Another day, another rumor. New Wachovia (WB) CEO Bob Steel may offload WB's securities division, which consists of A.G. Edwards and Evergreen Mutual funds. Other supposed targets for the axe are the bank's Northeast and Texas retail branches.
After an $8.9 billion loss in Q2, Steel pledged to sell "non-core" assets, promising a review to be completed in a few months. Given WB's lack of scale in Texas and the Northeast, retail branches in those region might be good candidates for spinoffs. Bloomberg:
I threw in with JCP 5 years ago as a turnaround. Sold it and it is now down $15 under. I always sell too soon. They are trying to mimic the stand alone boxes. Good model but late (not their fault).
One option we have looked at extensively is covered bonds, which are a $3 trillion market used widely in Europe for mortgage funding. I believe covered bonds have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions by providing a new funding source that will diversify their overall portfolio.
While many European countries have dedicated covered bond legislation, the U.S. regulatory environment is different.
Covered bonds are a promising financing vehicle and we believe this market can grow in the United States absent federal legislative action.
OTS
Regulatory Bulletin
RB 37-23
Handbook: Examination
Summary: This bulletin transmits Examination Handbook Section 080, Enforcement Actions, and
moves it from Management to the Administration Chapter of the Handbook. Examination Handbook
Section 080 replaces Examination Handbook Section 370, Enforcement Actions, and 045, Regulatory
Action Data System. Section 080 also replaces former Compliance Activities Handbook Section 140,
Enforcement Actions. This bulletin rescinds RB 32-28 dated June 11, 2003.
SUMMARY OF CHANGES
We substantially revised and updated this section to comport with interagency guidance related to enforcement actions. We provide a summary of all substantive changes below.
080 Enforcement Actions
We updated the language and added Memoranda of Understanding as an informal enforcement tool. In
addition, because OTS undertakes certain actions regularly as part of its supervisory function, we deleted
the following actions from the list of informal enforcement actions:
Meetings with Management
Meetings with the Board of Directors
Special Examinations
Request for Voluntary Management Changes http://www.ots.treas.gov/docs/7/74839.pdf
Who will tell the little people that their 401K's are worthless? Oh, and your house is worthless too. But we are winning this war on terror, I swear it, we are winning....
Paulson: "While many European countries have dedicated covered bond legislation, the U.S. regulatory environment is different." -- BB
Good one, BB.
"U.S. regulatory environment" is an oxymoron.
Shorter (longer) Paulson: We'll let the covered bond market take off like a Saturn 5. Then when it crashes we'll fill in the crater with thousand dollar bills - millions of them.
I suggest we adopt Aaron's practice of referring to major events for psecific companies as "imploding" rather than BK or collapse, etc. Just to be safe as Sheila might be watching.
Retail implosions are impossible to rank as to their order of occurrence. Too many variables. Some will implode over favorable lease expiry like Dave & Busters. Others will lose their supplier credit lines, I think Mervyn's is suffering this fate. Many will be sucked into the vortex of malls losing critical mass as other stores close. Some like Linens & Things never had a reason to exist in the first place. IMO Kohl's will get its kneecaps whacked because they expanded in exactly the wrong places but those are normal cyclical business problems. not enough by themselves to cause an implosion.
Mervyns closing will generate 20,000 pink slips. All you overpaid money managers trying to hide out for the duration, in plain sight, at WMT, M, TGT, COST, KSS and AZO, among others, with your clients money, your pinks are next.
Probably more like millions of trillion dollar bills, Tim.
That reminds me, I should answer that email from Dr. Ngunomu who promised me 75 trillion dollars for helping to get the rest of his funds out of Zimbabwe.
Mervyn's has been on life support for years. An out of date business plan with irrelevant merchandise buyers. A slow economy dealt the final blow but hardly a red herring.
The last two syllables of your last word in the sentence aptly sums it up.
One day they clamor for more regulation in commodities and the next day they say this. The SEC restricts naked shorts for selective financial institutions but not all stocks.
Their motto should be :"Selective regulation and enforcement at our behest"
I was in Seattle until this afternoon. The city is booming
I live in Seattle. I walked through the Bellevue Mall yesterday, 13 stores are closed, the most I've ever seen. Not a disaster but foot traffic was substantially down for some stores. Abercrombie & Fitch was so empty I thought it had closed, too, but no, it was open, just no customers.
The area is doing well all things considered but restaurants and stores are closing.
Just to be safe as Sheila might be watching. -- Rob
"Imploding" is on the list too, Rob. We'd better go with "accelerated entropy." It's got a very positive feeling to it if you're only marginally literate.
I live in Seattle, and I'm not sure I'd describe it as booming. The condo and house markets are starting to suffer; prices are coming down; inventories are going up. We're still in the "overhang" phase where projects started during the boom years are still being completed even though they're sure to lose money now. There are also a few fenced-off holes in the ground where planned projects for condos, supermarkets, etc. have been canceled. At this point we're just trying to make sure we've built up enough overcapacity to make sure our RE bust is just as big as anyone else's.
Broward Home, as the parent of 13 and 15 y.o. girls, I have to tell you that A&F is dead not because of the economy, but because the kids now despise the brand. Sorry.
Lucky Jim - I spent the weekend at a 10 acre estate on one of the lakes (brother in law's family). One of the family was a realtor, who claimed things were leveling off.
The crains Bellvue were very surprising to me.
I agree with you though, the PNW is about 12 months behind CA.
Cause and effect are tricky things. Do they hate the brand because it's going out of business? or is it going out of business because they hate the brand? The store had plenty of customers a few months ago.
And A&F is just one example. The Qwest store looked the same - stone dead, store clerks hiding somewhere in the back room.
I was at the Nordstarm Rack on Sunday at it was packed. I also went to the outlets past Everett (I think) and they were also crowded. Things seemed muched better off than Central Ca (maybe my comparison is not fair??)
The annual art fair was on just outside Bellevue Mall, most folks were there
Ahem.
Exactly.
is the point of the fair to generate foot traffic? I think it's quite interesting that customers were outside spending $3 on a hot dog but not $30 on a shirt.
Believe me, my kids know nothing about whether or not a business is doing well. They simply know what they want, and A&F is actively mocked by the mean girls now.
I must say, though, that no one could be happier than I am that cheaper stores are becoming cool (I forgot Forever 21). I think I'll have to cut the clothing allowance.
Just for fun, lets look at the other end of the spectrum: Nordstrom (NYSE: JWN).
Nordstrom is a well-managed company, right? They are obviously fairly valued with a trailing PE just under 10, right? Nothing so horrible could befall Nordstrom
I am betting that the tables will turn sometime in the not-too-distant future. High-end stores like Nordstrom will be the ones sucking air before too long. Consider these numbers I pulled from Nordstrom Annual Reports for the past 10 years or so:
Average earnings from 1996-2003 were $153,118 during a period included the DotCom bubble/bust. Then from 2004-2007 their average earnings jumped to $584,447. Thats basically a quadrupling of earnings.
If you believe, like I do, that much of the recent earnings boom was credit-bubble induced, then you can see what is coming. All retailers will be hurt badly, but some more badly than others. I actually think that low-cost stores like Mervyns will be better off, if they can survive.
To make matters worse, Nordstrom is in the process of launching several new stores (with $2.5 debt to go with it) at this very inopportune time.
There's a 5-pack of 20+ storey condo towers going up along the river. 2 are completed; the third is halfway up. The first two, completed two years ago, still appear to be empty.
There was a 12 storey tower put up right near Market St. 1 condo per floor (about 1000sq./ft. by the looks of the footprint)... $1,000,000 per condo.
Appears to be e m p t y.
There are also various holes in Northern Liberties (up-and-coming-yuppy) that don't look like they're getting filled anytime soon.
I also live in Seattle's Eastside (Woodinville). Those cranes have been up in Bellevue for years. Microsoft is building one mother of a complex... CRE will hit this area like a ton of brick in 09, excuse the pun. Also, Woodinville/Redmond area residential RE will be slammed by the Alt-A/Neg Amortization resets. We are not so special after all...
Crispy, I wish I'd known you were in town. I've have sent you three miles over to Crossroads Mall.
You'd have felt right at home.
Bellevue, South Center and Westlake malls are doing okay, but there's still thirteen stores closed in Belleuve. That last time I counted was around December and the count was about 1/2 dozen empty spaces.
Factoria and Crossroads malls are the walking dead, though. Factoria had about a 15% vacancy rate when I walked through around Mar/April.
Do your homework on retail. They are fairly simple to understand vis a vis financials.
Look at debt ratios, Inventory, floorplan covenents etc. There will be some winners.
In the end, good analysis trumps momentum doomsayers.
No doubt the economy sucks. BK's simply take down competition that piggybacked some wacko consumers with too much HELOC. Rejoice! The good guys will win.
Your job, if you choose it, is to separate the wheat from the chaff.
I'll agree that the area is doing okay so far, better than I expected. But there's substantial overbuilding in RE, especially in Bellevue.
A lot of it is in work-in-process.
There's several new commercial developments along the shore of Kirkland that are just nearing completion. Sorry, no pictures, maybe I'll do it this weekend.
I do like this area, though. The metro area is around 2 million people which is still relatively small and it's kooky enough that nobody cares much about kooky people so I'm fairly low-profile here.
Mervyn's has been irrelevant for a long time. Walmart, Target, others have particularly taken their slice of Mervyn's business, but especially Target.
I went to a Mervyn's in Modesto last year, and the place was beyond descriptors like "ghost town" or "graveyard." It was abandoned, but nobody had told the employees. I'm surprised bankruptcy has taken this long. Well, credit was easy to get, I suppose.
I live in Redmond, about a mile from the Microsoft main campus. They're still building like mad.
I've got a friend in the construction industry, he says concrete orders can be placed as few as two weeks in advance, last year it was measured in months.
