"But he was among executives who could earn a bonus based on good survey results."
It is time, I think, to introduce the use of the guillotine in this country.
That previous comment may have seemed off-topic. Let me fix that.
When all the dust settles on this whole sorry bubble, one of the things we're going to find is just how important it all was that consumers felt satisfied by being provided with reckless but prompt and polite service.
We didn't even get to the issue of what the questions were. I hear all this crap all the time about how great builder-owned mortgage companies are because they understand how terrible it is when lenders delay closings, and how the builders don't do that. So if you have a lender who is "service-oriented" enough to go ahead and close a loan even though the property is not 100% complete per plans and specs and you may never end up getting your carpet or grading, because someone got paid before they had to deliver or install it, you're screwed, but you got great prompt service and are able to start making payments on part of the loan amount that should never have been disbursed.
Since I got on to you (despite having been warned not to) for crucifying the NYT a few days ago, it seems fair for me to mention that I appreciate you handing out props to journalists when you believe it is deserved also. I'm still unsure that you use the correct standard for judging such things, but at least you are true to your principles. Also, lest I be misunderstood, I do enjoy and appreciate your work as it is. The Internet has more than enough homilists already, and I don't read any of them.
G.M. Profit Down 90% From 2006
By NICK BUNKLEY
Published: May 4, 2007
DETROIT, May 3 General Motors reported a 90 percent decline in first-quarter profit today as losses at its finance arm overshadowed gains from restructuring its automotive operations...Reductions in health care spending...helped G.M. cut its North American losses to $85 million from $251 million in the first quarter of 2006...In 2006, G.M. cut its fixed costs in North America by $6.8 billion, largely through buyout and early retirement package offers that were accepted by about 35,000 of its hourly workers...Its fair to say the U.S. market isnt very robust, Mr. Wagoner said, citing gas prices that have topped $3 a gallon in many parts of the country as one reason. But that is slightly less of a concern for G.M. than for Detroits other automakers, because G.M. now sells more than half of its vehicles abroad...G.M.A.C. said its mortgage division, Residential Capital, lost $910 million, while net income from automotive financing, insurance and other operations was $605 million, more than double the earnings those divisions generated in the first quarter of 2006. G.M.A.C. said it expects improved results from the mortgage division in the second quarter.
Health care? We've got that under control. Insurance? Auto financing? Check. Mortgage lending? A few problems, but we're off-loading them.
I hope you're aware that I have no particular objection to having my case jumped for what I write. (I get a bit annoyed, like anyone else, when I'm getting my case jumped for what I didn't write, but you can't stop people from putting words in your mouth; it seems to be human nature.)
I also reserve the right to enter the fray and jump back, should it strike me as either interesting or worth it.
I get goofball name-calling dimwit comments (and emails) as often as anyone else does. Most of the time I just ignore that stuff. Here and there I fall off the good-sense wagon and try to reason with a troll. I always regret it and try hard never to do it again.
But I hardly thought that your comment was trollish, and I also hardly thought that you were unwilling to stand the heat since you went out of your way to wander into our kitchen here. Taking other people seriously, on the terms they offer, has always struck me, personally, as a compliment. It can be rather a tough compliment when it turns into "please do better," but if implicit there is "because I know you can," it's at least better than just ignoring someone on the assumption that they're hopeless.
I am well aware that my take on this is a minority viewpoint. But nothing annoys me more than preaching to the choir or making endless observations on the obvious. The day I start writing stuff that everyone agrees with and nobody is in any possible way offended by is the day you should take my internet access away. We certainly agree on that, I'm sure.
Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it.
Thanks for promising not to bore us by refuting claims that no one made in the post to which we are commenting, Sebastian. There's nothing like changing the subject back to your favorite dead horse and then promising not to beat it to warm the cockles of my heart.
Do you ever allow other people to have a conversation that isn't about you, or is it just on blogs?
I'm only doing this because I just promised to stop dignifying certain kinds of behavior with a response, and I have to prove that I'm just as fallible as the next blogger by breaking my promise 20 minutes later. I hope everyone who thinks I'm insufferably arrogant is paying attention.
"Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it."
For me these numbers only have meaning as trend indicators. If the ISM or jobs number trend up or down for 6 months or more then the numbers have more meaning. If you think the trend in ISM or the jobs number in any given month points to a certain direction so be it, I rather take a slower overall point of view.
In keeping with the exceptionally irresponsible bearish tone of this blog, UBS announced today that they're closing their Dillon Read hedge fund unit due to massive losses in their sub-prime portfolio. To make matters worse, they haven't actually begun to dispose of the problem portfolio yet. I'd suggest that this isn't good news for credit markets, and only the beginning of the pigeons coming home to roost, but that would be exceptionally irresponsible of me. After all, there's no risk in the world, and markets, house prices and the economy only go up. To suggest otherwise is irresponsible fear mongering.
Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it.
Those are strong numbers, I'll admit. I'm looking at some past data, and all these indicators have done "head fakes" at the same time in the past, but if these numbers stay strong then we have some sort of rebound. The fly in the ointment is that probably the most important number reported this week, consumer spending, showed a decline. If that continues it could easily negate everything else.
Alternatively, it could be that a strong stock market stimulates the economy and keeps us out of recession. But since US stock values are already approaching 1929 levels and we have even more overvalued markets all across the globe, this is once again a case of the cure being worse than the disease.
I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog.
OK, great, now we've got a discussion going. You will have noticed that while I might be able to sell newspapers, I am not, actually, selling one at the moment.
This blog, if I may say so myself, gives you carefully prepared and meticulously reasoned original information and analysis. CR and I have both made mistakes, and we have always been endlessly grateful for a functioning commenter community that points them out. Then we fix them. We do this because we care about getting it right.
Of course that's got dog to do with differences of opinion about what those facts mean. Reasonable people can disagree. In fact, it makes for a more intellectually satisfying blog. Nobody I know ever thought that publishing one's opinion and providing a free, no-registration, privacy-protected, unmoderated comment section beneath that opinion insulated anyone from criticism.
It is merely frustrating in the extreme to have gone to all the trouble to provide quality content on the blog, as much as it is in our ability to do that, and then to get somebody say it's "irresponsible." To what do I have this responsibility you invoke? To agree with you? To agree with the mainstream press? To intuit what you want to talk about today before I write a post, so that it will always meet your requirements for what "the real point" is? If you are implying that CR and I are "talking the market down," I guess I should appreciate your over-estimation of our influence on the world, but I have to break it to you that we're not that kind of market-movers.
Nobody, but nobody, wants to lose the free-flowing, funny, occasionally splendidly rambling and off-topic nature of this blog's comment section. It is, in my view, a national treasure. What I like best about most of the off-topic commenting is that it involves people bringing things to the blog that we didn't already have. New information. Hot news. Alternative ways of understanding the issues. The occasional really good snark song lyrics. Blog does not live by bread alone.
But some people can't keep from crossing the line into implying that the blog owes them a justification for its own existence. Don't go holding your breath for that.
Ron wrote: "For me these numbers only have meaning as trend indicators. If the ISM or jobs number trend up or down for 6 months or more then the numbers have more meaning. If you think the trend in ISM or the jobs number in any given month points to a certain direction so be it, I rather take a slower overall point of view."
Okay, but ISM Svcs & Mfrg agree; the unemployment stats look good (especially continuing claims). I agree that all economic data moves up or down month by month, but overall, we are seeing some pretty consistent trends.
Granted, home sales are not picking up. Inflation, at this point, is a concern. But I don't think you can throw out this grouping of positives as being meaningless. You can fairly argue that you don't think this is enough to fight the downdrafts, but it is a meaningful set of indicators at this time.
"think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog."
Public Service is a term reserved for people who go out into the community and assist other people to improve their lives. Posting contrary comments on a blog does not fit that description. You sound like a student who acts up in class distracting the teacher with the belief that you are making the class more fun.
I will always skip over your comments in the future, since your comments are not meant to add value to the discussion but only to be a negative point of view.
Turbo said: "In keeping with the exceptionally irresponsible bearish tone of this blog, UBS announced today that they're closing their Dillon Read hedge fund unit due to massive losses in their sub-prime portfolio..."
Excellent, now we're getting somewhere.
Just FYI, I don't consider discussion about any negative or bearish conditions to be irresponsible. (No, this board isn't mine and it's not my agenda to set, but on an open-participation board I think I'm entitled to explain my own position.)
I consider forecasts that 400k-600k construction workers are going to lose their jobs and basing it on questionable evidence to be irresponsible.
I consider fostering the idea that hundreds of thousands of American families are going to lose their homes (and basing it on questionable evidence) to be irresponsible.
I consider that encouraging the idea that a weak housing market, along with problems isolated to the subprime mortgage market, is going to drag the economy into recession with all the widespread economic misery that would entail (based on questionable evidence) to be irresponsible.
I think these are far worse offenses than any real or perceived annoying, obnoxious behavior on my part, but I'm clearly biased about that.
I feel honored.
I'm going to have to be exceptionally irresponsible to get my discount mortgage though. But then again, exceptional irresponsibility is still very much alive and well in the financial world, so I have a veritable treasure trove of material to work with.
ron said: "...I will always skip over your comments in the future, since your comments are not meant to add value to the discussion but only to be a negative point of view..."
A negative point of view...that the U.S. economy isn't going to fall into recession, that hundreds of thousands of people aren't going to lose their jobs and their homes?
I am still on the sideline in cash.
The FCB and carry trade is the continuing storyline, nothing really has changed other then wondering what we be the next bubble and getting in early to max out the profits. LOL
Sebastian wrote: "I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog."
Look, Sebastian, I am thankful that you are here. This blog is much better because people will argue about interpretations and data, as Tanta eloquently pointed out.
