Mark Cuban is being prosecuted for insider trading 4 years after the fact because he angered the wrong people when going public against the TARP proposal and by creating a foundation to track down the use of the bailout proceeds, bailoutsleuth.com
I guess we do live in a country run by crooks and scammers.
oldtrader, I hate to use his hammered-to-death terminology, but this kind of prosecution (of something that is totally endemic in our markets) just smacks of a crime-syndicate or chinese-government style hitjob.
Please send me an email, I need your professional help.
Since you're expressly asking for "professional help" unless she's licensed in the same state as the advisee, any response would probably be in violation of state laws and professional responsibilities.
Hey on the way home I heard my local city advertising their bond offerings on local radio touting their AAA rating (LOL). It almost sounded like a Jim Cramer piece including a warning at the end not to take the ad as advice. I've never heard of anything like this before except it reminds me of the War bonds.
Where is the Treasury going to get all the money to pay these short term bills? Are we seeing a new game of hot potato where the Fed and Treasury will go back and forth funding their own deficits?
Rough day for information on all fronts. The Goldman news about shorting the same stuff they were selling to clients is another nail in the coffin for market confidence. The GM video that is basically a scare campaign for cash is the sickest thing I have seen in a long time. That video made my resolve to close their doors bulletproof. The second half of the TARP funds being put on delay may make some bank mergers, I mean token buyouts, slow down as there may not be TARP enough for all. And republicans perhaps waking up a few months late to oppose more bailouts? I mean what is this world coming too?
Can someone, hint hint CR, please ask Krugman if there is a limit to the size of the "Stimulus" he says is needed to make up for "demand gap"? I mean it was spending money nobody had that front loaded demand over the past 5 years, snd now Krugman is calling for unlimited money to keep demand at that artificial high. Is there a limit? I mean at what point would a "demand gap" simply be too big? I estimated on Friday night that a stimulus plan in the 2-3 trillion range is on the way. At what point is the number too big?
Here in silicon valley, rents seem to be dropping. A couple of my friends are moving, and they are reporting deals like "2 months free", and they are holding out for even better terms.
My own lease is coming up soon, and I am waiting till the last minute to drive a hard bargain with my landlord. He is a reasonable man, and fortunately, he owns the house free and clear, so has room to negotiate!
"smacks of a crime-syndicate or chinese-government style hitjob"
Good thing, too. We might as well get used to it since we are actually making the transition from being governed by a crime syndicate to being governed by the Chinese.
Mnay years ago I spent a lot of time in the UK. It was much cheaper back then to rent an apt than stay at a hotel. Even for a weeks vacation it was a better deal. I wouldn't be at all surprised that renting is the best choice today.
regarding falling rents...
over a year ago i decided to move to a part of vegas that many people i know consider seedy. it's very close to unlv. the experience has been as positive as apartment living can be. minor issues with neighbors and dealing with incompetent management have been swamped by positive experiences with other neighbors.
i tell my friends that the only difference between my neighborhood and theirs is that in mine we pay cash and own our possessions while their 'hood is kept afloat on credit.
the rent is a pittance and my utilities are shockingly low.
Can someone, hint hint CR, please ask Krugman if there is a limit to the size of the "Stimulus" he says is needed to make up for "demand gap"?
More importantly, how can such stimulus be provided in an environment already rife with excess capacity and consumption without effectively defaulting on our debt?
Also, historically, what nations have borrowed and spent their way to prosperity?
Also, is Krugman admitting to thinking only short-term here?
Why doesn't this make me in any way confident about the future:
After the stimulus
For the coming year, and probably well beyond, the economy will be on life support sustained by massive fiscal stimulus. (Either that, or well be in a very deep slump.) But eventually the economy will have to come off life support. What will take the place of the stimulus?
AC,
Exactly. If we can spend and print all we want, why would no other country in the history of the world have been successful at it? The "demand gap" Krugman et al are so worried about is no such thing. It is a reduced state of consumption to a still crazy high rate, but no longer a balls to the wall record setting rate.
Also, is Krugman admitting to thinking only short-term here?
Well, the brutally honest answer to his question is that nothing will replace a certain amount of the economy for years and years. That's a tough answer to face head on.
The "demand gap" Krugman et al are so worried about is no such thing.
Also, let's be realistic here. Krugman was the guy making arguments against a speculative bubble in oil and cheering on Bernanke's rate cuts while prices were rocketing well over $100/bbl.
Should this lead any critical thinker to question his credibility?
The GM video that is basically a scare campaign for cash JJL
At firedoglake.com, emptywheel offers a detailed senario if GM filed bankruptcy.....informative & fun facts I was unaware of.
We Are All Flint, MI Now
...Congress would fight the scenario at every stage, though with increasingly less leverage... a scenario that follows a great deal of logic about possible outcomes. It is this scenario, though, that explains why both Toyota (I've seen reported--looking for the link) and many in Congress want to bailout GM before it gets to bankruptcy.
Here's the short version:
GM files for Chapter 7 bankruptcy
GM's Chinese partner, SAIC, buys much of GM (Buick, Chevy, Cadillac)
GM/SAIC starts importing Chinese-made Buicks and Chevys, undercutting Toyota's cost advantages ...So if GM goes bankrupt in January, as may happen, it may well have to sell itself off (unless the government guarantees the same kind of financing that it is refusing now). And I believe one company is one of the most likely--and indeed sensible--buyers: Shanghai Automotive Industry Corporation, or SAIC, the Chinese company with which GM partners to do business in that country.
