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I didnt see an OT thread, but what is up with silver.
SLV was at 205 just last week, now below 170. I dont think inflationary pressures are behind us, so might it be a good time to pick some up?
Why did the market shoot up on this news?
CR,
I think you got last months. It was -17 this month.
Bob_in_MA, I think you need to read the actual release instead of listening to the liars on CNBC.
Yahoo's Market Overview Market Overview - Yahoo! Finance - The basics of investing.
says:
Just hitting the wires, the March Philadelphia Fed, a regional manufacturing survey, came in at -17.4, which is higher than the previous reading of -24.0. Economists expected a reading of -19.0.
There is a disconnect somewhere.
CR and Tanta,
You MUST start another thread immediately now that the financial crisis is officially OVER!
US financial crisis is over, says Punk Ziegel's Bove
March 20 (Reuters) - The U.S. financial crisis is over but problems facing the economy are not, said Richard Bove, financial analyst with broker Punk Ziegel, adding that this was a "once in a generation" opportunity to buy bank stocks.
"I do, in fact, believe that the crisis is over. There will be more negative developments but they will be meaningless," Bove wrote in a note to clients.
"This comment sounds ridiculous given the conviction on the part of most commentators that the worst is yet to come; the extent of the decline is unknown; and that the length of the decline is similarly unclear," Bove wrote.
"An environment has been created that will pump profits into the American banking system," Bove said.
"Investors are so focused on the potential for loan losses and the flawed valuations created by an obscenely invalid accounting rule supported by a soporific SEC (Securities and Exchange Commission) that they are missing this fact."
UPDATE 1-US financial crisis is over, says Punk Ziegel's Bove
| Reuters
Punk Ziegel? Is that a Rock Band? Well, I am glad it is all over, that was scary for a bit!
"Why did the market shoot up on this news?"
Because it means the Feds will lower rates again and the junkies on Wall Street will get their fix.
CR
Bob in Ma is correct.
My etrade also says -17.
Why that is good news is beyond me.
Cheers,
Anonymous writes:
Bob_in_MA, I think you need to read the actual release instead of listening to the liars on CNBC.
I don't listen to those idiots, apparently, you do.
If you read the release, you'd see it was the one from February. This is the March issue.
I can see why you like anonymity.
Bove was also recommending buying Citi about $15/share ago. He was shocked when they cut the dividend.
He might be right about the current situation, but if he is, I think it's dumb luck.
Something doesn't make sense here. The link to the report CR lists shows a decrease to -24. Yet, all the articles in the business media talk about an increase to -17. Further, stocks are rallying due to the better than expected numbers.
Bloomberg: "The Federal Reserve Bank of Philadelphia's general economic index rose to minus 17.4, a bigger increase than economists had forecast, from minus 24 in February, the bank said today."
Philadelphia Index Shows Fourth Month of Contraction (Update2) - Bloomberg.com
CR linked to the February report, not the March report.
Here's the correct link:
the March issue.
EVERYONE gets a gold star today....
The SPY buyers are passing them out as we speak....
Ciao
MS
Sorry, Bob_in_MA, you were right.
CR has linked to last months. Unfortunately, this time CNBC was right and CR was wrong.
I'm sure it will never happen again.
The best explanation of Bove's remarks (and some others)is that GWB's dealer has opened a franchise on Wall Street.I am supposed to buy Bank stock NOW??? Buy now or lose your chance boys,once they are BK no more stock will be available!
Has there evre been a time that someone here can remember that had as many totally opposite view lines running wild at the same time?
Deflation vs. Inflation vs. Stagflation?
Banks done with losses vs. deleveraging means big losses to come?
Stocks cheap by P/E standards vs. The E in P/E is a phantom?
Bear Stearns needs quick bailout to save the galaxy vs. Bear can operate independently in the new FED environment?
Lots of opposing views that cannot be reconciled with one another. Serious dislocations must occur. Risk is high.
Risk is high if you listen to the people who don't know anything.
CR or Tanta, please update or delete this post--it's the wrong report.
My real-time quote says the 13-week T-Bill yields 0.25%.
0.5% represented a 50-year low. I have no idea what 0.25% represents...
http://finance.yahoo.com/q/bc?s=^IRX&t=6m&l=off&z=l&q=l
Maybe my real-time feed is just confused.
Slightly OT, but what type of business happens in Philly anyway (besides sandwich sales)? Really, off the top of my head, I cannot think of why the city is relevant at all anymore (except for sandwiches and history). Maybe the Philly Fed should be moved to some place else like Las Vegas.
stealthwii said: "...I don't think inflationary pressures are behind us, so might it be a good time to pick some up?"
Inflation pressures are going to ease at this point in the cycle.
So, in the "may as well be hung for a sheep as hung for a lamb" department: No recession in 2008 and easing inflation pressure in 2008.
Sebastia
At least some part of the perverse response to the March Philly reading is that it is better than the Bloomberg median estimate of -19 (though not by enough to really mean anything) and far better than a stupid story that was circulating prior to the release that the number would be -33. There has been a pretty clear tendency for data rumors to be the wrong way lately, which I take as evidence that those rumuors are nothing more than some jerk trying to swing prices around by lying.
Looks like there's absolutely no correlation between this index and recessions.....
Where's a Wright Model B when ou need one.
I guess Dick Bove thinks the banks will do great in a recession with all that commercial loan and RE exposure....
I am so damn sick of this. Since summer nothing but bad news every freaking day. and yet, most of America is blind to this. All they see is their gas and food prices go up. If Nuriel is right (and I dont doubt it) there wont be lines at the banks waiting to withdraw money, there will be looting and anarchy. Our local branch of America has 3 ladies working in it. They will be toast when the masses come crashing through the door.... We will be witnessing insanity, national guard in the streets and god knows what else. Now I know why my friend and his wife are moving to Costa Rica. I wish I had the money to do the same. I am beginning to get real scared. scared and sick. Thanks George, Cheney, greenspan , Paulson et al. Good job.
Sebastian,
In the comments to the Architectural Billings Index, you were offering outdated construction spending data as evidence that everything is dandy. If you can't even get the data right, there really is a question about the ethics of you running around touting your views on the economy. Somebody new to this place might mistake you for something other than a broken record. When you start getting the data right, maybe you'll deserve a place in the chior.
I thought I was the only one feeling this way. Welcome compadre'. I have lost much weight since the summer, am probably going to lose my job/career in the coming months, can't sell my house to move into an apartment and have had to use my retirement money for medical issues/ payments. If things go the way they seem to, I and my family will have to move in with relatives, etc. because we will be homeless. Every night i ask my wife if she found a miracle that day. No miracles. I wish I was in a nursing home with dimentia so I wouldnt be experiecing the daily pain that I now am. My wife is the pillar, but she is cracking under the stress,also. I can go on. Once an executive, soon to be a bum. I surmise we aren't the only ones out there.
in_the_trenches said: "Looks like there's absolutely no correlation between this index and recessions..."