But "exceptionally irresponsible"? I can assure you that nothing that anyone writes on this blog is going to talk markets up or down. Get a grip. Americans may be many things, but they are not feeble-minded pessimists apt to scream and bury their money in the backyard because of some comments on the internet. If there's a job, they'll go get it, and if they see a window of opportunity, they'll dive right through it.
If your comment is aimed at certain commenters, you owe Tanta and CR an apology. I think if you will make your points with facts rather than just statements you will gain a lot of credibility. Over and over again CR has posted stats noting that they don't confirm his hypothesis (or that they do, as warranted). Tanta's efforts to describe how the mortgage industry really works, and to suggest ameliorations, are deeply responsible. If we are going to mitigate the effects of irresponsible lending, we genuinely need efforts like Tanta's.
You can't talk and make mortgages default, Sebastian. Nor, unfortunately, can you talk and make mortgages perform.
on an open-participation board I think I'm entitled to explain my own position
No, you don't. You think you're entitled to have the rest of us care about your position. And by "position," I mean "position." It's nobody else's fault you're long on whatever it is you think CR is bearish about.
You haven't yet explained why it is "irresponsible" to engage in economic analysis that doesn't agree with yours.
The GM results (auto sales) were particuliarly interesting, while North American sales are lagging their international sales are strong.
I noticed the other day that steel inventory is low and prices high in Asia and developing countries. Will Asia and the developing countries pick up the slack from America and become the world growth engine and if so will capital leave the American empire and seek returns overseas. Life without huge FCB inflows could be interesting.
"GM sales in Latin America, Africa and the Middle East jumped nearly 17 percent, and GM actually picked up market share in the region which quietly put up the biggest sales growth across the industry in the quarter.
It also picked up ground in the high-profile, fast growing Asia-Pacific region, where China has the focus of just about every automaker's future expansion plans. And it posted gains in Europe as well."
I too like and want opposing views, especially and most importantly, if their thoughts are "SUPPORTED" by info they believe could qualify as facts (as bears do too). As far as low jobless claims, If you are not a citizen =, you can't file for unemployment. And in hard times, who gets fired first, not the citizen, cause with a phone call he will ruin the builders day/life.
Also a report came out not to long ago re; monetary transfers into mexico were way down and tracking further. Even sympathetic papers are picking up the stories on the migration of the illegals trying to find employment in other cities...
I will try and find that link, but bet that CR or Dryfly beat me to it.
"Meanwhile, the capital markets have been running for some time. Value isn't exactly gushing in abundance when it comes to such metrics as risk spreads and earnings ratios over price. Of course, if you think that the recent past will continue into the foreseeable future, there's nothing much to do but hang on and collect the capital gains.
Enter the Fed, which theoretically must keep inflation at bay while juicing the economy and sidestepping a recession. A thankless task, and one that may be impossible. In short, the central bank must pick one or the other, or so one might assume.
If so, we present evidence that juicing the economy may be the preference these days. M2 money supply, the broadest measure published, has been pushing higher for some time now, as our chart below shows. Based on rolling 52-week percentage changes, M2 rose by nearly 7% for the year through April 9, although it's since slowed to 6.3% That's the fastest rate of printing money in more than three years."
Since you ignored my post, I will ask you directly if you'd like to disclose any monetary interests you may have from posting contrary information to this blog.
"The other business which significantly affected our Q1 results was obviously LendingTree. Doug will talk further about the dynamics here, but it is clear that the events in the subprime market have spilled over to other segments of the mortgage market, and virtually every element of this business has been affected. While overall QF volume was up 17% and at a reduced marketing cost per QF, close rates were down on both the exchange and in our own LendingTree Loans. Moreover, the highest-margin products have been the hardest hit, with significant lender pullback or outright exit.As a result, the business has become, at least for now, largely centered around conforming loans, which are the most competitive from a lender perspectives and hence the lowest margin for us, whether at the exchange or at LendingTree Loans. We do expect the business to increase its profitability from the Q1 level over the course of the year, but market conditions make giving any specific financial outlook very difficult."
"At LendingTree, margin compression in the mortgage industry caused major changes to our financial picture. Subprime, option ARM and home equity loans, particularly those with the high loan-to-value ratios, all saw liquidity tighten considerably. In many instances, investors simply stopped buying any loan that isn't conforming, meaning within the guidelines of Fannie Mae and Freddie Mac. Thus, the average margin per loan sold at LendingTree Loans decreased significantly. LendingTree Loans thus shifted away from originating these products and is in the process of changing to a lower-cost, mostly conforming mortgage platform. Additionally, some lenders on LendingTree's exchange also stopped taking consumers that fell out of those conforming guidelines. We saw transmits rates, which is the percentage of consumers we can match with at least one lender, fall in refinance leads from 90% to 87% this quarter versus last year, and transmit rates on purchase fell from 76% to 57%. Additionally, because fewer products were available for consumers, we saw our close rates fall 14% for refinance, 9% for home equity and 5% for purchase on the LendingTree Exchange"
BTW, that was not my comment earlier. Must be another Brian here.
Several players in home mortgage market agree on principles for borrowers in trouble Page not found
Sen. Christopher Dodd, D-Conn., had urged such voluntary action by mortgage lenders and other players two weeks ago when he convened a meeting of their officials and federal regulators to discuss possible solutions to the crisis gripping the market for high-risk loans. Such industry initiatives are preferable, in Dodd's view, to any government bailout to cover mortgage loans in default.
Several players in home mortgage market agree on principles for borrowers in trouble Page not found
Sen. Christopher Dodd, D-Conn., had urged such voluntary action by mortgage lenders and other players two weeks ago when he convened a meeting of their officials and federal regulators to discuss possible solutions to the crisis gripping the market for high-risk loans. Such industry initiatives are preferable, in Dodd's view, to any government bailout to cover mortgage loans in default.
In a comment in the Financial Times about ten days ago, David Hale argues that there is little need to worry about either the dollar or the US current account deficit. The US has no shortage of financial assets to sell the world, and the world has no shortage of savings to lend the US.
True enough.
The question is whether the rest of world or, more precisely, private investors in the rest of the world want to lend that savings to the US and in the process buy US financial assets in the process.
Right now, in my judgment, the data says that they dont. That is what currently worries me.
Best that I can tell, there has been a very significant fall off in private demand for US assets over the past two quarters. By private demand I mean net private demand that is foreign demand for US assets relative to US demand for foreign assets.
The US hasnt noticed this fall off because foreign central banks have stepped up their purchases of US assets dramatically, offsetting the fall in private demand.
This thing is held together with bailing wire and chewing gum. FCBs go away and there isn't much punch in the punch bowl left.
On the other hand they are all terrified at the thought of letting the dollar go.
It gets real interesting - in a nasty sort of a way - if that happens.
Brian--I mean the plain but not simple Brian--thanks for that. I noticed some real dancing around that margin issue in the GMAC-ResCap presentation. Now everybody has to figure out how to go back to making low-margin commodity product again.
I guess we're all in need of some denovation that will improve our productectomy. Anybody want to bet on when RetroMortgage, Inc. does its IPO?
Anybody want to bet on when RetroMortgage, Inc. does its IPO?
RetroMortgage Inc. - where the guys all wear white shirts and stripped ties and the gals all wear hose and silly little scarves... and EVERYONE has big plastic glasses!!!
Might have to look for the '9 to 5' betamax... gotta be around here somewhere....
Hale said:
"The question is whether the rest of world or, more precisely, private investors in the rest of the world want to lend that savings to the US and in the process buy US financial assets in the process.
Right now, in my judgment, the data says that they dont. That is what currently worries me."
Well even though my life at times seems held together with BW and Chewing gum, it still holds, but my crap eventually loosens and falls apart, even if i can make until i find that last roll of duct tape.
Sometimes, buying new before it breaks is the best policy
If you want to take the other side of arguments here, why not take them when there is actually something to argue, perhaps on a relevant thread, hmm?
And when you decide to make such arguments, why is it that you are just like the other trolls who can't resist the little-boy routine of sticking your tongue out and taunting? Did you have to go to troll school or something to learn this, or is it something your parents imbued in you by abandoning you?
Furthermore, your arguments are most often completely lame. For example, 9 out of 10 indicators are pointing to a downward economic trend, and the increasing possibility of problems ahead in the economy, yet, you think it makes you look smart to trot out that in one month, one indicator didnt continue going down. Wow, that's brilliant, as usual. Somehow, to you, pointing out that we are not yet in recession makes us all morons since obviously we should be already and we're not. As if you don't even bother to understand what all the threads amount to here - that the s&%t is only starting to hit the fan and we've got a ways to go, with some serious imbalances in the economy that could unwind in a very ugly fashion. That's what many of us are interested in, not whether Sebastian can proclaim in a new sarcastic manner that there is no recession in 2007. Note to Sebastian : I can get that from all the standard IB houses and economic forecasting firms. That's what they do. There is never a recession ahead, only behind. I dont need that view on this blog, since it's proven itself as useless, just as you do every day you appear here.
And of course, when all else fails, you trot out the "you bears are losing all your money, just look at the new record in the stock market". Do you just enjoy being a jerk, or is it something you can't help? Did you ever stop to think for a second that the people here could very well want to understand where the economy is heading if things do continue to deteriorate, and perhaps do care about how this very interesting housing market evolves? Or do you just feel that we are here to say the economy is doomed, so let's all short stocks together and go down with the ship? Ever think that we might understand that the market can move in a direction opposite to the underlying economic fundamentals? Nooo, only Sebastian knows how to make money, and has to come here to remind us how much he already made though his illustrious IB career.
Really, give it a rest. No one wants or needs you here. If you want to continue to make the comments section unreadable, it's your prerogative. But it's mine to call you on it for being a pompous and annoying jerk.
