From the Record:
Home prices decline in metro area
Home prices in the New York metropolitan area, which includes North Jersey, declined 7.4 percent from July 2007 to July 2008, the Standard and Poor’s Case-Shiller Index said today. That’s well below the national decline of 16.3 percent.
“We’re clearly seeing a correction taking place in prices,” said Bill Gilsenan of Gilsenan & Co., a Ridgewood real estate firm. “These numbers fall in line with our multiple listing service numbers.”
According to the New Jersey MLS, median home prices in Bergen County dropped 7.5 percent in the 12 months ended July 2008, to $467,000, down from $505,000 in July 2008. The New Jersey MLS does not release data for Passaic County, which relies in large part on a different listing service.
…
The volume of home sales has declined in Bergen County more than the prices. According to MLS data, there were 685 homes sold in the county in July 2008, down almost 24 percent from July 2007. In August 2008, there were 691 homes sold, down 20 percent from August 2007.Gilsenan acknowledged that the recent turmoil and job losses on Wall Street may affect demand for luxury houses in the northern Bergen County, where many financial professionals live.
“There’s clearly going to be an impact in the short term,” Gilsenan said. “We just don’t know where it will go in the long term.”
He pointed out that in the late 1980s and early 1990s, after another Wall Street shock, home prices declined for several years. But, he added, the volume of sales actually began climbing after a few years, as buyers responded to those lower prices.
“We may be okay once we get a correction in prices,” Gilsenan said. “I think our volume will come back.”
Frist! Woohoo!
A three-thread day. Is this a first?
lisoosh Says:
September 30th, 2008 at 2:27 pm
Actually Chi – Feel free to discount any opinion I may have. I’m not a finance person. I don’t dabble in “the market”. Maybe I’m a moron who just “doesn’t get it”. But instead of dismissals and vague statements and “you’ll see in a few months”, do me a favor – tell me exactly WHY Schiff, who DOES deal with these issues on a daily basis, who was spot on in predictions YEARS ago is 180 degrees wrong.
After what, 3 years on this board(?), do that for me.
Rhyming and Lisoosh: OK – I am getting crushed due to quarter end activity. I will do my best to repond some time this evening or tomorrow. Please remind me if I am delinquent. Your line of questioning is reasonable and demanding of a response….
Just wanted to share a silver lining: yesterday, the moms were telling each other “Don’t Panic”… Today, the moms (ok, different set of moms, but still…) were talking about learning how to can/preserve, and maybe borrowing a church kitchen to do it in, so we could take turns with the scalding fire and the keeping an eye on the children to keep them from falling into the scalding fire. See? Building community!
Woot!
(We also were sharing what steps we were taking… and kind of quizzing each other as well “Do you know where your birth certificate is? Do you know where you would go/how you would get there if you had to grab your go bag and go?”)
Good clean fun. ;)
[4] alia,
bug out planning???? What would hubby say? He would think you were reading ferfal again.
Problem for me is that my bug out destination is in southern maine (until we get one in the poconos). That hudson crossing will be a b1tch.
shore (re two threads ago) medicine. i have prescriptions for two kinds of asthma medicine, but only need the one so haven’t been filling the second. i am now going to. it’s small, easy to store (or trade. ppl would trade a lot of apples for being able to breathe. i know i would.)
nom: ah, but even the gov’t says you should have a go-bag. http://www.nyc.gov/html/oem/html/get_prepared/supplies.shtml
so i’m not being paranoid. just prepared. (cue Tom Lehrer’s boy scout song in 3…2… 1…)
[6] alia
Yeah, also called a BOB (Bug Out Bag).
You are being sensible, of course, and I am not criticizing. Just remember to constantly rotate stock, such as meds. They have a shelf life.
Being in the city, you sound as if you would be a good candidate for “the compound” as Kettle and I call it. We will have to fill you in at a GTG sometime.
A step back, fannie mae, 1999;
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1
Can’t believe that Steelers are down to their 4th running back!
HC
This will probably be the proverbial straw;
“The global credit crisis has slammed into Europe with stunning violence over the last two days, triggering five major bank rescues and a near total shut-down of the region’s credit markets.”
“The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days,” he said.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3104666/Banking-crash-hits-Europe-as-ECB-loses-traction.html
nom, shelf life: yes. but it’s longer than what they print (according to the wife of someone who was in charge of something in the fda)… and diapers (which take up a whole lot of space in my bug out/go bag) never go bad. :) yea for non-composting diapers! (i bet they’d make excellent bandages, too…)
re: compound… see, here’s what i’m thinking: make it a bed and breakfast, with a sustainable theme. *educate* people about sustainable stuff (makes it an educational non profit, yea tax dodges!) get a graduate from one of the uk’s estate management courses to be the on-site director. cook meals from what is grown onsite( or what’s bartered for from what’s made) have little cal-earth cottages for the staff (or paying guests to try out)… kind of like a Green Colonial Williamsburg… you can either defend against the masses or embrace and educate them (and get young healthy college students to do the heavy manual work)… ’cause there will be a world after oil, and i don’t want it to look like argentina.
ok, one more link.
http://www.amazon.com/SHOPZEUS-Gas-Mask-Onesie/dp/B001993YRC/ref=sr_1_14?ie=UTF8&s=apparel&qid=1222817806&sr=8-14
Still can’t e-mail members of Congress.
Hmmm…
BC (10)-
Watch them pass some kind of bailout, only to be followed by a total collapse of Europe. Our little punt will be the equivalent of pissing in the wind.
Our housing markets are red-hot, in comparison to Spain & England. Now, Europe has to deal with our subprime crap, their subprime crap and a CB with their heads stuck in the sand.
Clot: (13)
http://thehill.com/leading-the-news/house-limits-constituent-e-mails-to-prevent-crash-2008-09-30.html
“The House is limiting e-mails from the public to prevent its websites from crashing due to the enormous amount of mail being submitted on the financial bailout bill.
As a result, some constituents may get a ‘try back at a later time’ response if they use the House website to e-mail their lawmakers about the bill defeated in the House on Monday in a 205-228 vote.
“We were trying to figure out a way that the House.gov website wouldn’t completely crash,” said Jeff Ventura, a spokesman for the Chief Administrative Office (CAO), which oversees the upkeep of the House website and member e-mail services.
The CAO issued a “Dear Colleague” letter Tuesday morning informing offices that it had placed a limit on the number of e-mails sent via the “Write Your Representative” function of the House website. It said the limit would be imposed during peak e-mail traffic hours.
“This measure has become temporarily necessary to ensure that Congressional websites are not completely disabled by the millions of e-mails flowing into the system,” the letter reads.”
I guess they didnt build their email system to take such a onslaught of public outrage.
Galgon,
I guess now they will be able to say that e-mail traffic has fallen off.
If one has a direct e-mail address on can still get through. Look for the name of your member’s staff then e-mail to @mail.house.gov
I am on the Mike Morgan RE call. Anybody have any questions you would like to ask?
lisoosh Says:
September 30th, 2008 at 2:27 pm
do me a favor – tell me exactly WHY Schiff, who DOES deal with these issues on a daily basis, who was spot on in predictions YEARS ago is 180 degrees wrong.
L: Can you point me to what I should respond? Also, I think I made it clear that nothing is binary. Just because I espouse a viewpoint does not make everyone else 100% wrong for differing. Please note the following posts.
This one…
chicagofinance Says:
September 30th, 2008 at 10:50 am
Let’s all agree on something…..regardless of the soap opera around us, the key is real estate prices. If you don’t believe that real estate will stabilize until 2009-2010 or later, then that opinion should color everything else. Don’t lose focus on the important driver here. One of the arguments about the $700B “allocation” of capital for investment (please let me use this phrase) is that it will stabilize the system and also real estate prices. Such an argument is patent folly. Regardless, what I focus on is the coagulation of the life blood of our economy (i.e. daily cash flow). I have run a money market desk for a large multi-national corporation. I ran it across Y2K. Don’t underestimate how messed up things are. The fact that this is cutting across a quarter end (9/30/08) is a disaster. The other critical component is the “turn” (i.e. 12/31/08). We need Gunnery Sergeant Hartman from Full Metal Jacket here….
also this one….
chicagofinance Says:
September 29th, 2008 at 4:29 pm
rhymingrealtor Says:
September 29th, 2008 at 4:21 pm
The employess might not like it and think the boss is nuts but the boss is the boss! The american people have been calling, emailing, faxing, mailing and overwhelmingly sayin NO!.
Karen: Guess what? Mostly of the people against this bailout are ignorant or have bet big short the markets. Chaos reigns? Fine, I guess. If I have offended any of you, my apologies. I have mostly remained silent, because I have been busy, but really, the bile spilled here is over the top, and I honestly would have expected a more controlled discourse. I am underwhelmed.
Everyone should be more critical of their information sources. Even the ones that have predicted doom are not necessarily messianic. Do not give iconic status to anyone! We must look to the people who speak solutions, not just those who are cashing in as the hurricane comes tearing through…..
Shore,
You could always print the email and send it in a letter. Takes more effort but my guess is that someone might actually read it. It wouldnt surprise me if staffers are wiping out large swaths of email as quickly as possible. They might be taking the time to count up the for and against emails but that would be a stretch.
I wonder how many emails it took to have them shutdown the system.
The death of Mark to Market?
http://www.cnbc.com/id/26961218/site/14081545/
SEC And FASB: Clarifications on Fair Value Accounting
30 Sep 2008 | 04:41 PM ET Font size: The current environment has made questions surrounding the determination of fair value particularly challenging for preparers, auditors, and users of financial information.
The SEC’s Office of the Chief Accountant and the staff of the FASB have been engaged in extensive consultations with participants in the capital markets, including investors, preparers, and auditors, on the application of fair value measurements in the current market environment.
There are a number of practice issues where there is a need for immediate additional guidance. The SEC’s Office of the Chief Accountant recognizes and supports the productive efforts of the FASB and the IASB on these issues, including the IASB Expert Advisory Panel’s Sept. 16, 2008 draft document, the work of the FASB’s Valuation Resource Group, and the IASB’s upcoming meeting on the credit crisis. To provide additional guidance on these and other issues surrounding fair value measurements, the FASB is preparing to propose additional interpretative guidance on fair value measurement under U.S. GAAP later this week.
While the FASB is preparing to provide additional interpretative guidance, SEC staff and FASB staff are seeking to assist preparers and auditors by providing immediate clarifications. The clarifications SEC staff and FASB staff are jointly providing today, based on the fair value measurement guidance in FASB Statement No. 157, Fair Value Measurements (Statement 157), are intended to help preparers, auditors, and investors address fair value measurement questions that have been cited as most urgent in the current environment.
Can management’s internal assumptions (e.g., expected cash flows) be used to measure fair value when relevant market evidence does not exist?
Yes. When an active market for a security does not exist, the use of management estimates that incorporate current market participant expectations of future cash flows, and include appropriate risk premiums, is acceptable.
Statement 157 discusses a range of information and valuation techniques that a reasonable preparer might use to estimate fair value when relevant market data may be unavailable, which may be the case during this period of market uncertainty. This can, in appropriate circumstances, include expected cash flows from an asset.
Further, in some cases using unobservable inputs (level 3) might be more appropriate than using observable inputs (level 2); for example, when significant adjustments are required to available observable inputs it may be appropriate to utilize an estimate based primarily on unobservable inputs. The determination of fair value often requires significant judgment. In some cases, multiple inputs from different sources may collectively provide the best evidence of fair value. In these cases expected cash flows would be considered alongside other relevant information.
The weighting of the inputs in the fair value estimate will depend on the extent to which they provide information about the value of an asset or liability and are relevant in developing a reasonable estimate.
How should the use of “market” quotes (e.g., broker quotes or information from a pricing service) be considered when assessing the mix of information available to measure fair value?
Broker quotes may be an input when measuring fair value, but are not necessarily determinative if an active market does not exist for the security. In a liquid market, a broker quote should reflect market information from actual transactions. However, when markets are less active, brokers may rely more on models with inputs based on the information available only to the broker. In weighing a broker quote as an input to fair value, an entity should place less reliance on quotes that do not reflect the result of market transactions. Further, the nature of the quote (e.g. whether the quote is an indicative price or a binding offer) should be considered when weighing the available evidence.
Are transactions that are determined to be disorderly representative of fair value? When is a distressed (disorderly) sale indicative of fair value?
The results of disorderly transactions are not determinative when measuring fair value. The concept of a fair value measurement assumes an orderly transaction between market participants. An orderly transaction is one that involves market participants that are willing to transact and allows for adequate exposure to the market. Distressed or forced liquidation sales are not orderly transactions, and thus the fact that a transaction is distressed or forced should be considered when weighing the available evidence. Determining whether a particular transaction is forced or disorderly requires judgment.
Can transactions in an inactive market affect fair value measurements?
Yes. A quoted market price in an active market for the identical asset is most representative of fair value and thus is required to be used (generally without adjustment). Transactions in inactive markets may be inputs when measuring fair value, but would likely not be determinative. If they are orderly, transactions should be considered in management’s estimate of fair value. However, if prices in an inactive market do not reflect current prices for the same or similar assets, adjustments may be necessary to arrive at fair value.
A significant increase in the spread between the amount sellers are “asking” and the price that buyers are “bidding,” or the presence of a relatively small number of “bidding” parties, are indicators that should be considered in determining whether a market is inactive. The determination of whether a market is active or not requires judgment.
What factors should be considered in determining whether an investment is other-than-temporarily impaired?
In general, the greater the decline in value, the greater the period of time until anticipated recovery, and the longer the period of time that a decline has existed, the greater the level of evidence necessary to reach a conclusion that an other-than-temporary decline has not occurred.
Determining whether impairment is other-than-temporary is a matter that often requires the exercise of reasonable judgment based upon the specific facts and circumstances of each investment. This includes an assessment of the nature of the underlying investment (for example, whether the security is debt, equity or a hybrid) which may have an impact on a holder’s ability to assess the probability of recovery.
Existing U.S. GAAP does not provide “bright lines” or “safe harbors” in making a judgment about other-than-temporary impairments. However, “rules of thumb” that consider the nature of the underlying investment can be useful tools for management and auditors in identifying securities that warrant a higher level of evaluation.
To assist in making this judgment, SAB Topic 5M¹ provides a number of factors that should be considered. These factors are not all inclusive of the potential factors that may be considered individually, or in combination with other factors, when considering whether an other-than-temporary impairment exists. Factors to consider include the following:
‘B7 ‘B7The length of the time and the extent to which the market value has been less than cost;
‘B7 The financial condition and near-term prospects of the issuer, including any specific events, which may influence the operations of the issuer such as changes in technology that impair the earnings potential of the investment or the discontinuation of a segment of the business that may affect the future earnings potential; or
‘B7 The intent and ability of the holder to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.
All available information should be considered in estimating the anticipated recovery period.
*****
Finally, because fair value measurements and the assessment of impairment may require significant judgments, clear and transparent disclosures are critical to providing investors with an understanding of the judgments made by management.
In addition to the disclosures required under existing U.S. GAAP, including Statement 157, the SEC’s Division of Corporation Finance recently issued letters in March and September that are available on the SEC’s Web site to provide real-time guidance for issuers to consider in enhancing the transparency of fair value measurements to investors.
Additionally, the SEC staff and the FASB staff will continue to consult with capital market participants on issues encountered in the application of fair value measurements.
to add to the above….my general point is that no one is 100% correct. Often, the worst thing that an analyst can do is be SPOT ON…..think Abby Joseph Cohen…. They likely lose perspective and they begin to believe any fascinating tale because it came out of their mouth….I am not indicting anyone. However, it is this philosophy that drives me to continually question the value of any source. I love the Roubinator, and he may be entirely correct, but he has taken on rock-star status and it detracts from his ability to be flexible.
When you drop your guard, you %uck up…..
“send it in a letter”
We have been through this before on this board. Suffice it to say, since the anthrax attacks, congress does not want your letters going to the Hill. E-mail and fax is what they want. If one feels compelled to do something in writing, it should go to a district office, NOT to the DC office.
One more note: It’s not as if we are re-igniting the problem here…the sausage maker is gone forever (or at least 7-10 years). Nothing starts again. Does that provide any level of comfort to people?
Clot and BC,
i thought many countries in Europe had a housing bubble to rival California and Florida. I think New zealand and Australia are in one too. I read about 6 months ago that the median house was around 9 times the median income in Sydney, historically it’s around 6 times income.
Here’s a link from 2004 (WARNING PDF) showing Sydney’s median house is 8.7 times median income. It was 4.1 times back in 1981.
#24
missing link
http://www.fbe.unsw.edu.au/cityfutures/publications/presentations/ncoss.pdf
i love it, i don’t feel a sense of victory at all, because these f***holes in DC are just going to ram it through with minor changes tomorrow. I mean, with the outrage and majority opinion running against this bailout the way it is… it’s obvious the American people don’t want this thing done with a few minor additions. they want a completely different framework for a deal. but these lazy jerks won’t go back to the drawing board. Reggie Middleton and Nouriel Roubini both said the same thing… these idiots are just too lazy to get it right. so they took the garbage that Paulson threw out there and they’re acting like it’s the only foundation from which to build.
this is disgusting. any sense of victory that you guys felt yesterday and today will quickly swirl down the toilet tomorrow when this thing gets rammed through.
Oppenheimer star analyst Meredith Whitney predicts at least a 25% fall in home prices from current levels:
The credit crisis that began last summer has intensified so much that any U.S. government bailout plan has “little hope” of improving core fundamentals over the near and medium term, said analyst Meredith Whitney. …
“Since the onset of the credit crisis, over $2 trillion less liquidity has flown through the U.S. domestic capital markets than during … a year prior,” Whitney said.
“With that much less available capital, both consumers and corporations have and will spend less,” she added. …
“Credit market disruption has had underappreciated consequences on the economy … what started last summer has accelerated and intensified so much so that we believe any government bailout plan has little hope of improving core fundamentals over the near and medium term,” Whitney said. …
Oppenheimer’s Whitney expects the country’s GDP to take a hit from likely moves by state governments to cut costs.
Given that over 12 percent of the U.S. GDP is driven by state and local government spending, and with many key states’ 2009 budgets being under-funded, governments will be forced to cut costs and this will weigh significantly on GDP, she said.
Whitney said home prices were not close to bottoming and expects prices to ultimately be at least 25 percent lower from current levels. She also sees further declines in homeownership rate.
The unemployment rate, which is up over 40 percent year-on-year in key states, is “headed materially higher,” Whitney said.
http://www.rgemonitor.com/globalmacro-monitor/253807/a_warranted_buy-in
I am still searching for plausible solutions. I, like Skep and Chicago, do not believe you need to throw the baby out with the bath water.
The idiots who created CDOs, SIVs, MBS, CDS (that is supposed to be credit default swaps) should be hiding in some cave …..
It is pretty obvious now..that was a really dumb idea.
Because it isn’t just bad R/E loans
-I have a friend with 36 rentals. Another with 14 – she just bid on the house next door to me.
Mostly, they bought them the last time California RE took a down turn. There have been booms and busts before. We have houses selling here – 40 -50% off 2006 highs. The market is starting to clear itself. Folks are snatching them up – cheap.
What is different now? These CDOs.
Who concocted this modern-day version of a derivatives scheme?
Cindy, if you go back to 2001/2002 and search archives, you can find the powerpoint presentations that were given to HUD, Fannie, et. al., during the selling process.
Well Pat – What a piece of crap that must be.
CF, being a minority voice is challenging, yet rewarding, no?
Yes, the first time I stumbled upon them, when trying to define the origin of the lingo, I was stunned at the simplistic message of risk dispersion.
On a lighter note – a student of mine had on a t-shirt today that read:
Save the Earth
(insert recycle symbol here)
Recycle my sister
Stu (27) “She also sees further declines in homeownership rates.”
Well glory be – What a novel idea.
When I looked up the census bureau info the other day – I do believe Spain was on top at 80% home ownership. Well,well -aren’t they experiencing some trouble as well?
Stu is talking about buying physical and I am saying if we do that, we need a gun. What has this crazy world come to?
(Pat) 32 – “Simplistic measure of risk dispersion.” Risk dispersion…Did anyone speak up for fiduciary duty to the customer?
You know, our system worked just fine until this crap entered the picture. The powers that be better outlaw this stuff or whatever it is you do…
Believe it or not – I have to pack it in – up a 3:00 these days.
Just know – Skep-tic and Chicago – I’m with you.
If I need to tear out the lantana and plant lettuce – I will. But there is some needless carnage going on..
I will continue my search for answers…
I’ve been trying to locate the doc(s) for you, Cindy.
Apparently I’m crazy or someone has pulled them down.
Fortunately, JB archives everything, and I once linked to the presentation here. I will keep trying.
Oh Pat – There is no way I want to read them. I’m not paid millions of dollars to do that like the banking folks were. But, I think they should be required reading for every sitting congressman.
See you in the AM
#11 Alia
Your concept of a bed & brekfast combined with sustainable farming is alive and well throughout the US and the world- it is called agritourism. There are many websites about it.
Just scanned the last thread. I gotta go get me some sugar-coated shit pie.
It’s best with the light glaze over the crust.
Just a bedtime thought. Life could be worse. You could be sitting in this chair:
http://washingtondc.craigslist.org/nva/fuo/861829066.html
Anybody lose a serial killer in NOVA?
