Interesting anecdote - Wife's an RN, works surgery center... pick-your-time surgeries. It has been as busy as ever with double booked DRs & rooms 100% full, overtime. It started early Dec. Otherwise it had been on the slow side for years.
To give you a clue 4 tonsil surgeries are scheduled for Christmas Eve. kids might not be too comfortable on Christmas morning. Never ever happened before.
Yesterday a Dr had a meeting with the nurses saying how grateful they were for the nurses working so damned hard to hustle the patients along. He said it would probably slow down after New Years. He said the reason it got so busy all of a sudden is patients are hurrying to get all elective work done ahead of '09 because either they knew or suspect they will get let go by their employers and want the insurance to cover it...
On the topic of this thread, there really does need to be a better way of peircing the corporate veil in cases of firms that are entirely owned by one or 2 people. However as things stand, yeah CRE jingle mail will be a big problem. As a % of total value much higher than RRE, far les sentimental attachement, kids like the schools type thing. While RRE probably has to be 20% underwater to result in jingle mail, CRE is probably more like 5%.
reason it got so busy all of a sudden is patients are hurrying to get all elective work done ahead of '09 because either they knew or suspect they will get let go by their employers and want the insurance to cover it...
bearly
Lawmakers will agree to release the funds in exchange for Treasury Secretary Henry Paulson and Obama agreeing to programs that cut interest rates and forgive a portion of a mortgage’s principal, House Financial Services Committee Chairman Barney Frank said in a telephone interview yesterday.
"You planned to take your equity out of the wasteland.... You sent them out this morning to find a credit line big enough to haul that fat chunk of cash.... what a puny plan! Just walk away..."
Blloomberg has quoted a couple of guests in the past week predicting that emerging markets are poised for a bull run - making the claim that they were the last in and will be the first out.
I seem to recall commenters here expecting the emerging markets to have a very rough 2009, squarely at odds with the "experts" invited to prognosticate on Bloomberg.
If the strings that were attached to TARP funds required the banks to more actively engage in principal reductions for short sales only, then there would be some balance in the effect - since this benefits those who have been reckless (the seller who was over-leveraged) and those who were prudent (the buyer who saved) in equal portions. Are there associated moral hazards that I'm not seeing?
Dedicated to developing highly creative financing solutions for the most complex deals and discriminating borrowers, CWCapital's Structured Finance Division is staffed by a distinguished group of knowledgeable and highly experienced real estate and lending professionals. Focused exclusively on highly structured bridge, new construction and mezzanine loan needs, we utilize our managed CDOs, balance sheet investment accounts and commingled funds to creatively address borrower financing requirements. Our structured finance loans are serviced in-house, offering our borrowers the same level of personal service and commitment after the loan closing that we extend throughout the application and underwriting process, and offering âone stop shopping" for high leverage transactions.
As I've noted before, CRE owners are much more willing to just walk away than residential owners. - CR
Here let me fix that for you:
As I've noted before, CRE owners are much more willing to just walk away than residential owner-occupiers with skin in the game.
The modified statement addresses two of the things different this time. Lots of homes classified RRE were really investment vehicles and past downturns were stabilized by much higher downpayments (residual equity) and/or better LTVs. Add to those two factors several more issues pushing people to just walk away from RRE as if it were CRE; no stigma, no consequences, historical gaps between cost of renting v. owning, the phenomena of second houses. No, this time it is not possible to extrapolate from the past. That only worked in charted waters. 30 month 30% declines are not on any graph of housing market tracking, why should consumer responses remain comparable to past behaviors?
EMs are a split between mfg & resources. Mfg should continue to decline but resources I have no clue about. EMs are prolly the lowest marginal cost producers so any uptick once the loading docks and silos/ships are emptied helps them most?
--
T Boone Pickens, a geologist: "Do you know What an economist is?"
T Boone Pickens Answer: "Someone who didn't have the purse to be a CPA"!
For full disclosure, my son is a CPA. He had zero debt when he graduated and he has zero debt now. How many young economists, or CPAs, bought a Beemer with profits in UST STRIPS alone?
I seem to recall commenters here expecting the emerging markets to have a very rough 2009, squarely at odds with the "experts" invited to prognosticate on Bloomberg.
Hymns for the Lord | 12.20.08 - 10:37 am | #
Most emerging markets are pretty dependent on commodity prices, as long as they stay low, not a great place to be. China is the exception as a big user of commodities, but they have other problems. Still, the Shanghi market is about at the same levels it was a decade ago. While one can argue that there has been no true growth in the U.S. economy over the last decade (or 8 years). I dont think the same it true for China. I think there is probably quite a bit of value in China, but not sure about the timing, nor do I know enough about the individual stocks there. With underinvestment occuring now in commodities, most notably oil, I would expect them to rebound and rebound sharply, once the world economy turns up again. Eventually emerging markets will make you lots of $, but probably more a 2010 story than 09.
The end of year swell of surgeries is a yearly phenomenom, partly because of time off, and also because people who have paid their deductibles can have surgery for much less cost. This year, though, it's a lot of people who can smell layoffs/decreased bennies.
bearly writes:
Interesting anecdote - Wife's an RN, works surgery center... pick-your-time surgeries
bearly: anecdotal update--
My wife works for the State of NC. I hurt my shoulder in a fall at the beach in Aug '08--went to Dr 6X Sept-Dec; finally sent to get MRI yesterday by ortho-doc.
Thurs pm, got a call from MRI office saying BCBS would only pay 60% after review, & wanted to know how I would pay balance. Typically (or perhaps I should say 'in the past') accidents were 100% covered. Put $250 on debit card--no Xmas for the kids I guess.
Went to office Fri am--big medical building across from large, regional hospital. Door was open but lights were still out! Thought they'd rush me in and out to get to the next patient, but no one was in a hurry--still very nice folks, though. Never saw another patient...very strange.
Ken Riis held the Q3 earnings call, unrestricted cash had dwindled to about $100 million, which was not great, but still not terrible, and it was certainly enough to fund the preferreds. However, by "electing" not to pay a preferred dividend, which is hardly an election, one can only assume that Q4 was a disastrous three months of losses driven by margin calls, and it looks like NCT is now in some serious, serious trouble.
Updating yields on the Mortgage REIT list keeps getting easier and easier. There are now more zeros than a room full of turnips
That hip, young economist from Tribeca, Nouriel Roubini, says in Forbes that the Fed must continue on its insane, destructive path because, well, just because:
"Thus, as a next step, the Fed may be soon forced to walk down the credit curve and start buying private short-term and long-term securities with lower credit ratings. That would mean the Fed will take on even more credit risk than it is already taking on today while purchasing illiquid private assets. But desperate times lead to desperate actions by desperate policy makers.
Pretty soon the Fed will "crowd out" all economic activity in the United States. I bet it looks good on paper.
For full disclosure, my son is a CPA. He had zero debt when he graduated and he has zero debt now. How many young economists, or CPAs, bought a Beemer with profits in UST STRIPS alone?
very commendable; your son is doing his part to stimulate the [German] economy
Trade your bling
For some canned goods
Hide away in the back woods
A beautiful sight
A gold bugs delight!
A Kondratiev winter wonderland
Gone away is Abercrombie
Here to stay are the zombies
While Mom hides the bread
Dad pumps 'em with lead
A Kondratiev winter wonderland
In the meadow we can build a gallows
Then pretend to hang some banker scum
Some same Robespierre would call us callow
But they taste so good with beans and rum!
Later on we'll conspire
To find some fuel, and burn some tires
Those central bank hacks
Have brought us "Mad Max"
A Kondratiev winter wonderland
km4 | 12.20.08 - 10:37 am
Great band! I have the album I bought in 69 somewhere in the garage.
It just occured to me if homeopathic medicine, midwives, and other lower level medic types might be in a lot more demand. After all, you can pay in goods with them probably.
SRS declined from the $120s to the $50s in the past coupla weeks. Guessin' there's a buyer of last resort for CRE debt. He should be on a Wanted poster.
Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion.
Commercial real estate shorts are suffering through the short squeeze from hell.
It reminds me of the senseless rally in homebuilder stocks that began in late January and lasted until May. Fueled by denial, hope and plain stupidity.
It will end very, very badly for IYR longs. Many weak shorts have to be shaken out, though.
--
"very commendable; your son is doing his part to stimulate the [German] economy ;)"
Samdog,
I bet Americans who sold him made more money than the Germans who built it!
There is no business like commission business!!
Jas
PS: The real a-hole at the dealership was the GM, an East-Indian named "Bobby." (The guy had to come out, for no reasons, and show us who the boss was). The two white guys we dealt with were very professional.
joe after the 12 pack writes:
"Speaking of walking away Cerberus is wanting give Chrysler to the UAW and walk away"
... and speaking of 'Chrysler' and 'walking away' in the same sentence:
I took the family out for dinner last night at the new shopping center.
Since the former "Ruth's Chris's" has been converted into a tatoo parlor/nail salon/pawn shop/biker lab, we went to the pizza joint instead.
On the way, lots of traffic, blue lights, etc. The waitress in the pizza joint said a car had 'lost a wheel.' I said I hadn't heard of something like that happening in decades.
She said 'yeah, some kinda Chrysler.' I thought, Oh, that explains a lot....
As I've noted before, CRE owners are much more willing to just walk away than residential owners## Sure, why not, with the deal structured that way, no personal guarantee, nobody's name and reputation on the line to stand good.
How did Woody Allen say it? "More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly."
--
"Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion."
Morocco Bama,
Agree. My son is an "ass," but I love him and mostly he is a good boy and not an ass.
What is an ass?
Mrs. Singletary: "Someone who pays for the logo on his, or her, jeans' behind (wear on the ass)."
Also, those who pay for the logo on the ass of the car! Conspicuous Consumption democratized.
Citing the unstable economy and shaky capital markets, Trademark Property Co. is halting construction of High Street, a large real estate project on Westheimer just inside the Loop.
The Fort Worth-based developer, which started the mixed-use project earlier this year and had expected to complete it next fall, said High Street will remain on hold for the foreseeable future.
[snip]
To be sure, Trademark is not alone in its decision to pull back until the economy improves.
Kerri Reed, 34, a Lyndhurst, N.J., hairdresser who was outside Macy's flagship store in Manhattan on Wednesday with her husband, a police officer, and their two boys, 8 and 11, said she finished her shopping and doesn't plan to go back after Christmas. Reed says she and her husband have secure jobs, but she's worried about the overall economy.
"It's a done deal. I covered my bases," said Reed, who said she bought for fewer people this year, spending $2,000 instead of last year's $3,000.
"Consumer demand is much less than most of us understood even in September," said Richard D. Hastings, a strategist with Global Hunter Securities, who expects total retail sales will fall as much as 8 percent for the November through January period. Even with recent moves to cut inventory and slow store expansion, he said retailers are finding that their assets - stores and inventory - are "out of whack."
Hastings doesn't think the spending malaise will hit bottom until the second half of 2010 as mounting layoffs depress sales even further next year.
I'm a CPA, as well, Jas. We irreverently refer to the acronym as Couldn't Pass Again. By the way, we're Honda people. I recently sold my 1990 Honda Civic with 200k on it for $2,000. I claimed I would keep it until I ran it into the ground....it wouldn't die, so I had to renege on my word and give it up, and I still got money for it after all those years. By the way, I purchased it for $11,500.
Ministry of Truth writes:
Oh Oh, opening a can of worms. Everyone will want a principle reduction.
Congress Will Set Conditions for $350 Billion in Rescue Funds
Isn't it amazing how we just can't seem to get a clue regarding moral hazard. The more the government tries to do, the bigger the mess they make.
Consumers, who had shut their wallets since the financial meltdown accelerated in September, came out for bargains on the day after Thanksgiving, the traditional start of the holiday season, but have retreated since then. Figures released late Sunday by SpendingPulse, a data service provided by MasterCard Advisors, show that for the first week of December, luxury sales dropped 34.5 percent compared with the same period last year, while overall apparel sales fell nearly 23 percent. Electronic sales fell 22 percent.
My parents purchased a Chrysler Newport Royal in 1972. In 1975, with only 40,000 miles on it, and too many mechanical issues to mention, the engine caught fire and the car was totaled. Never thought the same about Chrysler since.
"By the way, we're Honda people. I recently sold my 1990 Honda Civic with 200k on it for $2,000. I claimed I would keep it until I ran it into the ground...."
My Japanese cars have always lasted as long as I've wanted them to last. My Toyota is a tank, and I plan on keeping it my entire life (or until I cannot get parts or gas for it). Not buying Japanese is generally a bad financial decision.
Retail sales taxes are most states primary revenue sources. Considering what was posted above then 20% plus drop in revenues is possible. Plus, shortfalls in other areas, increased social services needs, and then add CRE pullback...
--
Time to shovel some more snow. Yesterday morning there was 12-15 near my front door.
I live where I do because I love to be snowed-in 2-3 times a year (I grew up near the Indian desert of Thar and didn't see snow until I was 20) and have a white Christmas. Well, this whole week, beginning Sunday night, is going to be snowed-in week. I had two furniture deliveries that are waiting all week and would be made most likely on Monday or Tuesday. During winters I am provisioned for at least two weeks.
Casino stocks have declined over the past year and are down sharply from all-time highs reached in the summer of 2007. Las Vegas Sands (NYSE: LVS - News), once a favorite among analysts and investors alike for its ambitious expansion into the lucrative Macau market, has had to cut its plans back substantially and recently completed a secondary offering to raise much needed cash. The offering removed doubts about Las Vegas Sands' ability to stay afloat, but it also significantly diluted shareholders.
With temperatures far below their normal level, the city's new most popular attraction appeared to be posing beneath the "Welcome to fabulous Las Vegas" sign blanketed in snow.
Think of all the sushi shops that will go belly up over the next couple of years. Plus, sushi shops will be keeping fish longer than they should. Finally, Japanese men skilled with knives will be unemployed. I'm bumming myself out here.
"With temperatures far below their normal level, the city's new most popular attraction appeared to be posing beneath the "Welcome to fabulous Las Vegas" sign blanketed in snow.
Diamond Dick"
I have to stick up for Chrysler, I had a 1974 New Yorker that I drove till 1996. The last 8 years or so it had a cracked head (my fault) and the coolant leaked into the oil. As it happens I had a friend who ran an oil proficiency testing program and he used one of my oil changes for a test sample, turns out it was 40% ethlyene gylcol. It was the most comfortable riding car I ever had. I did put a quart of Slick 50 in it when I changed the oil (annual ).
Another source of surplus CRE: Many may think that's not a California problem. Fremont's NUMMI Toyota and Pontiac plant â which already has announced a production slowdown â is the state's only auto factory. But California has 190,000 auto-related jobs, more than any state other than Michigan, according to the Center for Automotive Research in Ann Arbor, Mich. Some of those jobs involve making computer chips and other electronic and mechanical components that end up in cars. But the bulk are linked to the state's 1,594 car dealerships.Last year, those dealerships sold nearly 2 million new cars and trucks for a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales.I've already mentioned Moorpark's Special Devices layoffs. They make the explosives for airbags. Excerpt above from SJ Mercury News.
"Under the proposal, a bank would take control of the retail and restaurant portion of BayWalk and appoint a trustee to run the complex until a suitable buyer is found."
