oh yes... the odor of mainstream media... is getting worse.
Tanta I have an unrelated question. You said that it ain't a real mortgage crisis unless an insurer fails. Does this necessarily imply, especially in this particular crisis, that the GSEs will have trouble generating as much paper? They depend on insurance too...
Does this necessarily imply, especially in this particular crisis, that the GSEs will have trouble generating as much paper?
Yep.
My concern is that the GSEs will (not entirely intentionally) "support" a failing MI on the way down, and not pull back until it's too late. They don't want to see an MI go down, and I can imagine them stretching or bending their required rating rules for one of the bigger MIs if somebody notches down too far. Anyway, that's what I'm watching for: will the GSEs hang tough on MI ratings? 'Cause once Fannie and Freddie won't take your policies, you's toast, and once your policies are worth a fraction on the dollar, a big chunk of Fannie and Freddie is toast.
Just as Russrt, Broder, Matthews et al think they get to decide who should be president, AP is convinced that it can control the economy by deciding what the public reads about same said economy.
In the last few months I have received many, many mailings of sheafs of blank checks from Citi trying to get me to take a cash advance on the credit card I hold with them.
I shred them, but I wonder how many are being filled out who need the money (and possibly can't repay).
This can't be a good in the long run, but it sure could pump up the "assets" of the operation in the short term.
Productivity and labor costs for the third quarter were sharply more favorable than expected. Third quarter productivity surged to an annualized 4.9 percent increase, following a 2.2 percent gain in the second quarter...
...unit labor costs not only moderated but fell 0.2 percent annualized in the third quarter, following a 2.2 percent increase in the second quarter. The consensus had expected a 1.0 percent gain in unit labor costs for the third quarter. The decline in unit labor costs suggests modest inflation pressure from the labor sector overall.
Neil, that sort of thing is why I'm suspicious of the "you can't push on a string," meme. If the subprime mess teaches us anything, it's that you can always find SOMEBODY willing to borrow money if you're not too particular about their ability to pay it back. You're not borrowing, I'm not borrowing, but Cletus the slackjawed yokel certainly is.
Greenspan: "Well the question is a very interesting one. We have at this particular stage a fiat money which is essentially money printed by a government and it's usually the central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or currency board or something of that nature because unless you do that, all of history suggests that inflation will take hold with very deleterious effects on economic activity. ... There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
Fox News: "We did well without the Federal Reserve. People forget that."
Washington Mutual, the largest U.S. savings and loan, said on Wednesday it expects credit losses in the first quarter of 2008 similar to those in the current quarter as the slumping U.S. housing market makes it more difficult for people to pay their bills.
The Seattle-based thrift maintained its Oct. 17 forecast for 2007 credit losses of $2.7 billion to $2.9 billion, nearly twice as high as it projected in July.
In what sense is giving someone money that both you and they know they can never pay back with the requisite interest "borrowing"? Keeping the game going one more round feels like lending and borrowing is going on, but it's no more borrowing than a school bully "borrows" your lunch money.
China really put some attention on the dollar this morning with the mini slide last night. Lots of Fed statements coming out as well trying to offset the peception that there will be another rate cut.
Excerpts:
New York Attorney General Andrew Cuomo is expanding his investigation of the mortgage industry to include Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing. Fannie Mae and Freddie Mac shares fell.
Cuomo said in an e-mail today that he plans a news conference in New York City for 12 p.m. Last week, Cuomo sued the real estate appraisal unit of First American Corp., the biggest U.S. title insurer. Cuomo accused the appraiser of inflating home values under pressure from Washington Mutual Inc....
Cuomo will announce ``a significant new development in his expanding investigation into the mortgage industry involving Fannie Mae and Freddie Mac,'' the statement said.
....
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
As more and more money flowing away from the Old Bubble, more and more Old Bubble sectors get underwater. Next to come is consumer credit.
The only good thing is that by inflating oil prices hopefully the liquidity will be inflated away as well.
New York Attorney General Andrew Cuomo is expanding his investigation of the mortgage industry to include Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing. Fannie Mae and Freddie Mac shares fell.
Cuomo said in an e-mail today that he plans a news conference in New York City for 12 p.m. Last week, Cuomo sued the real estate appraisal unit of First American Corp., the biggest U.S. title insurer. Cuomo accused the appraiser of inflating home values under pressure from Washington Mutual Inc....