The Federal Reserve has set up it’s own SHADOW BANK. While we sit here thinking we won some kind of victory, cheer about what we have accomplished, and imagine it has really meant something, the Fed had already done an ENRON end run. The bailout bill was nothing but cover for an already done deal. Read it and weap. We are ENRON NATION. This country is cooked:
The Board’s H.4.1 statistical release, “Factors Affecting Reserve Balances of Depository Institutions and
Condition Statement of Federal Reserve Banks” has been modified in a number of ways.
On September 17, the
Treasury Department announced the Supplementary Financing Program. Under this program, the Treasury
issues marketable debt and deposits the proceeds in an account at the Federal Reserve that is segregated
from the Treasury General Account. This account is shown as “U.S. Treasury, supplementary financing
account” in table 1, table 4, and table 5.
On September 19, the Federal Reserve announced a new lending facility to extend non-recourse loans to U.S.
depository institutions and bank holding companies to finance their purchases of high-quality asset-backed
commercial paper from money market mutual funds. Extensions of this credit are reported in table 1 as
“Asset-backed commercial paper money market mutual fund liquidity facility” and reflected in “Other
loans” in table 3, table 4, and table 5.
On September 21, the Board of Governors authorized the Federal Reserve Bank of New York to extend credit
to the U.S. broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against all
types of collateral that may be pledged at the Federal Reserve’s primary credit facility for depository
institutions or at the existing Primary Dealer Credit Facility. In addition, the Board authorized the
Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of
Goldman Sachs, Morgan Stanley, and Merrill Lynch against the types of collateral that would be eligible
to be pledged at the Primary Dealer Credit Facility. Credit extended under these authorizations will be
included, along with credit extended under the Primary Dealer Credit Facility, in Table 1 under the entry
“Primary dealer and other broker-dealer credit.”
http://www.federalreserve.gov/releases/h41/Current/
I now understand that the $700 billion was already promised to the world’s banks. It was not going to banks to buy their worthless paper. It was going to backstop bank crashes. The worthless MBS paper was only about giving the bailout operation some legitimacy.
Think of it as a multi-level marketing (MLM) scheme. An MLM is a ponzi scheme, but it is legal because you are selling a product. If there was no procuct, it would be a pure ponzi scheme and illegal. Product or no procuct, the suckers in the downline end up losing their money to those higher up. That’s what the bailout bill is all about. Taxpayer money is being given to the banks, and the taxpayer is receiving worthless paper for that money. Without the worthless paper, it would never pass. With the paper, something is being bought, even though it is of little value. Ponzi scheme or not, once the rabbis in Congress have said their prayers over it, it is kosher (legal). The taxpayers are the suckers in the downline.
Trust me on this, if the Fed hadn’t created that $620 billion and traded it for foreign currency, there would have been so many margin calls, that the derivative trade would have exploded. The market dropping only 777 points, was a blessing. Without the foreign central bank rescue, our market would have crashed and taken a lot of other world markets with it. If the USD was not the world’s reserve currency, we wouldn’t have been Argentina, we would have been Mexico during the Peso Crisis.
No bailouts!
email & fax your Senators adn tell them NO, or your voting them out!
SAS
Cindy (28)-
Lou Rainieri
GM All…
20-shore
“Are transactions that are determined to be disorderly representative of fair value? When is a distressed (disorderly) sale indicative of fair value?”
I have been asking this question for the last 18 months… & I’m still waiting for an answer.
I’m thinking 40%. when the distressed sales break the 40% mark that could constitute fair value. just saying, It has to be higher than 33.33% but below 50%(in my world). I suggest that when a towns distressed sales reach 40%, they’re considered indicative of fair value.
thoughts?
http://www.nakedcapitalism.com/2008/10/marc-faber-disses-bailout-plan-likes.html
Still looking for answers…
Banks should stop paying dividends to their shareholders..
“I went back and looked at just 20 of the top banks, including GS, MS and Mer and saw that they are paying out $40B per year in dividends. The lending rule of thumb is $1 of capital can service $10 of lending. That is $400B in lending capacity that gets freed up.”
http://www.financialsense.com/fsu/editorials/2008/0605.html
In my quest to find out more about derivatives…
From Financial Sense University
Fighting the Fear
Preventing a Meltdown of OTC Derivatives
6/5/08
10 pages – Some solutions offered at page 8….
Asset values need to be allowed to deflate..
1. Report net positions on OTC derivatives separately from overall positions.
2. Establish new future contracts that are closer in structure to what banks trade in the OTC market.
(Add transparency to the market)
3. Banks need to take self-regulation more seriously and give more power to internal credit and risk controls.
4. Tighten regulations in mortgage lending.
Clot (47)
Lou Raineri – I’ll have to look that up…Is he in a cave somewhere??
SAS Grim,
The video Memorias_del_Saqueo
114minutes
http://video.google.com/videoplay?docid=-6758899307929087686&hl=en
From MarketWatch:
Mortgage applications fell 23% last week: MBA
Mortgage applications filed last week dropped a seasonally adjusted 23.0% compared with the previous week, the Mortgage Bankers Association said Wednesday.
Applications for the ended Sept. 26 were also lower than in the same week during 2007, down 28.4%, the Washington-based MBA said. The group’s survey covers about one half of all U.S. retail residential mortgage applications.
Applications to purchase a home were down a seasonally adjusted 10.9%, compared with the week before. Filings to refinance existing mortgages fell 34.7% on a week-to-week basis.
“Stu is talking about buying physical and I am saying if we do that, we need a gun. What has this crazy world come to?”
Gator,
No need for that. Inasmuch as the physical gold is a hedge against a complete collapse of the system, all one needs is a secure place to store it. Hire a contractor to cut an 18 inch by 18 inch hole in your basement floor, and remove the plug the cuts create. After he/she leaves, one digs it out. Then one places one’s stash in the hole covers with dirt, then gravel, and refills with concrete. One covers the spot with a carpet and a chair, and there ya go. Is it possible for someone to find it and get it? I suppose so, but, it would take one hack of an effort. If one wants, one can do two or three holes. If one ever needed the store, one would need to cut or break apart concrete but in the event it was needed, one wouldn’t care.
“Banks should stop paying dividends to their shareholders..”
Cindy,
Exactly, that’s a start. Let them raise capital, like Goldman and WB, and cut/eliminate the dividends. Place the burden on shareholders/debt holders before the taxpayers. Why is it the US taxpayers responsibility to “attempt” to bail out the world’s banks. Yes, the world’s banks, it’s right there in black and white.
When folks here are buying physical metals, what kind of dealer fees are you paying?
All you people talking about buying gold is starting to make me nervous. Time to bail?
Whoo Hoo, as hit $2.99 on my drive into work. The disaster is over. Time to start driving the SUV again.
/sarcasm
as = Gas
I may need to start pricing my services in metal weight.
Cindy (51)-
Here’s a little start on Lou Ranieri, from the wiki on the housing bubble:
“Lou Ranieri of Salomon Brothers, inventor of the mortgage-backed securities market in the 1970s, warned of the future impact of mortgage defaults: “This is the leading edge of the storm. … If you think this is bad, imagine what it’s going to be like in the middle of the crisis.” In his opinion, more than $100 billion of home loans are likely to default when the problems in the subprime industry appear in the prime mortgage markets.”
How long before the Euro tanks relative to the dollar?
From Business Week:
“The past quarter-century has seen a revolution in finance. It’s felt every time a homeowner refinances a mortgage or signs up for a credit card. No one person can claim to have lit the fuse for this revolution — but Lewis S. Ranieri was holding the match. Joining Salomon Brothers’ new mortgage-trading desk in the late 1970s, the college dropout became the father of “securitization,” a word he coined for converting home loans into bonds that could be sold anywhere in the world. What Ranieri calls “the alchemy” lifted financial constraints on the American dream, created a template for cutting costs on everything from credit cards to Third World debt — and launched a multibillion-dollar industry.
Salomon and Bank of America Corp. (BAC ) developed the first private mortgage-backed securities (MBS) — bonds that pooled thousands of mortgages and passed homeowners’ payments through to investors — in 1977. Not a moment too soon: Skyrocketing interest rates were turning the business of savings and loans — funding long-term mortgages with short-term deposits — making it a financial death trap for banks just as the housing demands of maturing baby boomers began to surge.
Ranieri’s job was to sell those bonds — at a time when only 15 states recognized MBS as legal investments. With a trader’s nerve and a salesman’s persuasiveness, he did much more, creating the market to trade MBS and winning Washington lobbying battles to remove legal and tax barriers.
A less likely financial engineer would be hard to imagine. Ranieri, a Brooklyn native, set out to be an Italian chef until asthma ruled out work in smoky kitchens. A part-time job in Salomon’s mail room set him on the path to trading. A large, volatile man, Ranieri built the firm’s mortgage desk in his own image: “fat guys,” as author Michael Lewis described them in Liar’s Poker, promoted from the back office, who indulged in feeding frenzies and practical jokes while selling strange new bonds to doubtful investors.
But Ranieri also recognized that “mortgages are math.” He hired PhDs who developed the “collateralized mortgage obligation,” which turns pools of 30-year mortgages into collections of 2-, 5-, and 10-year bonds that could appeal to a wide range of investors. The homeowner in Albuquerque could now tap funds from New York, Chicago, or Tokyo, a change that Ranieri figures cuts mortgage rates by two percentage points. Soon everything from credit-card balances to auto loans was being repackaged.”
Cindy (51)-
“Liar’s Poker” is an excellent book. Ranieri is a big part of it.
she (not palin) should excuse herself from this debate:
http://www.wnd.com/index.php?fa=PAGE.view&pageId=76645
I’ve got a few ounces of physical I’d like to unload.
From MarketWatch:
Layoff announcements rise 33% in September
Large U.S. companies announced plans to eliminate 95,094 jobs in September, 33% more than a year earlier, according to a nonscientific tally released Wednesday by outplacement firm Challenger Gray & Christmas.
For the third quarter, layoff announcements rose 48% from a year earlier to 287,142, the highest three-month total in nearly three years.
Although the collapse of several big financial firms dominated the news in September, the financial sector actually announced relatively few cuts during the month: 8,244.
“It may take several weeks or months for the fallout from September’s Wall Street turmoil to hit the employment numbers,” said John Challenger, CEO of the firm that bears his name.
Workers’ fate, he said, “remains in limbo,” while some firms are taken over by other banks, some are liquidated and others are taken over by the government.
So far this year, the financial-services industry has announced 111,201 layoffs.
Shore (62)-
Any Euro bust will only be them pulling slightly ahead of us in the death race to the bottom. I’m sure we’ll overtake them again before reaching the finish line.
terms?
Clot [68],
It will be a race to the bottom in currencies. The dollar is benefiting by the fear trade, rush to t-bills, notes. In addition to this you have hedgies liquidating and parking their cash there, along with cb intervention. Just a thought, it may be a good short, sell t-bills/notes, soon. At this time, no short sale ban.
(63) Clot –
OMG! “Ranieri’s job was to sell those bonds-at a time when only 15 states recognized MBS as legal investments.”
There should have been a law….
Here is where my concerns over fiduciary duty comes in…
“..while sending strange new bonds to doubtful investors…”
Well this is all a bunch of CRAP!
(Thanks Grim for allowing me to type in crap.)
Can’t the world banks get together and admit we were all “duped.” Sure, it’s our fault. We allowed some snake oil salesman to pull the wool over our eyes and brought the world in with us.
Let’s admit it. Grovel. Do whatever. But there is no reason to bring the worlds’ economies to a stand still all because of a boondoggle.
BC (70)-
“Just a thought, it may be a good short, sell t-bills/notes, soon. At this time, no short sale ban.”
An excellent hedging idea. However, I’ve got to believe we’re weeks away from a total ban on short-selling of any type. I figure the next big tap out- wherever it comes from- will seal the deal on it.
Randon thoughts from last night.
1. Never watch Gov Corzine on CNBC with food in your mouth, it sticks to the screen,
2. By proposing suspension of mark-to-market rules, the SEC is invoking a very arcane accounting rule that allows banks to employ what is known in the accounting world by its technical name – lying.
3. If a loss of confidence among financial institutions is the problem being addressed by the bailout, and the bailout is supposed to shock the credit system into a change of perception, how much money will it take to shock and awe it?
Cindy (71)-
You have to keep in mind that 25 years ago, Ranieri had to package the securities with much higher quality stuff than what you’ve seen recently.
Ranieri is on the record as having noted that Fannie’s guidelines back then precluded a lot of skulduggery. Remember that on a micro level, borrowers had to have excellent credit and a significant DP to get a mortgage in 1985.
DL (73)-
I sometimes wonder why I even watch what Congress, Klink, et al are doing.
In the end, we’re going to be done in faster by Commissar Jon and the gang of thieves in Trenton.
Bottom line is a lot of people don’t care about RE prices. A 1/3 of people in US have no mortgage and a 1/3 of people bought before 2000. But those peoples 401Ks, Dividends and bond payments are being disrupted, particular retired people who banked on Citi Dividends etc. The small business are being choke of all credit and any company that needs credit. The plan is trying to fix that, now fix Jose the LA gardner who bought a no money down house in San Diego in the go go days.
I’d like to see a question about this popped on VPILF or Brillohead tonight:
Oct. 1 (Bloomberg) — ‘The European Central Bank offered to drain 200 billion euros ($283 billion) from money markets after being swamped with record deposits from banks.
The ECB said it will make the offer at 3 p.m. today at a fixed rate of 4.25 percent. Banks yesterday deposited a record 102.8 billion euros with the ECB overnight and borrowed 15.9 billion euros at the emergency marginal rate, the most since 2002. The ECB’s deposit rate is 3.25 percent and the marginal lending rate is 5.25 percent.
“We’re seeing a kind of market failure,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt. “The ECB can do nothing but treat the symptoms. The situation won’t normalize as long as we see negative surprises in the financial sector.”
Commercial banks are refusing to lend to each other after the U.S. housing slump caused the collapse of New York-based Lehman Brothers Holdings Inc. and forced governments to bail out banks in the U.S. and Europe. Central banks including the Federal Reserve and the ECB are injecting billions into global money markets in an effort to keep them functioning.
The Frankfurt-based ECB today raised the amount of dollars it is offering banks overnight to $50 billion from yesterday’s $30 billion. It allotted the full $50 billion after banks bid for a total of $70.9 billion.’
Congress should just adjourn today and go do Jello shots. Something’s about to blow overseas that will undo in 10 minutes whatever “fix” these guys are trying to piece together.
“2. By proposing suspension of mark-to-market rules, the SEC is invoking a very arcane accounting rule that allows banks to employ what is known in the accounting world by its technical name – lying.”
DL,
It’s called an accounting holiday. Marked to an internal assumption, or back to 2 years ago, marked to fantasy. Strictly following the playbook written by Japan, back in the early 90’s. Oh by the way, we blasted Japan, at that time for allowing dead banks to limp to their demise. Our recommendation, at that time, was to allow insolvent banks to fail, clean up the mess sooner rather than later.
Yes, we are all turning Japanese. However, we knew this last year.
Now CBs are pumping billions into banks, and it all goes right back the the CBs.
Forget the bailout. This sucker is about to blow sky high.
German news reporting the virus has hit German banks with government resuce packages being developed for those in trouble. Once I have details on names I’ll provide. But it reinforces my perception that regardless of what Congress or the Fed does, this will play out in deflation as massive de-leveraging takes place. Any efforts by governments to stop it or slow it down will only make it worse and prolong the pain. Given that it will happen regardless, of more concern to me is how will State and local gov’t react. Will this force Corzine to make budget cuts? Will the State re-look mandates. Can school boards be reigned in?
Euro is collapsing vs USD, JPY.
BC (78)-
I’ve grown to enjoy sushi for breakfast.
What? Little vomits in the back of my throat don’t qualify as sushi?
These countries better get together with some sort of coordinated effort – understanding…Put all the cards out on the table in this Liar’s Poker game.
“Put all the cards out on the table in this Liar’s Poker game.”
Cindy,
The house of cards is collapsing. Gotta get to work, later.
bill shot down in the house? no problem, we’ll attach it to some other bill already in the senate.
i bet if it gets shot down in the house it becomes one of bush’s “signing statements” on some other bill they hand him.
Karen: Guess what? Mostly of the people against this bailout are ignorant or have bet big short the markets.
Chifi,
When you refer to me by my first name instead of my posting name, it rings in my ears like “Listen Sweatheart” I have listened, listened, read, read, heard, heard, reasearched and asked opinions of trusted intelligent friends. I still say no.
KL
cf
I don’t think housing is the key, it is a part, but not the key. This will always come back to credit.
There are a few points that everyone is in agreement. One big one is that credit is the lubrication of our Economy and if they banks would start lending, there would be some short term relief.
The problem with that is no matter what the government do, the banks have one focus. They are in cash preservation mode. Even if the government buys all the MBS, the banks are just going to take that cash and sit on it.
Libor and TED going up is the markets way of dealing with this crisis. It now costs companies more to service their debt and rollover if they can. Just like the towns and cities saw their debt servicing costs shoot up when the muni and ARS markets disappeared. If you need credit you are going to pay.
Now some companies are going to be unable to survive with the higher costs. If they are already extended, they may top out and go under. That is the risk they take. We can agree that a Ninja loan going into forclosure is an accpetable conclusion. If you took on a loan that was too big for you on an ARM, you can’t complain that you can’t make the payments when the rates go up. Just like the homeowner, the business cannot complain that they can’t afford the debt servicing just because they can’t afford the nut.
Banking is going back to basics. The first law of banking used to be’ “the easiest way to get a loan is to prove you don’t need it”. If I have 800+ credit and 20% down, I will get a mortgage, even in todays market. I may pay more, but I will get it. If I am a company, and I’m not over-leveraged, I will get the roll-over but it will cost.
A company that is over leveraged will have to find some way to scale back or they will hit the wall.
My last though is that the only way out of this is to let Libor, TED, FFR all go to double digits. It will hurt, bankruptcies will soar, but the high interest rates should restart savings. The government will need to backstop the slide with social programs to stop the chaos. While I understand this will be hard for some R’s to swallow, that is the price that needs to be paid. The choice is do you want to pay it now or next year. Next years price will be higher.
While some members of this board should look into cabins in Montana or compounds in Texas, there have been some relevant points leaking out among their doom and gloom. Just as you have had some good points while sometimes coming across as holding on too tight. I understand that you and others are feeling a lot of pressure. This place is a good place to let off steam, but we can’t forget the fact, it is just a blog.
WestLB (Duesseldorf) will be merged with Deka-Bank in Frankfurt. It received a gov’t sponsored 5B euro short term loan until it could find a buyer.
#76 John: Don;t be so sure about people not caring about real estate prices.
Everyone I know who has a house, has at least one HELOC/Hoem Equity loan.
Cindy (84)-
Spare yourself the agita. Pull up a chair and get a frosty drink.
All the players’ hands are on the table. Everbody’s holding rags.
The fireworks are about to begin.
Germany’s Finance Ministry has assumed control of Hypo Real Estate for 35Bn euros.
kl (87)-
I’ve bet big short the markets, but I think I’m far from ignorant.
How can one be long thieves, liars and racketeers?
People on my side of the fence have been marginalized in terms of market participation. How much longer before the special agents are at our doors?
Just wait. Next, it will be an all-out ban on short selling. Then, it will be mandatory buy-and-hold regulations.
Mandatory hold-to-maturity on debt would certainly make for an interesting scenario.
Pat Says:
September 30th, 2008 at 11:11 pm
CF, being a minority voice is challenging, yet rewarding, no?
Keepin’ It Real…..I hope I’m not channelling pret-a-manger though….
DL (92)-
Always loved that name, Hypo RE.
Makes you think of a RE shop run by junkies. Guess it sorta was, in a way.
Grim,
Maybe after the next huge downturn, the next thread should be titled “It’s Only A Flesh Wound.”
chi (95)-
No, you’re nowhere near pret territory. I do, however, believe you are trying to apply common sense and rational thought to an area in which both left town a long time ago.
And now, that town won’t let them back in. The only solution is to let the madmen burn it all down.
A vision of the Gold Coast?
In this housing market, downtown San Jose condos can”t sell; developers turn them into rentals
By Joshua Molina
Mercury News
Article Launched: 09/30/2008 07:13:00 PM PDT
For years, San Jose’s vision for downtown was based on the dream of young professionals living in high-rise condos and shopping and doing business in a hip, fast-paced 24-hour city.
But the collapse of the housing market is forcing developers and the city to put their dreams on hold. Upscale condo sales have slowed to a crawl, and developers in desperation are turning their for-sale homes in the downtown into rentals, in hopes of seeing some return on their multimillion-dollar investments.
For city officials who spent millions in public subsidies trying to create a downtown full of committed homeowners, the trend stings. But they say there is no choice.
“The problem we have now is that a lot of for-sale units are coming online at the same time, and they are obviously struggling,” said San Jose Housing Director Leslye Krutko. “Right now our concern is to try to stabilize the market.”
The latest project to convert to rentals is Barry Swenson’s Skyline, an 11-story, high-rise tower near Highway 87. The San Jose City Council approved the conversion Tuesday after Swenson closed his sales office and ceased marketing the 242-unit project because he couldn’t attract buyers.
