household). how do think very high unemployment on top of a sudden and significant spike in interest rates is going to lay out this time. a non trivial portion of that household consumer debt is NOT at a fixed rate!!!
http://2.bp.blogspot.com/_lsF4HSdqo04/SeuhEOYoLAI/AAAAAAAABAw/08mbLDtGdQU/s1600-h/10+yr+tbill,+U3+and+consumer+debt.PNG
“nobody is asking how or why this SUDDENLY happened overnight. how did the mess get cleaned up so quickly?”
Yikes [143],
It’s easy if you borrow $ at zero percent and are allowed to calcuate the value of dead assets by simply applying your own fantasy assumptions. Also, how about you report $2.5B in profits, based on your distressed debt taking another dive, Citi. In theory you can buy your debt back at lower prices and book a gain. Sustainable? Yeah, I guess if they go under they will indicate further gains in their distressed debt?
Remember, quarterly reports are just a dog and pony show, accounting trickery. Net result? It enables Bi and John to blow smoke up each other’s ass.
Below from Ritzholtz.
“How did the banks, so many of which seemed to be slouching toward extinction, get their act together to the point where they were in the black in January and February?”
“As Zero Hedge explains, AIG, desperate to hit up the Treasury for more moola, decided to throw in the towel and unwind its considerable portfolio of default-credit protection. In the process, the badly impaired insurer, unwittingly or not, “gifted the major bank counterparties with trades which were egregiously profitable to the banks.” This would largely explain, according to Zero Hedge, why a number of major banks actually, as they claimed, were profitable in January and February. But the profits, it is quick to point out, are of the one-shot variety, and, ultimately, they entailed a transfer of money from taxpayers to banks, with AIG acting as intermediary.”
http://www.ritholtz.com/blog/
Good News: Option ARM Resets Delayed
“…Thousands of mortgage loans that were supposed to reset at a higher rate this spring won’t be changing, putting off the grim threat of foreclosure or bankruptcy for many Americans by as much as a year. Unfortunately, the reprieve will only be a temporary one.”
http://www.businessweek.com/lifestyle/content/apr2009/bw20090416_103126.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis
“Purple Beaver”
so, what that mean?
why the name change?
SAS
“seanm” are you Sean (my CDS informant) or…a new sean?
Zieba,
About cars, one thing overhanging the market that I have notbheard discussed by the talking heads is how the change from current auto-power technology to whatever we are on the cusp of is affecting buy/don’t buy decisions.
186. That is why you need parents who are your ‘friend’ as many want to be…but also challenge and push you to think. Provided that they also possess the ability. Schools won’t teach that — even the best ones.
anyone watching 60 minutes?
oh, man. jobs and 401k sadness.
“I didn’t deserve this.”
ok done with “Purple Beaver”
SAS,
the name was an inside joke
if anyone is watching, wall street is getting blamed BIG TIME for the crumbling of everyone’s 401ks.
oh yeah, the pitchforks are eventually come out for wall street (if they aren’t out already)
zeiba 182,
“I welcome the coming wave of ALT-A resets”
I tried to ask this a few weeks ago, but perhaps my timing was poor. I noted that some of the major news outlets were reporting that the increase in mtg apps were due to a lot of refis. Would these be the result of the govt’s refi initiative for troubled homeowners, and will it offset the predicted ARM reset doomsday scenario?
Even if these folks get refi’ed and foreclosures are averted, they’re essentailly trapped in that house the market catches back up to them, since they’re unlikely to have the cash to bring to closing.
“if anyone is watching, wall street is getting blamed BIG TIME for the crumbling of everyone’s 401ks”
as they should be.. along with a few politicans.
SAS
I’m sure this was asked before, but why on earth are long term rates still so low? Is the gov’t pushing this, and if so, how?