I keep trying to point out that the economy either has to be hit with a haymaker that knocks it out in one blow, or a good one-two punch where it gets hit hard again before it has a chance to recover from the first blow.
Housing wasn't big enough to be a haymaker, and the second blow from the one-two (like serious weakness in other sectors) didn't come quickly enough.
Sebastia
Sam, you should have bought some health insurance. And if you want to sell your house, lower the price.
Just curious: how many cars and TVs do you own, Sam?
k harris said: "...If you can't even get the data right, there really is a question about the ethics of you running around touting your views on the economy."
Well, no worries then. I'll be proven wrong soon enough.
S.
CNBC reporting Barney Frank calling for a 'Risk' regulator. I say just have current regulators do their jobs.
Nemo,
I have no idea what .23 on the 13 month treasury means.
I'll be headed to the bunker now.
Cheers,
sebastian recently admitted he expects to be paying off his mortgage until his death.
Beware of financial advice from someone who couldn't figure out how to do better than that.
looks like a run on the bank for T-bills is going on:
^IRX: Technical Analysis for 13-WEEK TREASURY BILL - Yahoo! Finance
FFDIC,
Check.
Cheers,
Mable Jensen of Dubuque, Iowa
My price is the lowest in the neighborhood, but the inspector found a structural problem and I have to disclose that or I can be sued. Hence, no buyers. I have 2 cars. I drive a 1986 mercedes deisel with 350k miles on itand my wife drives a 1996 subaru with 120k. I have one 12 year old tv and my son has one of those 199 dollar specials. we havent gone out to eat in over a year and we are very frugal. Does that answer your question?
You are starting to see forecasts (FedX, Starbucks, car sales) that recognize continued weakness in U.S. economy into at least early 2009. The "2nd half bounce" story is fading away.
But bottom-up earnings forecasts still are wildly optimistic for the 2nd half. There is today probably the greatest disconnect in modern times between economic realities and earnings forecasts.
It makes you wonder why.
Why is it so important to artificially prop up the U.S. stock market?
And how long can the props last?
Every asset class in the world is falling...except U.S. stocks.
Sebastian,
Think of this era as the mirror image of the nineties: instead of a vibrant economy that could shrug off industry retrenchments(like textiles over in Mt. Pilot) due to massive productivity gains; today we have an economy that no longer has the productivity gains to mask these retrenchments.
On top of that, to cover up this weakness we brought consumption forward in a big way and for all that e had below population trend growth.
Mable Jensen of Dubuque, Iowa
I have health insurance and they denied tens of thousands in claims. I pay 1200/month for a family of 3. I am fighting them now to no avail and attornies cost too damn much.
What is this 13 week T-Bill thingy? A 70% drop of anything in one day must mean something. Any ideas out there? Sebastian, I am sure this means good things for the economy going forward.
12th percentile said: "sebastian recently admitted he expects to be paying off his mortgage until his death.
Beware of financial advice from someone who couldn't figure out how to do better than that."
According to the bears, I'm shooting par.
I have a house and can make my payments for the indefinite future.
With interest rates this low and long-term investment returns this high, people ought to be borrowing all they can.
S.
Sebastian -
The housing haymaker aint over yet.
Neither is the credit contraction haymaker.
The corporate haymaker and commercial real estate haymaker will be the story of Q3 and Q4 of this year.
Business is slowing and budgets are being cut back - we are cutting back all hiring plans and have gone back to all of our managers for cost/headcount reduction plans. We've also cut back on our cap ex budget and are contemplating space rationalizations.
I talk to many business operators out there and our thinking is a very common theme among them. I had one CEO (who's 60 years old and been in a variety of manufacturing businesses for 4 decades) tell me last night that he thinks this contraction will be much longer and deeper than anything he's experienced in his career. This comes from someone who has made alot of money for himself and those that have backed him as a CEO for the past 20 years. I have also found his advice to be spot on during that time.
We'll see what happens but we're preparing for the worst because the trends we're seeing are very bad and imply this cycle has much further to go.
Commodity prices tumbled across the board on Thursday as investors retreated into cash.
Others seeing no end to financial instability have taken their portfolios back to neutral, which for many including U.S. investors means selling commodities and moving into cash.
Frances Hudson, global thematic strategist agrees there is an element of safety in the move to cash, but thinks the falls in oils and industrial metals are also to do with expectations of a U.S.-led global economic slowdown.
"A lot is being touted on the U.S. slowdown and maybe its also a reaction to how far commodity prices rose," she said.
Part of the gain between the middle of January and early March was due to new institutional and speculative money, which led many analysts to replay the de-coupling theme.
But the idea that emerging markets would be able to withstand a U.S. recession is too optimistic.
"I've never really bought the story about the de-linking of Asia," Morley said. "If we are heading into recession, which we are, and economic activity declines, then at some point the demand for commodities will also decline."
Closing long positions in commodity markets also spread into soft commodities, which have recently jumped to new highs.
My thoughts about gold...
GOLD = Beanie Babies
Only less liquid and supplies concentrated in the hands of CBs that can SELL at will.
And... Seb says credit crisis over. What a bright guy. CDS market on the verge of discovering what actually paying on the contracts is all about. Wait until those failures hit with no prospect of Fed bailouts.
JJL said: "Sebastian, I am sure this means good things for the economy going forward."
If only we could borrow at .25%.
S.
True enough!
Yeah, throughout history, people have turned to Beanie Babies as a store of value in times of crisis.
Sam, I agree with you completely. You're toast.
But you can still say you drive a Mercedes, right?
Amigos and amigahasses,
This is the story:
"It is the absolute flight to safety," said Bryan Taylor, chief economist with Global Financial Data in Los Angeles.
"People are just scared that non-government debt is risky," said Taylor, whose data shows the 3-month T-bill yield has not been this low since 1947.
Sebastian,
Think of this era as the mirror image of the nineties: instead of a vibrant economy that could shrug off industry retrenchments(like textiles over in Mt. Pilot) due to massive productivity gains; today we have an economy that no longer has the productivity gains to mask these retrenchments.
On top of that, to cover up this weakness we brought consumption forward in a big way and for all that e had below population trend growth.
I am wondering why I never see any blog entries that aren't negative? Surely, there are positive developments that occur as well, but they never make it onto this fine website.
Mable Jensen of Dubuque, Iowa
But you can still say you drive a Mercedes, right?
What an arrogant ignorant statement.
TooOneSided,
Bush is positive.
CP 30 day spreads collapsed by about 1/3 since yesterday - all is well or the desperate borrowers now have access to another source of funding?
Oh yeah, CP balances declined again...
It's been below zero without a recession, but it's never below -20 without one. (-20.9 today)
sam, you pay 1200/month in health insurance?? i'm from the UK so don't know what prices are like for that, but that seems insane. here in the UK, you can get private cover from $250 a YEAR or so (although NHS is fine).
wow you guys over in the US must get ill a lot, why not just not pay it if you're broke and healthy?
Corporate debt is incredibly risky.
