The underlying debate is precisely the one we are discussing, and Keynesians like Krugman seem to think that with the credit crisis / deep recession / Great Depression II upon us, it would be silly not to borrow and spend at 4% interest.
I am never entirely comfortable disagreeing with people who are smarter than I am.
CR, Quit vacationing so much. You've got a responsibility to to respond instantaneously to all our requests for information and to put up posts as some as news hits the wire. Failing to do this is purely unprofessional. Don't try to have an outside life. Your life is here and here only.
Overnight dollar Libor's down over a full percentage point from Wednesday, and equally importantly, three month Libor is falling pretty fast too - down nearly 60bp over the same time period. This is good stuff and hopefully we'll see similar movements in euro and sterling Libor after those central banks begin their fixed rate auctions.
Still it seems as though some of these sales are at WTF prices, though.
Are these buyers potential walk-aways as prices continue their march to affordability? I realize that the new mortgages are not of the toxic variety, but does anyone have a clue as to what's really happening here?
For instance in an area I've been looking at we're seeing OK homes selling for 500k. Median income is in the 70k range and the prices would not interest investors.
The TED spread: 3.04 down from 3.59 yesterday (BETTER)
Better? As in your are drowning in 6 ft of water instead of 60? No, I must object. The FFR is an artificial construct specifically designed to allow the Fed to influence the cost of borrowing. The LIBOR is the cost of borrowing.
Until the TED spread is less than 100 bps it is still drowning.
Ignore the DQNews sales and prices. 60% of the reported transactions are involuntary and artificial. It is an artifact of the reporting methodology that we are seeing increased sales in the numbers.
I disagree, Canada is the most likely location for a bank closing this week. My family tried to immigrate there once and their racist policies denied my family because we're Indian, but it was for the best because now we rent and operate a laundromat in Seattle. The lack of industrious immigrants coupled with european-like innovation is how Canada will fail ultimately, and this crisis should start exposing the cracks in the wall. I don't have any statistics but all the pre-wwii white Canadians are due for one.
FFDIC writes: Page Not Found | ajc.com banks.html
Several Georgia banks in jeopardy
(Georgia is the most likely location for a Friday bank closing this week.)
I'm hearing that there are issues with payments for food exports from US in to Europe/Russia/Australia. Shipments from US getting held up. Anyone else heard anything?
A lot of these sales are just kinfe catchers who think they are stealing something. These are the same people who bought JDSU after it went from 150 to 75...on it way to $3.
In talking to realwhores, most of these purchases are "investors" (speculators) who are trying to rent them out...unsucessfully, I must add
RobDawg,
Look at the total LIBOR rate vs the spread, after all that is what a business cares about and there have been substantial overnight interest rate cuts by all central banks.
Dollar LIBOR was down to ~1.6%, which is pretty darned good (JPM manipulation or not)
I take issue with the belief that a lower TED spread is "better". Better for whom??
Beware
A Jedi's strength flows from the Force. But beware the Dark Side. Anger, fear, and aggression; the Dark Side of the Force are they. Easily they flow, quick to join you in a fight.
Mr Bernanke said today: With the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate. He added: "If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers. Such actions might be particularly effective at promoting economic growth and job creation...
"Access to Credit!!!" Unba-fucking-real. These guys have absolutely no shame, not a moral or ethical cell in their malignant souls.
Give the stupid, ignorant mass of poor slobs money so that they'll feel OK about getting into MORE debt; give 'em that false sense of wealth---like the one "W" gave 'em with the $600 'stimulus' checks---so that they feel OK about getting 3 new credit cards and running up $7500 in debt and paying the minimum payment each month of $50 while NEVER, EVER getting close to getting out of debt. Debt servitude, for all of your days. Pay the man and make him rich.
Look folks, this has gotta stop. We cannot exist forever as the meat for the financial industries sausage grinder. There are many ways to get out from under this pile of shit, but one very straightforward method comes to mind first: stop playing.
Stop borrowing money from corrupt banks and stop paying money to a corrupt government. Don't pay your taxes, don't take out new mortgages, don't patronize the institutions that prop up this system. Live smaller---live in and for your community. Grow vegetables, trade with neighbors, share resources. Don't buy cool things anymore---you don't need them. One small TV is just fine...in fact, my wife and kids and I have chosen not to have TV in our home. We listen to the radio and occasionally watch MAS*H on an old DVD player. Don't buy into the need to buy into happiness. Ride a bike to work.
The Empire cannot make us go to THE DARK SIDE. We have a choice. The Dark Side exists on greed and excess and hubris. If we can learn how to live small, the forces of Evil will fall. They can only exist if we subsidize their existence. I say, no more!
darius,
Have seen various reports in local papers. In Canada and states bordering the Mississippi. Letters of credit and financing between shipment + delivery are being jammed.
However it is not across the board, just for some of the smaller players so far. The larger media has certainly actively avoided reporting it. Either way, we wouldn't be able to observe the impacts for a few months as scarcity in importing countries due to the supply chain lag and inventories.
With recent government bank guarantees I don't think this will become a big story any time soon, save for a few importers finally succumbing to bankruptcy after eating too many losses having expected that increased prices were just a short term phenomena
EvilHenryPaulson writes:
RobDawg,
Look at the total LIBOR rate vs the spread, after all that is what a business cares about and there have been substantial overnight interest rate cuts by all central banks.
Dollar LIBOR was down to ~1.6%, which is pretty darned good (JPM manipulation or not)
We don't disagree. The traditional spread has been 0.7%± so really anything greater than 1% is still a drag on lending in those arenas that use LIBOR. And that brigs up an interesting conflict. My HELOC is tied to the FFR. The same HELOC would be substantially higher were it tied to LIBOR. I like to think I was smart but in retrospect it was more luck. I feel for those who have been unable to share the largess of an accommodative Fed.
YearningToLearn,
You would have to be non-white to understand how lazy and racist white Canadians are. Well educated Brits, Russians, and others will all say the same thing. How is my family good enough to get USA visas but not for a little country like Canada?
crispy&cole writes:
A lot of these sales are just kinfe catchers who think they are stealing something. These are the same people who bought JDSU after it went from 150 to 75...on it way to $3.
In talking to realwhores, most of these purchases are "investors" (speculators) who are trying to rent them out...unsucessfully, I must add.
Thanks, C&C.
This is what I've been thinking. We've been on the sidelines (renting) for a few years after selling out. Wifey is getting antsy, but holding steady...had to get her a Tivo and program it to grab every Oprah episode to keep her settled down.
Guys just ignore satan, he periodically pops up trying to goad me into an argument that facts or logic cannot win. He can be reasonable on some topics, but for others it is best to just let him talk himself out. He clearly represents no opinion beyond his own (hey I have Indian friends who will call him a moron, so it's not racism either)
--
CR (last thread): most indicators suggest the economy is already in free fall.
It should be noted that a free falling economy doesnt keep falling all the wayy into a severe recession. It gets arrested before that. Such is the power of economists.
Yeah, I was cruising around the condo complex I live in this weekend. There's like 60 units in my building. I counted 12 empty. 2 more than last month. And the 10 were the same as last month.
I'm hearing that there are issues with payments for food exports from US in to Europe/Russia/Australia. Shipments from US getting held up. Anyone else heard anything?
Yes I have heard more. The horse meat, beets and vegamite lobbies are pissed
EvilHenryPaulson writes:
RobDawg,
Do you get the effective FFR or just the targeted rate?
People get the effective rate? No. Seriously. "People?" No, the FFR is for big players not we marks.
I'll make a point. Why is the "Prime Rate" the FFR plus Three? Any reason? No. You want to "stimulate" then RAISE the FFR to 3 and lower the Prime to 4. What's taht? The central banks would barely break even? Tough. I thought the concern was the economy not the banker's bottom line. Oh sorry.
"Do you get the effective FFR or just the targeted rate?"
That reminded me of another question. His heloc isn't tied directly to FFR, it's tied directly to WSJ Prime. WSJ prime has been traditionally 3 points higher than FFR (target?). Why?
Paulson also said banks that participate would need to "accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity," Paulson said.
"Obviously she did'nt get the news that in Fort Myers/ Cape Coral they have dropped from 322K to 147K, about 54%."
Deflationista | 10.20.08 - 1:21 pm |
The parents rents in the Cape currently support 1995-96 prices. Prices still have a ways to fall there. Heck,the under 100k listings on the MLS have exploded over the last 6 months...
FDIC: Board Meetings
FDIC Board Meetings
Location
Board Room on the sixth floor of the FDIC Building located at 550 - 17th Street, N.W., Washington, D.C.
Date
October 23, 2008
Description
Pursuant to the provisions of the Government in the Sunshine Act (5 U.S.C. 552b), notice is hereby given that the Federal Deposit Insurance Corporations Board of Directors will meet in open session at 2:00 p.m. on Thursday, October 23, 2008, to consider the following matters:
Discussion Agenda:
Memorandum and resolution re: Minimum Capital Ratios; Capital Adequacy Guidelines; Capital Maintenance; Capital: Treatment of Perpetual Preferred Stock Issued To the United States Treasury under the Emergency Economic Stabilization Act of 2008.
"Southern California home sales shot up by an unprecedented 65%".
Southern California median home prices shot down 6.5% in Sep.
20% equity to 0% in 90 days. $60,000 cash down, equity, gone. How many more months like this does it take before buyers pull back, or do they just keep running off the cliff?
"You would have to be non-white to understand how lazy and racist white Canadians are. Well educated Brits, Russians, and others will all say the same thing. How is my family good enough to get USA visas but not for a little country like Canada?"
Sorry Satan, you're a troll and also full of shit.
I grew up in Canada, am white and am married to a Chinese and most of my friends are Indian. If you got a green-card but couldn't get into Canada you're either lying or have major issues.
I have a US green card and know plenty of Indians who got a Canadian green card as a backup in case they couldn't get a US green card. Funny thing is the ALWAYS got the Canadian green-card no matter how much trouble they had here.
The Canadian process is fast,easy and simple compared to the hoops you need to run through in the US.
This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. "The Fed," she argues, "has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible."
20% equity to 0% in 90 days. $60,000 cash down, equity, gone. How many more months like this does it take before buyers pull back, or do they just keep running off the cliff?
This crisis has taught me how stupid investors are. Jas and Lahde are right. This country is full of dopes.
Everybody is spewing optimism while the fire continues to rage through all sectors of the economy. Even CR is looking at the wrong metrics looking for improvement. I welcome the opportunity to load up on more puts. The show is just beginning.
The climax is going to be default of the US government, with an accompanying currency collapse.
RobDawg,
I don't know of anyone that does, but there might be a bank out there using effective overnight rate instead of the target rate.
Deutschebank analyst was just on CNBC re: oil
He expects Americans to use as little oil in the next year as they were consuming at an annualized rate when oil was $147.27.... I've already seen people drawn in by the SUV/truck ads car companies are running right now. Used that as a basis for oil to average $58 over the next year
I would call that optimistic in every sense. Beyond having specious understanding of oil consumers, he has a limited understanding of oil's uses. What's the #1 buzzword plan in every government's docket, China included? Infrastructure. Roads require asphalt which makes up about 3% of a barrel of oil by weight. Rail? Then steel which restarts shipping and forces China to accept Rio Tinto's prices
I would definitely agree that oil demand will fall YoY due to shipping and airlines, but 7-10% globally is huge.
FWIW, Oppenheimer upgraded all oil/commodity stocks while Deutsche and the Swiss downgraded them. Looks like book talking
More unemployed bloggers like me coming to CR!
UN: Crisis to put 20 million out of work globally
Associated Press
"The global financial crisis will add at least 20 million people to the worlds unemployed, bringing the total to 210 million by the end of next year, the U.N. labor agency said today." 404 Error, No such article | Chron.com - Houston Chronicle
Merrill Lynch's Thain
Expects 'Thousands' Of Job Losses Bloomberg.com
♥® writes:
Paulson also said banks that participate would need to "accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity," Paulson said.
Next, I expect to read outraged newspaper articles about how the banks got around the golden parachutes restriction by purchasing from Lloyds of London "job loss insurance" coverage for senior management with the senior executives as beneficiaries.
