From Bloomberg:
Fed, ECB, Central Banks Lower Rates in Coordinated Reduction
The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented, emergency coordinated bid to ease the economic effects of the financial crisis.
The Fed cut its benchmark rate by a half point to 1.5 percent, the central bank in a statement. The ECB and central banks of the U.K., Canada, Sweden and Switzerland are also reducing rates, the Fed said in a statement.
“The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability,” according to a joint statement by the central banks. “Some easing of global monetary conditions is therefore warranted.”
From the Wall Street Journal:
Housing Pain Gauge: Nearly 1 in 6 Owners ‘Under Water’
The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults — the very misfortune that touched off the credit crisis last year.
The result of homeowners being “under water” is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall.
And having more homeowners under water is likely to mean more eventual foreclosures, because it is hard for borrowers in financial trouble to refinance or sell their homes and pay off their mortgage if their debt exceeds the home’s value. A foreclosed home, in turn, tends to lower the value of other homes in its neighborhood.
About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody’s Economy.com.
The comparable figures were roughly 4% under water in 2006 and 6% last year, says the firm’s chief economist, Mark Zandi, who adds that “it is very possible that there will ultimately be more homeowners under water in this period than any time in our history.”
Among people who bought within the past five years, it’s worse: 29% are under water on their mortgages, according to an estimate by real-estate Web site Zillow.com.
From the Federal Reserve:
Press Release – October 8, 2008
The Federal Open Market Committee has decided to lower its target for the federal funds rate 50 basis points to 1-1/2 percent. The Committee took this action in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures.
Incoming economic data suggest that the pace of economic activity has slowed markedly in recent months. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit. Inflation has been high, but the Committee believes that the decline in energy and other commodity prices and the weaker prospects for economic activity have reduced the upside risks to inflation.
The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.
Cindy [392], Previous thread
Bernstein, along with Roach are just a part of the few that have leveled with the public over the past few years. He is spot on, nobody is focusing on the real problem, the econmoy. You can jump up and down, bang tables, massage, throw band aids in the air, etc.. You can’t force more leverage down the throats of an economy that is deleveraging. The world economy has fallen off a cliff. That’s the real issue. Everything else is smoke and mirrors.
From Reuters:
Fed leads global coordinated rate cut, eases by 1/2 point
The Federal Reserve led a coordinated round of global official rate cuts on Wednesday, easing by a half-point, as did the European Central Bank, Bank of England and Swiss, Canadian and Swedish banks. In an attempt to stem unprecedented global market turmoil, the Fed cut its key federal funds lending rate by half a percentage point to 1.5 percent and also lowered its discount rate by the same amount to 1.75 percent.
The ECB also cut by a half-point to 3.75 percent as did the Bank of England, taking its rate to 4.5 percent.
Dollar carry trade.
Asian markets in the crapper … could be a queasy day once the clock strikes 930
I love this line from GMA: “5 to 10 years from now, you’ll probably recoup your stock market losses.”
Tell that to someone in the 45-60 range.
Grim, have you had any media inquiries lately?
Rally on?
(3)BC – Phew – I was hoping someone would agree that he made sense. He made sense to me – All of the financial solutions in the world aren’t being well received because they are not real economic solutions.
futures up a whopping 168 points!
http://ap.google.com/article/ALeqM5gHs5OM3gFG_DytQQZFbWfgPT08MAD93M9BTO0
wonder what will happen by noon.
Wow, didn’t realize the Nikkei was down 950 points.
JB [10],
3rd worst % move ever.
They keep cutting rates but my student loan rates stay the same.
“They keep cutting rates but my student loan rates stay the same.”
Lost,
The only parties to benefit are idiot bankers and those long hard assets.
13 BC
I guess you’re right. Like I always say, I’m in the wrong business.
So it appears they are pulling out all the stops to try and keep things stable BEFORE the election. How lousy do you see things getting AFTER the election? Dow 6000? 15% unemployment?
what are some foreclosure sites out there? given the current economic conditions of the banks holding these ‘toxic’ assets, maybe we can just walk up to the bank and offer 50 cents on teh dollar for the home of our choosing….
the more i hear about whats going on out there, there more i am getting into vulture mode….
thoughts? comments?
“Less than a week after the federal government had to bail out American International Group Inc. (AIG), the company sent executives on a $440,000 retreat to a posh California resort, lawmakers investigating the company’s meltdown said Tuesday.
The tab included $23,380 worth of spa treatments for AIG employees at the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy
”
http://apnews.myway.com/article/20081008/D93M0K6G3.html
The absolute GALL of these people!! We ought to storm 70 Pine St, NYC this morning. Torch their headquarters and see what kind of insurance they have!!
Demand didn’t get hit, it got bombed;
“NEW YORK (Reuters) – U.S. retail gasoline demand dropped to its lowest level since September 2005 as gasoline demand dwindled due to the wider U.S. economic slowdown, MasterCard Advisors said Tuesday.”
“Year-on-year, gasoline demand plunged 9.5 percent.”
http://news.yahoo.com/s/nm/20081007/us_nm/us_usa_gasoline_demand
CAIBC [16],
Happy hour pricing has entered the building.
Fiddy [17],
And, thank you taxpayers.
HEHEHE,
its the perfect storm brewing out there….real estate market – almost vanished….stock market – spiraling down……elections coming up – govt will be in disarray for at least 6 months…..
buy more mattresses and start stuffing….although, the way our govt is just printing money – those pieces of paper in your mattress may not be worth much!!!
Hey Cox, glad to see the ban on short selling has done the trick. Please step up and walk away. You incompetent rogue.
Hey JB, how about the next GTG in Iceland? The exchange rate is favorable. Maybe we can invite Putin?
is there anyway the govt can go directly to the bank accounts (check offshore accounts too) of these CEOs and get paid back from there first? there is absolutely no reason why any of these CEOs should be able to keep any of the profits from their tenure at these companies…..
there should be at least a few billions in there…
Hey JB, how about the next GTG in Iceland?
On my list of places to visit before I die, but I’d rather host a GTG at the St. Regis. Well, as long as Hank picks up the tab again.
Just send the bill to AIG.
I hear the $23K Spa treatments are da bomb! They must rival one on John’s Rub-n-Tug’s!!!
http://www.oftwominds.com/blog.html
Here’s an interesting take – You think there are a lot of vacant houses now? Wait until folks lose their jobs – or retirees need extra cash. The houses are bigger now so….They may fill up with grandma, cousins, etc. – out of work. MORE houses on the market…
Employment as an issue is HUGE.
don’t worry – this will do nothing for Libor rates – 3month twas up 20bp last night (pre-cut), is currently trading a mere 10bp below that. So Libor/OIS rate now 300bp, wider than ever.
#28 – And TED is back at 391bp.
don’t worry – this will do nothing
When all you have is a hammer, every problem looks like a nail.
I love this line from GMA: “5 to 10 years from now, you’ll probably recoup your stock market losses.”
Tell that to someone in the 45-60 range.
Good point. The question is will the boomers with retirement looming really even risk getting back into the market at this point? Or, will they cash out what’s left, lick their wounds and get conservative?
“Employment as an issue is HUGE.”
Cindy,
Numero Uno. Yet, the masters think that some additional finacial engineering will solve the problem.
JB,
Hold onto that shiny.
Mac announced his plan last night to have the Gov. buy up mortgages and write down the principal to market value to keep home borrowers in their home. When the Republicans start talking like this we are really screwed.
Friend of mine went to Iceland a couple of years ago. He said he never saw so many beautiful women in one place in his life.
28/29/30,
I would love to hear from skep, how the bailout, stroke job, bill, will thaw the world’s credit markets.
The 1934 market losses were recouped in 1954.
34 Old Stan
I’m pretty sure that was already in the 700B bailout that just passed. It’s not new.
#34 – It would be nice if he understood that we are not talking about individual mortgage notes. A lot of people have a hard time grasping the whole MBS thing.
Surely someone on the “Straight Talk Express” could explain this to him.
Hehehe, yes, when I was there, it was like models worked in every business. But it seemed as if the same girl worked every place, because they all looked alike.
Re AIG,
I think once the employees found out the government had taken over they decided it was ok to spend money like they were government employees.
Clot, when do you think the inventory of houses on the HUD auction sites will begin to grow again?
I want another rate cut!!!!!!!!!! 50bp was just a teaser.
The scary news was the Jap stock Market, back in the late 1980’s that baby was at 40K, today it is around 10K. Over a 20 year period you would have lost 75% of your money which is why when rates were zero people still kept money in savings acoounts in Japan. We are headed there. Horrible news for the stock market. But at least we get a little pop today.
That AIG story is stupid news they booked that conference way before the collaspe and that stuff is non refundable.
He phrased this like it was a new proposal, although I don’t see much difference between paying par for MBS, writing them down and selling them for a big loss vs. doing the same for individual mortages. Either way, the homeborrowers who overextended themselves out of fear, greed or stupidity are going to get a $50K + free grant from the taxpayers.
“I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes.”
McCain said that would allow people to make payments and stay in their homes. He acknowledged that such a plan would be expensive, but added that “until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”
http://features.csmonitor.com/politics/2008/10/08/obama-mccain-debate-jabs-but-no-knockout/
UGH;
“This “bail out” is an absolute joke. The idea the US government can control or diminish house mortgage failure or control or influence the price of housing; is absurd.”
“Many more people will be walking away from their home mortgages and a lot more mortgage derivatives will fail. This is not the stock market talking, it is home prices on main street. It is the chiseling away at equity by homeowners who now find their little gold mine is a money pit. It is worth less than their debt they have piled onto their home and the mortgage, and it only makes sense to walk away and buy the house next door for thousands less.”
“Tens of millions of US homeowners are aging and selling homes in the suburbs and this will accelerate.”
“There is an exodus from the suburbs to population centers as traffic, cost, age, and pollution, become more of a concern.”
“The US is experiencing high unemployment, and an economic “slowdown” as “consumers” have less to spend.”
“The number of residential mortgages “underwater” will continue to rise for at least a year.”
“It is no longer a new homeowner “sub-prime” lending problem – as many “prime” older homeowners are now underwater due to the constant chiseling away at their equity through second mortgages, and equity lines of credit.”
“Sixty to eighty percent of US residents are two weeks from the streets, if their lines of credit-money and/or job is lost.”
http://perth.indymedia.org/index.php?action=newswire&parentview=132914
My response to McJohn’s mortgage buyout plan from last night.
If that’s what the deadbeats and over spenders get, then the responsible smart money gets a 3-4 year no cap gains on ANY property they buy within those years, regardless of when they sell. This includes willing the properties to relatives, its grandfathered in.
This is not only fair play, but it makes economic sense of the name of the game is to jump start a dieing or dead market.
and the futures go negative…
#35 – I’ve heard the same. Per some Euro friends who have spent time there; they’re all beautiful, have no idea they are, and can easily drink any man under the table.
Apparently Icelandic men are borderline knuckle dragging trogledytes.
Or so I’ve been told.
“We are headed there.”
John [43],
Yep.
The UK have come up with a plan that might actually work. They are planning to guarantee all overnight interbank lending. If they put the regulations in place for minimum capital requirements, it might get LIBOR back under control.
Target same store sales down %3, rally canceled.
Rally on?
Rally off
From BP;
“One other thing I’ve done, is I’ve called on private sector mortgage banks and banks to be more aggressive about lending money to first-time home buyers. And the response has been really good. There’s a lot of people in this — our communities around the country that deeply care about the issue of homeownership, and they’ve been responsive.”
– George W. Bush, U.S. President, March 26, 2004.
lisoosh Says:
October 7th, 2008 at 10:48 pm
Skipped the debate. Looks like I didn’t miss much. Just me, hubby, a bottle of Glayva (better than Drambuie. Shh. Scots secret), and “Don’t mess with the Zohan”.
Not hilarious. But a better night than it seems anyone else had.
lisoosh: Mets fans have a new phrase “Don’t mess with the Johan”.
Nobody’s been shopping in Targets down here. Target is where the 20-30 something people go who are trying to appear green and anti-Walmart. But when you get hungry, all those wonderful ideals go out the window.
I’ll tell you what parking lot has been full. Salvation Army. That place is rocking.
And the first thing out of the PTA president’s mouth last night was, “With the economy as bad as it is, I’d like to propose that we suspend some of the fund-raisers we’ve had in the past….”
No new climbers this year.
Kids and old folks suffer first.
And animals.
MEG WHITMAN. I still can’t believe I heard that.
“I too know of the Glayva that you speak of.”
Actually, it is one of the few ways I can stand the taste of Honey.
Krugman makes with the yucks. Warning: Python references ahead.
“And having more homeowners under water is likely to mean more eventual foreclosures, because it is hard for borrowers in financial trouble to refinance or sell their homes and pay off their mortgage if their debt exceeds the homes value.”
Of course, had such home-renter-owners contracted for a 30-year fixed-rate mortgage, the value of the home would be of little more than academic interest, as long as they were able to make the payments and they were not forced to sell for some other reason, such as job relocation.