But the U.S. stock market is flying up.
Explain that to holders of Bear Stearns stocks and bonds. Stockholders got wiped out. But bondholdes may do just fine.
Among smaller, highly-leveraged and risky companies, there are many more Bear Stearns to come. Not just in finance, either.
The disconnect today between valuations in risky corporation debt and equity have not happened in decades. It's all driven by speculation and leverage.
in_the_trenches said: "We'll see what happens but we're preparing for the worst because the trends we're seeing are very bad and imply this cycle has much further to go."
Here's another concept I can't generate much interest in: Your preparation for an expected slowdown affects the outcome.
If you were ignorant or in denial of a slowdown, that would have a different affect.
In 2000, who was battening-down the hatches for rough weather? At the peak of the housing market and during the beginning of the slide, who was being cautious?
Nobody. It makes a difference.
Sebastia
rich,
Are you making the case why people should be buying ETFs that short the market?
I believe this will be a global recession and everybody gets hurt, but because of the huge USA debt burden compared to the surpluses in Japan and elsewhere, the dollar will remain under pressure and not repeat its past safe haven status. Why place your hard-earned credit with a hopeless debtor in a credit crisis? That doesn't make sense to me.
TooOneSided,
Apparently you haven't been here long enough to see any of Seb's or O-Joe's posts. Feel free to step right up with some of the good news you feel we're missing.
Sam-
"mable" is a douche.....it seems that when people come here with real stories, some of these people here always find a way to insult.
Reality is still wrong according to some here.
Ciao
MS
rich
i would have to say that there is indeed a PPT. i follow the dow/sp everyday, all day and i can tell u that no waterfall declines are ever seen. each significant decline is "caught" by the invisible hand. the only steep drop i can remember the last 3 yrs was about 3 mo ago or so when a rate cut disappointed and we immediately dropped 300 or so pts. even that was caught in the end.
OTOH i can site numerous examples of straight up rocket shots esp. in the last hr that are unfettered.
its enough to make u want to be a bull. or perhaps i am "bullheaded" about the financial mess we're in and that eventually the PPT will fail.
i look forward to the day when this is uncovered and someone goes to jail.
With the FFR at 2.25 banks should be able to offer competitive short term CD's well above the 0.25% rate for T-bills. What this indicates is that either banks are severley base capital impaired that they can't issue new debt or that the potential investor is calling for a heavy risk premium of bank issued CD's over T-bills.
Either way not a good sign for the banking system.
jp Morgan insider trading
http://wikileaks.org/wiki/Whistleblower_exposes_insider_trading_program_at_JP_Morgan
Paulson to meet w/ soveriegn weath funds (Sing and Abu)
I believe US currency will again be a safe haven. It might take a few years, though. Developing/emerging economies have a lot of growing pains to endure before they become safe. It is okay to be fearful, but the demise of the US is a little too panicky and premature, in my opinion.
traderboy writes:
sam, you pay 1200/month in health insurance?? i'm from the UK so don't know what prices are like for that, but that seems insane. here in the UK, you can get private cover from $250 a YEAR or so (although NHS is fine).
traderboy, that's the magic of or free-market health care system! Sure, we spend twice as much as other developed economies, have administrative costs several times the worse run nationalized systems, and similar, or worse, outcomes. But those are the costs of freedom!
Don't get me started...
The flight into T-Bills is a flight out of cash and MM accounts. This is a huge deflationary move.
Reuters
Citigroup cuts 2,000 banking, trading jobs
Thursday March 20, 11:00 am ET
By Jonathan Stempel and Dan Wilchins
NEW YORK (Reuters) - Citigroup Inc (NYSE:C - News) is cutting about 2,000 more investment banking and trading jobs, a person briefed with the matter said, as the largest U.S. bank moves to lower costs after subprime mortgage and credit problems led to a record quarterly loss
idoc-
they are all in it together....when these "banks" all have the same desire ...."up" it's mot that hard to accomplish...especially with retail largely on the sidelines.
If they manage to keep it propped into May than we willmost likely get a repeat of last summer when low volumes were used to inflate.
It's a travesty and needs to be stopped...how do do that remains the burning question...
Any idea's out there??
Ciao
MS
energyecon - I thought the num was 1600 or so I was wrong
Sam,
I feel sorry for you. Looks like you got hit with multiple blows at the same time.
It's time you started guiding the ship down instead of letting it go into an uncontrolled landing. Talk to a bankruptcy lawyer.
I'm guessing your lender isn't going to be anxious to foreclose on a house with a structural problem. Your cars and most everything else that you own will probably be exempt.
I'm just sorry you didn't do this before you started raiding the 401K's. They are exempt from bankruptcy and would have provided a basis for a fresh start.
I am afraid Bernanke needs to support the dollar and stop screwing around saving corrupt banks! The banks that are left standing need to come forward and plead guilty and they need to get on their collective knees and explain what strategies they have, versus allowing The Fed to crash the dollar and print more bogus money. This is a matter of national interests which The Fed can no longer help with, i.e, this is a matter of individual banks laying all the cars on the table and pleading a case as to what they have done and what they are going to do. We can no longer trust The Fed in this matter. If I were a CEO of a bank in trouble, I would have a news conference and lay out a plan as to where they are and what they are going to do, versus hiding under Bernankes skirt and waiting 2 months for another rate cut. The time to act is this afternoon -- to help restore confidence.
Negative Yields On Treasury Funds
Mish's Global Economic Trend Analysis: Negative Yields On Treasury Funds
Treasury yields on 3 month T-Bills have fallen to 1.16%. Any money market or short term treasury fund that has high fees or expenses higher than .16% is now (or will soon be) offering returns under 1%.
Any fund with fees in excess of 1.16 will be offering negative returns.
Here is an interesting story from March 11. At that time 3-month rates were 1.46%: Rate cuts pummel money market funds.
Low interest rates and high fees have driven yields on two small broker-sold money market funds below 1%. Some funds now collect more money in expenses than they pay investors. That hasn't happened since 2001.
One of the funds whose yield has fallen below 1%, BB&T U.S. Treasury money market fund, charges 1.43% in expenses and pays a seven-day simple yield of just 0.88%, according to iMoney.net, which tracks the funds. The other, Merrill Lynch WCMA Treasury fund (class 1), charges 1.5% and yields 0.95%, according to iMoney.net.
Funds with the highest expense ratios have seen the sharpest declines in yields. Typically, broker-sold B and C share classes have the highest expenses, because they impose up to 1% for marketing and distribution costs, beyond the cost of managing the fund. The average fund charges 0.55% in expenses.
"It's a good time to look at your expenses," says Peter Crane of Money Fund Intelligence, which tracks the funds. Vanguard Treasury Money Market fund is one top performer: It has a 0.24% expense ratio and yields 2.88%.
The rate on the three-month bill, viewed by investors as a haven in times of trouble, dropped 32 basis points, or 0.32 percentage point, to 0.56 percent at 5:30 p.m. in New York, according to bond broker Cantor Fitzgerald LP. It's the lowest level since May 1958.
