Unable to deal with the problem of falling home prices, 2010, ask Father Time to go directly to 2011. "I don't want people thinking of 2010 like GWB.", it reportedly told Father Time.
Elvis you were turning out the hits last night. Lefty's closed?
yogi
No, the batting cages were closed on account of the Baltic Dry Index collapse. It seems they could not get a letter of credit to ship baseballs from China.
McCain, Obama, Abe Lincoln ... doesn't matter. No one can "solve" the problem. The markets may not be free but they will function in some way. In fact, I'd say that they're as far from free as possible. Tey're going to exact a cataclysmic cost.
"Colleen Pestana, a real estate agent in Orange County in California, said many people losing their homes in Southern California used to work at mortgage and real estate companies. Many of them bet heavily on real estate by upgrading to bigger houses every few years. Now, many are losing their homes."
Talking with a coworker today, I was told stocks were "a sound investment now if you stay in there for at least five years." I said "if the housing market continues to crash, all assets lose value, for maybe more than five years." I was told that I was being 'negative.' Heaven forbid.
When the dearth of baseballs was reported in the media, Yogi (Berra) stated, "When I want balls, I just call on Steinbrenner and he comes to my house in a French maid uniform."
we're not yet through the deflation of the housing bubble and now there is a major recession, possible depression. The effects of increasing unemployment and declining wages will give housing another wallop.
Not to mention a credit freeze with still developing crystalline formations creeping throughout the system.
1996 prices seem ever more likely. I used to think we would hit bottom at 2002 prices, more or less, with Los Angeles as my local reference graph
(actual results might vary with location and the progress of actual events)
Agreed, I also figured something like 2002 prices with Sacramento as my reference. That would have approximated some type of normal appreciation. Now, it looks like I was wildly optimistic.
Doesnt take a genious. Get yourself on Ziprealty, price a home. Go to Craigslist, and find a comp that you can rent. (I happen to be speaking of the bay area, but the same holds for many places in CA that are even as little as semi-desirable - we arent talking riverside) Anyway....do the math. These places dont come CLOSE to penciling out. When capital appreciation was 10-15% a year, a 3% cap rate made sense. Now, it is ludacris? (Is that how you spell it?)
"Many of them bet heavily on real estate by upgrading to bigger houses every few years. Now, many are losing their homes."
friardaddy "
Not to mention their pretty wives. If you want to get lucky, just go to a chic California bar and tell the women that you are cash rich and starting an alternative energy company.
"What can be gathered about Griffin's appearance in the securities market is a remarkable success story. While at Harvard University, he started two funds from his dorm room, and in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital [1]. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bonds), and provided a relatively small investment for Griffin to work miracles with ($1 million) [2]. Griffin exceeded Meyer's expectations, and as word of his wonders spread, investors flocked to Griffin for a piece of his remarkable rates of return. Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility [3].
With Citadel quickly growing, it began to show uniqueness in the hedge fund world. For those who put their trust in the firm, huge rewards followed as the result of the funds distinctiveness, which reflected Griffins exceptional investment skills. Citadel's success and immensity is perhaps entirely the embodiment of Griffin's wide range of skills he had before the company was incepted. Griffin could program advanced computer code, write complicated mathematical formulas, and was quiet: Citadel, in a sense, has succeeded by blending the three. Through its employees the firm has brought together mathematicians, physicists, engineers, investment analysts, advanced computer technology, and a high level of confidentiality.
After it became known in 2006 that Citadel Investment Group would be the first hedge fund to issue publicly traded debt bonds, the Financial Times speculated that Kenneth Griffin may now be "the most feared man on Wall Street"
East Bay Hills (Berkeley, Oakland, El Cerrito, Albany) just peaked.
Seriously, prices have been climbing until this summer, and last sales for a lot of houses I am seeing lists were last sold in 2008... yep... people are still trying to flip, with markups up to 20% in cases I have seen.
One difference between now and 3 months ago is that all of a sudden, there seem to be a lot more houses on the market.
Also, I have to agree. In many California markets, after 30-50% depreciation, renting is still much cheaper than buying. But you would miss out on the appreciation.
Lab....come one now, here boy. Fetch! But seriously, Sac has been at 02 for a long time...we're goin back to 95 prolly here. Remember, CA, seat of GOV? Doomed....Fargo is fraud.
P Geoff: yep, not even close. They gotta come down to 1996 prices in East Bay Hills. At least. And that's a long, long, long ass way down from what they are listing for right now.
You do have to wonder how Ben et al are planning on financing all this.
Geoff,
Sac has dropped to 02 levels on medians, but when you go out to look at houses in decent neighborhoods they still seem pretty overpriced to me. We may see 95 prices (in other words, when we were trying to come out of the last crash. Wait, that can never happen again ... no more military bases to close. We're good).
They have to come down in my neighborhood pretty much 65-70%, which of course will never happen.
The economic health of East Bay is probably most accurately estimated by the number of au pairs hanging out at Starbucks on Solano at 11 am weekday mornings. Need to mosey on up there and take a look.
"The economic health of East Bay is probably most accurately estimated by the number of au pairs hanging out at Starbucks on Solano at 11 am weekday mornings. Need to mosey on up there and take a look.
Chill Bear"
The best thing about au pairs is their "Oh, pairs" in their tight sweaters. And the fact that they don't wear underwear with mini-skirts.
The fury among those of us who didn't buy into this stupidity in the Bay Area is vast, cold and deep. We know we'll be the one's really paying for the party we didn't enjoy. And the more they bail out, the longer we're holding out to buy. Or even spend.
Lab - I know....same as Bay Area. Granted, the higher end places will have more net worth accessible to support the prices that dont pencil out on rents, but they are still headin down. It's like med center here in Sac. Stupid prices, but, they arent nearly as ridiculous as Natomas. Garbage. By Med center, youve got dual income medical salaries, even if nurses or techs. Can support 300k homes. Rents are still 200k homes, but whatever, these peeps want to be near work. But overall, there are very few of these types of places that have a convenience premium. Very few. And when what is 1 to 2 miles away craters, the premium rises, and then people think again. Ya know? Takes time, but it all comes to pass.
It's a similar story everywhere, but Britain is a special case. The famine in mortgage finance has meant that mortgages and transactions are running at an astounding fifth of the level of summer 2007 while prices slide 2% a month. Gazundering, the practice of lowering an agreed offer still further days or hours before completion (a cowboy practice not permitted in most other developed countries' property markets but which "light touch" regulation permits in England), means that achieved prices are 25% off their peak.
Dont get me started on Solano, Au Pairs, etc. It's not healthy. But screw that, I'll go off anyway. Here is the deal....Au pairs, many, come from EEurope. Guess what is goin on there? Yeh, economic catastrophe. Expect to see many more of them desparate to come here, and get paid less. Basically, room and board survival. They will still be around, and they wont be the best indicator.
lol. Immune. Cracks me up. There was a guy who in HS, thought he was immune to the charms of CSC. Could puff all day. Hilarious. And then one day it all ended, and he became a stoner.
If prices fall like they should (and have to, and will) there is nothing anyone or even everyone could possibly do to save this system. Does no one in power see this? Why give $125B to banks with no strings in the hope it will do something? That's the best they can do?
Lab - the Sac junk in the trunk, is already priced at reasonable rental values. Cept no one is around to want to rent them, so maybe I should take that back. Way way overbuilt here. Just drive to the airport and laugh your arse off at how disgusting and optimistic the junk here was. Now, granted, when population catches up in 10 years, there will be those who say, hey, what a great buy, but they wont be counting all the money they had to sink into keeping that slapped together junk in one piece. The stuff they built out there will NEVER be a good investment.
I have gold, and silver, and lead.
Aluminum foil for my head.
I've got food that'll store
And a whole shitoad more
But it won't matter dudes, we're all dead.
got to be careful renting houses these days. lots of them get foreclosed, then the renters get tossed. throws off price/rent ratios, too. general disaster.
"I have gold, and silver, and lead.
Aluminum foil for my head.
I've got food that'll store
And a whole shitoad more
But it won't matter dudes, we're all dead."
If we are dead, I'd sell the gold and silver and buy puppies. Puppies always make you happy and that is a good way to die. Happy.
Re: Eastern European women. We see a lot of them in Santa Cruz. The Beach Boardwalk (seaside amusement park) brings them over from Croatia, Ukraine, and so on to work for the summer and live in company housing (which the workers pay for).
They all try to take second jobs (usually with Boardwalk concessionaires) to earn as much money as possible and typically work 10-12 hours a day.
I hope the current shitstorm lightens up the pressure on Steamer Lane. Indicators is one of my favorite spots, but I don't even go any more. Especially on weekends. Too damn crowded.
Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, Bernanke said.
labrador writes:
"If prices fall like they should (and have to, and will) there is nothing anyone or even everyone could possibly do to save this system. Does no one in power see this? Why give $125B to banks with no strings in the hope it will do something? That's the best they can do?"
Totally agree! We need to cut our losses and start investing from the bottom up...bullet trains, education, unemployment insurance, energy, green anything...
Wall street is f*cked in any case, might as well quit digging and invest what money we still might have in the future.
"I hope the current shitstorm lightens up the pressure on Steamer Lane. Indicators is one of my favorite spots, but I don't even go any more. Especially on weekends. Too damn crowded.
Chill Bear"
Good luck on that, Chill, but I dunno. If they lose their jobs, they'll have more free time to surf. I'm not just kidding, either.
"If they lose their jobs, they'll have more free time to surf."
I personally prefer Mavericks in January after a big swell off Hawaii. (PS I don't rally know what that means except for bone breaking waves and cold waer."
FFDIC, over at Mish's I called the high, the reversal low last week, within 100 pts, was short the SPOO, out of all of it, loaded gold multiple times including even earlier today, and continue to run my biz, bulletproof until the USG sinks. I'm still freaked, though life's been exceptionally good to me due to my anti-mild positioning. Waiting to find a high probability entry point on the way to DJIA 5000 or a bit lower, like 4300, lowest.
FFDIC, I'll read here a while as the wits are sharp, the facts useful, and hopefully, the insights honest and forecasted.
The game for me is to protect store of value and accrete when possible.
"East Bay Hills (Berkeley, Oakland, El Cerrito, Albany) just peaked.
Seriously, prices have been climbing until this summer, and last sales for a lot of houses I am seeing lists were last sold in 2008... yep... people are still trying to flip, with markups up to 20% in cases I have seen."
No way,no hell did prices just peak in Berkeley, Oakland.
We've been looking in Berkeley Hills and Montclair for the last 2 years. The same house (square footage, yard size) are selling for atleast 20% less than 2006.
The only reason that median prices have held up is that up until the last few months 1M++ houses were still selling. Wonder how long that will continue with 10%++ jumbo rates.
Agree, unemployment ain't going to help with crowds in the lineup...grrrr! However it WILL help with the lines at the ski lifts!! Ya win some, ya lose some...
$60 billion more of crap from UBS! Doesn't this bank have any good assets? This is almost Icelandic scale trouble for Switzerland. 6 million people taking on $60 billion of 'illiquid assets'= $10,000 per capita. US equivalent $3 trillion. Yikes!
UBS is the next big run target. Lots of mortgage losses and its home country, as unit472 says, can't guarantee it. Now that the EU countries all have at least implied, and mostly credible, guarantees, why would anybody bank with UBS in Euros or dollars? And that will be another spectacular crash.
"IAskStupidQuestions writes:
Wouldn't this bailout be cheaper if the government just gave every adult $200,000 to purchase a house?"
They might as well issue a price control of $1 for any house, and Congress can pretend it is responsible by requiring a 20% downpayment, unless of course social "fairness" requires a waiver.
"However it WILL help with the lines at the ski lifts!! Ya win some, ya lose some...
wtf"
Ah, skiing. Next to polo, it is the ultimate, white, elitest sport. Riots will start in Aspen from angry black bears who are tired if truffles and want hot dogs.