Back on topic, I wonder what "until a suitable buyer is found" really means. My guess is that a suitable buyer will be the FDIC when the bank goes under.
Morocco Bama -- have a 98 Accord V6 fully loaded, got 168K on it. Only thing replaced is the alternator. Plan to keep it till it hits 1/4 million. Wife owns an Acura, bought because of the Accord.
Paul Krugman on CSPAN right now, just starting if anyone is interested. On Chrysler, my grandma had a Dodge Omni back in the 1980's it was a great lil car, dont think they have produced much worthwhile since, although I do sort of think the PT Cruiser looks cool
visited Ridgedale mall yesterday, which serves the nice western suburbs.
The power was out for one-third of the mall. Stores dark. Initially when I walked in, I thought they had gone T.U., but instead the owners decided to close the doors, and in some cases, put duct tape over the openings. "For shoppers safety,"
Walked into Macy's with intent to buy a new coat for Ms. Lafleur. Half the store working, half dark. Found the coat, now 50% off and when I tried to find a place to buy it, the gal said, try downstairs because our computers ain't working.
Uh, no thanks. One less sale.
Today, which I've heard is "Super Saturday," is going to be snow all damn day long, with shit roads. Spending the day inside baking treats with the kids, sledding on our back hill and playing MarioKart.. Family days rule.
I predict holiday retail in the Twin Cities is gonna get hammered. This weekend might be it for many stores.
I have been weeding the garden and planting a tomato plant and a couple little broccolis.
The tomato plant I planted week before last has little yellow tomato flowers.
the hub is up a tower getting his ham radio antenna rotator fixed, so I have to stay out there to call 911 if he falls down. He's got all kinds of safely stuff, but still. So I am forced to stay out there and garden instead of reading cr all day.
Previous broccolis and cabbages doing well. Gonna plant some turnips for the hub. Maybe some beets.
Completely ot factoid: beets and swiss chard are the same thing only one has a big root.
"I predict holiday retail in the Twin Cities is gonna get hammered."
Sports Guy Lafleur"
Along with all the people. It's too cold to do anything else, so those Minnesotans will sit around playing euchre and drink themselves silly. Pass me a Special Export or some Windsor.
I'm bettiing there's a Burger King Employee of the Month plaque hanging with pride on Jas' wall as the pinnacle of success in his shrine of accomplishments.
"I'm bettiing there's a Burger King Employee of the Month plaque hanging with pride on Jas' wall as the pinnacle of success in his shrine of accomplishments.
bearly
I don't think they can hang pictures in padded rooms.
This is a great weekend to be homebound. Plenty of football on, be with the family, socialize with the neighbords, push some snow around, ignore the endless Franken/Coleman recount, make some chili, surf CR.
Off to the Panhandle for New Years week, so something to look forward too.
"crispy&cole writes:
1st large California city (1 million metro population) to enter a depression....Fresno, Ca unemployment rate now 12.1%"
As long as they have some of the most fertile ground around, Fresnoites will survive. Las Vegans are screwed (because that is the best paying job right now there and it is almost impossible to grow vegetables in parched desert soil).
"Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion."
You don't understand the world of high stakes finance. The financier - hedge fund manager, stock broker, whatever - reasons: why forgo life's pleasures, whether it be a luxury car, a weekend in Cancun, or an all-you-can-screw fest at the nearest bordello? He can always steal more money later.
The subprime borrowers who were offered the American Dream with no money down employed similar reasoning.
The real fools are those who did not feast at the table of the largest credit orgy in history. Because the hi-fi guys can afford the bill - they're paying it with money they steal from you - and the subprime guys will just skip out on it. Those who didn't live beyond their means get to clean up the morning after and take care of the tab.
My wife and I decided to try Burger King again after not eating there for at least ten years. We wanted to see if it tasted as we remembered it. It was awful. That's not beef...it's human flesh, carved from the bones of homeless people and the hundreds of thousands of people who go missing every year. And their fecal fries are disgusting. That's not how I remember it...but, of course, I've been unconditioned since I last had it, so my reaction is really not surprizing.
"Morocco Bama writes:
My wife and I decided to try Burger King again after not eating there for at least ten years. We wanted to see if it tasted as we remembered it. It was awful. That's not beef...it's human flesh, carved from the bones of homeless people and the hundreds of thousands of people who go missing every year."
They day they got rid of the Yumbo was the day they lost my business.
Me-I'm one of those cpas too-got a 17 yo celica-230,000 miles-haven't had a car payment in 8 years-guess I'm not doing much for the economy...cheap bastards aren't we?
Bernard L. Madoff Investment Securities replaced its in-house proprietary Financial Information Exchange (FIX) engine with Cameron Systems' FIX protocol engine to connect with brokers, networks and service bureaus.
Just an T opinion, but I think Madoff was able to pre-screen trading activity and front-run trades, i.e, he ambushed accounts with his patented software.
"Dallas 11th on commercial property risk report
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened, according to the study by New York-based Real Capital Analytics.
FFDIC"
Dallas will get hammered, because oil is horrible and Texas was the final frontier for flippers (including CRE). They wrongly believed that since prices hadn't gone parabolic, real estate was a bargain. Now, they will just swim away and Dallas will be left with a massive oversupply of unmaintained homes and commercial properties.
FFDIC writes: Dallas News, Sports, Weather and Traffic from The Dallas Morning News shared...n1.4a2ecb4.html
Dallas 11th on commercial property risk report
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened
.. and two weeks ago, people were still marveling how well TX has held up...
I read somewhere years ago that BK was adding worm meal to their burger meat mix, no idea if they still do it. It's pure protein, doen't have much taste and better for you (no fat) than the beef ... and it's a cheap filler. Just add more tallo and it still tastes like a flame broiled burger, YUM !!!
Not a big deal to me, I've eaten far worse in Asia.
You're confusing him with a Buddhist...try to picture Gandhi spinning thread...
Samdog
You're kidding aren't you ? More like Laxmi Mittal ( MT ), though since he said Thar desert - possibly Marwari - OT, great movie called "Paheli" - that uses the Marwari landscape, language etc..
We need a pic of Jas Jain to be sure - in it, does he wear a Sherwani, a Marwari or a dhoti ? Then we'll know.
crispy&cole writes: \tSan Antonio will get crushed more than any city in Texas...Toyota plant job losses and flippers gone wild crispy&cole | Homepage | 12.20.08 - 12:34 pm | #
The military presence is orders of magnitude more important to San Antonio than one Toyota plant. BRAC will be net positive for San Antonio. IMHO.
This sunny ut cold day in qTown is a scene for a nationally televised football game in the third annual Chile Bowl. One of the teams is from Fresno. Each team is required to purchase thousands of tickets, but the number sold to the fans from California is in the hundreds. Now I know why since football bowl games away is expensive for the umemployed ifrom Fresno.
I expect to see more empties than bodies this afternoon on the ESPN game.
Chile, as Jas would again, is a wonderful food for the cold winter months.
Quote from crispy's link: That loss of confidence is leading households and companies to undervalue assets, which in turn is hurting consumer spending and investment, he said.
Notice the subtle bias. It's not this guy's job to know what things are supposed to be worth.
Mothballing? Can you realistically mothball commercial space?
nova, you can mothball the permits which on a project not yet begun may be their most expensive and most valuable asset.
i lived on a beach in S FL for 15 years. all sorts of new anti development laws could not stop old permits from being used to build things that no other entity would ever be let to do again. old permits frequently increased in value tremendously because you could be sure there would be no competition if what you were allowed to do was now illegal.
a big con that the newly arrived boomers bought was "anti-development". what happened was zoning committees seized power of denial over all property through their planning boards.
deals got done. people got paid. everyone knew who was in charge as anti development laws were used to stifle any resistance to "gentrification", which was really corporatization.
these "quality of life" laws of paranoia and intolerance were primarily applicable to the activities and promotions of small businesses. the small business owners were the original stakeholders and the first to say things smelled fishy. they would be punished by parts of their business literally being outlawed.
sw fl is so corrupt and infected with the boomer looter mentality.
A former Governor of Arizona went BK- all of his junk was sold, but guess what, he still had a trust from the grandparents, and his wife continued to support him in the style that he was accustomed too.
Nothing like a community property state with an ironclad prenup.
Lenders think they are getting a chance at steak and they get gruel instead.
This is the difference between the common man and the rich, the rich always have their fallbacks, because they know every project can fail. Look at Trump- broke again in Atlantic City, yet personally wealthy.
It is well past the time that the US re-examine its incorporation laws and financial responsibility laws to curb the most egregious cases of layering of corporate entities (including the so-called ring-fencing) that allow the rich to protect their irresponsible 'investments' from attack in the bankruptcy courts and torts courts.
I'd start by removing the fiction that corporations have all the rights of persons under the laws - a SCOTUS-created fiction that goes way beyond rationality and has resulted in corporation control of the economy, and various fictions such as 'off-balance sheet' entities.
Just why should a corporation have a right to 'free speech' or other Bill of Rights protections? Do corporations have the right to keep and bear arms as well, or is that a private army?
Dock Ellis, who infamously claimed he pitched a no-hitter for Pittsburgh under the influence of LSD and later fiercely spoke out against drug and alcohol addiction, died Friday. He was 63.
It's just classic with these clowns - the market sets the price - until they get an answer they don' t like, then it's time to go answer shopping to the Fed...
a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales. - Dawg
And we know how dependent local CA governments are on sales tax revenue now that property tax receipts are dropping like a stone. Max | Homepage | 12.20.08 - 12:39 pm | #
Actually property tax assesments are doing fine. Strangely, tax reciepts are even stronger. This is the flip side of the stabilizing factor of Prop 13. The side its opponents overlook. My taxes are going up 2% this year as is near every house sold prior to 2003. Prop 13 is the only bright spot in the California budget picture. Municipalities are as you note very dependent upon sales tax revenues. So much so that they've engaged in a generation of what is called "zoning for dollars." This contributed to some incredible examples of commercial overbuilding. Oxnard, CA for a poster child built the "Oxnard Auto Center" and enticed dealers with a 1% sales tax rebate. Don't even ask about the prospects for the Thousand Oaks Auto Mall. Again, gross reciepts are "plunging" to c. 2003 levels. There were far fewer fiscal problems then. This is not a revenue problem. Indeed there is no amount of revenue that can possibly address California's spending patterns. I would go further and suggest that more money like the proposed "Obama Manna" will ultimately make things worse.
That loss of confidence is leading households and companies to undervalue assets, which in turn is hurting consumer spending and investment, he said.
Notice the subtle bias. It's not this guy's job to know what things are supposed to be worth.
Max--Let me fix it for you:
That perceived loss of confidence tends to influence leading households and companies to somewhat lean toward undervaluing assets--at least to a degree, which, in some cases, might hurt consumers' propensity to spend and invest, at least in the very long run, he said.
Chicago-based ShopperTrak RCT reports that foot traffic at 50,000 U.S. stores fell 18 percent for the week ending last Saturday as compared to the same week in 2007.
Howsabout principal cuts for only those who put some minimum amount down--like 10%-15%-20%. Did what you are supposed and got screwed anyway people??
lawyerliz | 12.20.08 - 10:49 am |
It's going to be interesting to see what the details are if there is any direct to homeowner aid.
Like you said, do people who scratched up a down payment get preference?
Does the help go to people who are current on their mortgage, or those who are behind?
Do people with good credit ratings get help first?
Do we make people tap any available funds like 401ks first?
wait till you see charlotte, nc blow up. it is the poster child for particleboard.
In future there will be loose associations of oddballs, all of equal means, who as a hobby obsessively seek out ways they could have made millions in the age before the government controlled all endeavor. Kind of like people who play Dungeons and Dragons.
NYT : Governor Says Higher Taxes On Wealthy Likely
"If the deficit starts to grow again, then we're out of moves. I've cut as much as I could"
First, they came for the wealthy and I said nothing..., Tha Peter Lynch Mob | 12.20.08 - 1:09 pm | # If you have any taxable assets or income you <b>are</b> wealthy. And in this deflationary air pocket there's no place to hide either.
R-Dawg,
Funny you mention the Ventura County auto-malls. Bought a car last weekend (Acura); we live in VenCo but no dealer could match the price from Orange County; I don't even think they would've hit our price trying to sell us a used car. When we were haggling with the salesman he was saying they couldn't even sell us at a comparable price because even though their sales have dropped, they still need to pay their electricity bill. Our cranky son got us out of there quick but he followed us all the way out. Looking at their online inventory it looks like they haven't sold anything.
You can't make a profit for selling below your cost, but at the same time not selling anything is a good way to get to the bottom faster...
Funny you mention the Ventura County auto-malls. YLSP | 12.20.08 - 1:17 pm | #
Both Oxnard and T.O. have massive new multi-million dollar dealership projects nearing completion. The Ventura Volvo has already closed. The Cars 101 (Bunnin Group) is closing. Late model lease return X3s and X5s are clollecting dust at Steve Thomas in Camarillo. The entire 101 corridor is getting crushed. And what does SPG have in store(s)? 45 new storefronts and 5 new restaurants (apr 09) at Las Posas across the road from the just closed Linen's N Things and Coco's. Don't even get me started on the Esplanade and Riverpark.
Another data point from the Central California Coast :
Did a blog entry about a formerly well-off Silicon Valley woman who was desperately selling her possessions to make her rent. This comment came in from another local:
"We have two friends in (Santa Cruz) living in homes they have owned for years with fantastic views of the bay and city lights. Both are on the verge of losing them. One via loans against the house to work the stock market using options and the other with loans against the house to work the stock market on margin.
Both think it will go up from here. They have no choice. They're all in."
How many more victims of the casino economy like that are out there? The walking dead -- and so are their mortgages.
"Time to shovel some more snow. Yesterday morning there was 12-15 near my front door.
I live where I do because I love to be snowed-in 2-3 times a year (I grew up near the Indian desert of Thar and didn't see snow until I was 20) and have a white Christmas. Well, this whole week, beginning Sunday night, is going to be snowed-in week. I had two furniture deliveries that are waiting all week and would be made most likely on Monday or Tuesday. During winters I am provisioned for at least two weeks."
Jas: great! Are you prepared to do without electricity, gasoline and kerosene? Coming soon to a community near you. (Blackouts, etc.)
Lay in chickens and plant root veggies for borscht. East Europeans knew how to survive.
I laugh at the competing survivalist theories. Vegatable gardens? This time is gonna be more like "Johnny Memnonic" than "The Waltons." Save up for wetware.
I was curious about this - wasn't sure what it was - condo complex? Shopping mall? Turns out to be the latter - moreover, it was opened in 2000 (before things went nutso) AND it is described as "the soul of St. Petersburg." Which makes me really wonder about St. Petersburg.
The $40-million BayWalk entertainment complex has become a hot spot for shopping and nightlife. Adding momentum to a revitalization of downtown St. Petersburg, BayWalk opened in the fall of 2000.
The Mediterranean Revival-themed complex known as the Soul of St. Petersburg includes bars and restaurants such as Wet Willys, dish and Dan Marinos Town Tavern as well as a full-line Ann Taylor shop and other retail outlets.
Comments lately seem very gloomy and pessimistic. I'm not sure they are wrong long-term.