Broward....you know what is up. You always have to separate out apparel from fashion apparel, and AF is stone cold life support soon. You have to have contacts in the know, and, as you know, you are, how to say, um, in the know, as far as I can tell, by your reference to the mean girls. They are what we would like to call the deciderers, and they can kill a retail chain in a matter of months. Nordstrom rack can make a killing while one by one the fashionable chains can be instant fashion victims....take a look at CROX. Toastie...once the death spiral starts, people eventually end up ashamed to wear the brand, and then its T.U.
I imagine Circuit City will come along soon.
- Bob Dobbs
Maybe to Place or Show but my bet for the Win is Best Buy. Three reasons of a not particularly rigorous nature. First they've got among the most virulent and vocal haterz. Second they don't make money sell stuff, they think they are making money financing stuff. Third the stores are butt ugly, essentially three digit dollar stores. I could go on but you get the idea.
As a brand, what the hell does "Mervyn's" represent (emotionally) anyway?
Reminds me of a goofy, big-eared kid.
OT from previous thread: Dilution is the worst kind of debt there is.
Someone alluded to MER management serving themselves at the expense of shareholders (agency problem). Well, if shareholders are about to lose all their rights, there isn't anything left to worry about, no?
The greatest trick Wall Street pulled was getting ERISA passed. It has allowed them to bypass all the individual shareholders (accredited investors) to sucker in
pensioner's money via "funds' and their inept and lazy fund managers.
Personal anecdote* Went to a muni pension fund oversight meeting last week for kicks. You oughta see the "professionals" "managing" billions of dollars. It's a disgrace how subpar these clowns are.
Sadly, I left wondering what kinds of bribes were paid to acquire these "advisory" contracts and how they were paid.
OT: Washington state plans to revoke the license of a California mortgage broker.
The state Department of Financial Institutions says an investigation has found Paramount Equity Mortgage, Inc. engaged in deceptive lending practices.
In a statement issued Tuesday, the state says it also will fine the firm $500,000 and require restitution for Washington borrowers.
Paramount is accused of charging and collecting unearned fees, charging consumers to buy down interest rates without actually reducing rates, failing to make required disclosures and making state and federally required disclosures in a deceptive manner.
In a statement, Paramount denied any wrongdoing, saying the state's allegations are false and that it plans to appeal.
Paramount said it plans to defend its ability to continue offering mortgages to Washington residents.
The company made more than 1,700 mortgage loans to Washington borrowers in 2007, collecting more than $8.7 million in fees.
Another OT: The Treasury Department said on Monday it expects to borrow $171 billion in net marketable debt in the July-September quarter, the highest borrowing level on record for that quarter.
Rising expenditures, along with falling tax receipts, will likely force the Treasury to increase its borrowing. Analysts forecast that the Treasury will opt to sell $15 billion to $16 billion in benchmark 10-year notes and $9 billion to $10 billion in 30-year bonds as a part of its August refunding.
They also said there is a strong likelihood the government will bring back a retired maturity such as the three-year note.
3rd OT: ...The U.S. Department of Justice (DOJ) has been investigating charges that financial institutions have engaged in market allocation and bid-rigging both of which violate Californias anti-trust law and common law. As a result of this investigation, Bank of America has already agreed to cooperate with the DOJs Anti-Trust Divisions Corporate
Leniency Program in exchange for immunity from criminal prosecution over its involvement in the conspiracy to manipulate the municipal securities market. As part of this deal, Bank of America is set to disclose the details of the scheme that has harmed investments by many cities, including the City of Los Angeles...
OT: Gov. Arnold Schwarzenegger will wait until Thursday to sign an order slashing state workers' pay to the federal minimum wage and laying off thousands of other employees to save money during the impasse over the state's $17.2 billion budget deficit, a spokesman for the governor said today.
Stocks and indices breaking 1 year support today and pointing to broad, parabolic, 10% declines, suggest renewed federal 'open mouth' policy starting tomorrow, combined perhaps with some desparate, trick moves designed to prevent an October '87 investor loss of confidence re-run.
Today's pathetic, transparent, covered bond promotion suggests how far Ben and Hank are behind the curve, and how far this market can drop as earnings uncertainty comes back into investor focus and confidence in reflationary miracles dwindles.
Still think a minus 1250 point Rule 80B down move would just get this market started in discounting the retail disaster and house price collapse evident everywhere I look here in the SoCal desert.
People I talk to aren't looking for it, so they don't see it. They'll just end up like the frog: where there's no sense, there's no feeling.
So does anyone else feel that the 90% haircut NAB gave to structured credit products might have been the trigger for this flood?? This deal was probably in the works for weeks, but got hurried along with NAB's bombshell. MER probably realized that things are going to get a hell of a lot worse - so they need to grab cash now...
National Australia Cuts Bond Sale as Investors Balk National Australia Cuts Bond Sale as Investors Balk (Update3) - Bloomberg.com
National Australia Bank Ltd., the nation's biggest by assets, slashed a planned A$850 million ($812 million) bond sale by two-thirds after credit-market losses triggered a three-day, 19 percent slump in the stock.
Exactly: Wall St. and Europe have all been playing a varsity game of hide the salami, and could be petrified at the prospects of an outsider shining a light on their hidden losses.
Hank and Ben couldn't have liked that NAB news. This may be the final signal to the world that these Mortgage bonds are essentially worthless. Read Price Discovery. People will no longer confuse MBS(worthless) and houses/land.
FYI The printed piece of paper is the worthless asset.
"We'd better go with "accelerated entropy." It's got a very positive feeling to it if you're only marginally literate."
And I spontaneously busts out (to the tune of EW&F's "Reasons") with
"Entropy's rising.
I'm starting to feel
I'm in the wrong place to be real."
Arborland strip has recently lost high-end fitness equipment and furniture stores. Remaining with a few local odds and ends are a Mervyn's, a Circuit City, a Petco, the emptiest OfficeMax I've ever seen (for months and months now), and a Border's (with a Barnes&Noble 3min down the road), with the only viable-looking store in 20 acres a grocery that survives on quality meats and fish.
Old news (Monday, March 24, 2008): One of Californias largest subprime auto lenders is closing the doors to its only North Bay office after suffering heavy losses from bad loans.
the banks parent company, Chicago-based financial services provider Unitrin Inc. (NYSE:UTR)
Newer news (Jun 26, 2008 12:54pm ED): nitrin's Negative Rating Outlook reflects Fitch's negative view
of the subprime auto lending market, which is the focus of Unitrin's
consumer finance business (Fireside Bank). Fireside Bank suffered significant losses in 2007 and Fitch expects additional losses in 2008 given deteriorating macro-economic trends. If loan losses materially increase for a prolonged period, it could lead to an additional ratings downgrade. Also, further losses in consumer finance could lead to more capital transferred from the insurance companies to Fireside Bank.
It was triggered by a move from struggling US investment bank Merrill Lynch to get rid of billions worth of CDOs in which the NAB was a co-investor.
Merrill's took a decision to sell the CDOs at a written-down value and the NAB had no option but to follow suit. Its larger write-down than Merrill Lynch (90% vs. 78%) reflects its lower ranking of security.
The NAB was involved in a parcel of whats called "super-senior" CDOs with a face value of $19.9 billion.
NAB and the Australian stockmarkets were directly affected by the Merrills move, which reflects the US banker's desperate desire to quit as much of its toxic subprime mortgage related investments as it can, without regard to the flow on impact to other banks and markets.
Sounds like MER was super-senior on the debt and NAB got whiff of a coming liquidation. Since they were only Sr. on the debt they decided to put a thumb in the eye of Merrill - who only went to 22 cent on the dollar... Not 10 like NAB. See article above.
FRIDAY, NOVEMBER 30, 2007
Paulson Promoting Rescue Program for Subprimes
Do we see a pattern here? The much-covered, little-loved SIV rescue program (formally known as the Master Liquidity Enhancement Conduit and informally called the Entity or Super SIV) was announced prematurely, didn't clearly solve the problem it was meant to address, involved a lot of failing around to try to resolve irreconcilable interests (those of the SIV sponsors versus the investors who would eventually fund it) and appears to be stillborn (despite the expectation that a structure would have been announced and syndication of the credit enhancement would be underway, we've heard nada, presumably because HSBC's decision to rescue its own troubled SIVs has put a damper on the MLEC plan).
Paulson seems unable to learn from his own experience. He is swinging for the fences with another Big Scheme That (Purports To) Fix The Problem With A Master Stroke. His track record here is not encouraging.
This really belongs here since SPG has Mervyns, Dillards, Steve & Barrys as some of their anchor stores
Here are some Simon Property Group conference call comments from David Simon and crew.
"the days of "oh the tenant is interested. let's build it!" are done"
"the risk we have is if it is 90% leased"
"we're in the first half of the downturn, i do think we'll see the worst of it manifest itself in '09, no in '10"
"you're going to see more stores closing cause of the credit situation"
Q: Will year end '09 be lower than year end '08?
A: "Too difficult to say"
"Good malls are getting better and bad malls are getting worse"
"The under-writing is very conservative... It would take a consortium of banks in order to get a mortgage on some of the bigger malls"
"Inventory is increasing. We're shopping the inventory to the best of our abilities"
Q: Will you be a buyer of your stock around these levels?
A: "Prudence at this point is not an unwanted asset. We're going to be very prudent as we think about that"
As long as CR is still here, I know the apocalypse has not arrived. When I wake up and the blog doesn't respond or redirects to a FDIC welcome page, then I'll know the end is at hand.
As an aside, what's the best way to go long on regulatory/governmental stupidity, shortsightedness, corruption, fear, and greed?
Dude, I'm really starting to shit bricks here. It's all unraveling now... there's nothing that can stop this bullet train that is coming towards us. I think what freaked me out of the most was this post on naked capitalism today... I hope my family members and friends can hold on to their jobs.
