SEC: Wall Street Sold "Too many Lottery Tickets"
Submitted by
CalculatedRisk on Wed, 11/28/2007 - 7:19pm (92 comments)
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The risk is clearly overstated.
http://www.marketwatch.com/news/story/five-signs-we-trash-talking-our/story.aspx?guid={08E730CA-73E4-4C80-B664-00501FD85D26}&siteid=yahoomy
Now about that bridge
Well it finally happened. Tanta's Alt-A as in "attitude" has not been contained. CR is now sporting steel toed bunny slippers just in blue instead of pink. We are all Tanta now.
This was brought up before but not discussed much:
Florida School Fund Rocked by $8 Billion Pullout (Update2) - Bloomberg.com
Orange County, home of Disney World, removed its entire $370 million from the pool on Nov. 16, two days after the head of the agency that manages the state's short-term investments disclosed the defaulted debt in a report delivered to Governor Charlie Crist.
and
Almost 6 percent, or $2.4 billion, of its short-term investments consist of asset-backed commercial paper that has defaulted. Those holdings include $425 million in Axon Financial, a structured investment vehicle, or SIV, according to state records.
What caught my eyes was Orange County, FL in potential financial trouble! In 1994 (only 13 years ago), Orange County, CA went bust under Treasurer Bob Citron.
This guy recently attended a seminar on how to price a CDO. His report is here:
Evanescent Ramblings
there's a meme that J6P should be able to relate to... lottery tickets... we're all winners now !
Confidence in securitized debt products has been hurt by recent turbulence in credit markets, Reserve Bank of Australia assistant governor Guy Debelle said Thursday.
"The recent developments have generated a large amount of investor skepticism about securitized products," Debelle said in a speech to the Australian Securitization Forum in Sydney.
He said such products have served a purpose by enhancing competition and contributing to lower margins, but that the market will have to work to overcome their tarnished image.
Debelle said there was a lack of transparency about the pool of assets underlying some securities.
Referring to a 1970 paper by economist George Akerlof entitled "The Market for Lemons", which used the example of the used car market to argue that a lack of information about product quality depresses the price buyers are willing to pay, Debell said: "A lemons problem has arisen."
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
The mix of language is losing me here. He's using gambling slang (trifecta) with stuff I don't get.
What is "a concentrated position with negative convexity that suddenly became illiquid"?
I got the gambling slang down. Thanks to my mom for that...
Securities firms and banks sold ``too many lottery tickets'' tied to U.S. mortgages and failed to look closely enough at their growing risks, the head of the Securities and Exchange Commission's market regulation division said today.
That's because the Fed bailed them out the last time they sold too many dot.com lottery tickets.
For your listening pleasure:
YouTube -
YouTube -
Enjoy.
Cheers,
homedad43,
"a concentrated position with negative convexity that suddenly became illiquid"?
Concentrated position:
They bought a whole shite load of the same kind of bets.
negative convexity:
Bonds relate to interest rates nonlinearly. In simple terms think of the trajectory of a progectile.
that suddenly became illiquid:
Think of that shell being from the Bismark and hitting the poorly defended ammo magazine of the hood.
Hope that helps.
Cheers,
Terribly sorry, that should be the HMS Hood, sir!
Cheers,
Finding Fraud: Fitch To Overhaul Ratings Process Will Review Originators and Issuers / Fitch Ratings issued a wide ranging press statement...
this is taking place
Another lovely month for California real estate: statewide sales down 40% YOY, prices (median, resale homes) down 10% YOY.
Page Not Found!
Astounding.
Source: PrudentBear
Almost hilarious (and almost unbelievable): months inventory on hand is 16 (compared to six months one year ago).
Wow.
"What is "a concentrated position with negative convexity that suddenly became illiquid"?"
===
homedad:
I'll give it a shot... others can probably define better.
We'll start with the two easy things.
1. "concentrated" this means that the investment is "all in"... no diversification.
So 1 and 2 mean that this investment is a large bet that one might get stuck with.
Now for negative convexity.
Let's pretend you have a securtiy that yields 5% fixed for 10 years.
If the Fed drops rates to 4%, now other people will want your security more than the 4% securities... thus your security is worth more simply because it's got a higher yield. Thus, if you were to sell it, it's value would go up as interest rates fall.
Alternatively, if you have a security that yields 5% fixed for 10 years and the Fed RAISES interest rates to 7%, now your security isn't worth as much because other buyers would rather have 7%.
This is typical of "noncallable bonds".