But short-term, I see CBs and govts. around the world just putting the peddle to the metal on monetary expansion and deficit spending stimulus programs. They don't know what else to do, and there is almost a contagious quality to it. I think it will escalate through through 2009 and into 2010, until the point where it starts to work at the same time that there is vast quantities of liquidity floating around in the world.
The liquidity will generate massive inflation, maybe faster than some here realize, and work its way into several new bubbles. But given the panicky nature of these times, bubbles seem to me most likely in real things people need to survive like food and oil.
Gold price is the true barometer of hyperinflation. To me, the only question is when it goes vertical, not if.
The high Sunday in the Twin Cities is gonna be -3.
Yep, it gets cold in Minnesota in the winter. It's true. Everybody from California ; don't move here. Go to Arizona, Nevada or Mexico. Plenty of sunshine and dry climate.
comscore shows YTD online spending flat YoY - week of December 8-14 down at -2% YoY - nice weekly chart about 3/4 of the way down the page. Error /
kernel (20) - comScore, Inc? press=2629
citizen energyecon | Homepage | 12.20.08 - 1:04 pm
It would be interesting if Comscore (or anyone for that matter) broke down on-line sales by whether sales tax was paid. Avoiding sales tax has probably been a big factor in on-line sales growth, and is a reasonable target for state revenue in the near future.
Further up the thread there was talk about investing in emerging markets, especially China.
Please do your due diligence on the Shanghai stock exchange before investing there. Very manipulated, companies are hugely inflated before they even get onto the stock exchange. The government also keeps a lot of stock float off the exchange and sells the shares over time. A lot of manipulation going on there as well.
You would be much better off investing via Hong Kong stock exchange. Much less manipulation, fixed-rate currency and no problems with currency flows being stopped at any time. Unfortunately HK is up 50% off the lows.
My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing.
Personally, I believe he's actually in one of only growth industries around ... and sooner or later, the lines will light up at the call center. But I was surprised to hear that activity appeared slow. 2009 should be interesting for him, but I guess he'll have to look busy for a few weeks.
RhodesianGreenbackinAZ writes:
My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing.
Unfortunately, it looks like your little brother has fallen for the soon-to-be-notorious 'call center employment bubble.
I predict holiday retail in the Twin Cities is gonna get hammered. This weekend might be it for many stores. Sports Guy Lafleur | 12.20.08 - 12:14 pm | #
Yup. Even my wife & daughter are staying in due to the snow - when that happens Pawlenty calls an economic state of emergency the next week as sales taxes fall that much - look for it to happen.
@Unfortunately, it looks like your little brother has fallen for the soon-to-be-notorious 'call center employment bubble.'
Samdog | 12.20.08 - 2:16 pm | #
did it ever occur to you Mrs Krugman might be reading?
Your statement assumes she doesn't have a sense of humor. I tend to agree with your assessment. Morocco Bama | Homepage | 12.20.08 - 12:40 pm | #
Don't worry about PK & the Princess... he'd want to talk economics & she'd say 'well it's getting late... ' And no one knows that better than Mrs. PK... bet on it.
"Please do your due diligence on the Shanghai stock exchange before investing there. Very manipulated, companies are hugely inflated before they even get onto the stock exchange."
HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China.
My shopping forays have shown malls that are semi busy, not dead.
The problem is the whole idea of basing all your profits on Christmas sales.
I am rather bored with Xmas. Haven't put up a single decoration.
Have bought presents.
This is the 2nd or 3rd time I've seen the overbuilding in Miami Dade.
The banks never learn. Actually things were seriously overbuilt when hurricane Andrew hit. Well, that took care of it for a few years!!
"HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China."
Please be my guest and invest directly in the Shanghai Stock Exchange. Then report back to us two years from now on how it's worked out. Let me know how it goes when your assets are frozen to prevent hot money outflows. How did that investment by BofA into the biggest mainland Chinese bank work out just now? Not to well since they've just been prevented from selling their shares.
"As opposed to these non-rigged markets here in the US?"
Did say anywhere the US markets aren't rigged? I don't believe so.
Again, please due your due diligence. You will find more than meets the eye. Speak to people who have invested in Asia via Shanghai versus Hong Kong. People who have experience circumnavigating currency restrictions. Ask them why they invest in China via Hong Kong, or why the invest in the China growth story via select commodities versus directly in China.
But hey I guess glib statements work a lot better the investigating before you invest right?
Market's not going to be as bad as most here foresee, reason is they are throwing everything at it. It's bound to recover.
Anonymous | 12.20.08 - 2:28 pm | #
If the market was the problem with our economy I'd agree. The market is rigged and manipulated and not a true indicator of anything except loss of confidence in our entire system.
The government sees the stock market as America's brand and they still believe the brand is preeminent. Prop it up at all costs. The cost will be the destruction of our dollar and our quality of life.
"My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing."
Count on it - the amount of time the internet is sales tax free is measured in months - with a new congress as the breadth of sales tax declines for brick and mortar becomes fully appearant...
Yep, it gets cold in Minnesota in the winter. It's true. Everybody from California ; don't move here. Go to Arizona, Nevada or Mexico. Plenty of sunshine and dry climate.
What's that... water? Well, can't have it all. Lurker McMidwest | 12.20.08 - 1:56 pm | #
Gonna get another 6-8 inches of that frozen water on my driveway tonight they say - falling now. Oh the horror.
HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China.
Tim, I hope you're not with Bloomberg....cuz I know a "Timmy" there. Anyways....
Great point. Let's listen to Michael Bloomberg @ 16:45 pontificate about American Exceptionalism. Considering everything that has transpired since this sit-down at Georgetown, his comments about transparency in America versus other countries is quite laughable. Oh sure, we have the veneer of transparency...but it's just that...a facade hiding the terrible decaying rot.
Dear RE,
First a minor point : If I remember correctly (maybe this time) I think Moore's law only dealt with the growth of density and speed of solid-state circuitry (the dumb hardware).
Now, what you denote as "commoditization of labor" is in my terminology just the result of learning (to do things more efficiently). If you do something new the first time, it is difficult, after long practice, you do it much more efficient. Has happened since the beginning of time (well, not quite!).
But why do you think humans don't "stand a chance to compete in the technology race" ("Automation/robotics is a game changer that outmodes human ability"). On what basis do you make such a fatalistic prediction ?
(btw. I am not so sure there is actually a race, do you see humanity move/develop ? I guess you need spans of 10.000 years to notice any change in human brain structure/capability)
I remember when computing really took off (in the late 60's) people made dire and wide-ranging predictions about the comming world-dominance and power of IBM . (Computers then were mysterious for normal people and in a way frightened them. ) But it didn't happen !
History showed that the company puroprted then to grab world-dominance was just a normal, although very successful enterprize made and run by humans and perfectly capable of the usual human shortcommings. No ominous "Über-company", no world-dominance and today it has a significantly changed bussiness model ! Computers are just an ajunct anymore. So, that company had to change dramatically (!) and (probaly to a good deal by not being encumbered by unions and ideology) did so successfully. IBM in the early 90's was also on the brink of bankruptcy! But there were no government aid, congressional heatings and all the fuss and whining we have today with GM and Chrysler! (Ford may even make it into the future). The then IBM management just made the meccessary changes (and yes there were also some layoffs, e.g. 3k people or so on a certain day in Poughkeepsie I remember) and it worked very well : IBM today is a very solid, profitable and still almost 100Billion (revenue) company.
So, people then were afraid of technology they did not understand, made dire and ominous predictions and all what happened was a very ordinary train of events, including a successful turnaround.
I also remember that the real "1984", when it came around was quite a dissapointing dud as opposed to the literary one! Another failed dire prediction !
As to your fatalistic opinion about automation/robotics outmoding human ability :
Remember, automation and robotics are just ordinary tools made and controlled by humans (like hammers, forklifts and yes computers). Nothing sinister here. !
As to "artificial evolution" (i.e. the progress of "artificial intelligence" :
The same applies as to automation/robotics : that is all man-made and (imperfectly, but not in the sinister sense, but in the sense that as all new stuff is beset with errors) controled machinery, plain and simple!
Every roboter is man-made and none so far hascreated another roboter! And even if it did (wild sience fiction dreams) , since the creating roboter was human-build/ -programmed /-instructed , it could easily be re-instructed to stop any nonsense. There is no magic .
I am a bit familiar (but only a bit) with that ominous artificial intelligence.
E.g. I understand the severe shortcommings and limitations of the "rulesbased expert systems" (that chessplaying computer is as I suspect based on that, and IBMs speech-recognition is, I forgort the name of the guy from Yorktown Heights fathering that. The "intelligence" these machines exhibit does not come out of a mysterium, it was placed in them labouriously by their human designers.).
Also, I know the workings of the "selforganizing feature map" of Teuvo Kohonen, which is btw. an excellent model for what goes on in the cerebellum !! No magic here ! (and it btw. has an excellent mathematial model in "adaptive vector quantisation" , used in such profane tasks as image-compression and such.)
I also know the ridiculous paradigma of "back propagation" (and the 10+ years of fruitless research into that).
Anyway, no sinister magic here at all.
There is also a similar false thinking about AI : "Can a brain understand itself ?" It is rooted in a philisophical attack on that matter, not a "natural science" (physics, mathematics, medical) based root and thus leads to false conclusions and mystery.
Well, it may shock you but there is no mystery as to the principles of how a brain performs its "information processing" !
Lastly, you say "The real number of jobs are not anymore in manufacturing but in white collar." and "Automation and robotics have caused a displacement further up the intelligence scale."
These are very profound observations and point to the major problems america will encounter in the next two or three decades and the mastery of the current crisis.
With technical progress, you certainly need more better educated people to invent, make and deal with the future, more complex (if only complex since everything new is at first not well understood and thus puzzeling ) products. Thus the upshift in the intelligence scalemore, and those who can not hold up here go into services (become hamburger-flippers, travel agents, can I dare to say brokers, etc.). So, more and better education, and this does take time!!
The other aspect is even more troubeling : the shift in american education. When I was young, my american colleagues were typical WASPs. I was surprized to lears that e.g. in the mid 80's half of the americam studends in, lets say electrical engineering/computer science were non-americans. Young americans then predominantly went into (better paying ?) law, management, etc. and later heavily into finance ! Now you have a completely overblown financial sector (?30% of GDP?) , which btw. has completely lost ist reputation and trust. I suspect, that will dramatically shrink towards (maybe not to) the 70's level of 10% of GDP. So, here you have a bunch of "superfuous" people, what do you do with them? You can not convert a financial guy or a manager into an computer scientists.
Furthermore the education of a new generation of studends into "future-viable" domains (highly educated, see previous point) takes time!
So, this is your future predicament (if all goes well, i.e. absence of any calamity) : a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future. So, two or three dark decades.
The call girl who was connected to Eliot Spitzer's fall from grace has a tattoo on her lower abdomen,"Tutela Valui". The translation seems to be contested among the literati bloggers but the one I liked was "protection to be strong" or in connection to her stock in trade "wear a condom."
Useless information provided for entertainment value and not to be construed as investment advice. Good health advice is another matter.
Huh? writes:
The call girl who was connected to Eliot Spitzer's fall from grace has a tattoo on her lower abdomen,"Tutela Valui". The translation seems to be contested among the literati bloggers but the one I liked was "protection to be strong" or in connection to her stock in trade "wear a condom."
Did it say anything else, like maybe 'tutela valui, BUY TROJAN.' In which case it was a blatant advertisement.
Morocco, you're confusing me: If we have a transparent veneer, wouldn't we still see the decaying rot?
No. It's a propagandized concept bandied about by insiders, politicians and the msm to provide the illusion of transparency. That illusion is the veneer, or facade.
"a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future. So, two or three dark decades."
Exactly and for more, Asia with billions of people acts now like a giant sponge in the job markets; almost all the jobs will go there.
Hairdresser / Policeman couple spending $2000 instead of $3000.
This thing has a long way to go.
Yep. I have a co-worker who gets called by bill collectors at work. Husband is a traveling salesman. 4 kids in college. Is talking about upgrading her flat panel from 40 inch to 52. Because everything's on sale!
Nice diatribe. Any caffeine intake over 1200 mg is considered bad for your health.
You make some good points but I'm still on my first cup of coffee and will pass on the torch of responding to your argument. Jas, go for it! Speak out from the Luddite perspective.
"Did it say anything else, like maybe 'tutela valui, BUY TROJAN.' "
The beach pictures didn't reveal any further words. I would not be adverse to seeing if the bathing suit bottom covered any further relevant announcements.
JR at 1:53pm re: Jim in Portland's statement regarding corporate status.
I can hear Justices Scalia, Roberts & Alito laughing all the way from DC. With our wonderful Congress' approval, Bush appointed one of the most pro-business Supreme Court's the US has seen (and that's saying alot). The Bush Administration has also gotten legislation passed that means more class actions end up in federal court than state court (state courts--& especially state court juries--tend to give bigger awards, be less sympathetic to corporate defenses) & to decrease the # of parties with standing--as has the S.Ct itself.
Easy to imagine the S.Ct striking down as unconstitutional restraint of/interference of interstate commerce any state effort to limit right of any corporations.
Nice diatribe. Any caffeine intake over 1200 mg is considered bad for your health.
You make some good points but I'm still on my first cup of coffee and will pass on the torch of responding to your argument.
Yes, it also helps if you've had a few years of college German ... then you can invert all the back-asswards German word order on the fly ... I'm rereading it, myself.
"I guess you need spans of 10.000 years to notice any change in human brain structure/capability) "
Have you see cave paintings made 20,000 years ago, and carvings made over 30,000 years ago?
If there have been changes, perhaps they've been for the worse. Maybe we were better at cooperation too, because it was more obvious that our lives depended on it.
When the Bank of Japan initiated quantitative monetary policy easing in March 2001, it expected portfolio-rebalancing effects to help spur the economy. But as stated by Governor Fukui (2003), the expected stimulus to the economy did not seem to materialize:
one of the effects expected from the introduction of quantitative easing was the so-called "portfolio rebalancing effect." The Bank thought that, even when the marginal value of liquidity services became zero, people would start to rebalance their portfolios by investing in assets with higher marginal values whether these were real or financial assets, if the Bank increased further its provision ofliquidity. The aim of this process was thus to generate positive economic momentum, acting, for example, to push up asset prices. So far, however, the effect has not been widely observed. (Fukui, 2003)
One reason why the portfolio-rebalancing effects were seen as ineffective was that the capital positions of the private-sector financial intermediaries had been impaired by an accumulation of nonperforming loans following a fall in asset prices and a prolonged recession. As a result, financial institutions may have become more reluctant to take on portfolio risk.
"I also remember that the real "1984", when it came around was quite a dissapointing dud as opposed to the literary one! Another failed dire prediction !"
Just got notice of my 2nd credit card cancelled for lack of use. First one had a $20,000+ credit line, this one I forget, probably about as much, maybe less.
They're catching the whiff of what's about to happen when people turn to their cards for income after all else fails. Can't blame them. (People or card companies)
Werner writes:
Dear RE,
First a minor point : If I remember correctly (maybe this time) I think Moore's law only dealt with the growth of density and speed of solid-state circuitry (the dumb hardware).
Werner,
I'm glad to see I wasn't the only one not following where the 'Moore's Law' point was leading.
from TPM
"The Fed has set up something called the TALF, the Term Asset-backed Securities Loan Facility, which will offer "low-cost three-year funding to any US company investing in securitized consumer loans" including hedge funds.