Let me see if I got this straight: They cut interest rates again so that banks can lend to each other and ultimately lend to the plebians who can’t pay it back. Ok, understood.
Euro exchanges all pushing the -%4 range now.
Really thinking hard about what is going on….for those not paying attention…we are at about the one year anniversary of the equity market top….you have some eye popping 52 week returns:
DJIA: -33%
Wilshire 5000: -36%
NASDAQ: -37%
S&P 500 Index: -36%
Russell 2000: -36%
So the question is…….we have recession pricing…..do we enter depression pricing? If you think recession, then we are done and the way to go is up…if you think depression….then there is more to go….remember, the stock market is a forward looking indicator of expectations by 6-9 months. So what you are viewing is the collective opinion of where the economy will be in April-July 2009……you think there is another leg down or several legs down…..just something to consider before you short the %*#)$()@ out of your portfolio……
gary,
repeat the mantra, over and over.
soft landing
soft landing
soft landing
Friend of mine went to Iceland a couple of years ago. He said he never saw so many beautiful women in one place in his life.
I felt this way about the Playboy party at the Super Bowl in Detroit a few years back. Snowy, memorable, night.
TED spread is at another new record: 4.01
Fed funds futures still show traders are betting the central bank will lower its target interest rate by a half percentage point by the end of the month. On Monday, traders had priced in odds for a 75-basis point cut from the current 2% rate.
Russia has halted equity trades, again.
DJI futures approaching -300, S&P -30 should be an interesting day.
Quick Ben, another 50 bps.
Anyone have any experience with Commerce Bank? They seem to be convenient, but I don’t know if they club you over the head with fees, etc.
Does anyone have a Dow 8k hat?
Looks like the 1/2 point cut was offset by the poor September Retail Sales, so Ben will need another 1/2 point cut this afternoon. He has enough bullets to carry through Thursday. Guess Market tanks Friday.
They seem to be convenient, but I don’t know if they club you over the head with fees, etc.
Their rates are typically lower than their less-convenient competitors. You are indirectly paying for that convenience with lower yields.
I 2nd 3rd and 4th this motion! And add a jail time rider to it…
# CAIBC Says:
October 8th, 2008 at 8:07 am
is there anyway the govt can go directly to the bank accounts (check offshore accounts too) of these CEOs and get paid back from there first? there is absolutely no reason why any of these CEOs should be able to keep any of the profits from their tenure at these companies…..
there should be at least a few billions in there…
—————–
Does anyone have a Dow 8k hat?
Greenspan said anything beyond Dow 6K is Irrational Exhuberance.
Russian markets closed until Friday?
Sign of lack of consumer confidence – at Toy R Us yesterday, a big sign, “We have Wiis in stock!”
Sadly, after this rate cut opened up the floodgates of video game financing, they will be all gone.
Board poll:
How long till people resort to cannibalism?
Rough estimate.
RE:75 Grim.
MICEX is closed until further notice
#77 – If Escape from New York has taught me anything, and it certainly has, about 3-4 months without game shows.
So do I transfer my brokerage account out of MS this morning?
gonna get worse…..
Chi [62],
Those #’s are a treat. You can remain short, short the crap out of it, on a rally, and hedge with protection. The trend is down, why try to pick a bottom? When long term trendlines are broken, nobody really has a clue how far down the bottom is. There will be rallies, maybe 6 months long. That said, what if we are entering a 1968-82 period or Japan? I may just change my strategy. No need to short, just take in premium.
On another note, I would not be surprised by a rally tomorrow. Once the short ban is lifted, there may be huge buying in certain sectors, now that they can hedge their exposure. The bulls may be cheering the expiration of the ban?
How long till people resort to cannibalism?
I’ve got a great recipe for general tsos kitten.
#80 – It’s off a bit pre-open. There have been a lot of rumors about problems there from various clients pulling out.
All disclaimers.
An old family friend (whom we regarded as very intellectual but slightly insane) used to say what this country needs is a benevolent dictator. After last night’s debate, I agree.
Who can we get? Would Bloomberg give up a 3rd term if he could be President Bloomie?
@NJLifer: just don’t trust them with over $100K (or $250K till 12/09)
(85)Seneca
I vote for Paul Volcker.
@grim:
holy sh!t! you run this board but have money in a broker dealer?
tosh,
picked up a 40d the other day, needed something to tide me over until the price on the new 5d comes down a bit
PGC 49
The UK government guaranteeing interbank lending wont help. The UK is just as bankrupt as the US is. it would only take 1 or 2 banks to call the UK government on the backing for it to all fall apart as they would have to print the money.
On top of that Icelandic banks are heavily involved in UK business and as such there is a disproportionately large foreign influence in their banking system. The UK has said they will guarantee all private bank accounts. They were forced to do this because when Ireland did it (and Ireland has a number of Irish banks in the UK) all of the deposits in UK banks started to flow out to Irish banks.
The problem with europe is that they are so heavily interconnected that any one nation cannot act without heavily effecting the other natons. The only way for them to have a successful effect is ether to take unified steps , all nations acting as one, or the more likely scenario; that the individual nations begin to cut some of the ties that currently interconnect them so they can try and isolate themselves from the systemic damage.
Think I am going to take a little money out of the bank this weekend. Got a funny feeling we are heading for a bank holiday pretty soon.
No real evidence, just a hint.
I was raised by a depression era granny. I can handle this.
FYI no PPT at opening bell, they are just going to let it rock and roll.
oh, I have a rather large spa gift certificate that I haven’t used. Must do that this week, I don’t see them being in business for long.
Bost, #3
Cindy [392], Previous thread
Bernstein, along with Roach ..
I couldn’t find the previous thread at 392 …Cindy, could you re-post the article you were talking about?
I was raised by a depression era granny. I can handle this.
Nod, I can’t tell you how many times she told me to “put some money away for the bad times”.
Grim,
I’ve got the money. I’m just not sure about where it is “put away.” I may have to make better use of my fire proof safe.
For you Putin fans…
Had to pick up the parents from a cruise that docked in Bayonne. Waited out the debarkation at the 9/11 Memorial they have which is very powerful. It was a gift from Russia. But then I turned around and saw this mural painted onto the wall of the warehouse adjacent to the memorial. Yup, that is Vlady on the left and Dubya on the right. Speechless.
http://flickr.com/photos/jag9889/2762200709/
Can we get six flags to sponsor the Dow.
Wwwhhhhheeeeeee
Down 220 before my browser froze.
U.K. to Inject About $87 Billion in Country’s Banks.
Prime Minister Gordon Brown’s government will invest about 50 billion pounds ($87 billion) in an unprecedented step to prevent a collapse of the U.K. banking system.
As part of the plan, the government will buy preference shares, and the Bank of England will make at least 200 billion pounds available for banks to borrow under the so-called special liquidity plan, the Treasury said in a statement today. The government will also provide a guarantee of about 250 billion pounds to help refinance debt.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHzUKK8c6Ls0
#89 – Congrats! They’re nice cameras. I’m really tempted by the 5dMkII as well. Any big camera purchases may have to wait for little bit though.
I’ve got the money. I’m just not sure about where it is “put away.” I may have to make better use of my fire proof safe.
Hmm, maybe she said ammo, and I’m not remembering it right.
http://www.cnbc.com/id/15840232?video=881099968&play=1
Scribe – I said “This guy makes sense to me…”
Richard Berstein – We need more than financial solutions – look at employment.
tosh,
I unloaded my Oly kit a week or so ago, was more of a migration than a purchase for me.
#90 Kettle
If they write the rules correctly, there should be no chance of default. The point here is that they need to get confidence in at the highest levels and let it trickle down.
Grim,
Ammo will probably hold its value better then most things, the way things are going
Horrible news for the stock market. But at least we get a little pop today.
John (43)
Market is catching on to these bums managing money supply and send a message this morning.
Shove it.
@grim:
I have a 40D as well. I think the 5D2 is not a good upgrade, since I’m used to the superior speed, shutter, and AF of the 40D.
[106] Ket,
Up for a road trip to ammoman?
(44) John
“That AIG story is stupid news they booked that conference way before the collapse and that stuff is non refundable.”
No, stupid was going…
They should have donated it to someone – anyone…Grim and members of the NJRE Report?
PGC,
The problem is that the UK cannot account for all of the possible effects due to the banks of other euro nations . Other euro nations can take steps that force the hand of the UK. The Irish guaranteeing their deposits is a perfect example. They can write all the rules they want about that but they cannot prevent the money moving to the safest perceived location.
And if you mean that the EU and UK as a whole should make the rules, then that is not going to happen. Too many competing interests. It may have been doable in good times, but not in times of crisis. there are people that have been telling the EU to make such rules for years, knowing that such rules cannot be effectively generated and implemented after a crisis has already struck.
banks wont loan each other money because debt is rapidly losing its value relative to cash. The government, whether UK or US cannot fore the banks to hand out loans again until deleverageing is completed. the are trying to hold back the tide.
Connibalism Yes, right after we get all the money from the Swiss accounts
“Got a funny feeling we are heading for a bank holiday pretty soon.”
AH,
I agree. There will be a bank holiday and probably a stock market holiday. I’m not talking about Columbus Day.
Nom,
emailed you
CAIBC (21)-
Don’t bother stuffing dollars in your mattress. Pretty soon, the greenback will be de-monetized. Worthless. Repudiated.
Introducing: the Amero! They are already being minted!
Watch this and discuss:
http://www.youtube.com/watch?v=ge2J2lNusJs
Clot,
Kind of reminds me of all the early 90s “UN Road signs” stuff.
I am going to a great beach front conference in two weeks, the Marriot makes you pay for whole conference, food and golf outing even if you cancel and everyone who is attending needs CPEs anyhow. Being symbolic and not going and paying anyhow and then taking some on-line CPE classes or some cramped conference rooms does not make any business sense. The problem is AIG is now a govt enitity where spending more money to give apprearance you are cutting back makes sense.
Cindy Says:
October 8th, 2008 at 9:42 am
(44) John
“That AIG story is stupid news they booked that conference way before the collapse and that stuff is non refundable.”
No, stupid was going…
They should have donated it to someone – anyone…Grim and members of the NJRE Report?
BC (22)-
Having a holiday dinner tonight with my pal from the SEC. I’ll pass along your sentiments for Cox.
This is my pal who told me months ago that none of these financial criminals will do a day of jail time.
Cindy,
Thank you.
113 BC
I dont think there will be a bank holiday until after the election. It will spark to much chaos to allow one before then. After Nov 4th all bets are off
Should we arrange a group viewing of Escape From NY as prep for Nov4th?
Cindy,
Perhaps you should arrange a showing of Escape From LA for you and your friends.
LONDON (MarketWatch) — While the global credit crunch is clearly beginning to bite hard, there are some positives to the financial turmoil that it has wrought.
The U.S. election is no longer leading the news.
Whatever your brother-in-law’s brilliant financial move was last year probably looks pretty boneheaded now.
Wall Street bigwigs are exposed as blubbering hypocrites in congressional hearings.
You probably didn’t do anything as embarrassing as the head of Iceland’s central bank, who issued a statement announcing a 4 billion euro loan from Russia when Moscow hadn’t actually agreed to it.
The world will no longer have to spend trillions of dollars to cut carbon emissions since the crisis will do more to reduce greenhouse gases than all the government initiatives, wind farms and cap-and-trade schemes combined.
Capitol Hill bigwigs are exposed as blubbering hypocrites in congressional press conferences.
You probably didn’t do anything as embarrassing as Germany’s KfW Bankengrouppe, which transferred 300 million euros to Lehman Bros. just before the investment bank filed for bankruptcy.
Instead of foreign aid programs or the United Nations, your tax dollars will now go to fund assistance where it’s really needed — Wall Street.
Gasoline’s back down to merely extortionate prices from obscenely extortionate prices.
It’s as good a distraction as any from the Chicago Cubs’ abject playoff failure.
“That AIG story is stupid news they booked that conference way before the collapse and that stuff is non refundable.”
Nonsense. Facials and manicures were not paid way in advance.
“That AIG story is stupid news they booked that conference way before the collapse and that stuff is non refundable.”
In addition, The conference hotels only charge you a reservation fee, and you pay for everything in the end. If they never went St. regi swould have been just another creditor on line to get paid.
They would have got Jack.
(120) Kettle – Yikes!
Off to work..Enjoy
I wonder how much longer until the illegals next door finally pack it up and go back to central America. They already had to pack in 6 adults and 4 kids into a 3 person glorified garage just to make rent.
HE (35)-
“Friend of mine went to Iceland a couple of years ago. He said he never saw so many beautiful women in one place in his life.”
I bet it just got a lot easier to hook up with one.
“If they never went St. regi swould have been just another creditor on line to get paid.”
make,
Send their accounts receivable call to TARP, for payment.
I wonder how much longer until the illegals next door finally pack it up and go back to central America. They already had to pack in 6 adults and 4 kids into a 3 person glorified garage just to make rent.
It appears that my neighbors (two houses up) have abandoned their in-foreclosure/for-sale home. My next-door neighbor has been mowing their lawn.
