I know a repo man who is working 24/7 in the chicago suburbs. I'm thinking of making an offer. My kids are moving up to a minivan now, prices are down, and any offer is accepted.
Pressed on the matter, Paulson said "I didn't say it wasn't a factor. I said I don't think it is a major factor and I don't think it's a driver."
Asked if he believed the so-called "Enron loophole" allowing speculators to trade was already closed, Paulson declined to answer.
"I think there's a series of regulatory issues that deserve study and careful consideration and we are looking at a number of these things but again the fundamental issues with energy are supply and demand," he said.
Earlier in the day, the acting head of the Commodities Futures Trading Commission told Congress the exemption has already been closed but the CFTC would be looking into changing the rules regarding a separate "swaps loophole" which exempts investment banks from limits and other reporting requirements mandated for other investors.
That's very important. As Brian Pretti makes abundantly clear, households' cash assets (he defines it as all checking/savings/money market accounts, all treasury/corporate/municipal bonds - everything except equities and real estate) as a percentage of liabilities is less than 50. Three generations ago it was 250%! This is a generational change in the publics' view toward leverage, and it's all unwinding as we type.
It's not just the big guys, there are 15 community banks in the Atlanta area with Non-Performing Assets greater than Tangible Equity. None of these banks have been sold or closed.Note that this is as of the first quarter 2008, before the Spring of No Housing Sales When the Bulders Went Bye-Bye. By now, there are sure to be more underwater community banks in the area, and the 15 aforementioned banks are sure to have deteriorated further.
Anyone know what the vote was today for the Dodd-Shelby housing bill in the Senate? Did it get enough votes to be able to override a sure veto from Commander Codpiece?
For now, they're making the case that any benefit cuts to Social Security and Medicare would "impose serious hardships" on the finances of those approaching retirement.
Maybe promising the Sun, Moon and stars to people and actually delivering are two different things.
To me this looks like the same phenomenon as people expecting NINJA loans to get paid off.
Moreover, the authors suggest that homeownership is not always an effective way to accumulate wealth, and they blame economists and policy professionals for not recognizing the housing bubble that they claim could be seen as far back as 2002.
Interesting that statements like this are showing up more often.
Yep, they have that little wealth. And that's including the equity in the house.
I'm amazed at what I hear from folks in isolated comments. I was taught to dummy up about money and say nothing. Others don't.
Without realizing the historical circumstances, they're looking at a pre-depression retirement...aka none. They'll work until their too exhausted and can't do it anymore.
I don't buy any of the boomer "we want to work because it's meaningful" crap. The finances are shot.
I talked to a friend the other day about how risky the stock market appeared to me,he has merrill managing his retirement...got a call from him a few minutes ago and 96% of his portfolio is in stocks.Boy I tell ya,there ain't nothing like having a pro handle your business...
Well at least the big banks will survive suckling Uncle Sugar's teet. That's so special, I can hardly hold back the heat from the warm glow it is causing me.
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
"I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt."
Aren't they already choking on the high level of debt they have? I kinda thought that that was the whole problem.
Paul - this is the part where the banks desperately cut credit on anyone who looks a bit risky, and then spend a lot of money trying to find people who are better risks.
I can top your five credit card offers. My father's been dead for 17 years, and last month when I went through the mail at my mother's house, he got two!!! Not from WaMu, though. He's been getting a lot of mail for a dead man.
Wamu sends me nice letters all of the time offering to loan me money.
As far as boomers. i always figured I'd have to support my parents in their retired years. Last year i asked them what their retirement was in. All index funds. My dad was retired that year and my mom is retiring this year. I convinced them to move it all out of that last summer. they are ahead ten percent or so because of that.
All of their peers (teachers), for the most part, left their money in the index funds.
My parents have a half million dollar house with no mortgage. they have around another half mil in investments. We worry about them and expect to have to pony up for health coverage of some kind. In the past three years they made a quarter mil in real estate. If it wasn't for that things would look grim. And yet, they seem to be well above the 12th percentile. It will get uglier. Despite the happy veneer.
My brother and his wife make too much money and have more than that already. Despite my advice, they went long earlier this year via the management of a pro who was taking one.five just to be wrong.
I know it's a pastime of many to misrepresent U.S. future entitlement solvency (not accusing you here), but the main problem is the disappearance of the three-legged model of retirement funding: 1)defined benefit pension, 2)Social Security, 3)personal savings.
Since most people never had or lost #1, and they've either been conned or under the delusion or both that #3 means their house, then they're almost fully dependent on S.S. That's an ongoing structural change to our economy - how the largest demographic of consumers will manage to continue consumption at anything like current levels with such a poor financial future.
Anonymouse well said, Canada is in about the same boat. We may fare a little better with our smaller population and natural resources. But there will be a lifestyle change for many.
I am sitting here listening and trying to write as the wife watches "Buy Me." The women is a boomer and is trying to sell her house so she can retire. The agent just told her that a reasonable listing price is 30k less than what the women expected.
The agent after breaking the news observes how upset the women is and tells her "Its just a house." The womens reply is "No, it is not. It is my future."
This is the future of many of my cohort. They have none. At least finacially.
About two years ago, I got a phone call from a stockbroker prospecting for business from my dad who died seven years (I'm a Junior). He'd had my dad about 15 years prior - Dad canned him. I swear to you that when I informed him of my dad's death, he didn't miss a beat and asked if I was interested.
Cold. One more reason that I manage my own money.
BTW, I had to fire a stockbroker about ten years ago. My daughter's college fund still hasn't caught up with my middle kid's, who's 3 years younger.
And in the real world department, my daughter had to be disabused of the "dead grandparent"/inheritance school of retirement planning.
We walked thru the costs of retirement homes and what could happen if she takes seriously ill. I pulled out my recent hospitalization bill for 5 days and the cost blew her mind.
But Bloomberg quoted Derek Aney, a spokesperson, as saying Killinger, as a director, received support of 88 percent of shareholders who voted at the companys annual meeting in April.
Either that was deliberately disingenuous, or perhaps the wording there was flat wrong. What percentage of shareholders supported you has nothing to do with it. What percentage of shares voted has everything to do with your well-being.
That's astounding to me. I would assume you'd have to have 10x that to even think of retiring.
[...]
From the boomer article:
:::For now, they're making the case that any benefit cuts to Social Security and Medicare would "impose serious hardships" on the finances of those approaching retirement.:::
Maybe promising the Sun, Moon and stars to people and actually delivering are two different things. - ac
Yup. And SS is barely more than three hots and a cot. Look at the pay out vs real cost of living.
That's why I say most boomers will die with their boots on - they'll be working right up to the end when their cold bodies get hauled out of their cubicles & tossed on the mail cart. Or dragged out of WalMart on a stretcher.
OT? - What leads us out of recession? Any ideas? Every post-WWII economic cycle has been led by pent up demand for housing/autos, right? Has CR addressed this in a post before? Conventional economic recession deniers claim exports plus cough will drive post-non-recession growth, but is that all anyone has? C+G+I+X = ??!?
We walked thru the costs of retirement homes and what could happen if she takes seriously ill. I pulled out my recent hospitalization bill for 5 days and the cost blew her mind.