"People are confused. They are in a reactive mode," said Lou Brien, market strategist at DRW Trading in Chicago.
It's a capital preservation trade,'' said Michael Cloherty, an interest-rate strategist at Banc of America Securities LLC in New York.The rationale is, `I'll buy a bill, I know that when the thing matures I'll get 100 cents on the dollar.'''
``The actions that have been taken so far by the Fed have not and cannot address the underlying problems in housing and mortgages,'' said John Canavan, a fixed-income analyst in Princeton, New Jersey, at Stone & McCarthy Research Associates.
See Also:
2008-10; March 14, 2008
The Corporate Bond Credit Spread Puzzlehttp://www.frbsf.org/publications/economics/letter/2008/el2008-10.html
They find that, in addition to a set of firm-specific factors, two market-based factors--the 3-month Treasury bill rate and the 12-month trailing return on the S&P 500 index--have significant explanatory power in predicting the default probability of the firms in their sample. These results suggest that, if credit spreads are primarily linked to default risk, the two market-based factors should be the only common factors in credit spreads on corporate bonds.
When photos of the Great Depression start showing up daily in the nation and foreign newspapers it's time to worry.
L.A. Times - A new Great Depression? It's different this time.
A new Great Depression? It's different this time -- latimes.com
Is the Japan carry trade blowing up on the hedge funds?
The 30-year, yen basis swap, after rising gradually away from zero since the beginning of the year, has suddenly spiked - and it seems likely that macro funds will be hurting.
The last time the swap moved in this fashion was back in the 1990s, when concerns about the Japanese banks prompted the so-called Japan premium.........
Now the situation appears reversed. Counterparty concerns about the US banks may have prompted funds to start unwinding their trades. Now its starting to look like a stampede to get out, with no bid on the swap.
FT Alphaville » Blog Archive » The America premium? This could hurt
Why did we focus on the Philly index today and ignore the leading indicators that have been negative for 5 months in a row now? Is a local index really more important than the global indicators?
3-month T-bills are at .39% right now.... yeow...
So, what does Sam want? Would he now like the government to give him some National Health Insurance? I'll bet he would. Would he like the Fed to buy his mortgage and bail him out, an idea Nouriel Roubini floated yesterday? I'll bet he would.
But then, shouldn't we all have great compassion for people who drive a Mercedes-Benz--especially the diesel models, now that diesel fuel is through the roof? I think so!
Dick Bove with Punk Ziegel was basing his comments on the assumption that the current Fed will not allow any financial intitutions to fail.
How big a net do they have?
How many can they catch before they destroy the dollarz?
T-Bills and TED-spread both are showing a highly elevated probability of a cascade default throughout the system.
The panic is intensifying.
Choose your safe haven wisely.
Can't we all just get along? C'mon Mabel and Sam. Just hug each other. You'll feel better.
Neal
this is precisely why i remain bullish on gold and commodities. the Fed will continue its destructive ways and the next step will be monetization of the debt. we are right there.
Mable Jensen--must be Sebastians mom.
Leading index shows US economy in recession, ECRI says
The Economic Cycle Research Institute, which correctly predicted the 2001 recession at a time when many on Wall Street still maintained a rosy outlook, said their numbers indicate the economic contraction is already under way.
UPDATE 1-Leading index shows US economy in recession, ECRI says
| Reuters
Put that in your pipe and smoke it Sebastian.
Sebastian -
You must be kidding? In the manufacturing world people were battening down the hatches BIG TIME in 2000. I can tell you from first hand experience across the board. Your comment that "nobody" was is absolutely ludicrous.
Mark Haynes on CNBC has blamed the 2001 recession on corporate CEOs cutting back prior to 2001 for years. His belief (and yours that business leaders create their own recessions) assumes that CEOs aren't reacting to what they're seeing in their business or hearing from their customers/vendors, but are instead acting on some whim or basing their decisions upon what some reporter says or writes. That couldn't be further from the truth and it cuts both ways. I remember hearing from bankers, economists and some press that we were going into a recession in late 1995 - but we saw nothing in our business that made us feel that way so we took advantage of others fears to expand and it worked out great for us. What we are seeing now and what we saw in 2000 is far different that what we saw in 1995.
People who are stewards for businesses and shareholders dont get paid to be "ignorant or in denial of a slowdown" - they get paid to be prepared to take advantage of opportunity and prepared to navigate successfully through a downturn.
There's no doubt that corporate cut backs will further the slowdown, but without reacting greater problems get created down the road which would be much more detrimental to the corporations and the economy overall.
Looking briefly at that chart, the next period looks to be shaping up to be worse than the early '70s.
And back then, things were bad enough that we got a national public jobs program (CETA) for the unemployed. From a Republican administration, no less. And the white middle-class unemployed definitely got their piece. I worked with the program.
Given the same employment dynamic and a new administration that isn't made of brain-deal zealots, a serious infrastructure-rebuilding or public-jobs program next year is almost a done deal.
Heliben, I was referring to the blog itself. I never see anything positive there. You sound silly with your challenge to find good news.
I just said I have great compassion for Sam. I have also said that I agree with him completely.
The world will continue on long after the US creaks to a halt.
I agree--commodities and gold.
Mable Jensen of Dubuque, Iowa writes:
I just said I have great compassion for Sam. I have also said that I agree with him completely.
Mable Jensen of Dubuque, Iowa | 03.20.08 - 12:07 pm | #
Mable Jensen of Dubuque, Iowa writes:
So, what does Sam want? Would he now like the government to give him some National Health Insurance? I'll bet he would. Would he like the Fed to buy his mortgage and bail him out, an idea Nouriel Roubini floated yesterday? I'll bet he would.
So what exactly was your point?
But then, shouldn't we all have great compassion for people who drive a Mercedes-Benz--especially the diesel models, now that diesel fuel is through the roof? I think so!
We'll, that goodness that not buying couple decade old diesel Mercedes is the key to financial success in the US. Since I don't have one it should be pretty clear sailing for the rest of us, huh?
I'm guessing Sam's situation is hitting too close to home for your comfort and you desparately need to put some distance between you and him.
Kind of like when you find out a co-worker had a heart attack at a young age. The first words out of peoples mouth is "ooohhh" and the second is "But, he was carrying a couple more pounds than he should."
Got to put some distance as you eat your doughnut at the end of your 12 hour, over-stressed day.
Errin Burnett just called the top in commodities. If we have had 10 years of malinvestment (housing bubble, finance bubble, dot-com bubble) that is a lot capital that has been lost in non-productive assets. It may have been needed in our infrastructure.
in_the_trenches said: "You must be kidding? In the manufacturing world people were battening down the hatches BIG TIME in 2000."
But it wasn't in the headlines for months on end until Hell wouldn't have it.
Nor was there a widespread, mainstream concern.
S.
I drive a 22 year old car, I never asked for nationalized health insurance. Never said I wanted a bailout. You are an evil woman. Go watch the soap operas.
