Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.
"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.
Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.
advertisement
The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance 5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has 11bn of assets.
Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy.
daily telegraph
I thought the USA economy can continue to float along on BS financial services and market bubbles so who needs manufacturing in America ?
25+ yrs of industrial production decline and increasingly financial engineered driven bullshit for the US economy ( especially last 8 yrs under Bush ) with massive market bubbles has created systemic damage.
Inflation-the silent killer..raise rates fast or bring out the defibrillators..Prices are careening out of control like a bunch of bulls running in the streets of (Spain)....
You forgot the bit about lousy appraisals by the folks who were supposed to objectively be looking at Martinsa' books (yet were owned by the company's biggest creditor.)
Back to a country of farmers! All those suckers like India and China won't realize what hit their economies since we've outsourced their cheap manufacturing. Someone asked what will lift us out of this... and you all thought the farming bill was insane!
This is a genius plan! The world won't be able to eat without us!
Sentence above should read something like "outsourced our cheap manufacturing to them".
It's really a diabolical play by America!
Wait... what's that you say? Something about building value-less CRE on top of valuable farm land for the past 20 years? Nah... TBTB in this country are geniuses... they'll take care of us..
Alec
my attention was focused on a country whose leader has cajones.
I expect Spain is just as corrupt as the US and maybe a little more.
There is also an article on Brits who had clear title to beachfront land whose houses are being bulldozed by gov't. EU just says please don't!
What do we export? Lumber, raw materials, Yes--even US refined oil!(So much for needing more offshore drilling to fix our oil crisis!) And so much for the cheap dollar spurring manufacturing! Checkmate....
At lease Spain has the integrity to tell their people the truth--something completely lost on Washington. And, will let their reckless financial institutions fail instead of bailing them out on the backs of the taxpayers. And we thought Europe was socialist!
All of the effort the govnmt puts into
propping up the financial stocks does
have a good side: it allows us to take
out even more put options for when they
inevitably crash later on.
Spain's finance minister can't afford to bail out real estate speculators or mortgage lenders because his country has a strong streak of socialism and a large poverty class. They wouldn't stand for it.
In this regard, they are 5-10 years ahead of the U.S.
Spain has socialism for the people
US has socialism for the rich. Never did I think I would agree with Sen. Bunning. I got Chuck the Schmuck and Hillary. No sense even e-mailing them
I did e-mail Dodd and Shellby pointing them to Yves column on Ackman and Roubini.
Pls do same
Is there an absolute measure of manufacturing activity? It is interesting to see that it is contracting less, but my thought is that perhaps there is less to contract in the past as we have lost manufacturing jobs to countries overseas. Is there data to show this?
Oh yes, aas a fall-back for those also represented by lefty Senators I did e-mail Chuck and Hillary that if the did support Paulson, at least make George and not Hank the one who has the power to bring us fully into Corporate Socialism
Thanks for bringing up the Spanish housing issue. Their overhang of excess inventory is far greater relative to population fundamentals than that of the US. Plus the Spanish demographic profile indicates that the population will likely be stagnant to shrinking in the next 20 years. Whereas the US has slightly positive population growth due to higher fertility and in-migration. The financial losses in percentage terms are going to be far worse for Spain than the US, IMHO. There are plenty of data that can be Googled to back my thesis up.
Industrial production has nearly doubled over the past 25 years. It hasn't shrunk. Industrial employment has fallen, but output has risen. It stopped rising a little over half a year ago, but that seems entirely cyclical.
WASHINGTONA panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.
"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
"Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't importantjust as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."
"The U.S. economy cannot survive on sound investments alone," Carlisle added.
Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.
Current bubbles being considered include the handheld electronics bubble, the undersea-mining-rights bubble, and the decorative office-plant bubble. Additional options include speculative trading in fairy dustwhich lobbyists point out has the advantage of being an entirely imaginary commodity to begin withand a bubble based around a hypothetical, to-be-determined product called "widgets."