Unfortunately, I'm one of those people that defines "standard of living" and "assets" very nebulously, not limited to concrete items. It's going to be interesting to see how deflation are going to affect the health care and education "bubbles," especially if one believes that the recalibration of global imbalances will mean that standards of living converge.
I've said it before and I'll say it again: anyone who didn't run for the hills when the PE firms started going public is a loon. Clearest contrary indicator of all time!
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
Any thoughts please?
Hello, new(?) Banker. My thought is "print plenty of money so people can pay off debts with near-worthless paper and hope nobody notices"
The ONLY thing wrong with SS is that the GOP uses the surpluses of the system (via the unified budget myth) to excuse tax cuts for the wealthy. The real crisis in our Federal fisc is that the wealthy have been screwing us all, hard under Reagan, less hard under Clinton but still, boy howdy, and hardest of all under the Chimperor.
There is no problem of solvency in SS (Medicare, however . . .) The problem is that all of us have been passive victims of class warfare fought viciously since I was a toddler.
Banker writes:
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
Any thoughts please?
Fed windows are as busy as they have ever been. I'd like to see a shred of evidence on the so called deleveraging. Maybe out of ABS/MBS, but not overall.
That's why I say most boomers will die with their boots on - they'll be working right up to the end when their cold bodies get hauled out of their cubicles & tossed on the mail cart. Or dragged out of WalMart on a stretcher.
People have a surprise coming.
You know when I think about it (according to the stories) in my family up until about the late 60s everybody over a certain age ended up living with their kids or their kids unforutnate ex-husband/wife, etc.
I have old letters from family members arguing about who will take care of whom (mostly denials of responsibility).
It's like a reverse custody battle.
I wonder if that's really been some widespread sort of significant change in the way people live in this country and if maybe we're headed back there.
There is no problem of solvency in SS (Medicare, however . . .) The problem is that all of us have been passive victims of class warfare fought viciously since I was a toddler.
Gary | 06.24.08 - 10:19 pm | #
Gary I don't think solvency is the issue - some do but I don't (assuming the country stays productive - BIG IF). Its that SS doesn't pay for crap compared to how people have become accustomed to living in most parts of the country. If they want to live better than three hots & cot then they better have serious savings or put off retirement a long time past the typical retirement ages. That's why I think a lot of people will die with the boots on - they'll have little choice.
In fact the single biggest factor keeping SS solvent will be so many older workers will keep working that they'll still be contributing LONG after the actuarial folks thought they'd start drawing down. Won't be everyone but it will be a lot of folks. It will change the solvency equations a lot.
Plus after this current bout of asset deflation is over - there will be more, many more - who will find themselves in that boat. I know some now, already.
ac [That household's wealth will decline to $113,268 in 2009, from $150,113 in 2004.
Do boomers really have that little wealth?]
Of course that value is an average. You know how wealth is distributed in the USA ? I would like to see a chart with the distribution or at least the median. 10mm are in the hole. I'll be the median is below 20k.
OK. I can agree with all of that. I actually think many people should keep working instead of retiring . . . at least volunteering or doing public service.
The retired people I know who aren't politically active or working are bored out of their frigging minds.
My MIL starting splitting a year's time living with 3 of her daughters after stressing her finances several years ago. I don't know the specifics, but the nest egg from selling the home wasn't manage too well. She spends winter months down here and it's been great for our boys since both of their grandfathers are dead and my mom is elderly and in a nursing home. Talking with my friends leads me to believe our positive situation is not the norm.
I wonder if that's really been some widespread sort of significant change in the way people live in this country and if maybe we're headed back there.
ac | 06.24.08 - 10:32 pm | #
I know for a fact at least one of my BILs will be living with us - that's fine to, he's one helluva a fisherman - good company. Plus he's lived with us two prior times - sultry, goes of into the woods by himself for days on end...
I wouldn't be surprised to see one of my kids & his family move in too or move so close by one might as well call it moving in - say we share a duplex... they are all over this valley & cheap as dirt too.
People will probably do fine... but very few will be living the Dennis Hopper CNBC TV commercial version of retirement if you know what I mean - they'll need savings for that and there isn't that much.
People will probably do fine... but very few will be living the Dennis Hopper CNBC TV commercial version of retirement if you know what I mean - they'll need savings for that and there isn't that much.
I think people tend overlook the fact that the US is still a fabulously rich country and even if we had a depression we'd still be a fabulously rich country at the end.
The real damage is going to be more psychological. People who expected to spend every other week on a cruise ship might instead find themselves doing the occasional weekend work in the WalMart Reserves.
It won't be the end of the world.
That will come with the genetically engineered crop destroying plague carrying super-weevil.
The real damage is going to be more psychological. People who expected to spend every other week on a cruise ship might instead find themselves doing the occasional weekend work in the WalMart Reserves.
It won't be the end of the world.
It sure doesn't have to be EOW - dumb policy I suppose could make it a lot worse though. We've already had some of that.
A few years ago I saw an article saying you could retire on SS if you could be satisfied living in a mobile home with only the library for entertainment. Sounds fine to me. My entertainment is cheap ('cause I'm cheap) On the other hand I'm not planning on sitting around doing nothing for the rest of my life, so why not spend it doing something I like and getting paid?
Dryfly's BIL has a place to take a shower and goes fishing all the time, well,...
did you see my thought experiment about one world currency...your thoughts.
the dollar is beyond toast
Mock Turtle | 06.24.08 - 11:11 pm | #
No I didn't - I'll wander back & look. But in general - 'yes' I agree the dollar is toast pretty much. I think we are at the sunset of the dollar reserve currency era.
Do you read Setser at all? Check the most recent entry:
A few years ago I saw an article saying you could retire on SS if you could be satisfied living in a mobile home with only the library for entertainment.
I'm assuming this article didn't expect the dollar index to sub 70.
save you the trouble of going back...it was a short simple idea
we don't worry about trade imbalances between Oregon and California (et al) because both "STATES" share a common currency.
it would seem to me...and i am not at this time advocation a one world currency (emphasis)
BUT
if the international free traders really want to implement nafta and gatt in a system that hovers around an equilibrium, wouldnt that suppose the necessity for a common currency.
mock turtle | 06.24.08 - 12:38 am | #
The fractional decrease in quality due to curved liquidity ratios that are escalating prior gross write-downs fail to compensate for the overarching quantitative curvature at the top of the physical cycle.
How we can all retire OK without db plans or house equity?
Multigenerational living in a big shared house provides instant daycare, keeps the elderly happy, and saves a bundle. They do it in China and India and Italy and maybe they have the right idea.
I figure it will by my dead body scooped up in its cardboard box habitat by street and sanitation.
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
if the international free traders really want to implement nafta and gatt in a system that hovers around an equilibrium, wouldnt that suppose the necessity for a common currency.
Mock - I think we'll get something like that. My guess it will be 'hard money' - gold & silver - because gov'ts won't be able to agree on the next reserve currency.
BTW - I am NOT a gold bug and don't even own the stuff except for the wife's jewelry (and not much of that).
But countries holding USD for reserves will have been so badly burned by this $$$ collapse I have to think they'll want some back up - and without an agreed alternative reserve it will end up being 'metal'.
However it won't be a true metal standard since the currencies will all still float against each other & gold/silver. Instead gold/silver will become the new 'reserve currency' instead of USD.