GM's Chinese partner, SAIC, buys much of GM (Buick, Chevy, Cadillac)
Well, the brutally honest answer to his question is that nothing will replace a certain amount of the economy for years and years. That's a tough answer to face head on.
Well the thing that he is proposing to provide massive short-term stimulus.
This necessarily comes from:
a) Massive taxes in the short-term which will largely negate the stimulus effect.
b) More lies, deception, and broken promises to illicitly take people's wealth in the short-term via inflation with no intention of returning it in the long-term.
What other alternative is there?
Also, how is alternative b) any different from what we have been doing for the past 25 years?
Vultures begin to make their move into stinking rotten carcasses.
And while I dont see a stock market bottom without insolvency issues getting resolved in financials and/or a failure of a major builder - I consider John Paulson to be a leading indicator.
I am now slightly more confident of a major market bottom something between March - Oct of 2009. Time will tell.
I wouldn't cry too much over Mark Cuban's prosecution.
I listed to National Public Radio's description of what he did, and it's a slam dunk case of insider trading. When I was an officer of a publicly held high tech company in Silicon Valley, our lawyers drilled the law and the consequences of going afoul of the law into our heads. He must be either incredibly stupid or arrogant, and I don't think he's stupid.
The IRS and SEC always go after high-profile individuals to scare the rest of us. If he wants to break the law to enrich himself, he might want to stay off "Dancing with the Stars".
with rents falling, the buy-vs-rent breakeven point won't break even at house prices derived from bubble-phase rental rates
If you look closely at the Tokyo RE bubble, it had a false recovery about two years into their crash. I expect the same in the US.
At 3am I drove through the apartment here and counted up empty parking spaces vs total. 98 empty out of 400, or 25%. That's probably about double from when I moved in six months ago.
Lots of elasticity in housing. If I don't have a job offer in the next two weeks then I'll be back in Idaho sitting in my parents' house which has far more space for me than I'd want to buy on my own.
Sen. James Inhofe (R-OK) is making waves by criticizing Treasury Secretary Paulson's handling of the bailout and saying that Congress should take back whatever is left of the $700 billion "blank check" it issued to the Bush administration in October.
In a letter posted on his website, Inhofe told his Senate colleagues that he intends to push for immediate legislation that would require Congressional authorization for any further payouts.
The ultra-conservative Oklahoma Republican told the Tulsa World, "It is just outrageous that the American people don't know that Congress doesn't know how much money (Paulson) has given away to anyone. ... It could be to his friends. It could be to anybody else. We don't know. There is no way of knowing. ... He was able to get this authority from Congress predicated on what he was going to do, and then he didn't do it."
Eliot Spitzer had a op-ed in the Washington Post yesterday.
How to Ground The Street
The Former 'Enforcer' On the Best Way to Keep Financial Markets in Check.
"Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum. Rather, a market is a product of laws, rules and enforcement. It needs transparency, capital requirements and fidelity to fiduciary duty. The alternative, as we are seeing, is anarchy."
The question is whether Obama would 'overlook' the hooker thing? I believe Wall St. fears Spitzer as a consideration to head the Justice Dept. or SEC
The ultra-conservative Oklahoma Republican told the Tulsa World, "It is just outrageous that the American people don't know that Congress doesn't know how much money (Paulson) has given away to anyone. ... It could be to his friends. It could be to anybody else. We don't know.
Inhofe told his Senate colleagues that he intends to push for immediate legislation that would require Congressional authorization for any further payouts.
Unless Inhofe is talking about the remainder of the initial $350B, and not the full $700B, then it's scary that he doesn't even know the details of the law that he signed.
Anyway, we got an email from our LL sating that he was rasing the rent $110/month starting January.
Ouch!
We decided to start looking. FOund everyone w/condo or home here in Rancho Santa Margarita is upside down.
Well, we bit the bullet and found a 2-bed, 2-bath apartment for $275 less amonth than we pay now and would have been $385 less than what he wanted beginning in Jan.
Well, we emailed him and told him we were leaving. He responds back that the new rate was monthly and that the old rent would stay for a 12-month.
Told the wife it doesn't matter. We are moving and saving the money. Condo isn't worth what he wanted anyway. We overpaid this past year and he is going on vacay for 3 weeks.
Oh well. I got snookered, but not in '09. Move in rate was great too. Just $229 with the credit check. Who said you need thousands to move in to something? You just have to look and lower the standards a little, not much!
Paulson saying he is not going to deploy the other half of the TARP is creating one of the great shorting opportunities of all time. Sharks are going to try to take down institutions to call Paulson's bluff. The insurance companies are highly exposed. Why he said that is beyond me. He has created a hell-storm.
Harsh Realty writes:
I'm happy about the death of the stupid comments about how foreclosures are going to drive up the cost of renting.
Harsh Realty | 11.17.08 - 8:52 pm | #
It's all about supply and demand and cost.
You see all those foreclosures, just means more housing for the number of people are already in given town. It also means that the people who bought them couldn't afford them, although some may have had a catastrophic financial loss.
Bottom line is even in the South OC, you can a deal if you are persistent, patient, and willing to be flexible.
Sure, if you want something in Coto De Caza with 8 bedrooms, you are gonna pay. But if all you need is 1 or 2 bedrooms, you can get a bargain.
Signs of stress in the property rental and property sales markets continued to flow through in the first two weeks of November as an exodus of students after university exams increased rental listings and mortgagee listings jumped to a fresh record above 500.
The index of total rental listings on real estate websites reached 7.7 per cent in the last two weeks, its biggest rise since interest.co.nz started monitoring listings in March.