The project follows two others: The downtown Globe development in June received approval from the city council to rent out 76 units it once considered selling.
snip
http://www.mercurynews.com/news/ci_10602916?nclick_check=1
12557WRR4 CIT GROUP MTN 6.000 05/15/22 37.969(W) 16.500
Bond of the day!! CIT bond trading under 17
“Mandatory hold-to-maturity on debt would certainly make for an interesting scenario.”
Back to marked to fantasy/internal assumptions, whether it’s on the bank’s balance sheet or the taxpayer’s. Either way, it’s coming.
I’d guess- knowing Bergabe- we’re pretty close to a massive rate cut. Euro still plunging.
Anybody want to offload some ducats?
I don’t know anyone with a home equity loan, credit card balance or a car loan. I do know a lot of people who bought ABS, MBS, Bank stocks etc. who got hammered from the deadbeats who spend beyond their means.
Clot,
As long as its a cash deal, sure. Short-term funding is tight, I’ll take some profits to raise cash. My basis is low enough to make it worth my while.
Clot,
The problem for most Americans, with respect to Wall Street, is that we are told to buy long, dollar cost average, make our weekly or monthly investments and hang in there for 50 years; however, the people who are actually making out are the active traders, for whom movement of any kind produces profits. Market goes down and Joe Dollar Cost Average takes a hit, whereas Tony Goldman and Jimmy Sachs make money.
The average American’sd experience with the market is really fairly short — only since the early 80s. In that time, how many large busts have there been? If Joe and Jane main Street come to the conclusion that they have been taken for a ride, the push will be on to allow folks to purchase real property, not REITs etc, as part of IRAs and self-funded pension plans. Who amongst us would not like the option of buying an investment property and letting the profit from rent accumulate tax free? Likewise from buying and selling raw land or other RE. It would be a nice alternative to having to put one’s eggs in a lower-Manhattan basket.
chifi,
“Guess what? Mostly of the people against this bailout are ignorant or have bet big short the markets.”
outlandish remarks and ad hominems.
So unlike you
what corzine co-hosting today?
wine tours in south jersey
Clot -(98)
“I do believe, however, you are trying to apply common sense and rational thought to an area in which both left town long ago.”
Clot (91) – You advised me to pull up a chair and relax.
I am solution oriented… a bit tenacious. Common sense and rational thought are about all I have to offer. So you are basically saying I no longer matter. That my attempts to think “outside the box” or seek opinions of those who do is a waste of time. Well that just won’t do.
I know you are trying to spare me what you see as heartache or a wasteful use of my energy. But the game isn’t over until the fat lady sings..
Interesting review from the WSJ of the credit markets from the last quarter.
Credit Markets Go From Bad to Worse to Ugly
http://online.wsj.com/article/SB122279970936091233.html
“Credit Markets Go From Bad to Worse to Ugly”
Is ‘Fugly’ next?
Is ‘Fugly’ next?
Remember that
“Beauty is only skin deep, but ugly goes to the bone”
#104 John: I guess it’s different in Jersey.
Saw three more bank-owned homes on my short trip down Liberty Avenue in Union this morning. Right on the realtor sign it says bank owned. It seems every 3rd POS cape in Union is up for sale and this is the slow season.
Crazy!
The best temp gig in history
Posted Sep 30 2008, 12:47 PM by Kim Peterson Rating: Filed under: Kim Peterson, JPMorgan, Washington Mutual
Congress wants to crack down on CEO mega-salaries for banks participating in the bailout. And while the politicians argue how best to do that, Alan Fishman of Washington Mutual is headed for the doors with $19 million in his pocket.
If that wasn’t outrageous enough, consider this: Fishman started the job three weeks ago. I never saw the employment ad Fishman answered, but it must have read something like this:
WANTED: Top executive for train-wreck bank about to be seized by federal regulators. Must be able to look busy while FDIC sells business from under you. Previous experience with angry shareholders sitting on worthless stock a plus. Perks: $7.5 million hiring bonus and $11.6 million cash severance.
Fishman got the best temp gig in history. He gets to keep the bonus and severance pay, though he must stay on the job while JPMorgan Chase completes its purchase of WaMu’s banking assets.
To be fair, Fishman wasn’t the one that took WaMu down a path lined with toxic mortgages and other bad assets. No, that role belonged to former CEO Kerry Killinger, who received $54 million over five years before leaving earlier this month. He’s eligible for around $20 million in severance pay.
Other execs are also cashing in big. President Stephen Rotella gets $12.7 million in cash if he’s terminated or quits with “good reason,” according to the Portland Business Journal. And CFO Thomas Casey would get a cash severance of $6.3 million.
And WaMu shareholders got huge payments of…oh, wait. The stock is worthless. Shareholders got wiped out.
You can see why folks are pitchfork, rifle, lit-torch angry…it’s stuff like this… Billions of MY/OUR hard earned dollars on the line so this shit head and his heirs can “fart thru silk?”
For FAILING.
F’ them all…
I almost vomited when I heard Bloomberg [who I do have respect for] arguing to not have executive pay caps — because “we want the brightest and the best and we shouldn’t be pennywise and poundfoolish.”
HOW ABOUT HONEST???
Or is honesty so pedestrian??***
***Def: dull: ordinary, unimaginative, or uninspired.
Sorry… I REALLY REALLY woke up on the wrong side of my CAVE this morning.
sl
RANT OFF
I stayed up late reading the 110 page TARP bill. Very confusing. Congresspeople must be “smart” to come up with this one.
Since I will soon be one of the bagholders of
MBS, don’t I have a right to demand a bill that I can actually understand?
During a White House briefing yesterday, reporters were asked how many were familiar with the term LIBOR. Five out of 15 raised their hands. I laughed at first, then, quickly I realized how pathetic it was.
Fareed Zakaria on VPILF
http://www.legistorm.com/
For those inclined to see what kind of debts/investments your MOC has and why they might be voting one way or another. One thing that is amazing, is the number of folks who have large LOCs.
(77) “Congress should just adjourn today and go do Jello shots. Something’s about to blow overseas that will undo in 10 minutes whatever “fix” these guys are trying to piece together.”
I’m dense. What’s about to blow overseas?
http://www.legistorm.com/browse_by_representative.html
This is the easier page to use. Enjoy.
http://www.legistorm.com/showPdf/ls_disclosure-member-2008-annual-report-410.pdf
For anyone in Northern Monmouth county.
Orion (119)-
European banks.
Chi – I am beyond disappointed by your patent non-answer. I asked a good faith question. A response warning me against idolatry and building up the straw man (yet again) of schadenfreude and revenge is unworthy.
There is nothing illegitimate in asking how the problem of excess liquidity will be solved by more liquidity (rate cuts), more liquidity (discount windows) and even more liquidity (just throwing cash at it). And if more liquidity isn’t the solution, why on earth suggest throwing good money after bad?
I listen. I listen to Bernanke describe a good part of his mandate as “price stability” and I see “inflation”. So the only solution (apart from raising interest rates, increasing savings, building capital in an organic fashion) is to inflate out of this mess – destroying my savings, the value of my currency (and there WILL be job cuts). And at the end of it we still don’t have a functioning economy. Bummer.
Bigger bummer that proponents don’t have the b*lls to be honest about it but are willing to take a “you don’t really understand” patronizing tone.
Well. I didn’t have a problem telling real estate “experts” 3/4 years ago what I thought about their new paradigm – house prices only go up, they aren’t making any more land, yada yada yada.
Stuff the bailout. I know it’s coming. But no need to bend over willingly.
Here is an interesting chart I found. I guessed that since everyone is complaining about LIBOR being high and leading to tight credit conditions, it would be really low in the middle to late 90’s – a period of economic prosperity.
You would be surprised to know that LIBOR was higher during the 90’s than it is now, hovering around 6% the entire time. It went really low during the housing bubble – hitting its lowest in 2004. This is probably due to the FFR being absurdly low during this time and easy money available to everybody.
I think everybody gorged on credit during that time and basically have stretched themselves too thin. Nobody was pricing in risk during lending. Now it is payback time. If companies could survive and indeed thrive during the 90’s with the high LIBOR, then why cant they now?
All evidence points to the fact that they are indeed pricing in risk right now and the risk is too high.
Please take a look at this chart and let me know what you guys think. I am sure that there are holes in this analysis of mine, please point them out.
http://www.07i.us/RealEstateCapital/index_files/LIBORChart.htm
When the folks in congress get up and talk about how much pain ther eis on Main Street as people see their 401k figures drop, what they mean is THEY, the MOC, is seeing his or her own numbers drop, whilst the debt load is steady.
Pallone, for instance has between $30k and $100k in visa balance and personal loans.
Cindy (109)-
“So you are basically saying I no longer matter.”
Not exactly. What I’m saying is, you don’t matter RIGHT NOW. The crooks and psychopaths are momentarily at the controls.
You- and folks like you- will matter greatly, after the crooks and psychopaths have blown everything up, and somebody has to pick up the pieces and put them back together.
Lisoosh (123) –
“Bigger bummer that proponents don’t have the b*lls to be honest about it but are willing to take a “you don’t really understand” patronizing tone.”
Truer words have never been spoken. This plan is basically throw a huge amount of cash at the system and hope that it sticks. At least that’s what i understand from all the soundbites.
Paulson basically wants to establish a price for these bags of cr@p, and make it the market price so that all other companies can mark their assets up to that price.
John (104)-
Please invite me over to your parallel universe sometime.
Me? Well, today just started with my only listing client who was solvent and had a shred of equity in his home calling to tell me we need to move into short sale mode. He’s tapped out.
Every client I have now is tapped out.
Victorian:
“If companies could survive and indeed thrive during the 90’s with the high LIBOR, then why cant they now?”
If home mortgage seeker could surive and thrive 20 years ago with 20% down, good credit, and higher interest rate, then why can’t they now?
vic (127)-
Whoever posted earlier about this being a Ponzi scheme and the downline participants getting the shaft couldn’t have been more correct.
This whole charade has now devolved into nothing more than Ponzi and accounting fraud.
IMF Chief urging the EU to come up with a U.S. Congress style rescue plan for when the full monty hits. Germans saying they want to deal with it on a bank-by-bank basis. Sound familiar?
ORION, 116
During a White House briefing yesterday, reporters were asked how many were familiar with the term LIBOR. Five out of 15 raised their hands. I laughed at first, then, quickly I realized how pathetic it was.
—-if you quizzed those five, how many could even tell you what it is — not just be <ifamiliar with it??
I’m going back to bed…. wake me up when this insanity is over.
sl
Anyone here represernted by Yea voter Rush Holt? He has both a mortgage on his house of between 500k and 1mm and a home equity loan in the same range and another mortgage on his weekend place in NY for half that.
I guess with $750,000 to over a million in debt, and declining investment values, it is worth spending $700B to prop up the markets.
Cutting fed funds rates and dropping t-bill rates along with driving the Wachovias and Washington Mutuals of the world that were offering 5% FDIC insured CDs out of business will result in 1% money markets and 2% CDs which may have the affect of driving people hungry for yield to take more risk and buy MBS, corporate and muni bonds. However, when we did this in 2003 we drove everyone to real estate and created a monster bubble.
What I would like to see if to make Bank Fannie/Freddie Pref share losses eligible for a tax loss, raise the FDIC level to 250K and delay the mark to market accounting rules another year along with a 50bp rate cut along with the AMT patch.
The shareholders of Wamu, Wachovia, Lehman and AIG lost their money and it ain’t coming back, people who bought POS capes and Toll Brothers McMansions during the summer of 03 to the summer of 08 are underwater and will be until years of inflation put them above water they will just have to sit there till they are above water, are dead or bankrupt. Case closed. They are still better off them the Lehman and Wamu shareholders who have no chance of ever getting their money back.
The bail out combined with the above will be a nice 1,000 jump in the Dow. And us Moms, Dads, Widows and Orphans may be able to use the pop to reallocate our 401ks and investments while it is up in case this new life perserver is made out of lead. The second shoe is about to fall. At least give us a lifeline through the bailout for people to get out of bad investments at a small loss rather than let more people go under.
John,
“I don’t know anyone with a home equity loan, credit card balance or a car loan. I do know a lot of people who bought ABS, MBS, Bank stocks etc. who got hammered from the deadbeats who spend beyond their means.”
Maybe they shoulnd’t have put their money into assets based on mortgages given to “deadbeats who spend beyond their means.”
When are the lawsuits against the rating agencies going to be daily news?
I put some of the investors in MBS on the same level as people buying homes during the boom. Investors were clearly at a dissadvantage. They couldn’t go see what loans was given to what person and other details. Just the asset class and the tranch from what I understand.
Rating agencies were asleep at the wheel or in the banking industry’s pocket.
What the lenders gave borrowers a post dated check in return for pissing in a bucket. Then the banks pumped C02 and bottled it in nice green foil capped bottles. But they said… shhhh… this is really good stuff but don’t open it right away.
This is also why I put more onus on the banking industry for this mess. When you have three peopel sitting side by side and the guy on the left has his wallet lifted and the guy on the right has is wallet lifted…. and the left and right can’t reach each other. You smack the guy in the middle upside the head..
Shore (133)-
Rush Holt is a vicious political hack, hiding behind the persona of a mild-mannered geek professor.
His two-faced opportunism makes Hillary C look like a piker.
Holt is also a not-so-closeted soci@list.
Of course they are, people with money are not selling homes. If I want to trade up and buy a two million dollar home and currently have a home worth one million that I can well afford and I think prices will fall 20% in the next two years I will just wait and sell my current home in two years for 800k and buy my new home for 1.6 million. However, if I was on the verge of default I would quickly sell my one million dollar home before it is worth 800K.
I for one ain’t losing any sleep over my $85,000 mortgage. If rates do fall down to 1% I guess I will just write a check and pay it off.
Clotpoll Says:
October 1st, 2008 at 10:04 am
John (104)-
Please invite me over to your parallel universe sometime.
Me? Well, today just started with my only listing client who was solvent and had a shred of equity in his home calling to tell me we need to move into short sale mode. He’s tapped out.
Every client I have now is tapped out.
#133 – I have Rush Holt.
Must say I am disappointed.
His office bent over backwards to help my family out in a crisis when my Senators offices and local pols ground to a disinterested halt so I had some loyalty there too.
Shore Guy (133):
Holt is my man. I already called his office and said that if he votes for this lousy bailout that I would not vote for him in the next election.
Nice to know he is leveraged out the wazoo…
I’m stealing this from a poster at calculatedrisk, I just thought it was funny;
Maybe the TARP can buy whole shopping malls. It would be fun to shop at J.C. Paulson, dine at T.G.I. Paulson’s, take the kids to Chuck E. Paulson’s…
Tom this has nothing to do with the banks. The banks biggest mistakes were buying mortgage from Mortgage Brokers who help clients lie on their applications and for letting wall street encourage them to do this through securitization which they thought was a risk managment tool but was only a process to spread the risk to every insititution like a virus.
I totally disagree with you. Banks are like Philip Morris. If I buy Philip Morris stock or bonds it is not my problem smoking causes cancer. The smokers fully know what they are getting into to. If I bought an MBS I am not the cause of the problem the subprime sludge who got turned down by a reptuable bank who went to a crooked mortgage broker are the two people who spread the virus like Patient X did with AIDs.
43.5?
CNNMoney.com
Manufacturing index plummets in September
Wednesday October 1, 10:10 am ET
By Lara Moscrip, CNNMoney.com contributing writer
A key measure of the nation’s manufacturing activity fell sharply in September, a purchasing manager’s group said Wednesday, nearing a benchmark that indicates a recession in the sector.
The Institute for Supply Management’s (ISM) manufacturing index fell to 43.5 in September, down from the August reading of 49.9. Economists were expecting a reading of 49.5, according to a consensus estimate compiled by Briefing.com.
The tipping point for the index is 50, with a reading below that indicating contraction in factory activity. A reading below 41 marks a recession. The index has hovered around the 50 mark for the past 12 months, with an average of 49.6.
lisoosh (139)-
US Reps are all about individual constituent response. Helping people in the district resolve intractible problems is their #1 marketing campaign.
My congressman in Memphis was Harold Ford Sr. (the dad of the Harold Ford you see on TV all the time). He was renowned for going to bat for his white constituents even harder than the black folks.
Of course, off the record, he used to ridicule white folks who saw this and bought into the idea that he actually cared.
I think Ford milked this kind of stuff for almost 10 terms…until it came out that he bounced a gazillion checks on the House bank.
BTW how many here put their money where there mouth is no the bail out package. My PAC donations are pro bailout, are your PAC donations anti bailout?
From the New York Times Manhattan facing some serious real estate problems; Bids on HSBC headquarters come in at %30 under asking, 40 story towers empty, and Stuy town can’t rent 1 bedrooms for $3800.
The market will be up big tommorrow. Due to Rusha Homa holidays there is a big lack of bargain hunters in the markets today but they will be back tommorrow and senate will vote yes tonight.
John (145)-
I don’t do PACs. Not even NAR’s.
In Amsterdam today,
I don’t know if Irish Govt bailout of banks was reported earlier or not. That is front page news here. Ireland is putting amount twice its GDP into Banks.
OT: enjoying nice view of Canals from my room. Only thing I hate about Europe, every thing is so expensive here.
John,
“If I bought an MBS I am not the cause of the problem “
That’s the point I was trying to make.
“the subprime sludge who got turned down by a reptuable bank who went to a crooked mortgage broker are the two people who spread the virus like Patient X did with AIDs.”
The biggest originators of subprime mortgages were “reputable” banks like Citi.
The banks hired appraisers they had underwriters, they weren’t innocent victims.
Early this decade they were gaming the system and artificially inflating home prices. So it’s not like they didn’tknow what was going on.
The banks apparently didn’t know how bad their loans where but they had no problem putting a quality stamp on them to sell to investors. I can see how people would think they were blameless.
Clot –
Do you have room for Kneale and Kudlow on your hit list? They literally shouted Gary Shilling down yesterday.
Tom (150)-
So correct. Wachovia had their whole circle of fraud- appraisers, originators, underwriters, etc- all under one roof.
The ones who were still left on Monday were shown the door. No severance, no package, no bennies…just put it in a box and get out.
CIndy,
What clott is saying is that the financial crisis is so wide spread an so deep that no one actor can address it. Regardless of whether that actor is a state a country of a school teacher.
Q.Why?
A. There are about 700 – 800 trillion is global derivatives in the global market right now. The global GDP is approx 65 trillion. The root cause of the financial crisis is that the global financial system is currently holding 800 trillion in derivatives that were valued at that price based on homes appreciating in value at 10%/yr. The creation of these derivatives assumed that such growth rates would continue for the life of the derivatives (years, decades).
As long as everyone agreed that homes would indeed continue to increase in price at such a rate then banks would loan money to each other based on the value of the derivatives.
As this behavior continued the banks found that the more money they invested in these instruments, the more they would make. And even prudent banks were forced into this as they could not compete with the banks that were doing it, if they stayed out of the derivatives.
The end result is that just like the consumer, the banks spent all of their money and then borrowed more money so that they could keep spending (investing) in these derivatives.
Now banks are required to hold a minimum amount of “cash” in its vaults, a rrequired reserve rate. US law states that the required reserve rate for commercial banks is 3%.
So if a bank has $100 in checking and savings accounts, then they are required to keep $3 in the bank and can loan out or invest the other $97. It gets more complicated. If the bank does not have the 3% as required by law the bank can borrow it from the FED in the form of a loan at a certain interest rate.
As of Spring 2008 100% of cash reserves in ALL of the US banks is borrowed money. All of the banks in the US combined have $0 of their own money in their vaults. Every dollar they have, every dollar that they hand you when you withdraw money is money that has been borrowed from the federal reserve and must be paid back with interest.
There is yet another component. Just like you and me, banks must make minimum payments of the loans that they have taken to buy derivatives. And like credit cars, the payments that the banks have to make can change based on certain criteria such as credit rating ( i.e moodies rating a derivative AAA).
Now how does all of this come together? The 800 trillion in derivatives can be seem as collateral for a set of loans ( a huge number of loans between a huge number of banks around the world). Remeber that the 800 trillion value was based on 10% annual home price increase. Well homes are now decreasing in value so those derivatives are no longer worth 800 trillion. Well now the banks have a problem. they loaned out 800 trillion (not exactly but this is a rough overview)on the basis of 800 trillion worth of derivatives as collateral. The collateral is now worth pennies on the dollar based upon the few transactions that have actually taken place.
This means that if i dont pay the bank the 800 trillion i owe them now along with an interst rate, they will take the derivatives and sell them in order to recoup their money. But the derivatives are only worth 100 trillion.
the only way i was able to pay the bank back was to use that 800 trillion to buy homes ( as an example and then sell them for more then i bought them in a very short period of time ( i.e flip them). Well i can no longer flip houses as there are not enough people who have enough money or make enough more for me to sell them homes ( the problem of 1st time buyers being priced out of the market).
Now i can no longer pay back the bank of the 800 trillion so the bank may take all of my derivatives and sell them, similar to a foreclosure. But the banks has a problem too. It will not get 800 trillion for the derivatives because the same problem that caused me to not be able to pay the bank causes the bank to not be able to cell the derivatives. The bank has now lost 700 trillion. But the bank owes that 700 trillion to its account holders ( people with checking and savings accounts) and to the FED (or their national equivalent).