Comrade Bear (tj & the bear) writes:
"Education? Unemployment insurance?!? Come on! Those are black holes that money disappear into, resulting in nothing productive"
Open to other better ideas for investing the money as long as its not the current blackhole we are throwing it into. What you got?
FFDIC, I'll read here a while as the wits are sharp, the facts useful, and hopefully, the insights honest and forecasted....How do you see it now...as in the next 6 months?
Gaudia Ray | 10.16.08 - 1:22 am | #
You've obviously been away since we now have several overtly dull wits including me on some nights. The facts here are often false and misleading especially when it veers off track into politics. However, many of the Palin jokes are fun and entertaining. Honest insights? You are joking right? Those flew out the window oh about 10 minutes after Tanta's last long winded post several weeks ago. Weather forecasting is about the only thing worth trusting here and those can be suspect from Texas. That and a host of other reasons is why we need you to polish up the blog with your outstanding since of right and wrong always standing ready to put somebody in their rightful place on a lower rung of course. Cheer up! Come back. Sling some shit. Get with the program! As for the next six months I'm not so worried. As for the next six years it's going to be hell on earth of millions.
AIG has canceled a retreat it had planned for salespeople for next week at the Ritz-Carlton Resort in Half Moon Bay, California, probably because some Representative from Maryland made them justify thousands of dollars worth of manicures, pedicures and facials. This is a major crock of shit.
Zillow is stoopid. They are so far off in so many place. You can see how sales influence their numbers, how local muni appraisals do, how their charts are ridiculously nonlinear.. just a crock there. Only thing that matters is the comps that arent fraudulent. NOt easy to find, but they exist. Eventually, the garbage loans go away, but the scary thing now is that they STILL havent disappeared. We need a giant lending enema in this country.
It is not elitist in Colorado until you have to buy the $500 board or skis and the $1000 worth of accessories, plus the pass, and the gas and the kind bud that isn't a dime bag anymore.
Leftys is always here, just working, had to clean up the vomit in toilets from customers opening their 401 statements. Actually talked to a fellow whose father was sharp and handled his investments. He didn't move a share, and is down by half. Well, he won't be retiring at 55 now. I told him to get out in May. Loves me, hates his father.
But the third expensive junket has slipped by with little public notice. The golf and spa outing Sept. 28-30 came just two weeks after the Federal Reserve stepped in Sept. 17 to save AIG from imminent bankruptcy from it bad bets.
The outing for 50 AIG representatives - said by several sources to cost as much as $500,000 - was at the Mandalay Bay Resort in Las Vegas. Hosting the junket was Keith Burger, the national sales manager of AIG Sun America's wholesale variable annuities unit, and Leslie Hunnicutt, the unit's managing director.
An AIG spokesman called the Mandalay Bay outing a "sales and training event" and disputed claims it cost $500,000, saying it cost only about $50,000.
"Leftys Liquors & Lubricants writes:
Leftys is always here, just working, had to clean up the vomit in toilets from customers opening their 401 statements."
I was thinking they were vomiting, because they had to use the lubricants in the men's bathroom to pay for the booze they needed to buy. My bad.
Lefty,
A friendly warning. If you continue giving free financial advice the TARP will force you to take money for capital, lower your prices, sell autos on the side in your parking lot, hire hot male strippers and purchase foreclosures in Stockton, CA. Stick to what ya know but don't give up the lubes.
Japan's Nikkei 225 Stock Average dropped 10.4 percent to 8,558.14, poised for its steepest slump since the crash of 1987. The retreat triggered a 15-minute halt in Nikkei futures trading. Hong Kong's Hang Seng Index fell 7.6 percent, led by Air China Ltd. and Jiangxi Copper Co. All Asian benchmark indexes sank.
If the interstate highway system was worth building ( and it was) to accomodate the age of oil, government might usefully consider a major upgrade of the US electrical grid as a place to put some stimulus.
Wind generation locations tend to be far from the urban centers where the power can be used and the coming of the electric car will demand a far more robust local grid.
Rights of way are mostly in place and it can be started right away. Would be much more efficient to to be able to move power from areas in short supply to areas with surpluses instead of having to have each region be 100% self sufficient 24/7
I'm still freaked, though life's been exceptionally good to me due to my anti-mild positioning. Waiting to find a high probability entry point on the way to DJIA 5000 or a bit lower, like 4300, lowest.
FFDIC - they may be able to force him to do all that, but they damn well can't force him to make a loan. Wouldn't be 'merican.
LOL. George Bush = "What? I always got a loan whenever I applied. Sometimes millions and no collateral. It was easy. Things just work better in Texas I guess."
"Wind generation locations tend to be far from the urban centers where the power can be used and the coming of the electric car will demand a far more robust local grid."
I think individual turbines or solar panels are the way to go. If every house had one(s), the need for huge bird guillotines in the wind swept plains would be reduced to bird Cuisinarts at home. Sparrow is good deep fried on a stick. Especially if it is cooked with a wind powered deep fat fryer.
Naw,I let my friend bury drums of radium in the parking lot. Its bright there 24 hours a day. Nobody will touch that. Hot male strippers? The taco vendor out front will handle them. ( enter your own comment ). Now the money for new capital is good. I hustle pool during Happy Hour sometimes.
LOL. George Bush = "What? I always got a loan whenever I applied. Sometimes millions and no collateral. It was easy. Things just work better in Texas I guess."
FFDIC
. . .
always helpful when daddy is CIA director, VP, or Pres, with lots of Saudi friends.
I'll chat a moment, but I gotta hit the hay. I'm in the South, now in GA and soon in NC.
The big current news is gov't guarantees to Fortune 100 companies. I'll see how deep it goes. Instead of recognizing losses, they're playing pretend, on a worldwide scale. Amazing. When there's zero risk of loss, the banks will loan to Ftne 100's who will do what with the money?? Ah, they'll buy smaller companies who deal with asset conversions.
I'm concerned this is the early stage of Weimar-like inflation. I'm watching the Treasury's long bond rates. That's the tell. Weimar ended after 2 years in 2 months, screaming up the parabolic curve. Hence, my accumulation even at these discomforting prices, physical gold.
If I may restate... 2 + 2 = 4.
The 3:1 ratio for RE is reasonable. But the perceptions always get violated in the capitulation phase. So, RE at 2 and 2.5:1 are expected.
When they're dead, though I'll be older, I'm trying to convince the 30 yr old kid-friend to seriously plan to become a landlord big time as he will have retired himself; but it may not be his cup of tea.
Yes, there are many now who are aware. It's a bit crowded, but my focus is way beyond now, and out there, it's always stimulating and sparsely populated.
Just read the UBS release. Too complicated for this hour EST but many interesting aspects. I fear it is too twisted for many investors, even wide awake.
The non-recourse loan by the Swiss National bank of $54 billion is secured only by the assets transferred to a Special Purpose Fund by UBS, which will raise 6 billion in Cumulative Mandatory Preferred shares. Should the assets decrease in value, the SNB gets a vague "participation in the increase in UBS share price", TBD.
8 years at Libor +2.5, can be extended to 12.
SNB's website says the loan is to the SPV, which SNB controls, but initially hires UBS to manage the assets. Not sure how this works. Does the SPV pay UBS for the "assets" some amount as it dumps them for liquidation? Or does UBS get whatever it needs?
"Republicans are TRAITORS writes:
When DOW 5000 comes and they are having problems finding 30 companies that aren't seeking bk, it will be difficult to invest."
The bottom is when Lefty's Liquors becomes a Dow blue-chip.
Like thousands of Icelanders, Karlsson borrowed in foreign currencies to get a cheaper loan as the benchmark domestic interest rate soared to 15.5 percent this year. With trading in the krona virtually suspended after it plunged against the euro, dollar and yen, debtors now face skyrocketing bills.
``I was told it was better and cheaper to take a loan in foreign currencies than in Icelandic kronur,'' said Karlsson, 65, who now pays 74,000 kronur a month (about $770) on his loan, compared with 59,000 four months ago.
Ah, yes. The supertanker economy . . . kind of like the Exxon Valdez . . . alcoholic Captain, didn't pay attention, tried to cover it up, etc. Familiar story. Got Sarah Palin involved, too.
AIG lobbying to relax oversight rules: report
| Reuters
Insurance giant American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) is spending money to lobby states to soften new controls on the mortgage industry, the Wall Street Journal said.
Help is appreciated. I've got a bunch of UBS puts. I assume this must be dilutive, but can they be paid the full 54 billion, default, and keep paying regular dividends?
WTF,
the average over that time period is about 3.6% per year, I think if you used a higher inflation rate (JOHN WILLIAMS' Shadow Stats), the DOW will not end up beating inflation but probably be right in line with inflation, just like everything else over time.
We're going to have Mad Max very soon.
People will be living on the street, roaming around looking to see what they can get.
So what if they get caught and arrested?
That's food and shelter.
Groups of them will overpower people in their homes.
Others will simply be laid off, with no prospects, and join the street dwellers. Maybe you'll even consider following an old lady home from the store. It's sick what this will do to us all.
In 5 years, you'll wish you could laugh at this. I'd tell you to bookmark it, but you might not even have electricity.
A One Night Stand with Madonna, now that she's single again. I guess she has a thing for overpaid baseball players who consistently choke when it matters most.
Second, I want to get rightously Stoned with CSC. We can compare notes on our expectations for financial depression.
Before the pressure gets too hot on the government, they'll turn up the media heat on the 'immigration problem' that appeared on our TVs out of nowhere as if it was a new issue. And they will put them in camps and horrible things will be done. All so we can rake leaves and wash cars and pick fruit.
And that's if we're one of the ones picked to survive.
A group of the largest US hedge funds has called on the Bank of England to intervene to free an estimated $65bn in assets frozen in London in the collapse of Lehman Brothers, warning that delays could be disastrous for UK plc. The funds, through the Managed Funds Association, said the scale of the problem was so great it could undermine bank rescue plans as tens of billions of dollars would be kept out of the market. It was also likely lead to the failure of some fund managers, said Richard Baker, chief executive of the MFA. The warnings come as hedge funds have been quietly shifting billions of dollars of assets out of London to the US, claiming the US legal system provides greater protection. Administrators at PwC running Lehmans UK business have won court approval for a process to work out how much they hold in protected assets but have warned it could take years to finalise.
I thought you would get your groove on with that one. Good night. Lola! Damn it to hell. Where did you put the Oprah porn? Okay then. Your mother borrowed it.
Oh, maybe y'all didn't catch this crazy shit. Blackwater assisting local law enforcement:
CAMDEN CO., N.C. (WAVY.com) -- Law enforcement personnel from 3 jurisdictions, with an assist from personnel and equipment from Blackwater, searched a rural area in the county Tuesday morning for a suspect they say shot a county resident as he walked out his house to go to work.
I wonder what crime they're going to pick me up for. I don't own a gun, so accusing me of shooting someone might be a bit difficult, so perhaps they'll come up with something more original.
Comrade Scared Shitless writes:
"I wonder what crime they're going to pick me up for. I don't own a gun, so accusing me of shooting someone might be a bit difficult, so perhaps they'll come up with something more original."
If they are not very clever they usually settle on just 'breathing'
They won't even tell you. Just put goggles and a hood on you and whoosh, off you go to be tortured and put to labor or killed. It's going to suck real bad here real soon.
You wanna know what's on the tip of everyone's mind that nobody is talking about? Cannibalism. In America. We're screwed, man.
You wanna know what's on the tip of everyone's mind that nobody is talking about? Cannibalism. In America. We're screwed, man.
Currently Smoking Cannabis
Even if things get really bad, won't you still be able to get 2 hot dogs for 99 cents at AM/PM?
CNBC Europe 11:14PM PDT. Patricia Szarvas quoted chief economist of komertz bank (sp?) that recession was actually the best case scenario. He's not a gloom munger (sp?) whatsoever but he is looking at a possibility of a depression. [She continued using recession instead of depression herself.]
[Too bad CNBC Europe doesn't do CC or their CC doesn't match US CC.]