I'd still expect most reserves to consist of a basket of 'paper fiat' & gold mixed (like now) with some dollars included - except the dollar will fall in prominence & the metals will move up a lot. No other country wants to be the reserve currency & go through what the US has (deindustrialization) so I don't see a different fiat based reserve stepping up anytime soon.
The idea that retirement is going to be based upon multigenerational kiving is going to run into a problem given the number of people without children.
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
Hard to say what the boomers will do. Did anyone predict the hippies? Disco? And then they turn around and become the yuppies? From all you need is love to SUV's, that's a change. Odds are you're right, but there's bound to be some "shocking" change in mindset. Maybe we'll all volunteer for the Peace Corps or become religious missionaries, who knows?
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
Vader | 06.24.08 - 11:33 pm | #
because gov'ts won't be able to agree on the next reserve currency.
Perhaps some international business bond thought up by a financial engineer? Mix a little of this and that and if the big multinationals can form an unofficial bank voila!
"Instead gold/silver will become the new 'reserve currency' instead of USD."
Can't happen soon enough,and it doesn't even have to be gold or silver, just someting that can't be printed at will.
The clear lesson I draw is that there is a high premium on doing what we can to minimize the risks and to ensure that there is time for orderly adjustment. I'm not suggesting anything unorthodox or arcane. What is required is a willingness to act now -- and next year, and the following year, and to act even when, on the surface, everything seems so placid and favorable.
What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still higher. Surely we would all be better off if other countries did their part. But their failures must not deflect us from what we can do, in our own self-interest.
A wise observer of the economic scene once commented that "what can be left to later, usually is -- and then, alas, it's too late." I don't want to let that stand as the epitaph of what has been an unparalleled period of success for the American economy and of enormous potential for the world at large.
Paul A. Volcker The Washington Post, Sunday, April 10, 2005
continuing to look for investments that are not dollar denominated nor dollar dependant
Tried to explain to a friend of mine that if she had converted $100K to Brazilian Reals and stuck it under her mattress five years ago, she would have $200K today. Americans don't have any clue about dollar depreciation, that's why it's never mentioned on the news.
You and Warren Buffett both. It might actually wake up America if the Oracle of Omaha went around proselytizing like Boone Pickens.
Mostly lurking, too many folks smarter than I are posting. I am too smart to post and let the true extent of my intelligence be known.
We could become a nation of small shops with the token boomer sweeping the floors and greeting or major corporations with a boomer concierge on each floor or perhaps Cracker Barrel will have live old geezers around a barrel iron stove as part of an interactive display.
OTOH I recall two sci-fi stories from my teenage hood. One New Father Christmas by Brian Aldiss where the old folks were swept up at Christmas and taken off like old broken toys. Or another one, whose name has vanished about a government program which put the homeless and destitute in the homes of the not homeless and destitute.
Thanks for the Setser link you posted, and I'd suggest that others follow on to the Reuters (Guardian) article linked therein, perhaps even before reading the rest of the Setser. Good background.
Anecdoteally, I can tell you that increased reserve requirements in China are impacting a lot of capex, and even some material trade financing, among smaller Chinese businesses.
Adding to that the inexorable increase in RMB, and exporters are really under the gun. Must increase prices or hang it up.
The switchover to doing domestic business cannot come too soon for most businesses, and for all the rest of us too, come to think of it.
What then replaced purchases of debt securities on Chinese bank balance sheets? More bank lending abroad. Bank loans (other investment in the balance of payments data) increased by over $140 billion. I wish I knew who Chinese banks were lending to. Figure that out, and I suspect you can figure out a lot.
During the height of the Weimar inflation in 1923, Russian Czarist rubles (pre-1917 revolution) circulated as cash in Germany and their value was quite stable. That's because the deposed Czarist regime wasn't printing any more of them.
Obviously, banks like Bear, JPM, LEH, WM and anyone afraid to disclose too much at The Fed Discount Window (where Warsh & Bernanke are playing dumb) and risk exposing Level 3 reality.
Japan's stocks fell, sending the benchmark index to its longest losing streak this year, on mounting doubts about the financial health of developers and consumer-finance companies.
Mitsui Fudosan Co. led real-estate companies to their lowest in three months after a smaller rival filed for bankruptcy, while consumer lender Aiful Corp. tumbled by a record. Mazda Motor Corp., which exports 80 percent of domestic production, sank to the lowest in a month on signs the U.S. economy is slowing.
Aiful Corp. fell for a second day in Tokyo trading to the lowest in a decade, leading consumer finance companies lower after Lehman Brothers Holdings Inc. said the lender's parent company may be insolvent.
Aiful, Japan's largest consumer lender by assets, plunged 14 percent to 1,292 yen, the lowest since the company was listed on the Tokyo Stock Exchange in 1998, at the 11 a.m. trading break on the Tokyo Stock Exchange. Takefuji Corp., the third-largest consumer lender by market value, fell 6.6 percent to 1,627 yen, also the lowest in a decade.
30 billion in credit losses are truly a figure that is hard to believe and incredible to cope with so let's give time to the time to learn how this comes to an end.
Although Conjure and I have never been political, we are thinking about dabbling on the long side, given the current consumer expectations number, and investing in America's Bavaria.
You know, like buying some uniforms, Feldstiefeln and Blutfahnen for some of the southern evangelical groups. They'd be grateful and possibly discover a side of themselves they'd never known before, so a small investment could produce a huge payback.
The southerners have come a long way. They're not the ones to watch. It's the folks who are moving to the isolated areas to get away from the rest of us.
Well, I guess I'm one of the few here who is actually in retirement mode. Personally, its not bad. I do agree that you've got to do something though to keep busy. For me, I'm working on a MA in history (something I've always wanted to do).
But living on social security only? No Way!!! It pays surprisingly well (to me anyway), far more than the $5k-$10k a year that I was thinking several years ago. Even so, I don't see how anyone could actually survive on it only.
And I can't even envision a couple thinking they'll make it on the equity in their house, moving to a cheaper part of the country (hint - some areas are less expensive than others but they all cost).
I could see a real, a very real drop in lifestyle and standard of living for a lot of future retirees.
You may be right about SS and Medicare. But, you forgot the "silent" elephant in the room -- Medicaid, which pays for nursing homes for the poor. A boomer with $80-160K has 1-2 years in a nursing home before they exhaust their assets, and Medicaid takes over. Then, the government takes over.
Medicaid is typically paid by state and local governments. Which is us, the taxpayer.
And in terms of nursing homes, I see that as a more likely outcome for more retirees. Diseases are becoming chronic conditions, and many elderly I know tend to linger for years in this "downward sprial" -- not well enough to take care of themselves unaided, but not exactly knocking on St. Peter's Gate anytime soon.
`Should the euro stay beyond its five-day moving average, and should the average show the upward trend, the euro will have a high chance to reach its record high set on July 23,'' said Hashimoto at the unit of Japan's largest publicly traded financial group.
Europe's single currency traded at 167.82 yen at 11:58 a.m. in Tokyo, from 167.85 in New York yesterday, when it touched 168.38, the weakest since July 23.
If the euro rises beyond 169 yen, it may climb to 173.60, which is a 123.6 percent reversal of its decline to 149.27 on August 17 from a high of 168.99 on July 23, based on a series of numbers known as the Fibonacci sequence, Hashimoto said.