However, let's pretend instead that you own a security at 5% fixed, but that the security is "callable" (in other words, the other party can "refinance" if you will.)
Now, if rates drop to 4%, the other party might "call" the bond... or in other words they'll pay off your security to buy a new 4% security instead.
other people will not want to buy your security, because they know that if the rates drop too far the other party will "call" the security and they'll lose out.
This is called "negatively convex"
The term comes from the shape of the bond curve...
so the triple wammy is when you have a LOT of money (concentrated) on one bet that isn't traded often (illiquid), and that money is bet on a security that LOSES value as the Fed Drops rate (negative convexity)
hope that helped....
clear as mud
Misean:
Thanks for the translation. That makes more sense now...
Homedad43
Same as a homeowner trying to sell in a market with no buyers and no means of financing a sale in a rapidly declining market.
It can't get any worster.
Sirri- And as one head trader wisely said recently, "Hope is a crappy hedge."
Conjure Bag says gleefully, "YES, they REALLY ARE that stupid."
Personal note: After 3 months in New York, mp and Conjure Bag head west tomorrow for a much-needed rest.
YTL -
Likewise, thanks for the translation..
The growing ranks of shocked, surprised bankers tells me that no institution has a handle on what their future losses are going to be.
"Originate-to-sell" business models trying to transform themselves into "originate-to-hold" is a difficult execution even in the best of markets.
That is why the Wells Fargo announcement was key. Not only did they put an ungodly mark on HELOCs (exposure every bank has in spades) but they went out of their way to let everyone know that they had a "dedicated team" to puke up what Wells senior management refuses to hold.
Originate-to-distribute bankers are not competent enough to quantify, manage & sell distressed assets, plain and simple. Painfully evident as delinquencies and severities mount.
Bubble-friendly Fed talk is giving CasinoWorld a new lease on life. Notice that nobody ever talks about using lower rates to fund productive enterprise.
Lower rates mean more poker chips for everybody:
Hong Kong's Hang Seng Index climbed 4.2% to 28,513 in late morning trade. The China Enterprises Index, or shares of mainland incorporated companies listed in Hong Kong, added 4.4% to 17,085.
In China, the Shanghai Composite Index was up 9% to 4,893.
Regional traders were bracing for a big day after a Federal Reserve official hinted that further interest-rate cuts could be in the pipeline, spurring U.S. stocks higher, with the Dow Jones Industrial Average clocking its biggest percentage gain this year.
"It looks like the market is going to explode following the sharp gains on Wall Street on anticipation of another rate cut," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong, adding trading activity would be affected by the expiry of November futures.
Hong Kong soars on rate talk, Tokyo also looks up
NY Times - Lenders' Belt-Tightening Stifles Growth in Economy
LENDERS TIGHTEN FLOW OF CREDIT; GROWTH AT RISK - NY Times
Yearning to Learn,
I'm too tired to deal with differential occasions tonight. Can't I just have artillery shells smashing into ammo magazines?
Actually very nice explanation. Bugger
Cheers,
Truly remarkable. 16.3 months is a "highlight" LOL! I call it an albatross.
"Highlights of C.A.R.s resale housing figures for October 2007:
C.A.R.s Unsold Inventory Index for existing, single-family detached homes in October 2007 was 16.3 months, compared with 6.4 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate."
2. illiquid. This means difficult to trade.
Also, I believe one implication of an illiquid market is that buying or selling assets into these markets is more likely to affect prices.
So if you sell a ton of securities into an illiquid market, you may screw yourself by driving prices way down before you've sold all your assets.
Clyde,
You are right. Bankers do not have the disposition to deal with distressed dispositions. They are much too conservative to believe that their "investments" should be dumped as soon as possible, because they will soon be worth much less. Sorry bankers, like in nature, those who cannot adapt to rapidly changing situations often do not survive.
It's quite reassuring to hear someone from the SEC refer to financial instruments as "lottery tickets."
The danger in this situation is akin to avalanche risk.
Avalanche risk occurs after successive snowfalls accumulate on a slope. The potential energy build-up is released not gradually, but in a catastrophic surge down the mountain.
The analogy works because the market normally discounts not the existence of a recession but its likelihood. This is why markets "predict" more recessions than actually occur.
A "broken" discounting mechanism is one that ignores the rising probability of a recession, and further ignores its potential magnitude. The more the evidence of likelihood mounts, the more "potential energy" builds up. The risk is that market participants change their mind all at once and begin to fear recession, and that triggers the avalanche.