Pending Home Sales Jumped 7.4% in August From July and 9% From Year Earlier. (Story Developing)
Are foreclosures part of these sales?
Pat (42)-
In about 2-3 years. Most of the recent vintage FHA/HUD damage is done. The foreclosure virus has moved up the chain into Alt-A and prime. We’ll have a lull in the HUD action until the crap FHA loans that are being done right now begin to tap out.
Yes, you heard me right…the crap loans being done RIGHT NOW by FHA. We are still churning out virtual 100% financing to owners who enter negative equity the moment the ink is dry on their closing documents.
make,
MLS-listed REO and short-sales would be, but foreclosures auctions would not.
Do you think people will be able to get FHA loans early next year?
Talked to a mortgage guy in Fla. just now.
He says the psychology has changed. Now, the people he encounters who are getting foreclosed don’t even feel that bad about it. It’s happening to everybody.
C Dawg (132)-
Depends on whether you think FHA goes bust/gets nationalized between now and then.
I think FHA hangs on for a long time. Gotta remember there’s MI on every loan. It’ll take a lot to wipe out that insurance pool.
That being said, I have great confidence in their ability to wipe it out. :)
Now, the people he encounters who are getting foreclosed don’t even feel that bad about it. It’s happening to everybody.
More of a stigma attached to having your SUV repo’d.
#34 I will just cut my bid another 15%
Lets see how the handheld does this:
http://www.snopes.com/politics/business/amero.asp
snip
Neither the U.S. Mint nor the U.S. Treasury has had a hand in creating these “Ameros.” These coins are merely collectibles offered to the buying public by a private company in the business of manufacturing such curiosities.
On 31 August 2007, conservative radio host Hal Turner posted to his web site an interesting tale about having been given an Amero on the sly by an anonymous Treasury agent. In that story he claimed that a few days after he posted about the coin, a web site proclaiming Ameros to be fantasy coins was erected on the Internet as part of “a full blown effort to discredit my story and the images as fake.” That was not the case.
Daniel Carr, the entrepreneur behind Designs Computed, has been displaying on his web site the coins he has designed at least since 2000 and has been offering some of them for sale at least since 2005. While his “Amero” entry dates only to 2007, the coins depicted thereon fit seamlessly into his catalogue of similar offerings, including his “parody State Quarters.”
<!–
and “concept President Dollars.”
–>
snip
http://www.snopes.com/politics/business/amero.asp
barbara,
article from the other day about mexico
Mexico feels our fiscal pain
http://www.usatoday.com/news/world/2008-10-05-Mexicofrets_N.htm?loc=interstitialskip
Grim in mod 137. Feel free to pull out the embeded hypertext. I couldn’t on handheld.
grim Says:
October 8th, 2008 at 9:21 am
So do I transfer my brokerage account out of MS this morning?
Yes…give it to me….
I hope Stu and Gator are helping Mexico by leaving some dollars behind.
#44 John: They still should have cancelled it. Do not be so dense. You have gone from Wall St tough guy, to sniveling for a bailout, and now defending undefendable behavior.
chi (53)-
‘Mets fans have a new phrase “Don’t mess with the Johan”.’
That’s nice. It has a better ring than “please shoot me between the eyes”.
From Reuters:
August pending home sales jump 7.4 percent: NAR
Pending sales of existing U.S. homes unexpectedly jumped in August to the highest level in over a year, data from a real estate trade group showed on Wednesday.
The National Association of Realtors Pending Home Sales Index, based on contracts signed in June, rose 7.4 percent in August to 93.4 from an upwardly revised index of 87.0 in July.
The August reading was 8.8 percent higher than a year earlier, and the highest level since 101.4 in June 2007.
Economists polled by Reuters ahead of the report were expecting pending home sales to drop by 1.8 percent.
Illegal immigration declines as economy falters
http://ap.google.com/article/ALeqM5hQSNYN2dHY18MzVy9TuruvFaMmaQD93IE4GO0
Yes…give it to me…
Ok, but I’ll need to apologize in advance for the pocket lint intermixed with my deposit.
I take it from the board that most of you are in the Depression camp then?
RayC (76)-
Much like housing, we have brought all the future Wii owners into the present.
No more prospects left. Tilt. Game over (as it were).
here is something I’ve been wondering. I think we have discussed at points that even if prices decline, individual buyers’ price point will not change– they will simply buy more house for the same money. I am not sure this is true any longer. I am still planning on looking to buy beginning next spring, but I have revised my price point down about 20%. I have realized that I would rather spend well under what I can afford so that I can save a lot more money. I wonder how many people are going through similar calculations at this point.
Bear Trap!
chi (148)-
Put me in the “Depression coupled with Black Plague” camp.
skep,
I’m not sure everyone will abandon that philosophy, but I can understand why many would.
I can’t help but find myself looking at the same price points as I did a few years back and being tickled at the prospect of getting “more house for my money.”
#152 clot: Any thoughts on the increase in pending home sales??
Hey this is a fantastic piece of music made by somebody at our firm, P*lin:
http://www.youtube.com/watch?v=7DIc8jdra0o
Barb (78)-
“How long till people resort to cannibalism?”
How long will it take Food Network to post a good recipe for roast femur?
Dont feel bad, its not just europe and the US ….
DUBAI (Reuters) – Saudi Arabia’s central bank said on Wednesday there was no need to provide emergency funds to banks in the world’s largest oil exporter as the financial sector faced no shortage in liquidity.
Muhammed al-Jasser, central bank vice governor, said in comments carried by the state SPA news agency that the central bank was ready to provide sufficient liquidity if needed but no bank had approached it for additional funds.
3b (154)-
No good thoughts. Only the thought that many bust markets feature rising sales volume, since over half the sales are foreclosure/REO…at prices over 50% off the ’06 peak.
That, my friend, is not my idea of progress.
415 pt swing
http://www.sixflags.com/greatAdventure/rides/Nitro.aspx
3b (154)-
OTOH, I’ve thought about expanding my biz into places like Detroit, Phoenix and Vegas.
More of a stigma attached to having your SUV repo’d.
I don’t think it’s so much a stigma issue, as a livelihood issue.
How else do you expect to tow an apple cart from the exurbs to the city?
#36
“I would love to hear from skep, how the bailout, stroke job, bill, will thaw the world’s credit markets.”
BC–I don’t know. I just think things would be worse if there was no gov’t intervention. In my opinion, anything that slows this train down at this point is welcome.
clot (158)
If he said that phrase one more time, I was about to take a sledgehammer to the tv last nite.
@HEHEHE
that video sucked. i couldn’t even finish it.
Worst thing by the chickenhawk is how he always says, “I know how”
He says he knows how to win in Iraq, fix the economy, and catch Bin Laden.
But he’s holding us for ransom? So he knows how but he’s not gonna tell us how unless he’s elected?
Um, sure. Right.
I kept waiting for someone to stand up and punch him in the neck. But sadly, didn’t happen.
SKF to 145 … less than 24 hours until the short sales are in the mix …
this is about to get super interesting …
skep (162)-
Pardon my blindness, but what, exactly, has been “slowed down”? Every new idiocy and crime that becomes official policy triggers a separate, disproportionate panic sell-off.
It’s really time for you to drop this. This thing is off the tracks, at 145 MPH.
BC–I don’t know. I just think things would be worse if there was no gov’t intervention. In my opinion, anything that slows this train down at this point is welcome.
I guess going Japanese for a decade seems like a welcome alternative to a depression at this point.
afe (163)-
Another reason that it’s a waste of time to watch the puppets debate.
Two sides of the same coin. Two guys, bought and paid for by slightly different sets of masters.
In the end, make somebody’s pet gerbil the prez. Doesn’t matter. Next stop, oblivion.
Hey Clot ask your pal at the SEC about this article:
http://nakedshorts.typepad.com/nakedshorts/2008/10/unless-your-lawyers-a-pal-omine.html
#158 clot: Thanks. That is what I thought. Who knows the guy I know who is a bigger doom and gloomer than I am who said that house price in north Jersey will revert back to late 90’s levels is no longer sounding that crazy.
Of course even now, there are still sellers/realtors listing 3 bed 1 bath houses at 449K. You just have to laugh.
#148
“I take it from the board that most of you are in the Depression camp then?”
depression was board consensus 2 months ago. new prognosis is cannibalism
SKeptic,
The idea of a slow down has a critical flaw. The current banking system is now a 0% reserve banking system. Such a system is based on banks acting more as IB’s then a traditional depository. The real solution is to slowly force banks to increase required reserve % to a high level, 75+%. Such a move inherently limits a banks ability to speculate with other peoples money and puts in place self imposing limits.
here is a better explanation by Herman Daly
an American ecological economist and professor at the School of Public Policy of University of Maryland
——————————————-
What allowed symbolic financial assets to become so disconnected from underlying real assets? First, there is the fact that we have fiat money, not commodity money. For all its disadvantages, commodity money (gold) was at least tethered to reality by a real cost of production. Second, our fractional reserve banking system allows pyramiding of bank money (demand deposits) on top of the fiat government‐issued currency. Third, buying stocks and “derivatives” on margin allows a further pyramiding of financial assets on top the already multiplied money supply. In addition, credit card debt expands the supply of quasi‐money as do other financial “innovations” that were designed to circumvent the public‐interest regulation of commercial banks and the money supply. I would not advocate a return to commodity money, but would certainly advocate 100% reserve requirements for banks (approached gradually), as well as an end to the practice of buying stocks on the margin. All banks should be financial intermediaries that lend depositors’ money, not engines for creating money out of nothing and lending it at interest. If every dollar invested represented a dollar previously saved we would restore the classical economists’ balance between investment and abstinence. Fewer stupid or crooked investments would be tolerated if abstinence had to precede investment. Of course the growth economists will howl that this would slow the growth of GDP. So be it—growth has become uneconomic at the present margin as we currently measure it.
#150, 153 Grim
“I can’t help but find myself looking at the same price points as I did a few years back and being tickled at the prospect of getting “more house for my money.”
More, but how much more? If I can get the 400k house yesterday for 200k today, and get a 400k house today that’s only 50% better than a 200k house, the 200k house today is still a better deal overall.
I don’t think $/sqft holds constant across price ranges (i.e., a 1000sqft loft costing twice as much as a 500sqft studio, all things being equal). On that note, is there a general trend between $/sqft for a range of prices?
clot-
no doubt, exactly the thoughts running through my mind listening to both of them. An hour and a half of “catch” phrases – and i use the term loosely, buzz words, a lot of “ah, let me correct yous” and “that my friends”…got me into a really bad mood. Only reason I watched is after a 16 hour day yesterday I could barely pry myself off the couch to find the remote!! :)
(121)
My I suggest a showing of all three Mad Max films or “I am Legend” for future educational purposes. Key to survial in the future is a good gun and a good dog. I have the dog, I need to work on the gun.
134 CLOT-
“He says the psychology has changed. Now, the people he encounters who are getting foreclosed don’t even feel that bad about it. It’s happening to everybody.”
ahhh… another unintended consequence of the $700B bailout. underwater homeowners will get their revenge via jingle mail. any remorse there was is now up in smoke, just like the phony equity
#167
“Pardon my blindness, but what, exactly, has been “slowed down”? Every new idiocy and crime that becomes official policy triggers a separate, disproportionate panic sell-off.”
Clot– the truth is we do not know what would have happened if the gov’ts had not taken all of the steps they have so far. I think we would already have seen the banks closed worldwide. This may still happen, but the more time people are given to make alternate arrangements, the better. You cannot expect everyone the world over to rearrange their finances in a matter of days. I am seeing firsthand how companies are scrambling to arrange alternate financing right now. Anything that stretches the window they have by a matter of weeks can easily make the difference between survival and failure.
It’s too bad the blow-up didn’t occur last fall, there might actually be a viable third party candidate right now. I am voting Libertarian as a protest bt would have been something if somebody like Ron Paul had some wind at his back.
if we go to 100% reserve requirement for banks, it seems to me that we will have depression-type economy permanently. the economy needs to grow along with the population/new workers entering the workforce.
NJ RE& Survival blog viewing list?.?.?.
I am legend
Mad max
Escape From NY
any others?
—————————————-
Herman Daly
http://en.wikipedia.org/wiki/Herman_Daly
He was Senior Economist in the Environment Department of the World Bank, where he helped to develop policy guidelines related to sustainable development. While there, he was engaged in environmental operations work in Latin America.
Before joining the World Bank, Daly was Alumni Professor of Economics at Louisiana State University. He is a co-founder and associate editor of the journal, Ecological Economics.
He is also a recipient of an Honorary Right Livelihood Award (the alternative Nobel Prize), the Heineken Prize for Environmental Science from the Royal Netherlands Academy of Arts and Sciences, the Sophie Prize (Norway) and the Leontief Prize from the Global Development and Environment Institute.
He is widely credited with having originated the idea of uneconomic growth, though some credit this to Marilyn Waring who developed it more completely in her study of the UN System of National Accounts.
NJ RE& Survival blog viewing list?.?.?.