Cuomo will announce ``a significant new development in his expanding investigation into the mortgage industry involving Fannie Mae and Freddie Mac,'' the statement said.
....
....
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
As more and more money flowing away from the Old Bubble, more and more Old Bubble sectors get underwater...
This is what I was thinking as well, the problem is that there is a big difference between surging stock and real estate prices (popular and expansionary) and surging oil prices (unpopular and contractionary).
I just don't see a "bubble" that crushes consumers lasting very long.
This morning I realized I've been watching certain types of news too closely, when I saw the headline "Prince Moves to Sue Fan Web Sites" and my first thought was "Chuck Prince has fan web sites?"
Greenspan is growing increasingly senile: "There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
Yeah everything was rosy with the exception of the financial panics and depressions of 1873-1879, 1893-1896 and 1907-1908.
"This morning I realized I've been watching certain types of news too closely, when I saw the headline "Prince Moves to Sue Fan Web Sites" and my first thought was "Chuck Prince has fan web sites?""
... There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
These are typical of Greenspans thoughts prior to becoming Fed chairman. But as soon as he discovered that responsible monetary policy was unpopular and didn't get him welcomed to weekly White House sleep-overs, these ideas were quickly abandon.
AG: "There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard."
Yep. The Silver depression of 1879 and the events of 1907 never happened.
And someone needs to tell Fed Governor Mishkin about the "dragged their feet in adding to reserves because they were hoping that interest rate cuts might bail them out" sorta destroying his theory.
Higher-than-expected growth in inventories in August and September could mean that third-quarter growth will be revised up to about 4.9% annualized from 3.9% originally reported, economists from Bear Stearns and Morgan Stanley said Wednesday after a report on wholesale inventories. The growth in the third quarter was stolen from the current quarter, however, said Morgan Stanley economist David Greenlaw, who now expects fourth-quarter growth of just 0.5%, down from his earlier estimate of 0.9%...
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
Because transparncy is SOO much better under the chicoms? Now THERE'S a sucker bet for you. I predict that 10 years from now you'd do better if you bought RE in San Fran than stocks in Shanghai.
ACA reports tonight. As pointed out by Egan Jones/Barrons they are extremely weak. Risk the auditors will make them report ugly # or qualification. This could eventually affect the ratings on all the debt they have guaranteed which would be a material event for the debt markets.
My father was a gold bug in the 80s, long before I was ever exposed to this wonderful Internet. Given his experiences, I am continually amused by the gold bugs online.
Between my father's experiences and reading history, I have become convinced that only difference between gold and the Fed is who gets to manipulate the currency.
""Now, the odor is getting stronger, and it looks like adding reserves is the only course of action they can follow without presenting misleading financials," Ciesielski said."
Hmmmm...
Roubini snippet:
Here is the Level 3 assets to equity ratio summary:
And of course we have Egan Jones on the MI's from last night's thread:
""There is little doubt that the credit and bond insurers face massive losses over the next few quarters and many will be capital challenged," Egan said."
Capital Challenged...gotta love it.
Other challenged things:
Sh*te on a shingle is taste challenged.
Raw sewage is scent challenged.
Ratings issuers are credibility challenged.
[ Walker |11.07.07 11:31 am]"Between my father's experiences and reading history, I have become convinced that only difference between gold and the Fed is who gets to manipulate the currency."
There is no reason to believe that increasing materials costs will ever cause "bling" to go away. The armed robbery industry has very low barriers to entry. It is also very easy to increase individual productivity since many armed robbers only work 10 minutes a day.
Plus we have massive continuing education programs on how to do crimes more effectively through TV, movies and popular music.
So you see the US economy is built on a very firm foundation. Every individual has it within his or her reach to emulate Wall Street, but with a slightly less opaque methodology.
So, if you believe in the PPT you should buy ACA- can't let a credit default go worldwide- too much like Credit Anstalt or Herstatt. The only quesiton I have is who bought most of the risk they repackaged and resold. I don't think they kept it all for themselves on their books;-} So the next question is which insurance and reinsurance companies reached for yield;-}
As for the rest of this financial crisis, oh well, the rest of the world has figured out Helicopter Bernanke- why do the bears act so stubborn? Gold and oil are good, houses are trash, until they recover to meet the needs of the market.
BTW- I find it rather comical that because we are finally starting to exceed the 1979-80 commodity peaks folks expect this to be a spike and not the new new. I think that we are exiting the era of cheap energy, and the transition will be very interesting indeed. What's in your portfolio?