Nah, dude. When shipping stops, there will be a good while with nothing. And if we're going there, I'm not waiting until I waste away. I'm going to get my lean protein and adapt. You should plan on doing the same. The new environment will select for cannabalism. Or hotdogs, if the supply lines are open.
The U.S. market doesn't close until 13 1/2 hours from now. Plenty of time.
They'll truly have some explaining if Monday's gain were to get completely wiped out by tomorrow. It might get some people to wake up, and never trust a rally again.
Yogi, I can't tell for sure - I'm babelfishing the article since I don't read German. It sounds rather like the original Paulson plan - the SNB creates a fund with 6b, loans it 62b, the fund buys assets from UBS and holds them. I assume the price is current book but it doesn't say, at least not that I can puzzle out. Over book is too blatant; below book would probably be the death of UBS. No time to audit - the run has probably been on all week and I suspect UBS is already almost out of cash.
"The transfer of the USD 49 billion of assets will take place over the coming months, during fourth quarter 2008 or first quarter 2009, but will be priced at valuations as of 30 September 2008. These prices will be verified by independent third parties and potential differences will be recorded in the bank's income statement."
Homes prices out here in southern CA are falling hard. Some homes have lost 60%of there value. I've seen homes that were selling for over 1 million 18 months ago down to 450,000.. Crazy part is that I don't see it letting up.
UBS will raise CHF 6 billion of new capital in the form of mandatory convertible notes (MCN). This will allow the bank to retain a strong Tier 1 capital ratio, even after providing the equity to the newly established entity. The MCN has been fully placed with the Swiss Confederation. The Swiss Confederation reserves the right to reduce part or all of its investment by transferring the MCN to third party investors.
The MCN issue is subject to approval by UBS shareholders who will vote on the creation of the required conditional capital underlying the MCN at an extraordinary general meeting (EGM) to be held in late November 2008. The MCN will count as Tier 1 capital for BIS capital adequacy purposes following EGM approval. Issuance of the MCN is expected to take place five business days after the EGM.
Actually given that the transferred assets are probably Level 3 kind of stuff, they don't really have day-to-day valuations. 30 Sep is book and since the values are basically fictional anyway what difference does it make what day they say they're making up the story? So it's book value - whatever UBS currently says it is, with the Swiss government reserving the right to audit to make sure it's not too much of a lie.
The Government will have a say on executive salry, and there is mention of "participation in future UBS share appreciation" but I saw nothing about dividends.
The Upper House of Parliament wants to submit the far parliament in the winter session a message, which plans an appropriate increase of the protected inserts and the system border. At present the inserts up to 30 ' 000 francs are protected
(do you have an English article, yogi?)
If I read this right, they haven't yet increased the deposit insurance; they're just planning to. I don't think this will be enough. UBS's international deposits over 30,000 CHF will still run.
Homes prices out here in southern CA are falling hard. Some homes have lost 60%of there value
During the Great Depression, high-end homes lost up to 90% of their value, although I believe the net fall in RE nationwide was in the 25-30% range. I imagine the loan distribution was quite different, though.
"Japanese Prime Minister Taro Aso said Thursday the U.S. bank bailout is "insufficient"".
Whew, that's a relief. For a minute, I thought $3 trillion was going to be enough!
If over the life of the transaction the fund equity declines in value, the SNB will be able to participate in some manner in the appreciation of the UBS share price. The arrangement will be based on no more than 100 million UBS shares and will be further defined early next year.
Nothing says "arranged under extreme time pressure" more than Swiss bankers spending billions on a TBD stock deal.
You're getting out of OC, huh? I'm leaving in Dec. after 2 years of this nonsense.
I'm currently renting a spare room from a friend who just bought her house for ~450k. It sold for over 700k last year. And I'm paying 800 a month for one of the FOUR ROOMS in the house.
I'm a Midwesterner by birth. This sh*t's crazy.
The one bit of consolation right now is that the county isn't on fire like it was around this time last year. That would be a camel breaking straw.
SNB's a central bank so, yes, they can take it. Switzerland has, or rather had, a great balance sheet, with debt below 50%. However, the only liquid reserves they have in that quantity are foreign exchange, so they'll have to issue bonds, with the usual crowding out issues. Not what you'd expect from the Swiss.
Default on the government and keep paying shareholders? No way. This is a major commitment for the whole country, and Switzerland is a relatively loose federation to start with. The government can't take that kind of hit (remember cantons don't share equally in exposure to UBS). However, the indication is that at least some degree of loss can be paid with stock so there is some leeway.
Remember one of the critical aspects of the deal, the stock options or whatever, is TBD for next year. Plus the assets are US assets. Would you bet that UBS has been squeaky clean in all the other bubbles? I didn't think so. So the real story is that the Swiss government has agreed to save UBS and UBS has agreed to submit to whatever the Swiss need to make it back. We could see big changes from this deal, likely to the detriment of UBS shareholders (and to your benefit, right?) Actually, given the inadequacy of the current deposit insurance, I'm betting on further intervention soon.
Much appreciated. Just visited your blog, which is excellent. Agreed about UBS, especially since the director that I know here in New York (not a Swiss or American) is a slime.
It will be a spiral reinforcing one another making this worst. Companies can't get credit, cut cost. More people lose job, can't pay for housing. Demand decrease, price falls. The Wall Street falls, then company's capital decrease, cut cost again. And the spiral continues...
Reporting in from San Francisco, where we haven't really gotten hit like other parts of CA yet...
I was checking out new places to rent, and I found a cute house in Brisbane, which is a small semi-desirable suburb just south of the city. Rental rate on Craigslist was $2500 a month. House is also for sale on another website for, get this,
$980,000 (!)
Doing the math that's a 3.1% return on assets, BEFORE taxes ($400 a month after tax deduct. maintenance and insurance, say another $500 a month).
(12*$2500/$980,000 = 3.06%)
Assuming a 9% cap rate (500 bps above the 10 yr) before expenses (say around 7% after expenses, conservatively), the house should be worth:
$333,000
For a grand total haircut of $646,000, or 66%.
We have a long way down to go folks... this is really scary. We are in really big trouble.
(100% cash and renting and thanking god for rational decision making)
Hey SF: Cindy Sheehan is running against Pelosi, and has great grassroots support. However you feel about her politics, she is decidedly against the Bailout.
I must apologise.
Seeing yesterday's chart of S&P500 future, it skyrocketed from 900 to over 1000 at the very beginning of the day.
And we all know how it ended.
Not a wise indicator then.
Guess which college has produced the most Nobel Prize winners?
Right. City College of New York City, a public institution. We have what is universally recognized as the best live theater in the country, thanks in part to a long tradition of tolerating homosexuality. We've taken in hundreds of thousands of vagrants from other states and tried to help them with public housing and welfare. Despite occasional flareups, we have the most extensive 'racial' integration of any part of the US. We welcome immigrants from all over the world. We'll survive without Wall Street. That $24 invested at 5% is now?...?
I suspect ipodius is adrift at sea, desperately treading water as Sebastian's right foot & sneaker float by, bobbling along in the gulf stream current.
"we'll send you chocolate"
Thank you, kind sir.
Please ensure that it is rum-filled.
1) He can make several versions of a funny face (gerning), especially
when he feigned surprise that poor old Joe the Plumber's fine for not providing
health insurance would be zero. What a classic moment, coming to You Tube for sure.
2) He set the record for the number of eye blinks in a minute.
3) He makes with the googily-googily eyes like a Vaudeville performer.
4) He is a cranky man who interrupts others when they're talking.
5) He has a truly creepy smile.
6) He laughs at his own 'I made a funny.' moments.
7) He is NOT! George Bush! He's not! He's not! He's not! Dammit!
What I learned about Obama from the debate:
He's on autopilot for the rest of the way. With a smile and a confident manner
he waved off all the shit that Walnuts threw at him. Unfortunately,
Walnuts ended up with most of the shit either flecked on his face or piled
on the table in front of him.
Side note on the wives: I thought it a lovely coincidence, Cyndi in red and Michelle in blue.
Volker, you're right on most things, BUT Michelle's got a very very (too) big ass.
So you DID follow the debate. Maybe Obama was promising to hang banksta as a qualifying part of his first 100 days program?
I recently sold an investment property in midtown Atlanta (parcel in an assemblage for a high rise development) . The sale was at the early 2007 prices (pre-crash in Altanta) . The only reason that the developer closed is that he would lose approximately 20% of the purchase in cash he put up for earnest money , contract extensions and rezoning costs . Early in the game I was looking at 1031 exchange possibilties instead of paying capital gains taxes in the mid six figures . So much for that now .
70 trillion of Credit Default Swaps are all worth less than zero. Entire wealth of the planet is misallocated to backstopping these bad bets. CDS crowd out real enterprises from credit and investment markets. Real human beings lost their jobs in massive numbers. Wealthy disappear to Paraguay and Dubai. Feral alpha dog mentality rules the streets. Looting empties store shelves. Mad Max within 24 hours of looying commencement.
@ Kung Fu Panda, on Griffin of Citadel: What you quote doesn't meet Wikipedia's standards of objectivity. This article should be cleaned up. My apologies.
i remember when we were told government borrowing was bad because it gobbled up available capital and made what was left more expensive for real entrepreneurs
i spose banks gobbling up all the available capital is good cos they'll lend it all to real entrepreneurs....
People don't get that when home prices correct, it's actually a good thing for some people as much as it's a bad thing for other people. People who are buying homes that cost more than 3x of their yearly take-home pay are nuts. In California, the homes are still at or above this level in many places. Safe havens are more like 2x or 1x- and you can actually make money being a landlord. I just advised a friend against buying a 440k house in Northern CA until the market levels off. 440k implies that the occupants should take home in the vicinity of 147k/yr or more, which I know they don't, even with 30% down. It's a short sale, and it's a great deal for the bank considering that the price could drop to 340k or 220k in only a 1-2 years.
Is it even remotely possible that there could be a default event on Ultrashorts?
Here's my take and it could be wrong.
ProShares buys plain vanilla equity swaps. Think of these swaps as two pockets of the same entity. In one pocket, they put almost all the money into interest-bearing cash. In the other, they put a small amount of money that's used to settle each day's trading, plus or minus. If the swap loses (market goes up in the case of ProShares shorts), money is paid out of pocket #2 to the swap counterparty. Vice versa if the swap wins. Each day, pocket #2 is marked to the market to reflect gains or losses. If pocket #2 starts to run dry due to heavy losses, money is transferred from pocket #1.
If a swap counterparty defaulted, I'm sure it wouldn't help ProShares. Some people would run to sell shares, but there is always the Creation Unit liquidity and arbitrageurs to keep the losses manageable. But I think you are really asking if there is swap counterparty default risk in these instruments. I don't think so, because pocket #2 is marked to market every day.
I've held some TWM and SRS all the way up, although I have sell limit orders in way high. I've stuck with these ultrashorts partly as a hedge against calamity and they've paid off. It hasn't been easy due to heavy volatility, especially in ultrashorts. Thanks to all who have provided moral support for the ProShares shorts along the way.
P.S. I am probably going to avoid ultrashorts in the future for all but short-term swing trades, sticking with the single ProShares shorts. There's nothing wrong with RWM and EUM, single versions of TWM and EEV. I've done really well with RWM and EUM without the volatility rattling.
Unfortunately, SRS doesn't have single short version.
I hate headlines that say "foreclosures down 64%" but ignore the fact that the homes are selling for 1/2 price from the peak. Just remember, a loss of 50% needs a gain of 100% in order to break even. Many of the people living in those areas are underwater 20%-50%, and continue to pay on investments that will be underwater for at least 10 years. A business would never do this.
First?
Shall be last?
So how does McCain intend to negotiate with homeowners if prices are still falling? But overall, this is not good news for the markets.
Prices and supply are still too high.
Yeah, house prices will fall through 2009. And 2010. And 2011. And probably through 2012, albeit at a much smaller percentage change.
But overall, this is not good news for the markets.
Joe Klein's conscience
Is this really news? I'd call it olds.