So successive rallies occur because of "rate cuts", "santa claus", or "sovereign wealth flows". All good reasons to rally, but all also good reasons for the potential energy to build. Afterwards people will wonder how the trends could have been ignored for so long.
Scary.
I once won a bunch of money with a lottery ticket. That was a good day.
If only all the lenders had been more like <a href="http://icanhascheezburger.com/2007/11/28/banker-cat-does-not-approve-ur-loan/>this banker.
Elvis,
Which is why Wells is manning up & taking their "first loss is the best loss" medicine.
Your nature metaphor is perfect, it will be bloody & final for all of the so-called conservative bankers that ran with the herd.
It's funny, though, in nature, you only need one that is slower. Not this time.
" I once won a bunch of money with a lottery ticket "
I read somewhere that the retirement plan for 10% of Americans is to win the lottery.
Sad to say, the way things are going these days that might just be a viable option.
As Warren Buffet says, the best steak is a undervalued insurance company.
China Investment Seeks to Stabilize Equity Markets "China Investment Corp., the nation's $200 billion sovereign wealth fund, signaled it may invest in stocks rocked by subprime mortgage defaults. CIC wants to be a stabilizing force in the international capital markets, Chairman Lou Jiwei told a conference in Beijing today. He then cited a recent example in which a similar fund invested in a financial institution with subprime losses, without elaborating."
China's Wealth Fund Seeks to Stabilize Equity Markets (Update2) - Bloomberg.com
Page Not Found!
sorry for the double post - did not see it before.
David,
you nailed it with the avalanche. But I don't agree with most of the people on this board, that each fed cut will keep juicing the markets like these first ones did.
With each cut that fails to produce short-term results, the market starts to get less hyped. The junky analogy works, because a junky needs stronger stuff each fix to get the same high. But the fed can only deliver weaker stuff with each fix. The fed probably knows this.
By withholding a demanded cut, the fed sends the junky into withdrawal. But the next cut will have more power.
David Pearson,
Debt piles on debt, piles on debt...then it collapses.
Nice analogy. I guess that means, after the avalanche, the citizens below will be saved by the local ski resort splashing artificial snow on the point of the avalanche.
But it likely means for this season, the Fed won't be able to pile up enough more snow to survive the "depth of snow derivatives" that were supposed to only go higher. And were shocked that there extremely deep and inept models of snow piling have crumbled massively.
Or something like that (psst...It's a stupid deflation analogy.)
Cheers,
and by "stupid deflation analogy" I mean I'm a deflation supporter and my analogy got extremely stupid. Nothing against you David.
Cheers,
Rich,
Unlike a sleep deprived narcoleptic, you somehow know what you are talking about. Glad you are on this blog. Keep on spewing the truth.
Maybe I've missed it, but Maine is struggling with no longer AAA investments:
NTERVIEW-Maine Treasurer Criticizes Merrill for Subprime Bet
"Maine Treasurer Criticizes Merrill for Subprime Bet"
Standard & Poor's on Tuesday cut the ratings on Mainsail II and three other "SIV-lite" investment funds. Other agencies acted more quickly, but not soon enough to keep Maine and others, including Connecticut, Florida, Montana and King County in Washington from getting in.
"More than 75 [deals] have been withdrawn because banks aren't lending, and that estimate is "probably conservative, because not all deals that blew up were well-publicized," White said.
"The commercial real estate market is imploding," said James Ortega, who manages $150 million at Saenz Hofmann Fund Advisory in Sao Paulo. Ortega has set trades to profit from a decline in property companies' shares. "We're about to experience a very significant correction."
Deadbeat Developers Signaled by Property Derivatives (Update2) - Bloomberg.com
Oh yeah, banks not lending and markets imploding...
Sounds like inflation to me...oh wait...no it doesn't.
Cheers,
And subprime blame goes to our northern buddy:
"Head of Quebec's Caisse de depot warns of possible $500-million loss"
http://www.canadaeast.com/business/article/140568
(It's Canada's largest pension fund manager.)
He said the Caisse has about $13.2 billion in asset-backed commercial paper but that the pension fund's exposure in the subprime mortgage market is $1 billion.
That means, he added, that the maximum the Caisse would have to write off in losses would be $500 million.
The rest of the $13.2 billion is comprised of "very high-quality assets," he added.
Yeah, right. "very high-quality assets." We all believe you!