FFDIC,
If the $70bn in Wall St (executive?) bonuses this year all trickle down, then that's taking 20mn unemployed and giving them $3,500 which is enough for several years' wages at the bottom end of world income scale....
I would not even know where to start in refuting all of the drivel in Galbraith's piece.
If he thinks we can support substantial fiscal expansion at this point in time, more power to him. But I have absolutely no problem saying that he is wrong.
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
evil...thanks for the ali baba link. I agree..its just another showe that could drop...any idea out there what will happen tomorrow? CDS settlement payments are due....
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
EBGuy | 10.20.08 - 2:13 pm | #
Been happening a long time now. My sister in AL has taken in quite a few horses, owners couldn't feed them.
Lie I said a pony is a liability unless you eat it.
EBGuy writes:
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
I would like to ask a personal finance question that I think could be applicable to many CR visitors or who have 401(k) options available to them at this annual open enrollment time (I am obviously a working stiff):
Given today's market - what should I do with my 401(k) and stock purchase choices at work.
Question 1: 401(k) - above the employer match amount. Should I contribute above the match max - or use the above employer match / federal max margin to pay down debt (say 6% mortgage).
I think I should max this out and then go to the market (cash instruments) with money I can invest on a tax deferred basis.
Question 2: stock purchase (only get a 5% stock discount with my after tax money).
I think I should bag this and pay down debt (especially since my company's share price always seems to rally around the quarterly purchase date).
--
This crisis has taught me how stupid investors are. Jas and Lahde are right. This country is full of dopes.
Gavshire Hathaway,
My conclusions were based on systematic observations and even then I waited before I started to share them with public. I do have a good research background, although it was in technology (I retired in March 2000). Some of my best friends (quite smart in their areas of expertise and with high IQ) were, and still are!, dopes! One of them is a super-bull on copper without knowing the historical behavior of copper prices and the supply-demand. He thinks that all histroy other than the recent is useless because of China and India.
scareonomics101, The Slosh Report
Slosh report (tracks all the Federal Reserve facilities) shows the Fed content to let a few facility lines to have maturity without replacement ... which might mean everyone has their ducks in a row for tomorrow. WaMu auction is this Thursday as for new CDS, with Iceland the week after
"NEW YORK (MarketWatch) -- Struggling electronics retailer Circuit City Stores Inc. is considering a plan to shut at least 150 stores and cut thousands of jobs to avoid filing for bankruptcy protection, The Wall Street Journal reported Monday, citing unidentified people familiar with the situation. "
Yeah, David Walker has been one of my favorite guys for years (sample). So I was dismayed by the Galbraith piece and (especially) Krugman's promotion of it.
If you do not mind my asking, what is your own background? Are you in the industry? Or academia? Or just a concerned layperson?
SHUAA CAPITAL AFFECTED BY LEHMAN BROTHERS CRISIS: Shuaa Capital CEO, Iyad Al Duwaji, announced that Dhs78.6mn of losses that the company witnessed during the first half its current fiscal year, are Write-downs of Dhs78.6m on structured products and fixed income securities that were exposed to Lehman Brothers. Shuaa reported on Friday net loss of Dhs371.1mn compared to Dhs 128.6mn net profit in for the same period last year.
FFDIC,
If the $70bn in Wall St (executive?) bonuses this year all trickle down, then that's taking 20mn unemployed and giving them $3,500 which is enough for several years' wages at the bottom end of world income scale....
EvilHenryPaulson | 10.20.08 - 2:08 pm | #
I'm glad you solved that vexing problem in 5 minutes now please go to Washington.
"The climax is going to be default of the US government, with an accompanying currency collapse."
A "technical" default by the US Govt is unlikely, because it has the sole authority to create as many dollars it wants, out of thin air, to pay back old debts.
But what those dollars will buy is another question. You are absolutely right we can have an overnight collapse of the dollar ( just like the icelandic kronar) against the currencies of countries who export to us.
The Treasury has bet the currency ( or the farm) , and it is gonna lose it.
Expect everything that is imported to go up sharply. Thatz why I am hesitant to go short on oil and commodities, even though their demand will fall sharply in a global depression.
The days of US & The developed West plundering the resources of the world in exchange for worthless paper are numbered.
We may have to start giving out something tangible in exchange for our imports.
I think short-term fiscal stimulus can work, only so long as it actually solves some of the other economic imbalances that we have. My current concern is that some of the stimulus programs being proposed, while being noble, are short term fixes of the safety net variety (e.g. home heating cost relief, extended unemployment benefits, health care, etc).
The other problem is that all that the stimulus may do is help one sector at the expense of others. Sure, "green" research is good, but from a purely economic point of view, is there any gain if one green job is created at the expense of a "carbon" job. There must be real productivity gains, not just stimulus for the sake of stimulus. The non-targeting was the failure of the first package. On the other hand, stimulus would work if it was redistributive income-wise or globally (reduction in imports or increase in exports).
The problem with the former is that the ruling classes probably won't go for it, and the problem with the latter is that neither will China, Europe, and OPEC.
See Nemo's earlier link to Krugman (which has link to Galbraith). It will not make you laugh as much as want to punch your monitor.
Nemo,
I am female, if it matters. I am not an academic, much as I enjoy economic philosophy. I am a financial analyst working with a large bond and interest rate derivative portfolio. Your turn
They may try to use the money raised from liquidation sales to keep the remaining operation afloat for a while.
Bob Dobbs
When you have no margins on the only thing that was selling, flatscreens, and then nobody buys anything at all, you are prbably out-of-luck. Another failed business model.
A theme I'd like to bring up here, which is actually on topic (I think?) morphs around ideas relating to Japan and its 13 year recession and that relationship to The Global Recession we are drifting towards.
My interest lies in how Japan and perhaps G7 structured the injection of capital during that social crisis. For example, did Japan print lots of cash and toss unlimited amounts of capital at failed banks? We know they dropped interest rates to zero, which is a topic I love right now, in regard to treasury yield curve construction and mechanics, hence, did Japan rely on international currency devaluations in addition to dropping rates to zero, or was Japan isolated as a rouge country that had taken on too much debt from credit leverage?
I hate to leave (now) but it's a really nice day out (here) but if anyone wants to pipe in there and add anything, Ill check in later. I just wonder if the global intervention to coordinate a network of synthetic liquidity will address the longer term structural and systemic problems we all are in. If Japan is a model for a recent recession, then we have about 10 years to go on this global problem.
The problem with that idea was, and is, how to price "toxic" assets that nobody wants. And lurking beneath that problem is another, stickier problem: If they are priced at current market levels, selling them would be a recipe for instant insolvency at many institutions. The fears that are locking up the credit markets would be realized, and a number of banks would probably fail.
Love it!
Also, FYI saw Linens and things was going out of business driving around this weekend...
I would not mind hearing from you privately. (This should be good for about 20 Emails from creppy middle-aged men in their parents' basements.)
Nemo | Homepage | 10.20.08 - 2:46 pm | #
If the Federal government goes bankrupt, there will be no entitlement spending, no matter how well Krugman and [Jamie] Galbraith managed to shut up the dissenters who warned about insolvency in the first place. Krugman's tone has degenerated into that of someone whose first impulse is to smear his intellectual opponent as someone who has an "agenda."
I think short-term fiscal stimulus can work, only so long as it actually solves some of the other economic imbalances that we have. My current concern is that some of the stimulus programs being proposed, while being noble, are short term fixes of the safety net variety (e.g. home heating cost relief, extended unemployment benefits, health care, etc).
I've been reading about the New Deal that past few daus, what's interesting to me is to see that there was a consensus by the late 30s that it wasn't really working and even FDR seems to have lost enthusiasm for it (this was kind of news to me).
What worries me today is that we've basically had this program of government spending to stimulate the economy since the Reagan era in the early 80s, with no apparent end in sight.
I need to understand now how this round is going to be different and why it is likely to work otherwise I have to assume it's just more politicians looking for excuses to spend other peoples money without just cause.
It's not enough to say we need to keep doing the same thing we've been doing for 25 years with a balance sheet that continues to deteriorate with no end in sight.
Soon, we can get back to ramping up housing prices to keep them unaffordable forever, encouraging mortgage fraud, and living beyond our means! Go 'merika!
Well that explains the nifty programming. My husband is a software developer. I get lost in vocabulary, but it appears to be solving logic puzzles all day.
"For example, did Japan print lots of cash and toss unlimited amounts of capital at failed banks? We know they dropped interest rates to zero,"
The BOJ pumped in so much liquidity into the banking system, it drove the target rate to zero. Because with so much excess reserves, the BOJ could not control it's "fund rate". Banks were willing to lend to each other for free, they had so much excess reserves. ZIRP was a consequence and not a target. And resulted in significant weakening of the yen.
But all this liquidity failed to get out of the banking system into the Japanese Economy because banks were unwilling to lend as they had just been burnt by making bad loans to the Japanese customers. The Japanese public was unwilling to borrow because they had just been burnt by going too much into debt.
Then international borrowers came, they started borrowing "yen" at zero/near zero rates. Selling it into the open market for dollars and other currencies. This helped drive down further the exchange rate of yen internationally, and support/sustain the "export economy" of Japan.
The US Fed is also headed to the ZIRP. It wont be able to control the Fed rate, if it continues to flood the banking system with liquidity.
This is gonna collapse the dollar just like the yen.
But since we are net debtors/importers, unlike Japan which is net lender/exporter, collapse of the dollar will put an end to everything we are able to import so cheaply from the rest of the world.
If the Federal government goes bankrupt, there will be no entitlement spending, no matter how well Krugman and [Jamie] Galbraith managed to shut up the dissenters who warned about insolvency in the first place. Krugman's tone has degenerated into that of someone whose first impulse is to smear his intellectual opponent as someone who has an "agenda."
I think it's highly unfortunate that we have politics getting so intertwined with economics. It discredits the entire field IMO.
To me it's no different than the global warming argument (which I believe does have some merit, but never mind that). The point is that they highly political nature of it serves as a tremendous distraction to something that may be immensely important. It smears any genuine scientific insights with the taint of an agenda.
If certain economists are going to turn economics in to a highly politicized field, then I believe they will be highly destructive to its future credibility.
Chairman Bernanke's comments today that "consideration of a fiscal stimulus plan at this juncture may be appropriate" (or words to that effect are reminiscent of the posture Arthur Burns adopted at the Federal Reserve in 1975 upon seeing that the presidency was going to Jimmy Carter. Burns prior to the elections was inexplicably tight with the Fed's money, and thereby helped greatly deepen the 1974-75 recession. However, when he read the political tea leaves, he started the Fed on a full-bore monetary growth path to help jump-start the economy. (Money supply figures from those years tell the tale.)
I suspect Bernanke was at least being 50% political in his remarks today, assuming that he will be dealing with a President Obama and wanting reappointment. Burns' last-minute monetary heroics did not get him reappointed. (Anyone remember G. William Miller?) We'll see about Bernanke.
I still can't figure out why people haven't already run to banks. That's the real great difference between '29 and today. We KNOW banks are toasted and they have no cash. But no one has the bravery to claim his money back. This is discomforting, and tells a lot on the dopeing effects of propaganda we're submitted to. I think THIS generation simply WOULD NOT survive a depression, as our grandparents did. Terrible.
Nemo's right. I. too, am a creepy middle-aged man attempting to get back to my parents' basement, but I'm conflicted. I'm having the best sex of my life and my girlfriend lives in a basement, too.
I'm really sick of this creepy twisted job market and I don't see much reason to "invest" in the future and playing pool has displaced work as my favorite pastime. But... For once the sex is actually great. I'm conflicted but unmotivated. I'll let the job market decide my fate.
I have two realtime charts open. Used to be I'd watch /ES and XLF. Now that I don't have a position in XLF, I watch /ES and INDU. Not that one really needs two windows for that since they track pretty closely.
But I'm not day trading. I've made my few bets, and I'm just waiting.
Goldman Sex writes:
I still can't figure out why people haven't already run to banks.
Anonymous
Most people on this blog have.
Delay the inevitable much? As far as I can see -- as long as you're sitting at the kid's table -- you're going to lose no matter where you put your money.
"Whats up with So Cal sales up?"
Look into Mr Mortgage on youtube and watch the explanation. A change in the rules that made this anomaly. Everything still plummeting. Nothing go to see here.