Sebastian, "I consider fostering the idea that hundreds of thousands of American families are going to lose their homes (and basing it on questionable evidence) to be irresponsible"
I agree. The number isn't several hundred thousand. It's several MILLION.
Thanks, mp. That reminds me of back in the wild & crazy days of my youth in Wisconsin, when underemployed grad students drank a lot of Point. Point is a beer produced in Stevens Point, Wisconsin, and at the time cost fractionally less than PBR. It tasted like bong water, without the floral overtones.
Anyway, the Stevens Point brewery sold T-shirts that said "Point: It's Not Just For Breakfast Anymore."
I'm pretty sure Point would be the beer of choice of RetroMortgage, Inc.
Point is a beer produced in Stevens Point, Wisconsin, and at the time cost fractionally less than PBR. It tasted like bong water, without the floral overtones.
If you were a REAL native born wedgehead you followed 'Point' with a bong water chaser.
Then drove your snowmobile at high speed to the next bar.
Listen man, I really think you need to let it out. Sure the truth hurts, but Sebastian really needs to hear it, so stop beating around the bush, tell him what he really needs to hear, quit holding back...
What you and everyone else should understand is that there are companies who hire trolls to "balance" blogs who are against their interests. Google "netvocates" and "customscoop". Anyone who wants to deny that this is happening should consider NAR and David Lereah. Any organization that has no qualms hiring one expert to lie to the media, will not have any qualms about hiring a few "activists" to post counterpoints to blogs and forums.
I'm sure they prefer centralized media, but the decentralized nature of the Internet makes this impossible. Paid trolls are David Lereah on a smaller and much broader scale. PR and spin doctoring for the internet generation.
Sebastian is too sophisticated, consistent and active to be your garden variety attention troll. I think more is at stake here.
I realize that this type of accusation is dangerous for open forums and debate of opposing positions, and I in no way want to start a "troll hunt". I just think they should disclose if they are making money from their posts, especially if asked directly.
This is the last I'll say about it until Sebastian answers. But I suspect he will just avoid the issue altogether.
Ive said all I have to say on Seb (and his compatriots - they know who they are.) Let me repeat - I welcome opposing views, when grounded in some sort of an attempt at objective analysis. But when it comes with a%sface attitude, it really gets old quick.
BrianTX - it is certainly possible, nowadays, that moneyed interests are creating this sort of annoying monster. If this is true, it's rather pathetic.
Then drove your snowmobile at high speed to the next bar.
Well, you must have had a privileged youth. We couldn't afford snowmobiles. We just stole trays from the Memorial Union cafeteria and tobogganed down Bascom Hill on them shrieking all of the words to "Magic Carpet Ride" we could remember (both of them). Right into the waiting arms of campus security.
When I become president of RetroMortgage, Inc., everyone will have to hand over the keys to the snowmobile (and the jetski) and take a fiberglass tray. RMI will be a very environmentally-conscious company.
I find it laughable that being bearish can be considered irresponsible. What's the downside? If you're bearish then you're likely to work harder, save more, and invest cautiously. All of those are good things. If a bear is wrong, the only thing lost may be a few extra dollars in profits; however, if a bull is wrong he'll lose his a$$. That's irresponsible.
p.s.: It takes no critical thinking skills to agree with the mass media.
Sebastian. When he's trapped by his own logic, he really does quit the thread.
"Sebastian, you made money by buying NEW immediately before its value fell off a cliff?" - No answer
"Sebastian, you say your home price rose nicely in the last year? Where do you live?" - No answer
...only to come back a few days later, begging for more attention.
What you and everyone else should understand is that there are companies who hire trolls to "balance" blogs who are against their interests. Google "netvocates" and "customscoop". Anyone who wants to deny that this is happening should consider NAR and David Lereah. Any organization that has no qualms hiring one expert to lie to the media, will not have any qualms about hiring a few "activists" to post counterpoints to blogs and forums.
[...]
Sebastian is too sophisticated, consistent and active to be your garden variety attention troll. I think more is at stake here. B-TX
Brian & Geoff - I know it happens but if that is the case then they are morons. The way you 'silence' opposing views in this medium is IGNORE them. Eventually they turn into echo chambers & only a handful ardent advocates return. The thing that makes this site interesting are voices like Seb's & Steve... even BODACIOUS if he's sober.
And Seb isn't very sophisticated - few data links or data dumps like I'd expect from a 'pro'... just opinions & reasonably consistent.
Honestly, I doubt any of our 'trolls' are hired guns. If they are, they are pretty pathetic & their clients are getting screwed.
"It is time, I think, to introduce the use of the guillotine in this country." and "Every normal man must be tempted at times to spit upon his hands, hoist the black flag and begin slitting throats. -- H. L. Mencken"
or perhaps the 1993 flick "Falling Down" will actually come to pass: "William Foster (Michael Douglas), AKA D-FENS, is an unemployed, divorced engineer in the defense industry who's reached his boiling point. First he finds himself in gridlock, which he deals with by abandoning his car. He subsequently happens across an unhelpful convenience store clerk whose prices D-FENS 'rolls back', by demolishing the store with a baseball bat after overpowering the clerk. Soon he finds himself in gangland, and deals with some tough-looking gang members by attacking them and running them off. When the gang members try to retaliate, it fails when they crash their car and D-FENS takes their bag full of guns ...."
When I become president of RetroMortgage, Inc., everyone will have to hand over the keys to the snowmobile (and the jetski) and take a fiberglass tray. RMI will be a very environmentally-conscious company.
Give up the snowmobile? I suppose we won't be able to take the hunting rifle to work either?
How in the hell do you expect us to shine deer on the way home? Realizing of course we got off work when its still light... but's its not light when we leave the bar we got to AFTER work... that I'm quite certain is a part of Wisconsin labor law.
The thing that makes this site interesting are voices like Seb's & Steve... even BODACIOUS if he's sober
Dryfly, Steve doesn't belong anywhere in that sentence. It is not a question of how you interpret the data. It's a question of how you behave in a conversation. I will defend to the death Steve's right to ask good hard questions and bring up alternative data.
As a matter of fact, when people like Steve (and others) get a good debate going on one of CR's economics threads, I just sit back and read, mostly, since I haven't got all that much, quite often, to contribute to those conversations. I just like to learn from them. Hint, hint, Sebastian. Hint.
The fact is, though, that I think I see a case where some of our best contributors are falling away from the blog. Maybe they just have better things to do. I'm sorry if that's true; I miss them. But if they're staying out of the comments because they're tired of long pointless threads full of posturing and pissing contests, then I'm going to do whatever I justly can to try to coax them back by solving the underlying problem.
Tanta is worthy of comparison to Mencken with this line: "When all the dust settles on this whole sorry bubble, one of the things we're going to find is just how important it all was that consumers felt satisfied by being provided with reckless but prompt and polite service."
Dryfly, Steve doesn't belong anywhere in that sentence. It is not a question of how you interpret the data.
Tanta - don't get me wrong, I look for Steve's comments. He's just a lot more bullish than the typical voice here as is Seb & BODACIOUS.
And I don't think that is bad at all.
But I don't see a lot different between his take & Seb's... EXCEPT that Steve is far more articulate & backs his position up with easy to follow links to the data. Seb not so much, opinion 'yes' data 'no'.
But I did't see Seb as terribly hostile or intimidating either, at least not until that little 'irresponsibilty' rant above. But then people all have bad days.
BODACIOUS - that's another story.
As far as getting 'voices' back - can't help you there... people come & go. I suppose you could close off access then the threads get short real fast. Other than that - I'm not sure what you do.
Dryfly, of course we're not going to close off access. We do it the way it's supposed to be done on the net: by driving out bad discourse with good discourse. It is still a free market. In all senses of the term here.
Sebastian has annoyed me, personally, lately mostly by all that posturing. He always makes great stock picks, and gets out just in time. He always took an ARM at the exact moment he should have, and always refinanced it into a fixed at the exact bottom of the market. His HELOC was always used for Morally Appropriate Spending and always paid off prudently. His neighborhood is perfect and his FICO is one gazillion. He therefore has the right to have an opinion about every mortgage-related post. The opinion appears to be, "but not every loan is going to default." Yeah, sure, that's exactly a point that needs to be made. Like I or anyone else ever argued anything to the contrary.
So it's the combination of goofy posturing and grotesque mischaracterization of other people's viewpoints that is the issue for me. "Strawman" is a logical fallacy. It's also a bit of an insult if you're the one being transformed into a strawman. I'm not here to provide fuel for Sebastian's ego, and I was speculating that perhaps others are also a bit tired of that. Certainly I am tired of seeing every one of CR's thoughtful posts get reduced to nothing but a recession prediction.
Look at it this way, the internet forum does to straw men what my compost pile does to lawn clippings. Takes a while, isn't too pretty but the result is the same.
"The fact is, though, that I think I see a case where some of our best contributors are falling away from the blog. Maybe they just have better things to do."
Blog's are really interesting and provide a great way to get information out to the public. Kash for instance didn't post much but lately has been very busy and interesting. He has a limited group of contributors who generally don't go off on large weird personal rants and stick to the topic at hand.
Dryfly today discussed a bit about private overseas investors and their possible impact on USA economics. This type of info really gives the blog some depth and also shows how we can help educate each other to new developments that may affect our investments.
Tanta, I don't think you need to worry about quality going down. Overall, I think it's still going up. Dryfly's explanations about manufacturing trends yesterday are a case in point.
I think some of us fall silent at times because we are intently reading.
