Anonymous beat me to it! I do think there is a "build it and they will come" mentality right now. Every sprawling strip mall or glass box office building that got built in the last ten years filled up with tenants, and I suspect there is a feeling that that will continue indefinitely.
State and locall construction spending has been up the past couple of months, but only after falling hard in December and a bit more in January. As a result, it is still down from the November peak. Federal spending has fallen in 4 of the past 5 months. The federal side of things may not last, but states and locals are in a squeeze, and we can expect them to be a drag on construction sending for some time.
By the way, Home Depot cancelled 50 planned stores, cutting its 3-year capital spending plan by $1 bln.
Yep, retail, sewers, hospitals, roads, airports. If it involves a permanent structure, it's likely to be construction spending. Circus tents don't count.
Americans will be forced to save more & consume less via a falling dollar. Nominal spending will likely increase, but I doubt the amount of goods consumed will. Think of your recent gas & food purchases. This will be a LONG adjustment process.
The time lag between initial bright idea with the planning, permitting, obtaining money and beginning of actual construction is significant. When all the necessaries are in place a developer has to choose to build or cancel no matter what the market is doing and being eternal optimists, they build. We will see another quarter or two of rising commercial construction as the pipeline empties and then the bottom will fall out.
Well, the numbers depend on the breakdown of the projects, don't they? if they are for CRE only, then I'd say bad. But if the heightened numbers are for infrastructure and government building projects, then that's a good thing. Is there a breakdown by sector on where the money is being spent? Is it in vacant offices, and condo projects, or bridges, roads, schools and sewers?
That gold chart is starting to look scary.... 10:40 am
Don't be ridiculous! Glod never loses its value. Hang onto it. Someone just gave me crap the other day about how wrong I was on glod peaking a couple of months ago. So I must have been and you should buy more and hang onto it.
Maybe you should buy Euros too, as the ECB won't cut rates this year, and the Eurozone will decouple as the dollar sinks past 165, right?
Prior to the 1970's inflation, Americans had been diligent savers. America was also a more heavily unionized country during the 1970s inflation. Workers had bargaining power - a hedge against inflation.
Today, Americans have little savings, and little bargaining power. Even 4% inflation wil be devastating to the middle class. I'm already seeing & hearing the public outcry for government help. This is why I don't think the commodity boom will run as far or long as it did in the 1970s.
All the surveyors in San Diego are out of work... Many of the architects and engineers have also been laying people off or forcing people out. Not enough work. Construction is still turning along but there spigot appears to be turned off....
I think it was our current president who said "I personally believe that the middle class and such using maps will learn from this credit gluttony and other countries such as South Africa and Kentucky will change their ways for the benefit of the children."
CR said: "...However, non-residential spending in March set a new nominal record (seasonally adjusted annual rate). This is a little surprising given tighter lending standards and reduced capital spending plans - and perhaps the numbers for March will be revised downwards in the next release."
(asterisks mine)
Another one of the (many, unsupported) assumptions imbedded in the recession argument is that an "unprecedented" situation (housing "crisis", credit "crunch") automatically means "beyond the ability of the system to cope."
If things had gone the other way with yesterday's GDP release I'd absolutely be re-evaluating everything I thought I knew about current economic conditions and my assumptions.
We went through exactly the same self doubt back in Q2 '06 when RRE spending kept climbing until just before it fell off a cliff. If you have CRE lines of credit you are running them out as fast as possible to get the product finished and sold before the coming bust and/or your credit dries up. So it takes 10 quarters this time instead of 6-8. It is still coming.
Hey, maybe if things get bad enough I can buy one of the dinosaurs and start an indoor model air racing club. Use the columns for pylon racing and stuff.
Maybe they just traded in their trash at the fed? Perhaps, we, the taxpayers, are now responsible for their CA, AZ, and NV HELOCs and ARMs. I can only hope this is true as my kids really want a 54% tax rate when they graduate from college.
Sebastian writes:
If things had gone the other way with yesterday's GDP release I'd absolutely be re-evaluating everything I thought I knew about current economic conditions and my assumptions.
But, but Sebastian. Things did go the other way. You predicted with 95.45% confidence that GDP would be much higher. According to your model 0.6% annualized GDP growth Q1 '08 was a 4 Sigma event. What? 4 sigma events don't cause you to reconsider?