But the advocates for poor and black people had immense political clout. Under President Bill Clinton, they passed legislation that called on banks to be required to lend to non credit worthy borrowers. The laws, including the Community Reinvestment Act, the CRA, required two large government sponsored enterprises, Fannie Mae and Freddie Mac, to buy those lower quality mortgages from the banks, guarantee them, and sell them to the public. These were bundled into immense pools of subprime mortgages as they were called, and sold all over the world.
What about all the other races, creeds and people of religion that fucked up and took on to much debt? What about the poor white bankers like Fuld that had no clue how to run a business?
I agree completely with the fiscal stimulus; I just don't see how it will help other than as a short term fix. As I mentioned earlier, they are all of the "broken window" variety.
I truly think that we are at "Peak First World" or "Peak Middle Class," and the PTB don't know exactly what to do about it.
Agree with your comments on Japan. But further the QEP or Quantitative Easing Policy pushed in liquidity beyond that needed for 0 interest rates, and this further drove down the yen as the carry trade pulled in the excess funds. I suspect the Japanese were actually targeting a lower yen with this policy in a backdoor way. This policy flooded the world with excess liquidity and has seriously worsened the present crisis IMO.
"My family tried to immigrate there once and their racist policies denied my family because we're Indian"
Highly unlikely. Canada is welcoming to Indians who meet their immigration standards. Other factors were in play if you were denied entry. So, you're stuck here in the US. That racist chip on your shoulder must weigh a ton.
Delay the inevitable much? As far as I can see -- as long as you're sitting at the kid's table -- you're going to lose no matter where you put your money.
Sad but true. But at least I can use it to heat the house if needed:)
Over the past week or two we have started to see a divergence of commodities and basic materials versus financials for the first time since ~Feb which resulted in the bubble that unwound in July.
I agree completely with the fiscal stimulus; I just don't see how it will help other than as a short term fix. As I mentioned earlier, they are all of the "broken window" variety.
I truly think that we are at "Peak First World" or "Peak Middle Class," and the PTB don't know exactly what to do about it.
Well, I will at least try to listen to any arguments as to why we can spend money beneficially, but I'm not very optimistic.
One real problem I think we might face is that the kind of work most people can perform really is finally being marginalized by technology.
When I see a robotic arm able to do very fine and articulate metalwork or software programs that can remove 3d objects from stereoscopic images, I wonder if part of the problems we face now are fundamentally the value of human labor.
"this further drove down the yen as the carry trade pulled in the excess funds. I suspect the Japanese were actually targeting a lower yen with this policy in a backdoor way."
Absolutely. Japan has been pretty heavy handed when it comes to yen appreciation.
An artificial peg sorts of, with the yen carry trade.
China doing the same thing, but in a more formal/obvious way.
The increase in automation need not mean that human labor becomes less productive...quite the opposite. Just multiply the capital: 1 machine and 4 workers used to make a car, now 1 machine and 1 worker makes a car. So build 4 machines and make 4 cars with the same labor.
Provided we have the physical resources, this should imply a greater standard of living, no?
Bond Girl,
I don't think it suggests anything, we're in the middle of earnings, government program announcements, and waiting on OPEC/FOMC/end of Oct stats reports.
I think once the banks have consolidated they will do well, but on much smaller margins/growth.
I also think commodities will resume a nice slow and steady price increase throughout a downturn. However there will not be as much credit available to complete buyouts so the companies will not have the same growth rates either.
The elephant in the room is government debt, how much they will issue and when. Who that pushes out of debt markets, how it affects currency exchange rates, which industries it goes to protect, and other questions will have to wait to be answered before we in turn can provide any beyond the immediate term (which is useless with existing volatility in most markets)
1 machine and 4 workers used to make a car, now 1 machine and 1 worker makes a car. So build 4 machines and make 4 cars with the same labor.
The problem with this model is that it assumes that the 3 displaced workers actually do something productive so that they can still afford the 3 additional cars. 10% unemployment in Detroit indicates otherwise.
The three displaced workers man 3 additional machines.
Agree that we need build the capital to make this happen. Workers need not be displaced provided we have access to capital (and resources are not stretched).
Arguably, we are hitting a resource constraint at the same time that we are over-supplied.
"Well, real food production will never be done by robots. Unless you think the Earth is infinitely pillage-able."
Nathan | 10.20.08 - 3:43 pm | #
You should see the latest gps mapping/driving sofware. Pretty cool shit. Automated will be coming soon enough. No roads or traffic to deal with. Start the farm equipment in the field a let the mapping system take over. I have watched a relative go from 400 or so acres to 1500+ in 20 years with no additional help. All mechanization. And the best is on the way...
Uncle Billy,
High-value production will be increasingly automated one step at a time.
The biggest labour market unserved by automation is picking vegetables/fruit -- there are some promising developments which will start making their way to market in the next decade. Advantages will include better sanitation, only picking the ripe fruit (giving the option to spread out the harvest, get the best price), in addition to the cost advantages.
The way to value human labour is how much would it cost to replace it? If someone's a postal carrier then you have your pick of millions to choose from and the price is bid down.
The developing world is a wild card, and I fear that disease/food-shortages will eventually shift how families are constructed. For now large families are primarily due to children acting as a 'retirement plan'. This is finally changing in places like India or China where children increasingly move away and do not want their parents sharing the house. In tropical climates the problem persists because little is needed to live beyond the regular food aid and a shanty thrown together.
Geez... everything I talk about turns into a disaster in about 3 sentences
Dunno bout that. I saw some wild automation in Israel a few years ago.
Still need people to slap cows on the ass though to get them into the dairy.
On 2nd thought, no you don't, but you do still need people to apply the milking tubes.
There have been self-milking dairies for years now. The cow walks in when they feel the need and has their udders emptied. RFID chips track which cows have been milked when and uses that data to spot any sick cows
"On 2nd thought, no you don't, but you do still need people to apply the milking tubes."
Uncle Billy, Adenoid | Homepage |
I hate to say this but...nope. The only thing the operator did was inspect the teats. Pretty cool operation in central Indiana. Heck the cows know when it's time to milk(I grew up on a dairy farm).
Goldman Sex writes:
I still can't figure out why people haven't already run to banks. That's the real great difference between '29 and today. We KNOW banks are toasted and they have no cash. But no one has the bravery to claim his money back. This is discomforting, and tells a lot on the dopeing effects of propaganda we're submitted to. I think THIS generation simply WOULD NOT survive a depression, as our grandparents did. Terrible.
If everyone ran to the bank then we all get zero. sub optimal outcome. Maybe sheeple are smarter than given credit? then again stupidity is also a real possibility.
Cobradriver writes:
You should see the latest gps mapping/driving sofware. Pretty cool shit. Automated will be coming soon enough. No roads or traffic to deal with. Start the farm equipment in the field a let the mapping system take over. I have watched a relative go from 400 or so acres to 1500+ in 20 years with no additional help. All mechanization. And the best is on the way...
Awesome. Imagine the irony of starving to death within inches of a mobile processor and packager as it ambulates autonomously (and endlessly) over a rich field of corn... or carrots... or ponies...
If everyone ran to the bank then we all get zero. sub optimal outcome. Maybe sheeple are smarter than given credit? then again stupidity is also a real possibility.
FRED | 10.20.08 - 3:56 pm
Nobody uses paper money anymore. They can't even fathom that the money isn't even there.
Since there is a new post, I don't feel bad about continuing the automation vein.
Don't keep your hopes up about stocking shelves. It's on the verge of becoming economically feasible to automate that.
From libraries to Wal-Mart, everyone has a magic price level that we might wait until the next economic boom-time to implement (during a recession capital is expensive and labour is cheap)
I work with munis, and there doesn't appear to be a whole lot of trading going on, although the short-term trend is cheapening. Compared to last week with Cali's issue, there's relatively little activity in the primary market. 30 day visible supply dropped $420.7M to $17.875B. I'd say it is really tough to say at this point where things are going.
"Do they automate the iodine application as well??"
Uncle Billy, Adenoid | Homepage | 10.20.08 - 3:58 pm | #
Yep. But the owner did say the nice thing was they could take the time to really inspect the cow for problems. You weren't rushing to do the milking process...
CR: I appreciate the update, but instead of making a regular post what we really need is a dashboard on the site with all of these metrics and cool looking needles and warning indicators for credit conditions. Also might want to add the number of visitors online, that always seems to indicate doom and gloom occuring. A real time feed of all of the indicators would be slick.
Bond Girl: You expecting a flood of business when the infrastructure projects get going?
Seeing as how states have used GARVEES to pay for their highways and given the problems with the federal highway trust fund right now.... I think states will be happy to get anything from the federal government so they do not need to use state funds to pay for federal projects.
It would be great if CR could get on the bandwagon with this automation thing. I mean, do we -- as humans -- really want to spend our time divining the markets and posting commentary? We could be out playing tennis, eating pizza, and drinking margaritas!
Hitherto we have continued to be as energetic as we were before there were machines; in this we have been foolish, but there is no reason to go on being foolish forever.
Nemo, why the hell are you making our lives miserable with your "Nemo's always first" program, when you could be coding up a dashboard including CRVIX for CR? Huh? Huh?
Interesting Times quoted Russell: "Hitherto we have continued to be as energetic as we were before there were machines; in this we have been foolish, but there is no reason to go on being foolish forever."
And Russell went on to say:
"For my part, while I am as convinced a Socialist as the most ardent Marxian, I do not regard Socialism as a gospel of proletarian revenge, nor even, primarily, as a means of securing economic justice. I regard it primarily as an adjustment to machine production demanded by considerations of common sense, and calculated to increase the happiness, not only of proletarians, but of all except a tiny minority of the human race."
To which I say, "That's somehow on topic, Comrade Interesting Times"!
stop already with the miniscule improvements of credit. corporate spreads are blown out and have not come in one iota. is this website a mouthpiece for the bull case? to whom are banks going to lend to? are we going to start the great credit consumption cycle miraculously all over again?
The zero interest rate policy (ZIRP) is a Keynesian macroeconomics scheme for economies exhibiting slow growth with a very low interest rate, such as contemporary Japan.
Under ZIRP, the central bank maintains a 0% nominal interest rate. The effect of a ZIRP is to encourage investment throughout the economy by making capital purchases more financially attractive. Whether ZIRP succeeds in achieving this goal is a matter of much debate.
I don't think the stock market has bottomed. The least little bit of good news and it zooms upward immediately. Market bottoms come with hopelessness and despair. We sure aren't there yet.l
http://www.FAKEPAYCHECKSTUBS.com Is your sole source for fake pay check stubs ON THE NET! Get the Credit you Deserve! Get Any Loan you Apply For using This $50 computer program!
http://www.fakepaycheckstubs.com This Easy To Use and Understand Computer Software Makes Printing Out a Paycheck stub a Breeze! Simply Input the company name (with company logo if desired), name of employee, hourly salary, and how often the "employee" gets Paid (weekly, twice a month, or monthly) Type in the state you live in and how many dependants you want to claim (for precise tax computation)! All Deductions and taxes are automatically calculated then configured on the paycheck! Just Press the Print Button!..... Instant pay check stubs!