Gold and oil look good, followed by farmland. Sell when you see mainstream articles touting a new Gold Standard and the "death of equities". In about seven years or so:-]
Whiffs brewing, feet dragging, borrowers breathing, odors sterngthening, and financials misleading. Oh, is the last one not metaphical?
oh yes... the odor of mainstream media... is getting worse.
Tanta I have an unrelated question. You said that it ain't a real mortgage crisis unless an insurer fails. Does this necessarily imply, especially in this particular crisis, that the GSEs will have trouble generating as much paper? They depend on insurance too...
That there odor wafting over from ummm Citi?
The "data driven" Fed will now have the data to justify more rate cuts "for the consumer".
Wall Street may recover with this help, but the consumer won't.
Does this necessarily imply, especially in this particular crisis, that the GSEs will have trouble generating as much paper?
Yep.
My concern is that the GSEs will (not entirely intentionally) "support" a failing MI on the way down, and not pull back until it's too late. They don't want to see an MI go down, and I can imagine them stretching or bending their required rating rules for one of the bigger MIs if somebody notches down too far. Anyway, that's what I'm watching for: will the GSEs hang tough on MI ratings? 'Cause once Fannie and Freddie won't take your policies, you's toast, and once your policies are worth a fraction on the dollar, a big chunk of Fannie and Freddie is toast.
This "toast," of course, will smell funny . . .
Just as Russrt, Broder, Matthews et al think they get to decide who should be president, AP is convinced that it can control the economy by deciding what the public reads about same said economy.
In the last few months I have received many, many mailings of sheafs of blank checks from Citi trying to get me to take a cash advance on the credit card I hold with them.
I shred them, but I wonder how many are being filled out who need the money (and possibly can't repay).
This can't be a good in the long run, but it sure could pump up the "assets" of the operation in the short term.
Gold $840.00, $1=113.155 yen, $1.4701=1 euro
Neal, I agree. You may not be able to force people to borrrow but when you are drowning in debt do you grab a lifeline from the slave ship?
Interesting:
Productivity and labor costs for the third quarter were sharply more favorable than expected. Third quarter productivity surged to an annualized 4.9 percent increase, following a 2.2 percent gain in the second quarter...
...unit labor costs not only moderated but fell 0.2 percent annualized in the third quarter, following a 2.2 percent increase in the second quarter. The consensus had expected a 1.0 percent gain in unit labor costs for the third quarter. The decline in unit labor costs suggests modest inflation pressure from the labor sector overall.
Putting manaure in your garden does wonders for your roses, as it turns out, slathering a layer on your toast does little to improve the flavor.
Neil, that sort of thing is why I'm suspicious of the "you can't push on a string," meme. If the subprime mess teaches us anything, it's that you can always find SOMEBODY willing to borrow money if you're not too particular about their ability to pay it back. You're not borrowing, I'm not borrowing, but Cletus the slackjawed yokel certainly is.
Greenspans' latest comments. MOST interesting.
Greenspan on the Central Bank and Gold
Fox News: "So why do we need a central bank?"
Greenspan: "Well the question is a very interesting one. We have at this particular stage a fiat money which is essentially money printed by a government and it's usually the central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or currency board or something of that nature because unless you do that, all of history suggests that inflation will take hold with very deleterious effects on economic activity. ... There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
Fox News: "We did well without the Federal Reserve. People forget that."
OT: WaMu confesses:
Washington Mutual Shares Slide on Bleak Outlook - CNBC
Washington Mutual Sees More Credit Losses Ahead
Washington Mutual, the largest U.S. savings and loan, said on Wednesday it expects credit losses in the first quarter of 2008 similar to those in the current quarter as the slumping U.S. housing market makes it more difficult for people to pay their bills.
The Seattle-based thrift maintained its Oct. 17 forecast for 2007 credit losses of $2.7 billion to $2.9 billion, nearly twice as high as it projected in July.
Cletus the slackjawed yokel certainly is.
In what sense is giving someone money that both you and they know they can never pay back with the requisite interest "borrowing"? Keeping the game going one more round feels like lending and borrowing is going on, but it's no more borrowing than a school bully "borrows" your lunch money.
Fox News: "We did well without the Federal Reserve. People forget that."
Depends on which "We" you represent, I suppose.
I know if I was at the end of the line and it was going to end badly anyway, I would cash as many of those cash advances as quickly as possible.
The hardest thing to repo is a roll of cash.