Other Fibonacci points are 38.2 percent, 50 percent and 61.8 percent. A break of one indicates a currency may move to the next, and a failure suggests a decline or a gain may stall.
Medicaid is typically paid by state and local governments. Which is us, the taxpayer.
While Medicaid is administered by the states, it is a federal matching program, ranging from 50% to 80% federal. In a way, this setup is terrible because the states see the Medicaid grant as "free" money, and have no incentive to contain its costs.
Japan looks like it is falling apart, sort of like 15 years ago
I don't see how. There exports are booming. Their workforce isn't as moribund as it was during the 80s. Their companies are the go-to guys for China and India. If that is falling apart then the US is living on a battery powered life support machine.
Boomers will just get to lie in the bed they made by continuing to vote in Republicrats. Unfortunately the MSM in the world is still trying to keep people in darkness. Lately seen a lot of MSM reports on the RIAA/MPAA cracking down on young people, yet they never explain to our parents how us college students managed to obtain the music for free so easily. I suppose you can call it surface reporting... I actually think the truth is that most parents don't care, mine never bothered to ask what I was doing on the computer.
Anyway, there are a ton of things that this younger generation can do through the power of the Internet:
1) Learn how to have leverage through bargain car shopping (fightingchance.com)
2) Find the best deals on certain items, especially if you are willing to waite (slickdeals.net).
3) Learn a lot about the housing crises (CR)
4) Pick up recipes on how to make healthy meals for the cheap (Google any type of recipe)
5) Learn a different language and watch television/movies from that foreign country...
Kid Clu writes:
"By now, there are sure to be more underwater community banks in the area, and the 15 aforementioned banks are sure to have deteriorated further."
Oh I get it, but someone explain why: there are even more to close than we imagine and FDIC doesn't want to start closing a few while they staff up to do the rest, they want to proceed en masse.
Or maybe it's so bad they are stalling 'til after November?
I remember Tanta describing Wamu as that wheezing rhino in Jumanji. That and the sudden appearance of slick new branches everywhere I looked were the final triggers for shorting them.
So, by posting on topic, I'm saying... thanks Tanta.
I think the idea of going back to the extended family where there might be grandparents, or an aunt or uncle all living in the same house might not be too bad. In the summertime, for entertainment, you could just sit around on the front porch and have a conversation instead of watching TV. Imagine that, people could actually talk to each other. There could definitely be an upside to a downturn in the economy.
Each McDonalds in India has an entire fleet of delivery motorcycles. There is just something creepy about having McDonalds delivered. Snowcrash, here we come.
Thanks to today's Senate vote, we know that the cost to taxpayers will be at least $300 billion. And that's just getting warmed up.
WaMu is easy pickings, who's gonna be the brave soul who predicts when SunTrust goes TU due to CRE?
Me, no later than Q309.
I think the number is zero, and that ain't the loses I'm talking about here by the way.
"Thanks to today's Senate vote, we know that the cost to taxpayers will be at least $300 billion. And that's just getting warmed up."
Just short Bucky, the US is going to default on all this crap sooner or later anyway.
Can anyone name a public company that is solvent in the US?
Giving cheap money to people that couldn't normally afford a home is obviously the right solution.
Goldman Sachs. State Street.
They both seem to be doing very well for themselves.
Berkshire Hathaway is as Aaa as it gets
Looked like maybe a few shorts got scared today and bailed on the financials.
30 bilion...
can we just assume that's the mark on the portfolio now, not cumulative over three years...
ps. how big is the portfolio anyway?
So who's going to "buyout" WaMu with gov't and fed money?
Cheers,
Misean writes:
So who's going to "buyout" WaMu with gov't and fed money?
I'd make a bid but I think I'll fill up my truck instead...
Rats, Rats:
I covered my shorts too early
hey, my little small business isn't public, be we're very solvent. No debt at all!
So who's going to "buyout" WaMu with gov't and fed money?
Cheers,
Misean
Well, it's just money. We're not giving them something valuable like food or gas.
Housing crash hits baby boomers
Home-price declines will eat into boomer retirement nest eggs: report
Home-price declines eat into baby boomer nest eggs: report - MarketWatch
That household's [45-54] wealth will decline to $113,268 in 2009, from $150,113 in 2004.
I know a repo man who is working 24/7 in the chicago suburbs. I'm thinking of making an offer. My kids are moving up to a minivan now, prices are down, and any offer is accepted.
Here is the complete boomer report from CEPR.
http://www.cepr.net/documents/publications/housing_crash_baby_boomers_2008_06.pdf
Wachovia/WaMu is Downey Savings/FirstFed writ large.
And Fannie and Freddie are Wachovia/WaMu writ large.
Once we see Fannie insolvent, I'm pretty confident we've hit the bottom of this cycle.
Pressed on the matter, Paulson said "I didn't say it wasn't a factor. I said I don't think it is a major factor and I don't think it's a driver."
Asked if he believed the so-called "Enron loophole" allowing speculators to trade was already closed, Paulson declined to answer.
"I think there's a series of regulatory issues that deserve study and careful consideration and we are looking at a number of these things but again the fundamental issues with energy are supply and demand," he said.
Earlier in the day, the acting head of the Commodities Futures Trading Commission told Congress the exemption has already been closed but the CFTC would be looking into changing the rules regarding a separate "swaps loophole" which exempts investment banks from limits and other reporting requirements mandated for other investors.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
All the commandments are gone, and all that is written there now is All animals are equal, But some animals are more equal than others.
ac,
"Well, it's just money. We're not giving them something valuable like food or gas."
LOL. Good one.
Cheers,
REBear,
That's very important. As Brian Pretti makes abundantly clear, households' cash assets (he defines it as all checking/savings/money market accounts, all treasury/corporate/municipal bonds - everything except equities and real estate) as a percentage of liabilities is less than 50. Three generations ago it was 250%! This is a generational change in the publics' view toward leverage, and it's all unwinding as we type.
iceman,
"Once we see Fannie insolvent, I'm pretty confident we've hit the bottom of this cycle."
Well, we'll hit something. Fan and poop come to mind.
Cheers,
It's not just the big guys, there are 15 community banks in the Atlanta area with Non-Performing Assets greater than Tangible Equity. None of these banks have been sold or closed.Note that this is as of the first quarter 2008, before the Spring of No Housing Sales When the Bulders Went Bye-Bye. By now, there are sure to be more underwater community banks in the area, and the 15 aforementioned banks are sure to have deteriorated further.
Bottome line: Don't buy the stock. Maybe even short it.
From Marketwatch article linked above:
"they just sort of assumed that it would go up...they didn't think they had to save."
Dumbasses. Just plain dumb.
Heard a new phrase today, specifically about two young men (approx 20 years old) who were on a vacation with a friend:
"they're on the bottom of the food chain."
That household's wealth will decline to $113,268 in 2009, from $150,113 in 2004.
Do boomers really have that little wealth?
That's astounding to me. I would assume you'd have to have 10x that to even think of retiring.
Anyone know what the vote was today for the Dodd-Shelby housing bill in the Senate? Did it get enough votes to be able to override a sure veto from Commander Codpiece?
From the boomer article:
For now, they're making the case that any benefit cuts to Social Security and Medicare would "impose serious hardships" on the finances of those approaching retirement.
Maybe promising the Sun, Moon and stars to people and actually delivering are two different things.