MOM, let me get right in there with you and say that Dryfly, just to use a first-rate example, brings all kinds of good information and ways of viewing things to the table when he goes "off-topic." Of course it's not really off-topic at all, it's an amplification of the topic, or a shift in viewpoint that has the effect of making us all see things afresh. The fact is that CR and I come at things most usually from a financial perspective. So boy oh boy do we benefit from someone bringing real maufacturing persepctives to the table.
I guess it just depends on how we define "topic." It's not the multiplication of topics, or the infusion of alternative areas of expertise, that are the problem; they are the strength.
But some days I'm not ready to write a post on executives in the HB industry bribing people to say happy talk, and then immediately get hit with Sebastian suggesting that anything other than happy talk is irresponsible. Irony overload or something. It makes me feel like I had Point for breakfast.
Need I say that you can say anything you want on any of my posts any time you want? Your ability to synthesize the issues and drill into the data is awe-inspiring.
Seconded. Barring this somewhat contradictory post, when I don't have something different to add, I try to keep my mouth shut.
I've sparred with Sebastian on occasion, and agree with the frustration of someone who consistently relies on red herrings in response to questions. Though, it never devolved into an uncivil discource. He gets some credit for that.
But some days I'm not ready to write a post on executives in the HB industry bribing people to say happy talk, and then immediately get hit with Sebastian suggesting that anything other than happy talk is irresponsible.
That 'response' is what happens when you hit close to the target... it is what this medium is all about.
I agree I'd try to keep it civil & you & CR do a great job at that - really do.
But I'd worry more about silence. Complete dead nothing. That's when its time to turn off the light on the place. Vader & I have seen that happen in a few very good blogs when the memes amplified a bit too tightly. A crescendo of identical opinions and then nothing.
We are a long way from that problem now but if there was a threat - that would be it.
How big a step is it to go from offering $100 for a good customer review (to prop up the bonus) to offering a buyer cash back on their purchase? To selling the public company you work for a large tract of land that you are a silent partner in?
Follow the money.
Tanta, I've learned more here about lenders, etc. than the WSJ will ever print.
Oh, believe me, I am capable of awesome stupidity. The constant need to offset that is what makes me read so intently! I come here for my own personal stupidectomy, and I must say that I find the surgeon's fees a pleasant surprise.
I've spent a lot of time in classrooms not learning as much as I do here.
I don't, btw, buy Sebastian as a person paid to troll. I think he is a decent guy who can't fathom that all the analysts, the ratings agencies, etc, could have missed the real weakness in companies like New Century. I agree with him that it is extraordinary, but a cursory read of Coast Bank's balance sheet should demonstrate that this has happened and is happening.
Most of the people who comment here seem quite sophisticated to me. If we all back away for a moment and try to look at this as if we didn't know all that we know, it makes sense that people not so immersed in the subject would be amazed, disconcerted and frustrated by what is happening.
I still maintain that nothing anyone posts on Calculated Risk is going to take the market down or push it up, though. I refuse to succumb to that sort of delusion. I am also bothered by the idea that a free and open discussion can ever be "irresponsible". It seems to me that successful businesses and democratic political institutions depend on such discussions. Groupthink is fatal.
OT/ADD,
MoM, You reminded me that I listened to a finance show this weekend where Burton Malkiel, author of A Random Walk Down Wall Street, was interviewed. Prof. Malkiel had a student that tracked Jim Cramer's recommendations. The day after he makes a recommendations, most of those stocks rise 4-8%.
But, there's just no way anything we small band of bondholding bears are influencing any market.
The difference is that Kramer has hundreds of thousands of viewers, who don't seem to be of the, um, detailed analysis and due dilligence variety. I think of the "jocks vs geeks" model of markets that Eric at iTulip posted some time ago. CR is populated by geeks for the most part. I mean that in the best possible way.
Agreed.
That's funny, I always think of Jocks vs Geeks when Doomie comes in..as though we're having a study group and a frat boy barges in, yelling and spilling beer on everything.
Like many rational bloggers here, I wish it would have happened at the highest level in our govt., dissenting voices are welcomed, especially those supported with objective data and facts. Certainly, it would enrich the ongoing debates. CR and Tanta have presented a well thought-out, thoroughly researched, though bearish, case of the housing fall-out. Yet, the bulls on this blogs have not constructed their bullish arguments that are on the same par as CR's and Tanta's. A cohesive analysis of why the housing bust would not bring down the economy would be received very well by the bloggers here.
Lama wrote: "Prof. Malkiel had a student that tracked Jim Cramer's recommendations. The day after he makes a recommendations, most of those stocks rise 4-8%.
But, there's just no way anything we small band of bondholding bears are influencing any market."
Exactly!! We are not the WalMart of economic sources. "Geeks" is a pretty good description.
Anon,
One bullish datum is the $500k capital gains exemption. I do believe that was a one time event that made homeownership more attractive and augmented values in recent years. Going forward in transactions, it will be a zero sum game (i.e.: attractive to sell, attractive to buy).
The Booyahs don't understand that and would never incorporate it in their arguements.
There are some bullish types here who make great and informative arguements; Banker, Steve, dc1000 to mention a few.
So here is my take on the PTB's viewpoint on housing: some misery for the suckers drawn in at the end, meanwhile immense amounts of money were pumped into the economy without too much distortion to smooth over that little 2000-2002 nastiness. Next bubble please.
Got to keep the folks from paying attention to anything beyond the next playoff game and the cost of beer.
As for expecting anything like rational discussions from the politicos- surely you jest! I note that Ron Paul is a very lonely man....
So inflation is baked permanently into the cake, the only question is how much and how fast. The old saw Keynes used is true- markets can remain irrational longer than you can remain solvent betting against them.
Now housing gets to stagnate, and something other bright shiny bauble will catch the investors' eye and be transformed into that ephemeral gold of the fools' desire.
Just don't notice when they start attacking alternative means of payment and storage of wealth like the crazy Norfed bunch and others that will shortly feel the wrath of the financial system (egold flies to mind).
Oh well, buy whiskey- it used to be a great currency on the frontier;-}
AllenM, you must be watching the Republican debate. Ron Paul is way out there on a distant wing of the Republican party. Loved his comment about the Inflation Tax. Good on him.
Whoa...so that's why my ears were burning all day. Thanks to tanta and dryfly and for the nice words.
I'm glad to hear that some people appreciate my posts even if they may disagree. If anyone wonders why I hang out here, it's because I think the level of discussion is the most intelligent and civil of any economic blog I've come across. I think the reason for that is the example set by our hosts.
It says a lot that even though my views aren't exactly aligned with the consensus here, I find it much more stimulating here than other blogs where my views are more aligned with the discussion.
As for the discussion, it has been the view of the Fed and many economists that the economy is likely to move back toward trend growth in the second half of the year (a viewpoint I agree with and have expressed here many times). I agree with those who say that while the data have looked better recently, it's a little too early to say things have turned the corner. The data could remain choppy for the next few months, but this also could be the economy ramping up a little earlier than some expected. We'll see what happens.
CR: What do you think on all the good economic stats coming out ?
Could it be that the share of ilegal in the workforce is so high and they are the 1st to get hit and thus totaly missed by stats ?
The sales numbers (Circuit city, target, state sales tax receipts) all tell a different story than the official stats.
"But he was among executives who could earn a bonus based on good survey results."
It is time, I think, to introduce the use of the guillotine in this country.
Shades of:" You so ugly yo mama have to hang a steak from your neck to get the dog to play with you."
There was a big thread on the consumerist earlier on car dealers doing this too...
Both under the table ("turn in the survey to us and we'll give you free gas") and more overtly.
Halo hates me.
That previous comment may have seemed off-topic. Let me fix that.
When all the dust settles on this whole sorry bubble, one of the things we're going to find is just how important it all was that consumers felt satisfied by being provided with reckless but prompt and polite service.
We didn't even get to the issue of what the questions were. I hear all this crap all the time about how great builder-owned mortgage companies are because they understand how terrible it is when lenders delay closings, and how the builders don't do that. So if you have a lender who is "service-oriented" enough to go ahead and close a loan even though the property is not 100% complete per plans and specs and you may never end up getting your carpet or grading, because someone got paid before they had to deliver or install it, you're screwed, but you got great prompt service and are able to start making payments on part of the loan amount that should never have been disbursed.
"It is time, I think, to introduce the use of the guillotine in this country."
Every normal man must be tempted at times to spit upon his hands, hoist the black flag and begin slitting throats.
-- H. L. Mencken
Cheers,
prat
And I want to point out that some other bloggers whose names will not be mentioned think that I'm "a little hostile."
Since I got on to you (despite having been warned not to) for crucifying the NYT a few days ago, it seems fair for me to mention that I appreciate you handing out props to journalists when you believe it is deserved also. I'm still unsure that you use the correct standard for judging such things, but at least you are true to your principles. Also, lest I be misunderstood, I do enjoy and appreciate your work as it is. The Internet has more than enough homilists already, and I don't read any of them.
G.M. Profit Down 90% From 2006
By NICK BUNKLEY
Published: May 4, 2007
DETROIT, May 3 General Motors reported a 90 percent decline in first-quarter profit today as losses at its finance arm overshadowed gains from restructuring its automotive operations...Reductions in health care spending...helped G.M. cut its North American losses to $85 million from $251 million in the first quarter of 2006...In 2006, G.M. cut its fixed costs in North America by $6.8 billion, largely through buyout and early retirement package offers that were accepted by about 35,000 of its hourly workers...Its fair to say the U.S. market isnt very robust, Mr. Wagoner said, citing gas prices that have topped $3 a gallon in many parts of the country as one reason. But that is slightly less of a concern for G.M. than for Detroits other automakers, because G.M. now sells more than half of its vehicles abroad...G.M.A.C. said its mortgage division, Residential Capital, lost $910 million, while net income from automotive financing, insurance and other operations was $605 million, more than double the earnings those divisions generated in the first quarter of 2006. G.M.A.C. said it expects improved results from the mortgage division in the second quarter.