This "toast," of course, will smell funny . . .
/me reminds Tanta of the slang name for chipped beef on toast
Next up: A massive surge in identity fraud as folks with bad credit attempt to get credit with somebody else's social security number.
Landmine? This crisis looks more like the German Army marching across europe.
China really put some attention on the dollar this morning with the mini slide last night. Lots of Fed statements coming out as well trying to offset the peception that there will be another rate cut.
Talking of odors, what's this being reported at Bloomberg :
Cuomo Widens Investigation to Fannie Mae, Freddie Mac (Update3) - Bloomberg.com
Excerpts:
New York Attorney General Andrew Cuomo is expanding his investigation of the mortgage industry to include Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing. Fannie Mae and Freddie Mac shares fell.
Cuomo said in an e-mail today that he plans a news conference in New York City for 12 p.m. Last week, Cuomo sued the real estate appraisal unit of First American Corp., the biggest U.S. title insurer. Cuomo accused the appraiser of inflating home values under pressure from Washington Mutual Inc....
Cuomo will announce ``a significant new development in his expanding investigation into the mortgage industry involving Fannie Mae and Freddie Mac,'' the statement said.
....
-K
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
As more and more money flowing away from the Old Bubble, more and more Old Bubble sectors get underwater. Next to come is consumer credit.
The only good thing is that by inflating oil prices hopefully the liquidity will be inflated away as well.
Talking of odors, what's this about ? Bloomberg reports:
Cuomo Widens Investigation to Fannie Mae, Freddie Mac (Update3) - Bloomberg.com
Excerpts:
New York Attorney General Andrew Cuomo is expanding his investigation of the mortgage industry to include Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing. Fannie Mae and Freddie Mac shares fell.
Cuomo said in an e-mail today that he plans a news conference in New York City for 12 p.m. Last week, Cuomo sued the real estate appraisal unit of First American Corp., the biggest U.S. title insurer. Cuomo accused the appraiser of inflating home values under pressure from Washington Mutual Inc....
Cuomo will announce ``a significant new development in his expanding investigation into the mortgage industry involving Fannie Mae and Freddie Mac,'' the statement said.
....
....
-K
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
As more and more money flowing away from the Old Bubble, more and more Old Bubble sectors get underwater...
This is what I was thinking as well, the problem is that there is a big difference between surging stock and real estate prices (popular and expansionary) and surging oil prices (unpopular and contractionary).
I just don't see a "bubble" that crushes consumers lasting very long.
One of these days, the market won't rally after falling in the morning. Its going to be a really ugly day when that happens.
This morning I realized I've been watching certain types of news too closely, when I saw the headline "Prince Moves to Sue Fan Web Sites" and my first thought was "Chuck Prince has fan web sites?"
Greenspan is growing increasingly senile: "There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
Yeah everything was rosy with the exception of the financial panics and depressions of 1873-1879, 1893-1896 and 1907-1908.
"This morning I realized I've been watching certain types of news too closely, when I saw the headline "Prince Moves to Sue Fan Web Sites" and my first thought was "Chuck Prince has fan web sites?""
LOL, too funny!
Greenspans' latest comments. MOST interesting...
... There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard".
These are typical of Greenspans thoughts prior to becoming Fed chairman. But as soon as he discovered that responsible monetary policy was unpopular and didn't get him welcomed to weekly White House sleep-overs, these ideas were quickly abandon.
AG: "There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard."
Yep. The Silver depression of 1879 and the events of 1907 never happened.
And someone needs to tell Fed Governor Mishkin about the "dragged their feet in adding to reserves because they were hoping that interest rate cuts might bail them out" sorta destroying his theory.
"Yeah everything was rosy with the exception of the financial panics and depressions of 1873-1879, 1893-1896 and 1907-1908."
But gold has magical economic powers! It says so right in the Trismegestus Book of Free-Market Magic! How can you doubt the man in the pointy hat!
Does anyone know what the lag between the rise in the price of gold and the price of bling? And how long before that market dries up and blows away?
One of these days, the market won't rally after falling in the morning. Its going to be a really ugly day when that happens.
That's what happened in August.
Next time it happens there's no guarantee Ben won't step right back in and ponzi-blast the markets to new highs.
They just can't stop screwing up.
That's all they've been trained to do.
New ad for Capital One: What's in our wallet?