Elvis you were turning out the hits last night. Lefty's closed?
Unable to deal with the problem of falling home prices, 2010, ask Father Time to go directly to 2011. "I don't want people thinking of 2010 like GWB.", it reportedly told Father Time.
Elvis you were turning out the hits last night. Lefty's closed?
yogi
No, the batting cages were closed on account of the Baltic Dry Index collapse. It seems they could not get a letter of credit to ship baseballs from China.
If we skip 2010 do we still owe interest?
I hope J6P can figure out the folly of McSame's mortgage purchase plan before Nov 4th. Talk about a half baked non-plan.
McCain, Obama, Abe Lincoln ... doesn't matter. No one can "solve" the problem. The markets may not be free but they will function in some way. In fact, I'd say that they're as far from free as possible. Tey're going to exact a cataclysmic cost.
hoocoodafreakinode?
From the link:
"Colleen Pestana, a real estate agent in Orange County in California, said many people losing their homes in Southern California used to work at mortgage and real estate companies. Many of them bet heavily on real estate by upgrading to bigger houses every few years. Now, many are losing their homes."
Talking with a coworker today, I was told stocks were "a sound investment now if you stay in there for at least five years." I said "if the housing market continues to crash, all assets lose value, for maybe more than five years." I was told that I was being 'negative.' Heaven forbid.
It seems "strong arming" 9 banks into taking $125 billion of taxpayer money has fixed everything right up. I wish I could be strong armed that way.
When the dearth of baseballs was reported in the media, Yogi (Berra) stated, "When I want balls, I just call on Steinbrenner and he comes to my house in a French maid uniform."
we're not yet through the deflation of the housing bubble and now there is a major recession, possible depression. The effects of increasing unemployment and declining wages will give housing another wallop.
Not to mention a credit freeze with still developing crystalline formations creeping throughout the system.
1996 prices seem ever more likely. I used to think we would hit bottom at 2002 prices, more or less, with Los Angeles as my local reference graph
(actual results might vary with location and the progress of actual events)
Dry index may have collapsed, but I sense your humor may pop any minute.
Yogi Berra is a great American, and that's about as good as doing well.
This will help: Congress needs to include primary residences in its cramdown provision under Chapter 13.
Joe Schmoe,
Agreed, I also figured something like 2002 prices with Sacramento as my reference. That would have approximated some type of normal appreciation. Now, it looks like I was wildly optimistic.
Doesnt take a genious. Get yourself on Ziprealty, price a home. Go to Craigslist, and find a comp that you can rent. (I happen to be speaking of the bay area, but the same holds for many places in CA that are even as little as semi-desirable - we arent talking riverside) Anyway....do the math. These places dont come CLOSE to penciling out. When capital appreciation was 10-15% a year, a 3% cap rate made sense. Now, it is ludacris? (Is that how you spell it?)
Anyway a long long way to go down.....
"Many of them bet heavily on real estate by upgrading to bigger houses every few years. Now, many are losing their homes."
friardaddy "
Not to mention their pretty wives. If you want to get lucky, just go to a chic California bar and tell the women that you are cash rich and starting an alternative energy company.
Beat me to it with a baseball bat.
Doesnt take a genious...
Now, it is ludacris?
Somehow that amuses me...
On the positive side, the Fed is considering further rate cuts. They have never let us down before, so...
Wikipedia on Griffin of Citadel:
"What can be gathered about Griffin's appearance in the securities market is a remarkable success story. While at Harvard University, he started two funds from his dorm room, and in between classes he would make trades. He even installed a special satellite link to his dorm to acquire real-time market data. After graduating with a degree in economics, he won the attention of an investor named Frank C. Meyer, founder of Glenwood Capital [1]. Meyer was amazed at Griffin's success and rate of return with his investments (which at the time were largely based on convertible bonds), and provided a relatively small investment for Griffin to work miracles with ($1 million) [2]. Griffin exceeded Meyer's expectations, and as word of his wonders spread, investors flocked to Griffin for a piece of his remarkable rates of return. Citadel was officially founded Nov. 1, 1990 with $4.2 million; the name "Citadel" was chosen to suggest strength in times of volatility [3].
With Citadel quickly growing, it began to show uniqueness in the hedge fund world. For those who put their trust in the firm, huge rewards followed as the result of the funds distinctiveness, which reflected Griffins exceptional investment skills. Citadel's success and immensity is perhaps entirely the embodiment of Griffin's wide range of skills he had before the company was incepted. Griffin could program advanced computer code, write complicated mathematical formulas, and was quiet: Citadel, in a sense, has succeeded by blending the three. Through its employees the firm has brought together mathematicians, physicists, engineers, investment analysts, advanced computer technology, and a high level of confidentiality.
After it became known in 2006 that Citadel Investment Group would be the first hedge fund to issue publicly traded debt bonds, the Financial Times speculated that Kenneth Griffin may now be "the most feared man on Wall Street"
Sounds like a character out of a Clancy novel...
East Bay Hills (Berkeley, Oakland, El Cerrito, Albany) just peaked.
Seriously, prices have been climbing until this summer, and last sales for a lot of houses I am seeing lists were last sold in 2008... yep... people are still trying to flip, with markups up to 20% in cases I have seen.
One difference between now and 3 months ago is that all of a sudden, there seem to be a lot more houses on the market.
Also, I have to agree. In many California markets, after 30-50% depreciation, renting is still much cheaper than buying. But you would miss out on the appreciation.
Lab....come one now, here boy. Fetch! But seriously, Sac has been at 02 for a long time...we're goin back to 95 prolly here. Remember, CA, seat of GOV? Doomed....Fargo is fraud.
You got it Chill...it is all impervious, til it innit. Just like Seattle. Watch, wait, learn.
"labrador writes:
On the positive side, the Fed is considering further rate cuts."
On the negative side, the Fed is considering posing for Playgirl to raise money for their recent mortgage refinancings.
P Geoff: yep, not even close. They gotta come down to 1996 prices in East Bay Hills. At least. And that's a long, long, long ass way down from what they are listing for right now.
ah, t-boone getting lucky with the ladies.
joe schmoe, labrador,
You guys are way too optimistic. 1996 is a ceiling, not a floor.
Think about it. Back then people had substantial equity, good jobs, rising incomes, rising portfolios, low inflation, real savings, low debt, etc.
Now they have none of those things.
We'll be lucky if prices don't revert back to the 70's.
It will not be a severe recession.
CR
House prices will not drop severely. CR
Has the tune changed here, yet?
Is it safe to discuss harsh reality and reality yet to come, yet?
Post a reply, please. I'll watch for it.
Got a 1 million dollar US bill today.
The weird part is that there is no satire anywhere, just a pretty good replica.
ah, t-boone getting lucky with the ladies.
bacon
"Wanna come to my place and see my windmill etchings?"
Elvis,
You do have to wonder how Ben et al are planning on financing all this.
Geoff,
Sac has dropped to 02 levels on medians, but when you go out to look at houses in decent neighborhoods they still seem pretty overpriced to me. We may see 95 prices (in other words, when we were trying to come out of the last crash. Wait, that can never happen again ... no more military bases to close. We're good).
I'm ready to sell my house, does anyone wanna buy?
Lab,
They have to come down in my neighborhood pretty much 65-70%, which of course will never happen.
The economic health of East Bay is probably most accurately estimated by the number of au pairs hanging out at Starbucks on Solano at 11 am weekday mornings. Need to mosey on up there and take a look.
Anyone think they'll announce a 'main street' mortgage bailout before the election?
I think this is next and it's not far off.
I'm short an au pair at the moment. Must get off this blog.
In Sacramento 1996 prices = 1989 prices +/-. Back to the 1980s anyone?
"The economic health of East Bay is probably most accurately estimated by the number of au pairs hanging out at Starbucks on Solano at 11 am weekday mornings. Need to mosey on up there and take a look.
Chill Bear"
The best thing about au pairs is their "Oh, pairs" in their tight sweaters. And the fact that they don't wear underwear with mini-skirts.
I'm cash rich and I ride a bicycle. Is that an alternative energy company under the bailout law?
RedFin reveals price/sq ft for recent home sales is often 2/3 or less of average listed asking prices/sq ft.
Stock market buyers take note.
Wouldn't this bailout be cheaper if the government just gave every adult $200,000 to purchase a house?
friar
The fury among those of us who didn't buy into this stupidity in the Bay Area is vast, cold and deep. We know we'll be the one's really paying for the party we didn't enjoy. And the more they bail out, the longer we're holding out to buy. Or even spend.
Realtors expect lower prices but higher sales - Los Angeles Times
LA Times - California Realtors forecast lower home prices, rising sales in 2009
Lab - I know....same as Bay Area. Granted, the higher end places will have more net worth accessible to support the prices that dont pencil out on rents, but they are still headin down. It's like med center here in Sac. Stupid prices, but, they arent nearly as ridiculous as Natomas. Garbage. By Med center, youve got dual income medical salaries, even if nurses or techs. Can support 300k homes. Rents are still 200k homes, but whatever, these peeps want to be near work. But overall, there are very few of these types of places that have a convenience premium. Very few. And when what is 1 to 2 miles away craters, the premium rises, and then people think again. Ya know? Takes time, but it all comes to pass.
"I'm cash rich and I ride a bicycle. Is that an alternative energy company under the bailout law?
yogi"
Correction: You own a bicycle wind mill farm in China. And your former girlfriends refer to you as "The Donkey."
Just remember... when everyone's getting money, no one's getting money.
Got gold?
peAkcredit writes:
RedFin reveals price/sq ft for recent home sales is often 2/3 or less of average listed asking prices/sq ft.
That's one problem, asking prices wildly out of line.
And in the U.K.
Will Hutton: The nightmare continues - on a high street near you |
Comment is free |
The Guardian
It's a similar story everywhere, but Britain is a special case. The famine in mortgage finance has meant that mortgages and transactions are running at an astounding fifth of the level of summer 2007 while prices slide 2% a month. Gazundering, the practice of lowering an agreed offer still further days or hours before completion (a cowboy practice not permitted in most other developed countries' property markets but which "light touch" regulation permits in England), means that achieved prices are 25% off their peak.
Dont get me started on Solano, Au Pairs, etc. It's not healthy. But screw that, I'll go off anyway. Here is the deal....Au pairs, many, come from EEurope. Guess what is goin on there? Yeh, economic catastrophe. Expect to see many more of them desparate to come here, and get paid less. Basically, room and board survival. They will still be around, and they wont be the best indicator.
Gazundering? Gadzooks!
there is way more market value to give up before we understand what the true equity is in the housing market...
Geoff,
I agree, Sacramento housing is going to see some painful times even compared to now. Except in those immune neighborhoods, of course.
"Gazundering, the practice of lowering an agreed offer still further days or hours before completion"
I thought that was negotiating...
Comrade Bear:
No.
I do not have gold.
I would never have gold.
No one can prove I have gold.
Just a worthless metal. Can't eat it.
lol. Immune. Cracks me up. There was a guy who in HS, thought he was immune to the charms of CSC. Could puff all day. Hilarious. And then one day it all ended, and he became a stoner.
P Geoff:
It's all good. They come here. They're bored. They want excitement.
Heh... then they go home. Lovely. Absolutely lovely.
Prol Geoff
You went to school with CSC?
I don't think two people on these boards have ever admitted to actually knowing each other, not counting CR and Tanta.
If prices fall like they should (and have to, and will) there is nothing anyone or even everyone could possibly do to save this system. Does no one in power see this? Why give $125B to banks with no strings in the hope it will do something? That's the best they can do?
Lab - the Sac junk in the trunk, is already priced at reasonable rental values. Cept no one is around to want to rent them, so maybe I should take that back. Way way overbuilt here. Just drive to the airport and laugh your arse off at how disgusting and optimistic the junk here was. Now, granted, when population catches up in 10 years, there will be those who say, hey, what a great buy, but they wont be counting all the money they had to sink into keeping that slapped together junk in one piece. The stuff they built out there will NEVER be a good investment.