I am legend
Mad max
Escape From NY
any others?
– Lord of the Rings. Frodo and Sam survived on a piece of bread for a long time.
Chi [148],
Pick your poison;
1-Depression
2-Weimar
3-Dead Man Walking- Japan
It might be a good time to load up on pharmacuetical companies that market Zoloft, Welbutrin, Effexor etc. I would think the anti-anxiety/anti-depression prescriptions will likely be seeing a serious up-tick in the coming years.
Get comfortable;
WASHINGTON (MarketWatch) — Treasury Secretary Henry Paulson will hold a press conference to discuss the Bush administration’s response to the global financial meltdown. Paulson will first make some brief remarks and then take questions. a Treasury spokesman said on Wednesday. The press conference will take place at 3:00 p.m. eastern.
Skep 180
Read up on it a bit. Its not the end of the world. But it would mean slower growth. That is not a bad thing. You lows are shallower and your highs are reduced in magnitude. It produces a more stable economy. Its the tortoise approach as opposed to the hare
BC Bob
1-Depression
2-Weimar
3-Dead Man Walking- Japan
1 % 2 go together. first 1 hits then as 1 recedes #2 strikes as the government attempts to overcompensate.
#183 – any others?
Any of the zombie movies.
All those zombie movies over the past few years were our own culture trying to tell us something. Zombies movies are never about zombies, they’re about your neighbors and what you fear they are; souless and dead mindlessly consuming.
grim Says:
October 8th, 2008 at 9:24 am
How long till people resort to cannibalism?
I’ve got a great recipe for general tsos kitten.
HEY!! NOW we know what to do with all those displaced foreclosure animals!!!
Cat curry?
Dog ala king?
Hamster kebabs?
Ferret francaise?
sl
#188 – That should be in response to #182.
Was the Great Depression really that bad? Or was the GD history written by a bunch of grim bloggers?
# Barbara Says:
October 8th, 2008 at 9:32 am
oh, I have a rather large spa gift certificate that I haven’t used. Must do that this week, I don’t see them being in business for long.
Don’t forget to invite an AIG exec!
Order them up the close shave…with a dull razor.
sl
HEHE
LSD or Shrooms are cheaper and more effective.
“clinical trial on cancer patients at Sinai Hospital in Baltimore indicated that LSD was effective in lowering anxiety, depression and the fear “
Tosh,
add 28 days later then
Ket,
Yeah but you can go to jail for those. I abide by the Elvis rule, if a doctor prescribed it then there can be no problems.
#193 – LSD or Shrooms are cheaper and more effective. They also make Pink Floyd interesting & The Wall watchable.
Too depressing, can’t we just talk about strollers instead?
It’s too bad the blow-up didn’t occur last fall, there might actually be a viable third party candidate right now.
Blow up was delayed by design. As a matter of fact gubmints thought they can push ut until after the election.
It would be nice to do a side by side of the downward slope/market reaction between Bernanke’s comments yesterday and Paulson’s today. Let’s see which one of the bs artists does a better job putting lipstick on the pig.
189
Squirrel Tartare..yummy!
or
Soylent Green
BC 185
I say go short from 3:00PM until he’s finished taking questions. Cash out at 4:00Pm and spend a month in Iceland sipping vodtka and enjoying blondes.
# HEHEHE Says:
October 8th, 2008 at 11:14 am
It might be a good time to load up on pharmacuetical companies that market Zoloft, Welbutrin, Effexor etc. I would think the anti-anxiety/anti-depression prescriptions will likely be seeing a serious up-tick in the coming years.
Better off investing in Smith&Wesson…you’ll be seeing more use of these instead.
That and tall buildings, trains, CO.. etc.
sl
EHEHE Says:
October 8th, 2008 at 11:25 am
Ket,
Yeah but you can go to jail for those. I abide by the Elvis rule, if a doctor prescribed it then there can be no problems.
Tell Heath Ledger and Anna Nicole Smith that..
sl
skep (178)-
Sorry, but I keep being reminded of the deck chair/Titanic metaphor every time you post.
BC (185)-
Great. That should shave off a few hundred more points before the bell. It took Bergabe’s opening his pie hole to really get yesterday’s festivities going.
Somebody needs to tell Klink that a real dictator doesn’t appear- or speak- too often.
Maybe we can arrange for him to be tutored by Kim Jong-Il?
make [201],
I’m in.
The economy is not bad for everyone.
Happy Birthday player.
http://www.dailymail.co.uk/tvshowbiz/article-1069710/Happy-Birthday-Mr-Hefner-Pamela-Anderson-goes-Playboy-roots-strips-totally-naked-deliver-cake.html
Don’t hate and congratulate the guy.
“Maybe we can arrange for him to be tutored by Kim Jong-Il?”
Clot,
LOL. Maybe Hank can borrow his head of hair.
Old Depression: “Brother, can you spare a dime.”
New Depression: “Brother can you spare a thigh?”
sl
[176] Escape, [181] Kettle
Add this made for TV movie from the 80’s: Amerika
Also, in case you are interested what the dems in DC will propose, and if you need further incentive to stock up, I commend reading NJ Assembly Bill 2490 (A2490) and imagine what that will do to the cost and availability of ammo.
post-apocalyptic movie suggestion:
Night of the Living Debt
BC Bob Says:
October 8th, 2008 at 11:14 am
Chi [148],
Pick your poison;
1-Depression
2-Weimar
3-Dead Man Walking- Japan
Bost: I starting to move strongly into the skep camp……I think you people are borderline delusional……or just having a lot of fun…..
XXX tittle,
blondes indebted to asia
Would love to get some financial advise on the following situation.
My partner and I own a house with about $90K left on the mortgage. We bought the house (in the Catskills, NY) in 2004 for a decent price ($150K) and a 5.25% or 5.5% interest rate (can’t remember now, it’s a fixed 30 yr.
It’s a “second” home (we rent our primary residence, since we didn’t want to buy into the crazy real estate bubble, etc., but did want to take some money and put it somewhere other than the stock market or the bank.
We are dilgent savers, and now each have a fair amount of cash in the bank, more than enough for each of us to pay off $45K on the mortgage and be done with having a mortgage.
My question is: should we do it? Is it better to get $45K out of the banks right now and pay off a mortgage, or does it make more sense to keep $45K in a safe CD, earning 3.5%/4%?
We don’t need the money for tuition, etc. We would be able to pay the $45K and still have some money left over as a safety net.
Would love to hear your thoughts.
blondes indebted to asia
See the hot hot LIBOR action!
These dirty girls need capital and aren’t afraid to do what it takes to get it!
Chi, Skep,
I don’t see the Stone Age either but what do you see as the impetus for future financial growth? Absent some unforeseen technological innovation, war or some Marshall Plan re alternative energy/infrastructure I just don’t see it happening.
“Tell Heath Ledger and Anna Nicole Smith that..”
It didn’t work to well for Elvis either, but he didn’t do jail time.
Chi, I am being swayed more in their direction every day. I think your outlook is a little more rational but the economy and markets are very sick right now and the same idiotic monetarist policies that got us into this mess are being attempted to get us out. The biggest financial mistake of our lifetimes was the increase in the money supply by Greenspan in response to the 2001 recession, letting a little money go to fuel the economy to hobble along is a good idea. Opening the floodgates to jump start tremendous growth 6 months later is insane. Out economy grew in undesired and unsustainable ways. I think the global economic malaise will cause a prolonged recession/depression featuring higher unemployment, reduced manufacturing and construction that will hurt most of the world. Assets will fall into a deflationary spiral as the money supply while on paper is large but is not in the hands of the people and is not spent the same way and I see this lasting 18-36 months if not 4 or 5 years. a Trillion dollars doesn’t just disappear from the system and everything is hunky dory. We are dealing with 5x the pain we would have had we not shocked the economy with cash in 2001. If you look at past previous economic problems there was pain and recovery seemed slow to happen. With any luck our economy will purge itself of the excesses and growth will follow soon.
It’s Official: September Slammed Hedge Funds
Despite being defensively positioned, September was the worst month for hedge funds in over a decade” said Charles Gradante, co-founder of Hennessee Group.
“Hedge funds have outperformed on a relative basis year to date. However, given their reduced exposures over the first nine months of the year, I would expect hedge funds to be down less,” said Lee Hennessee, managing principal of Hennessee Group. “Violent theme reversals, extreme volatility and unpredictable intervention have contributed to negative performance.”
http://www.finalternatives.com/node/5692
Now I am scared. Just got about of a detailed market meeting with prior head of options trading at EF Hutton. Basically he summed it up two years ago nobody thought about risk and today nobody thinks about opportunity. You have to balance the two and when masses only think about one or the other thinks can change very quick. The market is in a long put hockey stick right now and they may go on for a time and the doom and gloom folk are going to make a lot of money but when it does change it will change quick like it did to that trader at barrings and all their gains could be wiped out in a day. He also said the subprime problem is simple. The banks viewded Subprime mortgages as short RE puts however the underlying assets fell far quicker than they expected and they need to recapitalized. He finished it off by saying although he would not be suprised if we had another 500 point down day today as the 50bp means nothing to the market it is only symbolic and would not be surpised if this went down for weeks or even months. He did say markets on average return around 9 or 10% and we are down 40% in 12 months when the change happens it will be violent. He recommended that people still do their thing by betting down but right now you must give up some of your gains and buy some insurance to protect against the upward swinge via options. Anytime a one year up or down move of 40% will be subject to a violent swing the other way. Long term the trend may remain down and short sellers may be right but short term they will be wiped out as many strategies require next day settlement and brokers are credit constrained and want their money right away or they will sell you out at the worst time.
Nom,
regarding A2490…
Damn! time to get a PA address
dow another 230 points …
hey, SKF continues to soar! will the dow be in the 8’s by week’s end?
Chi [212],
Well, we engineered a fictitious economy over the past 8-10 years, one which is 70% consumer driven. This econommy was built on a house of cards. In the process we experienced an unprecedented credit/debt explosion. The geniuses, p/e, stripped out equity and converted to debt. Well, now the banks, corps and consumers are tapped, buried with toxic loans and debt. Asset prices are falling, yet the debt reamins.
In the meantime, the world is deleveraging, credit is as dry as the desert and the economy is falling off a cliff. Going forward, we are stuck in the muck, servicing debt while unemployment is rising and real incomes are falling.
I know you call me delusional and an idiot. That’s fine. You should have heard what they were calling me in 2003, when I was buying gold, in 2005, when I was getting out of Dodge and 2006, when I started to buy long dated puts, just to name a few.
You can certainly dish it. Please explain what you are serving?
If it’s not 1,2 or 3, what is it?
Oh, by the way, it has been somewhat fun.
Alan Greenspan must have been a rabbi in a prior life as his “cuts” were much better for the market.
Grim – regarding the NAR’s August sales numbers are they real? Or do you have to spend another couple of hundred hours to debunk them?
Did you ever get a thank you for them for pointing out their HUGE error a few months ago?
John, glad you stopped drinking the kool-aid.
i dont know clot, have never spoken to him in person or on the phone, but the guy has been saying this for quite some time now. dont like to put people on a pedestal, but what has he been wrong about?
well done, sir, and thx for all the SKF tips. after getting my car totaled last week, the SKF sell (plus the insurance check) will be paying for the new car in cash. this is a huge break, as i didnt want a car loan.
Roubini: Rate Cuts Reduce Crash Risk, But Dow 7,000 Likely ‘Sometime Next Year’
But the financial market crisis has unfolded even quicker than Roubini expected (which is saying something), and the economist now thinks the Dow and S&P will suffer 50% declines from last October’s peak vs. 40% previously.
In other words, the Dow is going to 7,000, but over the course of months vs. days if Roubini is right, as — unfortunately for bulls — he mostly has been for the past two years.
“The policy response is going to become more aggressive [but] a steady flow of bad financial and macro economic news is going to push down equity markets,” he says, forecasting a real bottom won’t be hit until “sometime next year.”
Because of growing slack in the global economy, Roubini says deflation is going to become a much bigger threat in the next six months vs. inflation. In such an environment, cash, Treasuries and gold are the only safe bets he says — provided your holdings are within the FDIC’s new $250,000 insurance cap.
BC Bob, Just wondering how can you predict a 1980s japanese style meltdown for the US and at the same time think the dollar will collapse in value? Im not doubting your prediction but i thought the yen currency got stronger through the decades of their deflationary mess, which helped them to break their credit addiction and save again?
“You should have heard what they were calling me in 2003, when I was buying gold, ”
– BC, if you don’t mind, what triggered this thinking? What were the indicators?
I am reading Marc Faber’s book right now and he has predicted this scenario almost down to the “T”.
BTW, highly recommend the book – “Tomorrow’s Gold”
Finally, Faber has predicted a bounce at these levels, but said that this should be used to sell. The earnings for 2009 are not going to look good.
Veto [228],
IMO, Japan is 1 of 3 possibilities.
http://finance.yahoo.com/tech-ticker/article/91357/Roubini-Rate-Cuts-Reduce-Crash-Risk-But-Dow-7000-Likely-%27Sometime-Next-Year%27?tickers=^DJI,^GSPC,^IXIC,SPX,DIA
kettle1,
Roubinator is on your deflationary camp. I have to applaud you for calling this right on the money if you’re right.