What is needed at this point, is aggressive action from the government to lift sentiment, said Shuja Rizvi, director of broking operations at Capital One Equities.
I'm doing some PT teaching for U.S. Steel in Bham, AL. They are running wide open, lots of overtime and building plants.
May be the Template for the return of manufacturing to the US. In theory, in a decade of so we could have the modern up to date stuff while China has the old crud.
Why would anybody backstop a firm that was cooking the books? It's nice that the finance minister didn't like his version of Enronm
Aside from the UK expat bubble, most RRE apparently is based on rotation out of antiquated housing stock into all mod cons. even then most of it is high density close to city center with solid transit routes, as opposed to Eire or America.
Pakistan scares me..I'm surprised were not propping that market up thru covert cia funds..they are the real nuclear threat to the middle east, india and the world. Heck they pardoned thier nuclear hero after he sold all the secrets to whomever...
This is the real story in middle east
Iran is a Bush story..Big difference....
rent_to_own writes:
'Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis....'
Yep, seems like pretty much the only adults are in Europe at this point.
Maybe, but who was in charge while they were blowing that enormous bubble?
During the GD Europe went went into recession before the U.S., before we acclaim their superiority in managing this debacle let's give a little thought to how they got there.
BTW, I agree that things are going to be ugly everywhere. My biggest concern is that if the EU and UK bubbles crash them, exports will go down the tubes and take us with them. The first bank run of this mess was in England, remember?
Heck they pardoned thier nuclear hero after he sold all the secrets to whomever...
Thought the nuclear threat accelerated under Musharraf. He was in charge of the military after all.
Pakistan nuclear proliferation case 'closed'
ISLAMABAD, Pakistan - Pakistan's Foreign Ministry insisted Saturday that its nuclear proliferation case was closed, a day after the disgraced architect of its atomic program claimed the army under President Pervez Musharraf helped spread the technology.
Can't believe mid summer rally is almost over. I was so looking forward to buying SKF @ 100 and selling it in October @ 50+% gain.
I mean common irrational mutual fund managers, COMMON..
The charge-off rate for JPMorgan's prime mortgages which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.
Anonymous writes:
The charge-off rate for JPMorgan's prime mortgages which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.
Things are definately not getting better. Weak accounting rules as well as low analyst expectations makes these financials easily beat forecasts. Watch the markets rally a bit and then reality will sink in as always.
It might not be long before communities start using concrete instead of traditional asphalt to resurface roads due to soaring oil prices.
Asphalt has two components, one of which is petroleum thats causing the price of asphalt to compete with concrete, according to figures from the Missouri Department of Transportation.
The figures state that a ton of asphalt now costs $59, bringing the cost of two tons of asphalt to $118.A yard of concrete, on the other hand, remains steady at $85.
Two tons of asphalt are comparable to a yard of concrete, according to Granite City Public Works Director Rich Fancher and Granite City Engineer Joe Juneau.
If "[t]wo tons of asphalt are comparable to a yard of concrete," and 10 workers can pave two roads in 6 days with asphalt, how many workers would it take to pave 12 roads in 3 days with concrete?
Manufacturing is being helped by the weak dollar, very strong wage growth in China making out-sourcing more expensive, and higher costs of transporting imports.
Also negative savings by consumers and increasingly governments and weak comparable figures since the sector has been doing poorly for a while.
CR,
You might have posted this before, but what are the absolute number of manufacturing jobs today versus every 10 years back going to the 50s? Morevover, what are the percentage of manufacturing jobs to overall jobs in these time period. My sense is that manufacturing is having a smaller and smaller impact on the economy as jobs shrink and wages (including benefits) stagnate or decline across most manufacturing fields. Therefore, these manufacturing numbers means much less to an economic recovery than they did in decades past.
Hey now! I thought the cheap dollar was boosting our exports and this was the road to recovery! What? People still aren't buying stuff? Inflation...there's no inflation!
Jeebus Pete, are we escrewed.