To me this looks like the same phenomenon as people expecting NINJA loans to get paid off.
Moreover, the authors suggest that homeownership is not always an effective way to accumulate wealth, and they blame economists and policy professionals for not recognizing the housing bubble that they claim could be seen as far back as 2002.
Interesting that statements like this are showing up more often.
ac:
Yep, they have that little wealth. And that's including the equity in the house.
I'm amazed at what I hear from folks in isolated comments. I was taught to dummy up about money and say nothing. Others don't.
Without realizing the historical circumstances, they're looking at a pre-depression retirement...aka none. They'll work until their too exhausted and can't do it anymore.
I don't buy any of the boomer "we want to work because it's meaningful" crap. The finances are shot.
What? Your kids are moving into a minivan?
That's terrible, Lefty. Just awful.
Oh wait, you said up to a minivan.
Never mind.
$113,268 is best of the three scenarios. In the worst case according to CERT, 45-54 households will be left with 81K.
Did it get enough votes to be able to override a sure veto from Commander Codpiece?
Haha... what do you think?
This thing got more votes than there are senators.
It was passed something like 112 -14.
i meant CEPR. What's cert?
Despite the efforts of very insightful posters here, I didn't quite get the price inflation/asset deflation scenario. Inflation was inflation.
NOW...I get it.
Some of us are slower than others.
I'm thinking of buying a house to build some equity and then I'll sell for a nice profit...
I talked to a friend the other day about how risky the stock market appeared to me,he has merrill managing his retirement...got a call from him a few minutes ago and 96% of his portfolio is in stocks.Boy I tell ya,there ain't nothing like having a pro handle your business...
Well at least the big banks will survive suckling Uncle Sugar's teet. That's so special, I can hardly hold back the heat from the warm glow it is causing me.
Cheers,
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
Any thoughts please?
for some scale, WaMu's latest balance sheet showed $320BB in assets and $22.5BB in equity.
A $30BB writedown would give management a very good insight into how underwater homeowners might be thinking...
We got five credit card offers from WaMu this week
Banker,
"I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt."
Aren't they already choking on the high level of debt they have? I kinda thought that that was the whole problem.
Cheers,
But don't the boomers get social security indexed to inflation?.....
And free medicade at a certain age in the US???............
More butter please.........
Paul - this is the part where the banks desperately cut credit on anyone who looks a bit risky, and then spend a lot of money trying to find people who are better risks.
I can top your five credit card offers. My father's been dead for 17 years, and last month when I went through the mail at my mother's house, he got two!!! Not from WaMu, though. He's been getting a lot of mail for a dead man.
Wamu sends me nice letters all of the time offering to loan me money.
As far as boomers. i always figured I'd have to support my parents in their retired years. Last year i asked them what their retirement was in. All index funds. My dad was retired that year and my mom is retiring this year. I convinced them to move it all out of that last summer. they are ahead ten percent or so because of that.
All of their peers (teachers), for the most part, left their money in the index funds.
My parents have a half million dollar house with no mortgage. they have around another half mil in investments. We worry about them and expect to have to pony up for health coverage of some kind. In the past three years they made a quarter mil in real estate. If it wasn't for that things would look grim. And yet, they seem to be well above the 12th percentile. It will get uglier. Despite the happy veneer.
My brother and his wife make too much money and have more than that already. Despite my advice, they went long earlier this year via the management of a pro who was taking one.five just to be wrong.
It is a funny game.
Canadian watching with popcorn,
I know it's a pastime of many to misrepresent U.S. future entitlement solvency (not accusing you here), but the main problem is the disappearance of the three-legged model of retirement funding: 1)defined benefit pension, 2)Social Security, 3)personal savings.
Since most people never had or lost #1, and they've either been conned or under the delusion or both that #3 means their house, then they're almost fully dependent on S.S. That's an ongoing structural change to our economy - how the largest demographic of consumers will manage to continue consumption at anything like current levels with such a poor financial future.
CR & Tanta, Thanks as always for you continued posts.
REBear, Thanks for your post. I read the report. Two comments -
It really is amazing the skew in net worth.
I highly suspect the authors aren't factoring in depreciation in other assets.
Anonymouse well said, Canada is in about the same boat. We may fare a little better with our smaller population and natural resources. But there will be a lifestyle change for many.
I am sitting here listening and trying to write as the wife watches "Buy Me." The women is a boomer and is trying to sell her house so she can retire. The agent just told her that a reasonable listing price is 30k less than what the women expected.
The agent after breaking the news observes how upset the women is and tells her "Its just a house." The womens reply is "No, it is not. It is my future."
This is the future of many of my cohort. They have none. At least finacially.
MoM:
About two years ago, I got a phone call from a stockbroker prospecting for business from my dad who died seven years (I'm a Junior). He'd had my dad about 15 years prior - Dad canned him. I swear to you that when I informed him of my dad's death, he didn't miss a beat and asked if I was interested.
Cold. One more reason that I manage my own money.
BTW, I had to fire a stockbroker about ten years ago. My daughter's college fund still hasn't caught up with my middle kid's, who's 3 years younger.
And in the real world department, my daughter had to be disabused of the "dead grandparent"/inheritance school of retirement planning.
We walked thru the costs of retirement homes and what could happen if she takes seriously ill. I pulled out my recent hospitalization bill for 5 days and the cost blew her mind.
But Bloomberg quoted Derek Aney, a spokesperson, as saying Killinger, as a director, received support of 88 percent of shareholders who voted at the companys annual meeting in April.
Either that was deliberately disingenuous, or perhaps the wording there was flat wrong. What percentage of shareholders supported you has nothing to do with it. What percentage of shares voted has everything to do with your well-being.
ac: That's astounding to me. I would assume you'd have to have 10x that to even think of retiring.
Me? I'll never retire; I'll just be old and unemployed.
That's astounding to me. I would assume you'd have to have 10x that to even think of retiring.
[...]
From the boomer article:
:::For now, they're making the case that any benefit cuts to Social Security and Medicare would "impose serious hardships" on the finances of those approaching retirement.:::
Maybe promising the Sun, Moon and stars to people and actually delivering are two different things. - ac
Yup. And SS is barely more than three hots and a cot. Look at the pay out vs real cost of living.
That's why I say most boomers will die with their boots on - they'll be working right up to the end when their cold bodies get hauled out of their cubicles & tossed on the mail cart. Or dragged out of WalMart on a stretcher.
People have a surprise coming.
OT? - What leads us out of recession? Any ideas? Every post-WWII economic cycle has been led by pent up demand for housing/autos, right? Has CR addressed this in a post before? Conventional economic recession deniers claim exports plus cough will drive post-non-recession growth, but is that all anyone has? C+G+I+X = ??!?
We walked thru the costs of retirement homes and what could happen if she takes seriously ill. I pulled out my recent hospitalization bill for 5 days and the cost blew her mind.
Unfortunately, I'm one of those people that defines "standard of living" and "assets" very nebulously, not limited to concrete items. It's going to be interesting to see how deflation are going to affect the health care and education "bubbles," especially if one believes that the recalibration of global imbalances will mean that standards of living converge.
$30 billion.
I remember when it was earth-shaking news when Nick Leeson lost $1.4 billion for his bank. Things are so much bigger and better today.