Says the Financial Times (reg.req.), "Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
"Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."
The FED and the politicans want the fraud, inflation and bubble back why not give'em the money.
Most of those laid-off jobs bank UAW members have plenty of hunting rifles and ammo...just saying, for the upcoming food riots. Maybe you should duck down in your Toyota's and Honda's?
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
Dammit fried!... I told you: you gotta invert the WORD ORDER!:
A READING FROM THE BOOK OF WERNER:
"So, this is your future predicament (if all goes well, i.e. absence of any calamity)..."
Thank you for the James Gang link. I just listened to about 30 mins of great music that I had forgotten. Man if I could go back to being 16 for just one damn day. Man oh man....
Dickeylee writes:
Most of those laid-off jobs bank UAW members have plenty of hunting rifles and ammo...just saying, for the upcoming food riots. Maybe you should duck down in your Toyota's and Honda's?
...Is this a not-too-thinly-veiled threat, Dickeylee?
The TARP(that never was) has now changed to the TALF.
No legislation required thanks to the crooks (Bush and Hank)
Now going to bailout the hedge funds.
Must be a few more ethical funds like Bernie Madoff's just discovered.
Cant have rich investors losing money
What a country.
I would rather have the money go anywhere but to the Hedge Funds.
Division of labour was hard enough to arrange properly (capitalism) but now we face even more challenging one: division of robots and automatic factories. At the same time the size of workforce is growing very rapidly, especially in the developing nations.
ILO (International Labour Organization) estimates that between 2010-2020 there will be additional 1000 million young people coming to working age. Traditional means can only employ roughly 300 million out of that. 700 million is left out to do whatever they can, like joining all kinds of extremists groups...
As much as I admire Teutonic thoroughness, keep blog posts short, dude. If you want to make three points, make three posts. Anyway, this is not criticism.
Can anyone here refute the logic of a mass die off in the worlds near future?
Does having emerging markets actually use their own resources for the betterment of their people not fly in the face of the past and it's colonialism and the current neocolonialism?
Breeders and eaters are seen as a liability in globalization. If you can't contribute to a balance sheet's credit side then what use are you?
I see tragedy and do not agree with the sentiment behind my questions.
As much as I admire Teutonic thoroughness, keep blog posts short, dude. If you want to make three points, make three posts. Anyway, this is not criticism.
With all due respect, Jas, cyber-RE is cheap, and if you don't want to read it--scroll down.
(If it's any consolation, I think Indian food is the best, yum ...)
Biden primed the pump with his "the economy is tanking" comments. Prepare for much worse news and "unprecedented" action by our government to "save" the economy.
Well, it may shock you but there is no mystery as to the principles of how a brain performs its "information processing" ! Werner | 12.20.08 - 2:48 pm | #
Maybe you should let these guys know they are spending a $1B on something that is already known. You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education ? Werner | 12.20.08 - 3:47 pm | #
Huh? writes:
Biden primed the pump with his "the economy is tanking" comments. Prepare for much worse news and "unprecedented" action by our government to "save" the economy.
Have we come full circle? Back to the 'Paulson's warning of martial law'?
"I would rather have the money go anywhere but to the Hedge Funds."
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you?"
Gordon Gekko
Sorry couldn't resist.
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you?"
Gordon Gekko
Sorry couldn't resist.
Democracy has been slipping away for thirty years.
Pace certainly accelerated under Bush and gang
All started with Ronnie Raygu
SamDog, brother-in-law is UAW, and the circle he runs in all vote straight Republican, and they can't believe that the Republican Senators sold them out. Sorta gives you an ideal of his intelligence. Should be real interesting come Thursday around my place fro Christmas!
--
"Division of labour was hard enough to arrange properly (capitalism)..."
one_timmy (English/Knuck/Oz?),
Division of labor is as old as civilization. One of the geniuses of the caste system in India was division of labor.
BTW, there is high correlation between ethnicity/caste and professions (various labor functions very much included) in the US of to-day. America has a lot of caste character, especially, at the ruling elite level. No?
In 2003, I took a business trip to NYC with an aristocratic American friend of Anglo-Dutch heritage and when we arrived there from LAX he commented about the very visible class system and I said it is more like a caste system and he immediately said, "YES!" There is a day-and-night difference between California cities (LA, SD) and NYC. You can't pay me to live in NYC.
Dirk- re your comment about piercing the corporate veil.
In the case of a large real estate transaction the banks have absolutely no basis for piercing the corporate veil. When they lent they knew who the developer was and whom they were lending and how much capital was invested. Now unless there was fraud (which the existing statutes already provide for) no basis for the lenders to want a do over.
All real estate loans are options written by the lender. It accounts for why prior to 1990 the wealthiest people were in real estate. The bought the cheap options sold by the banks. All great fortunes are built on cheap options.
The overall financial situation in the U.S. is changing, and thats what we dont know about. Its going to be changed fundamentally in many ways.
Think about the way weve been living the past 30 years. Thirty years ago, the leverage of the investment banks was like 4-to-1, 5-to-1. Today, its 30-to-1. This is not just a change of numbers. This is a change of fundamental thinking.
People, especially Americans, started believing that they can live on other peoples money. And more and more so. First other peoples money in your own country. And then the savings rate comes down, and you start living on other peoples money from outside. At first it was the Japanese. Now the Chinese and the Middle Easterners.
Wethe Chinese, the Middle Easterners, the Japanesewe can see this too. Okay, wed love to support you guysif its sustainable. But if its not, why should we be doing this? After we are gone, you cannot just go to the moon to get more money. So, forget it. Lets change the way of living. [By which he meant: less debt, lower rewards for financial wizardry, more attention to the real economy, etc.]
a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future
I mentioned "information domains" a couple of days ago and I'm sure people thought I was nuts.
Okay, I am nuts, but the issue of efficient information domains is relevant to the depression.
As a participant in four different bachelor degrees (CE, EE, CS, CIS) I can say that there is a great deal of overlap in certain concepts.
There's some gain possible by restructuring the current college programs to include generic design pattern/transaction cost/quantitative analysis curriculem for several vocations.
For lack of an empirical measurement, we can assume the 80/20 rule in how we structure work, i.e. 80% of a job should be domain-specific knowledge, 20% should be contextual overlap, a set of vocabulary, morals and common concepts that all team members ahare.
Current system is ad hoc legacy, i.e. "market-driven". One project I'd like to do is a way to measure inefficiency of it.
If you want more efficiency, you need more specialization. But more specialization means greater fragility. A lot of the current system rans on politics, not on domain knowledge.
"You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education ?
No, it is the ones who poor the stuff into the pill-making machines who get outsourced."
China is already churning out doctors at record speed and other Asian nations are also doing the same. Even the intra-Asian competition for good quality education is fierce. Singapore, South Korea, Japan, China, India, Thailand, Vietnam and even Pakistan, are all improving their school systems big time.
There is no research area in which Europeans or Americans can continue saying "Come on, only the cheap stuff will be made in Asia".
The same kind of thinking was with cars back in the 70's but look what happened! Cars nowadays are one of the most complex things to manufacture and Asians are winning that race. If they can make cars, they can make anything.
I am not saying Asians are somehow superior but they are catching up fast. That is not even the point.
The point is there will be only very limited number of available jobs coming "online" anywhere worldwide, compared to this supertsunami of available candidates for the jobs. That will create huge problems in near future, also worldwide.
About stock market derivatives and their role as source of evil:
If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.
Pavel Chichikov writes:
...Have you see cave paintings made 20,000 years ago, and carvings made over 30,000 years ago?...
No, but is there noticable change ?
Anyway my answer was more ment as a reply to RE's ##humans don't "stand a chance to compete in the technology race"##, trying to say that with the quite disparate advancement speeds of human beings and technology it doesn't make much of a race. Relative non-advancement of the human races intelligence vs. the advancement of technology makes would wake it at best an extremely single sided race, so as to effectively being no race (against each other) at all.
...If there have been changes, perhaps they've been for the worse. Maybe we were better at cooperation too, because it was more obvious that our lives depended on it...
Well, yes and no: We have for instance much fewer wars in Europe since the Middle Ages. So, not all progress was bad.
--
Last year, I became aware of common schemes for motel owners to push all the risks to the banks and the creditors. They were expanding not for sound business reasons but to profit from laying risk at bankers' feet. Yeah, yeah, CR, I hear you, "CRE was not as overbuilt as RRE." Arent there more crooks in CRE than in RRE?!
If people were lending their own money none of it could happen.
The point is there will be only very limited number of available jobs coming "online" anywhere worldwide
"Work is finite" at any instant in time.
Lately I've been wondering about the complexity of products. For consumers, airplanes & ships are fairly complex but most of the really complex stuff isn't aimed at consumers.
It's for large corporations or governments, i.e. 10,000 user IT networks, nuclear weapons, etc.
In a consumer-driven world, how much complexity & domain knowledge do you really need?
--
"Jas ... please clarify:... are you pro-caste system? Rather unusual point of view, wouldn't you say?"
I am a CRITIC and an observer. I am not pro anything as far as various human institutions are concerned. They arise in time and space based on conditions preceding them.
For example, I could be pro Swiss democracy of 100-200 years ago, but no way I am pro democracy of America and India today. Human institutions with the same labels could be radically different in practice. In general, monarchies are the best form of political system based on my read of history of East and West and in between.
Count on it - the amount of time the internet is sales tax free is measured in months - with a new congress as the breadth of sales tax declines for brick and mortar becomes fully appearant...
wouldn't even take an act of Congress. All that a state need do is to ask people to attach their year end credit card summary statement. Five people audited and charged penalties for not reporting out of state purchases would be enough.
fried writes:
" So, two or three dark decades."
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
Yes, I see your point and said ""if all goes well, i.e. absence of any calamity"" , then it still needs one to two decades to do the (re-)education. Maybe three decades was too pesimistic.
Already battered by a freeze in consumer spending that has sent their sales growth below zero, Massachusetts stores took another hit as a winter storm barreled through the state yesterday.
But while the storm certainly wont help retailers, chances for a successful season already have been wrecked and cant be salvaged, according to retail expert Howard Davidowitz.
"It's just a bummer all around," said Shultzie Fay, owner of The Paperdoll specialty boutique in Bellingham. "We're in an economic slump and all of a sudden you factor in weather conditions."
Storms this week kept so many customers away that Fay started offering to deliver purchases to customers unable to make it to her store.
It's only going to get worse. The National Weather Service issued a winter storm warning for much of Western Washington for this weekend. It also predicted heavy snow in Eastern Washington.
If I have a team of 5 members who all possess the exact same set of knowledge, that has X value.
If I have a team of 5 members, and each member has 50% of his own knowledge, but 50% of a common base for all members, that has X++ value.
If I have a team of 5 members with complete specialization and no common knowledge, that has no value for creating a complex product.
There's an optimum way to structure knowledg domains and specialization for society in general.
I havent' given it a lot of thought because I don't believe I have the power to change it. However, the people who run universities do.
But what i really believe will happen is that the world will devolve into many, many small sets of localized interpretations of the same base designs. Employment will be filled by "moderators" who serve as local communication domains.
I.e. there's no real long-term value in globalization because people work to defeat it by demanding ever-more intricate minor differentation in products & services.
I could be wrong but that's what the IT world looks like to me now. Lots of localized politics and minor differentation to preserve jobs.
"Well, yes and no: We have for instance much fewer wars in Europe since the Middle Ages. So, not all progress was bad."
The Thirty Years War of the 17th century was the first modern European war in terms of large scale atrocity, anarchy and slaughter. But nothing can compare with the 20th century for military horror.
"...with the quite disparate advancement speeds of human beings and technology it doesn't make much of a race."
--
"You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education? No, it is the ones who poor the stuff into the pill-making machines who get outsourced."
Werner,
You are sadly mistaken. What do you know about the Japanese pharma industry?
Just wait for 20 years and lot of pharma research would move to Asia. Whites and blacks might dominate the sports and entertainment industry, I suppose.
I am not very optimistic about South Asia, but East Asians will dominate, economically. In finance, Jews of the East (a term used by king of Thailand) would give Jews of the West run for their money!
Off-topic antecdote. Drove past Best Buy today Comrade Tech Sargent Chen | 12.20.08 - 2:24 pm | #
Regrettably I went to shop in one. While a depression is coming, you could never guess by the traffic jams in Northern Virginia today. I was so happy eventually to escape.
CRE jungle mail. No, you are not first!
That project was doomed from the start, there have been some huge brawls there.
third, by the way why is it that every time I do a long post it turns out to be on a dead thread
Other People's Money.
BayWalk? or Bail and Walk?
Interesting anecdote - Wife's an RN, works surgery center... pick-your-time surgeries. It has been as busy as ever with double booked DRs & rooms 100% full, overtime. It started early Dec. Otherwise it had been on the slow side for years.
To give you a clue 4 tonsil surgeries are scheduled for Christmas Eve. kids might not be too comfortable on Christmas morning. Never ever happened before.
Yesterday a Dr had a meeting with the nurses saying how grateful they were for the nurses working so damned hard to hustle the patients along. He said it would probably slow down after New Years. He said the reason it got so busy all of a sudden is patients are hurrying to get all elective work done ahead of '09 because either they knew or suspect they will get let go by their employers and want the insurance to cover it...
With economy in shambles, Congress gets a raise
News Archive - TheHill.com
Can U say Banana Republic? I can.
On the topic of this thread, there really does need to be a better way of peircing the corporate veil in cases of firms that are entirely owned by one or 2 people. However as things stand, yeah CRE jingle mail will be a big problem. As a % of total value much higher than RRE, far les sentimental attachement, kids like the schools type thing. While RRE probably has to be 20% underwater to result in jingle mail, CRE is probably more like 5%.
Re: "jungle mail"
You know in Zimbabwe it costs like $2 trillion to mail a letter.
reason it got so busy all of a sudden is patients are hurrying to get all elective work done ahead of '09 because either they knew or suspect they will get let go by their employers and want the insurance to cover it...
bearly
Add in Pre-Bankruptcy planning
And I really wish my comment were more off-topic.
Bring it on! CRE selling at half replacement cost levered 4 to 1 is manna from heaven.
This may be the most funnerist enviroment since 1990.
Gentlemen. Prepare to lever your balance sheets...
As I've noted before, CRE owners are much more willing to just walk away than residential owners.
They aren't the ones walking away, their corporate entity is. And they will be back in business at some point in the future with another venture.
Oh Oh, opening a can of worms. Everyone will want a principle reduction.
Congress Will Set Conditions for $350 Billion in Rescue Funds
Congress Will Set Conditions for $350 Billion in Rescue Funds - Bloomberg.com
Lawmakers will agree to release the funds in exchange for Treasury Secretary Henry Paulson and Obama agreeing to programs that cut interest rates and forgive a portion of a mortgage’s principal, House Financial Services Committee Chairman Barney Frank said in a telephone interview yesterday.
YouTube - The Lord Humungus' Speech
"You planned to take your equity out of the wasteland.... You sent them out this morning to find a credit line big enough to haul that fat chunk of cash.... what a puny plan! Just walk away..."
The James Gang Walk Away
YouTube -
CR (and others),
What are your thoughts on the emerging markets?