I wish all the guys on this blog would get their heads out of their asses when talking about the "TED spread" and "T-bill rates" if all hell is going to break loose, why is the DOW up so much????? Can you answer that one???????
Trading halted in CIT financial, talk they are about to go BK. Doesn't seem to be effecting today's the world is a better place trade though.
Look at the spread changes between the 30 day and the 90 day:
Daily Treasury Yield Curve Rates
Something big is going down.
it looks like CR got this one wrong. Therefore, their credibility to me is S&*t! I'm moving on to places that report actual real-time facts!!!!!!
It would be nice if Sam's circumstances improved, but not at the expense of other citizens.
Welfare for the middle class is a bad idea, though not nearly as bad as welfare for greedy, piggy Wall Street speculators.
There are also people who lived through the Great Depression who might listen to Sam and say, simply:
You think you got trouble? You still drive a Mercedes.
Sam
That Mabel is an idiot. I wish the best for you and your family and all our families.
What happened in late 95/early 96? The jobless chart earlier had a nasty looking spike then and so does this chart, but no recession.
CIT news pending:
"CIT to draw on $7.3 bln U.S credit facilities to repay debt"
CIT Group Inc. (NYSE: CIT), a leading global commercial finance company, today announced that it is drawing upon its $7.3 billion in unsecured U.S. bank credit facilities. The Company will use the proceeds to repay debt maturing in 2008, including commercial paper, and provide financing to its core commercial franchises. Over the near term, the Company will continue to actively seek additional funding sources, as well as explore and execute on the sale of non-strategic assets and/or business lines.
"Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies," said Jeffrey M. Peek, Chairman and CEO. "It provides us with added flexibility and ensures that our clients have the financing they need to operate and grow their businesses successfully. We are actively positioning CIT to maximize value by optimizing our business portfolio and sizing our company to market conditions."
Mr. Peek and Joseph M. Leone, Chief Financial Officer, will host a conference call at 4:00 PM EDT today, Thursday, March 20, 2008.
Call-in Number:
U.S. & Canada 866-825-3308 International 617-213-8062 Access code CIT Group
Mable's favorite author is Ayn Rand.
Mable Jensen of Dubuque, Iowa
would you care to comment on this. You seem so smart..
they played music on the deck of the Titanic while it sunk. The TED spread (2.14), 13 week treasury, and 2 year treasury yields indicate at least fear of a sinking ship by ANY HISTORICAL comparison known to mankind. yet the PPT paints a pretty picture (plays music) with the equities rallying (while the ship is sinking)...
is the ship still sinking while the PPT plays music to the unsuspecting masses ? this is a joke (funny), a farce (ludicrous) and dangerous (tragic) all at the same time. A comedy that ends in tragedy...
at some point, the disconnect between the marching orders as it relates to the PPT and manipulating equity indices and the economic, fundamental, logical and credit realities of right now have to reconcile themselves.
CIt is down big today. Has the stock opened up yet??
Mable's just mad because the river overflowed into her property..She'll find out that the Govt. doesnt have any money to loan for natural disasters..Mable your kind is what got us here. Have some empathy with your greed..
Turkish Daily News
U.S. Mortgage crisis hits Turkish marble sector
http://www.turkishdailynews.com.tr/article.php?enewsid=99353
Borders is done:
Borders to Consider Selling Itself
I am looking at it. And I can think of only one explanation.
Money market funds are anticipating a run on the bank.
Mabel
that is an old name . you must be in your seventies. Has dementia set in or are you always this crotchety. Shut up, woman.
m, Your apocalpytic vision may very well come true.
max & rich - someone is hiding something and a few people in the know are aware of a big bank in trouble...
rich
explain that to me.
Fed adds another $24B via 7-day repos, in addition to the $5B 14-days earlier.
The index of leading indicators fell -0.3% in February : its fifth consecutive decline as the 6-month growth has held below -1% for four months -- both recession warning signs the leading indicator is intended to detect.
During the last seven years under Bush, household debt has doubled, and manufacturing jobs have fallen below 1945 levels. The national debt has risen 300 percent. According to Paul Craig Roberts, former Assistant Secretary of the Treasury for Economic Policy, this is the profile of a third world economy.
David M. Walker, Comptroller General of the US and head of the Government Accountability Office, in his December 17, 2007, report to the US Congress on the financial statements of the US government noted that "the federal government did not maintain effective internal control over financial reporting (including safeguarding assets) and compliance with significant laws and regulations as of September 30, 2007." In everyday language, the US government cannot pass an audit.
Moreover, the GAO report pointed out that the accrued liabilities of the federal government "totaled approximately $53 trillion as of September 30, 2007." No funds have been set aside against this mind boggling liability.
Just so the reader understands, $53 trillion is $53,000 billion.
Frustrated by speaking to deaf ears, Walker recently resigned as head of the Government Accountability Office.
As of March 17, 2008, one Swiss franc is worth more than $1 dollar. In 1970, the exchange rate was 4.2 Swiss francs to the dollar. In 1970, $1 purchased 360 Japanese yen. Today $1 dollar purchases less than 100 yen.
A Bankrupt Superpower
The Collapse of American Power
By PAUL CRAIG ROBERTS
Paul Craig Roberts: The Collapse of American Power
*
What happened in late 95/early 96? The jobless chart earlier had a nasty looking spike then and so does this chart, but no recession.
Ummm, the Internet....
In '96 there was a confluence of events that helped us avoid recession. We had the Russian debt defaults followed by the Asian financial crisis. Tons of money flowed into the US looking for a safe-haven and the Internet gave it a place to go.
It allowed for a lot of non-inflationary growth.
can someone link me to the TED spread?
Coming soon to a bank near you (USA)?
Controls on bank transactions and foreign exchange.
It's a possibility ... especially as US banks start running
dangerously low on reserves.
You who can only throw insults at Mable are saying more about your own character than about Mabel. If you disagree, disagree. Insults and sarcasm are unwarranted.
sebastian was going on and on about the TED spread being a "major indicator" of things looking good. I notice now that it is no longer in his favor he doesn't metion it...
Here is a link for TED spreads.
Bloomberg.com:
Personal Finance
that is an old name . you must be in your seventies. Has dementia set in or are you always this crotchety. Shut up, woman.
Mable Jensen of Dubuque Iowa was the name of the fictional person that I suggested was now backing US mortgages (since so much of the Fed's holdings is now mortgage debt).
It seems she took on a life of her own as a troll.
thanks Sniglet
whats fascinating to watch is the continued strengthening yen since 7am and a stock mkt defying its usual correlation.
Bankrate mortgages rates spiking.
Mable Jensen of Dubuque, Iowa
All I can say to you is this.
How dare you speak down to Sam. he has posted here before and is quite educated. He was smart to buy a mercedes deisel in 1986. I own a 1984. Sam has 350,000 miles on his car , I have 420,000 on mine and they need very little maintenance. How many cars or pickups in your case have you gone through in that time? I used to like dubuque, but you have put a bad taste in my mouth.