Banker! Thank glod you're all right. I saw this article earlier today and was worried about you:
Desperate Banker Takes Job Hunt to the Streets - Gothamist
I've said it before and I'll say it again: anyone who didn't run for the hills when the PE firms started going public is a loon. Clearest contrary indicator of all time!
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
Any thoughts please?
Hello, new(?) Banker. My thought is "print plenty of money so people can pay off debts with near-worthless paper and hope nobody notices"
dryfly,
The ONLY thing wrong with SS is that the GOP uses the surpluses of the system (via the unified budget myth) to excuse tax cuts for the wealthy. The real crisis in our Federal fisc is that the wealthy have been screwing us all, hard under Reagan, less hard under Clinton but still, boy howdy, and hardest of all under the Chimperor.
There is no problem of solvency in SS (Medicare, however . . .) The problem is that all of us have been passive victims of class warfare fought viciously since I was a toddler.
Banker writes:
The Financial sector is clearly in big trouble, but what gets us out of this.....Time? does the excesses just have to run its course. I also cannot see Investment houses attaining the level of profits that they once had as I do not think they will be able to achieve a high enough level of debt.
Any thoughts please?
Fed windows are as busy as they have ever been. I'd like to see a shred of evidence on the so called deleveraging. Maybe out of ABS/MBS, but not overall.
I don't think this ends pretty.
That's why I say most boomers will die with their boots on - they'll be working right up to the end when their cold bodies get hauled out of their cubicles & tossed on the mail cart. Or dragged out of WalMart on a stretcher.
People have a surprise coming.
You know when I think about it (according to the stories) in my family up until about the late 60s everybody over a certain age ended up living with their kids or their kids unforutnate ex-husband/wife, etc.
I have old letters from family members arguing about who will take care of whom (mostly denials of responsibility).
It's like a reverse custody battle.
I wonder if that's really been some widespread sort of significant change in the way people live in this country and if maybe we're headed back there.
Not Sun Trust they have a race team but cars everything that supports them is for sale. In the racing world maybe Ruby Tuesday is next.
jo6pac
There is no problem of solvency in SS (Medicare, however . . .) The problem is that all of us have been passive victims of class warfare fought viciously since I was a toddler.
Gary | 06.24.08 - 10:19 pm | #
Gary I don't think solvency is the issue - some do but I don't (assuming the country stays productive - BIG IF). Its that SS doesn't pay for crap compared to how people have become accustomed to living in most parts of the country. If they want to live better than three hots & cot then they better have serious savings or put off retirement a long time past the typical retirement ages. That's why I think a lot of people will die with the boots on - they'll have little choice.
In fact the single biggest factor keeping SS solvent will be so many older workers will keep working that they'll still be contributing LONG after the actuarial folks thought they'd start drawing down. Won't be everyone but it will be a lot of folks. It will change the solvency equations a lot.
Plus after this current bout of asset deflation is over - there will be more, many more - who will find themselves in that boat. I know some now, already.
ac [That household's wealth will decline to $113,268 in 2009, from $150,113 in 2004.
Do boomers really have that little wealth?]
Of course that value is an average. You know how wealth is distributed in the USA ? I would like to see a chart with the distribution or at least the median. 10mm are in the hole. I'll be the median is below 20k.
OK. I can agree with all of that. I actually think many people should keep working instead of retiring . . . at least volunteering or doing public service.
The retired people I know who aren't politically active or working are bored out of their frigging minds.
ac,
My MIL starting splitting a year's time living with 3 of her daughters after stressing her finances several years ago. I don't know the specifics, but the nest egg from selling the home wasn't manage too well. She spends winter months down here and it's been great for our boys since both of their grandfathers are dead and my mom is elderly and in a nursing home. Talking with my friends leads me to believe our positive situation is not the norm.
I wonder if that's really been some widespread sort of significant change in the way people live in this country and if maybe we're headed back there.
ac | 06.24.08 - 10:32 pm | #
I know for a fact at least one of my BILs will be living with us - that's fine to, he's one helluva a fisherman - good company. Plus he's lived with us two prior times - sultry, goes of into the woods by himself for days on end...
I wouldn't be surprised to see one of my kids & his family move in too or move so close by one might as well call it moving in - say we share a duplex... they are all over this valley & cheap as dirt too.
People will probably do fine... but very few will be living the Dennis Hopper CNBC TV commercial version of retirement if you know what I mean - they'll need savings for that and there isn't that much.
Common among the Plain people here to just build a small addition for the elders while the "prime" generation takes the house.
Have some good friends who are trying to decide if/when to build a house with small inlaw quarters for the grands who are pretty much broke.
We're all Amish now.
Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs
Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs - Bloomberg.com
Illinois Sues Countrywide!!!!!!!!
(by Gretchen Morgenson)
Illinois Suit Set Against Countrywide - NY Times
Plus he's lived with us two prior times - sultry
Wow, dryfly, I didn't know. Not that there's anything wrong with that . . .
Illinois Sues Countrywide!!!!!!!!
I take it that the State of Illinois is long Bank of America, and is trying to break up the acquisition?
People will probably do fine... but very few will be living the Dennis Hopper CNBC TV commercial version of retirement if you know what I mean - they'll need savings for that and there isn't that much.
I think people tend overlook the fact that the US is still a fabulously rich country and even if we had a depression we'd still be a fabulously rich country at the end.
The real damage is going to be more psychological. People who expected to spend every other week on a cruise ship might instead find themselves doing the occasional weekend work in the WalMart Reserves.
It won't be the end of the world.
That will come with the genetically engineered crop destroying plague carrying super-weevil.
"The Financial sector is clearly in big trouble, but what gets us out of this.....Time? "
No...invade Canada...should be easier than Iraq since it's closer.
(snark)
Plus he's lived with us two prior times - sultry
Ummm, sultry is not shorthand for solitary.
The real damage is going to be more psychological. People who expected to spend every other week on a cruise ship might instead find themselves doing the occasional weekend work in the WalMart Reserves.
It won't be the end of the world.
It sure doesn't have to be EOW - dumb policy I suppose could make it a lot worse though. We've already had some of that.
what the masters have planned for us is one world currency.
dryfly...appreciated your response last night about FCB and detailed description about flow of funds
did you see my thought experiment about one world currency...your thoughts.
the dollar is beyond toast
Ummm, sultry is not shorthand for solitary.
sdtfs | 06.24.08 - 11:08 pm | #
LOL. Sultry leads to solitary. We're mostly Scandinavian background - especially my wife's side of the family. We know solitary & sultry real well.
A few years ago I saw an article saying you could retire on SS if you could be satisfied living in a mobile home with only the library for entertainment. Sounds fine to me. My entertainment is cheap ('cause I'm cheap) On the other hand I'm not planning on sitting around doing nothing for the rest of my life, so why not spend it doing something I like and getting paid?
Dryfly's BIL has a place to take a shower and goes fishing all the time, well,...
did you see my thought experiment about one world currency...your thoughts.
the dollar is beyond toast
Mock Turtle | 06.24.08 - 11:11 pm | #
No I didn't - I'll wander back & look. But in general - 'yes' I agree the dollar is toast pretty much. I think we are at the sunset of the dollar reserve currency era.
Do you read Setser
at all? Check the most recent entry:
Why not more articles on Chinas reserve growth? And just who are Chinese banks lending to?
Spend time there & you get an education.