Blloomberg has quoted a couple of guests in the past week predicting that emerging markets are poised for a bull run - making the claim that they were the last in and will be the first out.
I seem to recall commenters here expecting the emerging markets to have a very rough 2009, squarely at odds with the "experts" invited to prognosticate on Bloomberg.
If the strings that were attached to TARP funds required the banks to more actively engage in principal reductions for short sales only, then there would be some balance in the effect - since this benefits those who have been reckless (the seller who was over-leveraged) and those who were prudent (the buyer who saved) in equal portions. Are there associated moral hazards that I'm not seeing?
"What are your thoughts on the emerging markets?"
They would be renamed sub-merging markets in 2010.
Jas
The miracle of structured finance in CWCapital's own words:
Structured Finance
Dedicated to developing highly creative financing solutions for the most complex deals and discriminating borrowers, CWCapital's Structured Finance Division is staffed by a distinguished group of knowledgeable and highly experienced real estate and lending professionals. Focused exclusively on highly structured bridge, new construction and mezzanine loan needs, we utilize our managed CDOs, balance sheet investment accounts and commingled funds to creatively address borrower financing requirements. Our structured finance loans are serviced in-house, offering our borrowers the same level of personal service and commitment after the loan closing that we extend throughout the application and underwriting process, and offering âone stop shopping" for high leverage transactions.
How long until we are bailing out these clowns?
As I've noted before, CRE owners are much more willing to just walk away than residential owners. - CR
Here let me fix that for you:
As I've noted before, CRE owners are much more willing to just walk away than residential owner-occupiers with skin in the game.
The modified statement addresses two of the things different this time. Lots of homes classified RRE were really investment vehicles and past downturns were stabilized by much higher downpayments (residual equity) and/or better LTVs. Add to those two factors several more issues pushing people to just walk away from RRE as if it were CRE; no stigma, no consequences, historical gaps between cost of renting v. owning, the phenomena of second houses. No, this time it is not possible to extrapolate from the past. That only worked in charted waters. 30 month 30% declines are not on any graph of housing market tracking, why should consumer responses remain comparable to past behaviors?
Jas Jain writes:
"What are your thoughts on the emerging markets?"
They would be renamed sub-merging markets in 2010.
Very droll.
EMs are a split between mfg & resources. Mfg should continue to decline but resources I have no clue about. EMs are prolly the lowest marginal cost producers so any uptick once the loading docks and silos/ships are emptied helps them most?
On emerging markets, note that the Hang Seng is to be re-named the Tan King.
C
I haven't done many commercial closings recently, but if there were only a few main actors, why weren't they asked to sign personal guarantees?
Race to the bottom in this aspect also?
Howsabout principal cuts for only those who put some minimum amount down--like 10%-15%-20%. Did what you are supposed and got screwed anyway people??
--
T Boone Pickens, a geologist: "Do you know What an economist is?"
T Boone Pickens Answer: "Someone who didn't have the purse to be a CPA"!
For full disclosure, my son is a CPA. He had zero debt when he graduated and he has zero debt now. How many young economists, or CPAs, bought a Beemer with profits in UST STRIPS alone?
Jas
I seem to recall commenters here expecting the emerging markets to have a very rough 2009, squarely at odds with the "experts" invited to prognosticate on Bloomberg.
Hymns for the Lord | 12.20.08 - 10:37 am | #
Most emerging markets are pretty dependent on commodity prices, as long as they stay low, not a great place to be. China is the exception as a big user of commodities, but they have other problems. Still, the Shanghi market is about at the same levels it was a decade ago. While one can argue that there has been no true growth in the U.S. economy over the last decade (or 8 years). I dont think the same it true for China. I think there is probably quite a bit of value in China, but not sure about the timing, nor do I know enough about the individual stocks there. With underinvestment occuring now in commodities, most notably oil, I would expect them to rebound and rebound sharply, once the world economy turns up again. Eventually emerging markets will make you lots of $, but probably more a 2010 story than 09.
bearly:
The end of year swell of surgeries is a yearly phenomenom, partly because of time off, and also because people who have paid their deductibles can have surgery for much less cost. This year, though, it's a lot of people who can smell layoffs/decreased bennies.
bearly writes:
Interesting anecdote - Wife's an RN, works surgery center... pick-your-time surgeries
bearly: anecdotal update--
My wife works for the State of NC. I hurt my shoulder in a fall at the beach in Aug '08--went to Dr 6X Sept-Dec; finally sent to get MRI yesterday by ortho-doc.
Thurs pm, got a call from MRI office saying BCBS would only pay 60% after review, & wanted to know how I would pay balance. Typically (or perhaps I should say 'in the past') accidents were 100% covered. Put $250 on debit card--no Xmas for the kids I guess.
Went to office Fri am--big medical building across from large, regional hospital. Door was open but lights were still out! Thought they'd rush me in and out to get to the next patient, but no one was in a hurry--still very nice folks, though. Never saw another patient...very strange.
For what it's worth....
Ken Riis held the Q3 earnings call, unrestricted cash had dwindled to about $100 million, which was not great, but still not terrible, and it was certainly enough to fund the preferreds. However, by "electing" not to pay a preferred dividend, which is hardly an election, one can only assume that Q4 was a disastrous three months of losses driven by margin calls, and it looks like NCT is now in some serious, serious trouble.
Updating yields on the Mortgage REIT list keeps getting easier and easier. There are now more zeros than a room full of turnips
That hip, young economist from Tribeca, Nouriel Roubini, says in Forbes that the Fed must continue on its insane, destructive path because, well, just because:
"Thus, as a next step, the Fed may be soon forced to walk down the credit curve and start buying private short-term and long-term securities with lower credit ratings. That would mean the Fed will take on even more credit risk than it is already taking on today while purchasing illiquid private assets. But desperate times lead to desperate actions by desperate policy makers.
Pretty soon the Fed will "crowd out" all economic activity in the United States. I bet it looks good on paper.
Jas Jain writes:
For full disclosure, my son is a CPA. He had zero debt when he graduated and he has zero debt now. How many young economists, or CPAs, bought a Beemer with profits in UST STRIPS alone?
very commendable; your son is doing his part to stimulate the [German] economy
[This year, though, it's a lot of people who can smell layoffs/decreased bennies.
dr munch]
Wife's been at it since the late '80s. This year doesn't begin to compare to others.
OT rock blogging/parody:
Trade your bling
For some canned goods
Hide away in the back woods
A beautiful sight
A gold bugs delight!
A Kondratiev winter wonderland
Gone away is Abercrombie
Here to stay are the zombies
While Mom hides the bread
Dad pumps 'em with lead
A Kondratiev winter wonderland
In the meadow we can build a gallows
Then pretend to hang some banker scum
Some same Robespierre would call us callow
But they taste so good with beans and rum!
Later on we'll conspire
To find some fuel, and burn some tires
Those central bank hacks
Have brought us "Mad Max"
A Kondratiev winter wonderland
El Cliffo:
Roubini is a closet nihilist....
km4 | 12.20.08 - 10:37 am
Great band! I have the album I bought in 69 somewhere in the garage.
It just occured to me if homeopathic medicine, midwives, and other lower level medic types might be in a lot more demand. After all, you can pay in goods with them probably.
Speaking of walking away Cerberus is wanting give Chrysler to the UAW and walk away. It's not just for RE anymore.
Here is the news from Sarasota Florida
Just a few months shy of a scheduled groundbreaking, plans for the $1 billion Proscenium real estate project and its centerpiece Waldorf-Astoria Hotel may be unraveling
Doubt descends on Proscenium project | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader
| HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader
Florida struggles with nation's largest increase in food stamp recipients
http://www.heraldtribune.com/article/20081210/ARTICLE/812100371/2055/NEWS?Title=Florida_swamped_by__food_stamp_need
The decision to delay construction of University Town Center, the much-anticipated mall featuring Neiman Marcus and Nordstrom, is not surprising to retail experts who say it may be the first of many such mothballings in this region.
Luxury mall's delay may signal more woes ahead | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader
megamik | 12.20.08 - 10:59 am
Mothballing? Can you realistically mothball commercial space?
I haven't done many commercial closings recently, but if there were only a few main actors, why weren't they asked to sign personal guarantees?
That would be what a bank would traditionally do, but if there were multiple investors, maybe not.
central_scrutinizer:
nice lyrics ... let's all go caroling!
"CRE owners are much more willing to just walk away than residential owners."
Business decision. . . simply a business decision.
OT - I don't recall any post on JPN's rate cut. Seems like they got a little pissed when their currency got displaced as the carry-trade got-to well.
I don't have anything to do with Forex. Smelled like a currency war race-to-the-bottom move to me tho. Thoughts?
SRS declined from the $120s to the $50s in the past coupla weeks. Guessin' there's a buyer of last resort for CRE debt. He should be on a Wanted poster.
On topic:
If a REIT has no earnings (FFO) in a quarter, will they use borrowed money or cash on hand to pay a dividend?
Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion.
Commercial real estate shorts are suffering through the short squeeze from hell.
It reminds me of the senseless rally in homebuilder stocks that began in late January and lasted until May. Fueled by denial, hope and plain stupidity.
It will end very, very badly for IYR longs. Many weak shorts have to be shaken out, though.
--
"very commendable; your son is doing his part to stimulate the [German] economy ;)"
Samdog,
I bet Americans who sold him made more money than the Germans who built it!
There is no business like commission business!!
Jas
PS: The real a-hole at the dealership was the GM, an East-Indian named "Bobby." (The guy had to come out, for no reasons, and show us who the boss was). The two white guys we dealt with were very professional.
joe after the 12 pack writes:
"Speaking of walking away Cerberus is wanting give Chrysler to the UAW and walk away"
... and speaking of 'Chrysler' and 'walking away' in the same sentence:
I took the family out for dinner last night at the new shopping center.
Since the former "Ruth's Chris's" has been converted into a tatoo parlor/nail salon/pawn shop/biker lab, we went to the pizza joint instead.
On the way, lots of traffic, blue lights, etc. The waitress in the pizza joint said a car had 'lost a wheel.' I said I hadn't heard of something like that happening in decades.
She said 'yeah, some kinda Chrysler.' I thought, Oh, that explains a lot....
Ok, slightly less frivolous, I track the Asia aggregate indices for overall direction and smoothing of specific exchange endogeneities, like this:
Bloomberg.com:
Personal Finance
Check out the volume around the Set 18 and Oct 28 bounces - bear rally coming to a region near you...
I suspect it'll hover around 2000 in low volume for the next couple of weeks then crater and test the Nov 20 lows.
C
As I've noted before, CRE owners are much more willing to just walk away than residential owners## Sure, why not, with the deal structured that way, no personal guarantee, nobody's name and reputation on the line to stand good.
How did Woody Allen say it? "More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly."
--
"Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion."
Morocco Bama,
Agree. My son is an "ass," but I love him and mostly he is a good boy and not an ass.
What is an ass?
Mrs. Singletary: "Someone who pays for the logo on his, or her, jeans' behind (wear on the ass)."
Also, those who pay for the logo on the ass of the car! Conspicuous Consumption democratized.
Jas
Houston CRE showing cracks...
High Street development on Westheimer put on hold
Citing the unstable economy and shaky capital markets, Trademark Property Co. is halting construction of High Street, a large real estate project on Westheimer just inside the Loop.
The Fort Worth-based developer, which started the mixed-use project earlier this year and had expected to complete it next fall, said High Street will remain on hold for the foreseeable future.
[snip]
To be sure, Trademark is not alone in its decision to pull back until the economy improves.
Several developers have canceled luxury residential towers and mixed-use projects over the past few months, citing economic uncertainties and tumultuous financial markets.
High Street development on Westheimer put on hold | Business | Chron.com - Houston Chronicle
[It will end very, very badly for IYR longs. Many weak shorts have to be shaken out, though.
central_scrutinizer]
I am 1 stubborn MFer. I took SPG PUTs at the close yest & have been adding SRS to the pile...
Jas Jain writes:
Conspicuous Consumption democratized.
.. while democracy is being consumed conspicuously ...
Kerri Reed, 34, a Lyndhurst, N.J., hairdresser who was outside Macy's flagship store in Manhattan on Wednesday with her husband, a police officer, and their two boys, 8 and 11, said she finished her shopping and doesn't plan to go back after Christmas. Reed says she and her husband have secure jobs, but she's worried about the overall economy.
"It's a done deal. I covered my bases," said Reed, who said she bought for fewer people this year, spending $2,000 instead of last year's $3,000.
"Consumer demand is much less than most of us understood even in September," said Richard D. Hastings, a strategist with Global Hunter Securities, who expects total retail sales will fall as much as 8 percent for the November through January period. Even with recent moves to cut inventory and slow store expansion, he said retailers are finding that their assets - stores and inventory - are "out of whack."
Hastings doesn't think the spending malaise will hit bottom until the second half of 2010 as mounting layoffs depress sales even further next year.
I'm a CPA, as well, Jas. We irreverently refer to the acronym as Couldn't Pass Again. By the way, we're Honda people. I recently sold my 1990 Honda Civic with 200k on it for $2,000. I claimed I would keep it until I ran it into the ground....it wouldn't die, so I had to renege on my word and give it up, and I still got money for it after all those years. By the way, I purchased it for $11,500.
Ministry of Truth writes:
Oh Oh, opening a can of worms. Everyone will want a principle reduction.
Congress Will Set Conditions for $350 Billion in Rescue Funds
Isn't it amazing how we just can't seem to get a clue regarding moral hazard. The more the government tries to do, the bigger the mess they make.
Consumers, who had shut their wallets since the financial meltdown accelerated in September, came out for bargains on the day after Thanksgiving, the traditional start of the holiday season, but have retreated since then. Figures released late Sunday by SpendingPulse, a data service provided by MasterCard Advisors, show that for the first week of December, luxury sales dropped 34.5 percent compared with the same period last year, while overall apparel sales fell nearly 23 percent. Electronic sales fell 22 percent.
--
Cont...
America and most of the world is full of asses. As the depression progresses there would be lot fewer asses, for sure.
Let the bull market in savvy begin! That alone would cause the depression to prolong!!
Short BMW!!!
Jas
PS: I was a biigger ass than my son. His BMW is far superior in value than the one I bought 25 years ago.
Jas Jain writes:
Cont...
America and most of the world is full of asses.
All one needs is a mirror. Must be a nest somewhere.
Jas. Your on fire today! Cool.
--
"I'm a CPA, as well, Jas. We irreverently refer to the acronym as Couldn't Pass Again. By the way, we're Honda people."
MB,
My son was a "Honda people." Honda people are good people.
Jas
My parents purchased a Chrysler Newport Royal in 1972. In 1975, with only 40,000 miles on it, and too many mechanical issues to mention, the engine caught fire and the car was totaled. Never thought the same about Chrysler since.
Mopar Fuselage Styled Full Size Cars
--
Good one, Samdog.
Jas
"By the way, we're Honda people. I recently sold my 1990 Honda Civic with 200k on it for $2,000. I claimed I would keep it until I ran it into the ground...."
My Japanese cars have always lasted as long as I've wanted them to last. My Toyota is a tank, and I plan on keeping it my entire life (or until I cannot get parts or gas for it). Not buying Japanese is generally a bad financial decision.
I agree, Elvis....and plus, I Heart Sushi.