“191.Seanm says:
April 19, 2009 at 6:18 pm
Good News: Option ARM Resets Delayed …”
Gary,
I don’t recall if I mentioned in my e-mail I was thinking fri-sun or evenings so as to leave your other days/business hours free for the job serch.
182
BTW, reading that T2 report gave me a good ol’ fashioned boner
what is the t2 report?
200
sas not to say wall st. isn’t to blame but did most people realize the 401k is an investment and could go down? its the same w/ housing everyone wants to blame mortgage brokers, wall st., banks, realtors… not many have looked in the mirror and put some blame on themselves
Cross, wait will link… stuff will make you salivate…
Courtesy of BC Bob,
http://www.scribd.com/doc/14166113/T2-Partners-Presentation-on-the-Mortgage-Crisis4309-3
thanks zieba
“I’m sure this was asked before, but why on earth are long term rates still so low? Is the gov’t pushing this, and if so, how?”
Rev[201]
Yes, the fed is buying treasuries and mbs, They will continue as long as the need exists. It’s right in their statement.
Their goal is a positive sloping yield curve, to bailout idiot bankers. Allow them to borrow at 0% and lend at approx 5%. It’s a freebie to the dolts who burnt the stakes to the ground. There will be consequences. However, that’s for another day/discussion.
RE: 200
I don’t know. I never thought about the portion of applications that may have been driven by government programs. It’s possible.
Also, a while back I remember someone posting links about how the government programs are not helping nearly the amount of people they claimed they would at startup.
zieba [206],
Everybody should read that. By the way, T2 called the future bust when the RE market was a moon shot. Funny, the experts who missed it, now state that we are at the bottom. Yet, T2 takes the contra position; further, steeper declines. Guess who has it right?
new real estate tool?
you decide
http://www.homegain.com/?entryid=11049
Just read T2 report. Found it interesting that they revealed speculative holdings in General Growth Properties; guess that gamble didn’t pay off.
re 189,
my treasury note data was shifted off by 2 months. its correct below
10 yr treasury rate Vs U3 Vs Consumer debt per household in adjusted jan 2009$
http://3.bp.blogspot.com/_lsF4HSdqo04/SevDUIABKmI/AAAAAAAABA4/VA90NfekP2U/s1600-h/10+yr+tbill,+U3+and+consumer+debt.PNG
who asked about auto loans?
i came across some data on that by accident. Looks like the auto business has its own little segment of the greater debt bubble to face up to. Notice how much larger the financed amounts are and they correspond inversely with interest rate. Note that inflation adjusted income has been essentially flat since 1975.
http://www.scribd.com/doc/14432039/US-Auto-Loan-Data
Another little tidbit:
it looks like the market tried to correct itself in 2003. You can see the blip, sometimes large and sometimes just a leveling off; in the DOW, in regional, state and national home prices, in car loans, etc. This trend pops up all over the place.
“sas not to say wall st. isn’t to blame but did most people realize the 401k is an investment and could go down?”
agreed.
many people with 401k take it because its all that is offered. Many places just offer company stock and pay with risk rather than cash.
good when things go up, a real loser when it goes south.
oh yeah…
then we have fraudulent inducement by wall st & its CNBC/financial press cheerleaders.
but…people like to not to talk about that….lets brush that one under the Tunisian rugs.
SAS
CNBC is propaganda spin.
turn it off and go for a walk or a bike ride.
ye better off.
SAS
flipping through my directTV channels.
everything on the boob tube is white trash moron TV.
man, give me Sanford & Son, or Goodtims with JJ Walker any day. Those were great shows.
as was MASH & Bonanza.
SAS
sas (186)-
Put your head down, shut up, and get back to work.
We are not citizens, we are consumers.
Are we not men? We are Devo!
“Put your head down, shut up, and get back to work”
starting to sound like one of my x-wives.
:)
SAS
BC (210)-
Past performance is a good indicator of future results.
My loot is squarely on T2.
sas (211)-
Scuzbucket real estate lead-aggregator.