I know, I know...it's all fine in the "knowledge" and ipod based economies - the former just requires dreaming up new schemes and the latter just keeps getting cheaper and cheaper. I like my house to be made of bricks and mortar...they do a better job of keeping out the rain.
I've only skimmed it - getting ready to visit some factories tomorrow but seems pretty much right on (including the bit about 'near shoring' to Mexico - the plants I see tomorrow do that, do difficult component build in US, do lower skilled final assembly in Mex where labor costs are a quarter to third what they are here - overall a LOT more work in US compared to offshore to China).
The thing is even if it really is happening (and I think it is) it won't be NEAR ENOUGH to soak up the job losses in FIRE industries...
But then FIRE isn't going to come back either unless FCBs & SWFs continue to bank roll our excess consumption (ain't gonna happen forever) so they better start thinking about what next.
Last tip - they can't all be 'day traders' either... an economy built on 'day trading' is about as sustainable as an economy built on real estate agents and mortgage brokers. So if not mfg & if not agriculture... what are we going to trade with OPEC to keep your cars moving and air conditioners cooling?
Also - Philly region is nowhere near the mfg powerhouse it was say 50 years ago. Using Philly region as a barometer of US mfg is like using industrial Midwest as a barometer of national RE conditions. Might have been relevant 50 years ago before 'Rust Belt' - not anymore.
My guess is the Carolina's have more heavy mfg now than does the Philly region - whoddathunkit.
Caterpillar's decision to stay domestic may not have been in response to currency fluctuations or other variables tied to offshoring. But the company is bucking the trend of large, multinational manufacturers responding to demand spikes by employing cheap, overseas labor.
"There's not a boom in U.S. manufacturing. What there is, is a slower departure of U.S. manufacturing," O'Marah points out. "You may have a plant making car parts that's operating at 85% capacity, whereas last year or two years ago you might have run it down to 75% capacity and continued to source more out of your Asian plants. Most folks can produce multiple products in multiple locations, so they decide to put sourcing decisions in one location or another depending upon the total equation."
I see A LOT of that... choosing to produce more locally or at least regionally EVERYWHERE. If product is consumed in NAFTA Zone try to make in NAFTA Zone... if the product is consumed in Euro Zone try to make in Euro Zone. Same with ASEAN & BRICs.
Can't always be done but make it the mission - produces pretty much sustainable results everywhere.
I'd guess domestic resourcing of components & production will have a bigger effect on US mfg stability than increasing exports. But it will be facing a tough headwind of decreasing consumption overall as economy continues to slow. Just my WAG.
It's almost all agriculture welfare.
Angry Renter | Homepage | 07.17.08 - 1:49 pm | #
Virtually none of it sticks to fingers of small farmers either - it all ends up in the hands of agribusiness, banks financing agribusiness and equipment mfgrs.
I used to be a big supporter of 'farm supports'... back in the day when there were farmers.
If the dow goes up to 11,400 when oil drops to 130, where would the dow be if oil were at 100?
a) 14,400 (because you take away the 3 from oil and add it dow),
b) 10,000 (because cheap oil would mean bad economy, or because 10,000=100^2),
c) all of the above, but two days apart.
Hey angry renter what about Americas farmers!? What are you going to tell the 10 of them.
Tim | 07.17.08 - 1:56 pm | #
LOL. There still are some 'family farmers'... and if you look back over Cobra's posts he has family in the game. There just aren't that many of them.
But the reality is the recent farm bills don't help small farmers much. Its targeted to help ConAgra, Cargill, ADM, Deere, Case, Monsanto, etc. That and the IBs that finance them all.
There are lotsa ways to help small farmers survive & ensure we have a domestic food supply (that's important - imagine we produced food like we produce oil & OPEC was our food producer - remember the boycott?). The current farm bill is a pretty lousy way to do ensure success of small farmers & secure our food supply.
NYC RE update
"
Sales were down compared to last year while prices remained flat in Queens and Long Island, according to Miller Samuel's second quarter report for brokerage Prudential Douglas Elliman.