Health care? We've got that under control. Insurance? Auto financing? Check. Mortgage lending? A few problems, but we're off-loading them.
Don't worry about General Usury.
Sorry, it should be "General Motors".
Thanks, Amadis.
I hope you're aware that I have no particular objection to having my case jumped for what I write. (I get a bit annoyed, like anyone else, when I'm getting my case jumped for what I didn't write, but you can't stop people from putting words in your mouth; it seems to be human nature.)
I also reserve the right to enter the fray and jump back, should it strike me as either interesting or worth it.
I get goofball name-calling dimwit comments (and emails) as often as anyone else does. Most of the time I just ignore that stuff. Here and there I fall off the good-sense wagon and try to reason with a troll. I always regret it and try hard never to do it again.
But I hardly thought that your comment was trollish, and I also hardly thought that you were unwilling to stand the heat since you went out of your way to wander into our kitchen here. Taking other people seriously, on the terms they offer, has always struck me, personally, as a compliment. It can be rather a tough compliment when it turns into "please do better," but if implicit there is "because I know you can," it's at least better than just ignoring someone on the assumption that they're hopeless.
I am well aware that my take on this is a minority viewpoint. But nothing annoys me more than preaching to the choir or making endless observations on the obvious. The day I start writing stuff that everyone agrees with and nobody is in any possible way offended by is the day you should take my internet access away. We certainly agree on that, I'm sure.
Health care? We've got that under control.
That was so last century... it should read...
Health care? We've got that contained.
Mortgage lending? A few problems, but we're off-loading them.
How is a billion dollar injection considered "off-loading"?
(OT)
Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it.
Sebastia
Thanks for promising not to bore us by refuting claims that no one made in the post to which we are commenting, Sebastian. There's nothing like changing the subject back to your favorite dead horse and then promising not to beat it to warm the cockles of my heart.
Do you ever allow other people to have a conversation that isn't about you, or is it just on blogs?
I'm only doing this because I just promised to stop dignifying certain kinds of behavior with a response, and I have to prove that I'm just as fallible as the next blogger by breaking my promise 20 minutes later. I hope everyone who thinks I'm insufferably arrogant is paying attention.
"Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it."
For me these numbers only have meaning as trend indicators. If the ISM or jobs number trend up or down for 6 months or more then the numbers have more meaning. If you think the trend in ISM or the jobs number in any given month points to a certain direction so be it, I rather take a slower overall point of view.
Tanta, that was good. You could sell newspapers.
I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog.
But I do take your point.
Sebastia
Halo hates me. - Tanta
Don't mistake fear and respect for hate.
Sebastian,
Be aware that some of the readers here welcome your insights - just so we can have a balanced set of input upon which to base our comprehension.
In keeping with the exceptionally irresponsible bearish tone of this blog, UBS announced today that they're closing their Dillon Read hedge fund unit due to massive losses in their sub-prime portfolio. To make matters worse, they haven't actually begun to dispose of the problem portfolio yet. I'd suggest that this isn't good news for credit markets, and only the beginning of the pigeons coming home to roost, but that would be exceptionally irresponsible of me. After all, there's no risk in the world, and markets, house prices and the economy only go up. To suggest otherwise is irresponsible fear mongering.
Okay, let's have it. Where's the tortured rationalization on the lower jobless claims and the higher ISM services numbers? I promise not to bore everyone by refuting it.
Those are strong numbers, I'll admit. I'm looking at some past data, and all these indicators have done "head fakes" at the same time in the past, but if these numbers stay strong then we have some sort of rebound. The fly in the ointment is that probably the most important number reported this week, consumer spending, showed a decline. If that continues it could easily negate everything else.
Alternatively, it could be that a strong stock market stimulates the economy and keeps us out of recession. But since US stock values are already approaching 1929 levels and we have even more overvalued markets all across the globe, this is once again a case of the cure being worse than the disease.
Tanta, that was good. You could sell newspapers.
I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog.
OK, great, now we've got a discussion going. You will have noticed that while I might be able to sell newspapers, I am not, actually, selling one at the moment.
This blog, if I may say so myself, gives you carefully prepared and meticulously reasoned original information and analysis. CR and I have both made mistakes, and we have always been endlessly grateful for a functioning commenter community that points them out. Then we fix them. We do this because we care about getting it right.
Of course that's got dog to do with differences of opinion about what those facts mean. Reasonable people can disagree. In fact, it makes for a more intellectually satisfying blog. Nobody I know ever thought that publishing one's opinion and providing a free, no-registration, privacy-protected, unmoderated comment section beneath that opinion insulated anyone from criticism.
It is merely frustrating in the extreme to have gone to all the trouble to provide quality content on the blog, as much as it is in our ability to do that, and then to get somebody say it's "irresponsible." To what do I have this responsibility you invoke? To agree with you? To agree with the mainstream press? To intuit what you want to talk about today before I write a post, so that it will always meet your requirements for what "the real point" is? If you are implying that CR and I are "talking the market down," I guess I should appreciate your over-estimation of our influence on the world, but I have to break it to you that we're not that kind of market-movers.
Nobody, but nobody, wants to lose the free-flowing, funny, occasionally splendidly rambling and off-topic nature of this blog's comment section. It is, in my view, a national treasure. What I like best about most of the off-topic commenting is that it involves people bringing things to the blog that we didn't already have. New information. Hot news. Alternative ways of understanding the issues. The occasional really good snark song lyrics. Blog does not live by bread alone.
But some people can't keep from crossing the line into implying that the blog owes them a justification for its own existence. Don't go holding your breath for that.
Turbo, that was an exceptionally irresponsible comment.
I award you three TantaPoints.
Rack up 100 Tantapoints, and I'll give you 20% off on your next mortgage loan.
I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog.
I think you left out: "Because I get paid for it."
Ron wrote: "For me these numbers only have meaning as trend indicators. If the ISM or jobs number trend up or down for 6 months or more then the numbers have more meaning. If you think the trend in ISM or the jobs number in any given month points to a certain direction so be it, I rather take a slower overall point of view."
Okay, but ISM Svcs & Mfrg agree; the unemployment stats look good (especially continuing claims). I agree that all economic data moves up or down month by month, but overall, we are seeing some pretty consistent trends.
Also, trucking (http://www.truckline.com) and railroads (http://www.aar.org) are showing a recent pickup in volume.
Granted, home sales are not picking up. Inflation, at this point, is a concern. But I don't think you can throw out this grouping of positives as being meaningless. You can fairly argue that you don't think this is enough to fight the downdrafts, but it is a meaningful set of indicators at this time.
"think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog."
Public Service is a term reserved for people who go out into the community and assist other people to improve their lives. Posting contrary comments on a blog does not fit that description. You sound like a student who acts up in class distracting the teacher with the belief that you are making the class more fun.
I will always skip over your comments in the future, since your comments are not meant to add value to the discussion but only to be a negative point of view.
good luck in your future investing!
Turbo said: "In keeping with the exceptionally irresponsible bearish tone of this blog, UBS announced today that they're closing their Dillon Read hedge fund unit due to massive losses in their sub-prime portfolio..."
Excellent, now we're getting somewhere.
Just FYI, I don't consider discussion about any negative or bearish conditions to be irresponsible. (No, this board isn't mine and it's not my agenda to set, but on an open-participation board I think I'm entitled to explain my own position.)
I consider forecasts that 400k-600k construction workers are going to lose their jobs and basing it on questionable evidence to be irresponsible.
I consider fostering the idea that hundreds of thousands of American families are going to lose their homes (and basing it on questionable evidence) to be irresponsible.
I consider that encouraging the idea that a weak housing market, along with problems isolated to the subprime mortgage market, is going to drag the economy into recession with all the widespread economic misery that would entail (based on questionable evidence) to be irresponsible.
I think these are far worse offenses than any real or perceived annoying, obnoxious behavior on my part, but I'm clearly biased about that.
Sebastia
...but I'm clearly biased about that.
Yes you are.
I feel honored.
I'm going to have to be exceptionally irresponsible to get my discount mortgage though. But then again, exceptional irresponsibility is still very much alive and well in the financial world, so I have a veritable treasure trove of material to work with.
ron said: "...I will always skip over your comments in the future, since your comments are not meant to add value to the discussion but only to be a negative point of view..."
A negative point of view...that the U.S. economy isn't going to fall into recession, that hundreds of thousands of people aren't going to lose their jobs and their homes?
Sebastia
MOM:
I am still on the sideline in cash.
The FCB and carry trade is the continuing storyline, nothing really has changed other then wondering what we be the next bubble and getting in early to max out the profits. LOL
Sebastian wrote: "I think that I'm doing a public service by being one of the few posters to push-back at what I think is an exceptionally irresponsible bearish blog."
Look, Sebastian, I am thankful that you are here. This blog is much better because people will argue about interpretations and data, as Tanta eloquently pointed out.
But "exceptionally irresponsible"? I can assure you that nothing that anyone writes on this blog is going to talk markets up or down. Get a grip. Americans may be many things, but they are not feeble-minded pessimists apt to scream and bury their money in the backyard because of some comments on the internet. If there's a job, they'll go get it, and if they see a window of opportunity, they'll dive right through it.
If your comment is aimed at certain commenters, you owe Tanta and CR an apology. I think if you will make your points with facts rather than just statements you will gain a lot of credibility. Over and over again CR has posted stats noting that they don't confirm his hypothesis (or that they do, as warranted). Tanta's efforts to describe how the mortgage industry really works, and to suggest ameliorations, are deeply responsible. If we are going to mitigate the effects of irresponsible lending, we genuinely need efforts like Tanta's.