"anyone have any idea why all the finacial sector is up today"
Looks ike everything hasn't yet been priced into builders and financials. There must be some new found love for another bailout measure. Maybe dubya sees another spending bill he likes? hocouldaknowed? I can't remember a spending bill he hasn't liked, the shrub-brain.
mock turtle said: "50 dollars to the tip jar from the looser...i say gdp negative Q2, and you say positive...ok?"
As I've already pointed out, the bearish losers never admit they were wrong. I don't believe you'll live up to your part of the bet, so I'm declining your challenge.
hey, ipod. Newsflash for ya. I SOLD GLD @ $95 on the way down. Truth is, I simply don't like gold. Especially physical gold. My parents bought some in the '80s and I learned a painful lesson. They luckily dumped it this year. That's when I sold.
You make a good point about CRE lines of credit. I have recent, personal experiences of big banks extending new credit to dying companies. It is my belief that the banks are doing this so that they can continue to show the existing loans as performing while they try and raise capital to cover the RE losses. This type of lending NEVER would have happened even ten years ago.
I once challenged someone to wear a shock collar across the invisible fence line. He took the challenge, but I don't think he has taken on a new challenge sense. Perhaps Seb learned his lesson awhile ago.
A troll isn't someone who disagrees with your position on a subject. It's someone that is willfully baiting, and that is not Sebastian. His position is quite clear and differs from most on here. And whether you like it or not, he was right about Q1 and, so far, on the technicality of a recession.
Think of it more as stapling identifying ears tags on the bull so that the best cuts are correctly identified at the slaughterhouse. I've "steaked" claim to cuts of the 2 and 4 sigma prime variety.
mock turtle.. As I've already pointed out, the bearish losers never admit they were wrong. I don't believe you'll live up to your part of the bet, so I'm declining your challenge.
mock turtle says goodbye to sebastian
you have insulted my honor, i'm disappointed but not surprised
"I am starting to consider bets on the default of the United States of America."
What? The debt's all denominated in domestic currency. Devaluation of the real buying power implied by said debt is possible, but default would be pointless and remains utterly under the control of whomever has the printing presses. We owe dollars and we can always make more.
Elvis, If you like I'll sell you as much GLD you want @ $95.
FYI - Trading $84 and heading to $78. I'm thinking about closing it there, as long as it keeps weakening. If it comes up to $80 from $78 and stops I'll take it down to $65. Bear markets in gold tend to be pretty long and brutal.
Locally, that non-residential increase looks about right.
There are two billion-dollar-plus projects just breaking ground here and a host of merely grandiose affairs in various stages of completion. And this in a town of about 100K population, metro of perhaps 250K.
Some are restating residential/hotel components in order to satisfy the lenders, though the Waldorf Astoria obviously hasn't got that problem.
I just took a few moments to look over several of these to verify they're proceeding. Yes.
Guess the projected second half 2008 economic improvement plays a role here. I don't know that either banks or developers believe in it, but they tell it to each other.
"How should we expect this one to somehow change the value of worthless paper into spun gold ?"
Spin? Your tense is wrong. Spun. The goods were delivered, the paper sent and then recycled into claims on more future paper via the debt. Ask the Chinese and the Saudis if they think they got a good deal or not, I'm not one to judge.
This might prove to be a problem if there are further massive expansions of the debt that require more recycled paper, but given the number we're still sending to the ME I suspect that won't really be a problem.
Rob Dawg may be on to something in a end of Q rush to preerve value when they go TU.
In an earlier thread I mentioned that Centerpoint Condominiums in Tempe, AZ had stopped construction because they had run out of money, trying to find out if their other developments have stopped as well.
At one point they were going as scheduled but in January it seemed they went hogwild to make sure tower 2 got buttoned up with glass and had plumbers& electrical only working on tower 1(which was already sealed.) But it seems tower 1 is 3/4 done, & tower 2 is 1/10th done. At least the rebar won't be exposed for years like a condo tower development that happened near Chandler Fashion Square. or the Intel building in Austin.
There's a bunch of other condos scheduled and going thru the permitting process, but at this point in the credit cycle I have no idea how they'll go forward.
"When FDR abandoned the gold standard it was a default event. It suddenly took $33 to buy $20 worth of gold."