Not intended to use for any of the following refinance, loan, loans, mortgages, mortgage, refinance, bad credit mortgage, commercial mortgage, mortgage rates, mortgage refinancing, mortgage rate, commercial loan, second mortgage, home, home mortgage, mortgage loans, mortgage loan, mortgage, home loan, refinance rates, commercial loans, home loans, loan rates, home equity loans, home equity, mortgage interest rates, auto loans, refinance loan, mortgage quote, home equity line of credit, fha loan, equity mortgage, home improvement loan, home financing, home refinance, loan refinancing, bad credit loan, mortgage leads, loan officer, reverse mortgage, equity loan, mortgage insurance, first time home buyer, mortgage calculators, home equity line, home equity loan, bank loan, mortgage calculator, mortgage company, auto loan, debt consolidation loan, personal loans, refinance home loan, refinance home mortgage, mortgage refinance rates, refinance rate, online mortgage, home refinancing, business loans, refinance loans, va loan, home improvement, best mortgage, buying a home, cash loan, loans with bad credit, personal loan, bad credit loan, bad credit loans, business loan, cash loans, loan consolidation, car loan, consolidation loans, small business loans, refinancing, lenders, fha, financing, fannie, freddie, credit, refi, bankruptcy, debt homes, morgage, credit card, finance, money, real estate, recession, finance, housing crisis -
fake pay stubs fake payroll stubs fake check stubs make fake paystub bad credit instant proof of income letter bogus and doctored fake check car loan real estate refinance consolodate now no credit need pay stub make pay stub create pay stub fake check buy online buy online fake make pay stubs fake payroll stubs fake check stubs slip fake id ids home loan car loan cash advance cash loan auto proof of income novelty easy bad credit bad credit sample paycheck stub make sample paycheck stubs fake id ids car refinance home refinance state id identity create same day payday slip buy house home auto vehicle state create template sample not a child support solution prove income proof of income letter sample fake pay stubs fake payroll stubs fake check stubs make fake pay stub bad credit instant proof of income letter fake check car loan real estate refinance consolidate now not a mortgage fraud check scam no credit need pay stub make pay stub create pay stub fake check fake make pay slips stubs fake payroll stubs fake check stubs fake id ids home car cash advance cash auto loan proof of income novelty easy bad credit bad credit loan sample paycheck stub make sample paycheck stubs fake id ids car refinance home refinance id identity create same day payday slip buy house home auto vehicle state create template sample scam scam child support solution prove income proof of income letter not a child support sample template sample not used to stop my child support piggybacking verify income verification of income verification of employment support payday loan pay day money bling payday scam interest rate consolidate refinance instantly!vod,voe,ltv,fha,hard money,full doc,land ,no doc,subprime,cash fake paystub maker out,fico,commercial,jumbo,sc,arm ,vod,voe,ltv,fha,hard money,full doc,land ,no doc,subprime,cash out,fico,commercial,jumbo,sc,arm pay check maker fake paystub maker generator sample pay stub, free paystub template,pay stub template, blank pay stub, sample check stub, pay stub, payroll check stub, cash out, recession, credit crunch, mortgage, arm, refinance, bad credit, fake id, lost job, bogus, doctor, doctored, genuine proof of income, sell my home, credit guidelines, bad credit,, refinance, heloc, paycheck template,payroll template, boggus,crisis,slips,payroll template, free, pay slip, payslips , money , cash , 2007, 2008, tax, taxes, 1040,income tax, subprime, sub-prime, recession, housing crisis, help, tax relief , tax help, small business,mortgage fraud, fraud, credit crisis, financial crisis,subprime loan, loans,700 billion, stop foreclosure,foreclosure, freddie mack ,fannie mae ,novelty paycheck stub, paycheck stubs, paycheck stub template, sample paycheck stub, create paycheck stub, sample template, paycheck template,free paycheck stub, free, payday loan, countrywide, lehman brothers, mortgage broker, loan officer, leads, forge,documents,docs,2008 taxes,preditory lending,preditory borrowing,recession,recession proof http://www.fakepaycheckstubs.com sd
Whew! Out of the woods.
Nemo?
I see we have progress.
my question: is it meaningful or not?
in other words, how does this translate into Joe Plumber or whatever?
emo?
bottom?
corndog?
What's wrong with the stock market today? The Dow is so... stable. It's creeping me out
Things are holding steady and an improvement in many areas vs year ago when you look at the absolute rate and not just the spread.
Next we have bankruptcies for those who cannot get re-financing
Why not include Libor spreads on this data?
I have a question for anyone with a free second or two. What is the "two year swap spread"
I read bond guy's excerpt on why it was useful but what is getting swapped?
Many thanks in advance!
~
So cal numbers just out - TIMBERRRRRRR
Variable for fixed rate leverage
c&c link? thanks...
c&c - got a link?
--
Road to recovery has begun!
Severe recession has been averted!!
We feel reassured, CR. Welcome back home soon.
Jas
What's wrong with the stock market today? The Dow is so... stable. It's creeping me out"
what is stable for some is called "directionless" by others... and excruciating
Southland home sales up, prices down; foreclosures now half the market
(carry-over from previous thread)
Bond Girl --
I do not think the market-imposed ceiling on federal debt is right around the corner, but it is silly to spend like it doesn't exist.
Well, I tend to agree. I am just amazed that U.S. Treasuries remain as cheap as they do.
However, Paul Krugman (among others) disagrees:
James Galbraith lets loose - Paul Krugman Blog - NYTimes.com
The underlying debate is precisely the one we are discussing, and Keynesians like Krugman seem to think that with the credit crisis / deep recession / Great Depression II upon us, it would be silly not to borrow and spend at 4% interest.
I am never entirely comfortable disagreeing with people who are smarter than I am.
TED at 2.96.. yay?!
Only 25% more to fall in Cali home prices! Awesome news, cha-ching!
Marc Faber :
Bloomberg News
Nemo,
That 4% interest is not exactly what you think it is. The amount of treasuries outstanding skews horrifically to the short term.
Any boost in interest rates will be reflected on ~70% of the entire US debt within 2 years. That's what one calls a time bomb
EHP
+1
We like to borrow short and lend long(Fannie and Freddie).
Which makes the US vulnerable to liquidity and eventually solvency problems just like the banks.
CR, Quit vacationing so much. You've got a responsibility to to respond instantaneously to all our requests for information and to put up posts as some as news hits the wire. Failing to do this is purely unprofessional. Don't try to have an outside life. Your life is here and here only.
Overnight dollar Libor's down over a full percentage point from Wednesday, and equally importantly, three month Libor is falling pretty fast too - down nearly 60bp over the same time period. This is good stuff and hopefully we'll see similar movements in euro and sterling Libor after those central banks begin their fixed rate auctions.
CR,
U have internet connection while hiking in Bryce & Zion?
"http://www.dqnews.com/News/California/Southern-CA/RRSCA081020.aspx
Southern California home sales shot up by an unprecedented 65% "
Seems pretty good to me!
CR can't hide from the internets
Blah, blah, blah. Who cares about the credit markets? This is nothing more than accounting sleight-of-hand. CR is turning into CNBC.
CNBC's take on Cali housing:
flyover country can now afford to move to California for rock bottom prices
Lehman subpoena count: 17, for criminal fraud. SEC has yet to act on potential civil fraud with lower threshold of proof.
Atlanta Metro News | ajc.com
Several Georgia banks in jeopardy
(Georgia is the most likely location for a Friday bank closing this week.)
RE: SoCal home sales.
Still it seems as though some of these sales are at WTF prices, though.
Are these buyers potential walk-aways as prices continue their march to affordability? I realize that the new mortgages are not of the toxic variety, but does anyone have a clue as to what's really happening here?
For instance in an area I've been looking at we're seeing OK homes selling for 500k. Median income is in the 70k range and the prices would not interest investors.
The TED spread: 3.04 down from 3.59 yesterday (BETTER)
Better? As in your are drowning in 6 ft of water instead of 60? No, I must object. The FFR is an artificial construct specifically designed to allow the Fed to influence the cost of borrowing. The LIBOR is the cost of borrowing.
Until the TED spread is less than 100 bps it is still drowning.
Several Georgia banks in jeopardy.
What about the US, thuough?
It would be interesting if this data could become an form of an index on CalculatedRisk.
Ignore the DQNews sales and prices. 60% of the reported transactions are involuntary and artificial. It is an artifact of the reporting methodology that we are seeing increased sales in the numbers.
his lord was on cnbc this afternoon.
still shilling for a new bull market.
I disagree, Canada is the most likely location for a bank closing this week. My family tried to immigrate there once and their racist policies denied my family because we're Indian, but it was for the best because now we rent and operate a laundromat in Seattle. The lack of industrious immigrants coupled with european-like innovation is how Canada will fail ultimately, and this crisis should start exposing the cracks in the wall. I don't have any statistics but all the pre-wwii white Canadians are due for one.
FFDIC writes:
Page Not Found | ajc.com banks.html
Several Georgia banks in jeopardy
(Georgia is the most likely location for a Friday bank closing this week.)
CNBC's Melissa Francis wants to buy in So Cal because prices have fallen from 505K to 307K, about 39%.
Obviously she did'nt get the news that in Fort Myers/ Cape Coral they have dropped from 322K to 147K, about 54%.
And in Sacramento they are down from 392K to 195K, a 50% drop.
Pretty face, small brain....
Hi
I'm hearing that there are issues with payments for food exports from US in to Europe/Russia/Australia. Shipments from US getting held up. Anyone else heard anything?
A lot of these sales are just kinfe catchers who think they are stealing something. These are the same people who bought JDSU after it went from 150 to 75...on it way to $3.
In talking to realwhores, most of these purchases are "investors" (speculators) who are trying to rent them out...unsucessfully, I must add
RobDawg,
Look at the total LIBOR rate vs the spread, after all that is what a business cares about and there have been substantial overnight interest rate cuts by all central banks.
Dollar LIBOR was down to ~1.6%, which is pretty darned good (JPM manipulation or not)
the banking system is general is a parasite on our very way of life.
siphoning wealth from the economy and delivering it to the rich and powerful to hoard or use in ways which are counter to the good of mankind.
the current system was created after the panic of 1907. panic was used to start this scam...and now it is being used to ensure its legacy.
lehman = Knickerbocker Trust Company
Supposedly this is do to bank accounts being 'frozen' therefore no payments can be made for the deliveries.
I take issue with the belief that a lower TED spread is "better". Better for whom??
Beware
A Jedi's strength flows from the Force. But beware the Dark Side. Anger, fear, and aggression; the Dark Side of the Force are they. Easily they flow, quick to join you in a fight.
Mr Bernanke said today: With the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate. He added: "If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers. Such actions might be particularly effective at promoting economic growth and job creation...
"Access to Credit!!!" Unba-fucking-real. These guys have absolutely no shame, not a moral or ethical cell in their malignant souls.
Give the stupid, ignorant mass of poor slobs money so that they'll feel OK about getting into MORE debt; give 'em that false sense of wealth---like the one "W" gave 'em with the $600 'stimulus' checks---so that they feel OK about getting 3 new credit cards and running up $7500 in debt and paying the minimum payment each month of $50 while NEVER, EVER getting close to getting out of debt. Debt servitude, for all of your days. Pay the man and make him rich.
Look folks, this has gotta stop. We cannot exist forever as the meat for the financial industries sausage grinder. There are many ways to get out from under this pile of shit, but one very straightforward method comes to mind first: stop playing.
Stop borrowing money from corrupt banks and stop paying money to a corrupt government. Don't pay your taxes, don't take out new mortgages, don't patronize the institutions that prop up this system. Live smaller---live in and for your community. Grow vegetables, trade with neighbors, share resources. Don't buy cool things anymore---you don't need them. One small TV is just fine...in fact, my wife and kids and I have chosen not to have TV in our home. We listen to the radio and occasionally watch MAS*H on an old DVD player. Don't buy into the need to buy into happiness. Ride a bike to work.
The Empire cannot make us go to THE DARK SIDE. We have a choice. The Dark Side exists on greed and excess and hubris. If we can learn how to live small, the forces of Evil will fall. They can only exist if we subsidize their existence. I say, no more!
Here is a great video about THIS VERY TOPIC:
Google Videos Error
My family tried to immigrate there once and their racist policies denied my family because we're Indian
That seems odd because Toronto has one of the highest Indian populations around.
not to mention vancouver which has a high Asian population.
darius,
Have seen various reports in local papers. In Canada and states bordering the Mississippi. Letters of credit and financing between shipment + delivery are being jammed.
However it is not across the board, just for some of the smaller players so far. The larger media has certainly actively avoided reporting it. Either way, we wouldn't be able to observe the impacts for a few months as scarcity in importing countries due to the supply chain lag and inventories.
With recent government bank guarantees I don't think this will become a big story any time soon, save for a few importers finally succumbing to bankruptcy after eating too many losses having expected that increased prices were just a short term phenomena
virgile:
Here is why...
Bloomberg.com refer=home
Me again... is it really a lower TED because of improvement? Or because of large short term treasury auction/supply? There's grey area, me thinks
EvilHenryPaulson writes:
RobDawg,
Look at the total LIBOR rate vs the spread, after all that is what a business cares about and there have been substantial overnight interest rate cuts by all central banks.