Shame shame shame.
Consumer and small business finance could be the next shoe to drop.
I guess they can't get bailouts from the Fed.
CIT makes unsecured loans to consumers and they lease things like copying machines to small businesses.
Not great collateral for a credit crunch.
Disregard all the CNBC talk that the crisis is over.
Not one of them predicted the current environment.
Everyone who predicted and explained where we were headed several years ago says that we are no where near the end.
CIT announces it is on it's last breath, credit spreads are shooting to the moon, and the markets are happy (stocks are up!). All is well with the world.
Not great collateral for a credit crunch.
Nope. Not with ads like this becoming common:
Okifax 5680 Fax Machines (2) - $300 350
Scotty and doc are curious as to what that unsecured stuff is linked to??
Crispy&Cole said: "sebastian was going on and on about the TED spread being a "major indicator" of things looking good. I notice now that it is no longer in his favor he doesn't mention it..."
Must have been some other bull.
I have no interest in the TED spread, don't chart or follow it, and to my knowledge never mounted a serious defense of it as an indicator of anything.
Ask me whatever you want about the Treasury yield-curve, though.
S.
Another reminder of what people said:
----"This is not what a recession looks like....no way!" Mike Green and Jim Benham show 11/16/07
----Mike Green: "Wallstreet thinks things are bad, but in reality things are very good!!) 12/18/07 Dow at 13323 Das at 2596, S&p 1454
----"I have a real problem with people not using facts in basing their opinions."
Pat Powell, Powell investments (Reference Peter Schiff's opinion
we are in a recession right now 11/22/07)
----"all the bad news is priced into financials" Mike Green and Jim Benham show 12/14/07
----Fred Layne (layne and Barry) "This is a great time to be a buyer of equities 12/19/07 on bloomberg.
----Donald Luskin calls the bottom for financials on 12/07/07 (VFH at $56.22 at time of call----$48.45 on 01/15/08, $47.28 on 02/29/08, $45.57 03/04/08)
----Economist Monti says there will probably not be a recession, Bloomberg 12/17/07
----Mike Green: "This is the cheapest stocks have been in my lifetime" 12/17/07
----Fed Chairman, Fred Lacker said growth for 2008 will be between 2 and 2.5% 12/19/07
----Michael Darda from MKM partners: "There is no evidence for that (recession)" "I think those who think a recession is coming are wrong, dead wrong". 12/20/07
----Bruce Kassim "We think growth will rebound rather smartly in the second half of 08" 12/20/07
----Larry Kudlow "It does not look like a recession to me!" 12/20/07
----Brian Wesbury on Larry Kudlow show, "Brian Wesbury is not seeing recession, so add me to that list" 12/20/07 (Estimated 3.0 real growth next year, while Roubini estimated -1.5% 2008)
----Buzz Zaino, Royce & Associates: "I think the spring will see a rise in homebuying, why wait until 2009, the early buyers will get the best deal." "I think we've seen the bottom (housing stocks)" 12/26/07
cont,
These were written down as they were said.
----Richard DeKaser National City Chief Economist: "I think the first half of 08 will have GDP at less than 1% with a rebound to 3% in the second half of 08".
----Joe Brusuelus "I see an average growth of 2.1% for 2008. I think we will skirt a recession." 01/02/08
----Paul Kandel "I think we skirt by both a recession and stagflation and just see slow growth for 2008." 01/02/08
----Mike Green "These tech stocks are the cheapest I've ever seen them" 01/02/08
----Commerce Secretary Carlos Guitierrez, "we still see growth in 2008" (this after a horrible jobs report for December)
----01/06/08 Abby Joseph Coen calls for a 14% return on the S&P for 2008 to 1650 due to avoiding recession. (Cohen loses job calling S&P on 3/17/08, replacement calls for drop to 1160 and rebound to 1300 by year's end)
----01/06/08 Colin Glingsman Oppenheimer Capital...This month (Jan) is the bottom for financials, we will have a slight recession, the stock market will be up on anticipation for 2009, the bottom for housing stocks is upon us"
----01/06/08 Jeffy Kleintop (LPL Investments) "This is a great time for stocks since they are pricing in a recession that won't happen."
----01/06/08 Brian Wesbury "I don't think we are headed for a recession"
----01/08/08 NEW YORK, Jan 8 (Reuters) - BlackRock Inc global equities
chief investment officer Bob Doll on Tuesday forecast U.S. stocks will reach record highs again in 2008 as the U.S narrowly escapes a recession.
BlackRock's Doll sees record year for stocks in 2008
| Reuters
---01/28/08 Lincold Anderson (LTL Financial) on bloomberg: "We see this as a buying opportunity (for stocks), we don't see a recession ahead".
---01/30/08 David Boss on Bloomberg after the planned 50bps cut by Bernanke: "We think equities are going to be up 12 months from now."
---02/04/08 Fritz Meyer on Bloomberg commenting on the highest insider buying in January since 1996 "I think the insiders know when to buy. I would guess that at the end of '08, the market would be substantially higher than it is now. (said S&P at 1600 by year's end was "entirely reasonable")
---02/06/08 Jim Cramer, "I'm predicting a housing shortage and a bank stock shortage...There's gonna be a housing shortage a year from now!".
---02/08/08 Joe Keeting of First American Asset Mngmt, very bullish on stocks "I think we can do 10-15% this year. I think you will see low double digit gains" on bloomberg and said "Bank of American is a good place to be right now. (BAC at $43.07)"
---02/11/08 Barton Biggs on Bloomberg "I think valuations are quite attractive, unless you think we are going into some kind of credit abyss...and I think that's unlikely".
---02/21/08 Neil Hennessy, (chronic bull, who was saying buy stocks all second half of 07), "We happen to be in good economic times but people just don't believe it.." Bloomberg TV interview/ Dow at 12279.
---03/11/08 David Sewerby on bloomberg, "there are some attractive valuations out there and the fed is easing. I think we are at the bottom for stocks." Dow up 400 to 12140,
---03/14/08 Barton Biggs on Bloomberg, (after the Bear Stearns blow-up), "The markets are trying to make a bottom here. (DOW at 11591) We think we could see a 1000 point rally soon. Sometime you have to make a stand. This is just panic and you have to buy when it's the at the worst. We are in (the market) right now."
---03/14/08 Jerry Jordon on Bloomberg, (Dow at 12951), I think you load up on (stocks) Monday, and on Tuesday....This may sound crazy, but I think we hit all time highs (for stocks) this year(2008)!
---03/17/08 Jim Paulsen on Bloomberg, "The S&P is still expected to earn double digit profits, I think it's already priced in." S&P at 1276.
---03/20/08 Dick Bove says "Punk, Ziegel & Co.'s Richard Bove says now is the time to invest in banks, any more bad news will be 'meaningless.'http://money.cnn.com/2008/03/20/news/economy/bc.apfn.financials.ahead.ap/index.htm?source=yahoo_quote
NEW YORK (AP) -- The financial crisis is over and investors should take advantage of the "once-in-a-generation opportunity" to buy banking stocks, an analyst said Thursday.