Long Island, excluding the East End, and Queens saw sales drop by 5.3 percent than last year's second quarter, the report said. But sales did jump 36.9 percent from this year's first quarter.
Prices on Long Island and Queens only saw marginal changes. The median sale price increased 0.1 percent over last year to $445,450.
Sales in Queens fell by 23.7 percent to 2,363 compared to last year. The median price was up 0.2 percent to $470,000.
Sales in Nassau increased by 5.3 percent compared to last year to 2,875 properties, while in Suffolk they increased by 4.6 percent to 2,999 homes.
Nassau's second quarter median price was $485,000, the same as last year. Suffolk's median price decreased 0.6 percent to $396,550.
The luxury market remained healthy. Luxury median prices, taken from the top 10 percent of sales, increased by 7.4 percent from last year to $1.02 million, while the number of those sales fell 11 percent."
Real Deal
First?
Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.
"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.
Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.
advertisement
The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance 5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has 11bn of assets.
Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy.
daily telegraph
How come exports are growing? What exactly are we exporting?
Paris Hilton videos.
I thought the USA economy can continue to float along on BS financial services and market bubbles so who needs manufacturing in America ?
25+ yrs of industrial production decline and increasingly financial engineered driven bullshit for the US economy ( especially last 8 yrs under Bush ) with massive market bubbles has created systemic damage.
The are many manufacturing companies with their stock prices at all time highs,,,Graham,,GHM and Peerless, PMFG to name two.
Inflation-the silent killer..raise rates fast or bring out the defibrillators..Prices are careening out of control like a bunch of bulls running in the streets of (Spain)....
10:32 a.m.
Crude rises first day in three on weak dollar, Nigeria
Bull trap forming...
I'm so happy crude is $134.00 a barrell. Think I'll take a drive to the City...
REBear,
Try beef and pork:
Your Spot for Futures Trading, Commodities Info, Ag News, Successful Farming Tips & More
Fool,
You forgot the bit about lousy appraisals by the folks who were supposed to objectively be looking at Martinsa' books (yet were owned by the company's biggest creditor.)
maybe it's all the CDO printing machines and the rubber stamps at Moodys and S&
P.
Thanks Stormy! I guess butchers are in demand.
Back to a country of farmers! All those suckers like India and China won't realize what hit their economies since we've outsourced their cheap manufacturing. Someone asked what will lift us out of this... and you all thought the farming bill was insane!
This is a genius plan! The world won't be able to eat without us!
*Disclaimer: I'm only being half sarcastic.
OT: The MarketWatch says "Bulls taking a curtain call." I wonder if the author really meant what this prophetic headline implies.
Sentence above should read something like "outsourced our cheap manufacturing to them".
It's really a diabolical play by America!
Wait... what's that you say? Something about building value-less CRE on top of valuable farm land for the past 20 years? Nah... TBTB in this country are geniuses... they'll take care of us..
Just got an email from Citi: "Take a summer vacation with a personal loan." Yeah, that's a good, solid plan.
"and you all thought the farming bill was insane!"
YLSP | 07.17.08 - 10:56 am | #
Just a FYI. 75% of the current bill was for food stamp increases...
Chris
Alec
my attention was focused on a country whose leader has cajones.
I expect Spain is just as corrupt as the US and maybe a little more.
There is also an article on Brits who had clear title to beachfront land whose houses are being bulldozed by gov't. EU just says please don't!
What do we export? Lumber, raw materials, Yes--even US refined oil!(So much for needing more offshore drilling to fix our oil crisis!) And so much for the cheap dollar spurring manufacturing! Checkmate....
Bad DOW lost its mittens and its 100pt Bull Ru
At lease Spain has the integrity to tell their people the truth--something completely lost on Washington. And, will let their reckless financial institutions fail instead of bailing them out on the backs of the taxpayers. And we thought Europe was socialist!