Retail sales taxes are most states primary revenue sources. Considering what was posted above then 20% plus drop in revenues is possible. Plus, shortfalls in other areas, increased social services needs, and then add CRE pullback...
"plus, I Heart Sushi.
Morocco Bama"
Jeremy Piven does, too. Now he is as toxic as a themometer. Nothing better than ahi tuna.
Yeah, Mercury will put hair on your chest, for sure.
....or should I say..hair on your liver.
Yeah, Mercury will put hair on your chest, for sure.
Except your arms will be to short to comb it.
piven ordered that really expensive Hg tuna..
counterpointer, those rallies are getting seriously sold.
I should clarify my position. I only do the non-Mercury Sushi...no raw tuna for me. I like the cooked crab and California vegetable roll.
--
Time to shovel some more snow. Yesterday morning there was 12-15 near my front door.
I live where I do because I love to be snowed-in 2-3 times a year (I grew up near the Indian desert of Thar and didn't see snow until I was 20) and have a white Christmas. Well, this whole week, beginning Sunday night, is going to be snowed-in week. I had two furniture deliveries that are waiting all week and would be made most likely on Monday or Tuesday. During winters I am provisioned for at least two weeks.
Jas
OT - followed Mish to this, noting likely 920 hedge fund closures this year (but no word on value of holdings at closure):
Record Number of Hedge Funds Liquidated | Innovation Update | Financial Articles & Investing News | TheStreet.com
That's gotta hurt.
C
Casino stocks have declined over the past year and are down sharply from all-time highs reached in the summer of 2007. Las Vegas Sands (NYSE: LVS - News), once a favorite among analysts and investors alike for its ambitious expansion into the lucrative Macau market, has had to cut its plans back substantially and recently completed a secondary offering to raise much needed cash. The offering removed doubts about Las Vegas Sands' ability to stay afloat, but it also significantly diluted shareholders.
With temperatures far below their normal level, the city's new most popular attraction appeared to be posing beneath the "Welcome to fabulous Las Vegas" sign blanketed in snow.
Think of all the sushi shops that will go belly up over the next couple of years. Plus, sushi shops will be keeping fish longer than they should. Finally, Japanese men skilled with knives will be unemployed. I'm bumming myself out here.
Japanese men skilled with knives will be unemployed.
It's OK Elvis. They are really Koreans. The knive skills will come in handy when they go back to cousin Parks conveinence store.
Jas,
I'm somewhat familiar with your where-abouts and have to imagine it's beautiful.
I'm sure you have this bookmarked already..point click on map for local radar, discussion, satellite etc..
although that channel 9 girl in la doesnt fill the screen so wel..
NOAA's National Weather Service
one less need for tv using this..
"With temperatures far below their normal level, the city's new most popular attraction appeared to be posing beneath the "Welcome to fabulous Las Vegas" sign blanketed in snow.
Diamond Dick"
Hell has frozen over...
I have to stick up for Chrysler, I had a 1974 New Yorker that I drove till 1996. The last 8 years or so it had a cracked head (my fault) and the coolant leaked into the oil. As it happens I had a friend who ran an oil proficiency testing program and he used one of my oil changes for a test sample, turns out it was 40% ethlyene gylcol. It was the most comfortable riding car I ever had. I did put a quart of Slick 50 in it when I changed the oil (annual
).
In college, I bought a K car for $300 once. It wasn't very reliable, but the vinyl seats were top quality. I sold it for $500 when I was done.
At the end of the thread, you can sit in Jas' lap and he'll take your requests for Christmas presents.
does Jas have a long white beard, a big smile and a hearty laugh?
Another source of surplus CRE:
Many may think that's not a California problem. Fremont's NUMMI Toyota and Pontiac plant â which already has announced a production slowdown â is the state's only auto factory. But California has 190,000 auto-related jobs, more than any state other than Michigan, according to the Center for Automotive Research in Ann Arbor, Mich. Some of those jobs involve making computer chips and other electronic and mechanical components that end up in cars. But the bulk are linked to the state's 1,594 car dealerships.Last year, those dealerships sold nearly 2 million new cars and trucks for a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales.I've already mentioned Moorpark's Special Devices layoffs. They make the explosives for airbags. Excerpt above from SJ Mercury News.
"Under the proposal, a bank would take control of the retail and restaurant portion of BayWalk and appoint a trustee to run the complex until a suitable buyer is found."
Back on topic, I wonder what "until a suitable buyer is found" really means. My guess is that a suitable buyer will be the FDIC when the bank goes under.
Morocco Bama -- have a 98 Accord V6 fully loaded, got 168K on it. Only thing replaced is the alternator. Plan to keep it till it hits 1/4 million. Wife owns an Acura, bought because of the Accord.
Wouldn't even walk onto a GM lot....
For Bond Girl...and some thread levity.
bond spoofs - Google Videos
Paul Krugman on CSPAN right now, just starting if anyone is interested. On Chrysler, my grandma had a Dodge Omni back in the 1980's it was a great lil car, dont think they have produced much worthwhile since, although I do sort of think the PT Cruiser looks cool
Anonymous, your New Yorker was a mistake. I can't believe they let that one get past quality control.
The PT Cruiser is a Death Trap.
Snowy weekend here in MN.
visited Ridgedale mall yesterday, which serves the nice western suburbs.
The power was out for one-third of the mall. Stores dark. Initially when I walked in, I thought they had gone T.U., but instead the owners decided to close the doors, and in some cases, put duct tape over the openings. "For shoppers safety,"
Walked into Macy's with intent to buy a new coat for Ms. Lafleur. Half the store working, half dark. Found the coat, now 50% off and when I tried to find a place to buy it, the gal said, try downstairs because our computers ain't working.
Uh, no thanks. One less sale.
Today, which I've heard is "Super Saturday," is going to be snow all damn day long, with shit roads. Spending the day inside baking treats with the kids, sledding on our back hill and playing MarioKart.. Family days rule.
I predict holiday retail in the Twin Cities is gonna get hammered. This weekend might be it for many stores.
Bought a Dodge Charger SRT8 this spring as a mid life present to myself. What a butt kicking fun car. Worth every shekel paid for it.
Very funny central scrut.
I have been weeding the garden and planting a tomato plant and a couple little broccolis.
The tomato plant I planted week before last has little yellow tomato flowers.
the hub is up a tower getting his ham radio antenna rotator fixed, so I have to stay out there to call 911 if he falls down. He's got all kinds of safely stuff, but still. So I am forced to stay out there and garden instead of reading cr all day.
Previous broccolis and cabbages doing well. Gonna plant some turnips for the hub. Maybe some beets.
Completely ot factoid: beets and swiss chard are the same thing only one has a big root.
"I predict holiday retail in the Twin Cities is gonna get hammered."
Sports Guy Lafleur"
Along with all the people. It's too cold to do anything else, so those Minnesotans will sit around playing euchre and drink themselves silly. Pass me a Special Export or some Windsor.
Mazda B2300 pickup, will turn 200,000 next week.
Same truck as a Ford Ranger, for what it's worth.
Check this one out. Broken Back Bond.
YouTube - James Bond spoofs
Ponyless in NJ writes:
does Jas have a long white beard, a big smile and a hearty laugh?
You're confusing him with a Buddhist...try to picture Gandhi spinning thread...
Completely ot factoid: beets and swiss chard are the same thing only one has a big root.
lawyerliz | 12.20.08 - 12:16 pm | #
Coolness! Learned something new today, cut plenty o' swiss chard out of the garden growing up...
"I have to stay out there to call 911 if he falls down."
If he falls, just catch him.
I'm bettiing there's a Burger King Employee of the Month plaque hanging with pride on Jas' wall as the pinnacle of success in his shrine of accomplishments.
1st large California city (1 million metro population) to enter a depression....Fresno, Ca unemployment rate now 12.1%
http://www.fresnobee.com/updates/story/1087360.html
"I'm bettiing there's a Burger King Employee of the Month plaque hanging with pride on Jas' wall as the pinnacle of success in his shrine of accomplishments.
bearly
I don't think they can hang pictures in padded rooms.
--
"Paul Krugman on CSPAN right now, just starting if anyone is interested."
Thanks, Dirk.
Jas
White Russians for me.
This is a great weekend to be homebound. Plenty of football on, be with the family, socialize with the neighbords, push some snow around, ignore the endless Franken/Coleman recount, make some chili, surf CR.
Off to the Panhandle for New Years week, so something to look forward too.
"crispy&cole writes:
1st large California city (1 million metro population) to enter a depression....Fresno, Ca unemployment rate now 12.1%"
As long as they have some of the most fertile ground around, Fresnoites will survive. Las Vegans are screwed (because that is the best paying job right now there and it is almost impossible to grow vegetables in parched desert soil).
"Jas, I don't think it's very smart to buy a BMW. You're paying an inflated price for a car that cost too much to maintain. What good is it to save money in one area just to blow it another? Same difference, in my opinion."
You don't understand the world of high stakes finance. The financier - hedge fund manager, stock broker, whatever - reasons: why forgo life's pleasures, whether it be a luxury car, a weekend in Cancun, or an all-you-can-screw fest at the nearest bordello? He can always steal more money later.
The subprime borrowers who were offered the American Dream with no money down employed similar reasoning.
The real fools are those who did not feast at the table of the largest credit orgy in history. Because the hi-fi guys can afford the bill - they're paying it with money they steal from you - and the subprime guys will just skip out on it. Those who didn't live beyond their means get to clean up the morning after and take care of the tab.
"During winters I am provisioned for at least two weeks."
If you were out where it really frigging snowed you'd better have three months worth. 12-15", that ain't snow that's a drizzle.
"Off to the Panhandle for New Years week, so something to look forward too.
Sports Guy Lafleur"
I don't think there is much to do in the Panhandle of Oklahoma except watch football and surf CR. Might as well save the money and stay home.
My wife and I decided to try Burger King again after not eating there for at least ten years. We wanted to see if it tasted as we remembered it. It was awful. That's not beef...it's human flesh, carved from the bones of homeless people and the hundreds of thousands of people who go missing every year. And their fecal fries are disgusting. That's not how I remember it...but, of course, I've been unconditioned since I last had it, so my reaction is really not surprizing.
Dallas 11th on commercial property risk report | [an error occurred while processing this directive]
Dallas 11th on commercial property risk report
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened, according to the study by New York-based Real Capital Analytics.
"Morocco Bama writes:
My wife and I decided to try Burger King again after not eating there for at least ten years. We wanted to see if it tasted as we remembered it. It was awful. That's not beef...it's human flesh, carved from the bones of homeless people and the hundreds of thousands of people who go missing every year."
They day they got rid of the Yumbo was the day they lost my business.
Me-I'm one of those cpas too-got a 17 yo celica-230,000 miles-haven't had a car payment in 8 years-guess I'm not doing much for the economy...cheap bastards aren't we?
Madoff Shifts from Proprietary FIX engine to Cameron Systems
Madoff Shifts from Proprietary FIX engine to Cameron Systems
Bernard L. Madoff Investment Securities replaced its in-house proprietary Financial Information Exchange (FIX) engine with Cameron Systems' FIX protocol engine to connect with brokers, networks and service bureaus.
Just an T opinion, but I think Madoff was able to pre-screen trading activity and front-run trades, i.e, he ambushed accounts with his patented software.
Oklahoma.
Isn't that where the SuperSonics play?
Krugman's been flying high since coming back from Europe ... just a bad Nobel-jones or too much pickled fish in Sweeden?
Time to check his blood for methyl-Hg ...
They day they got rid of the Yumbo was the day they lost my business.
Elvis
Demise of the Whaler chased me away
"Dallas 11th on commercial property risk report
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened, according to the study by New York-based Real Capital Analytics.
FFDIC"
Dallas will get hammered, because oil is horrible and Texas was the final frontier for flippers (including CRE). They wrongly believed that since prices hadn't gone parabolic, real estate was a bargain. Now, they will just swim away and Dallas will be left with a massive oversupply of unmaintained homes and commercial properties.
Is this the gay XMAS thread again?
Diamond Dick - tend to agree, the Bilkotron 2000 had to work that or a similar way.
Of course liquidnet is completely different....
C
"Is this the gay XMAS thread again?
Diamond Dick"
You are here, aren't you.
just a bad Nobel-jones or too much pickled fish in Sweeden?
Princess Madeleine makes a mean Fur Pie. It sticks to your ribs.
FFDIC writes:
shared...n1.4a2ecb4.html
Dallas News, Sports, Weather and Traffic from The Dallas Morning News
Dallas 11th on commercial property risk report
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened
.. and two weeks ago, people were still marveling how well TX has held up...
San Antonio will get crushed more than any city in Texas...Toyota plant job losses and flippers gone wild
I read somewhere years ago that BK was adding worm meal to their burger meat mix, no idea if they still do it. It's pure protein, doen't have much taste and better for you (no fat) than the beef ... and it's a cheap filler. Just add more tallo and it still tastes like a flame broiled burger, YUM !!!
Not a big deal to me, I've eaten far worse in Asia.
You're confusing him with a Buddhist...try to picture Gandhi spinning thread...
Samdog
You're kidding aren't you ? More like Laxmi Mittal ( MT ), though since he said Thar desert - possibly Marwari - OT, great movie called "Paheli" - that uses the Marwari landscape, language etc..
We need a pic of Jas Jain to be sure - in it, does he wear a Sherwani, a Marwari or a dhoti ? Then we'll know.
All OTT and with no malice intended.
-K
Morocco Bama writes:
just a bad Nobel-jones or too much pickled fish in Sweeden?
Princess Madeleine makes a mean Fur Pie. It sticks to your ribs.
... did it ever occur to you Mrs Krugman might be reading?
a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales.
And we know how dependent local CA governments are on sales tax revenue now that property tax receipts are dropping like a stone.
did it ever occur to you Mrs Krugman might be reading?
Your statement assumes she doesn't have a sense of humor. I tend to agree with your assessment.
50% chance of a depression:
Business & Technology | 50% chance of depression forecast | Seattle Times Newspaper
A big mac has like 1000 calories. Don't think that counts the fries.
lawyerliz writes:
A big mac has like 1000 calories.
For a hard working man like me, I need all the calories I can get.
In-n-Out is the only real choice for a hamburger for me...BK and MCD are horrible
crispy&cole writes:
\tSan Antonio will get crushed more than any city in Texas...Toyota plant job losses and flippers gone wild
crispy&cole | Homepage | 12.20.08 - 12:34 pm | #
The military presence is orders of magnitude more important to San Antonio than one Toyota plant. BRAC will be net positive for San Antonio. IMHO.
This sunny ut cold day in qTown is a scene for a nationally televised football game in the third annual Chile Bowl. One of the teams is from Fresno. Each team is required to purchase thousands of tickets, but the number sold to the fans from California is in the hundreds. Now I know why since football bowl games away is expensive for the umemployed ifrom Fresno.
I expect to see more empties than bodies this afternoon on the ESPN game.
Chile, as Jas would again, is a wonderful food for the cold winter months.
Viva Chile!
re: "...As I've noted before, CRE owners are much more willing to just walk away than residential owners." -
and not held nearly to blame, or task, for their risk taking vs residential owners
it's the old thing that corporations have been granted more rights than individuals
so who's benefiting from that?
snopes on worm meal...
snopes.com: Worm Meat Used in Fast Food
Quote from crispy's link:
That loss of confidence is leading households and companies to undervalue assets, which in turn is hurting consumer spending and investment, he said.