Devaluation =/= default, sir, no matter how much it hurts. A promise to pay X in nominal assets is fulfilled if you fork over X, even if X no longer buys as much Y. If you cannot or are unwilling to part with X, then you default. The difference is not merely a technicality; a borrower who is repaid per contract in nominal terms, even in devalued assets, is usually willing to extend further credit (possibly repriced to take into account further risk of devaluation, if any.) One who is defaulted against is usually more gun-shy. The debtor, in that case, has proven to be unable to honor even the letter of the agreement, never mind the spirit.
There is a valid arguement that I do accept against gold. It is that in a global recession/depression, the only things of true value are food, security, entertainment, and shelter.
Yeah? Tell it to the peasant women in India, who work in the fields wearing the one sari they own, eat only rice and grass, and wear many ounces of gold around their arms and necks. Always. Just in case.
there's only one way to reach the following...and that's to hit the tip jar.
"Tippers: Tanta and CR sincerely appreciate the tip.
Thank you!
For Newsletter subscribers:
Thank you for signing up!
Your transaction has been completed, and a receipt for your purchase has been emailed to you. You may log into your account at http://www.paypal.com/us to view details of this transaction.
Important:
The newsletter is emailed monthly from bill@cr4re.com. The newsletter may be blocked by a spam blocker or be delivered to your bulk folder. After the newsletter is sent out each month, an announcement will be posted on the blog so you can check your spam / bulk folders.
Please Note:
1) Your PayPal email is your receipt.
2) You will receive your first issue at the beginning of the next month.
3) Currently there is no automatic response sending the previous issue.
If you have any questions, suggestions, problems,
or to change your email address, please contact CR at:
Note: this is a jpeg of the email address to miminize spam.
hey mock, no offense in anything. the only way anyone truly learns is by listening to opposing points of view. if you only surround yourself with people that agree with you, you just get narrow and, in the end, screwed by the real world. that's why i don't mind ojoe or sebastian. they provide an alternative way of looking at things, no matter how much i personally hate cheery people
i am near the bottom of the smart list at this site.
i am a juvenile corrections counselor by trade...i work with gang teenagers, street kids, and criminals.
economics was my minor in college.
i'm not all that bright but i prize my reputation and good name.
i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled.
Inflation in construction goods has been cancelling, and scaling back commercial construction projects for a few years now. The credit crunch has been causing a pull back in projects. Without those tow items, comercial construction would have goen through the roof.
As it is, I don't see a one month number being any more meaningful then the proceeding two months were. It takes a long time to see commercial construction trends at a national level.
crispy&cole said: "...Also his call on New Century was great..."
A mistake which I publicly owned-up to, on many occasions. The bears typically won't behave in this straightforward, honest manner, since their focus is on posturing and not understanding.
(My apologies to any posters who do have the integrity and open-mindedness to openly "own" a mistake.)
i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled.
Wow mock. Are you sure you're not talking about one of my company's board meetings (although that fire was only a rumor)?
in my experience, the people who think they're the least smart are usually not.
"anyone have any idea why all the finacial sector is up today? "
Indymac came out expecting to see lower losses, quarter by quarter, for the coming year. This, under the current circumstances, is being taken as the first glimmer of light at the end of the tunnel.
"i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled."
A man of wide experience once told me "When the fists are slow, the mouths are fast." His mouth was never fast -- but his fists were never slow.
Could use a little more of that around here, but the nature of the Internet makes that impossible. That's why it draws so many fast mouths.
Yeah? Tell it to the peasant women in India, who work in the fields wearing the one sari they own, eat only rice and grass, and wear many ounces of gold around their arms and necks. Always. Just in case.
As Andrew Tobias wrote regarding the same (except it was French peasantry): and yet they're still peasants, this is where the argument breaks down for me.
sdtfs, just re-write it like this, and it instantly becomes applicable:
Yeah? Tell it to the prole women in Indiana, who work in the local Walmart wearing the one blouse they own (instead of a sweatshirt), eat only NcDonalds and Pizza Hut, and wear many ounces of gold around their arms and necks. Always. Just in case.
Re: the default of the U.S. gov't. it is being actively debated and considered, only they don't call it that. They just start referring to the Social Security Trust fund as "worthless IOU's". They call them that so that they can default on them later by cutting SS benefits. What the SS trust fund holds are just as much full faith and credit obligations of the U.S. govt as any T-bill or T-note held by China, Japan, PIMCO or Fidelity.
In the Denver market, we've got so many non-residential projects in the works, we need the industry to thrive. With the scope of some of what's going on, we simply can't afford for it to fail.