Ooops, only now I have to get a Kindle w/ CR on the blogrole, otherwise,...
A few years ago I saw an article saying you could retire on SS if you could be satisfied living in a mobile home with only the library for entertainment.
I'm assuming this article didn't expect the dollar index to sub 70.
dryfly thanks
save you the trouble of going back...it was a short simple idea
we don't worry about trade imbalances between Oregon and California (et al) because both "STATES" share a common currency.
it would seem to me...and i am not at this time advocation a one world currency (emphasis)
BUT
if the international free traders really want to implement nafta and gatt in a system that hovers around an equilibrium, wouldnt that suppose the necessity for a common currency.
mock turtle | 06.24.08 - 12:38 am | #
setser...will do
usually all roubini and comments,,, setser once in awhile...going there tonight
thanx
The fractional decrease in quality due to curved liquidity ratios that are escalating prior gross write-downs fail to compensate for the overarching quantitative curvature at the top of the physical cycle.
How we can all retire OK without db plans or house equity?
Multigenerational living in a big shared house provides instant daycare, keeps the elderly happy, and saves a bundle. They do it in China and India and Italy and maybe they have the right idea.
dryfly
I figure it will by my dead body scooped up in its cardboard box habitat by street and sanitation.
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
if the international free traders really want to implement nafta and gatt in a system that hovers around an equilibrium, wouldnt that suppose the necessity for a common currency.
Mock - I think we'll get something like that. My guess it will be 'hard money' - gold & silver - because gov'ts won't be able to agree on the next reserve currency.
BTW - I am NOT a gold bug and don't even own the stuff except for the wife's jewelry (and not much of that).
But countries holding USD for reserves will have been so badly burned by this $$$ collapse I have to think they'll want some back up - and without an agreed alternative reserve it will end up being 'metal'.
However it won't be a true metal standard since the currencies will all still float against each other & gold/silver. Instead gold/silver will become the new 'reserve currency' instead of USD.
I'd still expect most reserves to consist of a basket of 'paper fiat' & gold mixed (like now) with some dollars included - except the dollar will fall in prominence & the metals will move up a lot. No other country wants to be the reserve currency & go through what the US has (deindustrialization) so I don't see a different fiat based reserve stepping up anytime soon.
Just my WAG.
The idea that retirement is going to be based upon multigenerational kiving is going to run into a problem given the number of people without children.
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
Hard to say what the boomers will do. Did anyone predict the hippies? Disco? And then they turn around and become the yuppies? From all you need is love to SUV's, that's a change. Odds are you're right, but there's bound to be some "shocking" change in mindset. Maybe we'll all volunteer for the Peace Corps or become religious missionaries, who knows?
Just what in the name of heaven makes you figure the boomers will die in harness? They may want to, but there will be not be any jobs and boomers only value will be in salvaging the gold in teeth.
Vader | 06.24.08 - 11:33 pm | #
LOL vader - how ya been?
I think there will be jobs - they'll just suck.
because gov'ts won't be able to agree on the next reserve currency.
Perhaps some international business bond thought up by a financial engineer? Mix a little of this and that and if the big multinationals can form an unofficial bank voila!
wish i was smart enough to understand more than 50% of what Roubini and Setser say.
Nouriel Roubini seems to think the risk of stagflation is less than ordinary inflation.
he talks about negative supply side shocks and positive supply side shocks
He goes on to say that a neg sup side shock like Israel attacking Iran is one of the scenarios that could precipitate stagflation.
"Barring a true negative supply-side shock, global stagflation is thus unlikely."
in either case, like several here, esp dryfly and misean, i put little or no faith in the future of the dollar.
continuing to look for investments that are not dollar denominated nor dollar dependant
"Instead gold/silver will become the new 'reserve currency' instead of USD."
Can't happen soon enough,and it doesn't even have to be gold or silver, just someting that can't be printed at will.
The clear lesson I draw is that there is a high premium on doing what we can to minimize the risks and to ensure that there is time for orderly adjustment. I'm not suggesting anything unorthodox or arcane. What is required is a willingness to act now -- and next year, and the following year, and to act even when, on the surface, everything seems so placid and favorable.
What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still higher. Surely we would all be better off if other countries did their part. But their failures must not deflect us from what we can do, in our own self-interest.
A wise observer of the economic scene once commented that "what can be left to later, usually is -- and then, alas, it's too late." I don't want to let that stand as the epitaph of what has been an unparalleled period of success for the American economy and of enormous potential for the world at large.
Paul A. Volcker The Washington Post, Sunday, April 10, 2005
I tried to explain that I plan on ever retiring to a friend, who didn't understand it.
People's perspectives will change.
Paul A. Volcker The Washington Post, Sunday, April 10, 2005
Anonymous | 06.24.08 - 11:59 pm |
was that from the speech Volker gave at Stanford about 3 years ago?
if so, that speech reported at CBS news.com sent me looking for blogs like this one to learn just what the hell was going on. Volker scared me good.
continuing to look for investments that are not dollar denominated nor dollar dependant
Tried to explain to a friend of mine that if she had converted $100K to Brazilian Reals and stuck it under her mattress five years ago, she would have $200K today. Americans don't have any clue about dollar depreciation, that's why it's never mentioned on the news.
You and Warren Buffett both. It might actually wake up America if the Oracle of Omaha went around proselytizing like Boone Pickens.
dryfly
Mostly lurking, too many folks smarter than I are posting. I am too smart to post and let the true extent of my intelligence be known.
We could become a nation of small shops with the token boomer sweeping the floors and greeting or major corporations with a boomer concierge on each floor or perhaps Cracker Barrel will have live old geezers around a barrel iron stove as part of an interactive display.
OTOH I recall two sci-fi stories from my teenage hood. One New Father Christmas by Brian Aldiss where the old folks were swept up at Christmas and taken off like old broken toys. Or another one, whose name has vanished about a government program which put the homeless and destitute in the homes of the not homeless and destitute.
And there is always Soylent Green to cheer me up.
dryfly,
Thanks for the Setser link you posted, and I'd suggest that others follow on to the Reuters (Guardian) article linked therein, perhaps even before reading the rest of the Setser. Good background.
Anecdoteally, I can tell you that increased reserve requirements in China are impacting a lot of capex, and even some material trade financing, among smaller Chinese businesses.
Adding to that the inexorable increase in RMB, and exporters are really under the gun. Must increase prices or hang it up.
The switchover to doing domestic business cannot come too soon for most businesses, and for all the rest of us too, come to think of it.
From Setser link (above):
What then replaced purchases of debt securities on Chinese bank balance sheets? More bank lending abroad. Bank loans (other investment in the balance of payments data) increased by over $140 billion. I wish I knew who Chinese banks were lending to. Figure that out, and I suspect you can figure out a lot.
During the height of the Weimar inflation in 1923, Russian Czarist rubles (pre-1917 revolution) circulated as cash in Germany and their value was quite stable. That's because the deposed Czarist regime wasn't printing any more of them.
Obviously, banks like Bear, JPM, LEH, WM and anyone afraid to disclose too much at The Fed Discount Window (where Warsh & Bernanke are playing dumb) and risk exposing Level 3 reality.
Japan's stocks fell, sending the benchmark index to its longest losing streak this year, on mounting doubts about the financial health of developers and consumer-finance companies.