"Much has been said about the case for launching a U.S.- style agency, but it seems unlikely that it would be right to tackle this century's problems with last century's solution, particularly given the time it would take to create such an agency," Crosby's report will conclude, the Treasury said.
The report leaves open all other options for unfreezing mortgage lending in the U.K. after the collapse of the subprime market in the U.S. last year.
Credit Crunch? I've been inundated by credit offers from 3 different frequent traveler (Marriot, Southwest, United) for the past two years. What's good use for shredder paper?
On the other hand: Costco today was empty... yes, Costco! The emptiest I've seen it on a Monday since MNF ended. Don't worry, the Internet is going to be blamed for the Wall Street bus crash and bloggers' hands will be chopped off to appease the idjits...
Recently I chopped 10% off of my 401(k) deposits. One of my older co-workers who wants to retire in 2-3 years said, "Oh, you did that... I upped my 401(k)... market is going to come back."
People in America still think the stockmarket can only go up... but don't want to look at Japan...
Not sure what to do but I think I'm going to liquidate all of my stock accounts in the near term and go in gold. I'd really like to know how to play the PUT game so I can go in short as well... but I'm not sure at all!
Way OT but could someone be so kind as to explain why the future and spot price of gold at the moment is the widest spread this observer has ever seen? Bloomnerg's got future at $940 and spot at $930. TIA
D-STAR is a new ham radio system which offers digital voice and data communication. It connects repeater sites over microwave links and the Internet and forms a wide area ham radio network. The DSTAR system provides a new capability and functionality to the ham radio world and increases the efficiency of emergency communications.
One would think that Software Defined Radio/GNU Radio would be the next generation in ham radio applications. I can't wait until current PCs run for months on AA batteries... I suppose that's what, 5 years away with Moore's law? Its late I'm not going to do the math...
Senator Kyl went off regarding energy policy and then mentioned the Federal Reserve.
here are two things that can be done to better the dollar. First, the Federal Reserve should switch its focus from maintaining economic stability to fighting inflation. In periods of slower economic growth the Federal Reserve traditionally responds by reducing short-term interest rates, but that can exacerbate inflation, which has increased substantially--growing at 4.9 percent in June from the same time a year ago.
Note that while the dollar has fallen, the euro remains relatively strong because the European Central Bank (ECB) has not only refrained from lowering interest rates due to their concerns about global inflation but actually raised their target interest rate to 4.25 percent on July 3rd. The Federal Reserve needs to follow the ECB's lead and resist the political pressure to cut interest rates in order to stabilize the value of the dollar. The second thing would be for Congress to begin to make our current, relatively low, tax rates permanent.
Not sure I agree with the "low" tax rates being made permanent, but this is interesting and not what I expected when I hit up Congressional Record.
Durbin bitched about having to come to work on a Saturday, him and the scores of staff that support the Senate. (Is DeMint the one who forced them to meet on a Saturday?)
Direct Durbin quote: I got a personal call from Secretary Henry Paulson, our Secretary of the Treasury, at home last week. He said: We have to do something. This is an emergency. I said to Secretary Paulson: I think you are right. I may not agree exactly with your approach, but there comes a time when we have to rise together, on a bipartisan basis, and deal with a serious crisis. This could be a crisis if we do not act. I said to him: Would you urge the Republican Members of the Senate to have the same sense of urgency in passing this housing bill that I hear in your voice? He said he would try. Well, he was not very successful. Six different times the Republicans have tried to stop this housing bill with a filibuster and now have dragged us into a Saturday session here to slow it down again.
More from DeMint There are a lot of problems with this bill, but it doesn't matter. Here it is. It is almost 700 pages. Not one Senator has read it. There are lots of little goodies stuck in there. There is one we found, an earmark on page 616 that overturns an IRS ruling where low-income housing--which is supposed to be for the general public and not discriminate--that they can discriminate for social organizations such as art colonies. Then we find an organization, Artspace, that develops low-income housing and gives it to these artistic colonies, one of their board members happens to be the executive director of the Fannie Mae foundation.
Folks, this bill needs to be aired out for weeks, if not months. They want to rush it through. We kept them here on Saturday so the American people could find out a little bit more about what is in it. But no matter what is wrong with it, most of the Members of this Senate are going to come in and vote for it and check the box and go home and say they did something about housing. I am afraid they may compromise the future of America as they do it.
Durbin's Response Mr. President, after hearing the Senator from South Carolina, it is time we initiate an investigation. I think we ought to call the Sergeant at Arms Office. Something terrible has happened here. Apparently, the pages on the Republican side of the aisle are not distributing the Congressional Record to the Republican Members.
... I am sure the Senator knows this is no new bill. This bill has been around since April. The Senator has had ample opportunity to read his so-called secret bill.
This is terrible that they aren't distributing the Congressional Record on the Republican side of the aisle. We have to look into this, as the Senator says he has evidence of 855 secret bills--again, a failure to deliver the Congressional Record to the Senator from South Carolina. Every single one of those bills, I say to my colleague, is printed in the Congressional Record for him to take home and to read--to read on the plane back and forth to South Carolina. It is all there.
Hilarious exchange right here...
Mr. DeMint: I ask unanimous consent--to clear up what the Senator from Illinois has said--that next week, when we come back, we have a free and open debate and that the Republicans and all Members be allowed to offer their amendments, without restriction from the Democratic side.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. DURBIN. I object.
The ACTING PRESIDENT pro tempore. Objection is heard.
Mr. DeMINT. That is what I thought. There is so much doublespeak here. They are saying one thing to the cameras and to America and another thing here. We are not allowed to offer our amendments.
Senator Dominichi quote Politico re: $200M that Fannie Mae and Freddie Mac paid to lobby Congress. (Its great when new media is discussed in Congress)
Ugh, great logic here. We know that the trigger to the current downturn in our economy was caused by the housing market. So it is important for us to pay special attention to the housing market as we try not only to help families who are struggling to keep their homes and keep communities strong but also to help our economy.
Hahaha, yeah right! This legislation also deals with the credit crunch--the availability of mortgage money for those who need to buy homes. The FHA modernization will help, and the reverse-mortgage provisions that seniors use. Seniors who have lived in their home for many years have a lot of equity in their home. They need the cash out of their house in order to stay there, and reverse mortgages help them obtain the resources they need to deal with their health care and to deal with quality-of -life issues. This bill modernizes the reverse-mortgage provisions, providing strong consumer protection provisions for our seniors.
Dang! Sen. Sessions supported this bill! You bastard!
Here's Dodd to close this boondoggle out!
This is a staggering loss of wealth we are seeing, coming at the very same time, as the Senator from Vermont has pointed out, that food prices, gas prices, health care, and education costs are rising. We are experiencing the worst of all possible worlds. Wealth is declining, the source of wealth creation, and costs are rising simultaneously. Moreover, when we consider the role that home equity has played in supporting consumer spending, we see the danger a vicious downward cycle could create, an economic disaster for our country.
Don't let yourselves be dulled by nameless and faceless statistics either. Behind each one of these numbers I have recited, there is a family--a mother, a father, children trying to grow up, facing unemployment, losing their homes, wondering what the future holds. So when we talk about the numbers, about how important this data is, pause for a minute, when deciding whether to support this bill, and remember: Behind every one of those numbers there is an American family who this morning is wondering whether their Congress can do anything at all about the problems they face.
Dodd with a more shameless dance-step-routine than Frank!
The bill establishes the HOPE for Homeowners Act to help at least 400,000 to 500,000 families stay in their homes. It does so after asking both lenders and borrowers to make financial sacrifices, and it does so at absolutely no cost to the American taxpayer.
YES HE SAID THAT! HE SAID NO COST TO THE AMERICAN TAXPAYER! YES! YES! CHECK THE CONGRESSIONAL RECORD!
More drivel:
This body has repeatedly provided emergency funds to communities ravaged by floods, hurricanes, and natural disasters. The foreclosure crisis is every bit as much of a disaster. This is an emergency equally deserving of these funds.
You effing' idiot! Floods, hurricanes and natural disasters are "acts of God!"... house price bubbles... nope, not the same jack-hole!
Gosh, I can't stand to hear our legislators say, "Well, I don't like this bill, but I've gotta vote for it..." dude, you weak ass pansy... stand up like a man against it if you don't like the bill!
More on the Credit Card Tax Mr. President, this bill, with one exception, complies with the Senate Republican conference principles on use of revenue raising offsets. This bill contains new tax policy. The new tax policy is offset with revenue raisers that a bipartisan majority in the Senate consider improved tax policy. The main one would put in place a reporting regime on credit card payments to merchants. It is a Treasury tax gap proposal.
Yes indeed it's an I-n-t-e-r-n-e-t T-a-x! Am I the only one who thinks of this as an Internet tax?
What's worse, taxing credit cards is going to disincentive their use so far less people will use than is estimated...
More on the credit card proposal: The payment card proposal has two features that help keep opposition to a minimum. First, the third-party source being tapped to supply information is already savvy in handling similar data. The belief among proponents, like Treasury Assistant Secretary for Tax Policy Eric Solomon, is that the "existing paper trail would make it relatively easy to generate information reports to the IRS."
Second, whatever the extra burden, none of it would fall directly on small businesses. All the newly required information would flow from credit card companies to the IRS. That's probably why former IRS Commissioner Mark Everson told the House Ways and Means Committee on March 20 that this was his favorite compliance proposal of the 16 the administration was proposing.
.... For security purposes, the banks will use their own internally generated merchant identification number. Under the proposal, the merchant acquiring banks would have to compute annual volume and keep the merchant numbers linked to TINs or SSNs. Programming and maintenance costs of this new database could be large. Another concern is that with increased use, there is increased risk that confidentiality of SSNs could be jeopardized.