All of the effort the govnmt puts into
propping up the financial stocks does
have a good side: it allows us to take
out even more put options for when they
inevitably crash later on.
Spain's finance minister can't afford to bail out real estate speculators or mortgage lenders because his country has a strong streak of socialism and a large poverty class. They wouldn't stand for it.
In this regard, they are 5-10 years ahead of the U.S.
But don't worry...we'll catch up!
Wachovia been investigated now. State regulators turn up at St.Louis HQ.
And also, I may add, that Spain's been running with the real bulls, whereas U.S. has been running with fake ones.
Spain has socialism for the people
US has socialism for the rich. Never did I think I would agree with Sen. Bunning. I got Chuck the Schmuck and Hillary. No sense even e-mailing them
I did e-mail Dodd and Shellby pointing them to Yves column on Ackman and Roubini.
Pls do same
CR -
Is there an absolute measure of manufacturing activity? It is interesting to see that it is contracting less, but my thought is that perhaps there is less to contract in the past as we have lost manufacturing jobs to countries overseas. Is there data to show this?
let the beating continue.
Oh yes, aas a fall-back for those also represented by lefty Senators I did e-mail Chuck and Hillary that if the did support Paulson, at least make George and not Hank the one who has the power to bring us fully into Corporate Socialism
foolonthehill:
Thanks for bringing up the Spanish housing issue. Their overhang of excess inventory is far greater relative to population fundamentals than that of the US. Plus the Spanish demographic profile indicates that the population will likely be stagnant to shrinking in the next 20 years. Whereas the US has slightly positive population growth due to higher fertility and in-migration. The financial losses in percentage terms are going to be far worse for Spain than the US, IMHO. There are plenty of data that can be Googled to back my thesis up.
BB writes:
Wachovia been investigated now. State regulators turn up at St.Louis HQ.
Link or it didn't happen.
You don't want Mr. Cox investigating you too, do you?
(I searched google news, FWIW)
Wachovia been investigated now. State regulators turn up at St.Louis HQ.
link?
Wachovia Securities Subject of Special Investigation
Last Edited: Thursday, 17 Jul 2008, 10:14 AM CDT
Created: Thursday, 17 Jul 2008, 10:14 AM CDT
Local Weather Forecast Radar, World News, Sports for St. Louis | Channel 2 - FOX2now.com | KTVI-TV - KTVI
Wachovia Securities hit with inspection in probe
| Reuters
Spain ain't got no press to print 10 Euro notes. So, they are at the mercy of their creditors and cannot inflate their way.............
km4,
Industrial production has nearly doubled over the past 25 years. It hasn't shrunk. Industrial employment has fallen, but output has risen. It stopped rising a little over half a year ago, but that seems entirely cyclical.
OT- But "Oh My GOD!"
WASHINGTONA panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.
"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
"Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't importantjust as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."
"The U.S. economy cannot survive on sound investments alone," Carlisle added.
Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.
Current bubbles being considered include the handheld electronics bubble, the undersea-mining-rights bubble, and the decorative office-plant bubble. Additional options include speculative trading in fairy dustwhich lobbyists point out has the advantage of being an entirely imaginary commodity to begin withand a bubble based around a hypothetical, to-be-determined product called "widgets."
Recession-Plagued Nation Demands New Bubble To Invest In | The Onion - America's Finest News Source
Anybody know the current spreads on 10 year Spanish bonds?
CNBC: UBS to shut down swiss-based services for U.S clients.
and
Angry investors storm Karachi exchange
FT.com / Asia-Pacific / Pakistan - Violence erupts over Pakistan stock drop
What is needed at this point, is aggressive action from the government to lift sentiment, said Shuja Rizvi, director of broking operations at Capital One Equities.
I'm doing some PT teaching for U.S. Steel in Bham, AL. They are running wide open, lots of overtime and building plants.
May be the Template for the return of manufacturing to the US. In theory, in a decade of so we could have the modern up to date stuff while China has the old crud.