(VFH at 47.83)
Mable Jensen of Dubuque, Iowa writes:
Sam, I agree with you completely. You're toast.
But you can still say you drive a Mercedes, right?
Mable Jensen of Dubuque, Iowa | 03.20.08 - 11:36 am | #
Mable, you are one ugly individual. Do us all a favor and stay off this board.
Sam
Hang in there. I got caught in the mess in CA in '82. Went from flying airplanes and racing cars to divorce, losing my business, living in a storage place and eating out of dumpsters behind some of the worlds finest dives. Twentyfive years later I have a much better wife, comfortable home, another airplane and enough food that I am 30 lbs, overweight. The racecar is the only thing missing and I'm just too old and slow for that. You will survive and be stronger for it.
Average Joe
CNBC has turned into another gvt agency. Its sad, and Cramer with his lousy track record is laughable.
You know what these retards are also saying.....huh, do yah punk.....huh...
These retards are saying stocks are cheap!!!
AJ: You forgot Cramer's BS "No!" quote.
Are we sure that Dick Bove isn't really Karl Rove?
Panel Chair Barney Frank calls for a [expensive]risk regulator:
- NY Times
Max,
To be fair, Cramer was kinda right on that call. He didn't say anything about the stock, he just said don't pull your money out of their trading accounts. This turned out to be fine since the Fed was gonna make sure you were made whole.
All Fall Down
I thank you for your good wishes. I dont know how you pulled through but I am slowly losing my mind.
did you read this book?
Amazon.com: Art and Science of Dumpster Diving (9781559500883): John Hoffman: Books
Any relief in the market now is like the homeowner who finally locks in a fixed rate loan after fearing a pending huge reset he can't afford. However, his problems are just begginng since, yes the mortgage crunch appears to be over, but there is pink slip waiting for him at the office on Monday.
I never feared (or frankly predicted)the credit crunch as much as the pending consumer crunch.
CIT trading was/is halted. It's borrowing on its unsecured lines to keep going... every day another bomb goes off. Do we live in Dresden?
Are we sure that Dick Bove isn't really Karl Rove?
No, that's Tarl Tove.
Looks like Bidu is going to go under 200. that was some run it had. what does that say for other Chinese stocks?
Insight: The sacrificial lamb of Wall Street
FT.com / Columnists / GillianTett - Insight: The sacrificial lamb of Wall Street
Repo Market: Massive Fails
Fails in the repo market - where banks and other firms lend securities in exchange for short-term loans - occur when a security isnt delivered on time and points to the surging demand for Treasury securities, even as the Federal Reserve continues to funnel more and more government securities into the market.
Alea | Page not found
Remember, Nasdaq 5000 to Nasdaq 2100 was only palpable because it went through 1700.
Any long term bull better hope for a market crash to allow you to at least pick up SOME of your stocks cheaply.
A slightly decending or even flat line for stocks is absolutly death for a long term investor. Dollar cost averaging into propped up stocks will decimate your returns.
All this equity optimism is reason for pessimism for all long term investors.
Sam -
Good one. Brought a smile to my wrinkled face! I don't think the book was around back then but sure could have used it. You'll be OK if you can keep your sense of humor. The hard part is breathing.
"People are just scared that non-government debt is risky," said Taylor, whose data shows the 3-month T-bill yield has not been this low since 1947.
doc holiday | 03.20.08 - 11:36 am
What happened in 1947?
Oh yeah, that Roswell thing.
All Fall Down
The hard part for me is not doing something stupid like taking my life. Its gotten that bad. The medication I am on only makes it worse. I feel like I am in hell. Every where I turn there is a wall. I would have been able to have gotten out of this mess if this crap didnt start happening in the summer. I know you know what I mean when I say, I have no relief. I still cant beleive the circumstance I am in.
You are an evil woman. Go watch the soap operas.
Hey sam, weren't you the guy on another thread that was using all of this as a backdrop for why your kid couldn't get into college?
sam = troll folks. don't feed the troll.
Once again, let me repeat that I want only nice things to happen from here on out to Sam and Sam's loved ones. I've already said so.
And I feel better about saying that especially because it appears that many of you also have the same kind of compassion, except towards people who don't agree with you.
Repo Market: Massive Fails
Alea | Page not found
well worth the read and educatio
Mable Jensen of Dubuque, Iowa
You showed your stripes. Do all of us a favor and go away. Dont forget to take your spitoon with you.
"In '96 there was a confluence of events that helped us avoid recession. We had the Russian debt defaults followed by the Asian financial crisis. Tons of money flowed into the US looking for a safe-haven and the Internet gave it a place to go."
Thanks, Kicker.
m - don't feed the trolls. The two in question are trolls, and both have posted on threads under different names. Good lord, are you all as gullible as the people the watch Fox all day?
ipodius
thanks for the heads up..
Good lord, are you all as gullible as the people the watch Fox all day?
Well, I can't speak for everyone, but personally,... yes.
I don't think I'm for our government in particular bailing out anything. But I'm certainly not for doing it in an election year. The wreckage of the give-aways would probably destroy us.
While our financial system melts down I don't see any accountability. I see golden parachutes and buyouts and pleas for bailouts from the taxpayers. Im seeing granite countertops, 52 plasmas, and leased BMWs. And hearings on steroids in baseball?
I'm sorry but I want to see some pain at the top before the middle class is asked to kick in their future. I want Greenspan hushed, we've heard enough from him. I want Mozilla bleached. The OTS, OCC, HUD, FHLB, FNMA, Freddie, FHA, all the state banking regulators, the monolines, and any other psuedo private/public entity that fools with my money should have their desks outside where we can see them. I would like to see some one from NAR nailed up on a cross. I want some one to say repealing Glass-Steagal was dumb and we're re-enacting it. I want to see some kind of action taken so that this doesn't happen again 5 years from now. Campaign finance reform would be a start. Something. Anything.
We always hear nows not the time for the blame game, the recriminations can come later. Hello! The day never comes. The lenders and brokers and realtors are still out there bangin people. There are still payment option arms, no docs, no money down, interest only and securitised pools of crap. Regulators are still not regulating, enforcement is still not enforcing. Pols are still taking money from the thieves. The executive branch ah forget it.
I (the middle class) am being fleeced for trillions by Wall St and trillions by DC for some sort of war we won 5 years ago and your asking for more to nationalise the mortgage industry and investment banks. Im not feeling it.
What corruption free person or entity is going to administer this bailout? Whos going to ensure my money doesnt go right back into the hands of the bankers. Name names.
Let the thing melt. Let it go all disorderly. The people who built this country have strong enough shoulders to handle it. But were not strong enough to just stay in this feed the beast loop any longer.
from the link
Martin Feldstein, who heads the highly-regarded National Bureau of Economic Research, has said not only that contraction is under way but also that it could be severe.
ipodius writes:
Hey sam, weren't you the guy on another thread that was using all of this as a backdrop for why your kid couldn't get into college?