We have all lost money. The only way to replace the 700 trillion is to print it. but that would cause massive inflation and all of the money you got back would actually be worth less then what you originally gave the bank due to inflation.
lets recap: I put $100 in the bank. The bank bought $100 worth of derivatives ( i.e loaned someone the money). But by law has to have 3% reserves so the bank borrows $3 from the FED. Housing prices stop increasing at 10% and start to drop so the person who borrowed the money has lost it and cannot pay it back. The bank can only sell the collateral for $20 but owes me $100 and the FED $3. Now the borrower has lost $100, the bank has lost $80 but still owes me and the FED a total of $103
I walk to a bank and deposit $100
Start of cycle (assets and Liabilities):
Bank: $+100
Borrower: $0
Step 2, Bank loans money to borrow for a $10 fee and borrows from the FED to cover its reserve requirement:
Bank:(-)$103 negative $103 due to its reserve being borrowed money and owing me my account balance, but it would be booked as a positive value as the borrower owes the bank $110. The bank accounts for this as a net positive $7
Borrower:$100
Step 3, homes lose value:
Bank:(-)$3 + collateral _+ Fee
Borrower:$0 (he cant pay his bill, the principle $100 of the $10 fee, so the bank takes the derivatives as collateral)
Step 4 bank tries to sell collateral and only gets 20% of the original value:
Bank:(-)$103 + $20 = (-)$83
Borrower: $0
Step 5 who does the bank pay back?
FED: +$2
Me: +$81
bank: $-20
the bank now owes me money and if it cant pay me then i lose $19, and the FED loses $1 even though i did not take part in the loan cycle directly
Vic (151)-
There’s room for them, as long as bullets don’t have to be wasted. Those two are only fit to be set upon by a pack of dogs.
Three hairs on your head are relatively few. Three hairs in your soup are relatively a lot.
“Euro-zone unemployment rises to 7.5 percent in August as economic gloom deepens”
http://biz.yahoo.com/ap/081001/eu_eu_unemployment.html
CBNC talking heads – to save bullets line them up single file.
(156)-
Post of the day.
A stroll down memory lane…
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1
BTW, Mike Morgan suggested the following selling strategy yesterday.
Every week you do not get a call from a buyer, drop your list price by 2%.
Once you start getting calls, drop the price by 1% until you get an offer.
Shore
From your attempted transaction yesterday. I can give the guy some leeway as the prices swings yesterday were a bit crazy. I think it traded between $903-$855. The day before it was $925-$860. The 10% was probably to allow him time to get a contract in to hedge the sale.
Small note. My SIL is a NY teacher. She said a lot of colleagues were cashing in their old jewelery to have some play money. I wonder if they realize how much they were fleeced.
CNBC Headline: “Auto Stocks Sink as Credit Crunch Hits Car Buyers”
Should read: Auto Stocks Sonk as Homeowners Can No Longer Get Home Equity Loans Based on Plummeting House Values
Probably didn’t fit the screen shot.
Nicholas,
Some people have been using that article to blame the GSE’s for creating this whole mess and the CRE.
The GSE’s at least had standards. It seems like the private issuers of MBS rant the most afoul.
Here’s an example I cited for the blog entry about the bailout probably not helping homeowners.
That was from an pool of mortgages Goldman assembled from “Fremont Investment & Loan, Long Beach Mortgage Co., and assorted other players”. Spring 2006, I think Paulson was still at the helm then?
Anyway from the article you linked to…
All this trying to blame the GSE’s is election nonesense.
Regarding my post @ 153:
first sorry for all the wordiness….
Second:
The US government is terrified because for all intents and purposes There is not a single dollar of money in US banks that is not borrowed money. if people start to demand their money back, there is nothing to give everyone. This is shown by the the total reserves being approx NEGATIVE 300 Billion. Every single dollar of reserves is a loan from the FED because the banks have spent or loaned out the money. A significant portion of those loans have gone bad. Consider the consequences.
More bad news:
No country is isolated. 600+ trillion worth of bad investment must be removed from the global market. That id 9-10 times larger then the global GDP (approx 65 trillion)
for orion: Why are we suddenly worried about europe?
Spain is bankrupt! It is only staying afloat because of the amount of money that the European central bank (ECB) has been giving it to cover its “minimum” debt payments. The ECB can no longer loan the money to spain or to other countries. Its out (oversimplified).
If/When the money stops flowing into spanish banks the spanish financial system could collapse, banks close people cant get their money, cats and dogs living together…..
if spain goes down it will cause a global cascade because there is no real separation between any one countries banking system and the global banking system. The are tightly connected. Spain will bring down the entire system because everyone has lost money , huge amoounts, and no one has the money to backstop spain. All of the money you hear about being pumped in so far is just IOU’s. There are no real assets to backup the IOU’s
Nicholas,
Key paragraph in that 1999 Fannie article. As usual, the warnings was right there!
“In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”
Tom, when it comes to Paulson lets just say him and Corzine ruined GS and now they will ruin NJ and the US financial system.
Clott etal
Last night on a conference call Mike Morgan tore into Hudson City. In his opinion they are not safer then most other banks. they apparently have a fair amount of commercial RE garbage and some other high end residential garbage on the books.
I think Rock Master Scott was the first to call the crisis.
The Roof the Roof the Roof is on Fire, We don’t need no water let the MotherF**ker burn, burn MotherF**ker burn
I kinda picture the people in DC who voted no getting drunk and singing that song with big ole gold chains on after they defeated the bill.
Hudson City is a big fat joke. The Hudson Brothers founded the bank after their singing career died.
kettle1 Says:
October 1st, 2008 at 11:05 am
Clott etal
Last night on a conference call Mike Morgan tore into Hudson City. In his opinion they are not safer then most other banks. they apparently have a fair amount of commercial RE garbage and some other high end residential garbage on the books.
Kettle1 (166): “Last night on a conference call Mike Morgan tore into Hudson City…”
This is what killed a bank my investment club was investing in. EWBC-East West Bank Corp. Residential was and is fine due to mostly Asian clientele who save and don’t overleverage. Commercial construction loans murdered their balance sheets though.
#146 and Stuy town can’t rent 1 bedrooms for $3800.
Gee, I wonder why, only $3800 for a one bedroom
Anyone represented by Ferguson? He is something like 99% in the market — Merrill, Blackrock, etc.
#115 still_looking
Don’t give up just yet. That 19mill might just get him an Orange jumpsuit.
I was out for dinner last night and the A-hole (long story) at the table next to me was discussing this. His two main points were that Fishman and co were pumping WAMU saying all is well and there is no issues while they were aware that 16Bil was going out the back door in withdrawals. The second point were that the three letter agencies are taking a long look at JPM to see if they had been short selling WAMU over the past few weeks (before the ban) to push them down to the point were they would have to be bailed or bankrupted.
If Paulson Plan II does not pass tonight, we will see DJIA sub 10K. My powder is dry and ready to be loaded.
rhymingrealtor Says:
October 1st, 2008 at 8:43 am
Karen: Guess what? Mostly of the people against this bailout are ignorant or have bet big short the markets. Chifi,
When you refer to me by my first name instead of my posting name, it rings in my ears like “Listen Sweatheart” I have listened, listened, read, read, heard, heard, reasearched and asked opinions of trusted intelligent friends. I still say no. KL
KL: Well, that interpretation is not what I intended, and I apologize if the reference spoke to you in text the wrong way. I used the referral in my own mind as a way to provide a personal identity to the post, as opposed to railing at some digital person out there. Maybe what is offending people is the language I am using that surrounds the urgency I feel about how this issue is misunderstood.
“From your attempted transaction yesterday. I can give the guy some leeway as the prices swings yesterday were a bit crazy.”
PGC,
What irritated me was not the total cost. If the spot proce had been $900, I would have bought it. What ticked me off was that I called in advance, we discussed what he charges, and then the terms moved when I was there with money on the counter, quite literally.
If he was not honest with me at first, I wanted nothing to do with him.
You know what’s really scary..
This morning I checked out my site stats.
Number one visitor to my site today is from a three letter agency network.
l: Maybe you can stop beating me on the head and actually read my posts, because I read yours? IT WAS A NON-ANSWER. Please let me know the exact Schiff comments that you want me to rebut and at least contrast to my stated opinions?
lisoosh Says:
October 1st, 2008 at 9:55 am
Chi – I am beyond disappointed by your patent non-answer. I asked a good faith question. A response warning me against idolatry and building up the straw man (yet again) of schadenfreude and revenge is unworthy.
chicagofinance Says:
September 30th, 2008 at 9:48 pm
lisoosh Says:
September 30th, 2008 at 2:27 pm
do me a favor – tell me exactly WHY Schiff, who DOES deal with these issues on a daily basis, who was spot on in predictions YEARS ago is 180 degrees wrong.
L: Can you point me to what I should respond? Also, I think I made it clear that nothing is binary. Just because I espouse a viewpoint does not make everyone else 100% wrong for differing. Please note the following posts.
all this will be irrelevant come 2010 when its the north america union, a combo nation of USA Mexico and Canada…and when that happens the dollar is worthless…it will be the Amero people…we need to wake up to the truth about this country….we need to get the one man who tells the truth in office..RON PAUL…this country is going to hell in a hand basket unless we all realize whats going on…who watches the watchmen??
Stu Says:
October 1st, 2008 at 11:11 am
If Paulson Plan II does not pass tonight, we will see DJIA sub 10K. My powder is dry and ready to be loaded.
What if you are caught flat footed?
Thursday’s “Fair and Balanced” debate moderator has a pro-O book scheduled for release on Innauguration Day:
http://www.amazon.com/Breakthrough-Politics-Race-Age-Obama/dp/038552501X/
The Breakthrough: Politics and Race in the Age of [The Messiah]
by Gwen Ifill (Author)
This title will be released on January 20, 2009.
Product Description
In THE BREAKTHROUGH, veteran journalist Gwen Ifill surveys the American political landscape, shedding new light on the impact of [The Messiah’s] stunning presidential campaign and introducing the emerging young African American politicians forging a bold new path to political power.
Ifill argues that the Black political structure formed during the Civil Rights movement is giving way to a generation of men and women who are the direct beneficiaries of the struggles of the 1960s. She offers incisive, detailed profiles of such prominent leaders as Newark Mayor Cory Booker, Massachusetts Governor Deval Patrick, and U.S. Congressman Artur Davis of Alabama, and also covers up-and-coming figures from across the nation. Drawing on interviews with power brokers like [The Messiah], former Secretary of State Colin Powell, Vernon Jordan, the Reverend Jesse Jackson, and many others, as well as her own razor-sharp observations and analysis of such issues as generational conflict and the “black enough” conundrum, Ifill shows why this is a pivotal moment in American history.
THE BREAKTHROUGH is a remarkable look at contemporary politics and an essential foundation for understanding the future of American democracy.
“What if you are caught flat footed?”
Chi,
That question has already been answered.
#88 “…it is just a blog.” I see it as a neighborhood.
Thursday’s “Fair and Balanced” debate moderator Gwen Ifill has a book scheduled for release on Innauguration Day:
http://shorl.com/gepevenymyji
Note the book’s Product Description on Amazon…
ChiFi:
“What if you are caught flat footed?”
In my numb nut opinion…my logic works as follows.
If bill passes, market climbs on euphoria and I short near peak of hysteria as I see no way to stop the loss in the value of housing. My biggest risk is that the economy is not as bad as it seems and I give back some of the gains I’ve made since playing it right since last August.
If bill fails, market drop to <10K and I inch my way back into some long positions, which quite frankly, I’m looking forward to doing. If market keeps dropping to 8K (which I predict it will), I will have a very nice long-term buy and hold position for the eventual recovery.
You and I both know that typically market recoveries are swift and V shaped. I expect the same thing to occur this time around. It is impossible to time the market and I have been quite lucky on my way out as I already won by getting out of my longs over 30% ago. I only wish I was more of an aggressive shorter when I did.
Now with some luck, I can get back in near a bottom. If I miss and the market keeps dropping, we are all screwed anyway.
Keep in mind, I am always well diversified and decently risk adverse. Also keep in mind that what I say today might change tomorrow ;)
Due to increased media and market action, topic of finance sips into some of our conversation.
What I find is most people are hypocritical in some sense. They will say good we should not bail out wall street companies, but in the same tone will say now is really good time to buy a house. Most people liked it when they could upgrade easily or take HELOC and spend it, but hate the thought that real estate prices can go down as well. The mentality is we bought it at right time, and we are entitled to higher prices.
anarchy1:
Ron Paul is a complete nut and the only thing that he has going for him is his economic view. I fear it is a ploy though, to gain office to push his Jesus pro-life agenda.
The ADP National Employment Report
September, 2008
Nonfarm private employment decreased 8,000 from August to September 2008 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change in employment from July to August was revised down from a decrease of 33,000 to a decrease of 37,000.
September’s ADP National Employment Report continues to offer evidence of a weak labor market. Note that this month, the ADP Report does not reflect two special factors that might have further depressed employment in September. These are the strike of some 27,000 machinists against Boeing, and job losses related to hurricanes that struck the Gulf Coast.
http://www.adpemploymentreport.com/pdf/FINAL_Report_September_08.pdf
Finally, NYTimes comes out with reality in NYC.
Failed Deals Replace Boom in New York Real Estate
Stu, you need to youtube him. he’s not a nut he’s the one person who can honestly bring this country around from the facism that it is today…dont be fooled this is all a ploy…and by the way i dont know if anyone knows this here but the Fed Reserve is a privately owned company…this “bailout” approval is just a formality for what hidden agenda they have with their cartel of banks..get ready to have all your civil liberties taken away
Stu and just so you know what kind of “nut case” ron paul is he raised 2 million in a single day for his campaign during the debates he was the winner via public votes on FOX of all places…yet he was silenced…why? B/c a lot of people dont want the truth to be told
Weeks like this, I really miss Booooyyyyyaaaaa! I hope he’s out there somewhere enjoying this, having a fiesta.
What took the NYT so long to figure out NYC RE was dropping?? I guess when a huge amount of advertising dollars are at stake, you’re not exactly impartial. The last bubble round NYC RE was the last to fall and the last to come back, looks like it’s doing the same this time.
Can anyone help with MLS# 2545788? It is now under contract and has been removed. This was a Brigadoon POS so I’m curious for any info.
still_looking @ 10:09 am
“During a White House briefing yesterday, reporters were asked how many were familiar with the term LIBOR. Five out of 15 raised their hands.”
And these are the same know-nothing monkeys who jump on the gaffes of others.
[182] querty
I used to watch Gwen in DC a lot (not much else on) and she is so far to the left, she makes Stu look like Ron Paul. (sorry stu, couldn’t resist)
So I expect that the Mc-P camp will jump all over every raised eyebrow or voice inflection. MSM is so clearly in the tank for ob, I am surprised the surrogates aren’t hitting this harder.
Anarchy1:
I don’t support his pro-life stance and his prayer in schools stance. There are a few more that I disagree with as well, but these are the big two. I do like his economic policy though.
WWJD? He would short the market.
Sassy, that is because NYer’s are crazy and push to the extreme we weren’t seeing nice increases. Properties were doubling in value in 3-4 years so it is basically set to fall off the map as big money disappears.
Anyone here have any experience with the stock GLD?
Funny thing is Nom, I’m not as lefty as most of you would believe. I truly believe in smaller government and the complete and utter reform of most welfare programs. I truly think the best thing for this country would be something in the middle. It’s just too bad that there is no one in the middle. Ron Paul comes close, but I’m not giving up on my pro-choice stance for anything.
Shore Guy (GLD):
It all depends on your take on what you are using gold for.
If you see it as an investment only, then GLD would probably work just fine.
If you see it as a hedge against the end of the US empire, then you want the physical stuff.
If you see it as a hedge against inflation, but expect the country to get through this crisis, then GLD or the miners might be the best play.
The best performance will come from owning the physical in all three cases, but dealing with $100,000 or so worth of gold in a major pain in the ass.
[183] Stu,
If history is any guide, I expect, if there is a bailout passed, a short spike upward. I will use that opportunity to rebalance 401(k)s because I expect a long, slow decline to level, and will start to put new money into more aggressive positions for the next run up.
I am holding loss positions because some may come back and I want to use the losses to offset gains in 2010 when I convert IRAs to Roths (have to see if the rule permits some gain recognition or treat it all as income, though it may not make a difference in my situation). Depending on what my finances look like, I may transfer more 401(k) $$$ to IRAs and convert them as well (until now, I did not do that because of the no-cherry-picking rule for the conversion).
PGC,
Thge other thing about the aborted, sorry Ron Paul, attempt to put some physical under the celler floor yesterday is that while I have heard of dealers selling for $20-25 above spot, this clown wanted $85 above spot. As a self-employed guy, I don’t begrudge anyone making a buck, but….
[198] stu
I wasn’t suggesting you were a commie, just socially and economically left on a number of issues. But not annoyingly so—after all, you are married to my running mate.
Would that make you Second Dude???
Stu,
I have two objects in mind. One is to hold some physical coin (maybe 100-200 oz of Ag, and, ideally in 1/10 oz coins, maybe 16 oz of Au. This is to provide some meaningful medium of exchange in case of chaos. It is not a huge sum, but it is What Mrs. Shore would go for right now. Frankly, I wouldn’t mind 1,000 or more oz of silver coin, and a couple kilos of gold.
The other thing is to hedge against a steep decline in the dollar, which does not bring about chaos. In that case, if the dollar tanked vs. Au, or other currencies, we would use it as a way to continue traveling, and even to convert back to dollars to scoop up assets.
Anyone here have any experience with the stock GLD?
Shore,
It’s the gold ETF. 1/10 the value of the underlying.
well, stocks are going to bounce here on expectation of a bailout.. might as well play it.
Shore,
$1 move in GLD is worth $100 in the futures.
Nom Deplume Says:
October 1st, 2008 at 12:04 pm
Depending on what my finances look like, I may transfer more 401(k) $$$ to IRAs and convert them as well (until now, I did not do that because of the no-cherry-picking rule for the conversion).
Nom: You CAN cherry-pick. Roll IRAs into 401(k)s, convert, and then distribute out of the 401(k)’s again. I don’t know the timing, but I’m sure it will be publicized starting in about 15 months.
BC Bob Says:
October 1st, 2008 at 12:14 pm
Anyone here have any experience with the stock GLD? Shore,
It’s the gold ETF. 1/10 the value of the underlying.
Shore:
expense ratios
GLD 0.40%
DGL 0.79%
IAU 0.40%
UBZ 0.30%
I am not going to vouch for any of these, and I have no idea about return profiles, return targets, and historical or future tracking error.
PASS THE RECOVERY PLAN
CALL YOUR MEMBERS OF CONGRESS NOW
In the aftermath of Monday’s failed vote, it has become very clear that telephone calls from local constituents matter greatly. Many Members of Congress could recite off the top of their heads how many constituent calls they received in favor or in opposition to the rescue package. We need to have our voices heard. We urgently need you, and your employees, to make calls today to the Senate and House of Representatives and ask them to pass The Emergency Economic Stabilization Act of 2008 to bring stability to our economy and increase credit availability for the benefit of every American citizen. The Senate votes tonight.
To find your representatives’ phone numbers, please visit http://www.sifma.org and click on “Pass the Recovery Plan Now”. From there, it is as easy as entering your zip code — the name of your representatives and their phone numbers will appear. If you experience any problems, you may also go to http://www.congress.org and look in the upper right hand side of the screen.
Please let your Representative know the following:
Vote YES on the recovery plan. We believe this legislation is critically important and should be enacted into law at the earliest possible time in order restore market stability and increase credit availability for businesses and consumers across the country.
Every day, working Americans rely on healthy credit markets for home loans, auto loans, student loans and other types of financing. These credit markets help support small businesses as well, which need cash flow to meet their payrolls. The economy has slowed and unemployment is on the rise, help save jobs.
Supporting this legislation will restore confidence, credit availability and market stability in a timely manner. There are no viable alternatives and doing nothing is not a reasonable option. This is as important – if not more, to Main Street – than to Wall Street.
Vote in FAVOR of the recovery plan.
Thank you for your immediate action contacting Congress.
-The SIFMA advocacy team
PASS THE RECOVERY PLAN
CALL YOUR MEMBERS OF CONGRESS NOW
my reference guide had a typo
UBZ = UBG
Stop Blaming the Shorts! SEC’s Ban Hurts Market and Didn’t Help WaMu, Wachovia
http://finance.yahoo.com/tech-ticker/article/83437/Stop-Blaming-the-Shorts!-SEC%27s-Ban-Hurts-Market-and-Didn%27t-Help-WaMu-Wachovia?tickers=GE,IBM,CVS,^DJI,^GSPC,XLF
“The SEC is under pressure to extend its “temporary” ban on short selling, which is set to expire tomorrow. By design, the ban has reduced the level of short interest — but has it really helped?”
Chifi/BC, thanks.
I have been looking at a couple oif metal options, including the physical for the purposes stated above. One thing that had a certain appeal was the Au 401k, but the custodial fees seem a bit outsized. The EFTs would seem to offer the same benefit as the 401k Au, inasmuch as the 401k metal is held away from me anyway in a vault. Am I missing something here?
“Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”
Andrew Jackson, the seventh president of the United States, to a delegation of bankers in 1832
http://www.gata.org/node/6699
follow the money!
#201 Shore
There is also an old sales trick. If you get your product physically into the hands of the buyer, it is harder for them to walk away from the sale. Sounds like this guy had his little red book out and was putting the squeeze on in a sellers market. As you demonstrated, it is only a sellers market if there is a buyer on the other end who accepts your price.
For me I have a hard time sitting on the sidelines. My plan is that, as my liquid assets (cash) is less than my mortgage, until I go +ve I don’t have to do anything to protect myself.
Great quote, kettle1.
What happened to men with honor?
PGC,
We are in the position where we have no mortgage debt, multiple of income (which itself is in the upper couple percent (certainly going to get hammered by BO if he is pres.)), 6 figures in cash, and we live modestly for our income (well, apart from pretty lavish vacations but, heck, why are we working in the first place?).
Our interest in metal, is simply as another form of insurance.
“What happened to men with honor?”
He is running for president at the head of my party.
multiple of income (which itself is in the upper couple percent (certainly going to get hammered by BO if he is pres.)) in equities, it should have said.
snip
“The cost to insure $10 million of GE Capital’s debt over a five-year period with credit-default swaps rose by $100,000 to $626,000 per year on Wednesday, up from $562,000 late on Tuesday, according to data from CMA DataVision.’
snip
http://www.cnbc.com/id/26973819
“He is running for president at the head of my party.”
I thought you were a republican?
:)
Not even Bruce could get me to go to an Oh-Ba-ma event.
http://www.app.com/article/20081001/NEWS/81001020&referrer=FRONTPAGECAROUSEL
“PHILADELPHIA — Bruce Springsteen will perform an acoustic set at a rally in the city to help the campaign of Democratic presidential candidate BO register voters and recruit volunteers.
The program begins at 3:30 p.m. Saturday on the Benjamin Franklin Parkway. Preferred tickets will be distributed to those who sign up to volunteer. Pennsylvania’s voter registration deadline is Monday.
Springsteen has endorsed O for president. He and fellow performer Billy Joel are teaming up in their first joint concert to benefit O next month in New York City after the final presidential debate between O and Republican nominee John M. O plans to attend that Oct. 16 concert.”
Ouch, Tom. That hurt my feelings. I never thought you were a leftie too. They are everywhere around here, lol.
Vic (159)-
I work that idea with every seller of mine.
vodka (166)-
I am disappointed to hear about Hudson City but not surprised.
This thing is off the tracks now. Not to mix metaphors, but the virus has spread everywhere.
#217 Shore
You have so physically more to lose than me, but at the bottom, you will have more available to you to survive. So we are about even on the “not losing sleep over this”.
Not to get partisan. I would not call “R’s” campaign honorable.
Shore (171)-
Ferguson is my sack of shit of a congressman.
Tom (176)-
NSA? SEC?
Shore (223)-
Be secure in the knowledge that I’m a complete anarchist.
The dems should have courted Gore. I liked him even before the inconvenient truth.
Need I remind y’all that Stu is a registered Republican?
Now regarding our household stance on the GOP in general, if the GOP could actually talk conservative common sense and fiscal disclipline like that espoused on this board along with mainstream social values, even I might be able to pull the lever some day. But until then…
BTW – There is no sign of a real estate bottom on my easy walk to train street in Montclair. Neighbor across the street is assessed at $657k and has just dropped their ask price for the second time in 118 days. Current ask is $499k. $657k is supposed to represent fair market value as of 10/1/2006.
“I used to watch Gwen in DC a lot (not much else on) and she is so far to the left, she makes Stu look like Ron Paul. (sorry stu, couldn’t resist)”
I am sure it was merely an oversight on Bi’s part for not posting this:
October 1, 2008 – O Over 50 Percent In Florida, Ohio, Pennsylvania Quinnipiac University Swing State Poll Finds; Debate, Palin’s Fade, Economy Put Democrat On Top —
http://www.quinnipiac.edu/x2882.xml?ReleaseID=1218
#23
“One more note: It’s not as if we are re-igniting the problem here…the sausage maker is gone forever (or at least 7-10 years). Nothing starts again. Does that provide any level of comfort to people?”
agree that this is a non-issue
#37
“Just know – Skep-tic and Chicago – I’m with you.”
muchas gracias
Here’s the Real Clear Politics Electoral College Map updated today. Remove the *s to get link to work. Today’s score card is O/B 348 McC/P 190. Still quite volatile, but tranding O and his biggest lead to date.
http://www.realclearpolitics.com/epolls/maps/o*bama_vs_mcc*ain/?map=10
CNBC is reporting the SEC is extending the short sale ban. No surprise there.
Current ask is $499k. $657k is supposed to represent fair market value as of 10/1/2006.
Wow! A 24% haircut from peak prices and still no sale. I may wade into a multi-family at the right price. No need to rush into a single family right now.
I bid on a multifamily 10/05 and was outbid. Of course I lowballed and the guy got it for 10% more than my bid. In retrospect, I’m probably in a better position because of it.
Hard Place – I personally feel this place was a bit overassessed in 2006. I would have pegged it closer to $600k at best. The owner is elderly and did not understand the appeal process. But we’re still looking at a 15-20% drop from peak. This is not on a scary street, but does need a lot of work. At peak someone would have easily paid $600k due to the location (1 block from train).
I wish this could have closed this year, because it would have made next year’s tax appeal a slam dunk for us. I am still going to attempt to use it to lower our assessment, since this is a larger home on a bigger lot than us, and still cant sell at 80k less than our current assessment.
#88
Great points overall.
“My last though is that the only way out of this is to let Libor, TED, FFR all go to double digits. It will hurt, bankruptcies will soar, but the high interest rates should restart savings. The government will need to backstop the slide with social programs to stop the chaos. While I understand this will be hard for some R’s to swallow, that is the price that needs to be paid. The choice is do you want to pay it now or next year. Next years price will be higher.”
Just not sure I agree with this part. I do not think letting rates explode will have the significant positive side effects you suppose because fear will overtake all else. I doubt people will be rushing to buy CDs if banks are collapsing right and left. I agree that pain is inevitable but it is not at this point a choice as to whether to feel it now or later– it is happening now. So the question is whether you take emergency measure to deal with the pain that is happening right now or just let everything go
#106
“The average American’sd experience with the market is really fairly short — only since the early 80s. In that time, how many large busts have there been?”
Shore– but not a problem if you just bought and held
[231] Gator,
Yes, after what I had been hearing from Stu as of late, I do need reminding. He hasn’t sounded so much as a libertarian lately but as a populist-progressive gravitating to O.
Still, y’all are welcome to visit the “compound.” There will be lots of candy for little gators and noms (hard candy stockpiles well).
Shore,
Wouldn’t call myself a leftie. I’m not big on either political party and think they need to slim down and lose a lot of power.
In 2000 it would have been a hard choice between McC and Gore for me. But that choice didn’t have to be made. The GOP really screwed McC over on that one.
After that I see McC as toeing the party line and losing credibility.
I didn’t like what the GOP did to McC. I didn’t like what they did to Gore regarding “inventing the internet”. I firmly believe that if it wasn’t for him, we may not be here discussing this right now on this site. The precursor’s to the internet may not have slipped away from the military so easily.
In 2004 when so many people would try and disredit someone that served in Vietnam to favor someone that was in the NG was amazing.
The whole Cllnton attack was a joke and me and my johnson feared the possible chilling effect of one consenting female sucking off a consenting male becoming a national issue.
Seems like the GOP just says and does thing to justify their positions are. No matter how stupid they are. I remember hearing one GOP pundit on Larry King saying Larry Craig wasn’t a homosexual, he was a pedophile. First like that’s even a good excuse. Second the page was a male.
I don’t like how the word “Family Values” was tattooed on every forehead until it wasn’t an issue they could win on.
I wish we could live in a world where we didn’t need the gov’t to force corporate responsibility but apparently we do. In exchange for that we have provided breaks and guarantees but we have removed the regulations but not the other side. I think we need either balanced intervention or no intervention. That’s not what I’ve been seeing from the GOP.
SP might be a good gov but she’s a joke for a running mate in these circumstances. That people support her is no surprise though. I wouldn’t be surprised if McC selected Ahmadinejad if the party would have found some way to justify it.
I have problems with the Dems too but I see them as the lesser of two evils and I believe that O has the mentality necessary to tackle tough issues that are constantly changing while McC is stuck in his ways.
I generally avoid looking at party affiliation. I try and listen to what someone has to say, determine if they sound like they believe it and if I agree with it.
[232, 235]
Will have to order and pick up the ammo this weekend. Once people start to figure out that this will be an O landslide, the shelves will clear.
Yup! Because, when we are about to take on close to a TRILLION more dollars in debt, what we MOST NEED is another tax cut. Heaven forbid we should ever cut a blessed thing. Uggh. I may have to bite the bullet, give in, and run for a House seat.
http://www.reuters.com/article/bondsNews/idUSN0147494320081001
WASHINGTON, Oct 1 (Reuters) – Leaders in the U.S. Congress have deployed their best weapon for winning passage of a $700 billion financial industry bailout just weeks before the elections, attaching tax cuts to an otherwise bitter pill.
cut
“Wouldn’t call myself a leftie.”
Tom,
It was all tongue in cheek. I should have said so.
160 PGC
They are completely ignorant. They honestly have no idea what’s going on with their money. They think the FDIC will cover everything. I shouldn’t say all of them, but I have yet to talk to a colleague with a clue about it.
“Seems like the GOP just says and does thing to justify their positions are. ”
Not that I approve but, the GOP realizes that the Dems tend to cave when faced a street fight. They are looking for Marquis of Queensberry rules and the GOP is willing to use a broken bottle, knife, chair, whatever, to gain the power to achieve goals.
I do not like it, actually but, as long as the Dems fail to respond in kind and make it more painful for the Rs, it will not change.
#116
“During a White House briefing yesterday, reporters were asked how many were familiar with the term LIBOR. Five out of 15 raised their hands. I laughed at first, then, quickly I realized how pathetic it was.”
this might explain why the general public has no idea what is going on.
One more for fodder. Pollster.com’s running average of national polls. Notice the swing towards O in mid-September
Nom – I’d go out and buy the ammo. Even if you don’t need it, it’s not like it will go bad or something.
http://www.pollster.com/polls/us/08-us-pres-ge-mvo.php
“Bigger bummer that proponents don’t have the b*lls to be honest about it but are willing to take a “you don’t really understand” patronizing tone.”
Lisoosh– I will tell you straight up that I believe inflation is the only solution
“Need I remind y’all that Stu is a registered Republican?”
Just a RINO, Gator, Just a RINO.
Which, bye the way, is something I have been called by a number of Rs in DC. I say, “Yup, in the tradition of TR.”
#124
“Here is an interesting chart I found. I guessed that since everyone is complaining about LIBOR being high and leading to tight credit conditions, it would be really low in the middle to late 90’s – a period of economic prosperity.
You would be surprised to know that LIBOR was higher during the 90’s than it is now, hovering around 6% the entire time. It went really low during the housing bubble – hitting its lowest in 2004. This is probably due to the FFR being absurdly low during this time and easy money available to everybody.”
libor isn’t the issue in and of itself; it is the spread above the fed funds rate that is the issue
NJGator,
I’ve read about your success challenging the assessment. Good for you. I’ve been thinking about doing the same thing for my mom. I think her property is unfairly assessed.
A multifamily I’ve seen on the market for over a year now in a top train town was listed for about $850k and is now at $675k. Assessment is about 750k. They have gotten no interest. I have stood by watching, but think they would be lucky to get anything in the 6’s. Maybe if they reduce more, I would consider a bid in the 5’s. I don’t want to be the one to have to shock them into reality. I’ll be there when they capitulate.
Hard Place – The appeals process is relatively straight forward. We were sucessful in ours using onlin etax/assessment info and sales data provided from a realtor. If you are going to pursue it yourself for your mother, and have questions about the process, feel free to get my email from Grim.
Good luck.
Shore 251 – If you are a RINO, then it’s about time that the RINOs start a coup and take over the party.
#166
“Clott etal
Last night on a conference call Mike Morgan tore into Hudson City. In his opinion they are not safer then most other banks. they apparently have a fair amount of commercial RE garbage and some other high end residential garbage on the books.”
but I thought Hudson City was going to take over for Wall St?!
“You have so physically more to lose than me, but at the bottom, you will have more available to you to survive. So we are about even on the “not losing sleep over this”. ”
Yea but a couple days or weeks of hyperinflation evens all bank accounts.
Gator,
It is the only reason I have not left the party. I still hold out hope of grabbing it back from the ones currently in control.
I missed much of what has gone on today, trying to get a project out the door. With the drops on your street, are you two, even with 20% down and whatever payments you made, still above water?
HA HA HA HA HA HA HA HA HA HA
WAMU WAMU WAMU WAMU WAMU WAMU WAMU
Anyhow the 5K WAMU bond I had that I thought was toast. And I was playing with Fire and I should be toast, turns out they had 5 billion laying around at the holding company level they forgot about so Bondholders are geting somewhere in the 60’s. I sold the thing at 63 today and got back 3,150. Could have waited til the end for maybe more for some strange reason I don’t trust them.
I also had another 5K wamu piece that matured at par on August 25. I remember my broker calling me on 7-15 to sell both. I got a little more by luck by waiting but boy did I get heartache.
The bond broker told me when you play with fire and get burned it sure is nice to be holding a senior bond.
Gator the problem in Montclair is the same as the problems in most of the rest of Essex County. Your tax base supports the failed cities of Newark, Irvington, and East Orange. Until they get those cities under control and economically viable taxes in Essex will be off the wall.
Ron Paul brings to mind the phrase beware of people preaching utopia.
in Queens: monday, no one else at the bank atm. on tuesday, no one else at the bank atm. today, 7 other ppl ahead of me. also note, it was the beginning of the week.
in general, the ppl i talk to who were in nyc in the 70s shrug. they have something to compare it to, i think. those of us who haven’t been grown-up during hard economic times are more nervous. just something i noticed today.
bah. beginning of the Month.
#213
kettle– count the number of financial panics from the mid 19th century and compare it to the era of central banking.
“I don’t want to be the one to have to shock them into reality. ”
No problem,
Just have Clot go in one Saturday and say, I’ll give you 565 have Stu go in a week later and say, I’ll give you 560. Have someone else go in the following week and offer 550.
By the time you come in the with an offer with 20% down, wrapped up like a Christmas present….
John,
I thought it might be but I don’t like either extreme, I used to like McC and I’m completely disollusioned with politics. I feel like all sorts of crappy legislation gets passed as long as the other party gets to throw in some of their crappy ammendments.
Here’s an example from the the House Financial Services Act of 1999 precursor to the Gramm-Leach-Bliley act.
“An amendment no. 10 printed in H. Rept. 106-214 to prohibit discrimination against victims of domestic violence and to allow mutual insurance companies to redomesticate to another state and reorganize into a mutual holding company or stock company.”
What the hell does one have to do with the other?
And you guys are going to love this one. There was an amendment to gramm-leach-bliley that didn’t pass.
“To prohibit insured depository institutions and credit unions from engaging in certain activities involving derivative financial instruments.”
Utopia a place for Nemo
Shore, Gator I think the problem with both parties is the power brokers and those who are politically interested tend to be extremists. Really I think neither party best represents most of its casual constituency. They are both extreme in different directions and have extremely weak candidates. I agree with Tom, GWB was such a bastardization of the party, a M vs. Gore race would have been good and I think the nation would have been better for it. Both the Dems and the Repubs are in a race to the bottom, I mean look at the candidates we are running are they kidding! Al Gore looks tremendously good compared to these people we have running. M sold himself out, lost credibility and is 600 years old now, and O is really way too inexperienced and does not have a long enough track record for us to know who he really represents or what he intends to “Change”. Change can be good but often from pols change can be like the changes instituted in Weimar Republic in the 1930’s. A viable third party to keep both of these parties honest seems more necessary than ever, although thanks to that idiot whos name starts with an N we got Bushed in 2000.
We are not underwater on our loan. We did after all, put significant money down :) We’ve made some minor improvements too, and bought privately at a good price, so worse case scenario, I think we are break even or slightly down on our 2004 purchase price.
Our plan anyway, is to hold long term and rent both units out. So as long as that can break even, all we have in the house is the down payment. We are ok.
Now of course if all lending dries up and we can’t buy another place with our good credit and DP money in the next year or so and get stuck living in our current circumstances long term, then Stu will get an earful. Especially if he doesn’t let me get the free outdoor hot tub we were just offered last week. That would go a long way to alleviating my unhappiness with our current digs :)
Shore Guy Says:
October 1st, 2008 at 12:53 pm
Not even Bruce could get me to go to an Oh-Ba-ma event.
Shore: When not on tour, he is often seen here…
http://www.theatlanticclub.com/
252 –
“libor isn’t the issue in and of itself; it is the spread above the fed funds rate that is the issue”
– Help me understand this, because I really dont know anything about this. How does the spread affect the ability of banks to borrow at this rates?
FFR is the interest the Fed Charges for banks to borrow. LIBOR is the rate which banks charge to lend to each other. So, the banks borrow cheap money from the FED and lend to each other at higher rates. The reason they are doing so is because they perceive that the risk of lending is high, because the balance sheets of these companies are highly suspect.
So, in effect, they are pricing in risk. My question was that companies in the 90’s were able to function fine at this rate. So, they were financially healthy. But now, without unrealistically easy money, they cannot function.
How is 700 Billion going to solve this issue. Isnt it too meager of a sum?
Especially, if Paulson buys these assets at market price (which is 22C on the dollar, if the Merril deal is taken as the baseline), how is this going to improve the balance sheets? In effect, the FED has to buy them at much higher prices than the market, in the hope that someday that house prices will recover.
We all that the consumer (70% of the GDP), is tapped out. Hence, house prices will not recover anytime soon, not in the next decade.
How is this going to solve anything?
Tom,
Can we find out who struck that from the bill and make sure that they never work in politics again?
260 jcer – Essex may be part of the problem, but only a part of it. The real problem is spending at the municipal level. Cedar Grove, Verona, Roseland, North Caldwell and Essex Fells all have relatively reasonable taxes compared with the rest of the county.
I don’t know if Montclair actually spends my tax dollars, or just burns it for fun.
#239 skep
There are a lot of points in our two paragraphs. I take your point about fear. My main point is that any emergency measure is not going to change anything. The banks will still hoard and the people will still hoard. How much of the 16Bil from WAMU went under a mattress or into the garden. Raising rates is the only way to get that cash back in play.
Any intervention at this stage is continuing price manipulation and putting stress on the dollar. It will tried to be used to keep the spread down and inflation under wraps. When it explodes (and it will) the rates will have to jump.
“Utopia begins with ‘U'”
That would be my campaign slogan.
Stu, the proud Rino who thinks the religious nuts hijacked and destroyed the Republican party.
#257 Shore
“Yea but a couple days or weeks of hyperinflation evens all bank accounts.”
The difference her is that you have no debt. I still owe on the mortgage.
P.S. Dig your own hole or that builder may be back in a few months to find out what you put in it. You can rent a grinding wheel and a Jack Hammer from Home Depot. That and a few bags of QuickCrete and you should be set.
Shore Guy,
Just have Clot go in one Saturday and say, I’ll give you 565 have Stu go in a week later and say, I’ll give you 560. Have someone else go in the following week and offer 550.
By the time you come in the with an offer with 20% down, wrapped up like a Christmas present….
That would be too easy…
Actually with all this talk of gold, bunkers, guns, go bags and the anihilation of the financial system, maybe I should go down to my local army/navy store.
Nicholas,
It was proposed by Sen. Byron Dorgan [D-ND]
Defeated in a voice vote.
I was thinking the other day, we need to come up with a lobby group that represents the average american to congress. Then I remembered… that’s what their job is. :(
“How is 700 Billion going to solve this issue. Isnt it too meager of a sum?”
Exactamundo. The amount that is needed is probably in the 500 to trillion range. The problem is announcing this to the republic.
“Ladies and gentlemen of the fine United States. I have some bad news. We have all been living high on the hog. Although people of my means have watched their working wage increase by 30% over the last 25 years, and you have lost to inflation, you must make the ultimate sacrifice so we can continue this charade. I am asking every American to donate $30,000 to save our way of life. If you do not have such a sum as I presume is the case with most, we will garner it from your paycheck as well as from your future offspring’s paycheck. Thank you for allowing me to preempt your Dancing with the Stars rerun and godspeed and good luck to all. Remember, Utopia begins with ‘you’!”
Buffet invests $3bb in GE preferreds. Nice little divvy for him from a top corporate.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a38DBL6ufMgw&refer=home
Clot,
wasn’t those two agencies. Looks like just some guy/gal looking at listings. I don’t think anything I’ve said has been radical but still, kinda freaked me out.
You guys should definitely check out the foreclosure video on CR right now. It is the scariest and saddest thing I have seen.
Nicholas,
Here’s what he said about the bailout.