Notice the subtle bias. It's not this guy's job to know what things are supposed to be worth.
Mothballing? Can you realistically mothball commercial space?
nova, you can mothball the permits which on a project not yet begun may be their most expensive and most valuable asset.
i lived on a beach in S FL for 15 years. all sorts of new anti development laws could not stop old permits from being used to build things that no other entity would ever be let to do again. old permits frequently increased in value tremendously because you could be sure there would be no competition if what you were allowed to do was now illegal.
a big con that the newly arrived boomers bought was "anti-development". what happened was zoning committees seized power of denial over all property through their planning boards.
deals got done. people got paid. everyone knew who was in charge as anti development laws were used to stifle any resistance to "gentrification", which was really corporatization.
these "quality of life" laws of paranoia and intolerance were primarily applicable to the activities and promotions of small businesses. the small business owners were the original stakeholders and the first to say things smelled fishy. they would be punished by parts of their business literally being outlawed.
sw fl is so corrupt and infected with the boomer looter mentality.
silvertoes writes:
Each team is required to purchase thousands of tickets, but the number sold to the fans from California is in the hundreds
... sounds like a Stanford home game on a good day ...
Har, personal guarantees of what?
A former Governor of Arizona went BK- all of his junk was sold, but guess what, he still had a trust from the grandparents, and his wife continued to support him in the style that he was accustomed too.
Nothing like a community property state with an ironclad prenup.
Lenders think they are getting a chance at steak and they get gruel instead.
This is the difference between the common man and the rich, the rich always have their fallbacks, because they know every project can fail. Look at Trump- broke again in Atlantic City, yet personally wealthy.
What a schlub.
Incorporate and shield risk, that is life.
Someday this war's gonna end...
It is well past the time that the US re-examine its incorporation laws and financial responsibility laws to curb the most egregious cases of layering of corporate entities (including the so-called ring-fencing) that allow the rich to protect their irresponsible 'investments' from attack in the bankruptcy courts and torts courts.
I'd start by removing the fiction that corporations have all the rights of persons under the laws - a SCOTUS-created fiction that goes way beyond rationality and has resulted in corporation control of the economy, and various fictions such as 'off-balance sheet' entities.
Just why should a corporation have a right to 'free speech' or other Bill of Rights protections? Do corporations have the right to keep and bear arms as well, or is that a private army?
Rest in Peace Dock:
Dock Ellis, who infamously claimed he pitched a no-hitter for Pittsburgh under the influence of LSD and later fiercely spoke out against drug and alcohol addiction, died Friday. He was 63.
Max | Homepage | 12.20.08 - 12:44 pm | #
It's just classic with these clowns - the market sets the price - until they get an answer they don' t like, then it's time to go answer shopping to the Fed...
a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales. - Dawg
And we know how dependent local CA governments are on sales tax revenue now that property tax receipts are dropping like a stone.
Max | Homepage | 12.20.08 - 12:39 pm | #
Actually property tax assesments are doing fine. Strangely, tax reciepts are even stronger. This is the flip side of the stabilizing factor of Prop 13. The side its opponents overlook. My taxes are going up 2% this year as is near every house sold prior to 2003. Prop 13 is the only bright spot in the California budget picture. Municipalities are as you note very dependent upon sales tax revenues. So much so that they've engaged in a generation of what is called "zoning for dollars." This contributed to some incredible examples of commercial overbuilding. Oxnard, CA for a poster child built the "Oxnard Auto Center" and enticed dealers with a 1% sales tax rebate. Don't even ask about the prospects for the Thousand Oaks Auto Mall. Again, gross reciepts are "plunging" to c. 2003 levels. There were far fewer fiscal problems then. This is not a revenue problem. Indeed there is no amount of revenue that can possibly address California's spending patterns. I would go further and suggest that more money like the proposed "Obama Manna" will ultimately make things worse.
Max writes:
Quote from crispy's link:
That loss of confidence is leading households and companies to undervalue assets, which in turn is hurting consumer spending and investment, he said.
Notice the subtle bias. It's not this guy's job to know what things are supposed to be worth.
Max--Let me fix it for you:
That perceived loss of confidence tends to influence leading households and companies to somewhat lean toward undervaluing assets--at least to a degree, which, in some cases, might hurt consumers' propensity to spend and invest, at least in the very long run, he said.
...glad to be of help.
Chicago-based ShopperTrak RCT reports that foot traffic at 50,000 U.S. stores fell 18 percent for the week ending last Saturday as compared to the same week in 2007.
Dock Ellis dead eh. Another hero bites the dust.
comscore shows YTD online spending flat YoY - week of December 8-14 down at -2% YoY - nice weekly chart about 3/4 of the way down the page.
Free Shipping an Important Stimulus of E-Commerce Spending Again this Holiday Season - comScore, Inc
My kids was hired to work at Macy's Kenwood for the Christmas rush and he hasn't worked in three weeks.
Howsabout principal cuts for only those who put some minimum amount down--like 10%-15%-20%. Did what you are supposed and got screwed anyway people??
lawyerliz | 12.20.08 - 10:49 am |
It's going to be interesting to see what the details are if there is any direct to homeowner aid.
Like you said, do people who scratched up a down payment get preference?
Does the help go to people who are current on their mortgage, or those who are behind?
Do people with good credit ratings get help first?
Do we make people tap any available funds like 401ks first?
How do we treat serial refinancers?
NYT : Governor Says Higher Taxes On Wealthy Likely
"If the deficit starts to grow again, then we're out of moves. I've cut as much as I could"
Just Offstage In Albany: Higher Taxes On Wealthy - NY Times
First, they came for the wealthy and I said nothing...,
wait till you see charlotte, nc blow up. it is the poster child for particleboard.
In future there will be loose associations of oddballs, all of equal means, who as a hobby obsessively seek out ways they could have made millions in the age before the government controlled all endeavor. Kind of like people who play Dungeons and Dragons.
NYT : Governor Says Higher Taxes On Wealthy Likely
"If the deficit starts to grow again, then we're out of moves. I've cut as much as I could"
First, they came for the wealthy and I said nothing...,
Tha Peter Lynch Mob | 12.20.08 - 1:09 pm | #
If you have any taxable assets or income you <b>are</b> wealthy. And in this deflationary air pocket there's no place to hide either.
Tha Peter Lynch Mob writes:
NYT : Governor Says Higher Taxes On Wealthy Likely
First, they came for the wealthy and I said nothing...,
Then they came after my Magellan Fund, and I still said nothing: because that's what it's worth...
Kind of like people who play Dungeons and Dragons.
otishertz | 12.20.08 - 1:11 pm | #
We could call it "Cossacks & Commisars."
Or... Krugmans & Keynesians.
R-Dawg,
Funny you mention the Ventura County auto-malls. Bought a car last weekend (Acura); we live in VenCo but no dealer could match the price from Orange County; I don't even think they would've hit our price trying to sell us a used car. When we were haggling with the salesman he was saying they couldn't even sell us at a comparable price because even though their sales have dropped, they still need to pay their electricity bill. Our cranky son got us out of there quick but he followed us all the way out. Looking at their online inventory it looks like they haven't sold anything.
You can't make a profit for selling below your cost, but at the same time not selling anything is a good way to get to the bottom faster...
If the deficit starts to grow again, then we're out of moves. I've cut as much as I could.
Did his nose start growing out like Pinnochio?
zoning for dollars... i could seriously go on and on about that.
Funny you mention the Ventura County auto-malls.
YLSP | 12.20.08 - 1:17 pm | #
Both Oxnard and T.O. have massive new multi-million dollar dealership projects nearing completion. The Ventura Volvo has already closed. The Cars 101 (Bunnin Group) is closing. Late model lease return X3s and X5s are clollecting dust at Steve Thomas in Camarillo. The entire 101 corridor is getting crushed. And what does SPG have in store(s)? 45 new storefronts and 5 new restaurants (apr 09) at Las Posas across the road from the just closed Linen's N Things and Coco's. Don't even get me started on the Esplanade and Riverpark.
Another data point from the Central California Coast :
Did a blog entry about a formerly well-off Silicon Valley woman who was desperately selling her possessions to make her rent. This comment came in from another local:
"We have two friends in (Santa Cruz) living in homes they have owned for years with fantastic views of the bay and city lights. Both are on the verge of losing them. One via loans against the house to work the stock market using options and the other with loans against the house to work the stock market on margin.
Both think it will go up from here. They have no choice. They're all in."
How many more victims of the casino economy like that are out there? The walking dead -- and so are their mortgages.
Jas Jain writes:
"Time to shovel some more snow. Yesterday morning there was 12-15 near my front door.
I live where I do because I love to be snowed-in 2-3 times a year (I grew up near the Indian desert of Thar and didn't see snow until I was 20) and have a white Christmas. Well, this whole week, beginning Sunday night, is going to be snowed-in week. I had two furniture deliveries that are waiting all week and would be made most likely on Monday or Tuesday. During winters I am provisioned for at least two weeks."
Jas: great! Are you prepared to do without electricity, gasoline and kerosene? Coming soon to a community near you. (Blackouts, etc.)
Lay in chickens and plant root veggies for borscht. East Europeans knew how to survive.
I laugh at the competing survivalist theories. Vegatable gardens? This time is gonna be more like "Johnny Memnonic" than "The Waltons." Save up for wetware.
Re: BayWalk
I was curious about this - wasn't sure what it was - condo complex? Shopping mall? Turns out to be the latter - moreover, it was opened in 2000 (before things went nutso) AND it is described as "the soul of St. Petersburg." Which makes me really wonder about St. Petersburg.
The $40-million BayWalk entertainment complex has become a hot spot for shopping and nightlife. Adding momentum to a revitalization of downtown St. Petersburg, BayWalk opened in the fall of 2000.
The Mediterranean Revival-themed complex known as the Soul of St. Petersburg includes bars and restaurants such as Wet Willys, dish and Dan Marinos Town Tavern as well as a full-line Ann Taylor shop and other retail outlets.
from Downtown St. Petersburg, Florida - Boardwalk
I suppose nothing says "soul" like Ann Taylor.
"Dan Marino's Town Tavern"
LO Effin' L
That sounds like something from The Simpsons !
I live in California.
Monday's predicted high for Minneapolis is 0 F.
I think I'll stay here (even though my furnace is out and won't be fixed 'til Monday).
Comments lately seem very gloomy and pessimistic. I'm not sure they are wrong long-term.
But short-term, I see CBs and govts. around the world just putting the peddle to the metal on monetary expansion and deficit spending stimulus programs. They don't know what else to do, and there is almost a contagious quality to it. I think it will escalate through through 2009 and into 2010, until the point where it starts to work at the same time that there is vast quantities of liquidity floating around in the world.
The liquidity will generate massive inflation, maybe faster than some here realize, and work its way into several new bubbles. But given the panicky nature of these times, bubbles seem to me most likely in real things people need to survive like food and oil.
Gold price is the true barometer of hyperinflation. To me, the only question is when it goes vertical, not if.
FYI, California Housing Finance Agency suspended a bunch of programs last week due to the California budget crisis.
Effective Demand: CalHFA suspends some programs
Hairdresser / Policeman couple spending $2000 instead of $3000.
This thing has a long way to go.
RGE - Blackouts and Cascading Failures of the Global Markets
Failure of grid, leading to shunting, leading to further failures.
Lights out.
JimPortlandOR writes:
It is well past the time that the US re-examine its incorporation laws and financial responsibility laws
POTD - thanks Jim. Strange how little comment is given to this egregious problem and the needed solutions.
It's like the economy has an arterial wound and everyone is looking for buckets, but not a tourniquet.
Monday?
The high Sunday in the Twin Cities is gonna be -3.
Yep, it gets cold in Minnesota in the winter. It's true. Everybody from California ; don't move here. Go to Arizona, Nevada or Mexico. Plenty of sunshine and dry climate.
What's that... water? Well, can't have it all.
I think the Fed knows there's overcapacity in CRE, and so that's why they're letting it blow up.
--
"Jas: great! Are you prepared to do without electricity, gasoline and kerosene? Coming soon to a community near you. (Blackouts, etc.)?
JohnR,
Thanks. Not there yet, but should be there in a year. I am big on caution and safety (except when it comes to sharing my views!).
Jas
Peter Lynch Mob
At Dan Marino's Town Tavern, all the employees stay home on Superbowl sunday, and none of the napkins have rings either.
comscore shows YTD online spending flat YoY - week of December 8-14 down at -2% YoY - nice weekly chart about 3/4 of the way down the page.
Error /
kernel (20) - comScore, Inc? press=2629
citizen energyecon | Homepage | 12.20.08 - 1:04 pm
It would be interesting if Comscore (or anyone for that matter) broke down on-line sales by whether sales tax was paid. Avoiding sales tax has probably been a big factor in on-line sales growth, and is a reasonable target for state revenue in the near future.
I don't have anything to do with Forex. Smelled like a currency war race-to-the-bottom move to me tho. Thoughts?
bearly | 12.20.08 - 11:06 am | #
Yes. Been a long time coming too. Just the opening salvos IMHO.
Further up the thread there was talk about investing in emerging markets, especially China.
Please do your due diligence on the Shanghai stock exchange before investing there. Very manipulated, companies are hugely inflated before they even get onto the stock exchange. The government also keeps a lot of stock float off the exchange and sells the shares over time. A lot of manipulation going on there as well.
You would be much better off investing via Hong Kong stock exchange. Much less manipulation, fixed-rate currency and no problems with currency flows being stopped at any time. Unfortunately HK is up 50% off the lows.
My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing.
Personally, I believe he's actually in one of only growth industries around ... and sooner or later, the lines will light up at the call center. But I was surprised to hear that activity appeared slow. 2009 should be interesting for him, but I guess he'll have to look busy for a few weeks.
RhodesianGreenbackinAZ writes:
My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing.
Unfortunately, it looks like your little brother has fallen for the soon-to-be-notorious 'call center employment bubble.
I predict holiday retail in the Twin Cities is gonna get hammered. This weekend might be it for many stores.
Sports Guy Lafleur | 12.20.08 - 12:14 pm | #
Yup. Even my wife & daughter are staying in due to the snow - when that happens Pawlenty calls an economic state of emergency the next week as sales taxes fall that much - look for it to happen.
LOL!
@Unfortunately, it looks like your little brother has fallen for the soon-to-be-notorious 'call center employment bubble.'
Samdog | 12.20.08 - 2:16 pm | #
I wonder if they serve Nutrisystem at Dan Marino's Towne Tavern?
YouTube -
Pissed Off In California writes:
Further up the thread there was talk about investing in emerging markets, especially China.
Please do your due diligence on the Shanghai stock exchange before investing there.
In this case, due diligence may involve no more that looking up 'shanghaied' in the dictionary...
did it ever occur to you Mrs Krugman might be reading?
Your statement assumes she doesn't have a sense of humor. I tend to agree with your assessment.
Morocco Bama | Homepage | 12.20.08 - 12:40 pm | #
Don't worry about PK & the Princess... he'd want to talk economics & she'd say 'well it's getting late... ' And no one knows that better than Mrs. PK... bet on it.