Hell Sam Zell is saying CRE may be a fantastic investment opportunity. Flee treasuries and invest in CRE
- Bloomberg.com
Yeah... Wonder if he can spell
Hoocoodanode????
Has non residential ever been higher than residential?
They're on to you, CR.
What exactly is included in nonresidential private construction? Retail?
Build it and they will come. Maybe.
Anonymous beat me to it! I do think there is a "build it and they will come" mentality right now. Every sprawling strip mall or glass box office building that got built in the last ten years filled up with tenants, and I suspect there is a feeling that that will continue indefinitely.
OT: savingsbonds.gov shows 0% for the new fixed rate on I bonds. I expected it to go down, but 0%? Jeez...
That gold chart is starting to look scary. Dunno, but if it breaks 780 next stop looks like $650.
State and locall construction spending has been up the past couple of months, but only after falling hard in December and a bit more in January. As a result, it is still down from the November peak. Federal spending has fallen in 4 of the past 5 months. The federal side of things may not last, but states and locals are in a squeeze, and we can expect them to be a drag on construction sending for some time.
By the way, Home Depot cancelled 50 planned stores, cutting its 3-year capital spending plan by $1 bln.
Outsider,
Yep, retail, sewers, hospitals, roads, airports. If it involves a permanent structure, it's likely to be construction spending. Circus tents don't count.
Americans will be forced to save more & consume less via a falling dollar. Nominal spending will likely increase, but I doubt the amount of goods consumed will. Think of your recent gas & food purchases. This will be a LONG adjustment process.
CR, when do we get updated MEW numbers?
Oops. You already knew about Home Depot.
This will be a LONG adjustment process.
Worth saying twice.
The time lag between initial bright idea with the planning, permitting, obtaining money and beginning of actual construction is significant. When all the necessaries are in place a developer has to choose to build or cancel no matter what the market is doing and being eternal optimists, they build. We will see another quarter or two of rising commercial construction as the pipeline empties and then the bottom will fall out.
Turner Construction--construction cost increase (percent) by year:
2002--1.0%
2003--0.3%
2004--5.4%
2005--9.5%
2006--10.6%
2007--7.7%
http://www.turnerconstruction.com/corporate/files_corporate/CI4q2007.pdf
Wsa the chart constructed with PPI or PPI deflator? Wouldn't the higer actual increases change the trajectory of the curves?
Well, the numbers depend on the breakdown of the projects, don't they? if they are for CRE only, then I'd say bad. But if the heightened numbers are for infrastructure and government building projects, then that's a good thing. Is there a breakdown by sector on where the money is being spent? Is it in vacant offices, and condo projects, or bridges, roads, schools and sewers?
I believe the new MEW numbers come out around the Flow of Funds numbers and I recall CR saying that was some time in late may.
All based on memory so I could be wrong.
What I find interesting is that investors are comparing todays environment with the 1970s, but only in the bull sense.
Commodities are booming in anticipation of a loss of purchasing power, yet bond yields are stuck in the basement.
Somebody is wrong.
Judging by how my screen is reacting, there must be another bailout wandering its way through the gauntlet of panderers in DC.
Somebody is wrong.
Angry Saver | 05.01.08 - 10:59 am | #
The manipulators can only manipulate for so long.
It can only get worse from here. Much, much worse. Hide the pets.
Manipulators have the TAF for the next 4 months and other pre-planned moves!
barely wrote:
That gold chart is starting to look scary.... 10:40 am
mock turtle agrees
yeah, i'm holding on to silver anyway as spendable money on the street...an unlikely scenario, but the stack is modest and helps me sleep.
the rest is history
all the PMs are getting hurt except rhodium...war is good for RH.. rotors in turbines and such.
3 out of the last 5 days dollar has been up against nearly all major currencies, i guess that's only part of the story.
and of course the recession is taking hold. i suspect all metals, PMs or not, in varying order will lead the commodities downturn.
whether ag or energy follow... or are even next i'm not smart enough to know.
new jobless claims are up
The residential spending graph is making a perfect pyramid.
however, after this down trend, and before the year is up gold might yet have another heyday as dollar destruction continues.
JDG,
re i-bonds, do you know what rate the inflation portion is fixed at? Thank you.
That gold chart is starting to look scary.... 10:40 am
Don't be ridiculous! Glod never loses its value. Hang onto it. Someone just gave me crap the other day about how wrong I was on glod peaking a couple of months ago. So I must have been and you should buy more and hang onto it.