““In 1999, when the bill was debated, I warned, ‘This bill will also raise the likelihood of future massive taxpayer bailouts…I also think we will, in 10 years time, look back and say…we forgot the lessons of the past.’ I take no satisfaction that I was right. ”
You can read the rest here.
http://current.com/items/89345107_dorgan_says_wall_street_bailout_plan_is_stampede_in_wrong_direction
So what do you do when your out of work?
http://tiny.cc/f7Ado
Gator I am well aware of the lower taxes in those Towns Fells taxes are very low period, also for the most part per capita they have better revenues from property taxes. Montclair has the wealthy who do nothing but put money in, most don’t use the schools and the rest of the people do not have very highly assessed property(shady part of town) and use the schools etc. also given the larger population you send more money to the county. Montclair and West Orange are atrocious, nice communities with nice homes for the most part except the far eastern parts of town but the tax bill and the services provided are nuts! There is a reason in 2005 every city in Essex wanted to be rid of East Orange, Irvington, and Newark. Newark at least has some corporate offices, a performing arts center, and a hockey arena, what those other places have I don’t know, I have gotten lost in both places and it looks worse than most third world countries, when I finally got to Newark it looks like a paradise comparatively.
“The whole Cllnton attack was a joke”
Tom– Clinton lied under oath. That is a felony. It was not a big deal until he decided to do this. It is also quite problematic that the person with whom he decided to have an affair was his subordinate. This would be out of line behavior for any boss, much less the president. Bottom line is that if he was going to fool around, shouldn’t have been with a white house employee and he shouldn’t have lied.
Daily Kos poll?
Come on.
Sorry link didn’t work.
It was a picture of some kid selling apples on wallstreet for 1.00$ a piece
Skep-tic,
And I bet those cigars were Cubans too. That is the biggest crime of all.
I wrote my senators and representatives asking where the congressional hearings were on how to make improvements to the economy.
*The congressional hearings that Bernake and Paulson are not invited to, but rather the economic elite.*
I would like to have a full accounting of what brought us to this problem and then work on a solution.
This doesn’t happen in 72 hours and I won’t be led by people who use fear tactics to fleece me.
This is the worst threat of a shutdown ever. What will we do if it happens. Will we have to go back to CD’s?
iTunes store shutdown feared
http://news.bbc.co.uk/2/hi/technology/7645537.stm
285 JCER – My only point was I am sick of my town council/mayor whining about the county and state whenever asked about what can be done about our spiraling taxes. These other towns are saddled with the same county and state and seem to get things done better and more efficiently.
Millburn has high taxes too, but a modest home in Millburn (07041 zip) will still have lower taxes than Montclair.
In addition to our high taxes, we have a very low level of municipal service. Stu and I are actually considering a modest home in the south end of Glen Ridge as our next purchase if we stay in the same area. The taxes are just as high as in Montclair, but the service level is much higher, and the town seems to be much better run in general.
#289
Stu– can’t tell if you’re joking or not, but clinton was a yale educated lawyer. lawyers get disbarred for perjury (e.g., Scooter Libby), so I think it is a pretty big deal that a sitting president was guilty of it. I personally don’t care who he fools around with
Shore –
You do know that McCane is proposing that the Treasury buy up a Trillion dollars of mortgages by bypassing the congress, right?
http://www.youtube.com/watch?v=SesiK5CpcII
Bernanke and Paulson have testified before Congress that the subprime problem was contained. Does that qualify as perjury?
skep:
Trust me…I despise the Clinton’s as much as anyone here, but the budget was balanced under his leadership. This did not happen in the 12 years before and the 8 years after his term.
In relative terms, lying about WMDs and the consequential death of more than 4,000 of our children to even a score for daddy is slightly more heinous than lying under oath about screwing around with a fat chick.
#295 – It should for Paulson, Bernanke can just plead ignorance.
Senate bill. A mere 452 pages :P
http://senateconservatives.files.wordpress.com/2008/10/ayo08c32_xml.pdf
#271
Vic– libor is a measurement of banks willingness to lend to one another over various periods of time. my understanding is that on an overnight basis, libor does not typically deviate from the fed funds rate by more than 1/8 of a point, because the risk of extending credit overnight between large european banks is not thought to be significantly different between the risk the fed takes to make the same credit available to U.S. banks. the fact that libor has deviated so wildly from the fed funds rate reveals that there is great fear between banks that is quite abnormal.
I am sure there are people here who can explain aspects of this dynamic better than me, but I can tell you that one big effect of this disruption is in corporate credit agreements. These are almost always tied to libor (of varying interest periods) as are many kinds of consumer loans. The assumption when the agreements are entered into is that libor is a fairly steady and predictable base for making loans. banks can agree to extend credit and company’s can agree to borrow using libor as a benchmark because it is ordinarily stable. Because it is very unstable right now, all of these outstanding credit arrangements are wildly off from the expectations the parties had when they entered the agreements. Companies believed they would have funds available to them within a certain range of prices and that has gone completely out the window in such a short period of time that there has not been an ability to adjust. The basic idea is that a steady benchmark is now behaving very erratically throwing off all sorts of business planing that is done months and years in advance
skep: I think I am fatigued of saying “companies” will be squeezed and people will be sorry, and being chastised for “platitudes” and arrogance. WTF? Look at %ucking GE!!!! Do people understand what is happen here!
If GE is issuing stock and selling a preferred to Berkshire with a hellacious handle doesn’t get the message to you…..YOU JUST DO NOT WANT TO HEAR IT…..
#295
Vic– again, not sure if you were serious, but statements of interpretation of fact are not perjury. Clinton intentionally lied. he knew very well the consequences of what he was doing and did it anyway. if that is unbecoming of an ordinary lawyer, in my book it is certainly unbecoming of a president
Yes Chi and that message is financing, ie CP has become too difficult to do.
Nick (290)-
“I won’t be led by people who use fear tactics to fleece me.”
Then, you are of no use to the current leadership.
#296 Stu– agree that clin-ton was far better president than W. I voted for Clin-ton and have met him in person a few times. I am just saying that what he did was unacceptable for a president.
Chi-
I think the point being made here was how does throwing money at the system help this? Isn’t the system too large for 700 Billion to be effective?
If you could shed light on how this would work, that would be appreciated.
#271 & #299 – Some addenda;
A quick visual look at the TED spread disruption gives a better idea of what skep-tic is talking about.
Normally the difference between 3 Mth US Treauries and 3 mth Euro bills (The treasury/euro dollar spread) is about %.5 or 50 basis points. As you can see it is much much high now due to the uncertainty of a borrower’s solvency and ability to pay back. Right now TED is 334 basis points or %3.34 higher. This would mean borrowing costs are, roughly, 6 times what they were 1 1/2 ago. This will of course affect almost everyone.
No one, I think, is disputing this. Where the dispute comes in is what, if anything can be done.
NOTE: GE is the gold standard in the CP market, and they are having serious difficulties turning over their stuff. They have suspended their stock buyback at a point where their stock is at multi-year lows.
This situation is not Wall Street versus Main Street. Wall Street wins, Main Street loses…..PERIOD….any way you look at it. If the system goes nuclear or nook-yah-ler, then the super rich will just lay waste to everyone else. Is that so hard to understand? The way to exact revenge is to survive and prosper in your own lives.
skep-tic,
“so I think it is a pretty big deal that a sitting president was guilty of it. ”
a sitting president was not found guilty of perjury.
He was found in contempt of court and fined for giving false testimony. As a lawyer you should be familiar with the difference between perjury and giving false testimony.
He was aquitetd of obstruction of justice and perjury during his impeachment.
So how do you call someone guilty of something he was never found guilty of? In most states libel is a felony.
And if you can sleep at night putting a hummer and outing a cia agent on the same level, good for you.
Question on the VP Debate –
I’m hearing conflicting stories… does anyone know if the VP candidates are provided with the debate questions in advance? I have heard, leading up to this debate, that was the case, but I just heard on NPR that the candidates will NOT have the questions in advance.
I tend to believe what is said on NPR, but just checking what others have heard….
Chi, the insanity continues, a company as large, as profitable, and as diversified as GE should not be having such difficulty moving their short term debt it is nuts, just like the auction rate muni problem was nuts, in that case there was a huge problem with a lot of ARS that made it totally undesirable but not with the better muni issues. Fear is ruling the market and once it gains critical mass we will see the bottom.
vic (271)-
The biggest ramification of LIBOR that all of us can immediately understand is that virtually all ARMs are indexed to it. There are a few tied to the US FFR, rolling US Treasury rates and other indices, but they are not common.
Woe be to those whose ARMs are adjusting right about now.
Skep and Tosh – Thank you!
That was certainly educational.
chi (307)-
“They (GE) have suspended their stock buyback at a point where their stock is at multi-year lows.”
Boo f-ing hoo. Tell ’em to sell more missile technology to Iran.
[249] Gator,
As I have been saying all along. And if O becomes president, it will be a good investment since I can sell some if prices spike for a nice profit.
Tried to order it and found that our sysadm blocked the site. Will have to do it from home.
As for the polling, I decided about three weeks ago that it would certainly be O, won’t be close, and we had all better learn to make money in the underground economy and start calling each other “comrade” starting in January.
Clot (311) –
True. The 3/1 ARMs must be resetting about right now (assuming these people bought at the peak in 2005).
So, if these people have good credit – what are their chances of refinancing their loan?
Comrade Nom (314)-
“start calling each other “comrade” starting in January.”
You are a few months too late. We are all comrades already.
Victorian Says:
October 1st, 2008 at 3:28 pm
Chi- I think the point being made here was how does throwing money at the system help this? Isn’t the system too large for 700 Billion to be effective? If you could shed light on how this would work, that would be appreciated.
Vic: You live in a neighborhood of $500,000 houses with no transactions for the last six months. One person was forclosed six months ago and sold for $400,000, but otherwise everyone else is stable. However, no transactions, so really no one knows what these houses are worth.
You are fine, have a job, everything is normal.
The problem? Everyone outside the neighborhood is afraid that the lack of transactions implies that anyone who lives there is in trouble. As a result, if you live in one of these $500,000 home, you credit card companies cut you off, the grocery store, tax assessor, cable company, electric company, etc. demand that you PREPAY all bills 30 days in advance and post collateral equal to one cycle’s billing in cash to maintain your ability to conduct commerece.
For no other reason than you live in this neighborhood of $500,000 homes.
This bailout comes in the form of a real estate company that comes in with the expressed purpose of buy and selling homes in the neighborhood. Previous, you didn’t have a choice………NO BUYERS = NO SELLERS.
The real estate company (REC) comes in and says “…I will buy your home for $425,000. The owner says “%uck you”. The REC company says “yeah, but if you sell your house, then everyone will give you credit and you won’t have to worry about all the collateral posting crap and you can get your credit card back.” Uh…ok….
Subsequently there are three or four more transaction in the neighborhood all in the $450K area. Everyone in the neighborhood gets their credit back in different shapes and forms depending on their personal situation.
Yeah…this explanation is choppy and kind of crap, but I can’t type and I have no time.
Harsh me out all you want…… please…..
#315 – If they have good credit, sufficient reserves, the LTV isn’t stupid, and their backend ratios (Debt-to-Income)are good it shouldn’t be too bad. This doesn’t describe most of the American populace with mortgages though.
[309] There is no way the candidates got questions in advance. No sponsor would do that for fear of appearing to favor one side or the other, and none would risk leaking it to one side only as that would be far worse and would have the opposite result if discovered, and the likelihood of discovery is pretty good.
Already, conspiracy theorists abound, just as they did when the tailoring in W’s suit produced an odd shadow line that was seen as evidence of a radio pack through which Ch’ney fed him answers in a debate against Flipper John back in 2004.
#306 #307
“If the system goes nuclear or nook-yah-ler, then the super rich will just lay waste to everyone else. Is that so hard to understand? The way to exact revenge is to survive and prosper in your own lives.”
“No one, I think, is disputing this. Where the dispute comes in is what, if anything can be done.”
Between both of you, you have defined the problem. Now the answer is Yes it will blow and No there is nothing can be done to stop it. To use the analogy from today, this 700Bil plan is taking a fly squatter to a gun fight.
Plume (314)-
You think this week’s been tough? Wait just a few more:
– Europe blows up. Their blowback is the KO punch to our financial system. Tilt. Game over.
– Ohdrama wins the election. Those of us who haven’t turned Japanese turn Soviet.
– Ohdrama appoints Commissar Jon Secretariat of the Treasury. Tilt. Game over.
BTW, the above is a scenario I’d place a significant bet on.
#320 – No there is nothing can be done to stop it
This is largely what I fear. Might as well get it over quick.
That’s good to hear. I’d been hearing the story that the questions were being shared in advance for a while now… it should be a fun saturday night live this week….
[316] Vic,
Da, Comrade Vic, Da.
“Shore: When not on tour, he is often seen here…
http://www.theatlanticclub.com/”
Yes. I have heard that. I was at the Green Parrot with him a few times, back in the day. I know people who felt compelled to go up and talk to him. I never did. I figured why bother the guy. The other thing is that i view entertainers as the hired help; I pay to hear them entertain me, and that is as far as I want the relationship to go. I don’t much care whom they date, marry, etc. Now, if business or a common social connection puts me in contact with someone of note, I am happy enough to engage with them.
Vic (315)-
The credit quality in that pool is for shit.
As far as equity goes, nonexistent.
Can’t refi negative equity.
Tvarish!
I heard they gave both SP and Biden not only the questions but the answers.
They figured it wouldn’t make a difference.
chifi writes: “This situation is not Wall Street versus Main Street. Wall Street wins, Main Street loses…..PERIOD….any way you look at it. If the system goes nuclear or nook-yah-ler, then the super rich will just lay waste to everyone else. Is that so hard to understand? The way to exact revenge is to survive and prosper in your own lives.”
EXACTLY.
So what I’m trying to determine is, how do I best do that?
For sure, voting and writing my “representatives” gets me nowhere.
I’m just trying to best navigate the fall of the American empire.
“The difference her is that you have no debt. I still owe on the mortgage.”
Which you could pay off with the price of a loaf of bread.
We need to open our eyes to what GWB and all his Cronies have done and will keep doing. They should all be tried for war crimes and crimes against humanity…i think everyone here should youtube NAU and he RFID chips plus Aaron Russo to show the truth behind who is pullin strings…Rock E Feller..and the truth behind 9/11 being an inside job all for pure war profiteering..we need smaller gov’t like Dr. Paul says..whos also not against speaking the truth.even he is against this bailout..who watches the watchmen?????
My current fear is that money itself has been broken, that the entire financial system might need to restart from scratch.
If that happens, RENTERS and SAVERS LOSE.
I can’t defend or spend gold.
If I hoard $USD that could turn worthless.
All I could hold onto and defend? A HOUSE.
Therefore, I’m now in a bit of a panic to buy a house.
“And I bet those cigars were Cubans too. That is the biggest crime of all.”
And what about the tee shirt monica wore:
“I ‘slept’ with the president and all I got was this cigar.”
Of course,it was a brilliant move in one respect. Who in their right mind would ever take a cigar from him or his humidor?
“Therefore, I’m now in a bit of a panic to buy a house.”
Just claim one of the abandoned properties when the rioting and looting starts.
Shore Guy Says:
October 1st, 2008 at 3:49 pm
“Shore: When not on tour, he is often seen here…
Yes. I have heard that.
Shore: comments from members there that I know….he likes walking around the men’s locker room nude and there is not an ounce of fat on him….
(331)-
Grim, I believe you have attracted your first paranoid schizophrenic.
Shore Guy Says:
October 1st, 2008 at 3:53 pm
“I ’slept’ with the president and all I got was his cigar.”
What about the dress with extra ‘special’ starch….
“Which you could pay off with the price of a loaf of bread.”
Can I say “What with, dollars? They are not making any more!” with out getting groans and bread rolls thrown at me.
How long will it be now before the SEC extends the short-selling ban?
“You do know that McCane is proposing that the Treasury buy up a Trillion dollars of mortgages by bypassing the congress, right?”
I am surprised the big Di-ck behind bu-sh didn’t come up with that. After all, the unitary executice knows all and can do all, according to mr “I am not part of the executive and do not have to listen to congress.”
In the end, I don’t think that it matters what M proposes. He is all but toast. A killer performance from Sp might halt the slide for awhile, but cant reverse it; a poor performance, well it is all over then. And I can’t even get a refund on my contributions. A few kilos of silver, oe few ox of gold, would have been a better investment.
Chifi,
I have seen him a half-dozen times this year alone and he is clearly in good shape. That said, I could go an entire lifetime without seeing mini-Bruce and be just fine.
Unless it plays guitar too, who wants that much information about the hired help?
“Grim, I believe you have attracted your first paranoid schizophrenic.”
First?
You guys need to lighten up and go long financials try UYG. Long term problems are there in the financial but even when you are on a losing streak in Vegas you have to know when to double down.
Plus triple AAA munis and A rate investment grade bonds are on sale now. Mix that with a few brokered FDIC CDs, a little bit of plaing old savings bonds and spank the monkey have a vodka nightcap and get a good nights sleep.
Tom– you are right and I was mistaken that clinton was charged with perjury. It is clear that he lied under oath, however, and this is still unacceptable for a president.
Baby Jmac was born last Wednesday, weighing in at 7 lbs 2 oz. Mom and baby are doing fine, and I’m learning all about diaper changes and swaddling. I’m glad he’s too young to remember the Mets collapse of 2008, but I’ll raise him as a Mets fan anyway so he’s better equipped to handle life’s disappointments.
Stu @ 3:02pm
“lying about WMDs”
The discussion above mentions “extremists” in the two parties as being problematic, and yet the selective memory evidenced above is clearly extreme.
To wit:
“In the next century, the community of nations may see more and more the very kind of threat Iraq poses now — a rogue state with weapons of mass destruction ready to use them or provide them to terrorists, drug traffickers or organized criminals who travel the world among us unnoticed.
If we fail to respond today, Saddam and all those who would follow in his footsteps will be emboldened tomorrow by the knowledge that they can act with impunity, even in the face of a clear message from the United Nations Security Council and clear evidence of a weapons of mass destruction program.”
President Clinton
Address to Joint Chiefs of Staff and Pentagon staff
February 17, 1998
—
“Iraq is a long way from Ohio, but what happens there matters a great deal here. For the risks that the leaders of a rogue state will use nuclear, chemical or biological weapons against us or our allies is the greatest security threat we face.”
Madeleine Albright, President Clinton’s Secretary of State
Town Hall Meeting on Iraq at Ohio State University
February 18, 1998
—-
“We stopped the fighting [in 1991] on an agreement that Iraq would take steps to assure the world that it would not engage in further aggression and that it would destroy its weapons of mass destruction. It has refused to take those steps. That refusal constitutes a breach of the armistice which renders it void and justifies resumption of the armed conflict.”
Senator Harry Reid (Democrat, Nevada)
Addressing the US Senate
October 9, 2002
Congressional Record, p. S10145
—-
So are people looking for bogus bumper sticker platitudes that summarize DNC talking points, or a sober and honest look at the facts of history?
And the “death of more than 4,000 of our children”? We have a VOLUNTARY army, staffed with ADULTS. How vulgar to use ‘body count’ as a measure of success or failure. By this silly standard the D-Day invasion, and all other battles where our troops have died, are also deemed a ‘failure’ and their sacrifice minimized.
iTunes just CANT shut down. At least not until I download my first song.
Congrats JMac!
More random musing —
MJ gets to be in the compound.
Anarchy doesn’t. He may be a good shot, but not sure I would trust him with a weapon.
“but I’ll raise him as a Mets fan anyway so he’s better equipped to handle life’s disappointments.”
What ever happened to parents hoping their children lead better lives? Do him a favor and buy him a Yankees cap.
#308
“And if you can sleep at night putting a hummer and outing a cia agent on the same level, good for you.”
I am not putting these on the same level. the issue I was raising is that lying under oath is a big dig, which clin-ton apologists can’t seem to admit.
big deal
John (344)-
“…even when you are on a losing streak in Vegas you have to know when to double down.”
If anybody ever doubted that you worked on Wall Street, the above is confirmation.
Some financial sense for once from CNBC. Read and heed, those of you that aren’t Masters of the Financial Universe, I am doing all of these except for selling losers now:
“Amid all of the financial and economic uncertainty in the world today, there is one sure thing: Your taxes are going to go up.
You can take that to the bank.
Even before the kabillion-dollar bailout proposed by Washington, the Federal government was spending $400 billion more every year than it was taking in.
Figure in aging baby boomers signing up for Social Security — and a few years after that, Medicare — and there’s no way to start closing that chasm other than by raising taxes.
Even George H.W. “Read My Lips” Bush saw that writing on the wall and raised taxes during his presidency.
“Congress will raise taxes regardless of who wins the presidential election,” said Janine Racanelli, of J.P. Morgan Private Bank.
The good news about all the bad news is that it offers taxpayers a little bit of time to prepare.
Here are some actions to take before the end of the year:
—Sell losers. If you haven’t done it yet, this is a good time to dump any stocks or mutual fund shares that you have lost money on.
You can cancel out any capital gains on winning investments with the losses you reap and use an additional $3,000 of losses to offset ordinary income.
If you have bigger losses than that, they will carry forward and offset your income in 2009 and beyond, until you’ve used up all of your losses.