You can't talk and make mortgages default, Sebastian. Nor, unfortunately, can you talk and make mortgages perform.
Come on, now, you are better than that statement.
on an open-participation board I think I'm entitled to explain my own position
No, you don't. You think you're entitled to have the rest of us care about your position. And by "position," I mean "position." It's nobody else's fault you're long on whatever it is you think CR is bearish about.
You haven't yet explained why it is "irresponsible" to engage in economic analysis that doesn't agree with yours.
The GM results (auto sales) were particuliarly interesting, while North American sales are lagging their international sales are strong.
I noticed the other day that steel inventory is low and prices high in Asia and developing countries. Will Asia and the developing countries pick up the slack from America and become the world growth engine and if so will capital leave the American empire and seek returns overseas. Life without huge FCB inflows could be interesting.
"GM sales in Latin America, Africa and the Middle East jumped nearly 17 percent, and GM actually picked up market share in the region which quietly put up the biggest sales growth across the industry in the quarter.
It also picked up ground in the high-profile, fast growing Asia-Pacific region, where China has the focus of just about every automaker's future expansion plans. And it posted gains in Europe as well."
This is almost too funny - Sebastien is getting kinda whiny this morning. Shoot a bad round of golf yesterday?
Sebastian,
I too like and want opposing views, especially and most importantly, if their thoughts are "SUPPORTED" by info they believe could qualify as facts (as bears do too). As far as low jobless claims, If you are not a citizen =, you can't file for unemployment. And in hard times, who gets fired first, not the citizen, cause with a phone call he will ruin the builders day/life.
Also a report came out not to long ago re; monetary transfers into mexico were way down and tracking further. Even sympathetic papers are picking up the stories on the migration of the illegals trying to find employment in other cities...
I will try and find that link, but bet that CR or Dryfly beat me to it.
OT but rearding the Fed and rates...
The Liquidity Engine Is Humming Right Along -- Seeking Alpha
"Meanwhile, the capital markets have been running for some time. Value isn't exactly gushing in abundance when it comes to such metrics as risk spreads and earnings ratios over price. Of course, if you think that the recent past will continue into the foreseeable future, there's nothing much to do but hang on and collect the capital gains.
Enter the Fed, which theoretically must keep inflation at bay while juicing the economy and sidestepping a recession. A thankless task, and one that may be impossible. In short, the central bank must pick one or the other, or so one might assume.
If so, we present evidence that juicing the economy may be the preference these days. M2 money supply, the broadest measure published, has been pushing higher for some time now, as our chart below shows. Based on rolling 52-week percentage changes, M2 rose by nearly 7% for the year through April 9, although it's since slowed to 6.3% That's the fastest rate of printing money in more than three years."
Sebastian,
Since you ignored my post, I will ask you directly if you'd like to disclose any monetary interests you may have from posting contrary information to this blog.
From the IAC conference call re: Lending Tree:
"The other business which significantly affected our Q1 results was obviously LendingTree. Doug will talk further about the dynamics here, but it is clear that the events in the subprime market have spilled over to other segments of the mortgage market, and virtually every element of this business has been affected. While overall QF volume was up 17% and at a reduced marketing cost per QF, close rates were down on both the exchange and in our own LendingTree Loans. Moreover, the highest-margin products have been the hardest hit, with significant lender pullback or outright exit.As a result, the business has become, at least for now, largely centered around conforming loans, which are the most competitive from a lender perspectives and hence the lowest margin for us, whether at the exchange or at LendingTree Loans. We do expect the business to increase its profitability from the Q1 level over the course of the year, but market conditions make giving any specific financial outlook very difficult."
"At LendingTree, margin compression in the mortgage industry caused major changes to our financial picture. Subprime, option ARM and home equity loans, particularly those with the high loan-to-value ratios, all saw liquidity tighten considerably. In many instances, investors simply stopped buying any loan that isn't conforming, meaning within the guidelines of Fannie Mae and Freddie Mac. Thus, the average margin per loan sold at LendingTree Loans decreased significantly. LendingTree Loans thus shifted away from originating these products and is in the process of changing to a lower-cost, mostly conforming mortgage platform. Additionally, some lenders on LendingTree's exchange also stopped taking consumers that fell out of those conforming guidelines. We saw transmits rates, which is the percentage of consumers we can match with at least one lender, fall in refinance leads from 90% to 87% this quarter versus last year, and transmit rates on purchase fell from 76% to 57%. Additionally, because fewer products were available for consumers, we saw our close rates fall 14% for refinance, 9% for home equity and 5% for purchase on the LendingTree Exchange"
BTW, that was not my comment earlier. Must be another Brian here.
Apologies to the other Brian.
I'll change my handle.
Several players in home mortgage market agree on principles for borrowers in trouble
Page not found
Sen. Christopher Dodd, D-Conn., had urged such voluntary action by mortgage lenders and other players two weeks ago when he convened a meeting of their officials and federal regulators to discuss possible solutions to the crisis gripping the market for high-risk loans. Such industry initiatives are preferable, in Dodd's view, to any government bailout to cover mortgage loans in default.
Several players in home mortgage market agree on principles for borrowers in trouble
Page not found
Sen. Christopher Dodd, D-Conn., had urged such voluntary action by mortgage lenders and other players two weeks ago when he convened a meeting of their officials and federal regulators to discuss possible solutions to the crisis gripping the market for high-risk loans. Such industry initiatives are preferable, in Dodd's view, to any government bailout to cover mortgage loans in default.
The GM results (auto sales) were particuliarly interesting, while North American sales are lagging their international sales are strong.
ron - there is money out there in the big wide world... isn't all in 'Merica.
Have you read this yet?
No need to worry -- the US isn't going to run out of assets to sell to foreign investors any time soon ...
In a comment in the Financial Times about ten days ago, David Hale argues that there is little need to worry about either the dollar or the US current account deficit. The US has no shortage of financial assets to sell the world, and the world has no shortage of savings to lend the US.
True enough.
The question is whether the rest of world or, more precisely, private investors in the rest of the world want to lend that savings to the US and in the process buy US financial assets in the process.
Right now, in my judgment, the data says that they dont. That is what currently worries me.
Best that I can tell, there has been a very significant fall off in private demand for US assets over the past two quarters. By private demand I mean net private demand that is foreign demand for US assets relative to US demand for foreign assets.
The US hasnt noticed this fall off because foreign central banks have stepped up their purchases of US assets dramatically, offsetting the fall in private demand.
This thing is held together with bailing wire and chewing gum. FCBs go away and there isn't much punch in the punch bowl left.
On the other hand they are all terrified at the thought of letting the dollar go.
It gets real interesting - in a nasty sort of a way - if that happens.
Brian--I mean the plain but not simple Brian--thanks for that. I noticed some real dancing around that margin issue in the GMAC-ResCap presentation. Now everybody has to figure out how to go back to making low-margin commodity product again.
I guess we're all in need of some denovation that will improve our productectomy. Anybody want to bet on when RetroMortgage, Inc. does its IPO?
Anybody want to bet on when RetroMortgage, Inc. does its IPO?
RetroMortgage Inc. - where the guys all wear white shirts and stripped ties and the gals all wear hose and silly little scarves... and EVERYONE has big plastic glasses!!!
Might have to look for the '9 to 5' betamax... gotta be around here somewhere....
Dryfly,
Hale said:
"The question is whether the rest of world or, more precisely, private investors in the rest of the world want to lend that savings to the US and in the process buy US financial assets in the process.
Right now, in my judgment, the data says that they dont. That is what currently worries me."
Well even though my life at times seems held together with BW and Chewing gum, it still holds, but my crap eventually loosens and falls apart, even if i can make until i find that last roll of duct tape.
Sometimes, buying new before it breaks is the best policy
And FYI,Mr. Hale we share the same worries!
Who is John Galt!!!!?
Productectomy? Sounds bad, whatever it is.
Dryfly, don't forget that big honkin' mainframe we'll be running.
CICS Vive!
Sebastian, WTF is your problem?
If you want to take the other side of arguments here, why not take them when there is actually something to argue, perhaps on a relevant thread, hmm?
And when you decide to make such arguments, why is it that you are just like the other trolls who can't resist the little-boy routine of sticking your tongue out and taunting? Did you have to go to troll school or something to learn this, or is it something your parents imbued in you by abandoning you?
Furthermore, your arguments are most often completely lame. For example, 9 out of 10 indicators are pointing to a downward economic trend, and the increasing possibility of problems ahead in the economy, yet, you think it makes you look smart to trot out that in one month, one indicator didnt continue going down. Wow, that's brilliant, as usual. Somehow, to you, pointing out that we are not yet in recession makes us all morons since obviously we should be already and we're not. As if you don't even bother to understand what all the threads amount to here - that the s&%t is only starting to hit the fan and we've got a ways to go, with some serious imbalances in the economy that could unwind in a very ugly fashion. That's what many of us are interested in, not whether Sebastian can proclaim in a new sarcastic manner that there is no recession in 2007. Note to Sebastian : I can get that from all the standard IB houses and economic forecasting firms. That's what they do. There is never a recession ahead, only behind. I dont need that view on this blog, since it's proven itself as useless, just as you do every day you appear here.
And of course, when all else fails, you trot out the "you bears are losing all your money, just look at the new record in the stock market". Do you just enjoy being a jerk, or is it something you can't help? Did you ever stop to think for a second that the people here could very well want to understand where the economy is heading if things do continue to deteriorate, and perhaps do care about how this very interesting housing market evolves? Or do you just feel that we are here to say the economy is doomed, so let's all short stocks together and go down with the ship? Ever think that we might understand that the market can move in a direction opposite to the underlying economic fundamentals? Nooo, only Sebastian knows how to make money, and has to come here to remind us how much he already made though his illustrious IB career.