... And some of us might say that credit card companies don't like the proposal because once it is in place, businesses would redouble their efforts to get customers to use cash rather than credit, and that is a threat to financial institutions' profit. But don't mention such ideas in polite company or on Capitol Hill.
... The purpose of requiring this reporting is based on the belief that small businesses are underreporting their income for a variety of reasons, including tax avoidance and lack of understanding related to the tax law. It has been proposed that by requiring merchant acquiring banks to provide reports on payments to merchants, the IRS could compare actual reported credit and debit card sales with reported tax filings, thereby allowing the IRS to extrapolate what a business cash transaction income should be. If the reported income on tax returns is not as it should be, the IRS would conceivably be able to target audit resources at those businesses that appear to have underreported.
I guess this is not an Internet Tax but a tax on small businesses (or large businesses). Congress wants a piece of the credit pie, but I bet these revenues fall way short of what the CBO says they will get...
REBear,
Unsure if it is an Internet tax, but the fact that companies using the Internet probably deal with credit cards a majority of the time... well if they were underreporting their income its easier to catch them.
Originally I thought the IRS was going to come after individuals, but now I see they are going after businesses that are under-reporting... and this proposal has been around a few years which is why there is information floating around that I could grab... although the source was blogs so who knows... I might have just made up all the transcripts from the Congressional Record as well...
So I expect we'll see something like a COD/check discount/cash discount more often? I think this goes into effect 2010...
They don't have anything particularly special going on there. Not to mention the big-box deserts they routinely set up in, are so unpleasant to visit (heavy traffic, huge parking lots with no sidewalks) that I'm surprised anyone would still want to waste a half hour of their lives navigating their way to and from the front doors.
Considering some of their desperate sales that I saw just after Christmas, I wouldn't be surprised if they go under before next spring.
UT - Let's change that retiree/worker ratio so we can retire! Can you say CLOWN CAR?
ABBOTSFORD, British Columbia A Romanian immigrant has given birth to her 18th child in British Columbia, making her the province's most prolific mother in 20 years.
Proud dad Alexandru Ionce said Saturday that his 44-year-old wife, Livia, gave birth on Tuesday. Their daughter Abigail weighed in at seven pounds, 12 ounces.
"We never planned how many children to have. We just let God guide our lives, you know, because we strongly believe life comes from God and that's the reason we did not stop the life," said Alexandru Ionce.
I don't know if the IRS and state division of taxation share data.
IRS has reciprocal tax info agreements with almost all states. Nevada is a notable exception. All those cash casino winnings? I'm sure they are 100% reported.
S&P/Case-Shiller Home Price Indices (May) -15.8%(YOY) versus (April) -15.2%(YOY). Consensus was for -16.0% for what that's worth. CR should post more later.
Monk writes: Woo-hoo! Only down 1.4%? I smell a market rally!
I recall the day last month when Case/Shiller was released; the market rallied pretty hard, but most likely for other technical reasons.
I'm looking for a bit more of a pullback in XLF and I'll buy, as explained <a href="http://www.haloscan.com/comments/calculatedrisk/5454652625492637449/?dt=1217318478#533393>here last night.
"One of my older co-workers who wants to retire in 2-3 years said, "Oh, you did that... I upped my 401(k)."
These are the same fools that drove this market up so their parents could retire in comfort. Who they gonna call. I told my daughter to cut her contributions by 50% and raise cash and keep it in the safe at home. I a boomer but I think they are in for a surprise at the butt scrunching they are going to get.
I'll save my in-depth take on the C-S number for the appropriate thread, but in a nutshell, this number isn't as good as it looks.
I've got a spreadsheet going that tracks this using a 12-month rolling average rather than the 3-month average that S&P reports, which to my layman's mind makes a hell of a lot more sense (since real estate is, you know, seasonal).
And in fact, using this method the yearly rate of change went from -8.9% in April to -10.1% in May ... so the downward acceleration in prices has not slacked off but in fact is picking up speed.
I suspect you won't hear CNBC lead with that conclusion today, though.
What about all the money they saved by importing literally everything in the store from the 3rd world sweatshops? Let me guess, the CEO and VPs made millions. What's the matter? The 3rd world illegal immigrants that were given houses and blank checks in Arizona and California have no more money to spend now? What will they do? It's good news for Wal-mart and Target. Bad news for everyone else. The housing boom in AZ, CA, and FL was built on the backs of illegal aliens: they made decent money to afford teaser loans, they took out equity as prices rose, they lived payment-free in their homes for 8 months, and now it's all over. Realtors were selling houses to ITIN holders as fast as they could sign on the dotted line. They even made a guide for it (Google it). Freddie, Fannie, Countrywide, and others hold these loans. All it takes is 1/100 to foreclose in order to destroy the prices. 1 in 10 people in this country are illegal aliens. That's 30 million, mostly concentrated in, you guessed it, CA, AZ, and FL. Most people in the US have no idea, but I lived it. I know what it's like to walk into a grocery store and 9/10 people speak Spanish-only in neighborhoods where the median home price is over 400k. I'm sorry, but a 20-30+ something who doesn't know but a few words of English is not here legally. Get your heads out of your arses and wake up. The American people were sold out! We are being robbed to bail out these banks. We are being robbed to further open-borders agendas. We are being robbed by these companies that import everything to save a buck and squander profits on CEO salaries. Oil companies take it in the chin, but at least they don't hire illegals. Oil drops + gold stays high = weak dollar.
US oil companies and Middle East oil lords are two different entities entirely. I'm no fan of US oil co's, but they have taken the brunt of the blame for just about everything. Drug companies make way more money per dollar invested, and they have an equivalent monopoly on the US market. Oil co's have suppressed new technologies for more efficient solar cells, more efficient gasoline engines, and oil-killing battery technology.
2ND
Another day, another rumor. New Wachovia (WB) CEO Bob Steel may offload WB's securities division, which consists of A.G. Edwards and Evergreen Mutual funds. Other supposed targets for the axe are the bank's Northeast and Texas retail branches.
After an $8.9 billion loss in Q2, Steel pledged to sell "non-core" assets, promising a review to be completed in a few months. Given WB's lack of scale in Texas and the Northeast, retail branches in those region might be good candidates for spinoffs. Bloomberg:
1st OT??
They have like 4000 employees where is the bailout? Get Hank and Ben on the phone...
I'd love to move to California...
It's just not quite there yet.
Mervyns is still in business? Lordy.
I threw in with JCP 5 years ago as a turnaround. Sold it and it is now down $15 under. I always sell too soon. They are trying to mimic the stand alone boxes. Good model but late (not their fault).
If you want a retail spec, I suggest Kohls.
FD: No positions
Kohl's is next....I never shop at those two stores, Kohls really grew too fast, built large stores as main anchor in the strip mall.....
Mall near me is "anchored" by Mervyn's and Shoe Pavillion - Both are now BK
Kohls is not next Sears was second in line.
Spent the week in Seattle.
The condo cranes in Bellvue rival Dubai!
WHY are all the stores I shop at going bankrupt?!??
Kohl's is next
Kohl's founder is Herb Kohl, senior senator from Wisconsin. TBTF
Mervyn's needs covered bond exposure
Whoa, Kohls is run by Minni-Sotans. If you can't trust Vikings, Hell will freeze over.
OK, maybe Ross stores? FD: no relation.
Just copied this from Eric in last blog:
"Good malls are getting better and bad malls are getting worse"
OT - For those interested.
Secretary Henry M. Paulson, Jr.
Statement on Covered Bond Best Practices
HP-1101: Secretary Henry M. Paulson, Jr. Statement on Covered Bond Best Practices
One option we have looked at extensively is covered bonds, which are a $3 trillion market used widely in Europe for mortgage funding. I believe covered bonds have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions by providing a new funding source that will diversify their overall portfolio.
While many European countries have dedicated covered bond legislation, the U.S. regulatory environment is different.
Covered bonds are a promising financing vehicle and we believe this market can grow in the United States absent federal legislative action.
Might of been covered already but from Mish.
Mish's Global Economic Trend Analysis: Macon Mall Faces Foreclosure
Mass are getting sick.
Luna,
Good malls just don't quite realize th world of hurt they are in.
SPG is waiting for the bad news to hit.
Raised rents by 6%?
Um, yeah righty oh.
Oh well, I nothing to do but wait for the funeral.
Someday this war's gonna end...
OTS
Regulatory Bulletin
RB 37-23
Handbook: Examination
Summary: This bulletin transmits Examination Handbook Section 080, Enforcement Actions, and
moves it from Management to the Administration Chapter of the Handbook. Examination Handbook
Section 080 replaces Examination Handbook Section 370, Enforcement Actions, and 045, Regulatory
Action Data System. Section 080 also replaces former Compliance Activities Handbook Section 140,
Enforcement Actions. This bulletin rescinds RB 32-28 dated June 11, 2003.
SUMMARY OF CHANGES
We substantially revised and updated this section to comport with interagency guidance related to enforcement actions. We provide a summary of all substantive changes below.
080 Enforcement Actions
We updated the language and added Memoranda of Understanding as an informal enforcement tool. In
addition, because OTS undertakes certain actions regularly as part of its supervisory function, we deleted
the following actions from the list of informal enforcement actions:
Meetings with Management
Meetings with the Board of Directors
Special Examinations
Request for Voluntary Management Changes
http://www.ots.treas.gov/docs/7/74839.pdf
Who will tell the little people that their 401K's are worthless? Oh, and your house is worthless too. But we are winning this war on terror, I swear it, we are winning....
What do you make of that, FFDIC? Is this just a way for them to forestall panic by not reporting early-stage regulatory actions?
Paulson: "While many European countries have dedicated covered bond legislation, the U.S. regulatory environment is different." -- BB
Good one, BB.
"U.S. regulatory environment" is an oxymoron.