Tool? You bet they’re tools.
The Long Branch boardwalk was pretty enjoyable today. Only a few New yorkers there being jerks.
When I was in high school the New yorkers liked to park their cars in front of the pier and hang out on the trunks of the cars. Even after it rained and huge puddles would form they would still be there. We would wait till there were no cars around, then fly down the street, hit the puddles, and creat a wave to wamp those buggers.
Even the NYT lies about relisting. Originally listed at 689k in Feb my a*s. I’ve had my eye on this place since it was listed at $749k months ago.
Now it is the NYT’s “Deal of the Week”.I wonder if that helps it sell.
http://www.nytimes.com/slideshow/2009/04/17/realestate/0415-buy-slideshow_index.html
Oops 224 was Gator, not Stu.
http://www.elwp.com/Joe%20Cocker.html
Finally, We know what Joe C@cker was saying…
Hilarious
Grim – 224 – same thing in moderation
Grim 224 in mod – It is all because of the artist’s name …
Joe C@cker –
Some lyrics finally explained…
heres the 60 mins piece
http://www.cbsnews.com/stories/2009/04/17/60minutes/main4951968.shtml
lost: WTF are you?
He’s one of the five extra tracks….
http://www.youtube.com/watch?v=KV6oPQ-WMjk&feature=related
here’s
60 minutes….good segment.
BC @208,
So I suspect they’re trying to attack the big “mound” of ’09, ’10, ’11 ARM resets on that chart (from Calculated Risk?) that shows the # of resets by year and ARM type. I remember a recent CNN Money article with the headline “Obama wants you to refinance” or something like that. I don’t see how the Fed can sustain this. And once they stop, won’t prices drop and push long term int rates even higher than they might have been otherwise?
Maybe the alternatives were worse.
zieba @209,
Yeah, it’s hard to keep up with all the gov’t programs these days. Plus, such programs won’t stop value from dropping, but they will reduce some foreclosures/short sales and just delay the correction. Funny thing is, I think that RE groups support these programs, but they would actually hurt business. I’d think higher volume is better than higher prices for realtors/brokers.
Whoa it’s late. I thought die-hard bloogers never sleep? ..all dreaming of green shoots, no doubt.
My bad! I mistook you all for ‘bloogers’.
G’night.
Rev (232)-
Nobody said we were smart. All of our industry’s top people are programmed like Moonies and possess the intelligence of a bag of hammers.
“HOMELESS IN HAMPTONS
NO-JOB LABORERS CAMP NEAR MANSIONS”
http://tinyurl.com/de2q6x
matt Laurer is a moron.
SAS
sas: BOOYA
Oracle buys Sun.
Another “Beavis, meet Butthead” moment.
Can they call the new company Orson?
Sore?
Suncle?
Clotpoll says:
April 20, 2009 at 7:52 am
Can they call the new company Orson? Sore? Suncle?
Blister in the Sun
Shoulda figured you for a Furs fan.
http://zerohedge.blogspot.com/2009/04/stress-test-results-leaked.html
Zero Hedge saying it has “leaked” stress test results
Grear song, but not so much Blister 2000
http://baselinescenario.com/2009/04/19/more-accounting-games/
Banks pay 5% dividend on preferred – right? If there is more trouble ahead, why would we want common? The government would then move to the front when losses have to be absorbed – right?
What would the price be? Back to the 20 days before 2/10?
Is this another attempt to keep the bondholders whole when trouble hits?
Cindy [243],
From the article;
“Put bluntly, the entire US Banking System is in complete and total collapse.”
My favorite USFL player is HEHATEME!!!!!!
(248) BC – I read that. It will be interesting to see how the day progresses. Lots of people forwarding “Zero Hedge” these days. Let’s watch and see how fast this “leak” moves around the system. Sorry I have to work today!