Barley:
Last week, Spain had to pull its bond offering:
Spain pulls bond sale amid economic crisis - Telegraph
Fool,
Why would anybody backstop a firm that was cooking the books? It's nice that the finance minister didn't like his version of Enronm
Aside from the UK expat bubble, most RRE apparently is based on rotation out of antiquated housing stock into all mod cons. even then most of it is high density close to city center with solid transit routes, as opposed to Eire or America.
Thanks argento.
And where did all those "lets make the economy happy" checks go?
clintonnews.com | Clinton, MS | The Clinton News
Pakistan scares me..I'm surprised were not propping that market up thru covert cia funds..they are the real nuclear threat to the middle east, india and the world. Heck they pardoned thier nuclear hero after he sold all the secrets to whomever...
This is the real story in middle east
Iran is a Bush story..Big difference....
rent_to_own writes:
'Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis....'
Yep, seems like pretty much the only adults are in Europe at this point.
Maybe, but who was in charge while they were blowing that enormous bubble?
During the GD Europe went went into recession before the U.S., before we acclaim their superiority in managing this debacle let's give a little thought to how they got there.
BTW, I agree that things are going to be ugly everywhere. My biggest concern is that if the EU and UK bubbles crash them, exports will go down the tubes and take us with them. The first bank run of this mess was in England, remember?
cd writes:
Heck they pardoned thier nuclear hero after he sold all the secrets to whomever...
Thought the nuclear threat accelerated under Musharraf. He was in charge of the military after all.
Pakistan nuclear proliferation case 'closed'
ISLAMABAD, Pakistan - Pakistan's Foreign Ministry insisted Saturday that its nuclear proliferation case was closed, a day after the disgraced architect of its atomic program claimed the army under President Pervez Musharraf helped spread the technology.
Can't believe mid summer rally is almost over. I was so looking forward to buying SKF @ 100 and selling it in October @ 50+% gain.
I mean common irrational mutual fund managers, COMMON..
Bubblevision babes getting all hot over Dimon. He's a ROCKSTAR!
The charge-off rate for JPMorgan's prime mortgages which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.
Anonymous writes:
The charge-off rate for JPMorgan's prime mortgages which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.
Things are definately not getting better. Weak accounting rules as well as low analyst expectations makes these financials easily beat forecasts. Watch the markets rally a bit and then reality will sink in as always.
West Lampeter Township budgeted $300,000 to resurface 12 streets this summer.
Then the price of oil used to make asphalt skyrocketed.
Then state officials ruled that workers laying asphalt for municipalities must receive higher pay.
LancasterOnline.com:News:Roads feeling bumpier? Blame soaring costs
It might not be long before communities start using concrete instead of traditional asphalt to resurface roads due to soaring oil prices.
Asphalt has two components, one of which is petroleum thats causing the price of asphalt to compete with concrete, according to figures from the Missouri Department of Transportation.
The figures state that a ton of asphalt now costs $59, bringing the cost of two tons of asphalt to $118.A yard of concrete, on the other hand, remains steady at $85.
Two tons of asphalt are comparable to a yard of concrete, according to Granite City Public Works Director Rich Fancher and Granite City Engineer Joe Juneau.
A yard of concrete measures 3 feet by 3 feet and a ton of asphalt covers an area roughly two inches thick by 12 inches in length.
http://granitecitypress-record.stltoday.com/articles/2008/07/17/news/doc487e0046cc9bc612040947.txt
The ass whose fault it was for raising oil prices shot a man in the face
If "[t]wo tons of asphalt are comparable to a yard of concrete," and 10 workers can pave two roads in 6 days with asphalt, how many workers would it take to pave 12 roads in 3 days with concrete?
Manufacturing is being helped by the weak dollar, very strong wage growth in China making out-sourcing more expensive, and higher costs of transporting imports.
Also negative savings by consumers and increasingly governments and weak comparable figures since the sector has been doing poorly for a while.