Dollar LIBOR was down to ~1.6%, which is pretty darned good (JPM manipulation or not)
We don't disagree. The traditional spread has been 0.7%± so really anything greater than 1% is still a drag on lending in those arenas that use LIBOR. And that brigs up an interesting conflict. My HELOC is tied to the FFR. The same HELOC would be substantially higher were it tied to LIBOR. I like to think I was smart but in retrospect it was more luck. I feel for those who have been unable to share the largess of an accommodative Fed.
"My family tried to immigrate there once and their racist policies denied my family because we're Indian"
When they don't get what they want, Indians just like to blame it on racism.
For the record, I am an Indian.
YearningToLearn,
You would have to be non-white to understand how lazy and racist white Canadians are. Well educated Brits, Russians, and others will all say the same thing. How is my family good enough to get USA visas but not for a little country like Canada?
How is my family good enough to get USA visas but not for a little country like Canada?
See above your post.
crispy&cole writes:
A lot of these sales are just kinfe catchers who think they are stealing something. These are the same people who bought JDSU after it went from 150 to 75...on it way to $3.
In talking to realwhores, most of these purchases are "investors" (speculators) who are trying to rent them out...unsucessfully, I must add.
Thanks, C&C.
This is what I've been thinking. We've been on the sidelines (renting) for a few years after selling out. Wifey is getting antsy, but holding steady...had to get her a Tivo and program it to grab every Oprah episode to keep her settled down.
Guys just ignore satan, he periodically pops up trying to goad me into an argument that facts or logic cannot win. He can be reasonable on some topics, but for others it is best to just let him talk himself out. He clearly represents no opinion beyond his own (hey I have Indian friends who will call him a moron, so it's not racism either)
How is my family good enough to get USA visas but not for a little country like Canada?
We have lower standards?
"The FFR is an artificial construct specifically designed to allow the Fed to influence the cost of borrowing. The LIBOR is the cost of borrowing. "
Libor is an opinion poll result asking how much you think you would need to pay to borrow if you were to borrow.
But nobody? uses it today because there is cheaper money available via CB's
Is it a bad sign when etrade won't let me invest my cash in stocks?!? Maybe their computers are too bogged down.
RobDawg,
Do you get the effective FFR or just the targeted rate?
Could have saved 50bp - 100bp for a good part of the year
--
CR (last thread): most indicators suggest the economy is already in free fall.
It should be noted that a free falling economy doesnt keep falling all the wayy into a severe recession. It gets arrested before that. Such is the power of economists.
Jas
"How is my family good enough to get USA visas but not for a little country like Canada?"
I have traveled to Canada, and had no problems getting visa.
How are all the other Indians who have migrated/visited Canada gotten their visas?
Does not sound racist to me....
Malcolme X the Owl, that link didn't work, got another one?
c & c,
Yeah, I was cruising around the condo complex I live in this weekend. There's like 60 units in my building. I counted 12 empty. 2 more than last month. And the 10 were the same as last month.
Nostrovia,
Dan,
Screw that "live small" crap. I like the dark side.
Stock Manipulation Probe Launched After Price Spikes (Update2) - Bloomberg.com
this one is good virgile...
speaking of Indians...how are the tribal casinos making out in this downturn?
darius writes:
Hi
I'm hearing that there are issues with payments for food exports from US in to Europe/Russia/Australia. Shipments from US getting held up. Anyone else heard anything?
Yes I have heard more. The horse meat, beets and vegamite lobbies are pissed
speaking of Indians...how are the tribal casinos making out in this downturn?
Malcome X the Owl
LOL! they are going to get scalped here in SoCal. Hundreds of thousands of sqft of supply coming on line
my question: is it meaningful or not?
Just another wave yearning. It will be back in a few months.
BTW, follow crispy's link.
Typical mortgage payment 2008: 1,458 (on a downward slope) and only about 2/3rds of 2007! We'll... 44.4% below the peak per Crispy's link.
"Foreclosure activity at near record levels." Mission accomplished Team America!
Got Popcorn?
Neil
LOL! they are going to get scalped here in SoCal. Hundreds of thousands of sqft of supply coming on line
nades
People forget that gambling declines in a recession. To paraphrase Ben F., the school of life is a dear school.
Got Popcorn?
Neil
EvilHenryPaulson writes:
RobDawg,
Do you get the effective FFR or just the targeted rate?
People get the effective rate? No. Seriously. "People?" No, the FFR is for big players not we marks.
I'll make a point. Why is the "Prime Rate" the FFR plus Three? Any reason? No. You want to "stimulate" then RAISE the FFR to 3 and lower the Prime to 4. What's taht? The central banks would barely break even? Tough. I thought the concern was the economy not the banker's bottom line. Oh sorry.
"Do you get the effective FFR or just the targeted rate?"
That reminded me of another question. His heloc isn't tied directly to FFR, it's tied directly to WSJ Prime. WSJ prime has been traditionally 3 points higher than FFR (target?). Why?
PAULSON SPEAKS!!
Paulson outlines equity purchase program
This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," Paulson said in a statement.
Paulson also said banks that participate would need to "accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity," Paulson said.
"Obviously she did'nt get the news that in Fort Myers/ Cape Coral they have dropped from 322K to 147K, about 54%."
Deflationista | 10.20.08 - 1:21 pm |
The parents rents in the Cape currently support 1995-96 prices. Prices still have a ways to fall there. Heck,the under 100k listings on the MLS have exploded over the last 6 months...
Chris
FDIC: Board Meetings
FDIC Board Meetings
Location
Board Room on the sixth floor of the FDIC Building located at 550 - 17th Street, N.W., Washington, D.C.
Date
October 23, 2008
Description
Pursuant to the provisions of the Government in the Sunshine Act (5 U.S.C. 552b), notice is hereby given that the Federal Deposit Insurance Corporations Board of Directors will meet in open session at 2:00 p.m. on Thursday, October 23, 2008, to consider the following matters:
Discussion Agenda:
Memorandum and resolution re: Minimum Capital Ratios; Capital Adequacy Guidelines; Capital Maintenance; Capital: Treatment of Perpetual Preferred Stock Issued To the United States Treasury under the Emergency Economic Stabilization Act of 2008.
Bernanke: The economy is in terrible shape, and we'll be lucky to survive the coming recession.
Market: YAY!
"Southern California home sales shot up by an unprecedented 65%".
Southern California median home prices shot down 6.5% in Sep.
20% equity to 0% in 90 days. $60,000 cash down, equity, gone. How many more months like this does it take before buyers pull back, or do they just keep running off the cliff?
"You would have to be non-white to understand how lazy and racist white Canadians are. Well educated Brits, Russians, and others will all say the same thing. How is my family good enough to get USA visas but not for a little country like Canada?"
Sorry Satan, you're a troll and also full of shit.
I grew up in Canada, am white and am married to a Chinese and most of my friends are Indian. If you got a green-card but couldn't get into Canada you're either lying or have major issues.
I have a US green card and know plenty of Indians who got a Canadian green card as a backup in case they couldn't get a US green card. Funny thing is the ALWAYS got the Canadian green-card no matter how much trouble they had here.
The Canadian process is fast,easy and simple compared to the hoops you need to run through in the US.
EvilHenryPaulson,
Just so that you know, some other person often uses my handle. While I have considerable antipathy towards canucks, I am certainly not petty.
FYI: Bernanke Is Fighting the Last War
Bernanke Is Fighting the Last War - WSJ.com
This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. "The Fed," she argues, "has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible."
20% equity to 0% in 90 days. $60,000 cash down, equity, gone. How many more months like this does it take before buyers pull back, or do they just keep running off the cliff?
Better return than the DOW.
This crisis has taught me how stupid investors are. Jas and Lahde are right. This country is full of dopes.
Everybody is spewing optimism while the fire continues to rage through all sectors of the economy. Even CR is looking at the wrong metrics looking for improvement. I welcome the opportunity to load up on more puts. The show is just beginning.
The climax is going to be default of the US government, with an accompanying currency collapse.
RobDawg,
I don't know of anyone that does, but there might be a bank out there using effective overnight rate instead of the target rate.
Deutschebank analyst was just on CNBC re: oil
He expects Americans to use as little oil in the next year as they were consuming at an annualized rate when oil was $147.27.... I've already seen people drawn in by the SUV/truck ads car companies are running right now. Used that as a basis for oil to average $58 over the next year
I would call that optimistic in every sense. Beyond having specious understanding of oil consumers, he has a limited understanding of oil's uses. What's the #1 buzzword plan in every government's docket, China included? Infrastructure. Roads require asphalt which makes up about 3% of a barrel of oil by weight. Rail? Then steel which restarts shipping and forces China to accept Rio Tinto's prices
I would definitely agree that oil demand will fall YoY due to shipping and airlines, but 7-10% globally is huge.
FWIW, Oppenheimer upgraded all oil/commodity stocks while Deutsche and the Swiss downgraded them. Looks like book talking
More unemployed bloggers like me coming to CR!
UN: Crisis to put 20 million out of work globally
Associated Press
"The global financial crisis will add at least 20 million people to the worlds unemployed, bringing the total to 210 million by the end of next year, the U.N. labor agency said today."
404 Error, No such article | Chron.com - Houston Chronicle
Merrill Lynch's Thain
Expects 'Thousands' Of Job Losses
Bloomberg.com
No cover for US-bound goods- Insurance news-Insurance-Personal Finance-The Economic Times
♥® writes:
Paulson also said banks that participate would need to "accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity," Paulson said.
Next, I expect to read outraged newspaper articles about how the banks got around the golden parachutes restriction by purchasing from Lloyds of London "job loss insurance" coverage for senior management with the senior executives as beneficiaries.
FFDIC,
If the $70bn in Wall St (executive?) bonuses this year all trickle down, then that's taking 20mn unemployed and giving them $3,500 which is enough for several years' wages at the bottom end of world income scale....
Nemo,
I would not even know where to start in refuting all of the drivel in Galbraith's piece.
If he thinks we can support substantial fiscal expansion at this point in time, more power to him. But I have absolutely no problem saying that he is wrong.
Malcolme X, thanks. That is very interesting indeed
sacreoeconomics101,
Thanks for the link. If you want to follow the smaller exporters from across Asia, try Ali Baba forums
Until I see panic there, I think the fear of global trade stopping is overdone
Bond Girl,
Link...I could use a good laugh.
Nostrovia,
Where did Pearson go? That guy had a head on his shoulders.
Safe travels CR.
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
"Better return than the DOW."
Yes, much better. Your own 5:1 leveraged Level 3 asset that you can live in.
evil...thanks for the ali baba link. I agree..its just another showe that could drop...any idea out there what will happen tomorrow? CDS settlement payments are due....
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
EBGuy | 10.20.08 - 2:13 pm | #
Been happening a long time now. My sister in AL has taken in quite a few horses, owners couldn't feed them.
Lie I said a pony is a liability unless you eat it.
EBGuy writes:
PONY ALERT: I just heard on NPR that people are giving away their horses as the price of feed and other economic pressures are too much, and even equine rescue organizations are having to turn away animals. For those of you waiting for ponies, your time has come...
Gavshire Hathaway writes:
"The climax is going to be default of the US government, with an accompanying currency collapse."
Exactly. Asked my travel agent to recommend the best destination currency for an extended visit, but she hasn't called back.
I would like to ask a personal finance question that I think could be applicable to many CR visitors or who have 401(k) options available to them at this annual open enrollment time (I am obviously a working stiff):
Given today's market - what should I do with my 401(k) and stock purchase choices at work.
Question 1: 401(k) - above the employer match amount. Should I contribute above the match max - or use the above employer match / federal max margin to pay down debt (say 6% mortgage).
I think I should max this out and then go to the market (cash instruments) with money I can invest on a tax deferred basis.
Question 2: stock purchase (only get a 5% stock discount with my after tax money).
I think I should bag this and pay down debt (especially since my company's share price always seems to rally around the quarterly purchase date).
Any other considerations.
--
This crisis has taught me how stupid investors are. Jas and Lahde are right. This country is full of dopes.
Gavshire Hathaway,
My conclusions were based on systematic observations and even then I waited before I started to share them with public. I do have a good research background, although it was in technology (I retired in March 2000). Some of my best friends (quite smart in their areas of expertise and with high IQ) were, and still are!, dopes! One of them is a super-bull on copper without knowing the historical behavior of copper prices and the supply-demand. He thinks that all histroy other than the recent is useless because of China and India.