Maybe you should buy Euros too, as the ECB won't cut rates this year, and the Eurozone will decouple as the dollar sinks past 165, right?
May 1 (Bloomberg) --
"Manufacturing in the U.S. contracted for a third consecutive month in April as employment shrank and prices increased more than projected.
snip
Manufacturers, which account for 12 percent of the economy,
snip
Other reports earlier today showed consumer spending rose in March, in step with higher energy and food prices, and firings are increasing.
snip
The number of workers filing first-time claims for jobless benefits rose to 380,000 last week from 345,000 a week earlier,
snip"
YEP no sign of downturn here.
Prior to the 1970's inflation, Americans had been diligent savers. America was also a more heavily unionized country during the 1970s inflation. Workers had bargaining power - a hedge against inflation.
Today, Americans have little savings, and little bargaining power. Even 4% inflation wil be devastating to the middle class. I'm already seeing & hearing the public outcry for government help. This is why I don't think the commodity boom will run as far or long as it did in the 1970s.
In any event, a painful adjustment lies ahead.
All the surveyors in San Diego are out of work... Many of the architects and engineers have also been laying people off or forcing people out. Not enough work. Construction is still turning along but there spigot appears to be turned off....
Look out below......
I think it was our current president who said "I personally believe that the middle class and such using maps will learn from this credit gluttony and other countries such as South Africa and Kentucky will change their ways for the benefit of the children."
Ipodius
sooner or later nearly everything looses it's value...and sometime later gains some, most, or all of it back...
except snark
CR said: "...However, non-residential spending in March set a new nominal record (seasonally adjusted annual rate). This is a little surprising given tighter lending standards and reduced capital spending plans - and perhaps the numbers for March will be revised downwards in the next release."
(asterisks mine)
Another one of the (many, unsupported) assumptions imbedded in the recession argument is that an "unprecedented" situation (housing "crisis", credit "crunch") automatically means "beyond the ability of the system to cope."
If things had gone the other way with yesterday's GDP release I'd absolutely be re-evaluating everything I thought I knew about current economic conditions and my assumptions.
Sebastia
anyone have any idea why all the finacial sector is up today ? some new tax benefit or other rabbit from a hat ?
WFC up 5% ? why ?
mp is right.
It is time for a new clock for Macro economics.
I am starting to consider bets on the default of the United States of America.
We went through exactly the same self doubt back in Q2 '06 when RRE spending kept climbing until just before it fell off a cliff. If you have CRE lines of credit you are running them out as fast as possible to get the product finished and sold before the coming bust and/or your credit dries up. So it takes 10 quarters this time instead of 6-8. It is still coming.
Hey, maybe if things get bad enough I can buy one of the dinosaurs and start an indoor model air racing club. Use the columns for pylon racing and stuff.
WFC up 5% ? why ?
Yal
Maybe they just traded in their trash at the fed? Perhaps, we, the taxpayers, are now responsible for their CA, AZ, and NV HELOCs and ARMs. I can only hope this is true as my kids really want a 54% tax rate when they graduate from college.
yesterday i acknowledged to you Sebastian that you were right the gdp numbers did not indicate recession.
the .6 number is not much to cheer about
then i issued a challenge... which you have as yet either accepted or decline. my offer still stands.
mock turtle wrote: (yesterday)
Sebastian
regarding gdp at .6 yep,you were right but by the slimmest of margins...
but in terms of the trend and the overall sickness of our economy you are sadly mistaken.
Hey Sebastian wanna make a (bet) no, i mean gentleman's agreement?
50 dollars to the tip jar from the looser...i say gdp negative Q2, and you say positive...ok?
mock turtle | 04.30.08 - 3:39 pm | #
except snark
absolutely mock! snark is the only item that will retain it's value over time. especially if the snark is on timeless subjects...like glod!
spike66,
The semiannual inflation rate for the period starting today is 2.42%
Sebastian writes:
If things had gone the other way with yesterday's GDP release I'd absolutely be re-evaluating everything I thought I knew about current economic conditions and my assumptions.
But, but Sebastian. Things did go the other way. You predicted with 95.45% confidence that GDP would be much higher. According to your model 0.6% annualized GDP growth Q1 '08 was a 4 Sigma event. What? 4 sigma events don't cause you to reconsider?