The end of university exams in early November is likely to have been a factor, although the slow spring property sales season may have convinced many property investors to take their property off the sales market and put it back on the rental market.
Weekly rental prices have been broadly stable for most of this year despite a slowdown in new housing construction, continued migration and higher actual interest rates for landlors.
This is what happens when the flippers get stuck with inventory, they all listen to the same gurus and move en mass into the rental market. Great spikes in listings.
"Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum."
I think sensible critics of the government in recent years have argued that the government's failure has been to act in such a way to promote market excesses rather than restrain them.
In other words, in major national or international crises it seems that the unifying force of easy monetary policy emanating from government agencies is what is coordinating and promoting these extreme excesses.
While it may be popular pressure or special interests that are in some way "forcing" these agencies to take actions that they may think is unwise (as seems to be the case with the Fed in the 1920s), it doesn't fundamentally change the fact that some government apparatus is playing a central role in creating a mass hysteria.
This is what governments frequently do, after all. How is acting to coordinate an unwise bubble any different than acting to coordinate an unwise war?
If we did the latter, why is it unlikely to think we would also do the former if in the short-term it demonstrably provided economic growth?
Great rents are going down. That much more income that can be spent on goods and services. This is very good for the economy. It is also inflationary for everything except for housing. More money chasing the same amount of goods (actually less goods since all production is going to be cut back temporarily). Every person that loses their house and moves to a rental or in with friends/relatives has more income to spend than he did before.
rps writes:
...GM's Chinese partner, SAIC, buys much of GM.
Ahh, what is it with that american fixation that the chinese are to buy either these treasuries (which will be payed back with much devaluated dollars, if at all)or bankrupt GM. Americans must think that the chinese are to buy all their trash ? When do americans take responsibility for their mess themselfs ? Grow up!
GM will get bailed out. You are paying. You got no choice so stop grovelling. Or you can call your congressman. Same difference. GM is never going bankrupt.
The big boys feared Spitzer was gonna end the fratboy party. So, they took him out....
Timeline:
Auction-Bond Failures Roil Munis, Pushing Rates Up
Feb. 13 (Bloomberg) ...Rates on $100 million of bonds sold by the Port Authority of New York and New Jersey, with bidding run by Goldman, soared to 20 percent yesterday from 4.3 percent a week ago
Feb 14 2008 Monolines given five days to find funds
Eliot Spitzer, New York governor, on Thursday gave bond insurers three to five business days to find fresh capital, or face a potential break-up by state regulators who want to safeguard the municipal bond markets.
Feb 21st 2008 Bond insurers and the markets
Splitting headaches
The Economist
The regulator and governor are shedding no tears over lenders losses. Their primary concern is the $2.6 trillion, tax-exempt municipal-bond market, used by cities, universities and the like to raise long-term funds, much of it from individuals. Were the monolines to lose their top-notch ratings, they fear, many issuers could struggle to meet higher funding costs.
Feb. 29 Goldman, Bear Stearns Bankers Targeted in Muni Criminal Probe
(Bloomberg) Goldman Sachs Group Inc. and Bear Stearns Cos. bankers are under investigation in the U.S. Justice Departments criminal probe of the municipal derivatives business, regulatory documents show .....Lawyers in the municipal bond industry have said the criminal probe is the biggest in the history of the almost 200- year-old market, where states, cities and towns have $2.6 trillion of debt outstanding. The Federal Bureau of Investigation also raided three brokers that advise local governments and ran the bidding as part of the probe, which may involve transactions as far back as 1992
MARCH 10--With the bombshell news today that New York Governor Eliot Spitzer has been implicated in a prostitution ring, the Democratic politician will now always be known as "Client-9
November 7, 2008
No criminal charges for Spitzer
AP/NEW YORK Federal prosecutors announced Thursday they will not bring criminal charges against Eliot Spitzer ...Manhattan U.S. Attorney Michael Garcia said that investigators found no evidence that Mr. Spitzer or his office misused public or campaign funds for prostitution. Federal prosecutors typically do not prosecute clients of prostitution rings.
America has the strongest military in the world. You want to get paid what we 'owe' you? Fine. You can have it in paper products. You want something more tangible? Come and get it. Then again you might want to reconsider your approach. I hope you aren't getting anything imported into your country over water. Because you know what? Its ours. We own it. All of it. Every sea and ocean. You are just renting the sea lanes by selling us cheap products.
the clipping doesn't capture how amateurs in UK were buying houses to rent them out. Buy to Let. One of the firms that made the loans for this 'business' went screaming into the machine guns some weeks ago, if I remember correctly. Now the housing units are falling into disrepair.
Werner,
If you read the article, GM and SAIC "ARE PARTNERS."
Shanghai Automotive Industry Corporation, or SAIC, the Chinese company with which GM partners to do business in that country
firedoglake.com
SAIC has high quality and good expertise, gained largely through its partnerships with GM and Volkswagen. SAIC has ambitions to sell cars internationally--and it has been willing to spend money to advance those plans.
ova: Small Indian Ponys writes:
...The world owes us. We saved Europe.
Hilarious ! Learn history!
(hint : when the russians captured Berlin in '45, americans were nowhere near, they had not even crosed the river Elbe by then!)
WSJ put up this piece on how investors in Countrywide loans now part of BofA are objecting to modifications "in the interests of both parties," because they were not asked first.
nova: Small Indian Ponys writes:
...The world owes us. We saved Europe.
Hilarious ! Learn history!
Team America F%^k yeah!
"We're an empire now, and when we act, we create our own reality. And while you're studying that realityjudiciously, as you willwe'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors and you, all of you, will be left to just study what we do."