Jas
scareonomics101,
The Slosh Report
Slosh report (tracks all the Federal Reserve facilities) shows the Fed content to let a few facility lines to have maturity without replacement ... which might mean everyone has their ducks in a row for tomorrow. WaMu auction is this Thursday as for new CDS, with Iceland the week after
Circuit City begins its long, slow capsize...
"NEW YORK (MarketWatch) -- Struggling electronics retailer Circuit City Stores Inc. is considering a plan to shut at least 150 stores and cut thousands of jobs to avoid filing for bankruptcy protection, The Wall Street Journal reported Monday, citing unidentified people familiar with the situation. "
http://www.marketwatch.com/news/story/circuit-city-may-shut-stores/story.aspx?guid={5AE745AD-512A-4902-AFD2-201831FBF5E5}
They may try to use the money raised from liquidation sales to keep the remaining operation afloat for a while.
Bond Girl --
Yeah, David Walker has been one of my favorite guys for years (sample). So I was dismayed by the Galbraith piece and (especially) Krugman's promotion of it.
If you do not mind my asking, what is your own background? Are you in the industry? Or academia? Or just a concerned layperson?
Oh, and are you really a girl?
++++++++++++
Thread Music
YouTube - Mister Would You Please Help My Pony - Ween Live
++++++++++++
Sorry to the horse lovers, but all breeds provide several hundred pounds of meat with more protein and less fat than comparable beef, no?
SHUAA CAPITAL AFFECTED BY LEHMAN BROTHERS CRISIS: Shuaa Capital CEO, Iyad Al Duwaji, announced that Dhs78.6mn of losses that the company witnessed during the first half its current fiscal year, are Write-downs of Dhs78.6m on structured products and fixed income securities that were exposed to Lehman Brothers. Shuaa reported on Friday net loss of Dhs371.1mn compared to Dhs 128.6mn net profit in for the same period last year.
FFDIC,
If the $70bn in Wall St (executive?) bonuses this year all trickle down, then that's taking 20mn unemployed and giving them $3,500 which is enough for several years' wages at the bottom end of world income scale....
EvilHenryPaulson | 10.20.08 - 2:08 pm | #
I'm glad you solved that vexing problem in 5 minutes now please go to Washington.
I only ask the above question as one of the dopes.
INSTANT VIEW: Bernanke says 2nd stimulus likely needed
| Reuters
INSTANT VIEW: Bernanke says 2nd stimulus likely needed
(Good article with quotes from the following:)
CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO/MISUBISHI, NEW YORK:
OMER ESINER, SENIOR CURRENCY ANALYST, RUESCH INTERNATIONAL,WASHINGTON:
NIGEL GAULT, DIRECTOR, U.S. ECONOMIC RESEARCH, GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS:
VASSILI SEREBRIAKOV, SENIOR CURRENCY STRATEGIST, WELLS FARGO, NEW YORK:
JONATHAN BASILE, ECONOMIST, CREDIT SUISSE, NEW YORK:
STEPHEN MALYON, CHIEF CURRENCY STRATEGIST, SCOTIA CAPITAL, TORONTO:
GREG SALVAGGIO, VICE PRESIDENT, TRADING, TEMPUS CONSULTING, WASHINGTON, D.C.:
Actually, US Treasury placed a net new $40bn in 4 day TIO
with another 2 day auction today.
They seem to specifically straddle the Oct 21 Lehman settlement
Argentine Defaulted Bond Trading Dries Up as Crisis Stalls Plan
Argentine Defaulted Bond Trading Dries Up as Crisis Stalls Plan - Bloomberg.com
What a freaking mess!!!
"The climax is going to be default of the US government, with an accompanying currency collapse."
A "technical" default by the US Govt is unlikely, because it has the sole authority to create as many dollars it wants, out of thin air, to pay back old debts.
But what those dollars will buy is another question. You are absolutely right we can have an overnight collapse of the dollar ( just like the icelandic kronar) against the currencies of countries who export to us.
The Treasury has bet the currency ( or the farm) , and it is gonna lose it.
Expect everything that is imported to go up sharply. Thatz why I am hesitant to go short on oil and commodities, even though their demand will fall sharply in a global depression.
The days of US & The developed West plundering the resources of the world in exchange for worthless paper are numbered.
We may have to start giving out something tangible in exchange for our imports.
Got gold in Fort Knox?
I think short-term fiscal stimulus can work, only so long as it actually solves some of the other economic imbalances that we have. My current concern is that some of the stimulus programs being proposed, while being noble, are short term fixes of the safety net variety (e.g. home heating cost relief, extended unemployment benefits, health care, etc).
The other problem is that all that the stimulus may do is help one sector at the expense of others. Sure, "green" research is good, but from a purely economic point of view, is there any gain if one green job is created at the expense of a "carbon" job. There must be real productivity gains, not just stimulus for the sake of stimulus. The non-targeting was the failure of the first package. On the other hand, stimulus would work if it was redistributive income-wise or globally (reduction in imports or increase in exports).
The problem with the former is that the ruling classes probably won't go for it, and the problem with the latter is that neither will China, Europe, and OPEC.
Nemo- re BondGirl, calm down, she's taken.
Comrade Misean,
See Nemo's earlier link to Krugman (which has link to Galbraith). It will not make you laugh as much as want to punch your monitor.
Nemo,
I am female, if it matters. I am not an academic, much as I enjoy economic philosophy. I am a financial analyst working with a large bond and interest rate derivative portfolio. Your turn
They may try to use the money raised from liquidation sales to keep the remaining operation afloat for a while.
Bob Dobbs
When you have no margins on the only thing that was selling, flatscreens, and then nobody buys anything at all, you are prbably out-of-luck. Another failed business model.
A theme I'd like to bring up here, which is actually on topic (I think?) morphs around ideas relating to Japan and its 13 year recession and that relationship to The Global Recession we are drifting towards.
My interest lies in how Japan and perhaps G7 structured the injection of capital during that social crisis. For example, did Japan print lots of cash and toss unlimited amounts of capital at failed banks? We know they dropped interest rates to zero, which is a topic I love right now, in regard to treasury yield curve construction and mechanics, hence, did Japan rely on international currency devaluations in addition to dropping rates to zero, or was Japan isolated as a rouge country that had taken on too much debt from credit leverage?
I hate to leave (now) but it's a really nice day out (here) but if anyone wants to pipe in there and add anything, Ill check in later. I just wonder if the global intervention to coordinate a network of synthetic liquidity will address the longer term structural and systemic problems we all are in. If Japan is a model for a recent recession, then we have about 10 years to go on this global problem.
Bond Girl: Independent Analyst?
The problem with that idea was, and is, how to price "toxic" assets that nobody wants. And lurking beneath that problem is another, stickier problem: If they are priced at current market levels, selling them would be a recipe for instant insolvency at many institutions. The fears that are locking up the credit markets would be realized, and a number of banks would probably fail.
Love it!
Also, FYI saw Linens and things was going out of business driving around this weekend...
Share volume is what, 25% of the recent 'normal' right now? 1bn shares is nothing for NYSE
Bond Girl --
Me? I am a creepy middle-aged guy living in his parents' basement.
Well, no, not really. But that is a wise assumption about any voice on the Internet, regardless of what it says.
Professional software engineer, amateur mathematician, concerned citizen.
I would not mind hearing from you privately. (This should be good for about 20 Emails from creppy middle-aged men in their parents' basements.)
yogi writes:
Sorry to the horse lovers, but all breeds provide several hundred pounds of meat with more protein and less fat than comparable beef, no?
yogi | 10.20.08 - 2:24 pm | #
Horse meat is delicious.
(Doh. First "parents'" was a typo. Second was deliberate.
I actually do speak English, mostly.)
Eliot Spizter warned us...February 2008 - in March he was taken out...may be some people didn't want to get the message out..
Eliot Spitzer - Predatory Lenders' Partner in Crime - washingtonpost.com
Must read
PrudentBear
BTW, a great indian, not into casinos.
Bond Girl,
Danke.
Nostrvia,
I would not mind hearing from you privately. (This should be good for about 20 Emails from creppy middle-aged men in their parents' basements.)
Nemo | Homepage | 10.20.08 - 2:46 pm | #
Have you heard of E-Harmony?
Ben: 20M unemployed!
Wally Dow:+3%!
Dopes.
If the Federal government goes bankrupt, there will be no entitlement spending, no matter how well Krugman and [Jamie] Galbraith managed to shut up the dissenters who warned about insolvency in the first place. Krugman's tone has degenerated into that of someone whose first impulse is to smear his intellectual opponent as someone who has an "agenda."
c & c,
ROFL!
Nostrovia,
How often do equities and bonds BOTH go up substantially on the same day and what does that mean? A lot of money heading into the market !
bearly,
volume is a factor there as well...didja see the slosh lately?
I think short-term fiscal stimulus can work, only so long as it actually solves some of the other economic imbalances that we have. My current concern is that some of the stimulus programs being proposed, while being noble, are short term fixes of the safety net variety (e.g. home heating cost relief, extended unemployment benefits, health care, etc).
I've been reading about the New Deal that past few daus, what's interesting to me is to see that there was a consensus by the late 30s that it wasn't really working and even FDR seems to have lost enthusiasm for it (this was kind of news to me).
What worries me today is that we've basically had this program of government spending to stimulate the economy since the Reagan era in the early 80s, with no apparent end in sight.
I need to understand now how this round is going to be different and why it is likely to work otherwise I have to assume it's just more politicians looking for excuses to spend other peoples money without just cause.
It's not enough to say we need to keep doing the same thing we've been doing for 25 years with a balance sheet that continues to deteriorate with no end in sight.
The strategy is losing credibility.
I'm sick of hearing "this time it's different".
Nemo is a bot.
bearly,
Lighter volume. People have their eye on something in the next few days. Quite possibly the OPEC announcement and subsequent responses to it
Whew!
Thank heavens!
Soon, we can get back to ramping up housing prices to keep them unaffordable forever, encouraging mortgage fraud, and living beyond our means! Go 'merika!
Nemo, I don't know how many creepy middle aged emails you're going to get, but I don't think you're going to live this down on this blog anytime soon.
Nemo is a lovebot
Nemo is going long.
ROFL at going long.
Bond Girl: Up your yield!
Nemo,
Well that explains the nifty programming. My husband is a software developer. I get lost in vocabulary, but it appears to be solving logic puzzles all day.
emo and Bond Girl sittin in a tree
k-i-s-s-i-n-g
First comes love,
then comes debt...
Nemo,
Just remember that love is a battlefield.
You guys are awful.
"For example, did Japan print lots of cash and toss unlimited amounts of capital at failed banks? We know they dropped interest rates to zero,"
The BOJ pumped in so much liquidity into the banking system, it drove the target rate to zero. Because with so much excess reserves, the BOJ could not control it's "fund rate". Banks were willing to lend to each other for free, they had so much excess reserves. ZIRP was a consequence and not a target. And resulted in significant weakening of the yen.
But all this liquidity failed to get out of the banking system into the Japanese Economy because banks were unwilling to lend as they had just been burnt by making bad loans to the Japanese customers. The Japanese public was unwilling to borrow because they had just been burnt by going too much into debt.
Then international borrowers came, they started borrowing "yen" at zero/near zero rates. Selling it into the open market for dollars and other currencies. This helped drive down further the exchange rate of yen internationally, and support/sustain the "export economy" of Japan.
The US Fed is also headed to the ZIRP. It wont be able to control the Fed rate, if it continues to flood the banking system with liquidity.
This is gonna collapse the dollar just like the yen.
But since we are net debtors/importers, unlike Japan which is net lender/exporter, collapse of the dollar will put an end to everything we are able to import so cheaply from the rest of the world.
If the Federal government goes bankrupt, there will be no entitlement spending, no matter how well Krugman and [Jamie] Galbraith managed to shut up the dissenters who warned about insolvency in the first place. Krugman's tone has degenerated into that of someone whose first impulse is to smear his intellectual opponent as someone who has an "agenda."
I think it's highly unfortunate that we have politics getting so intertwined with economics. It discredits the entire field IMO.
To me it's no different than the global warming argument (which I believe does have some merit, but never mind that). The point is that they highly political nature of it serves as a tremendous distraction to something that may be immensely important. It smears any genuine scientific insights with the taint of an agenda.