"anyone have any idea why all the finacial sector is up today"
Looks ike everything hasn't yet been priced into builders and financials. There must be some new found love for another bailout measure. Maybe dubya sees another spending bill he likes? hocouldaknowed? I can't remember a spending bill he hasn't liked, the shrub-brain.
Sebastian
please excuse my typing error
should read
then i issued a challenge... which you have as yet neither accepted nor declined. my offer still stands.
mock turtle said: "50 dollars to the tip jar from the looser...i say gdp negative Q2, and you say positive...ok?"
As I've already pointed out, the bearish losers never admit they were wrong. I don't believe you'll live up to your part of the bet, so I'm declining your challenge.
S.
Why continue to take the troll bait?
Greasemonkey + Killfile + [kill] = wi
hey, ipod. Newsflash for ya. I SOLD GLD @ $95 on the way down. Truth is, I simply don't like gold. Especially physical gold. My parents bought some in the '80s and I learned a painful lesson. They luckily dumped it this year. That's when I sold.
Rob Dawg,
You make a good point about CRE lines of credit. I have recent, personal experiences of big banks extending new credit to dying companies. It is my belief that the banks are doing this so that they can continue to show the existing loans as performing while they try and raise capital to cover the RE losses. This type of lending NEVER would have happened even ten years ago.
I don't trust bank balance sheets here.
This fantasy market it just annoying me..
Skf today-numbers in red..
96.46 4.66 (4.61%)
Yep all is well...
I once challenged someone to wear a shock collar across the invisible fence line. He took the challenge, but I don't think he has taken on a new challenge sense. Perhaps Seb learned his lesson awhile ago.
Why continue to take the troll bait?
A troll isn't someone who disagrees with your position on a subject. It's someone that is willfully baiting, and that is not Sebastian. His position is quite clear and differs from most on here. And whether you like it or not, he was right about Q1 and, so far, on the technicality of a recession.
Ipodius wrote
"..absolutely mock! snark is the only item that will retain it's value over time..."
Hey i knew when i typed it that the sentence had two meanings...either snark never lost it's value...or never retains or regains it's value.
i had a feeling which way you would interpret.
no problem
so maybe you and i can start an ETF snark fund!
no hard feelings as we banter back and forth i hope.
hey, ipod. Newsflash for ya. I SOLD GLD @ $95 on the way down.
The second it crossed over 1k I was out. Good for you too!
If you ever need to sell gold at $95, let me know. I'll buy it from you.
Kp writes:
Why continue to take the troll bait?
Think of it more as stapling identifying ears tags on the bull so that the best cuts are correctly identified at the slaughterhouse. I've "steaked" claim to cuts of the 2 and 4 sigma prime variety.
Sebastian wrotes:
mock turtle.. As I've already pointed out, the bearish losers never admit they were wrong. I don't believe you'll live up to your part of the bet, so I'm declining your challenge.
mock turtle says goodbye to sebastian
you have insulted my honor, i'm disappointed but not surprised
i will speak nor more with you
"I don't believe you'll live up to your part of the bet, so I'm declining your challenge."
S.
Sebastian | 05.01.08 - 11:29 am
Slap! ("You cad! I won't dignify that offer with a response!).
I'll vouch for mock turtle. Hell - I'll back him.
IT,
"I am starting to consider bets on the default of the United States of America."
What? The debt's all denominated in domestic currency. Devaluation of the real buying power implied by said debt is possible, but default would be pointless and remains utterly under the control of whomever has the printing presses. We owe dollars and we can always make more.
Regardless, we should all be using the tip jar.
Elvis, If you like I'll sell you as much GLD you want @ $95.
FYI - Trading $84 and heading to $78. I'm thinking about closing it there, as long as it keeps weakening. If it comes up to $80 from $78 and stops I'll take it down to $65. Bear markets in gold tend to be pretty long and brutal.
Locally, that non-residential increase looks about right.
There are two billion-dollar-plus projects just breaking ground here and a host of merely grandiose affairs in various stages of completion. And this in a town of about 100K population, metro of perhaps 250K.
Some are restating residential/hotel components in order to satisfy the lenders, though the Waldorf Astoria obviously hasn't got that problem.
I just took a few moments to look over several of these to verify they're proceeding. Yes.
Guess the projected second half 2008 economic improvement plays a role here. I don't know that either banks or developers believe in it, but they tell it to each other.
We owe dollars and we can always make more.
BG | 05.01.08 - 11:40 am | #
I am well aware of the printing presses.