BC – Sorry my Joe Co@ker post never got out of mod. I think you would have enjoyed it.:(
I looked it up on wikipedia and it said traditionally an indicator of this activity is when someone yells “Free Ham” on a crowded street in Williamsburb.
chicagofinance says:
April 19, 2009 at 1:24 pm
Clotpoll says:
April 19, 2009 at 9:15 am
I figured it would be another 9-12 months before the Jew-baiting started here.
clot: What is Jew-baiting? Is that pleasuring yourselves by rubbing a shankbone?
Great stocks historically return 10%!!!!!! Doubling our money.
BTW this does not matter much to bond holders, they are already ahead of pref holders!!! Does help with cash flow!!
Cindy says:
April 20, 2009 at 8:40 am
http://baselinescenario.com/2009/04/19/more-accounting-games/
Banks pay 5% dividend on preferred – right? If there is more trouble ahead, why would we want common? The government would then move to the front when losses have to be absorbed – right?
What would the price be? Back to the 20 days before 2/10?
Is this another attempt to keep the bondholders whole when trouble hits
The definition of savings is to keep safe, FDIC cds, insured anuities, t-bills, savings bonds, no one has lost a nickle of their savings. Investing involves risk in return for chance at higher returns. People lost money on investments and now they want the govt to reimburse them for their stupidity.
crossroads says:
April 19, 2009 at 7:57 pm
200
sas not to say wall st. isn’t to blame but did most people realize the 401k is an investment and could go down? its the same w/ housing everyone wants to blame mortgage brokers, wall st., banks, realtors… not many have looked in the mirror and put some blame on themselves
“Great stocks historically return 10%!!!!!! Doubling our money.”
Except for the fact that the S&P 500 is down more than 30% over the last 10 years. Real losses?
252 frank
thats the point personal accountability/responsibility. whatever you want to call it when are people going to take some of the blame? I didn’t lose much in 401k and I’m far from a savvy investor.
Buy Low Sell High!!!
BC Bob says:
April 20, 2009 at 9:01 am
“Great stocks historically return 10%!!!!!! Doubling our money.”
Except for the fact that the S&P 500 is down more than 30% over the last 10 years. Real losses?
@245 – original account pulled – appears to be simply for entertainment value – ah shucks!
BC 253,
come on now lets get real. you just need to choose the appropriate time horizon. In about 70 years the long term return in the S&P will still be 10%! enough fear mongering!
/sarcasm off
re: #252 Frank – Did you ever hear of the phrase “Saving for Retirement”.
Now go Google that phrase and add 401k to the search “Saving for Retirement 401k” learn something about how these investments are marketed before you make blanket statements about 401ks.
Also as far as you said quote “not many have looked in the mirror and put some blame on themselves”.
People are blaming themselves Frank, there are plenty of sad stories out there about suicides, open your eyes already man.
Smokers’ Urine May Give Boost to Hybrid Car Sales
Share | Email | Print | A A A
By Marilyn Chase
April 19 (Bloomberg) — Smokers with high levels of two chemicals in their urine may result in a combustable fluid that can power a small car up to 40 miles a day.
High levels of these chemical byproducts of tobacco smoke in the urine were linked to similar additives in gasoline at rates as much as 8.5 times higher than those of other smokers, said Jian-Min Yuan, the study leader and an associate professor of public health at the University of Minnesota in Minneapolis. He spoke in Denver today at the American Association for Autmotive and Tobacco Companies Research meeting.
The 2011 Ford Fusion will be equipped this technology and will be the first four seater equipped with five ashtrays.
259#, i added MO to my watch list.
Sean – Was that you posting as “seanm” yesterday?
Remember one person’s loss is another person’s gain. So you are saving for someones retirement. They do send prospectuses and most firms offer stuff like PIMCO total return and GICs that people bypassed for high risk high yield.
Sean says:
April 20, 2009 at 9:09 am
re: #252 Frank – Did you ever hear of the phrase “Saving for Retirement”.