Really, give it a rest. No one wants or needs you here. If you want to continue to make the comments section unreadable, it's your prerogative. But it's mine to call you on it for being a pompous and annoying jerk.
Sebastian, "I consider fostering the idea that hundreds of thousands of American families are going to lose their homes (and basing it on questionable evidence) to be irresponsible"
I agree. The number isn't several hundred thousand. It's several MILLION.
Productectomy? Sounds bad, whatever it is.
It is bad. If you've never had your Option ARMs yanked out of their sockets before, you can't imagine how bad it is.
"Denovated Mortgage Products"
Serving the fiscally responsible home buyer with conservative asset backed and earnings supported traditional loans since 2009
Our motto: No savings, no income, no credit? No problem. Come back when things get better.
.
There is a cure for productectomy:
YouTube - The College Breakfast
Thanks, mp. That reminds me of back in the wild & crazy days of my youth in Wisconsin, when underemployed grad students drank a lot of Point. Point is a beer produced in Stevens Point, Wisconsin, and at the time cost fractionally less than PBR. It tasted like bong water, without the floral overtones.
Anyway, the Stevens Point brewery sold T-shirts that said "Point: It's Not Just For Breakfast Anymore."
I'm pretty sure Point would be the beer of choice of RetroMortgage, Inc.
"It's Not Just For Breakfast Anymore."
Priceless.
Point is a beer produced in Stevens Point, Wisconsin, and at the time cost fractionally less than PBR. It tasted like bong water, without the floral overtones.
If you were a REAL native born wedgehead you followed 'Point' with a bong water chaser.
Then drove your snowmobile at high speed to the next bar.
Geoff,
Listen man, I really think you need to let it out. Sure the truth hurts, but Sebastian really needs to hear it, so stop beating around the bush, tell him what he really needs to hear, quit holding back...
Dr. Phil
Geoff,
What you and everyone else should understand is that there are companies who hire trolls to "balance" blogs who are against their interests. Google "netvocates" and "customscoop". Anyone who wants to deny that this is happening should consider NAR and David Lereah. Any organization that has no qualms hiring one expert to lie to the media, will not have any qualms about hiring a few "activists" to post counterpoints to blogs and forums.
I'm sure they prefer centralized media, but the decentralized nature of the Internet makes this impossible. Paid trolls are David Lereah on a smaller and much broader scale. PR and spin doctoring for the internet generation.
Sebastian is too sophisticated, consistent and active to be your garden variety attention troll. I think more is at stake here.
I realize that this type of accusation is dangerous for open forums and debate of opposing positions, and I in no way want to start a "troll hunt". I just think they should disclose if they are making money from their posts, especially if asked directly.
This is the last I'll say about it until Sebastian answers. But I suspect he will just avoid the issue altogether.
Sorry for the off topic posts.
I'm pretty sure Point would be the beer of choice of RetroMortgage, Inc.
And the Buick Electra the official company car
Gomez Addams had something to say about Buicks.
Ive said all I have to say on Seb (and his compatriots - they know who they are.) Let me repeat - I welcome opposing views, when grounded in some sort of an attempt at objective analysis. But when it comes with a%sface attitude, it really gets old quick.
BrianTX - it is certainly possible, nowadays, that moneyed interests are creating this sort of annoying monster. If this is true, it's rather pathetic.
Then drove your snowmobile at high speed to the next bar.
Well, you must have had a privileged youth. We couldn't afford snowmobiles. We just stole trays from the Memorial Union cafeteria and tobogganed down Bascom Hill on them shrieking all of the words to "Magic Carpet Ride" we could remember (both of them). Right into the waiting arms of campus security.
When I become president of RetroMortgage, Inc., everyone will have to hand over the keys to the snowmobile (and the jetski) and take a fiberglass tray. RMI will be a very environmentally-conscious company.
I find it laughable that being bearish can be considered irresponsible. What's the downside? If you're bearish then you're likely to work harder, save more, and invest cautiously. All of those are good things. If a bear is wrong, the only thing lost may be a few extra dollars in profits; however, if a bull is wrong he'll lose his a$$. That's irresponsible.
p.s.: It takes no critical thinking skills to agree with the mass media.
Sebastian. When he's trapped by his own logic, he really does quit the thread.
"Sebastian, you made money by buying NEW immediately before its value fell off a cliff?" - No answer
"Sebastian, you say your home price rose nicely in the last year? Where do you live?" - No answer
...only to come back a few days later, begging for more attention.
What you and everyone else should understand is that there are companies who hire trolls to "balance" blogs who are against their interests. Google "netvocates" and "customscoop". Anyone who wants to deny that this is happening should consider NAR and David Lereah. Any organization that has no qualms hiring one expert to lie to the media, will not have any qualms about hiring a few "activists" to post counterpoints to blogs and forums.
[...]
Sebastian is too sophisticated, consistent and active to be your garden variety attention troll. I think more is at stake here. B-TX
Brian & Geoff - I know it happens but if that is the case then they are morons. The way you 'silence' opposing views in this medium is IGNORE them. Eventually they turn into echo chambers & only a handful ardent advocates return. The thing that makes this site interesting are voices like Seb's & Steve... even BODACIOUS if he's sober.
And Seb isn't very sophisticated - few data links or data dumps like I'd expect from a 'pro'... just opinions & reasonably consistent.
Honestly, I doubt any of our 'trolls' are hired guns. If they are, they are pretty pathetic & their clients are getting screwed.
"It is time, I think, to introduce the use of the guillotine in this country." and "Every normal man must be tempted at times to spit upon his hands, hoist the black flag and begin slitting throats. -- H. L. Mencken"
or perhaps the 1993 flick "Falling Down" will actually come to pass: "William Foster (Michael Douglas), AKA D-FENS, is an unemployed, divorced engineer in the defense industry who's reached his boiling point. First he finds himself in gridlock, which he deals with by abandoning his car. He subsequently happens across an unhelpful convenience store clerk whose prices D-FENS 'rolls back', by demolishing the store with a baseball bat after overpowering the clerk. Soon he finds himself in gangland, and deals with some tough-looking gang members by attacking them and running them off. When the gang members try to retaliate, it fails when they crash their car and D-FENS takes their bag full of guns ...."
When I become president of RetroMortgage, Inc., everyone will have to hand over the keys to the snowmobile (and the jetski) and take a fiberglass tray. RMI will be a very environmentally-conscious company.
Give up the snowmobile? I suppose we won't be able to take the hunting rifle to work either?
How in the hell do you expect us to shine deer on the way home? Realizing of course we got off work when its still light... but's its not light when we leave the bar we got to AFTER work... that I'm quite certain is a part of Wisconsin labor law.
The thing that makes this site interesting are voices like Seb's & Steve... even BODACIOUS if he's sober
Dryfly, Steve doesn't belong anywhere in that sentence. It is not a question of how you interpret the data. It's a question of how you behave in a conversation. I will defend to the death Steve's right to ask good hard questions and bring up alternative data.
As a matter of fact, when people like Steve (and others) get a good debate going on one of CR's economics threads, I just sit back and read, mostly, since I haven't got all that much, quite often, to contribute to those conversations. I just like to learn from them. Hint, hint, Sebastian. Hint.
The fact is, though, that I think I see a case where some of our best contributors are falling away from the blog. Maybe they just have better things to do. I'm sorry if that's true; I miss them. But if they're staying out of the comments because they're tired of long pointless threads full of posturing and pissing contests, then I'm going to do whatever I justly can to try to coax them back by solving the underlying problem.
If I had a hero, it would be Mencken. All of this talk about him makes me wonder if it's time for another pilgrimage to Baltimore.
Tanta is worthy of comparison to Mencken with this line: "When all the dust settles on this whole sorry bubble, one of the things we're going to find is just how important it all was that consumers felt satisfied by being provided with reckless but prompt and polite service."
Holden, Tanta is sharpening her pencil here. I stand by my earlier prediction as to where she is headed. She just doesn't know it yet.
Dryfly, Steve doesn't belong anywhere in that sentence. It is not a question of how you interpret the data.
Tanta - don't get me wrong, I look for Steve's comments. He's just a lot more bullish than the typical voice here as is Seb & BODACIOUS.
And I don't think that is bad at all.
But I don't see a lot different between his take & Seb's... EXCEPT that Steve is far more articulate & backs his position up with easy to follow links to the data. Seb not so much, opinion 'yes' data 'no'.
But I did't see Seb as terribly hostile or intimidating either, at least not until that little 'irresponsibilty' rant above. But then people all have bad days.
BODACIOUS - that's another story.
As far as getting 'voices' back - can't help you there... people come & go. I suppose you could close off access then the threads get short real fast. Other than that - I'm not sure what you do.
Dryfly, of course we're not going to close off access. We do it the way it's supposed to be done on the net: by driving out bad discourse with good discourse. It is still a free market. In all senses of the term here.
Sebastian has annoyed me, personally, lately mostly by all that posturing. He always makes great stock picks, and gets out just in time. He always took an ARM at the exact moment he should have, and always refinanced it into a fixed at the exact bottom of the market. His HELOC was always used for Morally Appropriate Spending and always paid off prudently. His neighborhood is perfect and his FICO is one gazillion. He therefore has the right to have an opinion about every mortgage-related post. The opinion appears to be, "but not every loan is going to default." Yeah, sure, that's exactly a point that needs to be made. Like I or anyone else ever argued anything to the contrary.