Shorter (longer) Paulson: We'll let the covered bond market take off like a Saturn 5. Then when it crashes we'll fill in the crater with thousand dollar bills - millions of them.
thousand dollar bills - millions of them
Are you sure it won't be thousands of million dollar bills
OT
The Toronto RE is getting interesting. In one rich burb (Leaside) there are 250 houses listed. Each listed over $1 000 000 to $19 000 000
So that's over $250M of new money that needs to enter that tiny burb for turnover....
thoughts?
So that's over $250M of new money that needs to enter that tiny burb for turnover....
Im checking the cushions now.
I suggest we adopt Aaron's practice of referring to major events for psecific companies as "imploding" rather than BK or collapse, etc. Just to be safe as Sheila might be watching.
Retail implosions are impossible to rank as to their order of occurrence. Too many variables. Some will implode over favorable lease expiry like Dave & Busters. Others will lose their supplier credit lines, I think Mervyn's is suffering this fate. Many will be sucked into the vortex of malls losing critical mass as other stores close. Some like Linens & Things never had a reason to exist in the first place. IMO Kohl's will get its kneecaps whacked because they expanded in exactly the wrong places but those are normal cyclical business problems. not enough by themselves to cause an implosion.
Mervyns closing will generate 20,000 pink slips. All you overpaid money managers trying to hide out for the duration, in plain sight, at WMT, M, TGT, COST, KSS and AZO, among others, with your clients money, your pinks are next.
Rob - I just posted on your blog. I was out, but there was a big story on Carl Cole
Rob - I was in Seattle until this afternoon. The city is booming and still beautiful(I noticed you were there also)
Can't wait for Williams-Sonoma (which includes Pottery Barn) to implode. Overpriced yuppie cookware.
argento amen.
Probably more like millions of trillion dollar bills, Tim.
That reminds me, I should answer that email from Dr. Ngunomu who promised me 75 trillion dollars for helping to get the rest of his funds out of Zimbabwe.
Is that enough to buy a BigMac?
Mervyn's has been on life support for years. An out of date business plan with irrelevant merchandise buyers. A slow economy dealt the final blow but hardly a red herring.
Anonymous Bosch writes:
"U.S. regulatory environment" is an oxymoron.
The last two syllables of your last word in the sentence aptly sums it up.
One day they clamor for more regulation in commodities and the next day they say this. The SEC restricts naked shorts for selective financial institutions but not all stocks.
Their motto should be :"Selective regulation and enforcement at our behest"
I was in Seattle until this afternoon. The city is booming
I live in Seattle. I walked through the Bellevue Mall yesterday, 13 stores are closed, the most I've ever seen. Not a disaster but foot traffic was substantially down for some stores. Abercrombie & Fitch was so empty I thought it had closed, too, but no, it was open, just no customers.
The area is doing well all things considered but restaurants and stores are closing.
Just to be safe as Sheila might be watching. -- Rob
"Imploding" is on the list too, Rob. We'd better go with "accelerated entropy." It's got a very positive feeling to it if you're only marginally literate.
Thanks, I'm working on it.
Yeah, Seattle was a great place to vacation. Lots of construction and despite some insane transit projects adequate roads.
"And more ripples from the real estate bust"
CR - Shame on you; observations and assumptions are two different things.
I live in Seattle, and I'm not sure I'd describe it as booming. The condo and house markets are starting to suffer; prices are coming down; inventories are going up. We're still in the "overhang" phase where projects started during the boom years are still being completed even though they're sure to lose money now. There are also a few fenced-off holes in the ground where planned projects for condos, supermarkets, etc. have been canceled. At this point we're just trying to make sure we've built up enough overcapacity to make sure our RE bust is just as big as anyone else's.
Broward Home, as the parent of 13 and 15 y.o. girls, I have to tell you that A&F is dead not because of the economy, but because the kids now despise the brand. Sorry.
Not a disaster but foot traffic was substantially down for some...
The annual art fair was on just outside Bellevue Mall, most folks were there.
Should have elaborated - the favored stores now are PacSun, H&M, Papaya and, still, the venerable American Eagle.
Lucky Jim - I spent the weekend at a 10 acre estate on one of the lakes (brother in law's family). One of the family was a realtor, who claimed things were leveling off.
The crains Bellvue were very surprising to me.
I agree with you though, the PNW is about 12 months behind CA.
the kids now despise the brand
Cause and effect are tricky things. Do they hate the brand because it's going out of business? or is it going out of business because they hate the brand? The store had plenty of customers a few months ago.
And A&F is just one example. The Qwest store looked the same - stone dead, store clerks hiding somewhere in the back room.
Broward Horne -
I was at the Nordstarm Rack on Sunday at it was packed. I also went to the outlets past Everett (I think) and they were also crowded. Things seemed muched better off than Central Ca (maybe my comparison is not fair??)
The annual art fair was on just outside Bellevue Mall, most folks were there
Ahem.
Exactly.
is the point of the fair to generate foot traffic? I think it's quite interesting that customers were outside spending $3 on a hot dog but not $30 on a shirt.
Believe me, my kids know nothing about whether or not a business is doing well. They simply know what they want, and A&F is actively mocked by the mean girls now.
I must say, though, that no one could be happier than I am that cheaper stores are becoming cool (I forgot Forever 21). I think I'll have to cut the clothing allowance.
Just for fun, lets look at the other end of the spectrum: Nordstrom (NYSE: JWN).
Nordstrom is a well-managed company, right? They are obviously fairly valued with a trailing PE just under 10, right? Nothing so horrible could befall Nordstrom
I am betting that the tables will turn sometime in the not-too-distant future. High-end stores like Nordstrom will be the ones sucking air before too long. Consider these numbers I pulled from Nordstrom Annual Reports for the past 10 years or so:
Year\tEarnings\t% Change
1995\t\t
1996\t$165,112\t
1997\t$147,505\t-10.7%
1998\t$186,213\t26.2%
1999\t$206,723\t11.0%
2000\t$202,557\t-2.0%
2001\t$101,918\t-49.7%
2002\t$124,688\t22.3%
2003\t$90,224\t-27.6%
2004\t$393,450\t336.1%
2005\t$551,339\t40.1%
2006\t$678,000\t23.0%
2007\t$715,000\t5.5%
Average earnings from 1996-2003 were $153,118 during a period included the DotCom bubble/bust. Then from 2004-2007 their average earnings jumped to $584,447. Thats basically a quadrupling of earnings.
If you believe, like I do, that much of the recent earnings boom was credit-bubble induced, then you can see what is coming. All retailers will be hurt badly, but some more badly than others. I actually think that low-cost stores like Mervyns will be better off, if they can survive.
To make matters worse, Nordstrom is in the process of launching several new stores (with $2.5 debt to go with it) at this very inopportune time.
Fair Disclosure: I own Nordstrom put options.
Kohl's is next
Kohl's founder is Herb Kohl, senior senator from Wisconsin. TBTF
argento | 07.29.08 - 12:09 am | #
So what's Paulson going to do? Clear out their Extra-Early Bird Inventory Sale from 6 - 10 AM on T - Th?
Those shorts, Cox will permit.
The PNW is about 2 years behind California but likely to achieve success in its struggle to catch up. Like always.
"Imploding" is on the list too, Rob. We'd better go with "accelerated entropy."
Terminal deceleration owing to negative AGL.
Meanwhile Gloccamora-on-the-Delaware muddles on.
There's a 5-pack of 20+ storey condo towers going up along the river. 2 are completed; the third is halfway up. The first two, completed two years ago, still appear to be empty.
There was a 12 storey tower put up right near Market St. 1 condo per floor (about 1000sq./ft. by the looks of the footprint)... $1,000,000 per condo.
Appears to be e m p t y.
There are also various holes in Northern Liberties (up-and-coming-yuppy) that don't look like they're getting filled anytime soon.
I also live in Seattle's Eastside (Woodinville). Those cranes have been up in Bellevue for years. Microsoft is building one mother of a complex... CRE will hit this area like a ton of brick in 09, excuse the pun. Also, Woodinville/Redmond area residential RE will be slammed by the Alt-A/Neg Amortization resets. We are not so special after all...
Crispy, I wish I'd known you were in town. I've have sent you three miles over to Crossroads Mall.
You'd have felt right at home.
Bellevue, South Center and Westlake malls are doing okay, but there's still thirteen stores closed in Belleuve. That last time I counted was around December and the count was about 1/2 dozen empty spaces.
Factoria and Crossroads malls are the walking dead, though. Factoria had about a 15% vacancy rate when I walked through around Mar/April.
You must be mistaken the place is cold and damp and rains all the time.
Tomorrows Weather!
Seatac, Washington (98158) Conditions & Forecast : Weather Underground
SeattleSun
crispy&cole writes:
Rob - I was in Seattle until this afternoon. The city is booming and still beautiful (I noticed you were there also)
I posted this a few months ago but for those who missed it, here's pictures of Crispy's Excellent Adventure in Bellevue -
http://www.realmeme.com/roller/page/realmeme/?entry=a_taste_of_madness_i
How about the Kirkland area? It seemed to be doing ok. Several new condo and other CRE activity.
I think this area (seattle) has to be the last CRE booming holdout
Do your homework on retail. They are fairly simple to understand vis a vis financials.
Look at debt ratios, Inventory, floorplan covenents etc. There will be some winners.
In the end, good analysis trumps momentum doomsayers.
No doubt the economy sucks. BK's simply take down competition that piggybacked some wacko consumers with too much HELOC. Rejoice! The good guys will win.
Your job, if you choose it, is to separate the wheat from the chaff.
Broward Horne - That looks very familiar.
I think half of those are condos. Where are all of these people going to come from? It reminds me a lot of San Diego circa 2002-2005
I'll agree that the area is doing okay so far, better than I expected. But there's substantial overbuilding in RE, especially in Bellevue.
A lot of it is in work-in-process.