"Proletariat Geoff writes:
Dont get me started on Solano, Au Pairs, etc. It's not healthy. But screw that, I'll go off anyway."
That's what those au pairs hope. Then they threaten to tell your wife, and, the next thing you know you are $250K poorer.
I personally know at least one lurker on here, but he doesn't read every thread.
Greetz to my bro in George Town. Glad the hurricane missed you.
I have gold, and silver, and lead.
Aluminum foil for my head.
I've got food that'll store
And a whole shitoad more
But it won't matter dudes, we're all dead.
This is it.
No no no...I only speak of the magical mysterious ways of CSC. Proximity was only a mental construct.
Immune is a funny concept, unless you believe it and have to be disabused of the nothing I suppose.
Elvis:
That's poor screening.
A good wife would be lining up the au pairs. After all, they GO HOME!
Perfect!
El Vez? Are you the Mexican one?
Post a reply, please. I'll watch for it.
Gaudia Ray | 10.16.08 - 12:57 am | #
You win. We miss you. Come back and stay with us until the bitter end.
jim morrison has been reincarnated on this blog.
got to be careful renting houses these days. lots of them get foreclosed, then the renters get tossed. throws off price/rent ratios, too. general disaster.
Is it legal to hire an au pair without a wife and kids? Or is it mandatory.
"I have gold, and silver, and lead.
Aluminum foil for my head.
I've got food that'll store
And a whole shitoad more
But it won't matter dudes, we're all dead."
If we are dead, I'd sell the gold and silver and buy puppies. Puppies always make you happy and that is a good way to die. Happy.
Well, Nikkei is down < 10% so it's a good start to the day. Now to get some work done.
labrador writes:
peAkcredit writes:
RedFin reveals price/sq ft for recent home sales is often 2/3 or less of average listed asking prices/sq ft.
That's one problem, asking prices wildly out of line.
labrador | 10.16.08 - 1:03 am | #
**
You mean like this one?
10 GARRON Ct, Walnut Creek, CA 94596 | MLS# 40375608
Swiss govt. will buy $60B in UBS toxic waste.
some old fat guy did that on csi las vegas, he wore diapers.
and, no it was not mccain.
Re: Eastern European women. We see a lot of them in Santa Cruz. The Beach Boardwalk (seaside amusement park) brings them over from Croatia, Ukraine, and so on to work for the summer and live in company housing (which the workers pay for).
They all try to take second jobs (usually with Boardwalk concessionaires) to earn as much money as possible and typically work 10-12 hours a day.
Life's tough these days.
Is it legal to hire an au pair without a wife and kids? Or is it mandatory.
yogi
Legal? It is the only way to do it.
Speed writes:
Swiss govt. will buy $60B in UBS toxic waste.
Does that include Phil Gramm?
phil gramm has an afterlife.
They had to pay an extra billion to exclude Phil Gramm
afterlife or radio active half-life of for as long as the bastard lives?
Bob Dobbs
I hope the current shitstorm lightens up the pressure on Steamer Lane. Indicators is one of my favorite spots, but I don't even go any more. Especially on weekends. Too damn crowded.
Does that include Phil Gramm?
joe shmoe
Phil Gramm loves puppies.
maybe they can place gramm in yucca mountain.
No one can prove I have gold.
LMAO!!!
the spent fuel rods would scream bloody murder
Here's the link.
UBS - News
and a little taste from the past:
Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, Bernanke said.
maybe they can place gramm in yucca mountain.
bacon
The good thing about nuclear waste is...dammit, I cannot think about a good thing.
If prices fall like they should (and have to, and will) there is nothing anyone or even everyone could possibly do to save this system.
Exactly the point I've been making here for years.
labrador writes:
"If prices fall like they should (and have to, and will) there is nothing anyone or even everyone could possibly do to save this system. Does no one in power see this? Why give $125B to banks with no strings in the hope it will do something? That's the best they can do?"
Totally agree! We need to cut our losses and start investing from the bottom up...bullet trains, education, unemployment insurance, energy, green anything...
Wall street is f*cked in any case, might as well quit digging and invest what money we still might have in the future.
"I hope the current shitstorm lightens up the pressure on Steamer Lane. Indicators is one of my favorite spots, but I don't even go any more. Especially on weekends. Too damn crowded.
Chill Bear"
Good luck on that, Chill, but I dunno. If they lose their jobs, they'll have more free time to surf. I'm not just kidding, either.
Education? Unemployment insurance?!?
Come on! Those are black holes that money disappear into, resulting in nothing productive. We already have too much spending on both.
People need real jobs making real things.
"If they lose their jobs, they'll have more free time to surf."
I personally prefer Mavericks in January after a big swell off Hawaii. (PS I don't rally know what that means except for bone breaking waves and cold waer."
FFDIC, over at Mish's I called the high, the reversal low last week, within 100 pts, was short the SPOO, out of all of it, loaded gold multiple times including even earlier today, and continue to run my biz, bulletproof until the USG sinks. I'm still freaked, though life's been exceptionally good to me due to my anti-mild positioning. Waiting to find a high probability entry point on the way to DJIA 5000 or a bit lower, like 4300, lowest.
FFDIC, I'll read here a while as the wits are sharp, the facts useful, and hopefully, the insights honest and forecasted.
The game for me is to protect store of value and accrete when possible.
How do you see it now...as in the next 6 months?
Again, my typing skills are bad.
"East Bay Hills (Berkeley, Oakland, El Cerrito, Albany) just peaked.
Seriously, prices have been climbing until this summer, and last sales for a lot of houses I am seeing lists were last sold in 2008... yep... people are still trying to flip, with markups up to 20% in cases I have seen."
No way,no hell did prices just peak in Berkeley, Oakland.
We've been looking in Berkeley Hills and Montclair for the last 2 years. The same house (square footage, yard size) are selling for atleast 20% less than 2006.
The only reason that median prices have held up is that up until the last few months 1M++ houses were still selling. Wonder how long that will continue with 10%++ jumbo rates.
real jobs making real things.
like prison guards, making prisoners?
Re: Steamer Lane
Agree, unemployment ain't going to help with crowds in the lineup...grrrr! However it WILL help with the lines at the ski lifts!! Ya win some, ya lose some...
LOL!
$60 billion more of crap from UBS! Doesn't this bank have any good assets? This is almost Icelandic scale trouble for Switzerland. 6 million people taking on $60 billion of 'illiquid assets'= $10,000 per capita. US equivalent $3 trillion. Yikes!
Pissed Off: I'm watching Zillow, so while I don't doubt your numbers, I'm just calling what I see.
We probably both agree most of these houses need to come 60% off peak.
UBS probably has some good chocolate. Does that count as a good asset?
US equivalent $3 trillion.
Getting closer.
Blankfein's $70 Million Would Survive:
Blankfein's $70 Million Would Survive Paulson's Rules (Update2) - Bloomberg.com
wtf, bob dobbs:
Typically, I am going to more or less unknown breaks where I have to walk.
Sharp Park is a current favorite. Toughest wave in the entire Bay Area. Consequently, hardly ever crowded.
UBS is the next big run target. Lots of mortgage losses and its home country, as unit472 says, can't guarantee it. Now that the EU countries all have at least implied, and mostly credible, guarantees, why would anybody bank with UBS in Euros or dollars? And that will be another spectacular crash.
Chill Bear,
Zillow is still showing my old house a good 10% over what it's currently worth.
Zillow, NAR and 99% of local real estate agents are pretty useless on what homes are truly valued right now in East Bay, CA
"IAskStupidQuestions writes:
Wouldn't this bailout be cheaper if the government just gave every adult $200,000 to purchase a house?"
They might as well issue a price control of $1 for any house, and Congress can pretend it is responsible by requiring a 20% downpayment, unless of course social "fairness" requires a waiver.
"However it WILL help with the lines at the ski lifts!! Ya win some, ya lose some...
wtf"
Ah, skiing. Next to polo, it is the ultimate, white, elitest sport. Riots will start in Aspen from angry black bears who are tired if truffles and want hot dogs.
Comrade Bear (tj & the bear) writes:
"Education? Unemployment insurance?!? Come on! Those are black holes that money disappear into, resulting in nothing productive"
Open to other better ideas for investing the money as long as its not the current blackhole we are throwing it into. What you got?
FFDIC, I'll read here a while as the wits are sharp, the facts useful, and hopefully, the insights honest and forecasted....How do you see it now...as in the next 6 months?
Gaudia Ray | 10.16.08 - 1:22 am | #
You've obviously been away since we now have several overtly dull wits including me on some nights. The facts here are often false and misleading especially when it veers off track into politics. However, many of the Palin jokes are fun and entertaining. Honest insights? You are joking right? Those flew out the window oh about 10 minutes after Tanta's last long winded post several weeks ago. Weather forecasting is about the only thing worth trusting here and those can be suspect from Texas. That and a host of other reasons is why we need you to polish up the blog with your outstanding since of right and wrong always standing ready to put somebody in their rightful place on a lower rung of course. Cheer up! Come back. Sling some shit. Get with the program! As for the next six months I'm not so worried. As for the next six years it's going to be hell on earth of millions.
In Defense Of The Facials AIG Refuses To Get Behind
In Defense Of The Facials AIG Refuses To Get Behind - Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip
AIG has canceled a retreat it had planned for salespeople for next week at the Ritz-Carlton Resort in Half Moon Bay, California, probably because some Representative from Maryland made them justify thousands of dollars worth of manicures, pedicures and facials. This is a major crock of shit.
Zillow is stoopid. They are so far off in so many place. You can see how sales influence their numbers, how local muni appraisals do, how their charts are ridiculously nonlinear.. just a crock there. Only thing that matters is the comps that arent fraudulent. NOt easy to find, but they exist. Eventually, the garbage loans go away, but the scary thing now is that they STILL havent disappeared. We need a giant lending enema in this country.
Open to other better ideas for investing the money as long as its not the current blackhole we are throwing it into. What you got?
Relief distribution, curfew enforcement, and ski lessons for all non-white non-elitists (in lieu of a pony -- they'll be needed at the polo grounds).
Elvis writes:
"Ah, skiing. Next to polo, it is the ultimate, white, elitest sport."
Skiing is elitist if you live in Iowa, NY, San Diego, etc.
If you live in Colorado...nah, not so much...
If you live in Colorado...nah, not so much...
wtf
It is not elitist in Colorado until you have to buy the $500 board or skis and the $1000 worth of accessories, plus the pass, and the gas and the kind bud that isn't a dime bag anymore.
Greatest sales pitch EVER:
Stocks always go up... over time.
Nikkei DEC 1989 38916
Nikkei OCT 1988 8667
19 years -30246 -77.7%
NASDAQ Mar 2000 5020
NASDAQ Oct 2008 1628
8 years -3392 -67.5%
Note: Inflation not reflected in loss.
Leftys is always here, just working, had to clean up the vomit in toilets from customers opening their 401 statements. Actually talked to a fellow whose father was sharp and handled his investments. He didn't move a share, and is down by half. Well, he won't be retiring at 55 now. I told him to get out in May. Loves me, hates his father.
P Geoff: no argument wrt to zillow. They do show last sale price, which is useful and enlightening.
wtf: Truckee, man, Truckee!
Regarding the Swiss issue.
Swiss government participation using convertible bonds with 6 billion in UBS and 10 billion in Credit Suisse.
And a $60 billion toxic dump for UBS dirt managed by the Swiss National Bank.
UBS erhält 6 Milliarden Franken vom Bund - News Wirtschaft: Unternehmen - tagesanzeiger.ch
GOOFY GETAWAY
AIG RIPPED FOR SENSELESS SPENDING
GOOFY GETAWAY - NYPOST.com
But the third expensive junket has slipped by with little public notice. The golf and spa outing Sept. 28-30 came just two weeks after the Federal Reserve stepped in Sept. 17 to save AIG from imminent bankruptcy from it bad bets.