I have no idea what you are talking about, and I may be ugly, but I am not a troll. Oops I just looked up troll on wikipedia. great definition.
You are calling me an internet troll, big difference. Nor sir/mam I am not. There are many sams out there. My real name is Samuel but I beleive there is one posting on this blog already, therfore Sam, but I will gladly chnage my name if you wish. I do not play games. Everything I said is true.
Please stop pretending that Sebastian is a worthy opponent.
Bernanke's Own Home on Capitol Hill Shows Housing Boom and Bust
By Brendan Murray
March 20 (Bloomberg) -- The U.S. housing recession has arrived literally on the doorstep of Federal Reserve Chairman Ben S. Bernanke.
Bernanke lives in Washington's Capitol Hill area in a four- bedroom, 2,600-square-foot house he bought new in May 2004 for $839,000. Almost four years later, it may not be worth any more, according to real estate records and local agents.
Bernanke's timing wasn't the best -- values in the area peaked a year later -- and he is hardly alone among Americans living in an investment that's turned cold. His situation shows that the slump that began with distress in the subprime market is now engulfing wealthier neighborhoods, including some in the nation's capital.
Even though he's the Fed chairman, he's going to get hit -- but I think lot of people will in Washington,'' said William Wheaton, an economist at the Massachusetts Institute of Technology. The value of Bernanke's homeprobably went up to $1.1 million and it's probably back down to $840,000,'' because prices in Washington just a couple years ago ``got out of control,'' Wheaton said.
Bernanke, 54, started working in Washington in 2002, when he joined the Fed's board of governors under then-Chairman Alan Greenspan. His home purchase two years later may have occurred just before prices peaked on the Hill.
In an area of mostly brick row houses, some dating from the 19th century, Bernanke bought a new townhouse within Capitol Hill's historic district.
As Bernanke surveys the breadth of the housing slump, he won't have to venture far from home.
Sales Prices Fall
Real estate records show Bernanke's next-door neighbor's house sold in July 2007 for $880,000, 4.9 percent more than Bernanke's purchase three years earlier. A home four doors down and comparable in size and condition to Bernanke's has been on the market for five weeks at $899,000, after a failed attempt to sell for $988,000 in 2006.
That still leaves the homes of Bernanke and his neighbors worth about four times more than the median home price in the District of Columbia, as measured by S&P/Case-Shiller.
The District had been among the hottest real estate markets in the country, with its steady turnover of residents, proximity to government employers and fewer newly constructed homes than in the suburbs of Virginia and Maryland.
Home values in the U.S. capital were up 96 percent in the five-year period to the third quarter of 2007, the second- fastest pace in the country after Hawaii's 100 percent appreciation, according to figures from the Office of Federal Housing Enterprise Oversight.
`The Hill Stumbled'
Now, the nation's capital is no longer insulated from the downturn. The median home price on Capitol Hill last year fell to $545,000, from $550,000 a year earlier.
Nearly all the Hill stumbled last fall,'' said Joel Nelson, an agent on Capitol Hill with Keller Williams Capital Property.There were people who feared in 2005 that things on the Hill would just collapse like they did elsewhere in the country, but I think it's better described as reaching a plateau.''
Still, values in exclusive Washington neighborhoods such as Georgetown and Cleveland Park have held up better than in other parts of the District or elsewhere in the country.
The average sales price in the Washington area dropped to $217,780 in December, a decline of 13 percent from a record of $251,070 in May 2006, S&P/Case-Shiller data show. Washington's home prices had gained an average of 15.9 percent a year in the 10-year period ending in 2005, according to Case-Shiller figures.
No More `Froth'
Nationally, prices fell in every month in the second half of 2007, according to the S&P Case-Shiller index. The average price of a house in the U.S. was $170,640 in December, down 10 percent from a record high of $189,940 in June 2006.
The froth's come off from the standpoint that we've got a lot fewer buyers than we did last year,'' said Don Denton, branch vice president of Coldwell Banker on Capitol Hill.Prices have leveled off and we may have lost 3, 4 or 5 percent -- not bad considering the incredible run-up that we have had over the past decade.''
The health of real estate on Bernanke's block will get tested as the peak sales season gets under way next month. About 90 homes were for sale on the Hill at the start of this year, 50 percent more than the beginning of 2007, according to Coldwell Banker's figures.
It's a supply-demand equation that Bernanke himself is all too familiar with. The current crisis has many roots,'' Bernanke said in a March 14 speech in Washington.The drop in home prices in many once-hot markets is among the most significant.'
"max & rich - someone is hiding something and a few people in the know are aware of a big bank in trouble...
Crispy&Cole"
Does it rhyme with shitty troupe?
Theory 1
Models are broken.
The Great Depression: Banks were unable to adjust realtime dynamics not in the models.
Great Depression banks were basing financial dynamics which did not account for prior failures, e.g, The Civil War.
The problems with models is to assume that time based dynamics are invariant.
The two things I'm pondering today:
This is big. I have friends who work for Donnely.
Bloomberg.com
One last comment to add to the above post.
The risks of hedge funds and CMOs,SIVs,SPEs,SPVs off-balance sheet synthetic derivatives are now being consolidated to two choices, i.e, take bets in the stock market volatility and hedge bets in super safe treasuries.
Counter-productive! End result is greater risk and more losses!
off topic. this is bizarre.
Officials: Woman dies after stingray strikes her - CNN.com
CR said: "My apology, I Initially used data for the wrong month."
Not a problem, CR. You and Tanta have so much on your plates now I don't know how you keep from dropping a lot more.
Sebastia
Very strange market today after this poor information. It almost feels like some hedges were short on the stocks and / treasuries and long on the commodities. With the bad Phili news and possible lower interest rates after the FED said that they were worried about inflation, it almost feels like some hedges were taken out and shot. I guess we will hear about it in a few days. Fine for me, I will wait for the delation to stop and inflation to start.
randy writes:
I wish all the guys on this blog would get their heads out of their asses when talking about the "TED spread" and "T-bill rates" if all hell is going to break loose, why is the DOW up so much????? Can you answer that one???????
I would guess it is from people who think government with respond to a deflationary spiral with a hyper-inflationary shock.
They would rather own some productive asset than nothing.
Treasury yields are bought by other people who don't believe govt will inflate, but rather that it will let companies bankrupt en masse. By that logic stocks are a losing bet since many of them will go to zero.
In the end one group will be right and the other wrong.
sorry it should read "will respond to a deflationary spiral with an inflationary shock"
oh and also big funds are unwinding leverage all over the world, creating large price swings up and down in various assets.
A billion or two of short positions unwinding could easily send DOW soaring.
A must watch......
ECRI | News | Media Coverage
The 95-96 slowdown wasn't a result of a default of Russian debt or the Asian Currency Crisis, those things happened in 1997 and primarily in 1998.