Shorts, don’t be too excited on profit taking afte over 200% run-up. it beats estimates (4 cents) by 10 folds. an outstanding quarter by any measure.
“Net income rose to $4.25 billion from $1.21 billion, or 23 cents a share, a year earlier, the Charlotte, North Carolina- based bank said today in a statement. Earnings per share equaled 44 cents in the three months ended March 31 after preferred dividends to the U.S. rescue fund. The quarter included an addition of $6.4 billion to loan-loss reserves.”
https://njrereport.com/index.php/2009/04/18/weekend-open-discussion-155/#comment-289664
RE: The purported leaking of the stress test results… Has anyone here ever heard of Turner Radio News before?
I’m neither doubting or believing the story yet, but it does have me curious.
Yes
(267) – Thanks – I was going to fire off an email for the PDF file. Just wanted to make sure I knew it was my CDS compadre.
“Turner Radio News”
If it is related at all to Hal Turner, then you just fell for the propaganda of a modern day Klansman.
Turner seems to be an Ayrian group, not connected to Ted Turner/CNN etc. Some character called Hal Turner.
Open House Report
Location: Millburn
Visted two homes in the “under $1 million” category. Lots of activity (compared to the zero activity I am used to.) Not enough Realtors in the homes to handle the volume.
I would estimate about 50% of the attendees were neighbors based on the number of times I heard someone asked to sign in who gave the response “I’m just a neighbor”.
Overheard: “Anything under $1 million in Millburn is getting multiple offers. Its a very hot market right now.”
One home was asking 20% less than its assessed value. The other one was asking for 8% MORE than its assessed value.
(266) Tosh – When you go back to the site now, they have updates that it is probably for “entertainment value.”
Treasury to provide nearly $30 billion to AIG
By MarketWatch
Last update: 9:27 a.m. EDT April 20, 2009Comments: 27LONDON (MarketWatch) — American International Group on Monday said it’s reached a pact with the U.S. Treasury to swap classes of preferred shares, a deal that could give it access to nearly $30 billion in funds in return for limitations on lobbying and compensation
SAS,
the official memo about US military vets being considered at heightened threat of becoming extremists
http://turnerradionetwork.blogspot.com/2009/04/homeland-security-calls-returning.html
Stu beat me by a moment I see.
It does seem to be dirtbag radio, Stu.
#270 – Thanks Cindy, I did see that one ZeroHedge.
that on ZeroHedge
Monday, early, coffee…
“an outstanding quarter by any measure.”
Bi [263],
It’s really amazing that JB allows you to post this crap.
A bunch of one time events; a $2B gain in the sale of CCBC and a “gain” of $2B on losses of their own debt. Simply outstanding.
From CNBC via CalculatedRisk; B of A loan loss provisions increase to $13B (!!) for the quarter. Net charge-offs at just about $7B, and non-performing assets at $25B.
So, yeah, rally on!
BAC gotta thing long term!!!!!! 4 years out, Ken Lewis is 62 and mandatory retirement is 65!
Tosh, Shore
While the source of the leaked stress test results is looking dubious, i can provide an offical government source for item # 6 from the “leaked list:
Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!
official source: (see page 13 of 33)
http://www.occ.treas.gov/ftp/release/2009-34a.pdf
“an outstanding quarter by any measure.”
What was it Yackov Smirnoff used to say, “What a country”?
Here we have the insolvent showing record profits. If anyone has recently re-read Through The Looking Glass, it sounds amazingly like the statements originating on Wall Street and from DC.
as some lurkers noticed, this site will be degenerated more if it allows only one opinion.
>It’s really amazing that JB allows you to post this crap.
[281],
Bi,
It’s not a damn opinion, read the results of the quarterly report. Just tell me when you are 100% long.
#279 – Thanks ket. I try to remain skeptical of just about every news source. My main problem with the leaked stress test results (on blogspot natch!) is that it sounds far too accurate to be an actual product of the Treas. Dept.