The outing for 50 AIG representatives - said by several sources to cost as much as $500,000 - was at the Mandalay Bay Resort in Las Vegas. Hosting the junket was Keith Burger, the national sales manager of AIG Sun America's wholesale variable annuities unit, and Leslie Hunnicutt, the unit's managing director.
An AIG spokesman called the Mandalay Bay outing a "sales and training event" and disputed claims it cost $500,000, saying it cost only about $50,000.
Re: Elvis
lol...I hear you!
"Leftys Liquors & Lubricants writes:
Leftys is always here, just working, had to clean up the vomit in toilets from customers opening their 401 statements."
I was thinking they were vomiting, because they had to use the lubricants in the men's bathroom to pay for the booze they needed to buy. My bad.
Lefty - talked to my broker last week and he told me he'd been vomiting on his shoes. Have you seen him? Probably swilling Wild Turkey by now.
Lefty,
A friendly warning. If you continue giving free financial advice the TARP will force you to take money for capital, lower your prices, sell autos on the side in your parking lot, hire hot male strippers and purchase foreclosures in Stockton, CA. Stick to what ya know but don't give up the lubes.
Probably swilling Wild Turkey by now.
MLM
I think that is Male Turkey to pay for his booze.
Asian Stocks Plunge Most on Record; BHP, Sony, Woori Finance Lead Declines
Asian Stocks Tumble on Recession Concerns; Nikkei 225 Plunges - Bloomberg.com
Japan's Nikkei 225 Stock Average dropped 10.4 percent to 8,558.14, poised for its steepest slump since the crash of 1987. The retreat triggered a 15-minute halt in Nikkei futures trading. Hong Kong's Hang Seng Index fell 7.6 percent, led by Air China Ltd. and Jiangxi Copper Co. All Asian benchmark indexes sank.
If the interstate highway system was worth building ( and it was) to accomodate the age of oil, government might usefully consider a major upgrade of the US electrical grid as a place to put some stimulus.
Wind generation locations tend to be far from the urban centers where the power can be used and the coming of the electric car will demand a far more robust local grid.
Rights of way are mostly in place and it can be started right away. Would be much more efficient to to be able to move power from areas in short supply to areas with surpluses instead of having to have each region be 100% self sufficient 24/7
FFDIC - they may be able to force him to do all that, but they damn well can't force him to make a loan. Wouldn't be 'merican.
Elvis - Thanks for the reminder to stay out of the bathroom if he's in there.
I'm still freaked, though life's been exceptionally good to me due to my anti-mild positioning. Waiting to find a high probability entry point on the way to DJIA 5000 or a bit lower, like 4300, lowest.
Can't say you're wrong, but 4300? OMG
I'm back in at Dow 5000 - probably a little early.
N225 down 1000 points
Nikkei is down over 10%
FFDIC - they may be able to force him to do all that, but they damn well can't force him to make a loan. Wouldn't be 'merican.
LOL. George Bush = "What? I always got a loan whenever I applied. Sometimes millions and no collateral. It was easy. Things just work better in Texas I guess."
"Wind generation locations tend to be far from the urban centers where the power can be used and the coming of the electric car will demand a far more robust local grid."
I think individual turbines or solar panels are the way to go. If every house had one(s), the need for huge bird guillotines in the wind swept plains would be reduced to bird Cuisinarts at home. Sparrow is good deep fried on a stick. Especially if it is cooked with a wind powered deep fat fryer.
Naw,I let my friend bury drums of radium in the parking lot. Its bright there 24 hours a day. Nobody will touch that. Hot male strippers? The taco vendor out front will handle them. ( enter your own comment ). Now the money for new capital is good. I hustle pool during Happy Hour sometimes.
When DOW 5000 comes and they are having problems finding 30 companies that aren't seeking bk, it will be difficult to invest.
DOW 4300 still beats inflation if you started in 1990...
What inflation rate are you using.
LOL. George Bush = "What? I always got a loan whenever I applied. Sometimes millions and no collateral. It was easy. Things just work better in Texas I guess."
FFDIC
. . .
always helpful when daddy is CIA director, VP, or Pres, with lots of Saudi friends.
I'll chat a moment, but I gotta hit the hay. I'm in the South, now in GA and soon in NC.
The big current news is gov't guarantees to Fortune 100 companies. I'll see how deep it goes. Instead of recognizing losses, they're playing pretend, on a worldwide scale. Amazing. When there's zero risk of loss, the banks will loan to Ftne 100's who will do what with the money?? Ah, they'll buy smaller companies who deal with asset conversions.
I'm concerned this is the early stage of Weimar-like inflation. I'm watching the Treasury's long bond rates. That's the tell. Weimar ended after 2 years in 2 months, screaming up the parabolic curve. Hence, my accumulation even at these discomforting prices, physical gold.
If I may restate... 2 + 2 = 4.
The 3:1 ratio for RE is reasonable. But the perceptions always get violated in the capitulation phase. So, RE at 2 and 2.5:1 are expected.
When they're dead, though I'll be older, I'm trying to convince the 30 yr old kid-friend to seriously plan to become a landlord big time as he will have retired himself; but it may not be his cup of tea.
Yes, there are many now who are aware. It's a bit crowded, but my focus is way beyond now, and out there, it's always stimulating and sparsely populated.
Outta here for the next 20 hours. Later...
Can't say you're wrong, but 4300? OMG
sdtfs | 10.16.08 - 1:45 am | #
It's like Abbey J. Cohen in reverse!
Just read the UBS release. Too complicated for this hour EST but many interesting aspects. I fear it is too twisted for many investors, even wide awake.
The non-recourse loan by the Swiss National bank of $54 billion is secured only by the assets transferred to a Special Purpose Fund by UBS, which will raise 6 billion in Cumulative Mandatory Preferred shares. Should the assets decrease in value, the SNB gets a vague "participation in the increase in UBS share price", TBD.
8 years at Libor +2.5, can be extended to 12.
SNB's website says the loan is to the SPV, which SNB controls, but initially hires UBS to manage the assets. Not sure how this works. Does the SPV pay UBS for the "assets" some amount as it dumps them for liquidation? Or does UBS get whatever it needs?
"Republicans are TRAITORS writes:
When DOW 5000 comes and they are having problems finding 30 companies that aren't seeking bk, it will be difficult to invest."
The bottom is when Lefty's Liquors becomes a Dow blue-chip.
Like thousands of Icelanders, Karlsson borrowed in foreign currencies to get a cheaper loan as the benchmark domestic interest rate soared to 15.5 percent this year. With trading in the krona virtually suspended after it plunged against the euro, dollar and yen, debtors now face skyrocketing bills.
``I was told it was better and cheaper to take a loan in foreign currencies than in Icelandic kronur,'' said Karlsson, 65, who now pays 74,000 kronur a month (about $770) on his loan, compared with 59,000 four months ago.
"Especially if it is cooked with a wind powered deep fat fryer.
Elvis"
"That must be Nevada wind cooking. I can smell the full bodied aroma."
"No, I disagree. It must be Eastern Wyoming wind cooking. Tart and complex."
It's like Abbey J. Cohen in reverse!
FFDIC
Ah, yes. The supertanker economy . . . kind of like the Exxon Valdez . . . alcoholic Captain, didn't pay attention, tried to cover it up, etc. Familiar story. Got Sarah Palin involved, too.
S&P Futures -15
Dow Futures -115
If market falls 20 to 30% in a day, will Maria Bartobobo wet her pants on T.V.?
If market falls 20 to 30% in a day, will Maria Bartobobo wet her pants on T.V.?
Republicans are TRAITORS
Depends.
" And in todays trading, Leftys Liquors and Lubricants traded higher after a 2 for 1 split, and, a reverse cowgirl"
AIG lobbying to relax oversight rules: report
AIG lobbying to relax oversight rules: report
| Reuters
Insurance giant American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) is spending money to lobby states to soften new controls on the mortgage industry, the Wall Street Journal said.
Republicans are TRAITORS writes:
"What inflation rate are you using."
Minneapolis FED Calculator
The Federal Reserve Bank of Minneapolis
w/ OCT 1990 DOW 2442
I'm watching the Treasury's long bond rates. That's the tell.
Ten years freaked me out this morning. Rates are 60 bps higher over the past week, after the Beige Book, NY Survey, retail sales, etc. etc.
I'm thinking that can't be a good sign.
Help is appreciated. I've got a bunch of UBS puts. I assume this must be dilutive, but can they be paid the full 54 billion, default, and keep paying regular dividends?
Lefty, play like you are Cramer and write what he would say about your profitable shop with the glowing parking lot. I'm liking it already. TKS.
"AIG is spending money to lobby states to soften new controls on the mortgage industry, the Wall Street Journal said.
Ministry of Truth"
This includes sending 80 yr. old stripppers to mortgage conventions.
SNB's website says the loan is to the SPV, which SNB controls, but initially hires UBS to manage the assets. Not sure how this works.
Doesn't that sound a lot like the Super SIV? That's so 2007.
Both the So Cal baseball teams have tanked.
My hockey team is sucking up the ice, and will be eliminated from the playoffs by next week.
Pretty soon it will be All Kobe, All The Time.
I'm quite ready for the world to end now.
UBS,AIG,RBS and GE should merge
New acronym SUBGARBIGES
Nice to see the article below about the Fed possibly "considering" asset bubbles in the future.
Does this mean they may possibly get rid of the game plan of purposely blowing them?
Could future generations be so lucky?
"I was looking to stiffen mortgage laws until Elizabeth Taylor took off all her clothes and gave me a lap dance." stated the Democrat from Missouri.
I'm quite ready for the world to end now.
There's always next year.
WTF,
the average over that time period is about 3.6% per year, I think if you used a higher inflation rate (JOHN WILLIAMS' Shadow Stats), the DOW will not end up beating inflation but probably be right in line with inflation, just like everything else over time.
Will Conrad Cuckooclock allow the SNB to buy UBS junk non-recourse at face value?
Doesn't that sound a lot like the Super SIV? That's so 2007.
MLM | Homepage | 10.16.08 - 2:00 am | #
It does indeed sound like a SIV or maybe a SAVE which is a 2009/10 term coined from the longer SAVE MY ASS.
Nanook-
your friend is listening to Suze Orman. five years is the new mantra, I think.
Unfortunately, that represents real progress in her advice.
We're going to have Mad Max very soon.
People will be living on the street, roaming around looking to see what they can get.
So what if they get caught and arrested?
That's food and shelter.
Groups of them will overpower people in their homes.
Others will simply be laid off, with no prospects, and join the street dwellers. Maybe you'll even consider following an old lady home from the store. It's sick what this will do to us all.
In 5 years, you'll wish you could laugh at this. I'd tell you to bookmark it, but you might not even have electricity.
Mad Max time. Get ready.
Re: Republicans are TRAITORS
Good point, who'd have thunk that the Govt would understate inflation
Before I get taken away, I would like two things.
A One Night Stand with Madonna, now that she's single again. I guess she has a thing for overpaid baseball players who consistently choke when it matters most.
Second, I want to get rightously Stoned with CSC. We can compare notes on our expectations for financial depression.
Nikkei closed at 8,472.35 (－1,075.12)
http://www.nni.nikkei.co.jp/CF/FR/MKJ
Currently Smoking Cannabis, you must be currently smoking cannabis.
CSC put on some reggae, like Burning Spear. Works every time.
Mad Max time. Get ready.
Currently Smoking Cannabis | Homepage | 10.16.08 - 2:05 am | #
Smokin some of that good shit tonite CSC...pass it over here...
"Others will simply be laid off, with no prospects, and join the street dwellers."
They will be bandos, dude. Streets are for feral pitbulls.
Really CSC, with the number of empty houses we're going to have, what self-respecting criminal would live on the street?
Sorry, it was: 8,458.45
(－1,089.02 )
"A One Night Stand with Madonna, now that she's single again."
Wow. Setting the sights high. I'm suprised you didn't say Oprah.
Guadia Ray, if you are short SPOO, I recommend Viagra or Cialis.
This is the reality, gentlemen.