"As towns go broke, subprime crisis hits Arctic Circle"
As towns go broke, subprime crisis hits Arctic Circle - The New York Times
A Norwegian brokerage that lost its license over its role in turning four remote towns around the Arctic Circle into victims of the U.S. subprime crisis said Wednesday that it would file for bankruptcy
and
The municipalities of Rana, Hemnes, Hattfjelldal and Narvik lost about 350 million kroner, or $64 million, from investments that fell to less than 55 percent of their original value.
Subprime (toxin) export is now turning into BK export, too?
Re: What is negative convexity?
I found Sirri's options based explanation easier to understand.
"A trader can always generate cash today by selling optionality. Of course, the resulting risk profile is very asymmetric, with the upside is limited by the cash received while the downside is potentially unlimited hence the phrase "selling lottery tickets". The risk profile for selling optionality requires special attention if the options have strikes that are out of the money, as this gives rise to negative convexity, a technical term for describing exposures where mark-to-market losses accelerate rapidly when markets move adversely."
i.e. If you've sold out of the money put options, you owe nothing until the market price falls below the strike price. Once you're below the strike price, you've turned the corner and your losses become linear in the price.
In other words, it's a position that looks like a winner -- until the wrong conditions show up and you're slammed.
We can't forgot our friends "down under"
http://www.pr-inside.com/th-new-zealand-non-bank-finance-company-r323018.htm
"12th New Zealand non-bank finance company collapses"
Capital + Merchant Finance, New Zealand nonbank financier, on Thursday became the nation's 12th finance company to collapse in less than two years.
U.S.-based creditor Fortress Credit Corp., owed around 70 million New Zealand dollars (US$54 million), called in receivers after Capital + Merchant had breached agreements
with the Australian branch of Fortress, which has a prior charge over assets.
Anon | 11.29.07 - 1:00 am,
My analogy still holds...
(grumbles off to bed...Naval artillery, ammo magazines, pride of the British Empire goes kaploohee in one or two shots...grumble...whipersnapers...Bah!)
Cheers,
Misean,
Sorry, that should have been
... slammed by a shell to the HMS Hood.
(There I hope you're happy, I just spent 10 minutes trying to think of an intelligent response, when I could have been doing something productive like sleeping. The standards at this blog are to d#%* high
Indymac giving off an odour ..
Rumor starter Here....Indymac = See YA!
mark to market just the price some random person (possibly an idiot) paid.
mark to model "modeling the positions' value ensures that complex risks — such as out-of-the-money puts that generate negative convexity — are understood."
Zowie! Mark to model is better.
Soros bets on Countrywide:
Expired
Unless he has since sold.
Re: Negative convexity
Can someone post a link to definition / explanation? (not just an analogy)
Thanks
Never mind. Googling for it produces good references.
YTL:
great analogy thanks.
DannyHSdad:
they come in two's down here, expect to see more before xmas! Things are looking off for us down here. Companies are hurting with low dollar high gas prices, falling orders and home sales volume down by a third!
tinfoil hat securely fastened!
oops thats 'low US dollar', but you knew that.
bedtime...
Hi -
Re the CAR report. How can the meadian time to sale be under 60 days when there are 16 months of inventory???
illiquidity lies upon's negative convexity's lap
for hedge funds that are fueled on crap
Nothing like some MSM hysterics to greet the masses this AM:
From Bloomberg:
Oil Surges More thant $4.00 After Canadian US Pipeline EXPLODES
Anon, thanks for clarifying. At first read I thought that the analogy of "lottery tickets" wasn't quite apt, but in fact it is. Deep out of the money puts/calls are sometimes referred to as "lottery tickets", I know cause I've got a few worthless trade confirms on them
So I guess you could say that, as opposed to Joe Sixpack walking into the 7-11 and buying the powerball ticket, the banks were selling lottery tickets on an event with a much higher statistical probability of happening.
The kicker probably was that they assumed that a nationwide real estate price decline would never happen. Reality-based modelling would have perhaps avoided that.
Oil Surges More thant $4.00 After Canadian US Pipeline EXPLODES
Ahh, I knew there was a reason I had this song from a certain musical humming in my mind yesterday:
The fear will come back, tomorrow
Bet you're bottom dollar, that tomorrow, there'll be fear
Just thinkin' about, tomorrow
Takes away the damage
To my options
And there's sun
When I'm stuck with a tape, that's green, and lonely
I just stick out my chin and grin, and sing
Tomorrow! Tomorrow!
I love you, tomorrow
You're always a day away
OT from WSJ Online:
Breaking: Sears's profit plunged 99% as sales declined and margins plummeted. Full article coming shortly.