Mitsui Fudosan Co. led real-estate companies to their lowest in three months after a smaller rival filed for bankruptcy, while consumer lender Aiful Corp. tumbled by a record. Mazda Motor Corp., which exports 80 percent of domestic production, sank to the lowest in a month on signs the U.S. economy is slowing.
Aiful Falls to Lowest in Decade on Insolvency Concern
Aiful Falls to Lowest in Decade on Insolvency Concern (Update3) - Bloomberg.com
Aiful Corp. fell for a second day in Tokyo trading to the lowest in a decade, leading consumer finance companies lower after Lehman Brothers Holdings Inc. said the lender's parent company may be insolvent.
Aiful, Japan's largest consumer lender by assets, plunged 14 percent to 1,292 yen, the lowest since the company was listed on the Tokyo Stock Exchange in 1998, at the 11 a.m. trading break on the Tokyo Stock Exchange. Takefuji Corp., the third-largest consumer lender by market value, fell 6.6 percent to 1,627 yen, also the lowest in a decade.
30 billion in credit losses are truly a figure that is hard to believe and incredible to cope with so let's give time to the time to learn how this comes to an end.
Although Conjure and I have never been political, we are thinking about dabbling on the long side, given the current consumer expectations number, and investing in America's Bavaria.
You know, like buying some uniforms, Feldstiefeln and Blutfahnen for some of the southern evangelical groups. They'd be grateful and possibly discover a side of themselves they'd never known before, so a small investment could produce a huge payback.
mp:
The southerners have come a long way. They're not the ones to watch. It's the folks who are moving to the isolated areas to get away from the rest of us.
Well, I guess I'm one of the few here who is actually in retirement mode. Personally, its not bad. I do agree that you've got to do something though to keep busy. For me, I'm working on a MA in history (something I've always wanted to do).
But living on social security only? No Way!!! It pays surprisingly well (to me anyway), far more than the $5k-$10k a year that I was thinking several years ago. Even so, I don't see how anyone could actually survive on it only.
And I can't even envision a couple thinking they'll make it on the equity in their house, moving to a cheaper part of the country (hint - some areas are less expensive than others but they all cost).
I could see a real, a very real drop in lifestyle and standard of living for a lot of future retirees.
Dryfly,
You may be right about SS and Medicare. But, you forgot the "silent" elephant in the room -- Medicaid, which pays for nursing homes for the poor. A boomer with $80-160K has 1-2 years in a nursing home before they exhaust their assets, and Medicaid takes over. Then, the government takes over.
Medicaid is typically paid by state and local governments. Which is us, the taxpayer.
Japan looks like it is falling apart, sort of like 15 years ago
And in terms of nursing homes, I see that as a more likely outcome for more retirees. Diseases are becoming chronic conditions, and many elderly I know tend to linger for years in this "downward sprial" -- not well enough to take care of themselves unaided, but not exactly knocking on St. Peter's Gate anytime soon.
`Should the euro stay beyond its five-day moving average, and should the average show the upward trend, the euro will have a high chance to reach its record high set on July 23,'' said Hashimoto at the unit of Japan's largest publicly traded financial group.
Europe's single currency traded at 167.82 yen at 11:58 a.m. in Tokyo, from 167.85 in New York yesterday, when it touched 168.38, the weakest since July 23.
If the euro rises beyond 169 yen, it may climb to 173.60, which is a 123.6 percent reversal of its decline to 149.27 on August 17 from a high of 168.99 on July 23, based on a series of numbers known as the Fibonacci sequence, Hashimoto said.
Other Fibonacci points are 38.2 percent, 50 percent and 61.8 percent. A break of one indicates a currency may move to the next, and a failure suggests a decline or a gain may stall.
And there is always Soylent Green to cheer me up.
Funny -- I was just thinking that old, unwanted boomers could be "securitized". Bundle'em together, chop'em up, over-collateralize...
Medicaid is typically paid by state and local governments. Which is us, the taxpayer.
While Medicaid is administered by the states, it is a federal matching program, ranging from 50% to 80% federal. In a way, this setup is terrible because the states see the Medicaid grant as "free" money, and have no incentive to contain its costs.
Japan looks like it is falling apart, sort of like 15 years ago
I don't see how. There exports are booming. Their workforce isn't as moribund as it was during the 80s. Their companies are the go-to guys for China and India. If that is falling apart then the US is living on a battery powered life support machine.
Boomers will just get to lie in the bed they made by continuing to vote in Republicrats. Unfortunately the MSM in the world is still trying to keep people in darkness. Lately seen a lot of MSM reports on the RIAA/MPAA cracking down on young people, yet they never explain to our parents how us college students managed to obtain the music for free so easily. I suppose you can call it surface reporting... I actually think the truth is that most parents don't care, mine never bothered to ask what I was doing on the computer.
Anyway, there are a ton of things that this younger generation can do through the power of the Internet:
1) Learn how to have leverage through bargain car shopping (fightingchance.com)
2) Find the best deals on certain items, especially if you are willing to waite (slickdeals.net).
3) Learn a lot about the housing crises (CR)
4) Pick up recipes on how to make healthy meals for the cheap (Google any type of recipe)
5) Learn a different language and watch television/movies from that foreign country...
Sorry this was kind've a random post...
Kid Clu writes:
"By now, there are sure to be more underwater community banks in the area, and the 15 aforementioned banks are sure to have deteriorated further."
Oh I get it, but someone explain why: there are even more to close than we imagine and FDIC doesn't want to start closing a few while they staff up to do the rest, they want to proceed en masse.
Or maybe it's so bad they are stalling 'til after November?
tj & the bear
Funny -- I was just thinking that old, unwanted boomers could be "securitized". Bundle'em together, chop'em up, over-collateralize...
yea, might sell. China folks can own their own boomer or a piece of one anyway.
dryfly: People will probably do fine...
At least until the riots start at the u-picks...
tj & the bear: Funny -- I was just thinking that old, unwanted boomers could be "securitized". Bundle'em together, chop'em up, over-collateralize...
Have you tried Chinese "candy"? I'm pretty sure you could market 'em as that. How do you say Butterfinger in Mandarin?
I remember Tanta describing Wamu as that wheezing rhino in Jumanji. That and the sudden appearance of slick new branches everywhere I looked were the final triggers for shorting them.
So, by posting on topic, I'm saying... thanks Tanta.
I think the idea of going back to the extended family where there might be grandparents, or an aunt or uncle all living in the same house might not be too bad. In the summertime, for entertainment, you could just sit around on the front porch and have a conversation instead of watching TV. Imagine that, people could actually talk to each other. There could definitely be an upside to a downturn in the economy.
Leftys is now closed.
Dear Doctor:
Butter-finger:
黄油指头
(huang2 you2 chi3 tou2)
After you make it big, don't forget me...
sorry, I'm thinking Wade Giles romanization (old guy that I am).
should be zhi3 tou2
by the way, Nestle's products are so intensively distributed here, they come by bicycle even in Beijing. Yet to spot a Butterfinger though.
promise I'll shut up now.
Kou Jie -
keep posting.
Many folks post about china on this blog, few however live there. Don't stop.
Thanks, Kou Jie.
Each McDonalds in India has an entire fleet of delivery motorcycles. There is just something creepy about having McDonalds delivered. Snowcrash, here we come.