Before the pressure gets too hot on the government, they'll turn up the media heat on the 'immigration problem' that appeared on our TVs out of nowhere as if it was a new issue. And they will put them in camps and horrible things will be done. All so we can rake leaves and wash cars and pick fruit.
And that's if we're one of the ones picked to survive.
God help us.
And don't forget our court ordered new prison health care system!
I'll talk to Cramer, he's in the back nursing a rum and diet coke. Wait, did I say coke? Dam
"Oh, CSS, you are so sexy."
"Oh, Oprah, keep reading The Bridges of Madison County in that dirty, sultry voice and tell me I'm your Obama."
I don't know about you guys, but I am dreading the day I have to eat my dog. I think about it every day.
Joe Schmoe-
I've always thought a reversion to 1996 prices was needed . Just to get the froth out and start clean with prices people can actually afford.
Chose '96 because that's when the bubble took off bigtime in many places.
And wages/salaries did not.
If wages go down more, which looks increasingly likely, maybe we'll just go back to mid 80's.
That would be a good way to unload some extra inventory.
"Did you just call me Madonna? Get out of here before I beat you with this $1M thing I bought."
Currently Smoking Cannabis writes:
"I don't know about you guys, but I am dreading the day I have to eat my dog. I think about it every day. :("
More worried about my dog eating me...don't mess with hungry Mastiffs...
A group of the largest US hedge funds has called on the Bank of England to intervene to free an estimated $65bn in assets frozen in London in the collapse of Lehman Brothers, warning that delays could be disastrous for UK plc. The funds, through the Managed Funds Association, said the scale of the problem was so great it could undermine bank rescue plans as tens of billions of dollars would be kept out of the market. It was also likely lead to the failure of some fund managers, said Richard Baker, chief executive of the MFA. The warnings come as hedge funds have been quietly shifting billions of dollars of assets out of London to the US, claiming the US legal system provides greater protection. Administrators at PwC running Lehmans UK business have won court approval for a process to work out how much they hold in protected assets but have warned it could take years to finalise.
YouTube - The Byrds - I Wasn't Born To Follow (Easy Rider)
Easy Rider
The Byrds - I Wasn't Born To Follow
"More worried about my dog eating me"
More worried about the bandos with the knives.
I just saw a baby on tv, buy stock using ETrade.
So easy, even a baby can do it. Makes me want to wake up tomorrow morning and buy some too.
Or not.
That was a very good song.
"Makes me want to wake up tomorrow morning and buy some too."
I think buying babies is illegal.
The Etrade baby outperformed 98% of fund managers merely by puking on the keyboard and shorting it out.
I thought you would get your groove on with that one. Good night. Lola! Damn it to hell. Where did you put the Oprah porn? Okay then. Your mother borrowed it.
Bandos will be shot on-sight. Why don't people invoke "Running Man"? I think that is more apropos...
Government will be shooting bandos as the B&BD's cheer...
I'm guessing the PPT has some bullets saved up for tomorrow. We may see an up day in the Dow.
They want to make sure the week stays up.
Oh, maybe y'all didn't catch this crazy shit. Blackwater assisting local law enforcement:
CAMDEN CO., N.C. (WAVY.com) -- Law enforcement personnel from 3 jurisdictions, with an assist from personnel and equipment from Blackwater, searched a rural area in the county Tuesday morning for a suspect they say shot a county resident as he walked out his house to go to work.
Access Denied
They just slip it in there like it's no big deal. By the time you notice...hey, it's been that way for a long time, and you go back to the teevee.
You see that? Mad Max.
Goodnight now.
I wonder what crime they're going to pick me up for. I don't own a gun, so accusing me of shooting someone might be a bit difficult, so perhaps they'll come up with something more original.
Comrade Scared Shitless writes:
"I wonder what crime they're going to pick me up for. I don't own a gun, so accusing me of shooting someone might be a bit difficult, so perhaps they'll come up with something more original."
If they are not very clever they usually settle on just 'breathing'
They won't even tell you. Just put goggles and a hood on you and whoosh, off you go to be tortured and put to labor or killed. It's going to suck real bad here real soon.
You wanna know what's on the tip of everyone's mind that nobody is talking about? Cannibalism. In America. We're screwed, man.
I don't own a gun
Don't worry, they'll "lend" you one they've been keeping for just such an occasion.
That Swiss bailout of UBS is 13% of their GDP. (68 billion CHF bailout, 2007 GDP 512 billion CHF) For one bank. OMFG!
You wanna know what's on the tip of everyone's mind that nobody is talking about? Cannibalism. In America. We're screwed, man.
Currently Smoking Cannabis
Even if things get really bad, won't you still be able to get 2 hot dogs for 99 cents at AM/PM?
re: Cannibalism
lol!
Seriously though, the blackwater thing really is bullsh*t! I'm passing that one around.
How do you get 68?
Oh, in franks.
Seriously though, the blackwater thing really is bullsh*t! I'm passing that one around.
wtf
I'm not so sure about that.
Most Amerikans are so clueless though, they think that Blackwater is a remake of the Doobie Brothers tune.
Fair Econ how does it work? SNB states the loan is to the SPV which it controls. Are they saying they'll pay face value?
CNBC Europe 11:14PM PDT. Patricia Szarvas quoted chief economist of komertz bank (sp?) that recession was actually the best case scenario. He's not a gloom munger (sp?) whatsoever but he is looking at a possibility of a depression. [She continued using recession instead of depression herself.]
[Too bad CNBC Europe doesn't do CC or their CC doesn't match US CC.]
So, D word is becoming the new black?
Nah, dude. When shipping stops, there will be a good while with nothing. And if we're going there, I'm not waiting until I waste away. I'm going to get my lean protein and adapt. You should plan on doing the same. The new environment will select for cannabalism. Or hotdogs, if the supply lines are open.
We may see an up day in the Dow.
Futures say no, so far.
Stock Futures on Bloomberg
Night all.
Ya'll are a riot, its been fun!!
Nite!
-wtf
"The new environment will select for cannabalism."
Born and breaded dopes?
MLM writes:
We may see an up day in the Dow.
Futures say no, so far.
The U.S. market doesn't close until 13 1/2 hours from now. Plenty of time.
They'll truly have some explaining if Monday's gain were to get completely wiped out by tomorrow. It might get some people to wake up, and never trust a rally again.
Yogi, I can't tell for sure - I'm babelfishing the article since I don't read German. It sounds rather like the original Paulson plan - the SNB creates a fund with 6b, loans it 62b, the fund buys assets from UBS and holds them. I assume the price is current book but it doesn't say, at least not that I can puzzle out. Over book is too blatant; below book would probably be the death of UBS. No time to audit - the run has probably been on all week and I suspect UBS is already almost out of cash.
OK I found it:
"The transfer of the USD 49 billion of assets will take place over the coming months, during fourth quarter 2008 or first quarter 2009, but will be priced at valuations as of 30 September 2008. These prices will be verified by independent third parties and potential differences will be recorded in the bank's income statement."
Maybe they'll hire Hank.
I smell some backdating going on in the shadows.
Yogi, when does UBS get the cash? I don't think they make it to 2009Q1 without some serious help.
Homes prices out here in southern CA are falling hard. Some homes have lost 60%of there value. I've seen homes that were selling for over 1 million 18 months ago down to 450,000.. Crazy part is that I don't see it letting up.
TOKYO, Oct 16 (Reuters) - The Nikkei average tumbled more than 11 percent on Thursday in its biggest one-day loss since the 1987 stock market crash...
The benchmark Nikkei .N225 shed 11.4 percent or 1,089.02 points to finish at 8,458.45.
The broader Topix index lost 9.5 percent to 864.52.
UBS will raise CHF 6 billion of new capital in the form of mandatory convertible notes (MCN). This will allow the bank to retain a strong Tier 1 capital ratio, even after providing the equity to the newly established entity. The MCN has been fully placed with the Swiss Confederation. The Swiss Confederation reserves the right to reduce part or all of its investment by transferring the MCN to third party investors.
The MCN issue is subject to approval by UBS shareholders who will vote on the creation of the required conditional capital underlying the MCN at an extraordinary general meeting (EGM) to be held in late November 2008. The MCN will count as Tier 1 capital for BIS capital adequacy purposes following EGM approval. Issuance of the MCN is expected to take place five business days after the EGM.
Actually given that the transferred assets are probably Level 3 kind of stuff, they don't really have day-to-day valuations. 30 Sep is book and since the values are basically fictional anyway what difference does it make what day they say they're making up the story? So it's book value - whatever UBS currently says it is, with the Swiss government reserving the right to audit to make sure it's not too much of a lie.
You wanna know what's on the tip of everyone's mind that nobody is talking about? Cannibalism.
Doubt it.
Soylent Green is more palatable (politically, that is) and it creates valuable goods to balance our trade deficit with China.
The Government will have a say on executive salry, and there is mention of "participation in future UBS share appreciation" but I saw nothing about dividends.
Can't imagine Swiss taxpayer would let them pay a dividend after defaulting on the non-recourse loan, but...
The Upper House of Parliament wants to submit the far parliament in the winter session a message, which plans an appropriate increase of the protected inserts and the system border. At present the inserts up to 30 ' 000 francs are protected
(do you have an English article, yogi?)
If I read this right, they haven't yet increased the deposit insurance; they're just planning to. I don't think this will be enough. UBS's international deposits over 30,000 CHF will still run.
Homes prices out here in southern CA are falling hard. Some homes have lost 60%of there value
During the Great Depression, high-end homes lost up to 90% of their value, although I believe the net fall in RE nationwide was in the 25-30% range. I imagine the loan distribution was quite different, though.
"Japanese Prime Minister Taro Aso said Thursday the U.S. bank bailout is "insufficient"".
Whew, that's a relief. For a minute, I thought $3 trillion was going to be enough!
It's linked at 1:17 above
"Japanese Prime Minister Taro Aso said Thursday the U.S. bank bailout is "insufficient"".
Just shutup and buy some more of our Treasuries please.
The SNB can wind up with 9% equity, evidently.
Just shutup and buy some more of our Treasuries please
Only if you play "paper, scissors, rock" with me.
And that's a LOT of paper. Hopefully some of it is Paulson's retirement fund.
If over the life of the transaction the fund equity declines in value, the SNB will be able to participate in some manner in the appreciation of the UBS share price. The arrangement will be based on no more than 100 million UBS shares and will be further defined early next year.
Nothing says "arranged under extreme time pressure" more than Swiss bankers spending billions on a TBD stock deal.
Sounds like a shell game. Can the SNB absorb a large hit just like that?
CSC,
You're getting out of OC, huh? I'm leaving in Dec. after 2 years of this nonsense.
I'm currently renting a spare room from a friend who just bought her house for ~450k. It sold for over 700k last year. And I'm paying 800 a month for one of the FOUR ROOMS in the house.
I'm a Midwesterner by birth. This sh*t's crazy.
The one bit of consolation right now is that the county isn't on fire like it was around this time last year. That would be a camel breaking straw.
Good travels.
Soylent Green is more palatable (politically, that is) and it creates valuable goods to balance our trade deficit with China.
The Chinese may outnumber us, but we outweigh them, by gums.
SNB's a central bank so, yes, they can take it. Switzerland has, or rather had, a great balance sheet, with debt below 50%. However, the only liquid reserves they have in that quantity are foreign exchange, so they'll have to issue bonds, with the usual crowding out issues. Not what you'd expect from the Swiss.
So what's your guess on whether they'd let UBS default but pay dividends? Thanks.
Default on the government and keep paying shareholders? No way. This is a major commitment for the whole country, and Switzerland is a relatively loose federation to start with. The government can't take that kind of hit (remember cantons don't share equally in exposure to UBS). However, the indication is that at least some degree of loss can be paid with stock so there is some leeway.