GS already tried to sell itself to C shortly after the Lehman crises, but Pandit was not interested. So GS panicked and called Paulsen, who had to step in and convert GS and MS into banks, something he denied to Lehman when they asked for it.
It does read like a Greek tragedy.
Wonder what will bring catharsis...
rps, maybe you miss the point that you (patriotic americans) don't buy enough GM cars to keep it alife. Will you suddenly buy more GM cars if it is chinese-owned ?
Patton's Third army had blasted thru the Battle of the Bulge, breaking the last great German effort. Bradley held up Patton's advance to Berlin, withholding oil for his tanks. Ike decided to let the Russians take Berlin, and the resulting casualties in street by street fighting.
So it goes.
Werner writes:
Contrarian Troll writes:
America has the strongest military in the world...
See, you can not even get Osama Bin Laden!
(How many years have you tried now in vain?)
Werner | 11.17.08 - 9:46 pm | #
we really didnt try
when bin laden was cornered in the mountains of tora bora and the army asked for reinforcement, believing that OBL was cornered, Sec Rumsfeld ordered that the army withdraw, and refused to provide the support needed to kill or capture OBL
why?
think about it, destroy alqaeda and obl and the ameerican people wont put up with the constant state of war , and fear, needed to justify invading iraq.
at an irport in miami gen franks reported to sen bob graham (chair of sen intel com) that vital resources were being withdrawn from afghanistan and transfered to the ME thater in prep for a watr ( that had yet to be authorized by congress) in iraq
with rents falling, the buy-vs-rent breakeven point won't break even at house prices derived from bubble-phase rental rates
South bay part of LA too. I couldn't believe how much is available in the $1,300 to $2,200 range in decent areas. Ok, the beach rents are still asking sky high prices(but many vacancies...).
We've 'notched up' what we'll rent next year by a few hundred square feet and 'trim level.' The rents have absolutely plummeted!
What is the newest attractive rents is recent foreclosure purchased to rent! Really nice 4 bedroom homes... they first list for absurd amounts, drop to $2,500 and then finally drop to the market. Between demand destruction and this new supply... I wish we didn't have to sign a lease within six weeks! 'Market rate' is the landlord subsidizing $500 to $1,000/month.
Considering what I know about the layoffs coming... I see no upside for years.
Oh yea, I still think 2009 being the greatest down year (for home prices in CA and the nation) is a 'sure thing' prediction.
Krugman is just another hack sure he know how to spend other peoples' money better than those people know how to spend it themselves. Since the people don't even have any money, he presumes to borrow money in their name to spend in their name. Gee, he is just so good to us.
Let me spend some of your money, Paul. I'm sure I could improve your life.
Pig Time!
Lawyer Liz,
Please send me an email, I need your professional help.
Thanks,
bob_in_ma@yahoo.com
Zekund!!!
oink.
Ok...turd, the
Mark Cuban is being prosecuted for insider trading 4 years after the fact because he angered the wrong people when going public against the TARP proposal and by creating a foundation to track down the use of the bailout proceeds, bailoutsleuth.com
I guess we do live in a country run by crooks and scammers.
Hey Ken C - is there a way to make the rating you assign have its own color coding in the comment thread?
Hoopa,
Seems ol' Mark has a knack for rubbing darn near everyone the wrong way...sorta like our Jas, LOL.
oldtrader, I hate to use his hammered-to-death terminology, but this kind of prosecution (of something that is totally endemic in our markets) just smacks of a crime-syndicate or chinese-government style hitjob.
Please send me an email, I need your professional help.
Since you're expressly asking for "professional help" unless she's licensed in the same state as the advisee, any response would probably be in violation of state laws and professional responsibilities.
Probably been better to generalize it...
But since this is the inter tubes, anything goes.
Hoopajoops:
I think this has more to do with Bud Selig not wanting Cuban to own the Cubs than his criticism of the bailout.
Hoopa,
Can't say that I can argue with your point. Sure won't help his chances of buying the Cubs.
Hey on the way home I heard my local city advertising their bond offerings on local radio touting their AAA rating (LOL). It almost sounded like a Jim Cramer piece including a warning at the end not to take the ad as advice. I've never heard of anything like this before except it reminds me of the War bonds.
Things must be getting tight...
Where is the Treasury going to get all the money to pay these short term bills? Are we seeing a new game of hot potato where the Fed and Treasury will go back and forth funding their own deficits?
Rough day for information on all fronts. The Goldman news about shorting the same stuff they were selling to clients is another nail in the coffin for market confidence. The GM video that is basically a scare campaign for cash is the sickest thing I have seen in a long time. That video made my resolve to close their doors bulletproof. The second half of the TARP funds being put on delay may make some bank mergers, I mean token buyouts, slow down as there may not be TARP enough for all. And republicans perhaps waking up a few months late to oppose more bailouts? I mean what is this world coming too?
For comic relief, if you have not seen this exchange between a delinquent credit card holder and the company, it is a must see! He tries to pay his bill by submitting artwork:
Good Idea!: Man Submits Drawing Of Spider Instead Of Payment For Overdue Account - Geekologie
Timbrrrrr....
girlbear,
Brrrr is right, lake effect snow, here.
I wouldn't worry about U.K. When the Prime Minister and Paul Krugman agree on what needs to be done, it is like having God and St. Peter on your side.
ron paul on u tube? this bitch is hot!