Please send an application with O about the fed chairman position.
vic [229],
It would take all afternoon. Basically, at that time we were devaluing. Our only hope, at that time, was to increase the money supply, funny no more M3, and devalue, exports. Well now the world is buried in dollars and how does our export sector look?
Bergabe is trying the same. Unfortunately the plumbing is backed up for years.
BC Bob Says:
October 8th, 2008 at 12:09 pm
Chi [212], In the meantime, the world is deleveraging, credit is as dry as the desert and the economy is falling off a cliff. Going forward, we are stuck in the muck, servicing debt while unemployment is rising and real incomes are falling. I know you call me delusional and an idiot. That’s fine.
You can certainly dish it. Please explain what you are serving? Oh, by the way, it has been somewhat fun.
Bost: I have not been calling you an idiot. Do not put words in my mouth. Just a quick question…..theoretically, what would capitulation look like?
Veto, BC
correct me if i am wrong,
But when japan went down The population had a net positive savings rate and a fair amount saved in bank accounts. It was this underlying positive national savings that helped allow the yen to strengthen. On top of that the yen carry trade developed as japan shifted to negative real interest rates and there was a real functioning industrial base.
The US has a net negative savings rate i.e the average american lives off of credit. There are no deposits in bank accounts to back the dollar and no large scale industrial base. The dollar will strengthen anyway for a while before it crumbles. As it crumbles it will be a race to the bottom as all major currencies try to inflate their way out of the mess and make their currency look more attractive then their neighbors. Its a suicidal race.
Driving into work today $2.97 gas….nice…
tosh (188)-
George Romero as social oracle?
Why the hell not…
NIght of the Living Dead.
Ket: You are the Wile E. Coyote of doom….
sl (192)-
Or, a rather careless Brazilian wax.
Roubini has just called for DOW 7000
Lehman Under Fire: Prosecutors Line Up On Three Fronts
As the WSJ reports, the issues being investigated relate to a central question: Was Lehman saying publicly that its financial condition was sound while acknowledging behind the scenes that its situation was dire?
http://blogs.wsj.com/law/2008/10/07/lehman-under-fire-prosecutors-line-up-on-three-fronts/
“Bost: I have not been calling you an idiot.
Chi,
????
20-1 down volume, record volume, gap lower, make a new low, the plug gets pulled on CNBC and the markets end up higher on the day.
Recovery, big rally, 80-90% of the market hits the offer.
Again, the market, not the economy.
# BC Bob Says:
October 8th, 2008 at 12:21 pm
Veto [228],
IMO, Japan is 1 of 3 possibilities.
What are the other two?
Finally, Faber has predicted a bounce at these levels, but said that this should be used to sell. The earnings for 2009 are not going to look good.
I haven’t read the book, but are you saying it says to sell gold?
Breakfast: gerbils & grits.
When will this happen?
Another 10% down?
I knew those a-hole CEO’s would be getting investigated at some point. If they go after Fuld, why not Mack, Thain, Blankein etc. Between all the we are well capialized, it’s the ninth inning bs they were spilling in public you’d think they’d be all under investigation
Roubini has just called for DOW 7000
Here’s me. Going back to bed.
Wake me up when it’s 1954.
sl
make,
chairman of the Fed eh? Unfortunately i have never worked at GS or have close ties to them, so i am not eligible for a high level economic position in the government.
I disagree with Rubini’s gold comment. gold is only a good bet if you think the dollar will crash in the next 6-12 months or that gold will be unobtainable by that point. otherwise my lay opinion is cash or treasuries until 2-3Q09 and then go into metals.
of course i think there are real questions about how obtainable real quantities of metals may be at that point.
besides i just used my magic 8-ball to make the deflation call. maybe we should send one to bergabe and friends
Because of growing slack in the global economy, Roubini says deflation is going to become a much bigger threat in the next six months vs. inflation. In such an environment, cash, Treasuries and gold are the only safe bets he says — provided your holdings are within the FDIC’s new $250,000 insurance cap.
“I haven’t read the book, but are you saying it says to sell gold?”
– nope, equities. Faber has suggested to keep accumulating physical.
kettle [234],
Correct. Japan had a huge, positive, current account balance and the population was, still is, big savers. On the flip side, we are the world’s largest debtor nation, a negative current account balance and buried in debt. Not comforting, deep recession joined at the hip with debt servicing.
sl (209)-
How much is that kidney in the window?
I’m with Kettle — cash and treasuries, not gold. I’m expecting deflation.
“gold is only a good bet if you think the dollar will crash in the next 6-12 months or that gold will be unobtainable by that point.”
kettle,
Gold is blasting thru all currencies, not just the dollar. Gold, in the past, has rallied side by side with the dollar. It’s a currency play, not just a dollar play.
HE (216)-
Cold fusion.
238 Chi
it keeps me occupied ;) besides i hear ACME is having a sale on rocket boots and anvils
A few months ago, I tried to use the addiction paradigm to describe the US economy.
I was wrong. I should’ve couple the addiction paradigm to also portray the junkie as having terminal, inoperable cancer.
John (220)-
“The banks viewded [sic] Subprime mortgages as short RE puts however the underlying assets fell far quicker than they expected and they need to recapitalized.”
This statement alone should be the basis for hundreds of successful prosecutions. Alas, no one will pay.
I love how conventional wisdom is that if the government would only create another Manhattan Project, we could invent a replacement for oil.
I can see the President talking up the project now… “Only science stands in our way!”
BC Bob,
Cannot comment on currency plays per se as that is most definitely outside of my realm. I am still trying to learn that aspect of the market.
BC,
#223
Hindsight is 20/20.
So what does your crystal ball say now?
kettle [259],
Huge moves versus all currencies. Actually, the spreads have widened against all other commodities and stock indices.
MJ 258,
Manhattan project for oil.
The problem is very few understand what the question is in the first place.
the “oil problem” is actually multiple issues at once. 1st there is a liquid fuel issue. 2nd, there is a primary energy source question. Closely related yet separate
MJ (258)-
Science!
http://www.youtube.com/watch?v=2IlHgbOWj4o
homebuyer [260],
Are you new? If yes, check the archives. No need to take up space, rehash.
I don’t have a crystal ball. I react to the hideous. If you are still in the game, hindsight is not 20/20.
Richard Simmons is having a bad day!!!
Circumcision Doesn’t Reduce HIV Risk in Gay Men, Study Says
By John Lauerman
Oct. 7 (Bloomberg) — Circumcision, which can slow the spread of the AIDS virus from women to men during sex, doesn’t appear to provide the same protective effect for men having sex with other men, U.S. researchers said today.
@kettle1
You know my position:
There is simply no alternative to develop/implement/invent that is or would be as efficient, compact, powerful, and clean as oil. Not by a long shot.
Hence, there is no avoiding the societal, national, and world changing upheaval that comes, with certainty, along with oil’s inevitable reduction and depletion.
Any thoughts on TBT (Ultra-short 20 yr. treasury)?
TBT goes up if interest rates on the 20 year treasury go up (i.e. treasury prices drop). I figure with the pro-inflationary policies the gubmint is implememting and the increase in debt, this could be an interesting play.
#264 BC BOB: hindsight is 20/20?? Is that what we are going to start hearing from those who purchased/over extended themselves with housing over the last few years?
No 20/20, just plain old common sense. I know there is some disdain for that simple concept, but it is true.
Many people saw this coming (although I never expected or wanted it to get this horrible) I saw people literally out of control with spending/debt. House prices increasing 20% a year, everyday people borrowing 50-100K to splurge on krap; like it was candy, and on and on.
This is not 20/20, anybody that wanted to could see this situation was out of control;they simply chose to ignore it.
MJ 266
On these point we agree in general terms and differ only in degree.
it remains a solvable problem. Even if the solution is suboptimal in the minds of TPTB
John,
the study that showed circumcision reduces risk of aids……. well it turns out that the effect can be correlated with personal hygiene. keeping jr clean after the act provides the same effect as being circumcised. The circumcision effect is not seen in western cultures.
disclaimer: this comment in no way judges any given culture.
BC Bob,
if the gold/oil ratio holds, gold would have limited room for growth at this time (approx $1200?). I am also aware that there are many other influences involved, just commenting on the 1
Dow positive again
Depression Off
Zombies? I live near crackheads. Romero has already been in effect, go get a late pass. Step!
Here’s an early look at the cover of the next Economist issue:
zulukilo.files.wordpress.com/2008/1…economistpanics.jpg?w=292&h=379
MJ, I think your position regarding oil is short sided. I think we can probably develop a genetically engineered fungi or bacteria that can produce oil like substances from organic matter i.e plant and animal waste and that is the answer. Also biodiesel from algae and sugar can ethanol can add to the solution, couple that with reductions in use and the advancement of plug-in hybrids, diesel cars, and non fossil fuel electric plants we can in fact tremendously lower our oil footprint. It is just going to take some time, creative thinking, and the government will have to fund it as private enterprise has no real reason as oil is still cheap to do so. If the gov invested money in public transit, railways(promoted for cargo instead of subsidized interstate highways), invested in research(alt fuels, battery technology, etc) the goal is achievable. Imagine what the trillion dollars they gave to banks could do for improving our infrastructure, funding advanced research, and tax crediting environmentally sustainable living. Hell if the whole country lived the way people in NYC lived or even NJ the reduction of used resources would be great. Yes believe it or not NJ people are heavy users of mass transit, have smaller homes, the climate is more temperate, live closer to just about everything, etc and thus consume fewer resources. A car like the Volt if delivered as promised could conceivably provide the equivalent of 200mpg if used in Jersey, add new improved solar panels and it goes higher. If solar panels could be produced more inexpensively we could put them on the roofs of most buildings, combined with power saving lights, appliances, etc we could reduce the requirements for power generation. This is all within reach all we need is to push this effort. Solve congestion and energy use with mass transit/freight railway, reduce our energy usage by 20%(not very difficult actually), cut the amount of driving we do by 10%, Develop automobiles with 2x the fuel efficiency of current cars(20mpg), and if everyone fixed the heating/cooling insulation in their homes we could save huge amounts of power, oh yeah also we need to ship less from China and make more stuff here. I think in the next 25 years baring population increases we could get down to 25% of the oil consumption we use today and be pretty independent of oil. We have the tools today and maybe if our leaders had some insight we could achieve this.
The historic gold:oil ratio is about 15 barrels/oz AU. we are currently at about 10.5 (daily) and about 8.5 (200d moving ave). The price of oil is moving downward which would suggest there is limited upward movement for gold at this time. Once again this ignores other contributing factors
http://stockcharts.com/h-sc/ui
kettle [270],
Avg, 14-16/1. Only 1,200? That’s a huge move, futures.
Jcer,
genetically engineered fungi or bacteria that can produce oil
Already exists
http://tinyurl.com/4vyta9
BC 276
True, good point. i stand corrected
Dow positive again
Depression Off
Depression On
Is it still considered cannibalism if you eat yourself?
Please people pay those mortgages and for God’s sake, don’t circumsize your children! :)
Depression On
Off again, damn this economy.
280
also, don’t eat your children. And beware of zombies and stuff.
Wow, kettle it seemed like a possibility as all we are playing with is hydrogen and carbon. But that is good news indeed now all we need to do is get it to work on some scale.
Is getting an FHA loan a bad idea (assuming you were intent on buying)?
[221] Kettle,
got one for now, and I am not giving it up until I reload. But your point about ID is well taken and I had better confirm with the NJ supplier that I can come cross-border.
mmmmm brainzzzzzzz…….
@jcer
“We have the tools today and maybe if our leaders had some insight we could achieve this.”
Entirely, completely wrong, I think. Time will tell. Science and history are on my side. Wishful thinking is on yours.
I agree, I would hate to be caught in a sandstorm without any place to hide my chewed gum.
Mike NJ Says:
October 8th, 2008 at 1:41 pm
Please people pay those mortgages and for God’s sake, don’t circumsize your children! :)
I couldn’t help but laugh at the accidental (?)juxtoposition:
#207 Make Money: Pamela Anderson
#209 still_looking: “Brother can you spare a thigh?”
Jcer,
now all we need to do is get it to work on some scale.
And this is what makes many of these project unrealistic outside of niche applications. Only time will tell, but one potential issue that doesnt seem to be accounted for is that you would need fertilizer to grow the feed stock. fertilizer is highly dependent on oil as a large % of it is derived directly from oil. we shall see.
—————————————
Barbara,
Can we eat the rich?
Buffet kabobs, Paulson pork roll, bernanke bolognese
AA3/A+ 0258M0CY3 AMER EXP 7.300 08/20/13 9.079(W) 93.126
When American Express bonds are paying 9% for under 5 years out you know the market is koo koo.
was it over when the germans bombed pearl harbor?
I think we are all on the same page about how bad the damage might be, just disagree about whether it is necessarily a foregone conclusion. If these gov’t actions fail, then really you will be no worse off than you would’ve been otherwise.