Remember one of the critical aspects of the deal, the stock options or whatever, is TBD for next year. Plus the assets are US assets. Would you bet that UBS has been squeaky clean in all the other bubbles? I didn't think so. So the real story is that the Swiss government has agreed to save UBS and UBS has agreed to submit to whatever the Swiss need to make it back. We could see big changes from this deal, likely to the detriment of UBS shareholders (and to your benefit, right?) Actually, given the inadequacy of the current deposit insurance, I'm betting on further intervention soon.
Night all. I wonder what the news will be when I wake up?
I believe the ProShares Ultrashort prospectus says that UBS guarantees the counterparty risk on the swaps.
Is it even remotely possible that there could be a default event on Ultrashorts?
(I ask, though I'm currently not long any of the Ultrashorts.)
(Incidentally, Nikkei average is ~800 points from 25+ year low. Now that's what I call deflation.)
Much appreciated. Just visited your blog, which is excellent. Agreed about UBS, especially since the director that I know here in New York (not a Swiss or American) is a slime.
It will be a spiral reinforcing one another making this worst. Companies can't get credit, cut cost. More people lose job, can't pay for housing. Demand decrease, price falls. The Wall Street falls, then company's capital decrease, cut cost again. And the spiral continues...
Feel free to read fcrisis.blogspot.com
Reporting in from San Francisco, where we haven't really gotten hit like other parts of CA yet...
I was checking out new places to rent, and I found a cute house in Brisbane, which is a small semi-desirable suburb just south of the city. Rental rate on Craigslist was $2500 a month. House is also for sale on another website for, get this,
$980,000 (!)
Doing the math that's a 3.1% return on assets, BEFORE taxes ($400 a month after tax deduct. maintenance and insurance, say another $500 a month).
(12*$2500/$980,000 = 3.06%)
Assuming a 9% cap rate (500 bps above the 10 yr) before expenses (say around 7% after expenses, conservatively), the house should be worth:
$333,000
For a grand total haircut of $646,000, or 66%.
We have a long way down to go folks... this is really scary. We are in really big trouble.
(100% cash and renting and thanking god for rational decision making)
Hey SF: Cindy Sheehan is running against Pelosi, and has great grassroots support. However you feel about her politics, she is decidedly against the Bailout.
Broward Horne: Soylent Green is more palatable (politically, that is) and it creates valuable goods to balance our trade deficit with China.
An old one from March...
http://thumbsnap.com/v/KstT7j6m.jpg
Reporting in from San Francisco, where we haven't really gotten hit like other parts of CA yet...
Good Times... R.I.P.
The game is up for the tech startups. Everybody has been put on notice to move to survival mode. Post Series A? Game over!
Time until SF implosion... 3 months.
It will be a spiral reinforcing one another making this worst
It's the credit cycle in motion. Both the upcycle and downcycle are positive feedback loops.
Modern culture automatically defines itself as superior and more intelligent than previous eras,such as....
"Smoot Hawley" was "a mistake".
There's an unspoken arrogance lurking in today's culture that's disturbing.
In due time it will collapse and become something else. Perhaps hate.
S&P dramatic U-turn: from -11% to 10%.
Could please someone explain? WTF happened?
I was obviously referring to S&P futures
S&P dramatic U-turn: from -11% to 10%
The power of magic. All you have to do is believe and buy in.
Mu-ha-ha-ha.
The power of magic. All you have to do is believe and buy in.
Mu-ha-ha-ha.
Ok, but believe in what?
What's the big news in it I'm missing?
I still see shitty fundamentals and same old bailouts.
Uncle Sam's going to bail out another financial institution....
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Heck, man, it's all manipulated now because "perception is reality". Most people can't think past that, I am sorry to report.
New Bailout --> New Rally ---> New Crash
(and tomorrow it's Friday 17th gosh)
Manhattan real value now: $24 worth of trinkets. Give it back to Native Indians.
That place is full of friggin useless money shufflers. The natives should get them too as extra to be used in scalping practises...
I must apologise.
Seeing yesterday's chart of S&P500 future, it skyrocketed from 900 to over 1000 at the very beginning of the day.
And we all know how it ended.
Not a wise indicator then.
Guess which college has produced the most Nobel Prize winners?
Right. City College of New York City, a public institution. We have what is universally recognized as the best live theater in the country, thanks in part to a long tradition of tolerating homosexuality. We've taken in hundreds of thousands of vagrants from other states and tried to help them with public housing and welfare. Despite occasional flareups, we have the most extensive 'racial' integration of any part of the US. We welcome immigrants from all over the world. We'll survive without Wall Street. That $24 invested at 5% is now?...?
Hmmm. apparently we also bailing out USB via some secret backdoor mechanism.
yes, yes, this is a fine "confidence builder" indeed!
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Go, Feds!
We're #1!
Anyone remember Ipodius?
Whatever happened to his Rate Hike is a certainty call from the FED?
Hmmm. apparently we also bailing out USB via some secret backdoor mechanism.
Thank you ammeregan taxpayer, we'll send you chocolate
I suspect ipodius is adrift at sea, desperately treading water as Sebastian's right foot & sneaker float by, bobbling along in the gulf stream current.
"we'll send you chocolate"
Thank you, kind sir.
Please ensure that it is rum-filled.
What I learned about McCain from the debate:
1) He can make several versions of a funny face (gerning), especially
when he feigned surprise that poor old Joe the Plumber's fine for not providing
health insurance would be zero. What a classic moment, coming to You Tube for sure.
2) He set the record for the number of eye blinks in a minute.
3) He makes with the googily-googily eyes like a Vaudeville performer.
4) He is a cranky man who interrupts others when they're talking.
5) He has a truly creepy smile.
6) He laughs at his own 'I made a funny.' moments.
7) He is NOT! George Bush! He's not! He's not! He's not! Dammit!
What I learned about Obama from the debate:
He's on autopilot for the rest of the way. With a smile and a confident manner
he waved off all the shit that Walnuts threw at him. Unfortunately,
Walnuts ended up with most of the shit either flecked on his face or piled
on the table in front of him.
Side note on the wives: I thought it a lovely coincidence, Cyndi in red and Michelle in blue.
Volker, you're right on most things, BUT Michelle's got a very very (too) big ass.
So you DID follow the debate. Maybe Obama was promising to hang banksta as a qualifying part of his first 100 days program?
And can't someone get McCain some visine? He looked like he'd been crying for an hour before the debate started.
Thank you, kind sir.
Please ensure that it is rum-filled.
Broward Horne | Homepage | 10.16.08 - 6:14 am | #
If it's the same for you, it'll be filled with assed-backed securities.
Oh, don't mind about this strange smell.
I'm moving from the deflation to the inflation camp.
Whiskey, cigarettes and gold coins. That's all you need. Start piling folks. Sell your Short ETF's.
If it's the same for you, it'll be filled with assed-backed securities
You'll have to fight the United Ststes Federal gov't for them now because they're "valuable" (in the orignal sense of the word - able to be valued).
What's scarier than John McCain during a debate?
An Obama supporter swooning and exclaiming, "I'm saved! I'm saved!"
I used to be a Bellinghamster
I recently sold an investment property in midtown Atlanta (parcel in an assemblage for a high rise development) . The sale was at the early 2007 prices (pre-crash in Altanta) . The only reason that the developer closed is that he would lose approximately 20% of the purchase in cash he put up for earnest money , contract extensions and rezoning costs . Early in the game I was looking at 1031 exchange possibilties instead of paying capital gains taxes in the mid six figures . So much for that now .
Formula for Mad Max...
70 trillion of Credit Default Swaps are all worth less than zero. Entire wealth of the planet is misallocated to backstopping these bad bets. CDS crowd out real enterprises from credit and investment markets. Real human beings lost their jobs in massive numbers. Wealthy disappear to Paraguay and Dubai. Feral alpha dog mentality rules the streets. Looting empties store shelves. Mad Max within 24 hours of looying commencement.
@ Kung Fu Panda, on Griffin of Citadel: What you quote doesn't meet Wikipedia's standards of objectivity. This article should be cleaned up. My apologies.
Volker the Viking | 10.16.08 - 6:15 am | #
the lighting was set wrong for McCai
Early in the game I was looking at 1031 exchange possibilties instead of paying capital gains taxes in the mid six figures . So much for that now .
Thank you for your contribution for bailing out those poor, poor folks on Wall Street.
Love, Hank.
70 trillion of Credit Default Swaps are all worth less than zero.
What about all world's governments simply declaring CDS illegal?
Win-win IMHO
the red sea of ink was parted and those following the chosen were swamped
Looks like Deja vu, Groundhog Day and Greater Depression all over again today for the Bush regime, huh?
3rdQ reports that are due later in the day:
C, ML, Google, IBM, AMD
uh-oh
Looks like Deja vu, Groundhog Day and Greater Depression all over again today for the Bush regime, huh?
been there done that | 10.16.08 - 6:46 am | #
i'll bet Oliver Stone is kicking himself for not putting of the releae of "W" for a year
i remember when we were told government borrowing was bad because it gobbled up available capital and made what was left more expensive for real entrepreneurs
i spose banks gobbling up all the available capital is good cos they'll lend it all to real entrepreneurs....
o President wants to end up like FDR
Merrill Lynch Loses $5.56 a Share from Continuing Operations in Third Quarter Vs. $5.22 Est.
Merrill Lynch Loses $5.56 a Share from Continuing Operations in Third Quarter Vs. $5.22 Est.
And pays themselves in 2008 so far as richly as they did in 2007.
Anonymous writes:
Volker the Viking | 10.16.08 - 6:15 am | #
the lighting was set wrong for McCain
It wasn't the lighting that hurt so much as the amount of spackle troweled on his face
People don't get that when home prices correct, it's actually a good thing for some people as much as it's a bad thing for other people. People who are buying homes that cost more than 3x of their yearly take-home pay are nuts. In California, the homes are still at or above this level in many places. Safe havens are more like 2x or 1x- and you can actually make money being a landlord. I just advised a friend against buying a 440k house in Northern CA until the market levels off. 440k implies that the occupants should take home in the vicinity of 147k/yr or more, which I know they don't, even with 30% down. It's a short sale, and it's a great deal for the bank considering that the price could drop to 340k or 220k in only a 1-2 years.
C lost .60/share (bberg), 2.8bn net loss, 13.2bn credit loss.
4th straight quarterly loss. Naturally, shares up big in premarket.
Here's my take and it could be wrong.
ProShares buys plain vanilla equity swaps. Think of these swaps as two pockets of the same entity. In one pocket, they put almost all the money into interest-bearing cash. In the other, they put a small amount of money that's used to settle each day's trading, plus or minus. If the swap loses (market goes up in the case of ProShares shorts), money is paid out of pocket #2 to the swap counterparty. Vice versa if the swap wins. Each day, pocket #2 is marked to the market to reflect gains or losses. If pocket #2 starts to run dry due to heavy losses, money is transferred from pocket #1.
If a swap counterparty defaulted, I'm sure it wouldn't help ProShares. Some people would run to sell shares, but there is always the Creation Unit liquidity and arbitrageurs to keep the losses manageable. But I think you are really asking if there is swap counterparty default risk in these instruments. I don't think so, because pocket #2 is marked to market every day.
I've held some TWM and SRS all the way up, although I have sell limit orders in way high. I've stuck with these ultrashorts partly as a hedge against calamity and they've paid off. It hasn't been easy due to heavy volatility, especially in ultrashorts. Thanks to all who have provided moral support for the ProShares shorts along the way.
P.S. I am probably going to avoid ultrashorts in the future for all but short-term swing trades, sticking with the single ProShares shorts. There's nothing wrong with RWM and EUM, single versions of TWM and EEV. I've done really well with RWM and EUM without the volatility rattling.
Unfortunately, SRS doesn't have single short version.
You guys chill out and just wait for Paulson's plan to kick in. Have some
patience.
I hate headlines that say "foreclosures down 64%" but ignore the fact that the homes are selling for 1/2 price from the peak. Just remember, a loss of 50% needs a gain of 100% in order to break even. Many of the people living in those areas are underwater 20%-50%, and continue to pay on investments that will be underwater for at least 10 years. A business would never do this.