There's several new commercial developments along the shore of Kirkland that are just nearing completion. Sorry, no pictures, maybe I'll do it this weekend.
I do like this area, though. The metro area is around 2 million people which is still relatively small and it's kooky enough that nobody cares much about kooky people so I'm fairly low-profile here.
Mervyn's has been irrelevant for a long time. Walmart, Target, others have particularly taken their slice of Mervyn's business, but especially Target.
I went to a Mervyn's in Modesto last year, and the place was beyond descriptors like "ghost town" or "graveyard." It was abandoned, but nobody had told the employees. I'm surprised bankruptcy has taken this long. Well, credit was easy to get, I suppose.
I imagine Circuit City will come along soon.
I live in Redmond, about a mile from the Microsoft main campus. They're still building like mad.
I've got a friend in the construction industry, he says concrete orders can be placed as few as two weeks in advance, last year it was measured in months.
"barring a last-minute cash infusion"
Comrade Paulson, I think they are hoping you will put together a bailout plan for them.
Video - CNBC.com
OT - 1. Asia's looking a bit poorly.
2. Check out video re Asia and MER.
Broward....you know what is up. You always have to separate out apparel from fashion apparel, and AF is stone cold life support soon. You have to have contacts in the know, and, as you know, you are, how to say, um, in the know, as far as I can tell, by your reference to the mean girls. They are what we would like to call the deciderers, and they can kill a retail chain in a matter of months. Nordstrom rack can make a killing while one by one the fashionable chains can be instant fashion victims....take a look at CROX. Toastie...once the death spiral starts, people eventually end up ashamed to wear the brand, and then its T.U.
Seattle is beautiful in the summer. When the rains start in the fall though it's just dark and depressing.
I needed some shit to wear man, what now, where do I go?
"When the rains start in the fall though it's just dark and depressing"
You sound like my brother.
I imagine Circuit City will come along soon.
- Bob Dobbs
Maybe to Place or Show but my bet for the Win is Best Buy. Three reasons of a not particularly rigorous nature. First they've got among the most virulent and vocal haterz. Second they don't make money sell stuff, they think they are making money financing stuff. Third the stores are butt ugly, essentially three digit dollar stores. I could go on but you get the idea.
Mish has a post about an entire mall facing fc:
"Macon Mall faces foreclosure"
As a brand, what the hell does "Mervyn's" represent (emotionally) anyway?
Reminds me of a goofy, big-eared kid.
OT from previous thread: Dilution is the worst kind of debt there is.
Someone alluded to MER management serving themselves at the expense of shareholders (agency problem). Well, if shareholders are about to lose all their rights, there isn't anything left to worry about, no?
The greatest trick Wall Street pulled was getting ERISA passed. It has allowed them to bypass all the individual shareholders (accredited investors) to sucker in
pensioner's money via "funds' and their inept and lazy fund managers.
Personal anecdote* Went to a muni pension fund oversight meeting last week for kicks. You oughta see the "professionals" "managing" billions of dollars. It's a disgrace how subpar these clowns are.
Sadly, I left wondering what kinds of bribes were paid to acquire these "advisory" contracts and how they were paid.
Thanks homedad43,
Love Amanda Drury
OT: Washington state plans to revoke the license of a California mortgage broker.
The state Department of Financial Institutions says an investigation has found Paramount Equity Mortgage, Inc. engaged in deceptive lending practices.
In a statement issued Tuesday, the state says it also will fine the firm $500,000 and require restitution for Washington borrowers.
Paramount is accused of charging and collecting unearned fees, charging consumers to buy down interest rates without actually reducing rates, failing to make required disclosures and making state and federally required disclosures in a deceptive manner.
In a statement, Paramount denied any wrongdoing, saying the state's allegations are false and that it plans to appeal.
Paramount said it plans to defend its ability to continue offering mortgages to Washington residents.
The company made more than 1,700 mortgage loans to Washington borrowers in 2007, collecting more than $8.7 million in fees.
Local News | WA state to revoke license of CA mortgage company
| Seattle Times Newspaper
you are, how to say, um, in the know, as far as I can tell, by your reference to the mean girls
The trick to dealing with mean girls is to convince them that you're The Devil.
Not "a" devil but "The" Devil.
Now they're facing criminal charges and cancer surgery.
They stay clear of me now, ho ho ho.
Another OT: The Treasury Department said on Monday it expects to borrow $171 billion in net marketable debt in the July-September quarter, the highest borrowing level on record for that quarter.
Rising expenditures, along with falling tax receipts, will likely force the Treasury to increase its borrowing. Analysts forecast that the Treasury will opt to sell $15 billion to $16 billion in benchmark 10-year notes and $9 billion to $10 billion in 30-year bonds as a part of its August refunding.
They also said there is a strong likelihood the government will bring back a retired maturity such as the three-year note.
3rd OT: ...The U.S. Department of Justice (DOJ) has been investigating charges that financial institutions have engaged in market allocation and bid-rigging both of which violate Californias anti-trust law and common law. As a result of this investigation, Bank of America has already agreed to cooperate with the DOJs Anti-Trust Divisions Corporate
Leniency Program in exchange for immunity from criminal prosecution over its involvement in the conspiracy to manipulate the municipal securities market. As part of this deal, Bank of America is set to disclose the details of the scheme that has harmed investments by many cities, including the City of Los Angeles...
OT: Gov. Arnold Schwarzenegger will wait until Thursday to sign an order slashing state workers' pay to the federal minimum wage and laying off thousands of other employees to save money during the impasse over the state's $17.2 billion budget deficit, a spokesman for the governor said today.
CNbc made a good point on Mer. These writedowns come after the sale of bloomberg and blackrock. They don't have anything left to sell..
Stocks and indices breaking 1 year support today and pointing to broad, parabolic, 10% declines, suggest renewed federal 'open mouth' policy starting tomorrow, combined perhaps with some desparate, trick moves designed to prevent an October '87 investor loss of confidence re-run.
Today's pathetic, transparent, covered bond promotion suggests how far Ben and Hank are behind the curve, and how far this market can drop as earnings uncertainty comes back into investor focus and confidence in reflationary miracles dwindles.
Still think a minus 1250 point Rule 80B down move would just get this market started in discounting the retail disaster and house price collapse evident everywhere I look here in the SoCal desert.
People I talk to aren't looking for it, so they don't see it. They'll just end up like the frog: where there's no sense, there's no feeling.
MGM, Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan
MGM, Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan - Bloomberg.com
For those of you interested in the demise of American manufacturing, here's a report I found on the auction at Delphi last year.
You'll note that a lot of machinery was sold at or below scrap. A lot of the machine tools went to India and Peru.
YouTube
- Jim Graff of Graff-Pinkert & Co. Reports on Delphi auction
So does anyone else feel that the 90% haircut NAB gave to structured credit products might have been the trigger for this flood?? This deal was probably in the works for weeks, but got hurried along with NAB's bombshell. MER probably realized that things are going to get a hell of a lot worse - so they need to grab cash now...
Thoughts?
This couldn't happen here could it?
National Australia Cuts Bond Sale as Investors Balk
National Australia Cuts Bond Sale as Investors Balk (Update3) - Bloomberg.com
National Australia Bank Ltd., the nation's biggest by assets, slashed a planned A$850 million ($812 million) bond sale by two-thirds after credit-market losses triggered a three-day, 19 percent slump in the stock.
dk:
Exactly: Wall St. and Europe have all been playing a varsity game of hide the salami, and could be petrified at the prospects of an outsider shining a light on their hidden losses.
peAkcredit - you are a true poet.
dk
Hank and Ben couldn't have liked that NAB news. This may be the final signal to the world that these Mortgage bonds are essentially worthless. Read Price Discovery. People will no longer confuse MBS(worthless) and houses/land.
FYI The printed piece of paper is the worthless asset.
"We'd better go with "accelerated entropy." It's got a very positive feeling to it if you're only marginally literate."
And I spontaneously busts out (to the tune of EW&F's "Reasons") with
"Entropy's rising.
I'm starting to feel
I'm in the wrong place to be real."
Arborland strip has recently lost high-end fitness equipment and furniture stores. Remaining with a few local odds and ends are a Mervyn's, a Circuit City, a Petco, the emptiest OfficeMax I've ever seen (for months and months now), and a Border's (with a Barnes&Noble 3min down the road), with the only viable-looking store in 20 acres a grocery that survives on quality meats and fish.
Maybe football season will save them …
Old news (Monday, March 24, 2008): One of Californias largest subprime auto lenders is closing the doors to its only North Bay office after suffering heavy losses from bad loans.
the banks parent company, Chicago-based financial services provider Unitrin Inc. (NYSE:UTR)
Newer news (Jun 26, 2008 12:54pm ED): nitrin's Negative Rating Outlook reflects Fitch's negative view
of the subprime auto lending market, which is the focus of Unitrin's
consumer finance business (Fireside Bank). Fireside Bank suffered significant losses in 2007 and Fitch expects additional losses in 2008 given deteriorating macro-economic trends. If loan losses materially increase for a prolonged period, it could lead to an additional ratings downgrade. Also, further losses in consumer finance could lead to more capital transferred from the insurance companies to Fireside Bank.
Oh well?
It was triggered by a move from struggling US investment bank Merrill Lynch to get rid of billions worth of CDOs in which the NAB was a co-investor.
Merrill's took a decision to sell the CDOs at a written-down value and the NAB had no option but to follow suit. Its larger write-down than Merrill Lynch (90% vs. 78%) reflects its lower ranking of security.
The NAB was involved in a parcel of whats called "super-senior" CDOs with a face value of $19.9 billion.
NAB and the Australian stockmarkets were directly affected by the Merrills move, which reflects the US banker's desperate desire to quit as much of its toxic subprime mortgage related investments as it can, without regard to the flow on impact to other banks and markets.