If certain economists are going to turn economics in to a highly politicized field, then I believe they will be highly destructive to its future credibility.
This piece of sh%t, motherf#cking, pighole, DOW will close up 400. Watch
Don't let the notice on the Columbia website discourage you from registering. It worked for me as of about 15 minutes ago.
emo and Bond Girl sittin in a tree
Shelia Bair and Suzie Orma
ac: get with the program, man. They give out Swedish bank prizes for that sort of thing.
Chairman Bernanke's comments today that "consideration of a fiscal stimulus plan at this juncture may be appropriate" (or words to that effect are reminiscent of the posture Arthur Burns adopted at the Federal Reserve in 1975 upon seeing that the presidency was going to Jimmy Carter. Burns prior to the elections was inexplicably tight with the Fed's money, and thereby helped greatly deepen the 1974-75 recession. However, when he read the political tea leaves, he started the Fed on a full-bore monetary growth path to help jump-start the economy. (Money supply figures from those years tell the tale.)
I suspect Bernanke was at least being 50% political in his remarks today, assuming that he will be dealing with a President Obama and wanting reappointment. Burns' last-minute monetary heroics did not get him reappointed. (Anyone remember G. William Miller?) We'll see about Bernanke.
Well, I don't apologize for trying.
Besides, the conversation was getting boring around here.
Elvis --
Just remember that love is a battlefield.
Except on a battlefield you use your real name.
No pain no gain, Nemo. You're still "first" to us.
Anyone remember G. William Miller?
The Fed chairman who was a lawyer.
Looks like a jam up (right now)
Bernanke has to be on his way out, why would OhDrama want to keep anything from this administration?
This piece of sh%t, motherf#cking, pighole, DOW will close up 400. Watch
Don't get sore, sell some more!!!
(always loved that saying)
Eric,
Are you talking about your usual (S&P spoos)?
I still can't figure out why people haven't already run to banks. That's the real great difference between '29 and today. We KNOW banks are toasted and they have no cash. But no one has the bravery to claim his money back. This is discomforting, and tells a lot on the dopeing effects of propaganda we're submitted to. I think THIS generation simply WOULD NOT survive a depression, as our grandparents did. Terrible.
Bond babe,
Do you have a photo of yourself so that some of us can make a call on going short or long?
Goldman Sex writes:
I still can't figure out why people haven't already run to banks.
Most people on this blog have.
I would not mind hearing from you privately. (This should be good for about 20 Emails from creppy middle-aged men in their parents' basements.)
Nemo
LOL
Nemo - add to your background:
Nemo aka Brian always looking on the bright (funny) side of life
Nemo's right. I. too, am a creepy middle-aged man attempting to get back to my parents' basement, but I'm conflicted. I'm having the best sex of my life and my girlfriend lives in a basement, too.
I'm really sick of this creepy twisted job market and I don't see much reason to "invest" in the future and playing pool has displaced work as my favorite pastime. But... For once the sex is actually great. I'm conflicted but unmotivated. I'll let the job market decide my fate.
Are you talking about your usual (S&P spoos)?
I have two realtime charts open. Used to be I'd watch /ES and XLF. Now that I don't have a position in XLF, I watch /ES and INDU. Not that one really needs two windows for that since they track pretty closely.
But I'm not day trading. I've made my few bets, and I'm just waiting.
"Entertainment only" (like all of CNBC).
Except on a battlefield you use your real name.
Nemo
We all know that you live at 42 Wallabee Way, Sidney, Marlin,errr...Nemo.
We all know that you live at 42 Wallabee Way, Sidney, Marlin,errr...Nemo.
Elvis
Oh, that is right. You escaped. I forgot.
Why Im Still Buying
by Ben Stein ROTFLMAO!!
Or, Why I Lost my ass and need to double down!
Yahoo! Personal Finance: Calculators,Money Advice,Guides,& More
Why didn't I, Ben Stein, famous so-called braino, get what was happening and why did I remain optimistic so long?
LOL Bawhahahahaha
Goldman Sex writes:
I still can't figure out why people haven't already run to banks.
Anonymous
Most people on this blog have.
Delay the inevitable much? As far as I can see -- as long as you're sitting at the kid's table -- you're going to lose no matter where you put your money.
"This piece of sh%t, motherf#cking, pighole, DOW will close up 400. Watch"
Sounds like poor risk managment on your part to me.
"Whats up with So Cal sales up?"
Look into Mr Mortgage on youtube and watch the explanation. A change in the rules that made this anomaly. Everything still plummeting. Nothing go to see here.
But the advocates for poor and black people had immense political clout. Under President Bill Clinton, they passed legislation that called on banks to be required to lend to non credit worthy borrowers. The laws, including the Community Reinvestment Act, the CRA, required two large government sponsored enterprises, Fannie Mae and Freddie Mac, to buy those lower quality mortgages from the banks, guarantee them, and sell them to the public. These were bundled into immense pools of subprime mortgages as they were called, and sold all over the world.
What about all the other races, creeds and people of religion that fucked up and took on to much debt? What about the poor white bankers like Fuld that had no clue how to run a business?
ac:
I agree completely with the fiscal stimulus; I just don't see how it will help other than as a short term fix. As I mentioned earlier, they are all of the "broken window" variety.
I truly think that we are at "Peak First World" or "Peak Middle Class," and the PTB don't know exactly what to do about it.
"This piece of sh%t, motherf#cking, pighole, DOW will close up 400. Watch"
Sounds like Buffett
Nemo writes:
Bond Girl --
Me? I am a creepy middle-aged guy living in his parents' basement.
I'm a creepy middle aged chick sitting in my own basement. We could be a match made in... somewhere.
Sounds like Buffett
Anonymous | 10.20.08 - 3:22 pm | #
Nope.
GS at +120$ made his day.
Nothing2c here.
Nemo: google: pua mystery
Vega,
Agree with your comments on Japan. But further the QEP or Quantitative Easing Policy pushed in liquidity beyond that needed for 0 interest rates, and this further drove down the yen as the carry trade pulled in the excess funds. I suspect the Japanese were actually targeting a lower yen with this policy in a backdoor way. This policy flooded the world with excess liquidity and has seriously worsened the present crisis IMO.
"My family tried to immigrate there once and their racist policies denied my family because we're Indian"
Highly unlikely. Canada is welcoming to Indians who meet their immigration standards. Other factors were in play if you were denied entry. So, you're stuck here in the US. That racist chip on your shoulder must weigh a ton.
--
Delay the inevitable much? As far as I can see -- as long as you're sitting at the kid's table -- you're going to lose no matter where you put your money.
Sad but true. But at least I can use it to heat the house if needed:)
Nemo's right. I. too, am a creepy middle-aged man attempting to get back to my parents' basement...
Me too... except when circumstances on the Internets demand that I claim to be a luscious 20 somethings female.
Over the past week or two we have started to see a divergence of commodities and basic materials versus financials for the first time since ~Feb which resulted in the bubble that unwound in July.
Just a curious note
ac:
I agree completely with the fiscal stimulus; I just don't see how it will help other than as a short term fix. As I mentioned earlier, they are all of the "broken window" variety.
I truly think that we are at "Peak First World" or "Peak Middle Class," and the PTB don't know exactly what to do about it.
Well, I will at least try to listen to any arguments as to why we can spend money beneficially, but I'm not very optimistic.
One real problem I think we might face is that the kind of work most people can perform really is finally being marginalized by technology.
When I see a robotic arm able to do very fine and articulate metalwork or software programs that can remove 3d objects from stereoscopic images, I wonder if part of the problems we face now are fundamentally the value of human labor.
Anonymous
Sad but true. But at least I can use it to heat the house if needed:)
There you go. I'm sure our currency will make a great fire starter... unless they've taken that away from us, too...
:_(
EHP,
What do you think that suggests?
"this further drove down the yen as the carry trade pulled in the excess funds. I suspect the Japanese were actually targeting a lower yen with this policy in a backdoor way."
Absolutely. Japan has been pretty heavy handed when it comes to yen appreciation.
An artificial peg sorts of, with the yen carry trade.
China doing the same thing, but in a more formal/obvious way.
" I wonder if part of the problems we face now are fundamentally the value of human labor."
Food Production: Mechanized and automated
Nearly Everything else: Mechanized and automated
We're left with those that design and monitor, and market and those that consume.
Bonus: massages will continue to get cheaper
ac,
The increase in automation need not mean that human labor becomes less productive...quite the opposite. Just multiply the capital: 1 machine and 4 workers used to make a car, now 1 machine and 1 worker makes a car. So build 4 machines and make 4 cars with the same labor.
Provided we have the physical resources, this should imply a greater standard of living, no?
They be jammi
ac,
of course, this also means that we start becoming oversupplied. Hence the liquidity trap.
Bond Girl,
I don't think it suggests anything, we're in the middle of earnings, government program announcements, and waiting on OPEC/FOMC/end of Oct stats reports.
I think once the banks have consolidated they will do well, but on much smaller margins/growth.
I also think commodities will resume a nice slow and steady price increase throughout a downturn. However there will not be as much credit available to complete buyouts so the companies will not have the same growth rates either.
The elephant in the room is government debt, how much they will issue and when. Who that pushes out of debt markets, how it affects currency exchange rates, which industries it goes to protect, and other questions will have to wait to be answered before we in turn can provide any beyond the immediate term (which is useless with existing volatility in most markets)
What are you seeing with the bond market?
1 machine and 4 workers used to make a car, now 1 machine and 1 worker makes a car. So build 4 machines and make 4 cars with the same labor.
The problem with this model is that it assumes that the 3 displaced workers actually do something productive so that they can still afford the 3 additional cars. 10% unemployment in Detroit indicates otherwise.
What the hell. Twisted the cap off early today !!
Well, real food production will never be done by robots. Unless you think the Earth is infinitely pillage-able.
Basel Too,
The three displaced workers man 3 additional machines.
Agree that we need build the capital to make this happen. Workers need not be displaced provided we have access to capital (and resources are not stretched).
Arguably, we are hitting a resource constraint at the same time that we are over-supplied.
Gains by sector:
Health care: 3.18%
Financials: 2.33%
Consumer cyc: 2.61%
Technology: 2.63%
Energy: 9.62%
Capital Goods: 2.83%
Utilities: 7.47%
Basic materials: 8.93%
Transportation: 3.38%
Telecom: 3.36%
Consumer staples: 3.16%
Online Investing: Stocks, Personal Finance & Mutual Funds at SmartMoney.com
"Well, real food production will never be done by robots. Unless you think the Earth is infinitely pillage-able."
Nathan | 10.20.08 - 3:43 pm | #
You should see the latest gps mapping/driving sofware. Pretty cool shit. Automated will be coming soon enough. No roads or traffic to deal with. Start the farm equipment in the field a let the mapping system take over. I have watched a relative go from 400 or so acres to 1500+ in 20 years with no additional help. All mechanization. And the best is on the way...
Chris
Energy: 9.62%
Called it Oct 10th.
Up over 35%
But cramer said sell sell sell???
Uncle Billy,
High-value production will be increasingly automated one step at a time.
The biggest labour market unserved by automation is picking vegetables/fruit -- there are some promising developments which will start making their way to market in the next decade. Advantages will include better sanitation, only picking the ripe fruit (giving the option to spread out the harvest, get the best price), in addition to the cost advantages.
The way to value human labour is how much would it cost to replace it? If someone's a postal carrier then you have your pick of millions to choose from and the price is bid down.
The developing world is a wild card, and I fear that disease/food-shortages will eventually shift how families are constructed. For now large families are primarily due to children acting as a 'retirement plan'. This is finally changing in places like India or China where children increasingly move away and do not want their parents sharing the house. In tropical climates the problem persists because little is needed to live beyond the regular food aid and a shanty thrown together.
Geez... everything I talk about turns into a disaster in about 3 sentences
Nathan (Pearson?):
Dunno bout that. I saw some wild automation in Israel a few years ago.
Still need people to slap cows on the ass though to get them into the dairy.
On 2nd thought, no you don't, but you do still need people to apply the milking tubes.