“# kettle(Wile E Coyote)1 Says:
mmmmm brainzzzzzzz…….”
Hey! Maybe we should add “Hannibal” to the NJREReport movie viewing list. Great recipes.
“was it over when the germans bombed pearl harbor?”
HUH.
http://www.youtube.com/watch?v=V8lT1o0sDwI&feature=related
MJ, do I need to point out how much oil is saved in Brazil by using sugar cane ethanol. If you think about how massive the oil/carbon footprint of the Average American you would understand that it can be reduced by a significant amount while retaining most of our lifestyle. Kettle the feedstock already exists we discard a tremendous amount of sugar containing organic material as well as there are plants that do not require as much fertilization as our food crops. I do not think we will entirely replace oil but I think we can reduce our usage and add to the supply through biodiesel(not soy), ethanol(not corn), and newer innovative technologies such as this yeast that produces oil. I also see that the future of oil and manmade oil like products in in mobile transportation, if we eliminated it from power generation we could reduce demand significantly. Oil has won every time simply because it is easier and has been the cheap answer that is why nothing has displaced it. I see oil being in use for a long time but think we will reduce usage, conserve and these new fuels will add supply and allow the pricing to stay low enough for the economy to function. From my perspective of living in a city electrical power is way more important than petroleum.
The signs are everywhere, the market fell 777 points and that is a winning spin on a slot maching and, yesterdays 508 point drop was the same as Black Monday in 1987 and it is 10 years ago today, on Oct. 8, 1998, when the major averages reversed direction after a brutal 22% three-month decline during the global financial crisis in 1998.
Finally, for the Greeks out there Vega stands for Volaitiliy, we talked about Chevy Vegas on this site when the markets started to go wild.
Rent (272)-
“Dow positive again”
Fade the rally; Klink to open his pie hole @ 3:00.
mmmmm brainzzzzzzz…….
Paulson: mmmmmmm billionzzzzzzzzzzzzz.
sl
Paulson et al: moooooooore billionzzzzzzzzzzzzzz
sl
#295
“I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part.”
just like the TARP!
SKep
“If these gov’t actions fail, then really you will be no worse off than you would’ve been otherwise.”
except for the additional trillion $$ debt from trying to bailout the banks
Movie: Fun with D!ck and Jane.
People forced to liquidate belongings to stay afloat and eventually resort to robbery. Only real life will be less funny (not that the movie was).
amazing
the financial bailout according to animal house, episode 1
http://www.youtube.com/watch?v=rV5CLsHBzMc
the financial bailout according to animal house, episode 2
http://www.youtube.com/watch?v=pRB0JKlK8c0
clot,
what was that you said? paulson meat pie at 3:00?
Dow up 160. Clearly, this thing has blown over. Off to the BMW dealership to get on the Mini Clubman waiting list followed by an over priced meal at a mediocre chain.
Good times.
Nice relevant real estate article.
http://ny.therealdeal.com/articles/which-neighborhoods-will-take-biggest-knock-2
toshiro,
“Zombies movies are never about zombies, they’re about your neighbors and what you fear they are; souless and dead mindlessly consuming”
Scary… I just pictured my wife when she’s at Sak’s. hahaha
So Dean Martins son, the Terminator Arnold Schwarzenegger and Hammering Hank Paulson are going to do to muni bonds what they did to help Subprime bonds. God help us all.
Fed Must Restore Confidence in Munis, Arizona Treasurer Says
By Jerry Hart
Oct. 8 (Bloomberg) — The Federal Reserve, already acting to unfreeze the corporate credit markets, must do the same to restore confidence in municipal bonds, Arizona Treasurer Dean Martin said.
“What we have with the Federal Reserve is like a hedge fund, they are going to buy the assets,” Martin said in an interview on Bloomberg Television today. “That’s good if you have an investment problem, but we have a confidence problem.”
California and other states are trying to get their tax- exempt securities included in a Federal Reserve program to buy commercial paper from companies and bad mortgage debt from banks.
Massachusetts and California Governor Arnold told Treasury Secretary Henry Paulson last week they may need help as investors avoided the bonds of states and cities, leaving them short of funds to meet expenses while awaiting tax payments.
Martin said states have been talking to Treasury Department officials for the last month.
“You’re providing insurance for private money-market accounts,” Martin said he told the federal government. “They wouldn’t even listen to our request to provide the same kind of insurance for government money market accounts.”
#302
“If these gov’t actions fail, then really you will be no worse off than you would’ve been otherwise.”
except for the additional trillion $$ debt from trying to bailout the banks
*******
(1) better than the alternative (cannibalism)
(2) inflation will cut it down
Skep
“(1) better than the alternative (cannibalism)”
debatable.
How to Serve Man is my favorite book from the Twilight Zone
“(2) inflation will cut it down”
Paul Volcker just had a coronary.
skep,
on a serious note,
the trillion $$$ would be better spent on badly needed infrastructure. a much better return on investment in the long run.
Wisdomtree Invts IncWSDT (OTHER OTC) 0.70Change:-0.50-41.67%
the trillion $$$ would be better spent on badly needed infrastructure. a much better return on investment in the long run.
Tell that to the japanese. They overspent on infrastructure in the 80’s. i agree there probably are some infrastructure projects needed, but allocating the $$$’s appropriately is important.
From MarketWatch:
Paulson pleads for more time to give remedies time to work
Patience is needed because the ongoing financial market turmoil will not end quickly despite Congress approving a $700 billion bank rescue package, Treasury Secretary Henry Paulson said Wednesday. At the start of a press conference, Paulson said that the bailout plan and coordinated central bank interest rates could not end the crisis overnight. More banks are likely to fail in coming months, he said. Paulson stressed that Treasury now has the power to inject capital into banks, a step advocated by many economists. The plan allows the Treasury to purchase mortgage assets or any other assets that the government deems necessary. Paulson said he is seeking a leader of the bailout effort who would be acceptable to both of the presidential contenders. Paulson said he would talk to his G7 colleagues this weekend on separate and collective steps they can take to ease the crisis.
#317 – Hard Place – If I remember right, and I may not, wasn’t most of that infrastructure development in Japan done in the lead up to the crash? Also, wasn’t most of that build-up done for the benefit of the Yakuza?
Again, I may be wrong, but if the former is true infrastructure re-development in the US would at least help alleviate joblessness.
Do we really want a large number of out of work, p.o.’d people with nothing else to do?
My personal barometer of how things are for the tri-state area Joe Sixpack is how long the line is coming out of Chop’t at lunchtime.
For those of you who don’t work near one in the city, they sell salads that they machete beyond recognition before tossing it back into a plastic bowl. The local office crowd loves this stuff and ends up paying around $12+ for a salad. The lines have been out the door since they opened up and guess what… they still are.
As long as Suzie secretary, Adam Accountant and Raj the IT guy can afford to spend 50 cents extra on slivered almonds and a buck extra on the low-fat swiss, there is no economic crisis. You can get the same salad for $7 at any of the 20 delis in a two block radius (minus the mezalluna chopping effect).
Recession, what recession?
Paulson is calling for a special G20 meeting, G7 meeting on Fri.
Bank holiday coming soon.
Paulson: there will be winners and losers.
Gee, I wonder who the “decider” will be?
John (316)-
I guess Siegel will be back to working the falafel stand next to Franklin Field.
BC (314)-
If Volcker croaks during all this, it could drop the S&P 200 pts.
Grim (191),
WSJ had an interesting article in personal journal section today explaining why great depression was far worse than what is happening today. No fdic, no unemployment compensation, stock bubble created on mass amounts of margin and fed wouldnt lower interest rates. Actually one of the more positive articles ive read in a while.
Recession, what recession?
Frankly I believe any reports of consumer credit cutback (or even elimination) have been largely exaggerated. Or at least exaggerated to the extent necessary to prod politicians toward the policy position that would most benefit their book.
Had someone tell me that it was impossible to get a mortgage just the other day, which is, of course, complete BS.
Klink still whipping the “housing correction” as the bogeyman.
He’ll be blaming housing until he steals away under cover of darkness.
Hard to believe that Paulson went from soft landing to apple carts so quickly. No middle ground at all.
Clot (or anyone else on this board that’s up on selling homes): Seriously, is an FHA the (only) way to go for a first-time buyer like myself? I may need to buy a house around mid-next year, but wanted to start getting things in order now. I’m sorry for sounding naive–I’m a home buying virgin.
Hi Chi,
Roubini clip, he says things have a better chance of being worse than he is predicting than being better:
http://finance.yahoo.com/tech-ticker/article/91506/No-Quick-Fix-Roubini-Forecasts-Worsening-Economy-2-Year-Recession
grim (326)-
I have two banks fighting to do a refi on my building. The terms from both are attractive.
I didn’t approach either bank. They came to me.
My business is ok-to-good. Not great, not near as bad as many in my field. Gotta figure overall access to credit is ok, given my circumstances.
“Had someone tell me that it was impossible to get a mortgage just the other day, which is, of course, complete BS.”
grim– can you give a summary of prevailing lending standards right now? I have read various things suggesting if you do not have 25% down, you are going to get an off the charts rate. I do not understand how this squares with what seems to be increased FHA lending right now
Dawg (329)-
Don’t apologize. It’s a good question.
And no, FHA is not the only way to go. All underwriting now is geared to the benefit of first-time buyers. They’re the only buyers out there.
In places where foreclosure is bad, there are NO trade-up buyers at all. Instead, those folks are out of the game, probably forever.
Dawg-
I saw a 660 FICO, minimal DP, get approved yesterday with a 55% back ratio…at 6.25%.
HEHEHE Says:
October 8th, 2008 at 3:21 pm
Hi Chi, Roubini clip, he says things have a better chance of being worse than he is predicting than being better:
AND?
Clot,
Are you saying that you haven’t seen the “credit freeze” rear its head?
At least not yet?
Or is it all fear-mongering to get that bailout bill through Congress, but at the grassroots level, banks are still lending?
They’re just not doing suicide loans … which is to be expected?
Clot ]334],
Where’s this credit crisis that has the fed’s balance sheet exploding? Sounds more like Weimar than deflation?
I have read various things suggesting if you do not have 25% down, you are going to get an off the charts rate.
I only have detailed knowledge of a handful of deals over the past four weeks but none of the buyers had issues securing financing. The worse case was a potential buyer that actually hit a limit when he asked his lender to increase his preapproval. The loan amount in question was $440,000, and this was a stated income loan. $440k to a stated borrower? That doesn’t sound like a crisis to me.
Or is it all fear-mongering to get that bailout bill through Congress, but at the grassroots level, banks are still lending?
This is more likely the case.
332
My wife and I got good rates based on 20% down. Granted, she carries a 820+ FICO and we are looking to borrow less than 2.5X income.
scribe (336)-
You’ve got to document everything, and underwriting is painfully slow…but if you’re for real, you will get the loan.
#334 – clot –I saw a 660 FICO, minimal DP, get approved yesterday with a 55% back ratio…at 6.25%.
So no one has learned anything… great.
It’s the back end ratio that I can’t believe. At 55% this person is stretched from the word go. Almost anything could break them; rising gas or commuting costs, taxes, utilities, etc. It’s just f’ing stupid.
chicagofinance Says:
October 8th, 2008 at 3:26 pm
AND?
To be clear….already priced into the market….now if things get worse OK…again to clarify, I think Roubini’s 2 year recession with started 1Q08 and ends in 1Q10 is already priced into the market.
with = which
BC (337)-
Weimar? Deflation? Maybe there are elements of both, but to me, the biggest thing that’s happening is a massive daylight robbery of the US Treasury.
Unfortunately, too many are confusing the return to traditional lending standards as a cut off of the spigot.
Loans are still being made to qualified borrowers, same as it ever was.
Unqualified borrowers? Sorry. Maybe you shouldn’t own a home.
REMEMBER:
ECONOMY does not equal STOCK PRICES
tosh (341)-
That’s nothing. You should see what FHA still allows people to get away with.
We’ll still be dealing with those bust-outs in 2020.
tosh (341)-
Nobody’s learned a thing. The banks are salivating over the 700 bn giveaway, so that they can start the sausage grinder again.
I guarandamntee it.
#338
” only have detailed knowledge of a handful of deals over the past four weeks but none of the buyers had issues securing financing. The worse case was a potential buyer that actually hit a limit when he asked his lender to increase his preapproval. The loan amount in question was $440,000, and this was a stated income loan. $440k to a stated borrower? That doesn’t sound like a crisis to me.”
grim– what kind of downpayment are you seeing. I think I remember a couple of months ago Clot saying 10% was becoming minimum (still don’t understand how FHA fits into this). has this gone higher in what you’ve seen recently? also curious if income requirements have changed (e.g., now will lend only up to 3.0x). understand if you can’t give details.
Beginning of Klink speech: Dow +140
End of Klink speech: Dow -14.
Bring him back!
If that speech was meant to inspire confidence, maybe he should have at least rehearsed it first.