YouTube -
Can someone, hint hint CR, please ask Krugman if there is a limit to the size of the "Stimulus" he says is needed to make up for "demand gap"? I mean it was spending money nobody had that front loaded demand over the past 5 years, snd now Krugman is calling for unlimited money to keep demand at that artificial high. Is there a limit? I mean at what point would a "demand gap" simply be too big? I estimated on Friday night that a stimulus plan in the 2-3 trillion range is on the way. At what point is the number too big?
Here in silicon valley, rents seem to be dropping. A couple of my friends are moving, and they are reporting deals like "2 months free", and they are holding out for even better terms.
My own lease is coming up soon, and I am waiting till the last minute to drive a hard bargain with my landlord. He is a reasonable man, and fortunately, he owns the house free and clear, so has room to negotiate!
"smacks of a crime-syndicate or chinese-government style hitjob"
Good thing, too. We might as well get used to it since we are actually making the transition from being governed by a crime syndicate to being governed by the Chinese.
Mnay years ago I spent a lot of time in the UK. It was much cheaper back then to rent an apt than stay at a hotel. Even for a weeks vacation it was a better deal. I wouldn't be at all surprised that renting is the best choice today.
Vicious cycle alert: falling home and apartment rents imply a lower equilibrium point for housing prices as well.
In other words, with rents falling, the buy-vs-rent breakeven point won't break even at house prices derived from bubble-phase rental rates.
regarding falling rents...
over a year ago i decided to move to a part of vegas that many people i know consider seedy. it's very close to unlv. the experience has been as positive as apartment living can be. minor issues with neighbors and dealing with incompetent management have been swamped by positive experiences with other neighbors.
i tell my friends that the only difference between my neighborhood and theirs is that in mine we pay cash and own our possessions while their 'hood is kept afloat on credit.
the rent is a pittance and my utilities are shockingly low.
Can someone, hint hint CR, please ask Krugman if there is a limit to the size of the "Stimulus" he says is needed to make up for "demand gap"?
More importantly, how can such stimulus be provided in an environment already rife with excess capacity and consumption without effectively defaulting on our debt?
Also, historically, what nations have borrowed and spent their way to prosperity?
Also, is Krugman admitting to thinking only short-term here?
Why doesn't this make me in any way confident about the future:
After the stimulus
For the coming year, and probably well beyond, the economy will be on life support sustained by massive fiscal stimulus. (Either that, or well be in a very deep slump.) But eventually the economy will have to come off life support. What will take the place of the stimulus?
I dont really know the answer...
AC,
Exactly. If we can spend and print all we want, why would no other country in the history of the world have been successful at it? The "demand gap" Krugman et al are so worried about is no such thing. It is a reduced state of consumption to a still crazy high rate, but no longer a balls to the wall record setting rate.
Not sure if everyone has heard it already, but Jerry Yang, the CEO of Yahoo!, is stepping down
Expect more job cuts when the replacement is hired (2007q4 there were 14,300 yahooligans)
Google (2007q4: 16,805, 2008q3: 20,123) for comparison.
EHP:
About $22/share too late for YHOO shareholders...
Also, is Krugman admitting to thinking only short-term here?
Well, the brutally honest answer to his question is that nothing will replace a certain amount of the economy for years and years. That's a tough answer to face head on.
The "demand gap" Krugman et al are so worried about is no such thing.
Also, let's be realistic here. Krugman was the guy making arguments against a speculative bubble in oil and cheering on Bernanke's rate cuts while prices were rocketing well over $100/bbl.
Should this lead any critical thinker to question his credibility?
The GM video that is basically a scare campaign for cash JJL
At firedoglake.com, emptywheel offers a detailed senario if GM filed bankruptcy.....informative & fun facts I was unaware of.
We Are All Flint, MI Now
...Congress would fight the scenario at every stage, though with increasingly less leverage... a scenario that follows a great deal of logic about possible outcomes. It is this scenario, though, that explains why both Toyota (I've seen reported--looking for the link) and many in Congress want to bailout GM before it gets to bankruptcy.
Here's the short version:
GM files for Chapter 7 bankruptcy
GM's Chinese partner, SAIC, buys much of GM (Buick, Chevy, Cadillac)
GM/SAIC starts importing Chinese-made Buicks and Chevys, undercutting Toyota's cost advantages ...So if GM goes bankrupt in January, as may happen, it may well have to sell itself off (unless the government guarantees the same kind of financing that it is refusing now). And I believe one company is one of the most likely--and indeed sensible--buyers: Shanghai Automotive Industry Corporation, or SAIC, the Chinese company with which GM partners to do business in that country.
GM's Chinese partner, SAIC, buys much of GM (Buick, Chevy, Cadillac)
SAIC is, in my opinion, by far the most sophisticated of China's automobile companies...
Emptywheel » We Are All Flint, MI Now
Toyota is terrified of the Chinese cutting into their USA car market. And I was surprised about GM's partnership with SAIC...
Well, the brutally honest answer to his question is that nothing will replace a certain amount of the economy for years and years. That's a tough answer to face head on.
Well the thing that he is proposing to provide massive short-term stimulus.
This necessarily comes from:
a) Massive taxes in the short-term which will largely negate the stimulus effect.
b) More lies, deception, and broken promises to illicitly take people's wealth in the short-term via inflation with no intention of returning it in the long-term.
What other alternative is there?
Also, how is alternative b) any different from what we have been doing for the past 25 years?
Not all news is bad.
FT.com / Companies / Financial Services - Paulson hedge fund buys into mortgage securities
Vultures begin to make their move into stinking rotten carcasses.
And while I dont see a stock market bottom without insolvency issues getting resolved in financials and/or a failure of a major builder - I consider John Paulson to be a leading indicator.