No other country in the history of the world has been able to pull it off for more than 3 generations.
How should we expect this one to somehow change the value of worthless paper into spun gold ?
to Marcus Aurelius
thank you for co-signing my word
to Interesting Times
you are right we owe CR and Tanta much for creating this forum where we can read their most informative blogs and then post comments with each other.
i'm hitting the tip jar now.
Marcus Aurelius said: "I'll vouch for mock turtle. Hell - I'll back him."
"Sworn in by a fool and vouched for by a scoundrel...I was a lawyer at last.":)
You're not good for it, either, and for the same reason.
Sebastia
Interesting Times,
The U.S.A. has not pulled it off for three generations. It's been a one off shot.
When FDR abandoned the gold standard it was a default event. It suddenly took $33 to buy $20 worth of gold.
When Nixon abandoned the gold standard it was also a default. Just ask someone from France.
IT,
"How should we expect this one to somehow change the value of worthless paper into spun gold ?"
Spin? Your tense is wrong. Spun. The goods were delivered, the paper sent and then recycled into claims on more future paper via the debt. Ask the Chinese and the Saudis if they think they got a good deal or not, I'm not one to judge.
This might prove to be a problem if there are further massive expansions of the debt that require more recycled paper, but given the number we're still sending to the ME I suspect that won't really be a problem.
There is a valid arguement that I do accept against gold.
It is that in a global recession/depression, the only things of true value are food, security, entertainment, and shelter.
At that point I am covered too
"you like it or not, he was right about Q1"
lmfao!!
He was also right about NC real estate not going down (see Case_shiller), Also his call on New Century was great...
I'm going long on snark.
Rob Dawg may be on to something in a end of Q rush to preerve value when they go TU.
In an earlier thread I mentioned that Centerpoint Condominiums in Tempe, AZ had stopped construction because they had run out of money, trying to find out if their other developments have stopped as well.
At one point they were going as scheduled but in January it seemed they went hogwild to make sure tower 2 got buttoned up with glass and had plumbers& electrical only working on tower 1(which was already sealed.) But it seems tower 1 is 3/4 done, & tower 2 is 1/10th done. At least the rebar won't be exposed for years like a condo tower development that happened near Chandler Fashion Square. or the Intel building in Austin.
There's a bunch of other condos scheduled and going thru the permitting process, but at this point in the credit cycle I have no idea how they'll go forward.
OTOH, it could just be inflation.
"When FDR abandoned the gold standard it was a default event. It suddenly took $33 to buy $20 worth of gold."
Devaluation =/= default, sir, no matter how much it hurts. A promise to pay X in nominal assets is fulfilled if you fork over X, even if X no longer buys as much Y. If you cannot or are unwilling to part with X, then you default. The difference is not merely a technicality; a borrower who is repaid per contract in nominal terms, even in devalued assets, is usually willing to extend further credit (possibly repriced to take into account further risk of devaluation, if any.) One who is defaulted against is usually more gun-shy. The debtor, in that case, has proven to be unable to honor even the letter of the agreement, never mind the spirit.
Are you guys aware you've transformed this into an all-Sebastian-all-the-time thread? Again?
How should we expect this one to somehow change the value of worthless paper into spun gold ?
Interesting Times
Two words:
Thermonuclear weapons
Yeah? Tell it to the peasant women in India, who work in the fields wearing the one sari they own, eat only rice and grass, and wear many ounces of gold around their arms and necks. Always. Just in case.
Thanks burnside!
my word is my bond...mock turtle
there's only one way to reach the following...and that's to hit the tip jar.
"Tippers: Tanta and CR sincerely appreciate the tip.
Thank you!
For Newsletter subscribers:
Thank you for signing up!
Your transaction has been completed, and a receipt for your purchase has been emailed to you. You may log into your account at http://www.paypal.com/us to view details of this transaction.
Important:
The newsletter is emailed monthly from bill@cr4re.com. The newsletter may be blocked by a spam blocker or be delivered to your bulk folder. After the newsletter is sent out each month, an announcement will be posted on the blog so you can check your spam / bulk folders.
Please Note:
1) Your PayPal email is your receipt.
2) You will receive your first issue at the beginning of the next month.
3) Currently there is no automatic response sending the previous issue.
If you have any questions, suggestions, problems,
or to change your email address, please contact CR at:
Note: this is a jpeg of the email address to miminize spam.
Thanks again!!!