That’s a smaller reversal than after Bergabe’s. Does that mean traders have more confidence in Klink or Bergabe has more power to move markets?
Vic (351)-
I don’t think Blankfein finishes writing them soon enough for Klink to have time to rehearse.
Yeah, I mean, I might have 7.5 percent down, a good income to debt ration, 730 FICO and a high income. I’m not SOL am I?
Chi,
I don’t think forward P/E’s have a two year recession calculated in them.
Dawg (354)-
You’re in the game. You might even want to explore FHA. They don’t preclude your actually making a DP.
I’ve had a couple of recent clients go FHA and make 10% DPs.
334/Clot-
Could you share the name of the lender?
HE (355)-
Dunno about that. POT is trading at a 3 multiple.
“The banks are salivating over the 700 bn giveaway, so that they can start the sausage grinder again.”
Clot,
I hear the CME came out with a new exchange. A CDS market, for cb’s, traded strictly by the world’s cb’s. This recent, unprecedented coordination has many very apprehensive. Germany is a heavy buyer of Spain paper [default]. Not sure who is writing the paper. TARP?
Does anyone have an experience with the Hope Now Alliance?
http://www.hopenow.com/
clot, you assume that Blankfein and Paulson are not the same person? It is hard to see the difference. The credit lock up is not so much in the mortgage market because of Fannie and Freddie. Other types of financing are more difficult, try to get a construction loan or financing to do commercial real estate. Or how about a yacht loan, for all intents and purposes it is difficult 40% down 14% interest type deal. First oil prices and now the credit problems the boating business is dying in the US, well I guess there goes an other excess of the times.
Wasn’t Blankfein in “The Princess Bride”?
Inconceivable!
Hawk (357)-
No lender yet. It was run and approved through Fraudy- Desktop Underwriter. That means any conventional lender can take it and run with it.
Wisdomtree Invts Inc. WSDT (OTHER OTC) $1.06Change:-0.14 -11.67%
Volume:745,053
I love penny stocks went from .52 to 1.06 in less than two hours. All because a general ETF article on a website said ETFs will have a difficult time.
BC (359)-
Alice in friggin’ wonderland.
Clot,
Yeah I saw that, MOS is doing the same thing as are most of the oil/gas stocks.
There is definately some seriously oversold stocks and sectors that have been dumped more or less because they had to by hedge funds, banks etc. to meet redemptions, margin calls what have you.
I am just saying there’s a lot of tech names that will likely see a lot more downside in the future.
John (364)-
Especially ones that suck.
laughy (360)-
Yeah. All my agents call it “Hope No”.
A joke. Can’t refi negative equity.
Paulson speaks….markets down -194!!!!!! Ouch!!!!
CME CDS Exchange will be a big hit. Back around 2005 I got to see how Goldman did CDS, basically a buncy of SI and Brooklyn back office clerks taking orders over phone or email and overwelmed by paperwork. GS got so short staffed they called the three big 4 firms that were not their external auditor and asked them to send over juniors to take orders and confirm them near settlement. Faxes, phone calls, e-mails, data entry, confirming prices it was like 1978, even scarier some of the big four were short staff due to sox and said how about accounting summer interns at 75 bucks an hour to take orders. GS said send them over. Large six figure and more CDS insurance to protect again loss orders being taking by pimple faced 19 year old Baruch and St. John’s Accounting majors is no way for GS to do business.
A close to 200-pt puke, in the last 10 minutes.
Move along. Nothing to see here.
Tomorrow’s dilemma? Go to shul & repent…or trade?
I owned Wisdom tree once for a few hours and that was all I could stomach, I like to watch it as those guys claim it is going to take off yet all I see is it crashing for a year straight.
Clotpoll Says:
October 8th, 2008 at 4:03 pm
John (364)-
Especially ones that suck.
OOPS. Covered all my shorts. Contrarian indicator?
http://www.time.com/time/covers/0,16641,1101081013,00.html
Did Paulson say he was using all tools at his disposal or all fools at his disposal?
So now we get to see what happens when a country goes bankrupt???
Icelandic pension funds refuse to repatriate assets
http://www.ipe.com/news/Icelandic_pension_funds_refuse_to_repatriate_assets_29394.php
Iceland’s pension funds will not transfer any of their foreign securities back to Iceland as the deteriorating economy is dragging down pension fund assets, IPE has learnt. Hrafn Magnússon, director of the Icelandic Pension Funds Association (IPFA), told IPE: “All discussion with government to transfer 50% of foreign assets from pension funds has been postponed.” He added: “Icelandic pension funds are not going to transfer foreign assets to Iceland – there is no ‘fire sale’.”
In an emergency meeting of the board and the reserve board of the Icelandic Pension Funds Association (IPFA) last night, it was resolved an agreement would be postponed as Iceland’s economy was deteriorating further despite the emergency laws enacted by Iceland’s Althingi Parliament. “New information came to light regarding the situation over the course of the weekend, calling for even more widespread and serious reactions on behalf of the government than previously believed necessary,” the IPFA said in a statement last night.
The association has stressed it will encourage the boards and managers of the Icelandic pension funds to meet the needs of borrowers, as much as the situation can allow for at each given point in time. The IPFA has also warned there is likely to be a decrease in pension benefits paid which will come to pass early next year. “The financial situation in markets all over the world and the emergency laws set by the Icelandic parliament will affect the pension funds, as well as all homes and businesses in the country. It is clear that the assets of the pension funds will diminish accordingly,” concluded the organisation.
The news comes as the Central Bank of Sweden has granted Kaupthing, Iceland’s largest bank, a SEK5bn (€514m) loan, to ensure the bank can live up to its commitments towards the customers of Kaupthing’s Swedish branch. Trading in Kaupthing was halted on the Nasdaq-OMX after it shares plunged 34% within the first 30 minutes of morning trading.
The Icelandic Financial Supervisory Authority (FME) took over the board of second largest lender Landsbanki Bank yesterday morning and the government scrapped plans to nationalize Glitnir Bank hf, the country’s third-largest lender, putting the company into receivership under the control of the state regulator. In a separate development, the UK government declared this morning it plans to sue Iceland over lost deposits held by thousands of Britons with Icelandic bank accounts.
# Clotpoll Says:
October 8th, 2008 at 4:04 pm
laughy (360)-
Yeah. All my agents call it “Hope No”.
A joke. Can’t refi negative equity.
Strange. They apparently told somebody i know that since this person put down 10%, got a 30-year fixed, has never owned multiple houses, and had to deal with some other circumstances (and has receipts to back that up, as well as previous tax returns), they PROBABLY will be able to change the mortgage from owning 325k to owning 200k based on comps and foreclosures in the area (not NJ).
It sounded strange, for sure, and it’s not a done deal, but i just wanted to see if anyone had dealt with them.
Obviously if this place is legit, that would trim their mortgage payment significantly.
important news
Britney Spears’ 17-year-old sister Jamie Lynn is expecting her second child, US media reports claim.
Jame Lynn, who gave birth to her first child, Maddie Briann, in June, is apparently eight weeks pregnant.
An unnamed source told the National Enquirer that she and her mother, Lynne, were left “hysterical” after she took a pregnancy test.
“Neither of them knows what to do, but for now they’re trying to keep the news from getting out,” the source said.
“Jamie Lynn believed she couldn’t get pregnant while she was breast-feeding.
“She’d expected to have her period by early September, but a home pregnancy test came back positive and Jamie Lynn cried her eyes out.
“Lynne was livid when she found out.”
@BCBob
Magazine was delivered Saturday.
Besides, it says this WON’T be a depression.
Ah, kettle america is on its way to full out retardation. How one can accidentally have a teen pregnancy once is bad enough but then twice how the hell can anyone be that dumb!!!
MJ [378],
Actually, the short term oversold indicators were more of an impetus. I have no problem stepping aside and coming back another day.
i’m sorry:
OWING
not OWNING
essentially, the mortgage would have 125k shaved off
BOSTON – The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and firms during the financial crisis.
Treasurer Timothy Cahill’s requests to the U.S. Treasury and Federal Reserve Bank of Boston this week were prompted by the state’s inability to borrow from the short-term debt markets, The Boston Globe reported Saturday. The financial turmoil has caused credit markets to stop lending, or to charge prohibitive rates.
California has made a similar request, saying it would run out of money by the end of the month if the short-term debt markets do not ease. The state asked whether it could not obtain loans from the Fed.
Massachusetts has enough money to cover its expenses for the coming weeks, Cahill said. But a low-rate loan would ease a cash shortfall if the credit problems persist.
“That’s all we would ask them to do: Treat us like the investment banks,” Cahill said.
Federal officials have not responded to his request, Cahill said Friday.
The state’s borrowing problems come as it deals with a $223 million shortfall in projected tax collections during the first quarter of the state’s fiscal year. On Thursday, Gov. Deval Patrick announced the first of what could be a series of cuts to programs and operations to deal with the sagging collections.
Pelosi calling for 150 Billion stimulus plan
http://news.yahoo.com/s/ap/20081008/ap_on_go_co/meltdown_pelosi
Can I have mine in ammo credits please.
Bost,
Which short term indicators are oversold?
Also, I’m unclear – are your boots on or back in the closet? :)
Emergency Economic Stabilization Act of 2008 Summary of Major Provisions TARP-Troubled Asset Relief Program Creates an office within the U.S. Department of the Treasury authorized to purchase mortgage-related, and potentially other “troubled” assets. Authority will be exercised in consultation with the Federal Reserve Board and other federal agencies. $250 billion is available immediately and the President can authorize an additional $100 billion for the program. If the President certifies that it is necessary, another $350 billion will be available unless Congress passes a resolution disapproving. Oversight of TARP
– TARP Reporting. Treasury is required to submit a report to Congress within 60 days of the first purchase under TARP, with additional reporting every 30 days thereafter. Additionally, Treasury will file a report for each $50 billion of purchases under the program.
– Financial Stability Oversight Board. The Board has oversight authority of TARP. It is comprised of the Chair of the Federal Reserve, the Secretary of the Treasury, the Secretary of HUD, the Director of Federal Housing Finance Agency, and the Chair of the SEC. It will report to Congress quarterly.
– Special Inspector General. Conduct, supervise and coordinate audits and investigations of TARP. Reports quarterly to Congress.
– Comptroller General. Responsible for oversight of TARP and reports to Congress every 60 days. Conducts an annual audit of TARP.
– Judicial Review. Courts have authority to review actions of Treasury under TARP to ensure they are in accordance with law, and not arbitrary or capricious.
– Congressional Oversight Panel. Five-member panel appointed by congressional leaders (One member appointed by each of the Senate majority and minority leaders, the House Speaker and House minority leader. The remaining member chosen by House Speaker and Senate majority leader, after consultation with the Senate and House minority leaders.) Reporting every 30 days to Congress on TARP and its effectiveness and contribution to market transparency. Also reporting on the effectiveness of foreclosure mitigation efforts.
Insurance Program for Troubled Assets Alternative to asset purchase. Treasury will establish insurance program for troubled assets, charging a risk-based premium. Limited to assets originated or issued prior to March 14, 2008. Treasury to report on the program to Congress within 90 days of enactment.
Taxpayer Protections
– Revenues from sale of troubled assets to be used to pay down national debt.
– In 5 years, if TARP has incurred any losses, the President must propose plan to recover such losses from the financial industry.
– Treasury to receive non-voting warrants from institutions to cover any losses and costs, or to share in any equity gains.
Homeowners
– For mortgages and mortgage-backed securities purchased under TARP, Treasury will implement a plan to mitigate foreclosures and encourage mortgage servicers to do the same through the HOPE for Homeowners or other programs.
– Treasury will coordinate with the Federal Reserve, FDIC and government agencies to identify assets for purchase that will help the Treasury improve the loan modification and restructuring process, and to help tenants remain in their homes under current lease terms.
– Treasury may use loan guarantees or credit enhancements to facilitate loan modification and prevent avoidable foreclosures. Treasury will consent to reasonable requests for loss mitigation measures, where appropriate.
– Increased eligibility for participation in Hope for Homeowners Program.
FDIC & Federal Credit Union Insurance
Temporarily increases deposit insurance limit from $100,000 to $250,000 per account, until
December 31, 2009.
Executive Compensation
Treasury will establish compensation standards for senior executives (top 5) of institutions whose assets are directly purchased under TARP. Standards include barring incentives for taking unnecessary and excessive risks, prohibiting golden parachutes while Treasury holds a debt or equity position in the institution, and providing for recovery of compensation based on earnings or gains that are later proved to be inaccurate – so called “claw back” provisions. For institutions participating in auction sales under TARP (aggregating $300 million or more including direct purchases), new golden parachute arrangements that pay out in the event of termination, bankruptcy, insolvency, or receivership are prohibited. Establishes 20% excise tax on golden parachute payments triggered by events other than retirement, and tax deduction limits for compensation above $500,000.
Special Report on Regulatory Reform
The Congressional Oversight Panel will report on the current state of the financial regulatory system and its effectiveness at overseeing market participants and protecting consumers. The panel will make recommendations for improvements, including whether to regulate participants currently outside the regulatory structure and whether there are gaps in consumer protection. The report is to be submitted to Congress by January 20, 2009.