CR,
You might have posted this before, but what are the absolute number of manufacturing jobs today versus every 10 years back going to the 50s? Morevover, what are the percentage of manufacturing jobs to overall jobs in these time period. My sense is that manufacturing is having a smaller and smaller impact on the economy as jobs shrink and wages (including benefits) stagnate or decline across most manufacturing fields. Therefore, these manufacturing numbers means much less to an economic recovery than they did in decades past.
Hey now! I thought the cheap dollar was boosting our exports and this was the road to recovery! What? People still aren't buying stuff? Inflation...there's no inflation!
Jeebus Pete, are we escrewed.
I know, I know...it's all fine in the "knowledge" and ipod based economies - the former just requires dreaming up new schemes and the latter just keeps getting cheaper and cheaper. I like my house to be made of bricks and mortar...they do a better job of keeping out the rain.
Asphalt=Doc holiday
Great story in the WSJ about the PHX banker who offed himself.
Good article in Industry week covering this topic...
Welcome Back U.S. Manufacturing
I've only skimmed it - getting ready to visit some factories tomorrow but seems pretty much right on (including the bit about 'near shoring' to Mexico - the plants I see tomorrow do that, do difficult component build in US, do lower skilled final assembly in Mex where labor costs are a quarter to third what they are here - overall a LOT more work in US compared to offshore to China).
The thing is even if it really is happening (and I think it is) it won't be NEAR ENOUGH to soak up the job losses in FIRE industries...
But then FIRE isn't going to come back either unless FCBs & SWFs continue to bank roll our excess consumption (ain't gonna happen forever) so they better start thinking about what next.
Last tip - they can't all be 'day traders' either... an economy built on 'day trading' is about as sustainable as an economy built on real estate agents and mortgage brokers. So if not mfg & if not agriculture... what are we going to trade with OPEC to keep your cars moving and air conditioners cooling?
Also - Philly region is nowhere near the mfg powerhouse it was say 50 years ago. Using Philly region as a barometer of US mfg is like using industrial Midwest as a barometer of national RE conditions. Might have been relevant 50 years ago before 'Rust Belt' - not anymore.
My guess is the Carolina's have more heavy mfg now than does the Philly region - whoddathunkit.
Maybe we'll trade the bubbly title, escrow, mortgage, and real estate MEW-implanted girls to the oil sheiks?
WM
That calculation is OT here and so is the hyperbolic increase in asphalt which will incur higher taxes
Anthracite Heritage Camp
future to the back?
Hey CR are you talkin 'bout fundamentals again? What's that got to do with anything? Market's about to rock!
Is there any advance word on unusual movement by pepperoni trucks ahead of the weekend?
IMF raises global economic forecasts:
BBC NEWS | Business | IMF raises world economic targets
Alec = Tanta
"what are we going to trade with OPEC to keep your cars moving and air conditioners cooling?"
Any luck at all it will be the greatest spenders we have - Women.
Anonymous writes:
Alec = Tanta
Anonymous | 07.17.08 - 1:33 p
Means a lot coming from a person such as yourself.
From the IW article I linked to...
Caterpillar's decision to stay domestic may not have been in response to currency fluctuations or other variables tied to offshoring. But the company is bucking the trend of large, multinational manufacturers responding to demand spikes by employing cheap, overseas labor.
"There's not a boom in U.S. manufacturing. What there is, is a slower departure of U.S. manufacturing," O'Marah points out. "You may have a plant making car parts that's operating at 85% capacity, whereas last year or two years ago you might have run it down to 75% capacity and continued to source more out of your Asian plants. Most folks can produce multiple products in multiple locations, so they decide to put sourcing decisions in one location or another depending upon the total equation."
I see A LOT of that... choosing to produce more locally or at least regionally EVERYWHERE. If product is consumed in NAFTA Zone try to make in NAFTA Zone... if the product is consumed in Euro Zone try to make in Euro Zone. Same with ASEAN & BRICs.
Can't always be done but make it the mission - produces pretty much sustainable results everywhere.