Click here to return to the Calculated Risk blog.
Thermonuclear weapons
Alec | 05.01.08 - 11:53 am | #
Not surprised.
When all else fails, take their food, take their women, take their land.
I'm long women.
hey mock, no offense in anything. the only way anyone truly learns is by listening to opposing points of view. if you only surround yourself with people that agree with you, you just get narrow and, in the end, screwed by the real world. that's why i don't mind ojoe or sebastian. they provide an alternative way of looking at things, no matter how much i personally hate cheery people
IT-I like the plural use there!
Long women! Better than short financials!
BG,
I disagree. FDR & Nixon defaulted as the original contract allowed for exchange of $ for set amounts of gold.
The terms of the contract were unilaterally changed. That is a default.
Ipodius
i am glad to listen to opposing points of view.
i am near the bottom of the smart list at this site.
i am a juvenile corrections counselor by trade...i work with gang teenagers, street kids, and criminals.
economics was my minor in college.
i'm not all that bright but i prize my reputation and good name.
i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled.
I am long mayhem.
Inflation in construction goods has been cancelling, and scaling back commercial construction projects for a few years now. The credit crunch has been causing a pull back in projects. Without those tow items, comercial construction would have goen through the roof.
As it is, I don't see a one month number being any more meaningful then the proceeding two months were. It takes a long time to see commercial construction trends at a national level.
crispy&cole said: "...Also his call on New Century was great..."
A mistake which I publicly owned-up to, on many occasions. The bears typically won't behave in this straightforward, honest manner, since their focus is on posturing and not understanding.
(My apologies to any posters who do have the integrity and open-mindedness to openly "own" a mistake.)
Sebastian
i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled.
Wow mock. Are you sure you're not talking about one of my company's board meetings (although that fire was only a rumor)?
in my experience, the people who think they're the least smart are usually not.
"in my experience, the people who think they're the least smart are usually not."
ipodius
Right. They are usually dumb.
ipod, don't you mean 'smaaaht'?
Yal,
"anyone have any idea why all the finacial sector is up today? "
Indymac came out expecting to see lower losses, quarter by quarter, for the coming year. This, under the current circumstances, is being taken as the first glimmer of light at the end of the tunnel.
Shnaps writes:
ipod, don't you mean 'smaaaht'?
Wicked pissah. Dumb like a fox.
Right. They are usually dumb.
I think, Elvis, I left my "not" dangling out there. And no one wants a dangling not. So it should be...are usually not the least smAHt.
Or, as Rob says, if you want to be Boston Proper, the sentence should read "those who say they are wicked re-TAH-ded, are not".
"i learned the value of these things standing in the middle of prison yard during a riot where things were set on fire, people were thrown from high places and... during the mayhem... scores were settled."
A man of wide experience once told me "When the fists are slow, the mouths are fast." His mouth was never fast -- but his fists were never slow.
Could use a little more of that around here, but the nature of the Internet makes that impossible. That's why it draws so many fast mouths.
That's why it draws so many fast mouths.
Bob Dobbs | Homepage | 05.01.08 - 12:42 pm | #
Still better than Thermonuclear Weapons.
Deutsche Bank Forces Staff Vacations to Avoid Fraud (Update2) - Bloomberg.com
Yeah? Tell it to the peasant women in India, who work in the fields wearing the one sari they own, eat only rice and grass, and wear many ounces of gold around their arms and necks. Always. Just in case.
As Andrew Tobias wrote regarding the same (except it was French peasantry): and yet they're still peasants, this is where the argument breaks down for me.
sdtfs, just re-write it like this, and it instantly becomes applicable:
Yeah? Tell it to the prole women in Indiana, who work in the local Walmart wearing the one blouse they own (instead of a sweatshirt), eat only NcDonalds and Pizza Hut, and wear many ounces of gold around their arms and necks. Always. Just in case.
As if Sebastian had $50!
HA!
Re: the default of the U.S. gov't. it is being actively debated and considered, only they don't call it that. They just start referring to the Social Security Trust fund as "worthless IOU's". They call them that so that they can default on them later by cutting SS benefits. What the SS trust fund holds are just as much full faith and credit obligations of the U.S. govt as any T-bill or T-note held by China, Japan, PIMCO or Fidelity.
In the Denver market, we've got so many non-residential projects in the works, we need the industry to thrive. With the scope of some of what's going on, we simply can't afford for it to fail.