Regulatory Modernization Report
By April 30, 2009, the Treasury Secretary will review the state of the markets and the effectiveness of the regulatory system in overseeing market participants, including the OTC swaps market and the GSEs. It will include recommendations on regulating market participants that are currently outside the regulatory system and on enhancing the clearance and settlement of OTC swaps.
Authority to Suspend Mark-to-Market
SEC has authority to suspend mark-to-market accounting requirements for any issuer or for any class or category of transaction.
Study on Mark-to-Market
SEC, in consultation with the Federal Reserve and Treasury, will conduct a study on mark-to-market (FAS 157), including its effects on balance sheets, its impact on bank failures in 2008, and its impact on the quality of information available to investors. The report will also look at the Financial Accounting Standards Board process in developing accounting standards. The SEC will report to Congress within 90-days.
Study on Margin Authority
Comptroller General will conduct a study to determine the role of leveraging and sudden deleveraging of financial institutions in the current financial crisis. The report will include an analysis of regulatory authority relating to leveraging. The report is due to Congress by June 1, 2009.
Unrelated Tax Provisions
AMT Patch
Extends alternative minimum tax (AMT) relief for nonrefundable personal credits and increases the AMT exemption to $69,950 for joint filers and $46,200 for individuals in 2008. For tax filers who were not subject the AMT in 2007, these changes will generally protect them from being subject to the AMT in 2008 all other things being equal. Also provides relief to taxpayers who recognized AMT income by exercising incentive stock options (ISOs) in which the stock subsequently lost value.
Disaster Relief
Provides for $8.8 billion in disaster tax benefits. The provisions are generally similar to those enacted in the Gulf Opportunity Zone Act and the Katrina Emergency Tax Relief Act of 2005.
Tax Extenders
For individuals, extends the deduction for state and local sales taxes and the above-the-line deduction for qualified tuition expenses, among others.
OT: For those interested in preparedness, here is a link I received in an email today from our county government:
http://ema.cobbcountyga.gov/preparedness.htm
scribe [384],
Was just talking about technical indicators pertaining to the stock market. Not important, just babbling.
The boots are out. However, I’m not a wannabe buyer; patience, patience.
I take it I won’t get any of this second stimulus package either, thanks Nancy, you’re the best.
reading this article, just remined me of that article I posted the pther day, about airline mechanic jobs being outscorced.
“United Airlines to lay off 414 mechanics”
http://tinyurl.com/4axcml
When $85B just isn’t enough:
CNBC: Fed Provides Additional $37.8 Billion Facility For AIG
http://dealbreaker.com/2008/10/cnbc-fed-provides-additional-3.php
he [390],
I guess they booked a return trip to the resort?
BC,
If $85B for AIG goes up by nearly 50% is it safe to say the same will happen with the TARP?
he [392],
That’s baked into the cake. It’s a no doc, exploding arm.
No takers! What a steal.
http://www.ranch4you.com/Lorang/gunsitehideout.htm
HeHe 392.
Tarp is a revolving credit line. Tarp may exceed 3 trillion before it is said and done.
50% increase? try 4-500% increase. also consider that bernanke alone handed out 600 billion in 1 day last week. we are already in the hole for about 2 trillion. not counting however many times paulson revolves his 700 billion credit line called TARP
NOM,
Look at this, from sean @ 394
http://www.ranch4you.com/Lorang/gunsitehideout.htm
we found our compound!!! ;)
shall we all pitch in and start the NJRER Ranch?
some financiers are currently making money by “cannibalizing” the downside of the market.
interesting:
http://financialpermaculture.com
“Money As Debt 1: what money is & why we are bankers’ slaves”
http://tinyurl.com/3rdkx6
#348 clot: So we will have a collapse on top of the collapse???
#376 laugh: What is this again? Could nto follow all the posts today. Please explain
#345 grim: So is it 10% minimum now??
#341 toshiro: Are you kidding???
#338 grim: Stated loans are still being done??
#403 – 3b – Clotpoll saw the actual approval, so I hope he was kidding. I was just being incredulous.
California, Michigan, Missouri, New York, Ohio, South Carolina, Wisconsin, Indiana, Kentucky and Arkansas have less than six months’ worth of unemployment trust fund reserves, putting the funds at high risk of insolvency.
“Some state unemployment funds drying up”
http://tinyurl.com/4tsvub
*is this a bad thing? sounds like some people might actually have to get off their ass and get a job.
SAS
“The crisis spreads: Bailouts continue as state seeks buyers to help municipalities move short-term notes”
http://tinyurl.com/47uov5
“reading this article, just remined me of that article I posted the pther day, about airline mechanic jobs being outscorced.”
THATS IT! It is actually just a ploy by airline management. Heck, instead of $15 per checked bag, how about being given the choice to pay no extra for a plane that may or may not have been serviced and one that was? What is a well-maintained plane worth to you? $20? $50? What a gimick.
3b – It’s hope now alliance.
http://www.hopenow.com/
Again, i didnt make the call, just relaying info from someone who did. they are in a bit of a situation, though (can still the mortgage, but barely; a job loss would definitely equal a house loss).
if i could add something – nice to see Grim back and posting today.
this might have been the most doom and gloom day, ever.
big plans this weekend – hoping to pick up a used car and a couple guns.
Unfortunately, too many are confusing the return to traditional lending standards as a cut off of the spigot.
Loans are still being made to qualified borrowers, same as it ever was.
We just got a 30yr fixed at a very good rate. 20% down, 800 FICO’s, full docs, and PITI was 22% of gross income.
Agree. The spigot’s aren’t closed, we are just returning to more historically normal lending standards. Unfortunatly, our Ponzi economy isn’t set up for rational standards. It will take time and considerable pain to adjust.
italics off
TED Spread back to 3.91
Call me insane, I may buy a house tomorrow.
#320 seneca:As long as Suzie secretary, Adam Accountant and Raj the IT guy can afford to spend 50 cents extra on slivered almonds and a buck extra on the low-fat swiss, there is no economic crisis.
Until they get laid off. What you describe is fleeting.
http://www.politifact.com/truth-o-meter/
http://www.votesmart.org/index.htm
#414 MJ Why now?
#409 laugh:Not to be dense, but did they actuallly get the mtg modified,as in getting a chunk of it knocked off?
#339 hughes: Any particular reason you bought now? Based on your info, you were in the drivers seat. Why buy now?
Quiz
Which CEO of a very large wall street firm said today that though TARP is a very good idea, he cannot imagine any way that his company will sell any assets to it?
“#320 seneca:As long as Suzie secretary, Adam Accountant and Raj the IT guy can afford to spend 50 cents extra on slivered almonds and a buck extra on the low-fat swiss, there is no economic crisis.”
Real unemployment is close to 11%, auto sales are at levels not seen since the late 80’s/early 90’s, same store sales are falling off a cliff [excluding Wal-Mart, Costco], American Express reports late payments are the highest since 1992 and GDP would have been negative for the last 3 quarters if our govt utilized a real price deflator. If not a recession, is this just a dress rehearsal?
Of course if you are employed and liquid it may not appear to be a recession. However, if you lost your job, it’s a depression.
“Call me insane, I may buy a house tomorrow.”
MJ,
Why would you be insane?
#409 laugh:Not to be dense, but did they actuallly get the mtg modified,as in getting a chunk of it knocked off?
no. they just touched base with them today, and that’s the updated on the first call.
We have to notify our landlord 3 months in advance of when our lease expires as to whether or not we are going to renew … we have 11 weeks to tell him.
let everyone know how the search goes, MJ and BC Bob
Everything Hobroken/421-
jmac?
3b [415] and BC [422]
My observation was somewhat tongue in cheek but I honestly expected by now to see some pullback in the $15 lunch crowd.
Maybe I need to start paying more attention to the lines at the grilled hot dog vendors and the Hallal guys. Perhaps those lines are getting longer.
ha! I am Legend is on Cinemax tonight.
#422 BC Bob:Of course if you are employed and liquid it may not appear to be a recession.
True, but if should give you reason to pause.
I am getting a Triple Play offer for FiOS for $64.95 for six months ($99.95 for the next six)….do I go for it?
#423 BC Bob:Why would you be insane?
Because prices are not low enough yet!
woops accidentally posted to last thread…
Geez.. I got spam from John McCaln.
Seriously. It’s spam. I never signed up for any political stuff and I don’t hand out that email address any more.
It’s on a ton of spam lists since I get hundreds of emails a day from it but this one made it through.
That’s reason enough for me to not vote for him.
His plan spam sucks too.
Why now?
Here’s my theory.
It’s a new house. It’s been on the market for 2 years. It was built at the peak of the boom, targeted toward wealthy buyers in northern NJ. It was originally listed at $2.25M. It is now listed for $1.25M.
My thought is: the last of the few high end houses that did not sell are available at or near a loss by the builder. Once these are gone, they will not be building high end houses except to spec for a particular client, AND as of this summer I cannot trust the builder to stay in business while they build for me.
Thoughts?
#432 MJ Understand, but it is a still alot of money for a house IMO. Don’t think it is worth it long term.
3b (404)-
Stated loans never stopped being done.
I’m gonna get some shiny new toys.
Clot – My PERS is Oregon…from my years there. In CA – I have CalSTRS (just teachers) – seems more solid than CalPers. I can’t find any hedge fund hanky panky. If you hear of any, let me know. Thanks
I been checking into a few things here lately. You know, what with working until I’m 70 and all. The hope has always been to have two smallish checks add up to nearly one retirement. I will lose the SS from my 12 years in banking because of the Windfall Elimination Provision.
Didn’t Shore guy mention this could happen the other day.
http://www.smh.com.au/news/travel/qantas-plunge-compensation-offer/2008/10/09/1223145508283.html
An airplane plunged, but recovered due to a computer glitch.
Shore – rest assured, we have left enough money behind in Mexico. Today we trekked all the way out to Las Caletas, about an hour’s ride by boat from Puerto Vallarta. It was a lovely place to spend the day -beautiful beach and non stop Pacificos and Margaritas. Lil Gator got to swim in the ocean, had a baby monkey climb on his head and got a kiss from a parrot. Good times.
Lil Gator slept through the entire loud party boat ride back to PV, while Stu impatiently waited for my Treo to regain it’s signal to check on the final market numbers, while I wondered what was going to happen to all these nice people once Americans were cut off from credit and can no longer travel.
Today was our last port. We have 2 days at sea and then we’re back in Los Angeles. We’re hoping the ship does not have to divert from it’s course in order to evade Hurricane Norbert, which was a Cat 4 last we checked. Could be a bumpy ride back to reality, but I guess that would be fitting for the times.
An airplane plunged, but recovered due to a computer glitch.
Maybe that’s what’s causing the market downturn…
MJ 432
Could work. If built two years ago and quality – big if – it’s beneath material replacement cost now. Obviously need to factor in land depreciation and any possible material cost declines, but there is still cushion on the materials as they have not reverted back to prior levels yet.
My biggest recommendation, after building several houses in the original ask range, is to make sure you are comfortable with the quality of the construction. Get someone who knows building. If it doesn’t pass that test, all the discounts and below cost analysis don’t matter. Alot of crap went up at the peak, and you’ll have non-stop problems.
If you build there are ways to ensure that even if your builder goes belly up you are protected. Also, don’t forget the suppliers. It would be a b***h to have 150k of windows sitting in the yard of a business that just tanked.
[396] Ket,
I actually thought about this.
At approx 1,300 per acre, it is cheaper than sites I scoped in PA, though not by a lot.
Problem is that it doesn’t meet some of the criteria, which is weekend retreat accessibility, source of current use, proximity to recreation, and easy access in the event of a Bug Out Event. It also has no stands of useful timber.
It is simply a TEOTWAKI compound, and we would need at least 50 investors to make it viable, and then you would need to provide a heating source, so it is, in the end, no cheaper than something in NEPA.
But it looks really nice.
Nom-
How about this one?
http://poconos.craigslist.org/reo/825175871.html
“Didn’t Shore guy mention this could happen the other day.
http://www.smh.com.au/news/travel/qantas-plunge-compensation-offer/2008/10/09/1223145508283.html
An airplane plunged, but recovered due to a computer glitch.”
Yeesh. Talk about spooky timing. Indeed I did bring up the nasty things that can happen to modern aircraft due to computer issues. One day a plane I was on could not get its engines started due to a computer glitch. The solution? Download some patch code from the maint senter 1500 miles away. It would seem to be a new venue for virus writers.
Gator and Stu,
Enjoy the trip back. Just blame any stormy seas on Big Ben, Paulson (Daddy Warbucks), and George Herbert Hoover Bush. They seem to be behind everything bad lately, so you might as well.
Ket I remember you taking a ride up to my neck of the woods to check this one out.
http://newmls.gsmls.com/public/show_public_report_rpt.do?report=clientfull&Id=37051752_11260
Down 50k on asking dom 351 days!
Wasn’t this the place?
At 300 it looks like a buy.