I am now slightly more confident of a major market bottom something between March - Oct of 2009. Time will tell.
btw
At Park LaBrea(huge apartment complex in LA) rents are lower today than 2 years ago.
Leasing agents are complaining that tenants are all asking for lowered rates or transferring into cheaper units.
I wouldn't cry too much over Mark Cuban's prosecution.
I listed to National Public Radio's description of what he did, and it's a slam dunk case of insider trading. When I was an officer of a publicly held high tech company in Silicon Valley, our lawyers drilled the law and the consequences of going afoul of the law into our heads. He must be either incredibly stupid or arrogant, and I don't think he's stupid.
The IRS and SEC always go after high-profile individuals to scare the rest of us. If he wants to break the law to enrich himself, he might want to stay off "Dancing with the Stars".
with rents falling, the buy-vs-rent breakeven point won't break even at house prices derived from bubble-phase rental rates
If you look closely at the Tokyo RE bubble, it had a false recovery about two years into their crash. I expect the same in the US.
At 3am I drove through the apartment here and counted up empty parking spaces vs total. 98 empty out of 400, or 25%. That's probably about double from when I moved in six months ago.
Lots of elasticity in housing. If I don't have a job offer in the next two weeks then I'll be back in Idaho sitting in my parents' house which has far more space for me than I'd want to buy on my own.
Satellite tv, too, and free food!
Finally!!!!!!!!!!!!! Somebody is pissed!!!
Source: The Raw Story
Sen. James Inhofe (R-OK) is making waves by criticizing Treasury Secretary Paulson's handling of the bailout and saying that Congress should take back whatever is left of the $700 billion "blank check" it issued to the Bush administration in October.
In a letter posted on his website, Inhofe told his Senate colleagues that he intends to push for immediate legislation that would require Congressional authorization for any further payouts.
The ultra-conservative Oklahoma Republican told the Tulsa World, "It is just outrageous that the American people don't know that Congress doesn't know how much money (Paulson) has given away to anyone. ... It could be to his friends. It could be to anybody else. We don't know. There is no way of knowing. ... He was able to get this authority from Congress predicated on what he was going to do, and then he didn't do it."
Eliot Spitzer had a op-ed in the Washington Post yesterday.
How to Ground The Street
The Former 'Enforcer' On the Best Way to Keep Financial Markets in Check.
"Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum. Rather, a market is a product of laws, rules and enforcement. It needs transparency, capital requirements and fidelity to fiduciary duty. The alternative, as we are seeing, is anarchy."
The question is whether Obama would 'overlook' the hooker thing? I believe Wall St. fears Spitzer as a consideration to head the Justice Dept. or SEC
This is the part I like best...
The ultra-conservative Oklahoma Republican told the Tulsa World, "It is just outrageous that the American people don't know that Congress doesn't know how much money (Paulson) has given away to anyone. ... It could be to his friends. It could be to anybody else. We don't know.
Idaho... just the sound of it makes me want to fish.
A fate worse than debt!
Inhofe told his Senate colleagues that he intends to push for immediate legislation that would require Congressional authorization for any further payouts.
Unless Inhofe is talking about the remainder of the initial $350B, and not the full $700B, then it's scary that he doesn't even know the details of the law that he signed.
Our lease ended two days ago.
Anyway, we got an email from our LL sating that he was rasing the rent $110/month starting January.
Ouch!
We decided to start looking. FOund everyone w/condo or home here in Rancho Santa Margarita is upside down.
Well, we bit the bullet and found a 2-bed, 2-bath apartment for $275 less amonth than we pay now and would have been $385 less than what he wanted beginning in Jan.
Well, we emailed him and told him we were leaving. He responds back that the new rate was monthly and that the old rent would stay for a 12-month.
Told the wife it doesn't matter. We are moving and saving the money. Condo isn't worth what he wanted anyway. We overpaid this past year and he is going on vacay for 3 weeks.
Oh well. I got snookered, but not in '09. Move in rate was great too. Just $229 with the credit check. Who said you need thousands to move in to something? You just have to look and lower the standards a little, not much!
It should be apparent that nobody know what the hell is going on. We are making insurance companies banks.. Hell AMEX is a bank now.
oops.
Inhofe didn't vote for the bill, which makes sense, given his uber-conservativeness.
"Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum
That's an awesome statement.
Idaho... just the sound of it makes me want to fish.
A fate worse than debt!
Yeah but the sex sucks. That's one reason I'm holding out for Seattle.
ac, "Franklin Delano's B.O." by Paul Krugman is an interesting read.
P.S. I am not so sure I got the title right. L.O.L.
I'm happy about the death of the stupid comments about how foreclosures are going to drive up the cost of renting.
Paulson saying he is not going to deploy the other half of the TARP is creating one of the great shorting opportunities of all time. Sharks are going to try to take down institutions to call Paulson's bluff. The insurance companies are highly exposed. Why he said that is beyond me. He has created a hell-storm.
Harsh Realty writes:
I'm happy about the death of the stupid comments about how foreclosures are going to drive up the cost of renting.
Harsh Realty | 11.17.08 - 8:52 pm | #
It's all about supply and demand and cost.
You see all those foreclosures, just means more housing for the number of people are already in given town. It also means that the people who bought them couldn't afford them, although some may have had a catastrophic financial loss.
Bottom line is even in the South OC, you can a deal if you are persistent, patient, and willing to be flexible.
Sure, if you want something in Coto De Caza with 8 bedrooms, you are gonna pay. But if all you need is 1 or 2 bedrooms, you can get a bargain.
A C - GS merger being worked out ?