258 sean
“People are blaming themselves Frank, there are plenty of sad stories out there about suicides, open your eyes already man.”
suicide=blaming?
282#, you don’t remember what i told you 2 months ago? you like my mining but didn’t like my reits and financials.
Tosh (283):
“it sounds far too accurate to be an actual product of the Treas. Dept.”
My thoughts exactly. If you read Roubini’s recent blog entry, then you would realize that there is almost no chance that the stress tests will come back negative. These tests are no less than propaganda to further fool the sheeple. Mark my words, the government will never admit the insolvency of our nation’s big banks and will continue to do everything in it’s power to delay the inevitable.
[66] Purple Beaver
(I won’t ask)
Beav, I have seen that coming for a long time; means-testing has been floated before, and it will become the norm.
That is one of the reasons I chose to re-train in tax law. I expect a burgeoning industry in trusts and estate planning. I am already ahead of the curve in some respects: I had long advocated estate minimization techniques for FAFSA and financial aid purposes, and today we read that the Obamunists have floated the idea of linking FAFSA applications to IRS records so that DOEd can verify parental assets. Thus, it will become harder to finesse the FAFSA without engaging in actual tax evasion. This is going to force a huge shift in application profiles from the HENRY class, and the administration may counter that by, for example, imputing parental assets against students that are not supported by thier parents (called “independent” students).
We are also seeing a convergence of benefits and tax at the federal level, and eventually IRS will have a huge database and supercomputers that will likely surpass NSA in computing power (in fact, I predict that NSA’s capacity will be shifted to IRS use). Thus, IRS will know virtually every piece of information about you that is “on the grid” from your bank accounts to your Starbucks purchases. This is not conspiracy theory either—pieces of legislation to further this have already been enacted recently or proposed.
Going forward, I expect a renewed interest in asset protection trust techniques to shelter assets, and I have some novel approaches that I am researching to see if they will fly.
I also expect more, not less, outright tax evasion as people simply decide not to try to straddle the line, but instead put large chunks of their net worth “off the grid” (or encumber them with debt) so that they will qualify for benefits, financial aid, medicare, social security, etc.
I also expect that, for the HENRYs, and the “aspirational” class, you will see LESS participation in 529 plans, IRAs, and 401(k)s as these are assets that must stay on the grid. Further, in a means-testing environment, retirees will clear out their DC plans in one or two years so as to qualify for benefits faster (or if not working, they will cash out the accounts pre-retirement and take a 10% tax hit because it may be better than waiting).
In tax planning, Newton’s law of physics applies: For every action there is an opposite and equal reaction. The Obamunists have put in motion a number of actions that will result in counteractions that blunt the effect. Tax policy types call this “distortion” in that the tax action distorts normal behavior as people adjust to the tax. Consequently, the wealthiest folks in your town in 2025 won’t be the hedge fund traders, they will be the small business people and the drug dealers.
BC Bob,
Let Bi get excited about the headlines. The world needs bagholders.
“HOMELESS IN HAMPTONS NO-JOB LABORERS CAMP NEAR MANSIONS”
We need more of these camps, maybe they will finally reset the RE prices.
Bi,
2 months ago? I should be confined for reading what you posted 2 seconds ago.
“HOMELESS IN HAMPTONS NO-JOB LABORERS CAMP NEAR MANSIONS”
Frank,
Look at this as opportunity. You could have another applicant for your blackbox position.
he [288],
I just want to know when he/she/it is 150% long.
Haha it looks like the banks are back at their games, you downgrade me, Imma gonna downgrade you!
Citigroup Credit Losses Rising Rapidly, Goldman Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVD_g1ncb2.k&refer=home
Whoa, sorry for the lack of a Monday morning post.
The slacker is out in Pacific time.
Tosh, shore,
whether or not the “leaked” Stress test results are real or bogus, the points made in the leaked results are more or less accurate.