I'd guess domestic resourcing of components & production will have a bigger effect on US mfg stability than increasing exports. But it will be facing a tough headwind of decreasing consumption overall as economy continues to slow. Just my WAG.
wally writes:
Is there any advance word on unusual movement by pepperoni trucks ahead of the weekend?
wally | 07.17.08 - 1:31 pm | #
Thought I read something about them taking a holiday till at least the 25th to avoid riling the markets.
Speaking of the markets...keep it rolling, soon it will be time to jump back in on the short end.
Cobradriver writes" Just a FYI. 75% of the current bill was for food stamp increases...
The $10 billion increase in food stamps/ nutrition programs is actually just 3.3% of the total farm bill.
It's almost all agriculture welfare.
BB,
That article on the Pakistani investors is really a riot!
It's almost all agriculture welfare.
Angry Renter | Homepage | 07.17.08 - 1:49 pm | #
Virtually none of it sticks to fingers of small farmers either - it all ends up in the hands of agribusiness, banks financing agribusiness and equipment mfgrs.
I used to be a big supporter of 'farm supports'... back in the day when there were farmers.
Re: Means a lot coming from a person such as yourself.
It's almost all agriculture welfare.
Hey angry renter what about Americas farmers!? What are you going to tell the 10 of them.
Anonymous | 07.17.08 - 1:54 pm | #
As long as my clients can skull fuck u and read what's left for investment purposes.
If the dow goes up to 11,400 when oil drops to 130, where would the dow be if oil were at 100?
a) 14,400 (because you take away the 3 from oil and add it dow),
b) 10,000 (because cheap oil would mean bad economy, or because 10,000=100^2),
c) all of the above, but two days apart.
Manufacturing will get a boost from collapsing oil prices as well.
It's the last time you see such a high prices paid reading in years. Probably because of 2% FFR.
Interesting comparison to 1980. We all know what happened to inflation after that.
O-Joe
Hey angry renter what about Americas farmers!? What are you going to tell the 10 of them.
Tim | 07.17.08 - 1:56 pm | #
LOL. There still are some 'family farmers'... and if you look back over Cobra's posts he has family in the game. There just aren't that many of them.
But the reality is the recent farm bills don't help small farmers much. Its targeted to help ConAgra, Cargill, ADM, Deere, Case, Monsanto, etc. That and the IBs that finance them all.
There are lotsa ways to help small farmers survive & ensure we have a domestic food supply (that's important - imagine we produced food like we produce oil & OPEC was our food producer - remember the boycott?). The current farm bill is a pretty lousy way to do ensure success of small farmers & secure our food supply.
"Any luck at all it will be the greatest spenders we have - Women."
Should read
Any luck at all it will be the greatest spenders we have - US Congress.
rent_to_own,
Excellent European perspective as usual. Thanks for your contributions.
NYC RE update
"
Sales were down compared to last year while prices remained flat in Queens and Long Island, according to Miller Samuel's second quarter report for brokerage Prudential Douglas Elliman.
Long Island, excluding the East End, and Queens saw sales drop by 5.3 percent than last year's second quarter, the report said. But sales did jump 36.9 percent from this year's first quarter.
Prices on Long Island and Queens only saw marginal changes. The median sale price increased 0.1 percent over last year to $445,450.
Sales in Queens fell by 23.7 percent to 2,363 compared to last year. The median price was up 0.2 percent to $470,000.
Sales in Nassau increased by 5.3 percent compared to last year to 2,875 properties, while in Suffolk they increased by 4.6 percent to 2,999 homes.
Nassau's second quarter median price was $485,000, the same as last year. Suffolk's median price decreased 0.6 percent to $396,550.
The luxury market remained healthy. Luxury median prices, taken from the top 10 percent of sales, increased by 7.4 percent from last year to $1.02 million, while the number of those sales fell 11 percent."
Real Deal
So if not mfg & if not agriculture... what are we going to trade with OPEC to keep your cars moving and air conditioners cooling?
...Rapture porn?