Marketwatch is being mean:
Front page headline is:
YAHOO YANKS YANG
I thought Citi was buying Chevy Chase Bank
C C - ?
Signs of stress in the property rental and property sales markets continued to flow through in the first two weeks of November as an exodus of students after university exams increased rental listings and mortgagee listings jumped to a fresh record above 500.
The index of total rental listings on real estate websites reached 7.7 per cent in the last two weeks, its biggest rise since interest.co.nz started monitoring listings in March.
The end of university exams in early November is likely to have been a factor, although the slow spring property sales season may have convinced many property investors to take their property off the sales market and put it back on the rental market.
Weekly rental prices have been broadly stable for most of this year despite a slowdown in new housing construction, continued migration and higher actual interest rates for landlors.
This is what happens when the flippers get stuck with inventory, they all listen to the same gurus and move en mass into the rental market. Great spikes in listings.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10543645
"Those who truly understand economics, as did Adam Smith, do not preach an absence of government participation. A market doesn't exist in a vacuum."
I think sensible critics of the government in recent years have argued that the government's failure has been to act in such a way to promote market excesses rather than restrain them.
In other words, in major national or international crises it seems that the unifying force of easy monetary policy emanating from government agencies is what is coordinating and promoting these extreme excesses.
While it may be popular pressure or special interests that are in some way "forcing" these agencies to take actions that they may think is unwise (as seems to be the case with the Fed in the 1920s), it doesn't fundamentally change the fact that some government apparatus is playing a central role in creating a mass hysteria.
This is what governments frequently do, after all. How is acting to coordinate an unwise bubble any different than acting to coordinate an unwise war?
If we did the latter, why is it unlikely to think we would also do the former if in the short-term it demonstrably provided economic growth?
Great rents are going down. That much more income that can be spent on goods and services. This is very good for the economy. It is also inflationary for everything except for housing. More money chasing the same amount of goods (actually less goods since all production is going to be cut back temporarily). Every person that loses their house and moves to a rental or in with friends/relatives has more income to spend than he did before.
NO Chase Chevy is immaterial now.
That would confuse the market. you fire 35000 of your own and acquire another stupid bank ?
GS is what makes sense now and you get some FED / Treasury help too
rps writes:
...GM's Chinese partner, SAIC, buys much of GM.
Ahh, what is it with that american fixation that the chinese are to buy either these treasuries (which will be payed back with much devaluated dollars, if at all)or bankrupt GM. Americans must think that the chinese are to buy all their trash ? When do americans take responsibility for their mess themselfs ? Grow up!
GM will never go BK
GM will get bailed out. You are paying. You got no choice so stop grovelling. Or you can call your congressman. Same difference. GM is never going bankrupt.
When do americans take responsibility for their mess themselfs ? Grow up!
You are not an American I take it?
Generalized American World view:
1 The world owes us. We saved Europe.
2 The world owes us. We send billions of dollars and free food to starving people of color.
3 Europeans are wussies who forget how to fight. They sit around, whine, never work, are not clean, and like Jerry Lewis.
The big boys feared Spitzer was gonna end the fratboy party. So, they took him out....
Timeline:
Auction-Bond Failures Roil Munis, Pushing Rates Up
Feb. 13 (Bloomberg) ...Rates on $100 million of bonds sold by the Port Authority of New York and New Jersey, with bidding run by Goldman, soared to 20 percent yesterday from 4.3 percent a week ago
Feb 14 2008 Monolines given five days to find funds
Eliot Spitzer, New York governor, on Thursday gave bond insurers three to five business days to find fresh capital, or face a potential break-up by state regulators who want to safeguard the municipal bond markets.
Feb 21st 2008 Bond insurers and the markets
Splitting headaches
The Economist
The regulator and governor are shedding no tears over lenders losses. Their primary concern is the $2.6 trillion, tax-exempt municipal-bond market, used by cities, universities and the like to raise long-term funds, much of it from individuals. Were the monolines to lose their top-notch ratings, they fear, many issuers could struggle to meet higher funding costs.
Feb. 29 Goldman, Bear Stearns Bankers Targeted in Muni Criminal Probe
(Bloomberg) Goldman Sachs Group Inc. and Bear Stearns Cos. bankers are under investigation in the U.S. Justice Departments criminal probe of the municipal derivatives business, regulatory documents show .....Lawyers in the municipal bond industry have said the criminal probe is the biggest in the history of the almost 200- year-old market, where states, cities and towns have $2.6 trillion of debt outstanding. The Federal Bureau of Investigation also raided three brokers that advise local governments and ran the bidding as part of the probe, which may involve transactions as far back as 1992
MARCH 10--With the bombshell news today that New York Governor Eliot Spitzer has been implicated in a prostitution ring, the Democratic politician will now always be known as "Client-9
November 7, 2008
No criminal charges for Spitzer
AP/NEW YORK Federal prosecutors announced Thursday they will not bring criminal charges against Eliot Spitzer ...Manhattan U.S. Attorney Michael Garcia said that investigators found no evidence that Mr. Spitzer or his office misused public or campaign funds for prostitution. Federal prosecutors typically do not prosecute clients of prostitution rings.
Paulson has been yanking his yang since October.
America has the strongest military in the world. You want to get paid what we 'owe' you? Fine. You can have it in paper products. You want something more tangible? Come and get it. Then again you might want to reconsider your approach. I hope you aren't getting anything imported into your country over water. Because you know what? Its ours. We own it. All of it. Every sea and ocean. You are just renting the sea lanes by selling us cheap products.
the clipping doesn't capture how amateurs in UK were buying houses to rent them out. Buy to Let. One of the firms that made the loans for this 'business' went screaming into the machine guns some weeks ago, if I remember correctly. Now the housing units are falling into disrepair.