I.E goldman really does have a 1,000% Total Credit Exposure to Risk Based Capital (%)
Nom,
In Asbury, I think it is likely that the drug dealers are already at the top of the heap.
287#, deplume, very informative. as far as i know, current FAFSA doesn’t include retirement accounts. do you expect it will add that shortly?
Bond of the DAY!!! AIG is backstopped by Mr. O, lock in 24% now for the next 7 years.
AMERICAN INTL GROUP INC MTN BE 5.60000% 10/18/2016 FR
Price (Ask) 38.051
Yield to Worst (Ask) 23.618%
02687QBC1
second bond of the day!!
CIT GROUP INC INTERNOTES BOOK 6.15000% 04/15/2013 CALL
Price (Ask) 40.143
Yield to Worst (Ask) 35.237%
Yield to Maturity 35.236981%
12557WCQ2
292#, bob,
when the market moves up, i am 500% long and when the market moves down, i am 500% short. good enough?
>he [288],
I just want to know when he/she/it is 150% long.
300#, soorry. i mean opposite.
As for college, I suspect that for HENRYS the approach will be to get accepted and then defer. The children then go and work, establish a different dimicile (even if it is bogus), and come off mom and dad’s tax form, all to show economic independence. So what if one starts school at 20 or 21, especially if one has picked-up a number of credits at a local 4-year school or community college during the period of working. Most people are going to be working until 70 anyway, and being more mature when diving into full-time studies is not such a bad thing. One can see the huge benefit to work when one looks at the difference between law school graduates who worked a year or two between UG and law school. One also sees this with UG stusents who have some real life experiences before college.
Black is Back: Don’t Trust Earnings New Accounting Rules, Stress Test is a SHAM!
HE (283) –
Looks like Goldman is done making its money going long and raising capital. Now, they have set themselves short.
Gotta admit, smartest guys in the room.
tosh (283)-
True or not, that leaked report probably describes the real situation with 90%+ accuracy.
grim (294)-
Who needs daily post anymore? We can just start with Nat Turner or some internet spewage from Zero Hedge and entertain ourselves for at least 5-6 hours at a pop.
Have fun. Enjoy the weather…
Gary Shilling on Bloomberg,
In-Depth Look – Bank Stress Test – Bloomberg
vodka (295)-
But hey…you know those GS guys are the smartest ones in the room, so we can be sure all those positions end up netting positive for them.
Just like JPM’s 88 trill masterpiece of financial engineering.
[sarcasm off]
243#, re: stress test.
first you need to check is if HSBC is among 19 banks in the first round of stress test before you are too execited about the “leaked” results:
http://www.calculatedriskblog.com/2009/03/stress-test-19.html
Alternate view of stress tests.
http://4.bp.blogspot.com/_GsXvEJY5FMs/Saq66m49_wI/AAAAAAAAARc/2Jff5LiSWq4/s1600-h/Geithner%27s+Stress+Test+(Color)+(2)+1-28-09.jpg
Clot,
dont worry, GS will end up with a positive net from that 100% gamble as long as the US government is still functional. just because the AIG slush fund may have dried up doesnt mean they dont have a few more in their back pocket.
A more accurate description would be to chart the Total Credit Exposure to Risk Based Capital of the US taxpayer. Thats what we are really talking about anyway
3269 seneca:Overheard: “Anything under $1 million in Millburn is getting multiple offers. Its a very hot market right now.”
Don’t you just love the “expert” neighborss who always seem to be in the know, but are in fact clueless.
I dont understand how some ppl have probs wid stress tests, wat wil u do in a real stress situation? do u hav a choice then?
When a builder is going under who knows what shortcuts they might take. Here is a great resource to make sure you looking at something that is quality made. Now more than ever it’s important to buy a home that will be a good investment.
http://AccurateInspections.com
Thursday, April 23, 2009 3:04:00 PM