Higher-than-expected growth in inventories in August and September could mean that third-quarter growth will be revised up to about 4.9% annualized from 3.9% originally reported, economists from Bear Stearns and Morgan Stanley said Wednesday after a report on wholesale inventories. The growth in the third quarter was stolen from the current quarter, however, said Morgan Stanley economist David Greenlaw, who now expects fourth-quarter growth of just 0.5%, down from his earlier estimate of 0.9%...
link
IMHO this is all part of the Big 2007 Paradigm Shift of Bubbles.
Hot money is flowing away from Financials/Real Estate (Old Bubbles) into Energy/China (New Bubble).
Because transparncy is SOO much better under the chicoms? Now THERE'S a sucker bet for you. I predict that 10 years from now you'd do better if you bought RE in San Fran than stocks in Shanghai.
ACA reports tonight. As pointed out by Egan Jones/Barrons they are extremely weak. Risk the auditors will make them report ugly # or qualification. This could eventually affect the ratings on all the debt they have guaranteed which would be a material event for the debt markets.
But gold has magical economic powers!
My father was a gold bug in the 80s, long before I was ever exposed to this wonderful Internet. Given his experiences, I am continually amused by the gold bugs online.
Between my father's experiences and reading history, I have become convinced that only difference between gold and the Fed is who gets to manipulate the currency.
""Now, the odor is getting stronger, and it looks like adding reserves is the only course of action they can follow without presenting misleading financials," Ciesielski said."
Hmmmm...
Roubini snippet:
Here is the Level 3 assets to equity ratio summary:
Citigroup 105%
Goldman Sachs 185%
Morgan Stanley 251%
Bear Stearns 154%
Lehman Brothers 159%
Merrill Lynch 38%
RGE - The bloodbath in credit and financial markets will continue and sharply worsen
And of course we have Egan Jones on the MI's from last night's thread:
""There is little doubt that the credit and bond insurers face massive losses over the next few quarters and many will be capital challenged," Egan said."
Capital Challenged...gotta love it.
Other challenged things:
Sh*te on a shingle is taste challenged.
Raw sewage is scent challenged.
Ratings issuers are credibility challenged.
Cheers,
[ Walker |11.07.07 11:31 am]"Between my father's experiences and reading history, I have become convinced that only difference between gold and the Fed is who gets to manipulate the currency."
Hear, hear! [viz.] What he says.
There is no reason to believe that increasing materials costs will ever cause "bling" to go away. The armed robbery industry has very low barriers to entry. It is also very easy to increase individual productivity since many armed robbers only work 10 minutes a day.
Plus we have massive continuing education programs on how to do crimes more effectively through TV, movies and popular music.
So you see the US economy is built on a very firm foundation. Every individual has it within his or her reach to emulate Wall Street, but with a slightly less opaque methodology.
If the world is coming to an end(financially) and you really want a secure store of value, wouldn't 1-4 carat diamonds be better than gold?
It'd be tough to smuggle 100k of gold out of the country on your person.
"It'd be tough to smuggle 100k of gold out of the country on your person."
That's only about 8 pounds. . . at current prices.
So, if you believe in the PPT you should buy ACA- can't let a credit default go worldwide- too much like Credit Anstalt or Herstatt. The only quesiton I have is who bought most of the risk they repackaged and resold. I don't think they kept it all for themselves on their books;-} So the next question is which insurance and reinsurance companies reached for yield;-}
As for the rest of this financial crisis, oh well, the rest of the world has figured out Helicopter Bernanke- why do the bears act so stubborn? Gold and oil are good, houses are trash, until they recover to meet the needs of the market.
BTW- I find it rather comical that because we are finally starting to exceed the 1979-80 commodity peaks folks expect this to be a spike and not the new new. I think that we are exiting the era of cheap energy, and the transition will be very interesting indeed. What's in your portfolio?
Gold and oil look good, followed by farmland. Sell when you see mainstream articles touting a new Gold Standard and the "death of equities". In about seven years or so:-]
someday will come, but not soon enough!
That's only about 8 pounds. . . at current prices.
I'm going to peg the geek meter by saying that it's actually more like 10 pounds. It's just that they're smaller (troy) pounds.
( 100,000 / 850 ) / 14.58 = 8.0690712498991366093762607923828
Roughly. YPoGMV.
And Tanta probably prefers Troy measure since Ounce is from the latin uncia meaning 1 twelfth.
Maybe s/he he wrote this at night when the hurricane was passing through,
a "dark and stormy night" as it were.