Caveats: Do not buy back the same securities you sell within 30 days of selling them, or you will not be able to deduct the losses. And don’t bother doing this in your retirement account, you can’t take those losses.
—Sell winners too. If you’ve got a big gain in a stock you want to sell, this might be as good a time as any to do that.
Capital gains rates are as low as they have been in 30 years, and there is some pressure to increase them.
— Reposition your portfolio. You can use the current climate and the capital loss rules to move high tax investments into your retirement account and take low tax investments out, suggests Christopher Parr, with advisory firm Financial Advantage in Columbia, Maryland.
He calls investments like real estate investment trusts and bond funds “tax-ugly” because they throw off high, fully taxable dividends.
Sell them while they are beaten down if you hold them in taxable accounts, he said. Then buy similar investments (or wait 31 days and buy the same fund back) in your IRA or 401(k).
— Feed tax-free plans first. If you have a health-care savings account, make your maximum annual contribution to that before you salt money away in a tax-deferred IRA or 401(k) plan.
Think seriously about putting more money into your Roth IRA, even if it means putting less in your tax-deferred IRA or 401(k) plan.
By the time you retire, your tax rate on money coming out of those tax-deferred accounts could well be higher than they are now.
— Consider investing in municipal bonds. They are currently paying their highest rates in six years. With local and state governments facing their own deficits, they will be raising taxes too.
A triple tax-free muni fund — one that exempts its interest from federal, state and local taxes — can be a good bet for those in high tax brackets.
—Look at the advantages of converting your tax-deferred IRA into a Roth IRA. You’ll pay income taxes on that, but if you are having a bad year, that could limit the blow in two ways.
If your personal earnings are down, your tax rate could be lower now than it will be in the future.
And if the investments in the account are beaten down, your tax hit on them will not be as high as if you had waited for them to recover, and then made the move.
jmac (346)-
Congrats! Will you be steering him toward pencil sales, apple carts or migrant labor?
[351] shore,
Or you can make him look intelligent and loyal: Buy him a Red Sox cap. :-p
Oh, AND have him stay away from the Jets too. Let him live a happier sporting life.
[346] JMac
Congrats on the little mac!!! I know that feeling well.
Personally, I would go with Mets. Let him be in the majority (those that hate the Yankees). And more importantly, he won’t constantly be getting stopped and frisked for dressing like a gangsta thug.
Or you can make him look intelligent and loyal: Buy him a Red Sox cap. :-p
Yea, living in the NY area, that won’t encourage anyone to kisk his @$$.
MJ your right our USD will be worthless by 2010 when the Amero is introduced in the NAU..its coming folks..this isnt the ranting and ravings of a lunatic
“he won’t constantly be getting stopped and frisked for dressing like a gangsta thug.”
Enough carping about the Steinbrenner family. Leave them alone.
[360] Shore
Huh? I don’t find anyone even threatening to “kisk” my azz, and I wear my cap constantly.
Besides, with the exception of those I count as friends (and even a few of them), Yankee fans are loudmouth punks—I laugh, say “nice doggie”, then show them the back of my hand and ask if they want some.
Tom @ 3:33PM — Your second paragraph is rendered invalid by your first paragraph:
“So how do you call someone guilty of something he was never found guilty of? In most states libel is a felony.
And if you can sleep at night putting a hummer and outing a cia agent on the same level, good for you.”
“Let him be in the majority”
Like being in the majority is such a big deal. Hey, that can be the Mc-Ca-in tee shirt for after the election. Rs on the Hill too.
[362] shore
LOL (and coffee out the nose, thanks).
ROFL. Need to carry some Milkbone too, lol.
Congrats JMac.
My Chase stock hit 50 a share today. I have been taking small hits all year and I am getting tired of it, but I gotta come through this untouched if I want that McMansion.
For you folks on Long Island I see two house that got foreclosed one at 19 Great Oak, Manhasset and 1 Messenger Ln, Sands Point, Sands Point for you uneducated folk is where people in million dollar mansions trade up to. Went to a BBQ there once in my 20’s and I was in total Awe, I said to a guest at the party wow this is an amazing house, tennis court, pool, by beach a few acres and I asked what the owner did. Turns out I am stupid as the guy answered back he is the president of Time Warner and even stupider I said do you know him? And of course I was speaking to him. Anyhow I have never seen a foreclosure in Sands Point, even back in RTC days.
Clotpoll Says:
October 1st, 2008 at 4:16 pm
John (344)-
“…even when you are on a losing streak in Vegas you have to know when to double down.”
If anybody ever doubted that you worked on Wall Street, the above is confirmation.
“coffee out the nose”
Yess!!!!!!!!!! Nailed a Red Sox fan. My work here is done, lol.
Actually, I am as bad a Yankee Fan as I am a Republican. I hold no animus towards the Red Sox and, except when they play the Yankees, I root for them to win (unless winning moves them up, relative to the Yanks, in the standings).
Hoo boy! File this one under “Barn Door Open; Horses Gone”.
From Chase Wholesale Broker Bulletin (new policy, effective immediately):
“In mortgage letter 08-25, “Converting Existing Homes to Rentals”, HUD issued new underwriting guidance regarding the treatment of rental income when converting a principal residence to a rental property.
According to HUD, “this guidance is directed at the practice known as ‘buy and bail’ where the homebuyer purchases, for example, a more affordable dwelling with the intention to cease making payments on the previous mortgage.”
Such practices impact the value of surrounding properties and promote the further decline of the mortgage industry as a whole.
As a result, Chase is revising our FHA underwriting guidelines.
Rental income from a property being vacated may NOT be used to qualify for a new mortgage. The applicant must qualify using the full PITI payment of the current principal residence, regardless of whether a lease is provided.”
The only two exceptions are in the cases of corporate relocation or if sufficient equity exists in the vacated property to justify the loan on the new purchase. The old LTV must be 75% or less.
I hate baseball.
There was a time when 300+ posts occurred over an entire weekend.
Buy some bats anyway.
anarchy1 @ 3:51 — “the truth behind 9/11 being an inside job all for pure war profiteering.”
Such lunacy redefines the meaning of “kook.”
John (369)-
How are you at cold-calling?
I hope the Rays win it all and they tape a sheriff sale notice to that ballpark’s door while they’re clinching the Series.
[370]
LOL again. Glad you consider it work. I consider it fun when I nail a Pin[stripe]Head.
And it wasn’t hot coffee, sorry.
Funny thing this year is that there were lots of times I had to root for the Yankees, notably when they played the Rays, Twins or White Sox. Hardcore Pinstripeheads here couldn’t bring themselves to do the same though. They would rather see the Sox lose even if it meant they dropped further behind.
These provisions now included in the Senate bill should help us
right out of this mess:
Sec. 325. Extension and modification of duty suspension on wool
products; wool research fund; wool duty refunds.
Sec. 316. Railroad track maintenance
Sec. 317. Seven-year cost recovery period for motorsports
racing track facility
Sec. 503. Exemption from excise tax for certain wooden arrows
designed for use by children.
Not sure why people don’t trust politicians.
“I am not putting these on the same level. the issue I was raising is that lying under oath is a big dig, which clin-ton apologists can’t seem to admit.”
Cllnton – contempt of court and giving false testimony for statements he made during a deposition relating to a civil lawsuit where he was accused of dropping his pants not attacking anyone.
Libby – one count of obstruction of justice
two counts of making false statements during interviews with the FBI
two counts of perjury in his grand jury testimony regarding leaking the identity of an undercover CIA operative.
He was convicted of all but one charge of making false statements.
You want to make a big deal about what C did, fine, that’s your opinion. But when you come here making false statements and regurgitating the party line, hard for me at least to not see you as a party hack that doesn’t care what you say.
[375]
Makes me wish for Reinvestor. At least he wasn’t wearing a tin foil hat.
My advice is already given at full price on this blog, the full price is nothing as it is worthless.
Bottom line is it is 50/50 FS will pop very short term if bailout passes. I think the pop will be more than the drop so buying FS today is like dead or no deal when the board is at 100K, 500K, One Million. The upside is higher than downside so you roll the dice. That said total gamble like double down.
Clotpoll Says:
October 1st, 2008 at 4:32 pm
John (369)-
How are you at cold-calling?
Yippie, the Rules on Valuing Illiquid Assets were Relaxed, now give me 250K FDIC insurance and tax write offs on fannie and freddie pref losses by banks and my 50bps and I can get a good night sleep.
(317) Chi –
Thanks for the explanation. Please correct if I am wrong, I feel that the conclusion you are arriving at is that there is fear in the market and nobody wants to trade until someone takes the first step. People think that they are OK but do not want to trade with someone else because they fear that the other guy might be holding cr@p.
So, the FED comes in and buys some of this stuff and says that this is all good.
Here is where I begin to struggle to understand. The FED cannot possible buy all their illiquid assets. If the distribution is fair, all these companies will still hold significant amount of these assets on their balance sheets.
The underlying asset behind these securities (mortgages) are going down in flames. So, the government has put an artificial floor under these asset prices. The market knows this. Why would I lend money to these guys knowing that this is it, the party is over. The FED is out of cash.
Please bear with me as I am ignorant on these concepts, and am just trying to get an handle on them.
“Your second paragraph is rendered invalid by your first paragraph:”
Qwerty,
How so? Second paragraph I’m talking about the context of bouth charges. The first I’m talking about the verdicts.
The interesting thing is Main Street is on the hook for $800B, so that credit can be freed up for them to borrow money for Mortgages, Car Loans, Student Loans, Credit Card Debt, etc. Main Street winds up with Bail Out Debt in addition to Personal Debt. I assume that seizing their 401K and IRA’s will pay for it? Seems like a more reasonable approach would be for Government to Create their own $800B Bank to provide Credit where needed to those who can pay back, and let Private Banks & Investment Houses live with their own profits & losses on their exotic financial instruments.
“The video Memorias_del_Saqueo
114minutes
http://video.google.com/videoplay?docid=-6758899307929087686&hl=en”
Grim, this is a great docu about Arentinia Crisis, it would make a great thread and I suggest everyone on this board to watch it.
Also, the director of this flick, while making this film, was target for assination. He got a bullet in the leg (just like me), and now he was walks with a limp, as you will notice in the film.
Alot of people didn’t want this to get out.
SAS
and no, I don’t walk with limp…just when my arthrisits flares up.
SAS
Victorian it is as simple as you don’t know the value of anything until there are some bids on it. Sell a used car and if no one answers your ad how do you know what it is worth? Place an ad and say you are taking best price that weekend and ten show up and six throw out a bid by Sunday night you know what it is worth. Same when we did an FSBO we were happy that we got a lowball one minute into open house as that was baseline to beat and from there bidding started till it went up to market price. I think that is what Paulson has in mind. Plus the few hundred million stuff he buys at 30 cents on the dollar long term will double or triple. The businessman in him says this is a no brainer, but in DC where you have to explain everything on a third grade level and convince people who will do things bad for the economy and even their state if it means they get re-elected it is a tough sell.
My in-laws have no mortage, no stock, no loans of any kind along with a pension and 401K yet people like that will say the bail out is bad, what do they care?
Then you have the people who need car loans, student loans, mortgages etc. who say it is bad, when if you can’t securitize and there is no secondary market they will just do 10% loans and these people can kiss their kids college education goodbye.
Credit is the motor oil that keeps the US econonmy humming.
The anti bail out folks would rather drown in a lake than grab the hand of Hank Paulson to be saved.
Thanks for the well-wishes everyone.
Clot (356) – I’ll get him started with an Erector set (or whatever the equivalent is now). That way he can eventually repair the Mad Max contraptions that will be roaming our highways in 20 years and be of some use to local Somerset County warlords.
Congrats Jmacdaddio!
I wish you and the little guy all the best.
#347 Qwerty
Just because Clinton et al lied about wmd (and serbia for that matter) does not mean that it is ok for everyone else to lie about wmd.
As far as I’m concerned Clinton’s shameful attack on a country that posed no threat to us and hadn’t attacked us laid the ground work for what Bush did in Iraq.
“The anti bail out folks would rather drown in a lake than grab the hand of Hank Paulson to be saved.”
not so fast bloke.
unless of course, this is a joke?
SAS
John (389)-
“Victorian it is as simple as you don’t know the value of anything until there are some bids on it. Sell a used car and if no one answers your ad how do you know what it is worth?”
It is disappointing to hear you spew the same line of happy talk as some of your Wall St brethren. The silence on your used car ad speaks volumes on that car’s worth…just as no showings is reflective of the value of insanely-overpriced house listings.
This MBS/CDO/SIV crap has been peddled and re-peddled all over the Street and to any other party foolish enough to pay a plug nickel for them. This same crap took under LEH, because everyone who might’ve touched them saw how much of this garbage they were carrying. IT IS WORTHLESS.
All we are going through now is the exercise of defrauding the American public through a sophisticated chain of legal procedures that will result in the declaration that shit has turned to gold.
Everything else is just noise.
(389)-
“The anti bail out folks would rather drown in a lake than grab the hand of Hank Paulson to be saved.”
Not exactly. I’d prefer to grab his hand, pull him in with me, drown him, then crawl out of the lake using his dead carcass as my first step.
Victorian Says:
October 1st, 2008 at 4:50 pm
(317) Chi – The underlying asset behind these securities (mortgages) are going down in flames. So, the government has put an artificial floor under these asset prices. The market knows this. Why would I lend money to these guys knowing that this is it, the party is over. The FED is out of cash.
Vic: I don’t think one can arbitrarily state the there is an “artificial floor” being placed. Not very much of the $700B will be spent if it is clear that the terms are not going to reflect economic reality. There is plenty of liquidity out there in the form of vulture capital, the real question is whether the vultures will relent in their draconian terms once they face the reality that there are more attractive alternatives.
In a sense the public is being sold a bill of goods. If you were truly strategic, shrewd and cunning. I would have the Treasury plan out there that gets repudiated by Congress, then the banks get the REAL solution that they wanted from the beginning. Trash the FAS 157 marks and keep everyone in the dark. If no one can tell what you have because your financial statements will appear as clean as WorldCom’s books, then why would you expose yourself by taking advantage of the $700B bailout beyond just the most base level of liquidity.
To just assume that denying the bailout is “sticking it to” the banks is naive in the sense that these hustlers have already thought 9-10 chess moves ahead of all of us.
Think about it.
jmac (390)-
“…Somerset County warlords.”
After the engineering training, make sure you have Junior spend a lot of time in Franklin Twp. I can’t think of a better place to learn how to be a modern-day Sun Tzu.
Chi (396)-
The fact that the future viability of our economy now rests on a selection of the most palatable fraud- from an entire menu of frauds- is a prima facie argument that the whole show should be shut down.
The chaos that comes now may be more savory than the monster we’re creating, to be unleashed at a future date.
Yes, Red Sox fans are erudite fans of the game, love it for all it is. Just ask Bill Buckner how great the Sox fans are. And who are the best fans of all? The lovable Cubbies fans. Just ask Steve Bartman.
Every sports team has the whole spectrum of fans from boorish idiot to the perfect fan, the one we think we all are.
Except the Raiders. Those dudes are mental….
jmacdaddio Says:
October 1st, 2008 at 4:11 pm
congrats
Remember, NY fans are some of the most knowledgeable, and why they prefer National League baseball. NYC has always been a NL town. Now that the Boss is gone, I think it is going to be surprising how much the Ynaks are going to appear rudderless, regardless of resources. It is already mind boggling the abject stupidity of tearing down Yankee Stadium. It makes all of the YES (al-Yankzeera) nonsense about history and tradition seem laughable on its face.
[399]
Agreed. Though Philly fans are pretty awful. Got more trash talk from them when I lived there than from NY’ers.
Clotpoll Says:
October 1st, 2008 at 5:50 pm
Chi (396)- The fact that the future viability of our economy now rests on a selection of the most palatable fraud- from an entire menu of frauds- is a prima facie argument that the whole show should be shut down.
The chaos that comes now may be more savory than the monster we’re creating, to be unleashed at a future date.
clot: Humans are adaptable. All they need is time. However, you cannot adapt while moribund, which is the path that you appear to advocate.
I would rather save some joker’s job at the local corporation than have him rob my house six months later and shoot me to death……..what does $700B buy you, how about not having to put bars on your windows?
qwerty the proof is as clear as day that 9/11 was an inside job…
“It makes all of the YES (al-Yankzeera) nonsense about history and tradition seem laughable on its face.”
Chi,
Not promoting Yes. That said, The Yankees will be moving 26 banners with them. Banner day at Shea, Citi, Washitty or Abu Dhabi Field is scheduled for Sundays, during the season. Just sayin.
Chi,
700B buys you sheet. Picture Bergabe holding a fan, on the beach, trying to stop a cat 5.
BC Bob Says:
October 1st, 2008 at 5:57 pm
Chi, Not promoting Yes. That said, The Yankees will be moving 26 banners with them. Banner day at Shea, Citi, Washitty or Abu Dhabi Field is scheduled for Sundays, during the season. Just sayin.
A good number of those banners were won with illicit help from various bribed parties throughout the 1900’s. The four flags from the 1996-2000 were done with an extreme financial advantage that will likely not be repeated due to the luxury tax and revenue sharing. The one strategic advantage that the Yankees possessed that created incremental value was Steinbrenner and the Stick. These guys no longer weild sufficient influence.
Chi,
A bunch of sour grapes. Next.
BC Bob Says:
October 1st, 2008 at 6:05 pm
Chi, A bunch of sour grapes. Next.
Really? Read historical accounts of your team.
Paulson Bank Rescue Proposal Is `Crazy,’ O’Neill Says (Update1)
By Brendan Murray
Oct. 1 (Bloomberg) — Former U.S. Treasury Secretary Paul O’Neill said the $700 billion bank-rescue proposal under negotiation in Washington is “crazy,” with potentially “awful” consequences for the world’s largest economy.
“Doesn’t this seem like lunacy to you?” said O’Neill, who was President George W. Bush’s first Treasury chief, from 2001 to 2002, in a telephone interview today. “The consequences of it are unbelievably bad in terms of public intrusion into the private sector.”
O’Neill’s objections mirror those of Republicans in the House of Representatives who rejected the plan in a Sept. 29 vote. The former Treasury chief said he’s lobbying for an alternative solution that would offer guarantees for troubled assets, stopping short of purchasing the debt.
Chi,
Know it well.
“Doesn’t this seem like lunacy to you?” said O’Neill”
[409],
It certainly sounds like lunacy to me.
I can’t believe that Stu, Lil Gator and I will be flying during tomorrow’s debate festivities…and not on Jet Blue, so we’ll be reduced to You Tube and Cable News Video.
And in other news, my NJT Conductor just made the following announcement over the PA: ‘It’s raining out. I hope all you ladies brought your umbrellas, because sugar melts in the rain.’
John’s used car analogy doesn’t seem off to me. Just because no one shows up to bid that weekend doesn’t mean the car will be worthless in a year. That is the problem right now: short term fear caused by an inability to pinpoint where the next black hole is is causing everyone to hold back the flow of money. Gov’t steps in and throws out some bids and the great unknown starts to become known. You are assuming that all of this fear is rational. Some of it is likely irrational fear of the unknown
“Credit is the motor oil that keeps the US econonmy humming. ”
Unfortunately, the bill that is being debated was not crafted carefully and with due consideration. As a result, what we are faced with is KY jelly, to lubricate Joe and Jane Main Street. I suppose we should be grateful for that consideration, as it could have been worse.
“flying during tomorrow’s debate”
No wifi access in the air is a pain. Too bad you can’t use an aircard to pick up internet via cell towers.
I hate cut-rate pirates:
http://www.nytimes.com/2008/10/02/world/africa/02pirates.html?_r=1&em=&pagewanted=print&oref=slogin
Somali Pirates Said to Reduce Ransom
By JEFFREY GETTLEMAN
NAIROBI, Kenya — Negotiations over the arms-laden freighter hijacked by Somali pirates intensified on Wednesday and several people close to the talks said the showdown had come down to price.
The pirates, who seized the ship last Thursday, initially demanded a $35 million ransom, then dropped it to $20 million and now it seems they are willing to settle for much less.
“It’s down to $5 million,” said Andrew Mwangura, program coordinator for the Seafarers’ Assistance Program in Kenya, which tracks pirate attacks and communicates with the families of crew members. “But this needs to be done quickly. The longer that ship stays in Somalia, the more people who are going to get involved and the greedier they’re going to get.”
snip
Here’s an article from November 2000 concerning tech stocks.
“Paul Cherney, Standard & Poor’s market analyst, gives an overview from a technical perspective in his “Cherney on the Markets” column (available on Business Week Online and S&P Personal Wealth). He sees a “relief rally” in stocks once the election results are finally decided — though it may be brief.
Over the longer term, he views technology stocks as a driving force and expects a rebound — where earnings justify. He singles out Intel, Cisco, Dell, Sun Microsystems, and Microsoft as ones to watch. “
Is 8 years long term enough? MSFT is doing the best right now being down only 20% from that article. Dell down less than 40% but had a run in positive teritory for a while but that’s gone now. Intel and Cisco down close to 60% from the article. Sun, well… they had a long long way to fall. Down nearly 100% from the time that article was written.
http://www.businessweek.com/bwdaily/dnflash/nov2000/nf20001121_169.htm
Someone want to try and put a market value on those Goldman MBS I mentioned in 162?