How Merrills dragged NAB into an $830m writedown – Crikey
MER's actions just look like part of a planned unravel. It just seems too neat to be coincidence.
Sounds like MER was super-senior on the debt and NAB got whiff of a coming liquidation. Since they were only Sr. on the debt they decided to put a thumb in the eye of Merrill - who only went to 22 cent on the dollar... Not 10 like NAB. See article above.
Fab post at Nakedcapitalism:
FRIDAY, NOVEMBER 30, 2007
Paulson Promoting Rescue Program for Subprimes
Do we see a pattern here? The much-covered, little-loved SIV rescue program (formally known as the Master Liquidity Enhancement Conduit and informally called the Entity or Super SIV) was announced prematurely, didn't clearly solve the problem it was meant to address, involved a lot of failing around to try to resolve irreconcilable interests (those of the SIV sponsors versus the investors who would eventually fund it) and appears to be stillborn (despite the expectation that a structure would have been announced and syndication of the credit enhancement would be underway, we've heard nada, presumably because HSBC's decision to rescue its own troubled SIVs has put a damper on the MLEC plan).
Paulson seems unable to learn from his own experience. He is swinging for the fences with another Big Scheme That (Purports To) Fix The Problem With A Master Stroke. His track record here is not encouraging.
This really belongs here since SPG has Mervyns, Dillards, Steve & Barrys as some of their anchor stores
Here are some Simon Property Group conference call comments from David Simon and crew.
"the days of "oh the tenant is interested. let's build it!" are done"
"the risk we have is if it is 90% leased"
"we're in the first half of the downturn, i do think we'll see the worst of it manifest itself in '09, no in '10"
"you're going to see more stores closing cause of the credit situation"
Q: Will year end '09 be lower than year end '08?
A: "Too difficult to say"
"Good malls are getting better and bad malls are getting worse"
"The under-writing is very conservative... It would take a consortium of banks in order to get a mortgage on some of the bigger malls"
"Inventory is increasing. We're shopping the inventory to the best of our abilities"
Q: Will you be a buyer of your stock around these levels?
A: "Prudence at this point is not an unwanted asset. We're going to be very prudent as we think about that"
As long as CR is still here, I know the apocalypse has not arrived. When I wake up and the blog doesn't respond or redirects to a FDIC welcome page, then I'll know the end is at hand.
As an aside, what's the best way to go long on regulatory/governmental stupidity, shortsightedness, corruption, fear, and greed?
Sweet!
No more annoying Paramount Equity Mortgage radio ads in Seattle...
Don't worry we have an emergency ham radio network setup to broadcat CR if the internets get shut down.
As an aside, what's the best way to go long on regulatory/governmental stupidity, shortsightedness, corruption, fear, and greed?
Go long on PUTs.
Dude, I'm really starting to shit bricks here. It's all unraveling now... there's nothing that can stop this bullet train that is coming towards us. I think what freaked me out of the most was this post on naked capitalism today... I hope my family members and friends can hold on to their jobs.
Has Deleveraging Even Begun? (Not For the Fainthearted) « naked capitalism
Darling Should Rule Out Fannie Mae-Style Agency, Report Shows
Darling Should Rule Out Fannie Mae-Style Agency, Report Shows - Bloomberg.com
"Much has been said about the case for launching a U.S.- style agency, but it seems unlikely that it would be right to tackle this century's problems with last century's solution, particularly given the time it would take to create such an agency," Crosby's report will conclude, the Treasury said.
The report leaves open all other options for unfreezing mortgage lending in the U.K. after the collapse of the subprime market in the U.S. last year.
"what's the best way to go long on regulatory/governmental stupidity, shortsightedness, corruption, fear, and greed?"
Fail to move to Canada after the Supreme Court settled the 2000 election.
Oops.
Credit Crunch? I've been inundated by credit offers from 3 different frequent traveler (Marriot, Southwest, United) for the past two years. What's good use for shredder paper?
On the other hand: Costco today was empty... yes, Costco! The emptiest I've seen it on a Monday since MNF ended. Don't worry, the Internet is going to be blamed for the Wall Street bus crash and bloggers' hands will be chopped off to appease the idjits...
Rhodesian,
Welcome to the dark side. "Peak Debt" is here, and it's a long ways down.
p.s.: And yet so many will continue to say that a depression is "highly improbable". Yeah, right.
Recently I chopped 10% off of my 401(k) deposits. One of my older co-workers who wants to retire in 2-3 years said, "Oh, you did that... I upped my 401(k)... market is going to come back."
People in America still think the stockmarket can only go up... but don't want to look at Japan...
Not sure what to do but I think I'm going to liquidate all of my stock accounts in the near term and go in gold. I'd really like to know how to play the PUT game so I can go in short as well... but I'm not sure at all!
Re: mergency ham radio network setup to broadcat CR if the internets get shut down.
Whatever happened to ham-internet, or wireless-internet via ham-radio?
Way OT but could someone be so kind as to explain why the future and spot price of gold at the moment is the widest spread this observer has ever seen? Bloomnerg's got future at $940 and spot at $930. TIA
Saturday, May 31, 2008
The convergence of Ham Radio with the Internet
Chas' Compilation: The convergence of Ham Radio with the Internet
D-STAR is a new ham radio system which offers digital voice and data communication. It connects repeater sites over microwave links and the Internet and forms a wide area ham radio network. The DSTAR system provides a new capability and functionality to the ham radio world and increases the efficiency of emergency communications.
CR needs to prepare!!
One would think that Software Defined Radio/GNU Radio would be the next generation in ham radio applications. I can't wait until current PCs run for months on AA batteries... I suppose that's what, 5 years away with Moore's law? Its late I'm not going to do the math...
What's your frequency, Kenneth?
These D-Star radios transmit data at 128kbs, so no more youtube videos in the comments
Paulson is insane.
The problem is too much debt so the answer is more debt, except to stamp it with "we really, really, really will pay it back this time".
Madness.
Henry Paulson is the new Marie Antoinette.
OT: Reading the Senate Debate on the Housing Bill
Senator Kyl went off regarding energy policy and then mentioned the Federal Reserve.
here are two things that can be done to better the dollar. First, the Federal Reserve should switch its focus from maintaining economic stability to fighting inflation. In periods of slower economic growth the Federal Reserve traditionally responds by reducing short-term interest rates, but that can exacerbate inflation, which has increased substantially--growing at 4.9 percent in June from the same time a year ago.
Note that while the dollar has fallen, the euro remains relatively strong because the European Central Bank (ECB) has not only refrained from lowering interest rates due to their concerns about global inflation but actually raised their target interest rate to 4.25 percent on July 3rd. The Federal Reserve needs to follow the ECB's lead and resist the political pressure to cut interest rates in order to stabilize the value of the dollar. The second thing would be for Congress to begin to make our current, relatively low, tax rates permanent.
Not sure I agree with the "low" tax rates being made permanent, but this is interesting and not what I expected when I hit up Congressional Record.
I got a personal call from Secretary Henry Paulson, our Secretary of the Treasury, at home last week. He said: We have to do something. This is an emergency. I said to Secretary Paulson: I think you are right. I may not agree exactly with your approach, but there comes a time when we have to rise together, on a bipartisan basis, and deal with a serious crisis. This could be a crisis if we do not act. I said to him: Would you urge the Republican Members of the Senate to have the same sense of urgency in passing this housing bill that I hear in your voice? He said he would try. Well, he was not very successful. Six different times the Republicans have tried to stop this housing bill with a filibuster and now have dragged us into a Saturday session here to slow it down again.
There are a lot of problems with this bill, but it doesn't matter. Here it is. It is almost 700 pages. Not one Senator has read it. There are lots of little goodies stuck in there. There is one we found, an earmark on page 616 that overturns an IRS ruling where low-income housing--which is supposed to be for the general public and not discriminate--that they can discriminate for social organizations such as art colonies. Then we find an organization, Artspace, that develops low-income housing and gives it to these artistic colonies, one of their board members happens to be the executive director of the Fannie Mae foundation.
Folks, this bill needs to be aired out for weeks, if not months. They want to rush it through. We kept them here on Saturday so the American people could find out a little bit more about what is in it. But no matter what is wrong with it, most of the Members of this Senate are going to come in and vote for it and check the box and go home and say they did something about housing. I am afraid they may compromise the future of America as they do it.
Mr. President, after hearing the Senator from South Carolina, it is time we initiate an investigation. I think we ought to call the Sergeant at Arms Office. Something terrible has happened here. Apparently, the pages on the Republican side of the aisle are not distributing the Congressional Record to the Republican Members.
...
I am sure the Senator knows this is no new bill. This bill has been around since April. The Senator has had ample opportunity to read his so-called secret bill.
This is terrible that they aren't distributing the Congressional Record on the Republican side of the aisle. We have to look into this, as the Senator says he has evidence of 855 secret bills--again, a failure to deliver the Congressional Record to the Senator from South Carolina. Every single one of those bills, I say to my colleague, is printed in the Congressional Record for him to take home and to read--to read on the plane back and forth to South Carolina. It is all there.
Hilarious exchange right here...
Mr. DeMint: I ask unanimous consent--to clear up what the Senator from Illinois has said--that next week, when we come back, we have a free and open debate and that the Republicans and all Members be allowed to offer their amendments, without restriction from the Democratic side.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. DURBIN. I object.
The ACTING PRESIDENT pro tempore. Objection is heard.
Mr. DeMINT. That is what I thought. There is so much doublespeak here. They are saying one thing to the cameras and to America and another thing here. We are not allowed to offer our amendments.
This is a staggering loss of wealth we are seeing, coming at the very same time, as the Senator from Vermont has pointed out, that food prices, gas prices, health care, and education costs are rising. We are experiencing the worst of all possible worlds. Wealth is declining, the source of wealth creation, and costs are rising simultaneously. Moreover, when we consider the role that home equity has played in supporting consumer spending, we see the danger a vicious downward cycle could create, an economic disaster for our country.