So it's the combination of goofy posturing and grotesque mischaracterization of other people's viewpoints that is the issue for me. "Strawman" is a logical fallacy. It's also a bit of an insult if you're the one being transformed into a strawman. I'm not here to provide fuel for Sebastian's ego, and I was speculating that perhaps others are also a bit tired of that. Certainly I am tired of seeing every one of CR's thoughtful posts get reduced to nothing but a recession prediction.
mp, I know where I'm headed.
It's just that "The Lily Tomlin of Mortgage Lending" is not a destination anyone else necessarily thinks needs to be reached.
Thanks, Holden. I wish I had just stuck to that sentence . . .
I am mostly a long-time lurker here.
I have to second Tanta's concern about some of the better quality posters being drowned out by pissing and posturing.
Take a minute and determine if you really have anything to add or if you are pissing and posturing and then post appropriately!
I hear ya Tanta and agree.
Look at it this way, the internet forum does to straw men what my compost pile does to lawn clippings. Takes a while, isn't too pretty but the result is the same.
Turbo-
"But then again, exceptional irresponsibility is still very much alive and well in the financial world"
Didn't you already say that you work in emerging market debt markets? Don't need to keep repeating yourself.
"The fact is, though, that I think I see a case where some of our best contributors are falling away from the blog. Maybe they just have better things to do."
Blog's are really interesting and provide a great way to get information out to the public. Kash for instance didn't post much but lately has been very busy and interesting. He has a limited group of contributors who generally don't go off on large weird personal rants and stick to the topic at hand.
Dryfly today discussed a bit about private overseas investors and their possible impact on USA economics. This type of info really gives the blog some depth and also shows how we can help educate each other to new developments that may affect our investments.
Tanta, I don't think you need to worry about quality going down. Overall, I think it's still going up. Dryfly's explanations about manufacturing trends yesterday are a case in point.
I think some of us fall silent at times because we are intently reading.
"She just doesn't know it yet." Stupid thing to say. Really stupid.
I agree with Mama. Overall, it's going up.
MOM, let me get right in there with you and say that Dryfly, just to use a first-rate example, brings all kinds of good information and ways of viewing things to the table when he goes "off-topic." Of course it's not really off-topic at all, it's an amplification of the topic, or a shift in viewpoint that has the effect of making us all see things afresh. The fact is that CR and I come at things most usually from a financial perspective. So boy oh boy do we benefit from someone bringing real maufacturing persepctives to the table.
I guess it just depends on how we define "topic." It's not the multiplication of topics, or the infusion of alternative areas of expertise, that are the problem; they are the strength.
But some days I'm not ready to write a post on executives in the HB industry bribing people to say happy talk, and then immediately get hit with Sebastian suggesting that anything other than happy talk is irresponsible. Irony overload or something. It makes me feel like I had Point for breakfast.
Need I say that you can say anything you want on any of my posts any time you want? Your ability to synthesize the issues and drill into the data is awe-inspiring.
MoM,
Seconded. Barring this somewhat contradictory post, when I don't have something different to add, I try to keep my mouth shut.
I've sparred with Sebastian on occasion, and agree with the frustration of someone who consistently relies on red herrings in response to questions. Though, it never devolved into an uncivil discource. He gets some credit for that.
But some days I'm not ready to write a post on executives in the HB industry bribing people to say happy talk, and then immediately get hit with Sebastian suggesting that anything other than happy talk is irresponsible.
That 'response' is what happens when you hit close to the target... it is what this medium is all about.
I agree I'd try to keep it civil & you & CR do a great job at that - really do.
But I'd worry more about silence. Complete dead nothing. That's when its time to turn off the light on the place. Vader & I have seen that happen in a few very good blogs when the memes amplified a bit too tightly. A crescendo of identical opinions and then nothing.
We are a long way from that problem now but if there was a threat - that would be it.
JMHO.
How big a step is it to go from offering $100 for a good customer review (to prop up the bonus) to offering a buyer cash back on their purchase? To selling the public company you work for a large tract of land that you are a silent partner in?
Follow the money.
Tanta, I've learned more here about lenders, etc. than the WSJ will ever print.
Tanta, I've learned more here about lenders, etc. than the WSJ will ever print.
I second - I hand no idea they made sausage too.
What a kiss ass I am.
Oh, believe me, I am capable of awesome stupidity. The constant need to offset that is what makes me read so intently! I come here for my own personal stupidectomy, and I must say that I find the surgeon's fees a pleasant surprise.
I've spent a lot of time in classrooms not learning as much as I do here.
I don't, btw, buy Sebastian as a person paid to troll. I think he is a decent guy who can't fathom that all the analysts, the ratings agencies, etc, could have missed the real weakness in companies like New Century. I agree with him that it is extraordinary, but a cursory read of Coast Bank's balance sheet should demonstrate that this has happened and is happening.
Most of the people who comment here seem quite sophisticated to me. If we all back away for a moment and try to look at this as if we didn't know all that we know, it makes sense that people not so immersed in the subject would be amazed, disconcerted and frustrated by what is happening.
I still maintain that nothing anyone posts on Calculated Risk is going to take the market down or push it up, though. I refuse to succumb to that sort of delusion. I am also bothered by the idea that a free and open discussion can ever be "irresponsible". It seems to me that successful businesses and democratic political institutions depend on such discussions. Groupthink is fatal.
What a kiss ass I am.
Yeah, but you notice I'm not complaining. I guess we're in this miserable dynamic together.
OT/ADD,
MoM, You reminded me that I listened to a finance show this weekend where Burton Malkiel, author of A Random Walk Down Wall Street, was interviewed. Prof. Malkiel had a student that tracked Jim Cramer's recommendations. The day after he makes a recommendations, most of those stocks rise 4-8%.
But, there's just no way anything we small band of bondholding bears are influencing any market.
lama,
The difference is that Kramer has hundreds of thousands of viewers, who don't seem to be of the, um, detailed analysis and due dilligence variety. I think of the "jocks vs geeks" model of markets that Eric at iTulip posted some time ago. CR is populated by geeks for the most part. I mean that in the best possible way.
Agreed.
That's funny, I always think of Jocks vs Geeks when Doomie comes in..as though we're having a study group and a frat boy barges in, yelling and spilling beer on everything.
CR is populated by geeks for the most part. I mean that in the best possible way.
A great summary of a long and weird thread: "Look, we're geeks here. Stop trying to make us jocks."
Frankly, if it got to the point that geeks like us could move markets, I'd stop worrying so much about markets.
Plus I'd be disgustingly rich.
Like many rational bloggers here, I wish it would have happened at the highest level in our govt., dissenting voices are welcomed, especially those supported with objective data and facts. Certainly, it would enrich the ongoing debates. CR and Tanta have presented a well thought-out, thoroughly researched, though bearish, case of the housing fall-out. Yet, the bulls on this blogs have not constructed their bullish arguments that are on the same par as CR's and Tanta's. A cohesive analysis of why the housing bust would not bring down the economy would be received very well by the bloggers here.
Lama wrote: "Prof. Malkiel had a student that tracked Jim Cramer's recommendations. The day after he makes a recommendations, most of those stocks rise 4-8%.
But, there's just no way anything we small band of bondholding bears are influencing any market."
Exactly!! We are not the WalMart of economic sources. "Geeks" is a pretty good description.
Anon,
One bullish datum is the $500k capital gains exemption. I do believe that was a one time event that made homeownership more attractive and augmented values in recent years. Going forward in transactions, it will be a zero sum game (i.e.: attractive to sell, attractive to buy).
The Booyahs don't understand that and would never incorporate it in their arguements.
There are some bullish types here who make great and informative arguements; Banker, Steve, dc1000 to mention a few.
Anon, your comment was well taken.
So here is my take on the PTB's viewpoint on housing: some misery for the suckers drawn in at the end, meanwhile immense amounts of money were pumped into the economy without too much distortion to smooth over that little 2000-2002 nastiness. Next bubble please.
Got to keep the folks from paying attention to anything beyond the next playoff game and the cost of beer.
As for expecting anything like rational discussions from the politicos- surely you jest! I note that Ron Paul is a very lonely man....
So inflation is baked permanently into the cake, the only question is how much and how fast. The old saw Keynes used is true- markets can remain irrational longer than you can remain solvent betting against them.
Now housing gets to stagnate, and something other bright shiny bauble will catch the investors' eye and be transformed into that ephemeral gold of the fools' desire.
Just don't notice when they start attacking alternative means of payment and storage of wealth like the crazy Norfed bunch and others that will shortly feel the wrath of the financial system (egold flies to mind).
Oh well, buy whiskey- it used to be a great currency on the frontier;-}
AllenM, you must be watching the Republican debate. Ron Paul is way out there on a distant wing of the Republican party. Loved his comment about the Inflation Tax. Good on him.
Whoa...so that's why my ears were burning all day. Thanks to tanta and dryfly and for the nice words.
I'm glad to hear that some people appreciate my posts even if they may disagree. If anyone wonders why I hang out here, it's because I think the level of discussion is the most intelligent and civil of any economic blog I've come across. I think the reason for that is the example set by our hosts.
It says a lot that even though my views aren't exactly aligned with the consensus here, I find it much more stimulating here than other blogs where my views are more aligned with the discussion.
As for the discussion, it has been the view of the Fed and many economists that the economy is likely to move back toward trend growth in the second half of the year (a viewpoint I agree with and have expressed here many times). I agree with those who say that while the data have looked better recently, it's a little too early to say things have turned the corner. The data could remain choppy for the next few months, but this also could be the economy ramping up a little earlier than some expected. We'll see what happens.
Beazer keeps making news:
CNNMoney.com: 404 Page Not Found
But again, not in a good way.
They are now the subject of an informal SEC inquiry to determine if employees violated securities laws.
And former employees have sued the company regarding the company's 401(k) retirement plan.
The way this whacky market is going, expect Beazer to shoot up a few bucks on the news.