How's that rally looking today?
Citadel buying into ETrade, interesting part is that what was a $3 billion ABS portfolio will be purchased for $800 million...is a 73% haircut priced into writedowns to date if that is generally representative of ABS value deterioration?
No link, Bloomberg TV chatter
Should SRS rise as CRE falls? I should be able to research this for myself, but am having trouble. Sources?
It was very important to the fed that oil be pushed below $90 before the rate cut.
However, a lottery ticket, in the form of the Enbridge pipeline (9% of US oil consumption), comes into play, putting a $90+ floor under the price of oil prior to the rate cut.
The noise in the press that will be made when oil crosses the $100 mark will create problems for the fed in pushing for more rate cuts. This because the connection between cuts and oil prices will be laid bare for all to see. Pain to consumers, especially in the all important Christmas season.
But cut they will--now more likely a larger cut, trying to get it all done at once, as it will be harder politically to do it next time.
By the way, gas is being priced 50 cents less than it should be from on-hand oil supplies. Refiners are not making money at these prices. Why?
Credit crunch, round 2:
Libor for Dollars, Euros Soars as Banks Seek Year-End Funding.
"The London interbank offered rate that banks charge each other for dollars climbed 40 basis points to 5.23 percent, the British Bankers' Association said. The rate they charge for euros for a month jumped 65 basis points to".
65 bps jump is a fairly rare event. The 1M euro LIBOR is currently at the highest level during this cycle. The USD LIBOR is at the pre-cut level. GBP, CHF, and even JPY LIBORs soared, too.
To see how fast earnings are sinking, and how far behind the curve analysts can be...
90 days the consensus earnings for Sears Holding was .79 for the Oct 07 quarter. This morning it was .50.
Actual was .01.
So what happened?
Sears/Kmart is low-end retailing. But not low enough. Their market share is eroding to dollar clubs that buy crap straight off the boat from China and stick it in stores on skids.
This is what the low-end of American shoppers has become. Desperate bottom-feeders. The Christmas season will see enormous discounting in this tier and nobody will profit. After Christmas, deep discounting may become permanent. Sears Holding may have seen its last profit dollar for some time.
Ah. Foolish question. I found Dow Jones US RE index breakout comprises SRS. So now I have it.
1m LIBOR at 5.23%!
One-Month Libor Soars as Banks Seek Year-End Funding (Update1)
One-Month Libor Soars as Banks Seek Year-End Funding (Update3) - Bloomberg.com
By Gavin Finch
Nov. 29 (Bloomberg) -- The cost of borrowing euros for one month rose by a record and dollar loans jumped the most in more than a decade as banks sought funds to cover their commitments through to the start of next year amid a squeeze on credit.
The London interbank offered rate that banks charge each other for euro loans that only come due after the end of 2007 climbed 64 basis points to 4.81 percent, the British Bankers' Association said. The rate charged for dollars jumped 40 basis points to 5.23 percent.
The fastest increase in bank lending rates reflects growing concern about the strength of financial institutions after more than $60 billion of writedowns this year linked to U.S. subprime- mortgage defaults. Losses may rise to $300 billion, according to the Organization for Economic Cooperation and Development.
The increases we've seen in borrowing costs cannot be simply explained away by year-end pressures; this is a full-on credit crisis,'' said Stuart Thomson, who helps oversee $46 billion in bonds at Resolution Investment Management Ltd. in Glasgow, Scotland.There's no end in sight either. It's a really unpleasant picture.''
Today is the first day on which a cash loan of one month will cover a borrower's needs through the end-of-year holiday period.
Things aren't getting better, cash will be extremely tight at least into year end,'' said Andy Chaytor, a fixed- income strategist at Royal Bank of Scotland Group Plc in London.There is a heavy cash requirement.''
The cost of borrowing dollars for three months rose for the 12th day, climbing 4 basis points to 5.12 percent. The three- month rate for euros increased 3 basis points to 4.78 percent.
To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net
Sears/Kmart is low-end retailing. But not low enough.
Keep in mind that K-mart does sell quite a bit of consumables, Sears less so. WalMart probably sells more consumables that K-mart does. Consumables (generally speaking) have a shorter tail than the rest of the stuff they sell. Much of the consumables are US/MX/CA produced. You may see a price rise in those (as the price of energy gets hammered). The seasonal stuff (mostly clothes) is being produced very little in the NAFTA area. If clothes sales fall off (and there have been reports of weak sales this past summer at KM and WalMart) expect to see even more cutting (both retail prices and supply-side orders).