Don't let yourselves be dulled by nameless and faceless statistics either. Behind each one of these numbers I have recited, there is a family--a mother, a father, children trying to grow up, facing unemployment, losing their homes, wondering what the future holds. So when we talk about the numbers, about how important this data is, pause for a minute, when deciding whether to support this bill, and remember: Behind every one of those numbers there is an American family who this morning is wondering whether their Congress can do anything at all about the problems they face.
The bill establishes the HOPE for Homeowners Act to help at least 400,000 to 500,000 families stay in their homes. It does so after asking both lenders and borrowers to make financial sacrifices, and it does so at absolutely no cost to the American taxpayer.
YES HE SAID THAT! HE SAID NO COST TO THE AMERICAN TAXPAYER! YES! YES! CHECK THE CONGRESSIONAL RECORD!
More drivel:
This body has repeatedly provided emergency funds to communities ravaged by floods, hurricanes, and natural disasters. The foreclosure crisis is every bit as much of a disaster. This is an emergency equally deserving of these funds.
You effing' idiot! Floods, hurricanes and natural disasters are "acts of God!"... house price bubbles... nope, not the same jack-hole!
Gosh, I can't stand to hear our legislators say, "Well, I don't like this bill, but I've gotta vote for it..." dude, you weak ass pansy... stand up like a man against it if you don't like the bill!
Mr. President, this bill, with one exception, complies with the Senate Republican conference principles on use of revenue raising offsets. This bill contains new tax policy. The new tax policy is offset with revenue raisers that a bipartisan majority in the Senate consider improved tax policy. The main one would put in place a reporting regime on credit card payments to merchants. It is a Treasury tax gap proposal.
Yes indeed it's an I-n-t-e-r-n-e-t T-a-x! Am I the only one who thinks of this as an Internet tax?
What's worse, taxing credit cards is going to disincentive their use so far less people will use than is estimated...
More on the credit card proposal:
The payment card proposal has two features that help keep opposition to a minimum. First, the third-party source being tapped to supply information is already savvy in handling similar data. The belief among proponents, like Treasury Assistant Secretary for Tax Policy Eric Solomon, is that the "existing paper trail would make it relatively easy to generate information reports to the IRS."
Second, whatever the extra burden, none of it would fall directly on small businesses. All the newly required information would flow from credit card companies to the IRS. That's probably why former IRS Commissioner Mark Everson told the House Ways and Means Committee on March 20 that this was his favorite compliance proposal of the 16 the administration was proposing.
....
For security purposes, the banks will use their own internally generated merchant identification number. Under the proposal, the merchant acquiring banks would have to compute annual volume and keep the merchant numbers linked to TINs or SSNs. Programming and maintenance costs of this new database could be large. Another concern is that with increased use, there is increased risk that confidentiality of SSNs could be jeopardized.
...
And some of us might say that credit card companies don't like the proposal because once it is in place, businesses would redouble their efforts to get customers to use cash rather than credit, and that is a threat to financial institutions' profit. But don't mention such ideas in polite company or on Capitol Hill.
...
The purpose of requiring this reporting is based on the belief that small businesses are underreporting their income for a variety of reasons, including tax avoidance and lack of understanding related to the tax law. It has been proposed that by requiring merchant acquiring banks to provide reports on payments to merchants, the IRS could compare actual reported credit and debit card sales with reported tax filings, thereby allowing the IRS to extrapolate what a business cash transaction income should be. If the reported income on tax returns is not as it should be, the IRS would conceivably be able to target audit resources at those businesses that appear to have underreported.
I guess this is not an Internet Tax but a tax on small businesses (or large businesses). Congress wants a piece of the credit pie, but I bet these revenues fall way short of what the CBO says they will get...
The names Mervyn and Merrill look so similar.
YLSP,
What the f'k were lobyists from Amazon doing?
REBear,
Unsure if it is an Internet tax, but the fact that companies using the Internet probably deal with credit cards a majority of the time... well if they were underreporting their income its easier to catch them.
Originally I thought the IRS was going to come after individuals, but now I see they are going after businesses that are under-reporting... and this proposal has been around a few years which is why there is information floating around that I could grab... although the source was blogs so who knows... I might have just made up all the transcripts from the Congressional Record as well...
So I expect we'll see something like a COD/check discount/cash discount more often? I think this goes into effect 2010...
YLSP,
I don't know if the IRS and state division of taxation share data. If they do, the states will come after individuals.
Kohl's is just a gigantic ehhh.
They don't have anything particularly special going on there. Not to mention the big-box deserts they routinely set up in, are so unpleasant to visit (heavy traffic, huge parking lots with no sidewalks) that I'm surprised anyone would still want to waste a half hour of their lives navigating their way to and from the front doors.
Considering some of their desperate sales that I saw just after Christmas, I wouldn't be surprised if they go under before next spring.
UT - Let's change that retiree/worker ratio so we can retire! Can you say CLOWN CAR?
ABBOTSFORD, British Columbia A Romanian immigrant has given birth to her 18th child in British Columbia, making her the province's most prolific mother in 20 years.
Proud dad Alexandru Ionce said Saturday that his 44-year-old wife, Livia, gave birth on Tuesday. Their daughter Abigail weighed in at seven pounds, 12 ounces.
"We never planned how many children to have. We just let God guide our lives, you know, because we strongly believe life comes from God and that's the reason we did not stop the life," said Alexandru Ionce.
Whiners, all.
I don't know if the IRS and state division of taxation share data. If they do, the states will come after individuals.
bingo. This provision is to build the infrastructure for states to collect USE TAXES.
"Imploding" is on the list too, Rob. We'd better go with "accelerated entropy."
I like "rapture" because it lets you feel good about their demise. IMB was raptured this month, isn't that nice.
I don't know if the IRS and state division of taxation share data.
IRS has reciprocal tax info agreements with almost all states. Nevada is a notable exception. All those cash casino winnings? I'm sure they are 100% reported.
Downturn may be 'the big one'
S&P/Case-Shiller Home Price Indices (May) -15.8%(YOY) versus (April) -15.2%(YOY). Consensus was for -16.0% for what that's worth. CR should post more later.
S&P / Case-Shiller is out for May.
Composite-20 down 1.4% month-over-month, 16.0% year-over-year.
Woo-hoo! Only down 1.4%? I smell a market rally!
Correction - down 15.8% YoY, not 16.0%. Oops, looks like Anonymouse beat me to it anyway. Never mind.
Monk writes: Woo-hoo! Only down 1.4%? I smell a market rally!
I recall the day last month when Case/Shiller was released; the market rallied pretty hard, but most likely for other technical reasons.
I'm looking for a bit more of a pullback in XLF and I'll buy, as explained <a href="http://www.haloscan.com/comments/calculatedrisk/5454652625492637449/?dt=1217318478#533393>here last night.
"One of my older co-workers who wants to retire in 2-3 years said, "Oh, you did that... I upped my 401(k)."
These are the same fools that drove this market up so their parents could retire in comfort. Who they gonna call. I told my daughter to cut her contributions by 50% and raise cash and keep it in the safe at home. I a boomer but I think they are in for a surprise at the butt scrunching they are going to get.
I'll save my in-depth take on the C-S number for the appropriate thread, but in a nutshell, this number isn't as good as it looks.
I've got a spreadsheet going that tracks this using a 12-month rolling average rather than the 3-month average that S&P reports, which to my layman's mind makes a hell of a lot more sense (since real estate is, you know, seasonal).
And in fact, using this method the yearly rate of change went from -8.9% in April to -10.1% in May ... so the downward acceleration in prices has not slacked off but in fact is picking up speed.
I suspect you won't hear CNBC lead with that conclusion today, though.
Dead cat bounce ahead, watch for falling cats.
What about all the money they saved by importing literally everything in the store from the 3rd world sweatshops? Let me guess, the CEO and VPs made millions. What's the matter? The 3rd world illegal immigrants that were given houses and blank checks in Arizona and California have no more money to spend now? What will they do? It's good news for Wal-mart and Target. Bad news for everyone else. The housing boom in AZ, CA, and FL was built on the backs of illegal aliens: they made decent money to afford teaser loans, they took out equity as prices rose, they lived payment-free in their homes for 8 months, and now it's all over. Realtors were selling houses to ITIN holders as fast as they could sign on the dotted line. They even made a guide for it (Google it). Freddie, Fannie, Countrywide, and others hold these loans. All it takes is 1/100 to foreclose in order to destroy the prices. 1 in 10 people in this country are illegal aliens. That's 30 million, mostly concentrated in, you guessed it, CA, AZ, and FL. Most people in the US have no idea, but I lived it. I know what it's like to walk into a grocery store and 9/10 people speak Spanish-only in neighborhoods where the median home price is over 400k. I'm sorry, but a 20-30+ something who doesn't know but a few words of English is not here legally. Get your heads out of your arses and wake up. The American people were sold out! We are being robbed to bail out these banks. We are being robbed to further open-borders agendas. We are being robbed by these companies that import everything to save a buck and squander profits on CEO salaries. Oil companies take it in the chin, but at least they don't hire illegals. Oil drops + gold stays high = weak dollar.
I bet that someone in Dubai is trying to buy it right now.
Oil companies take it in the chin, but at least they don't hire illegals.
You might want to talk to folks in the Middle East about that...
US oil companies and Middle East oil lords are two different entities entirely. I'm no fan of US oil co's, but they have taken the brunt of the blame for just about everything. Drug companies make way more money per dollar invested, and they have an equivalent monopoly on the US market. Oil co's have suppressed new technologies for more efficient solar cells, more efficient gasoline engines, and oil-killing battery technology.
How come nobody has posted the follow up that Mervyn's has Indeed filed for bankruptcy today.