Here’s a chart comparing the stock prices mentioned above for reference. Starts from around the time the article was written.
Even piracy seems to be declining in value.
413 –
Skep, If the used car is a Ford F150 and gives you 5 mpg, that fear would be understandable.
A simple question – LEH’s books were open for everybody to see. Why didnt anybody buy it for $4/share? I mean there was potentially tremendous upside to that deal, wasnt there?
Again, I fail to understand what happens when the FED runs out of cash to throw around? Who will bid for the rest of the stuff? Assuming that the Fed has the wherewithal to hold them to maturity and realize profits, do the rest of them have the capacity?
The only way to do that (as Chi suggested), would be suspend mark to market and mark it to some fantasy model and wipe it off their books. But then, the issue of trust comes into picture and lending is all about trust.
I guess the bottom line is – is 750 Billion enough, all evidence points to the contrary at this point.
Tom,
But RE is different. BTW, it is a GREAT time to buy.
“The only way to do that (as Chi suggested), would be suspend mark to market and mark it to some fantasy model and wipe it off their books”
Newt Gingrich has suggested a moving average as an alternative.
Robert Kiyosaki, on Fox Tonight, says:
If a reasonable Bill fails to pass, we will have a Great Depression.
If a reasonable Bill passes, we will emulate the Weimar Republic with Hyper Inflation.
There are no winning choices.
How come there’s no news regardsing whats going on with commercial hard money lenders?
Got some spam recently that made me think of them.
re: hyperinflation: $700B sounds like a lot of money, but look at what is happening in Europe. Ireland just dropped $400B– double its GDP. Fortis is worth more than the GDP of its home country, Belgium. Basically the only real alternative to the dollar is the euro and that is probably more screwed. a lot of countries have an interest in propping up the dollar so I say let them absorb some of the pain
Found a video of Sen Byron Dorgan, who wanted to add the ammendment to Gramm-Leach-Bliley regarding derivatives.
Added it to my post on the repeal of Glass-Steagall.
He predicts the problems we’re seeing today when he was arguing against it. Only 7 other senators voted against.
#425 skeptic: So rather than being skpetical, you believe that this is the answer.
skep [425],
Why are you using $700B as a benchmark? It represents a drop in the bucket. World markets in a deep freeze over $700B? Come on, you know better than that. $700B is the teaser rate. You will be dealing with an exploding arm, if you want to put a dent into this problem.
I agree with Confused, it’s either deflation or Weimar. Pick your poison.
#425 – Isn’t this all evidence of an economic system that is so out of balance it is incapable of begin saved?
I heard the same thing about Fortis’ liabilities in relation to Belgian GDP (or was is GNP?), it was so depressing all I could do was laugh.
kettle1 (153 & 163)
Thanks for your analysis of banking pyramid and the explanation on Europe. It gave me shivers reading it.
(watching C-span again, man, I need a life!)
Marked to internal assumptions?
“Wachovia went out with a book value of $75 billion. Citi paid $2 billion. Could it be that asset values are overstated, not understated?”
-Michael Rapoport, Dow Jones
Stall the bill, we need a couple trillion here;
“DETROIT (Reuters) – The number of U.S. car dealerships closing is expected to increase into 2009 with as many as 3,800 dealerships at risk of closure because of dwindling sales and tighter credit, according to a newly released study by Grant Thornton LLP on Wednesday.”
http://www.reuters.com/article/domesticNews/idUSTRE49069R20081001
More on auto sales, from BP,
“http://4.bp.blogspot.com/_8rpY5fQK-UQ/SOPfqajdkqI/AAAAAAAAEak/QfS-rVs4P1k/s1600-h/auto.png”
SEC has extended the ban on short selling.
Scribe,
Until?
Please excuse my ignorance but what is RTS?
Soros Says Paulson’s Financial-Rescue Plan Is `Ill-Conceived’
By Katherine Burton and Matthew Benjamin
Oct. 1 (Bloomberg) — Billionaire investor George Soros said the U.S. should inject equity into banks rather than buy their bad debts as proposed by Treasury Secretary Henry Paulson in his financial-rescue package.
“The plan is ill-conceived or not conceived at all,” Soros said today in a telephone interview, calling the current credit meltdown “the crisis of a lifetime.”
shore,
not sure
but the Senate just passed the bailout bill.
TARP bill results at 9:38pm
Yes-74
No- 25
Unemployment down to 2%!! I am feeling better already.
“The plan is ill-conceived or not conceived at all,” Soros said today in a telephone interview, calling the current credit meltdown “the crisis of a lifetime.”
Another ill-informed, arrogant tazpayer.
That’s taxpayer.
Marc Faber called the market as oversold and said it may rally until March. I sure hope he was kidding.
He also said that the bailout should include the people who lost their money in the dot-com bust, people who bought in 2005 etc. That would make the bailout plan fair.
BC Bob Says:
October 1st, 2008 at 9:44 pm
“The plan is ill-conceived or not conceived at all,” Soros said today in a telephone interview, calling the current credit meltdown “the crisis of a lifetime.”
Another ill-informed, arrogant taxpayer.
Bost: With all due respect to Soros and sundry economists, they are sitting in the quarantine room during the plague, and judging those running in the hysteria. I want to hear from Soros as much as Bono about his judgement here….
Fcuk Trichet and Brown. Throw them in the heap with the other liars.
Chi,
All due respect. I’d much rather listen to Soros than;
Bush
Paulson
Pelosi
Frank
Dodd
Etc…
are they extending the no short sales from oct 2 to nov 1, or will we see madness in the market tomorrow?
(sorry, only on comment 200)
kettle,
thought you might be interested in this one here:
http://s31076.gridserver.com/images/uploads/guide-corporate-media-ownership.pdf
SAS
I just read…
Moreover, the increase in federal deposit insurance will not be financed over the short term, as the insurance program now is, by assessing premiums on banks that benefit. Instead, banks will get an open-ended line of credit directly to the Treasury Department. But the Congressional Budget Office noted Wednesday that federal law required the banks to eventually make up any shortfall and any loans to be repaid, though not until at least 2010.
….
open-ended? so they can borrow to repay deposits they can’t cover, if they PROMISE to pay it back?
anyone have a link of the new bill?
I haven’t read it yet.
anyone?
SAS
hey Grim,
you among the living?
Haven’t seen you for awhile.
Hope all is well.
SAS
Vic (420)-
Still maintain that all we’re doing is selecting the most palatable fraud to use so that we can make up a happy story that allows us to continue mainlining debt.
People think pain will come if we don’t do the bailout? Wait about 6-12 months. We’ll be wishing we’d just bit the bullet now and started picking up the pieces.
OT: I guess as bad as the Mets bullpen is, it just managed to get worse. Stupid %uck, I hope he fries……
http://sports.espn.go.com/mlb/news/story?id=3620877
oh, thats right.
Isn’t tomorrow the VP debates?
That should be a real peach.
SAS
skep (425)-
You say that as if Europe and the US were not intertwined like two giant, dying octopi.
Their pain is our pain.
BTW, don’t be surprised by the giant rate cut we’ll be getting right around election time. It the USD and the world’s currencies, locked in a race to the bottom.
“the proof is as clear as day that 9/11 was an inside job”
the question for me is did they hire the hitmen… or did someone give a tip off and they stood down.
SAS
Several senators that spoke before voting tonight admitted to getting hundreds of calls/letters, etc. against this bill.
So, if the American people are so much against it, and have stated as such, why aren’t they being represented in the Senate?
Cosa Nostra at least listened before they whacked ya’.
BC (428)-
Hell, it’s gonna be Weimar and deflation. First, Bergabe attempts to hyperinflate our way out of this mess…then the inflation fails to produce even the illusion of growth, and it’s straight back into the nasty deflation that’s rearing its ugly head right now.
RayC (449)-
Look at the bright side: the Treasury and Fed are already pretty adept at accepting IOUs and deposit bottles. They should be well-equipped to accept verbal promises of payback at some unnamed future date.
BTW, this arrangement always worked very well for Wimpy and Popeye.
I will gladly pay you Tuesday for a hamburger today.
Short Selling ban extended till Oct 17.
Vic (461)-
Oh, great. That should fix everything. Grim, you can go ahead and shut down the blog now. Nothing more to see here.
Seriously: do these guys just wake up every day and start dreaming up things to do?
The Securities and Exchange Commission’s decision two weeks ago to ban short selling of nearly 1,000 stocks failed to prevent big declines in share prices in some of the best-known financial companies, has made an already edgy stock market more volatile and has raised trading costs for investors.
LOL!!!!!
The SEC extended the ban on short-selling rules until three days after the $700 billion financial rescue legislation is enacted into law. It won’t extend beyond 11:59 p.m. on Oct. 17.
Now, all we need is mark-to-fantasy to be enacted and we will have Paulson’s wet dream come true.
Vic (464)-
Note to myself for tomorrow:
– canned food/ramen
– ammo
– ducats
– maps
– make list of friends who might have C4
– store more water
– find recipes for small forest critters
Clot –
Haven’t you heard? Franklin Twp. is the 5th best small city in the USA.
The Yanks will have their YES cash cow for the foreseeable future. The Mets only have a stake in SNY. They could carry their own channel if they filled the off-season with 70s disaster movies.
VPCLF believes there is a constitutional right to privacy. Also can’t name any other SC decision other than Roe. This is getting pretty painful to watch.
http://www.youtube.com/watch?v=0rXmuhWrlj4
Did you get that ammo yet, Nom?
http://politicalticker.blogs.cnn.com/2008/10/01/cnn-polls-major-gain-for-ob*ama-in-battleground-states/#more-21773
Opinion Research for CNN and Time. 9/28-30. Likely voters.
Florida, MoE 3.5% (9/14-16 results)
McC (R) 47 (48)
O (D) 51 (48)
Minnesota, MoE 3.5% (8/31-9/2 results)
McC (R) 43 (41)
O (D) 54 (53)
Missouri, MoE 3.5% (9/7-9 results)
McC (R) 48 (50)
O (D) 49 (45)
Nevada, MoE 4% (8/24-26 results)
McC (R) 47 (44)
O (D) 51 (49)
Virginia, MoE 4% (9/7-9 results)
McC (R) 44 (50)
O (D) 53 (46)
Senate votes to keep the bubble inflated. House likely to follow suit. In other news, legislators mull repealing law of gravity, banning static cling, and taxing those little rocks in the corner of your eyes when you wake up in the morning.
I heard the Flat Earth society’s candiadate is moving up in the polls.
This is why the bobble-heads at CNBC are in the tank for the bailout. GE is their parent company.
“Warren Buffett’s Berkshire Hathaway Inc. is investing $3 billion in General Electric Co., a huge vote of confidence for an iconic American company battered by the credit crisis.”
“…the conglomerates’ shares have dropped 42 percent in the past year, badly hurt by its financing business, which accounts for nearly half it profit, and has taken a big hit from falling consumer confidence, tighter credit, and the collapse of housing markets.”
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20081002/BUSINESS/810020383/-1/newsfront2
Yawn. The Gator is just not meant to go to work early. I’d much rather be sleeping than on the 6:14. Sigh…
Abandoned house sells on Ebay for $1.75
http://news.yahoo.com/s/ap/20081001/ap_on_fe_st/odd_cheap_home
Bought by a flipper.
At least now he flippers will only lose pocket change. Oh, she has to pay $850 in back taxes and yard clean up costs.
What did P.T. Barnum say?
jmac (466)-
The Mets can just show re-runs of their past two seasons. Those qualify as disaster movies.
Gator,
You work in Manhattan?
Yes, Shore. That’s why we will be trapped in an overpriced train towm in Upper Haughtyville.
“House prices in the UK have fallen by a record 12.4% in the past year, according to the Nationwide Building Society.” (longest link I have ever seen)
http://news.sky.com/skynews/Home/Business/House-Prices-In-UK-Have-Fallen-By-124-In-The-Past-Year-According-To-Survey-By-Nationwide/Article/200810115111665?lpos=Business_Carousel_Region_1&lid=ARTICLE_15111665_House_Prices_In_UK_Have_Fallen_By_12.4%25_In_The_Past_Year%2C_According_To_Survey_By_Nationwide
anyone read the stupid new 400 page document?
I love how it has gone from bailout to ‘rescue.’
who are we rescuing? and why? do we know how/why they got in this position?
KL: Well, that interpretation is not what I intended, and I apologize if the reference spoke to you in text the wrong way. I used the referral in my own mind as a way to provide a personal identity to the post, as opposed to railing at some digital person out there. Maybe what is offending people is the language I am using that surrounds the urgency I feel about how this issue is misunderstood.
Chifi,
Thank you for feeling my pain (-: I know your posistion, I respect your knowledge, I just disagree. If I am wrong I have much more to lose than you, not because I am short in the market, but because I am financially unprepared for the upcoming crisis. So I would like it to start and finish, to put it in the most simplest terms.
KL
Grim,
Nicholas Taleb was on NPR this morning. He said that this is NOT a Black Swan event because you could see this coming.
The other guest came up with the best analogy for the situation at the moment. He compared this to a chocolate souffle. I guess someone just turned the oven off and they are about to open the oven door.
Gator,
As bad as the commute may be at least it means that you are ever immune to declines inthe RE market, since you are under the protective force field of the mighty Gotham.
#466 Don’t forget antibiotics, narcotic painkillers, chocolate and coffee.
clean boy joke stay no deliver go see white jhon boy head all red black
yahoo stay all canada you tree boat joke black we clean
you juicy english look red trust home steven speed england
all global white boat jhon kitchen me woman global you usa
jhon joke sea tom frog red we head university deliver canada
google right microsoft girl red black ibm frog england tree letter wood
key ugly google dog letter stone usa england we see elephant
woman water ugly head no university global dog
red pets frog trust england cube white key keyboard all water go
we home apple apple home tree sea
microsoft we look white bag boat greed see vacant vacant
deliver university site joke this we google stone tree
joke student all vacant look you stay wood head cube greed all girl
head right tree jhon deliver
student sun pets deliver all dog bag woman university girl
red white frog australia no you america look day
house speed home steven jhon man man university busy we boat key keyboard
day letter water cube see ocean global global house vacant busy free
microsoft water pets look woman sea key deliver
head day all free car global car trust man red woman all pets see frog
right canada speed land england juicy student steven red bag steven
ocean sun jhon australia joke
ugly car red you green go red are
bag apple vacant kitchen australia red bag head minor white girl vacant greed
greed jhon we ocean see red day cube ocean
tom frog tom cube house site green sea stone key juicy
america england trust wood tree
deliver man me vacant go land house cube yahoo go frog
boy key apple we greed busy yes no this sea
go ocean keyboard land glass german glass canada usa site no ugly
all letter minor mail head dog canada red red trust red key global australia water
water free tree head frog jhon boy land america
jhon are see boy all wood kitchen house this all head night
mail jhon steven you see ibm site all tree
no yes boy minor jhon
trust tom yahoo car all joke
busy black apple steven day tom microsoft woman usa ocean
watch global minor dog stone black
night sun keyboard canada student watch wood all pets frog red
wood juicy no see home no
frog night day deliver girl red all usa clean man usa are me head
glass frog watch busy english university
head steven glass wood letter watch university bag dog microsoft red red
right site girl tree greed ocean
wood glass usa car juicy house student elephant watch
england england glass pets no house home ibm glass google house canada university
australia ocean woman pets tom dog house global we house global joke microsoft
stay vacant microsoft right girl free red
wood deliver busy stone german joke yes letter wood wood
yahoo frog stone ocean minor
black green tom australia sun tom
house right this ugly head land man land trust we
juicy no stone woman
jhon busy red pets yes keyboard you
keyboard see minor stone land usa
english red white all england
jhon google black site
all trust boy cube ibm glass car no bag go site go
sun elephant boat white joke stone trust bag pets this all letter
black wood are elephant
ibm sun kitchen key glass juicy bag
house vacant jhon canada jhon microsoft tom see head
juicy dog google pets tree canada clean greed letter green global
ocean juicy google glass boy
all woman jhon english all yahoo white jhon letter
usa wood look speed
house you red car water glass joke joke me minor greed
elephant red english key home yes we see stone
frog global canada water steven all key sun woman
mail bag bag free house no busy wood vacant head ibm
deliver night stay home right jhon yes black
yes head all red tom university right boat minor juicy
right america white juicy letter all are mail sea
sea me frog ugly jhon green house sun sun pets steven yahoo kitchen watch sea
mail sea tree yes frog jhon look england yes are house
this home letter no site night land
no stay clean yes go me
bag black right elephant water letter minor green england watch yes
house no land tree yahoo see watch red stone
yes woman yahoo car frog man are clean house tree
student dog free boat green
red ugly student white ocean man bag car sea watch greed university keyboard ugly
ibm free key me see red usa
white jhon deliver night global we all tom busy
elephant tom boat busy trust
speed sea deliver are green ugly all ugly wood
yahoo keyboard dog german
free yahoo usa watch black google minor elephant day you steven sea car
university key tree letter usa german australia busy jhon canada
green ugly house speed house sun home water trust australia glass
usa dog tom watch house head bag joke
juicy busy mail england bag mail england
canada tom red google you girl see
red cube night deliver boat free green cube boy
night yahoo letter night tom keyboard are water stone jhon
stone deliver man car woman tree greed yes
busy ugly elephant water ugly stay ocean
kitchen jhon steven tree house no
busy england house busy white stay yes google vacant clean me white
elephant glass all no usa house glass stone mail
are see stay cube day you
me all white apple usa deliver black canada ibm
ocean australia boat deliver america green australia
tree red england sun go water vacant stay you
student england wood boy house australia deliver car student
sea ibm yes german keyboard trust student england are
apple busy kitchen house stay frog england speed vacant
trust global home apple kitchen head minor white clean red america house
pets land all head stay speed site see joke minor house house jhon clean
right black girl student girl right yahoo australia
google head letter no look dog apple
england bag go usa australia boy see yahoo usa free mail
white sea sun stone are
speed juicy free stone yahoo letter boy steven global apple night wood steven key
free speed car glass stay student red england
red speed greed this yahoo home speed juicy we australia
canada canada site head water america we day apple bag we black jhon house
girl water free minor steven you me student
right kitchen house free
see sea wood stay you australia bag tom joke car head frog
global ibm yahoo land day ocean pets pets no look cube black you
elephant minor stone boy man pets glass home stay watch man
water free car keyboard black red deliver girl australia letter student
black right house global speed england vacant ocean cube university frog
busy water sea minor stone sea
head night ocean site joke
australia cube ugly you elephant house english ocean you america ugly google tree yahoo
mail wood busy vacant ocean head yahoo see sea student home canada stone
boy red red glass girl home man site jhon elephant
water german busy bag free keyboard ugly
home elephant stone cube australia stone watch
go england watch watch apple green sea woman glass elephant house you boat kitchen juicy england
go sea free sun usa watch canada wood car elephant
are site bag water no kitchen ibm we car university
are letter stone microsoft minor english vacant deliver white
glass kitchen busy boy apple dog all clean green steven site stay
site right head go kitchen english busy house are boy site
woman joke letter jhon man dog black green
student this frog free apple glass
microsoft all microsoft jhon me white
ibm home german ibm sea man steven dog pets jhon
boat look key you me no
student watch yahoo global english red letter yes america vacant right stone clean letter water
frog watch dog microsoft glass man house go see england home
yes boat joke busy red bag mail
no cube watch keyboard juicy stone house water
global girl green we this greed university ocean busy
boat no watch pets tom you look
no water cube busy australia apple
sun all university are black glass sun dog water german car free mail joke
boat all cube yes
watch see we jhon boy home man see usa day site
me trust mail all letter apple right this keyboard yes water microsoft all
woman speed sun land tree microsoft
usa jhon look speed apple busy usa apple home bag red deliver free white yes
tree kitchen girl free yes canada land girl no
german green this day sun glass stay girl australia man night clean
tom ocean red clean greed
sea vacant canada boat we keyboard white mail no stay kitchen
ugly man watch watch car this jhon
apple yes australia jhon black glass woman steven usa keyboard
boy ugly stay trust house ocean white ibm key speed white clean me
trust juicy free you dog man all letter key
english letter land are elephant keyboard house
letter night elephant sun we keyboard german pets
canada ocean america tom no go red german all minor ocean jhon
are dog jhon watch head sun clean clean yahoo elephant trust
clean global mail day wood vacant usa no joke key you student
dog juicy we yahoo stone ocean clean elephant red all water juicy green
greed stay minor stay glass red you ugly boy clean
right right white elephant are
usa frog tree glass student site go juicy
juicy we bag elephant black ugly vacant are you land
watch sun tom frog glass
cube watch stone english water
night go jhon yes red woman look minor
look vacant day clean juicy
pets home apple juicy key bag man watch this
deliver stone green boy elephant me australia key england ocean clean
are stay apple ibm minor
microsoft bag see dog
ocean frog site elephant stone black kitchen we google
english elephant jhon site girl clean keyboard deliver all
google green woman glass english head apple tree sea speed jhon
vacant tom key keyboard canada speed
me day minor dog site girl head green house english england woman
house night america global yahoo cube deliver joke tom german minor global
me land greed day university ugly man clean
man university stone water keyboard boat minor speed home stone red clean