Volatility in credit markets may also affect the long-tail supply lines (all the way back to southeast asia).
During my road trip Tuesday (to check the retail climate), I noticed a new trend of one-off dollar-stores beginning to open in empty store fronts here and there. A walk around the inside of one, revealed that their supply sources are as usual (asian) as opportunistic buying (overstock from dollar general, etc). Maybe big box has bigger problems than they want to let on.
CR, Tanta, someone who's in the industry:
What's the realistic chance we see the SEC actually use their teeth instead of their tongue in this case? It seems the only thing the nitwits respect is jail time.. so will we see anyone behind bars for selling these CDO's that have less value than the toner it took to print them off?
Neal,
I'm also suspicious that gas prices (at the pump) have stayed flat over the past month while crude flirts w/ $100.
Driving around ATL, it seems that all the stations are selling in a very tight range, with unleaded regular @2.99 almost anywhere you go, give or take a couple cents.
This reminds me of Ecuador, where the govt unabashedly fixes the price. The wife and I used to laugh at how every petrol station had the same price.
Granted we need more data but this smells like price fixing to me.
"interesting part is that what was a $3 billion ABS portfolio will be purchased for $800 million...is a 73% haircut priced into writedowns to date"
yeah that struck me as well. I think a 73% haircut on the same sort of portfolio for (say) countrywide and WaMu would wipe their equity out & by a handsome margin.
Clearly the 10Q confessional hasn't yet required 100% honesty.
eurodollar futures implied 3mLIBOR:
Mar08\t4.19
Jun08\t3.76
Sep08\t3.54
Dec08\t3.47
3mL today: 5.12
Actually, it is Bismarck. Crazy Alan Greedscam got in a lucky hit and now she steams around aimlessly because the rudder is locked up.
GDP up 4.9% in 3rd quarter.
This is beginning to remind me of tractor production statistics from the peoples glorious republic of the Soviet Union.
Sign of the times. I went out to dinner last nite on a major street in the SF East Bay and noticed that a large Remax office was gone, soon to be replaced by a fitness center.
BTW, today's economic numbers are decidedly bearish.
"I looked at the entire 15 year history of home prices and loan performance before I wrote those CDO models. . ." Bud Fox, 27
despite the fed's actions the yield curve (using LIBOR as a sub for the FFR) is mighty inverted.
Is this bullish?
;-p
Economy is expanding at 4.9% where are the bulls ???
Can we revisit the idea that the IBs all have November year-ends. If, and this is a big if, they could somehow pump the markets for a few days, does it not make sense to do it at their year end? I don't work for an IB so maybe someone who does could comment. In asset management if the markets are up 5% at quarter end and fees are based on AUM, well you all can do the math. Are IB fees similarly affected? Or, in terms of employee compensation, if IB stock prices are up at year end does this make their final compensation bill cheaper because (1) stock awards are converted at higher prices or (2) option awards have higher strike prices? Just curious.
Sears Holdings same-store domestic sales down 4.6% YOY.
And that's BEFORE the rececession starts.
US GDP revised up to 4.9% for third quarter.
How could the Fed cut with such great numbers?
Rich,
Went to Sears yesterday because I needed a new pair of jeans. Never saw anything like it, the whole huge box was totally empty of customers and the employees just standing around.
In normal times this store was always busy, even in the middle of the week.
Discounted to $19 from $36, not much profit.
Then I walked through the mall just to look around, at least 75% of the stores had not a single customer in them and the kiosk people in the walkways were all over you like the kids that wash windshields in Mexico City traffic.
Really weird feeling.
Kiosk people are sad. They are the bottom feeders of malls. They get commissions and no benefits, and some of them don't even have a place to sit down.
If I was a kiosk person, I would just heist the merchandise and scram.
I really like those little Mexican kids. If you pay them a few pesos extra, they will sit on your hood while you drive all the way through town. When you get outside the city, you have a clean windshield and they hop down and walk home.
LOL
Some of the kiosk people sure looked like the principals to me.
Of course the shell into the HMS Hood magazine immediately brought to mind a little piece in the paper about them finding old WWII ordnance in a neighborhood in Orlando.
"US GDP revised up to 4.9% for third quarter."
In other breaking news, chocoration raised to 20 grams! Spontaneous celebrations erupt in major cities of Oceania.
"Some of the kiosk people sure looked like the principals to me."
Wait a few months and they'll be trying to sell you credit default swaps.
soma....yummm