Proud to be an america
Werner,
If you read the article, GM and SAIC "ARE PARTNERS."
Shanghai Automotive Industry Corporation, or SAIC, the Chinese company with which GM partners to do business in that country
firedoglake.com
SAIC has high quality and good expertise, gained largely through its partnerships with GM and Volkswagen. SAIC has ambitions to sell cars internationally--and it has been willing to spend money to advance those plans.
ova: Small Indian Ponys writes:
...The world owes us. We saved Europe.
Hilarious ! Learn history!
(hint : when the russians captured Berlin in '45, americans were nowhere near, they had not even crosed the river Elbe by then!)
WSJ put up this piece on how investors in Countrywide loans now part of BofA are objecting to modifications "in the interests of both parties," because they were not asked first.
Investors Hit BofA Loan Modifications - WSJ.com
CR will be all over this like Elliot Spitzer in black socks
Contrarian Troll writes:
...You want something more tangible? Come and get it.
And you really expect foreingers buying your treasuries ??
nova: Small Indian Ponys writes:
...The world owes us. We saved Europe.
Hilarious ! Learn history!
Team America F%^k yeah!
"We're an empire now, and when we act, we create our own reality. And while you're studying that realityjudiciously, as you willwe'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors and you, all of you, will be left to just study what we do."
GS already tried to sell itself to C shortly after the Lehman crises, but Pandit was not interested. So GS panicked and called Paulsen, who had to step in and convert GS and MS into banks, something he denied to Lehman when they asked for it.
It does read like a Greek tragedy.
Wonder what will bring catharsis...
werner, I am surprised the world still does. What a bunch of suckers... Then again you might just be paying some more rent for those sea lanes.
MrM-please fill out that paragraph. I never heard of this
gerald - it is old news. See for example Goldman Approached Citi About Pursuing Merger Talks, FT Reports - Bloomberg.com
rps writes:
...GM and SAIC "ARE PARTNERS...
rps, maybe you miss the point that you (patriotic americans) don't buy enough GM cars to keep it alife. Will you suddenly buy more GM cars if it is chinese-owned ?
"We own it. All of it. Every sea and ocean. "
Maybe, maybe not. The Somali pirates are staking out a claim, and they keep upping the ante.
thanks MrM, I missed that one
Contrarian Troll writes:
America has the strongest military in the world...
See, you can not even get Osama Bin Laden!
(How many years have you tried now in vain?)
Werner,
What is your nationality?
"Hilarious ! Learn history! "
Patton's Third army had blasted thru the Battle of the Bulge, breaking the last great German effort. Bradley held up Patton's advance to Berlin, withholding oil for his tanks. Ike decided to let the Russians take Berlin, and the resulting casualties in street by street fighting.
So it goes.
Somali pirates - the last free men on earth. Too bad we're gonna hafta wipe'm out.
Werner:
nova was being facetious regarding those American Exceptionalism "truisms."
ried writes:
...Ike decided to let the Russians take Berlin...
Hihihi. Can you prove that, or do you just say so ?
Werner writes:
Contrarian Troll writes:
America has the strongest military in the world...
See, you can not even get Osama Bin Laden!
(How many years have you tried now in vain?)
Werner | 11.17.08 - 9:46 pm | #
we really didnt try
when bin laden was cornered in the mountains of tora bora and the army asked for reinforcement, believing that OBL was cornered, Sec Rumsfeld ordered that the army withdraw, and refused to provide the support needed to kill or capture OBL
why?
think about it, destroy alqaeda and obl and the ameerican people wont put up with the constant state of war , and fear, needed to justify invading iraq.
at an irport in miami gen franks reported to sen bob graham (chair of sen intel com) that vital resources were being withdrawn from afghanistan and transfered to the ME thater in prep for a watr ( that had yet to be authorized by congress) in iraq
all reported in bob grahams book
and summarized here
Senator Bob Graham’s book discusses Bush administration coverup about 9/11, deceptions about Iraq « Democratic Wings
nova was being facetious regarding those American Exceptionalism "truisms."
ron paul on u tube?
I'm trying to figure out why Calculated Risk put that up as the video of the day.
with rents falling, the buy-vs-rent breakeven point won't break even at house prices derived from bubble-phase rental rates
South bay part of LA too. I couldn't believe how much is available in the $1,300 to $2,200 range in decent areas. Ok, the beach rents are still asking sky high prices(but many vacancies...).
We've 'notched up' what we'll rent next year by a few hundred square feet and 'trim level.'
The rents have absolutely plummeted!
What is the newest attractive rents is recent foreclosure purchased to rent! Really nice 4 bedroom homes... they first list for absurd amounts, drop to $2,500 and then finally drop to the market. Between demand destruction and this new supply... I wish we didn't have to sign a lease within six weeks!
'Market rate' is the landlord subsidizing $500 to $1,000/month.
Considering what I know about the layoffs coming... I see no upside for years.
Oh yea, I still think 2009 being the greatest down year (for home prices in CA and the nation) is a 'sure thing' prediction.
Got Popcorn?
Neil
alex-because she's hot...makes me want to write a song for her..
Krugman is just another hack sure he know how to spend other peoples' money better than those people know how to spend it themselves. Since the people don't even have any money, he presumes to borrow money in their name to spend in their name. Gee, he is just so good to us.
Let me spend some of your money, Paul. I'm sure I could improve your life.
What's a republic?
No fall for me. The rent on my London flat went up by £10 a week in September.