Uncle Billy,
There have been self-milking dairies for years now. The cow walks in when they feel the need and has their udders emptied. RFID chips track which cows have been milked when and uses that data to spot any sick cows
Welcome to a Bear Rally, watch your step and hope you don't get stuck with any stocks when the music stops.
Bankers should not marry Bankers,
the children could come-out deformed.
but you do still need people to apply the milking tubes.
Uncle Billy, Adenoid | Homepage | 10.20.08 - 3:51 pm | #
Actually no you don't. That has been automated here in Canada. Using (no kidding) lasers.
I don't have a link handy though.
"On 2nd thought, no you don't, but you do still need people to apply the milking tubes."
Nope, not that either.
"On 2nd thought, no you don't, but you do still need people to apply the milking tubes."
Uncle Billy, Adenoid | Homepage |
I hate to say this but...nope. The only thing the operator did was inspect the teats. Pretty cool operation in central Indiana. Heck the cows know when it's time to milk(I grew up on a dairy farm).
Chris
Goldman Sex writes:
I still can't figure out why people haven't already run to banks. That's the real great difference between '29 and today. We KNOW banks are toasted and they have no cash. But no one has the bravery to claim his money back. This is discomforting, and tells a lot on the dopeing effects of propaganda we're submitted to. I think THIS generation simply WOULD NOT survive a depression, as our grandparents did. Terrible.
If everyone ran to the bank then we all get zero. sub optimal outcome. Maybe sheeple are smarter than given credit? then again stupidity is also a real possibility.
Jeezum, let's all gang up on Uncle Billy!
Cobradriver writes:
You should see the latest gps mapping/driving sofware. Pretty cool shit. Automated will be coming soon enough. No roads or traffic to deal with. Start the farm equipment in the field a let the mapping system take over. I have watched a relative go from 400 or so acres to 1500+ in 20 years with no additional help. All mechanization. And the best is on the way...
Awesome. Imagine the irony of starving to death within inches of a mobile processor and packager as it ambulates autonomously (and endlessly) over a rich field of corn... or carrots... or ponies...
If everyone ran to the bank then we all get zero. sub optimal outcome. Maybe sheeple are smarter than given credit? then again stupidity is also a real possibility.
FRED | 10.20.08 - 3:56 pm
Nobody uses paper money anymore. They can't even fathom that the money isn't even there.
Just shows I haven't been to a dairy in a while. Do they automate the iodine application as well??
Since there is a new post, I don't feel bad about continuing the automation vein.
Don't keep your hopes up about stocking shelves. It's on the verge of becoming economically feasible to automate that.
From libraries to Wal-Mart, everyone has a magic price level that we might wait until the next economic boom-time to implement (during a recession capital is expensive and labour is cheap)
Oh! I know, you still need a warm vet to remove impactions!
EVP,
I work with munis, and there doesn't appear to be a whole lot of trading going on, although the short-term trend is cheapening. Compared to last week with Cali's issue, there's relatively little activity in the primary market. 30 day visible supply dropped $420.7M to $17.875B. I'd say it is really tough to say at this point where things are going.
I guess if we want to cuddle up with cows we can always visit India.
So, basically, we're looking at doom in the context of Logan's Run? Infinite free time and carousing -- until you get 'old'?
(I suppose this also assumes we can clothe ourselves and carouse for free...)
Sorry, I mean EHP
Bond Girl: You expecting a flood of business when the infrastructure projects get going?
Did some financial analyst with a 530 credit score go out and get an unsecured loan today and declare the end to the deadbeat lending embargo ?
"Do they automate the iodine application as well??"
Uncle Billy, Adenoid | Homepage | 10.20.08 - 3:58 pm | #
Yep. But the owner did say the nice thing was they could take the time to really inspect the cow for problems. You weren't rushing to do the milking process...
Chris
Who called for that up 400?
Thanks Chris. Interesting. Moo
Whoa, for a econ/finance board, you guys sure know a lot about dairy farming!
I live in Wisconsin, and I've never even seen a cow being milked, neither by human nor robot.
CR: I appreciate the update, but instead of making a regular post what we really need is a dashboard on the site with all of these metrics and cool looking needles and warning indicators for credit conditions. Also might want to add the number of visitors online, that always seems to indicate doom and gloom occuring. A real time feed of all of the indicators would be slick.
Uncle Billy, Adenoid writes:
Bond Girl: You expecting a flood of business when the infrastructure projects get going?
Seeing as how states have used GARVEES to pay for their highways and given the problems with the federal highway trust fund right now.... I think states will be happy to get anything from the federal government so they do not need to use state funds to pay for federal projects.
Eric writes:
Who called for that up 400?
That would be me. I acted on my vision and was to the good for the day.
Yeah, not a whole lot of state funds around from what we're hearing.
It would be great if CR could get on the bandwagon with this automation thing. I mean, do we -- as humans -- really want to spend our time divining the markets and posting commentary? We could be out playing tennis, eating pizza, and drinking margaritas!
Are Garvees getting upgraded/dowgraded, graded at all lately?
greywalk3r - Read:
In Praise of Idleness
By Bertrand Russell
Exactly what you are looking for.
Hitherto we have continued to be as energetic as we were before there were machines; in this we have been foolish, but there is no reason to go on being foolish forever.
Brings a tear to my eye...
"I live in Wisconsin, and I've never even seen a cow being milked, neither by human nor robot."
Shnaps | Homepage | 10.20.08 - 4:06
I actually feel pretty lucky growing up on a farm...
Chris
Nemo, why the hell are you making our lives miserable with your "Nemo's always first" program, when you could be coding up a dashboard including CRVIX for CR? Huh? Huh?
Interesting Times quoted Russell: "Hitherto we have continued to be as energetic as we were before there were machines; in this we have been foolish, but there is no reason to go on being foolish forever."
And Russell went on to say:
"For my part, while I am as convinced a Socialist as the most ardent Marxian, I do not regard Socialism as a gospel of proletarian revenge, nor even, primarily, as a means of securing economic justice. I regard it primarily as an adjustment to machine production demanded by considerations of common sense, and calculated to increase the happiness, not only of proletarians, but of all except a tiny minority of the human race."
To which I say, "That's somehow on topic, Comrade Interesting Times"!
Russell was a god.
Russell seems to have been remarkably prescient.
What keeps me up at night...get a taste here:
Bailout Nation: More Govt. Control of JPMorgan, Citi, BofA Coming
Aaron Task
Yahoo Tech Ticker, Oct 20, 2008 11:32am EDT
Bailout Nation More Govt. Control of JPMorgan Citi BofA Coming: Tech Ticker, Yahoo! Finance
Bankers should not marry Bankers...why, counter party risk?
stop already with the miniscule improvements of credit. corporate spreads are blown out and have not come in one iota. is this website a mouthpiece for the bull case? to whom are banks going to lend to? are we going to start the great credit consumption cycle miraculously all over again?
The zero interest rate policy (ZIRP) is a Keynesian macroeconomics scheme for economies exhibiting slow growth with a very low interest rate, such as contemporary Japan.
Under ZIRP, the central bank maintains a 0% nominal interest rate. The effect of a ZIRP is to encourage investment throughout the economy by making capital purchases more financially attractive. Whether ZIRP succeeds in achieving this goal is a matter of much debate.
New Slogan for bumper stickers:
oldman Sex writes:
I still can't figure out why people haven't already run to banks.
Maybe because we have such great savings rate in the US that most people do not have much to run for...
oldman Sex writes:
I still can't figure out why people haven't already run to banks.
Maybe because we have such great savings rate in the US that most people do not have much to run for...
hurray, things are finally improving. we can all go out and spend again!
I don't think the stock market has bottomed. The least little bit of good news and it zooms upward immediately. Market bottoms come with hopelessness and despair. We sure aren't there yet.l
http://www.FAKEPAYCHECKSTUBS.com Is your sole source for fake pay check stubs ON THE NET! Get the Credit you Deserve! Get Any Loan you Apply For using This $50 computer program!
http://www.fakepaycheckstubs.com
This Easy To Use and Understand Computer Software Makes Printing Out a Paycheck stub a Breeze! Simply Input the company name (with company logo if desired), name of employee, hourly salary, and how often the "employee" gets Paid (weekly, twice a month, or monthly) Type in the state you live in and how many dependants you want to claim (for precise tax computation)! All Deductions and taxes are automatically calculated then configured on the paycheck! Just Press the Print Button!..... Instant pay check stubs!
Not intended to use for any of the following refinance, loan, loans, mortgages, mortgage, refinance, bad credit mortgage, commercial mortgage, mortgage rates, mortgage refinancing, mortgage rate, commercial loan, second mortgage, home, home mortgage, mortgage loans, mortgage loan, mortgage, home loan, refinance rates, commercial loans, home loans, loan rates, home equity loans, home equity, mortgage interest rates, auto loans, refinance loan, mortgage quote, home equity line of credit, fha loan, equity mortgage, home improvement loan, home financing, home refinance, loan refinancing, bad credit loan, mortgage leads, loan officer, reverse mortgage, equity loan, mortgage insurance, first time home buyer, mortgage calculators, home equity line, home equity loan, bank loan, mortgage calculator, mortgage company, auto loan, debt consolidation loan, personal loans, refinance home loan, refinance home mortgage, mortgage refinance rates, refinance rate, online mortgage, home refinancing, business loans, refinance loans, va loan, home improvement, best mortgage, buying a home, cash loan, loans with bad credit, personal loan, bad credit loan, bad credit loans, business loan, cash loans, loan consolidation, car loan, consolidation loans, small business loans, refinancing, lenders, fha, financing, fannie, freddie, credit, refi, bankruptcy, debt homes, morgage, credit card, finance, money, real estate, recession, finance, housing crisis -
fake pay stubs fake payroll stubs fake check stubs make fake paystub bad credit instant proof of income letter bogus and doctored fake check car loan real estate refinance consolodate now no credit need pay stub make pay stub create pay stub fake check buy online buy online fake make pay stubs fake payroll stubs fake check stubs slip fake id ids home loan car loan cash advance cash loan auto proof of income novelty easy bad credit bad credit sample paycheck stub make sample paycheck stubs fake id ids car refinance home refinance state id identity create same day payday slip buy house home auto vehicle state create template sample not a child support solution prove income proof of income letter sample fake pay stubs fake payroll stubs fake check stubs make fake pay stub bad credit instant proof of income letter fake check car loan real estate refinance consolidate now not a mortgage fraud check scam no credit need pay stub make pay stub create pay stub fake check fake make pay slips stubs fake payroll stubs fake check stubs fake id ids home car cash advance cash auto loan proof of income novelty easy bad credit bad credit loan sample paycheck stub make sample paycheck stubs fake id ids car refinance home refinance id identity create same day payday slip buy house home auto vehicle state create template sample scam scam child support solution prove income proof of income letter not a child support sample template sample not used to stop my child support piggybacking verify income verification of income verification of employment support payday loan pay day money bling payday scam interest rate consolidate refinance instantly!vod,voe,ltv,fha,hard money,full doc,land ,no doc,subprime,cash fake paystub maker out,fico,commercial,jumbo,sc,arm ,vod,voe,ltv,fha,hard money,full doc,land ,no doc,subprime,cash out,fico,commercial,jumbo,sc,arm pay check maker fake paystub maker generator sample pay stub, free paystub template,pay stub template, blank pay stub, sample check stub, pay stub, payroll check stub, cash out, recession, credit crunch, mortgage, arm, refinance, bad credit, fake id, lost job, bogus, doctor, doctored, genuine proof of income, sell my home, credit guidelines, bad credit,, refinance, heloc, paycheck template,payroll template, boggus,crisis,slips,payroll template, free, pay slip, payslips , money , cash , 2007, 2008, tax, taxes, 1040,income tax, subprime, sub-prime, recession, housing crisis, help, tax relief , tax help, small business,mortgage fraud, fraud, credit crisis, financial crisis,subprime loan, loans,700 billion, stop foreclosure,foreclosure, freddie mack ,fannie mae ,novelty paycheck stub, paycheck stubs, paycheck stub template, sample paycheck stub, create paycheck stub, sample template, paycheck template,free paycheck stub, free, payday loan, countrywide, lehman brothers, mortgage broker, loan officer, leads, forge,documents,docs,2008 taxes,preditory lending,preditory borrowing,recession,recession proof http://www.fakepaycheckstubs.com
sd