Off-topic antecdote. Drove past Best Buy today and there was a fellow holding a sign up announcing 10-30% off everything in the store.
"Please do your due diligence on the Shanghai stock exchange before investing there. Very manipulated, companies are hugely inflated before they even get onto the stock exchange."
HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China.
Bullard is a straw man. This whole pipe dream was big time RNC operative Mel Sembler's baby.
PK & the Princess
That has a catchy ring to it....a new CBS sitcom, perhaps?
Market's not going to be as bad as most here foresee, reason is they are throwing everything at it. It's bound to recover.
lease do your due diligence on the Shanghai stock exchange before investing there.
Samdog | 12.20.08 - 2:22 pm | #
As opposed to these non-rigged markets here in the US?
My shopping forays have shown malls that are semi busy, not dead.
The problem is the whole idea of basing all your profits on Christmas sales.
I am rather bored with Xmas. Haven't put up a single decoration.
Have bought presents.
This is the 2nd or 3rd time I've seen the overbuilding in Miami Dade.
The banks never learn. Actually things were seriously overbuilt when hurricane Andrew hit. Well, that took care of it for a few years!!
Morocco Bama writes:
PK & the Princess
That has a catchy ring to it....a new CBS sitcom, perhaps?
they tried it in the '70s ... sometimes it just doesn't work ...
Eric writes:
lease do your due diligence on the Shanghai stock exchange before investing there.
Samdog | 12.20.08 - 2:22 pm | #
As opposed to these non-rigged markets here in the US?
Eric | 12.20.08 - 2:28 pm | #
Pardon me, Eric, but I don't believe THAT was my part of the comment ...
elvis,
good one!
You are here, aren't you.
jas:
time for medication already. Or may that east indian ganja! Must be freezing up there in mountains.
Pardon me, Eric, but I don't believe THAT was my part of the comment ...
Samdog | 12.20.08 - 2:30 pm | #
It wasn't, but it's hard to point fingers at other corrupt countries when we've not gotten our own house in order.
And even when we do "regulate", in what way is, for example, banning shorting without notice anything other than crooked?
BJ and The Bear
YouTube - BJ and the Bear
First, they came for the wealthy and I said nothing...,
Tha Peter Lynch Mob | 12.20.08 - 1:09 pm | #
In NY it's more like... First, they came for the wealthy and I said ******* WHOOOPEE!!!
"HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China."
Please be my guest and invest directly in the Shanghai Stock Exchange. Then report back to us two years from now on how it's worked out. Let me know how it goes when your assets are frozen to prevent hot money outflows. How did that investment by BofA into the biggest mainland Chinese bank work out just now? Not to well since they've just been prevented from selling their shares.
"As opposed to these non-rigged markets here in the US?"
Did say anywhere the US markets aren't rigged? I don't believe so.
Again, please due your due diligence. You will find more than meets the eye. Speak to people who have invested in Asia via Shanghai versus Hong Kong. People who have experience circumnavigating currency restrictions. Ask them why they invest in China via Hong Kong, or why the invest in the China growth story via select commodities versus directly in China.
But hey I guess glib statements work a lot better the investigating before you invest right?
Eric writes:
Pardon me, Eric, but I don't believe THAT was my part of the comment ...
Samdog | 12.20.08 - 2:30 pm | #
It wasn't, but it's hard to point fingers at other corrupt countries when we've not gotten our own house in order.
And even when we do "regulate", in what way is, for example, banning shorting without notice anything other than crooked?
Ummm...OK.
By the way, I have two daughters adopted from China and I'll be there again in Jan '09.
I'll put in a good word for you.
"It wasn't, but it's hard to point fingers at other corrupt countries when we've not gotten our own house in order."
My wife was born in China, jumping to a bit of a conclusion there aren't you Eric?
Market's not going to be as bad as most here foresee, reason is they are throwing everything at it. It's bound to recover.
Anonymous | 12.20.08 - 2:28 pm | #
If the market was the problem with our economy I'd agree. The market is rigged and manipulated and not a true indicator of anything except loss of confidence in our entire system.
The government sees the stock market as America's brand and they still believe the brand is preeminent. Prop it up at all costs. The cost will be the destruction of our dollar and our quality of life.
Hairdresser / Policeman couple spending $2000 instead of $3000.
This thing has a long way to go.
bartman | 12.20.08 - 1:50 pm | #
Thank you - my thoughts exactly.
"My kid brother just started this week as a call center rep - contractor for the FDIC in the DC area. He's just doing orientation week now, but was surprised as to how slow it appeared and is worried that maybe they hired too many call center reps and that aren't going to be enough banks failing."
looks like the fdic is adding capacity.
not good
czar picosec | 12.20.08 - 2:03 pm | #
Count on it - the amount of time the internet is sales tax free is measured in months - with a new congress as the breadth of sales tax declines for brick and mortar becomes fully appearant...
Yep, it gets cold in Minnesota in the winter. It's true. Everybody from California ; don't move here. Go to Arizona, Nevada or Mexico. Plenty of sunshine and dry climate.
What's that... water? Well, can't have it all.
Lurker McMidwest | 12.20.08 - 1:56 pm | #
Gonna get another 6-8 inches of that frozen water on my driveway tonight they say - falling now. Oh the horror.
dryfly writes:
Hairdresser / Policeman couple spending $2000 instead of $3000.
This thing has a long way to go.
bartman | 12.20.08 - 1:50 pm | #
Thank you - my thoughts exactly.
... don't jump to conclusions ... how do you know they didn't fully deleverage first? (Hahahaha).
HAHAHAHAHAA. And New York isn't? With Madoff and all that crap, US markets are now somewhere between Thailand and China.
Tim, I hope you're not with Bloomberg....cuz I know a "Timmy" there. Anyways....
Great point. Let's listen to Michael Bloomberg @ 16:45 pontificate about American Exceptionalism. Considering everything that has transpired since this sit-down at Georgetown, his comments about transparency in America versus other countries is quite laughable. Oh sure, we have the veneer of transparency...but it's just that...a facade hiding the terrible decaying rot.
FORA.tv - Michael Bloomberg on the Economy in Crisis
If the market was the problem with our economy I'd agree.
The market actually has a lot do do with the economy. Lots of interconnections with the markets and sentiments effect on the real economy.
As for destruction of the dollar, it's been happening for a few decades but only now do people around perceive that something is up.
Quality of life has much to do with the direction society decides to take. More money doesn't necessarily equate to better quality of life.
Dear RE,
First a minor point : If I remember correctly (maybe this time) I think Moore's law only dealt with the growth of density and speed of solid-state circuitry (the dumb hardware).
Now, what you denote as "commoditization of labor" is in my terminology just the result of learning (to do things more efficiently). If you do something new the first time, it is difficult, after long practice, you do it much more efficient. Has happened since the beginning of time (well, not quite!).
But why do you think humans don't "stand a chance to compete in the technology race" ("Automation/robotics is a game changer that outmodes human ability"). On what basis do you make such a fatalistic prediction ?
(btw. I am not so sure there is actually a race, do you see humanity move/develop ? I guess you need spans of 10.000 years to notice any change in human brain structure/capability)
I remember when computing really took off (in the late 60's) people made dire and wide-ranging predictions about the comming world-dominance and power of IBM . (Computers then were mysterious for normal people and in a way frightened them. ) But it didn't happen !
History showed that the company puroprted then to grab world-dominance was just a normal, although very successful enterprize made and run by humans and perfectly capable of the usual human shortcommings. No ominous "Über-company", no world-dominance and today it has a significantly changed bussiness model ! Computers are just an ajunct anymore. So, that company had to change dramatically (!) and (probaly to a good deal by not being encumbered by unions and ideology) did so successfully. IBM in the early 90's was also on the brink of bankruptcy! But there were no government aid, congressional heatings and all the fuss and whining we have today with GM and Chrysler! (Ford may even make it into the future). The then IBM management just made the meccessary changes (and yes there were also some layoffs, e.g. 3k people or so on a certain day in Poughkeepsie I remember) and it worked very well : IBM today is a very solid, profitable and still almost 100Billion (revenue) company.
So, people then were afraid of technology they did not understand, made dire and ominous predictions and all what happened was a very ordinary train of events, including a successful turnaround.
I also remember that the real "1984", when it came around was quite a dissapointing dud as opposed to the literary one! Another failed dire prediction !
As to your fatalistic opinion about automation/robotics outmoding human ability :
Remember, automation and robotics are just ordinary tools made and controlled by humans (like hammers, forklifts and yes computers). Nothing sinister here. !
As to "artificial evolution" (i.e. the progress of "artificial intelligence" :
The same applies as to automation/robotics : that is all man-made and (imperfectly, but not in the sinister sense, but in the sense that as all new stuff is beset with errors) controled machinery, plain and simple!
Every roboter is man-made and none so far hascreated another roboter! And even if it did (wild sience fiction dreams) , since the creating roboter was human-build/ -programmed /-instructed , it could easily be re-instructed to stop any nonsense. There is no magic .
I am a bit familiar (but only a bit) with that ominous artificial intelligence.
E.g. I understand the severe shortcommings and limitations of the "rulesbased expert systems" (that chessplaying computer is as I suspect based on that, and IBMs speech-recognition is, I forgort the name of the guy from Yorktown Heights fathering that. The "intelligence" these machines exhibit does not come out of a mysterium, it was placed in them labouriously by their human designers.).
Also, I know the workings of the "selforganizing feature map" of Teuvo Kohonen, which is btw. an excellent model for what goes on in the cerebellum !! No magic here ! (and it btw. has an excellent mathematial model in "adaptive vector quantisation" , used in such profane tasks as image-compression and such.)
I also know the ridiculous paradigma of "back propagation" (and the 10+ years of fruitless research into that).
Anyway, no sinister magic here at all.
There is also a similar false thinking about AI : "Can a brain understand itself ?" It is rooted in a philisophical attack on that matter, not a "natural science" (physics, mathematics, medical) based root and thus leads to false conclusions and mystery.
Well, it may shock you but there is no mystery as to the principles of how a brain performs its "information processing" !
Lastly, you say "The real number of jobs are not anymore in manufacturing but in white collar." and "Automation and robotics have caused a displacement further up the intelligence scale."
These are very profound observations and point to the major problems america will encounter in the next two or three decades and the mastery of the current crisis.
With technical progress, you certainly need more better educated people to invent, make and deal with the future, more complex (if only complex since everything new is at first not well understood and thus puzzeling ) products. Thus the upshift in the intelligence scalemore, and those who can not hold up here go into services (become hamburger-flippers, travel agents, can I dare to say brokers, etc.). So, more and better education, and this does take time!!
The other aspect is even more troubeling : the shift in american education. When I was young, my american colleagues were typical WASPs. I was surprized to lears that e.g. in the mid 80's half of the americam studends in, lets say electrical engineering/computer science were non-americans. Young americans then predominantly went into (better paying ?) law, management, etc. and later heavily into finance ! Now you have a completely overblown financial sector (?30% of GDP?) , which btw. has completely lost ist reputation and trust. I suspect, that will dramatically shrink towards (maybe not to) the 70's level of 10% of GDP. So, here you have a bunch of "superfuous" people, what do you do with them? You can not convert a financial guy or a manager into an computer scientists.
Furthermore the education of a new generation of studends into "future-viable" domains (highly educated, see previous point) takes time!
So, this is your future predicament (if all goes well, i.e. absence of any calamity) : a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future. So, two or three dark decades.
The call girl who was connected to Eliot Spitzer's fall from grace has a tattoo on her lower abdomen,"Tutela Valui". The translation seems to be contested among the literati bloggers but the one I liked was "protection to be strong" or in connection to her stock in trade "wear a condom."
Useless information provided for entertainment value and not to be construed as investment advice. Good health advice is another matter.
ASHLEY DUPRI’S TUTELA VALUI « MEANINGFUL DISTRACTION
Please be my guest and invest directly in the New York Stock Exchange..
Morocco Bama writes:
"Oh sure, we have the veneer of transparency...but it's just that...a facade hiding the terrible decaying rot."
Morocco, you're confusing me: If we have a transparent veneer, wouldn't we still see the decaying rot?
Please be my guest and invest directly in the New York Stock Exchange..
\t Morocco Bama | \t \t \tHomepage | \t12.20.08 - 2:50 pm | #
Morocco Bama | Homepage | 12.20.08 - 2:50 pm | #
I am, via inverse ETFs. (:
"The market actually has a lot do do with the economy. Lots of interconnections with the markets and sentiments effect on the real economy."
Tomatoe or tomato?
What's ironic about that, huh?, and perhaps you know this, is Spitzer didn't like to wear condoms....she had to insist he wear one.
Huh? writes:
The call girl who was connected to Eliot Spitzer's fall from grace has a tattoo on her lower abdomen,"Tutela Valui". The translation seems to be contested among the literati bloggers but the one I liked was "protection to be strong" or in connection to her stock in trade "wear a condom."
Did it say anything else, like maybe 'tutela valui, BUY TROJAN.' In which case it was a blatant advertisement.
Morocco, you're confusing me: If we have a transparent veneer, wouldn't we still see the decaying rot?
No. It's a propagandized concept bandied about by insiders, politicians and the msm to provide the illusion of transparency. That illusion is the veneer, or facade.
Seattle Post-Intelligencer: David Horsey
"a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future. So, two or three dark decades."
Exactly and for more, Asia with billions of people acts now like a giant sponge in the job markets; almost all the jobs will go there.
Hairdresser / Policeman couple spending $2000 instead of $3000.
This thing has a long way to go.
Yep. I have a co-worker who gets called by bill collectors at work. Husband is a traveling salesman. 4 kids in college. Is talking about upgrading her flat panel from 40 inch to 52. Because everything's on sale!
Werner,
Nice diatribe. Any caffeine intake over 1200 mg is considered bad for your health.
You make some good points but I'm still on my first cup of coffee and will pass on the torch of responding to your argument. Jas, go for it! Speak out from the Luddite perspective.
Werner,
Once again I am impressed with your thorough and thought-provoking analysis.
Where's Ipodius? I was promised a rate increased on FED rates..
"Did it say anything else, like maybe 'tutela valui, BUY TROJAN.' "
The beach pictures didn't reveal any further words. I would not be adverse to seeing if the bathing suit bottom covered any further relevant announcements.
Have a link, preferably not a pay per view?
Once again I am impressed with your thorough and thought-provoking analysis.
Second that. Do write more insightful analysis.
JR at 1:53pm re: Jim in Portland's statement regarding corporate status.
I can hear Justices Scalia, Roberts & Alito laughing all the way from DC. With our wonderful Congress' approval, Bush appointed one of the most pro-business Supreme Court's the US has seen (and that's saying alot). The Bush Administration has also gotten legislation passed that means more class actions end up in federal court than state court (state courts--& especially state court juries--tend to give bigger awards, be less sympathetic to corporate defenses) & to decrease the # of parties with standing--as has the S.Ct itself.
Easy to imagine the S.Ct striking down as unconstitutional restraint of/interference of interstate commerce any state effort to limit right of any corporations.
GM writes:
Werner,
Nice diatribe. Any caffeine intake over 1200 mg is considered bad for your health.
You make some good points but I'm still on my first cup of coffee and will pass on the torch of responding to your argument.
Yes, it also helps if you've had a few years of college German ... then you can invert all the back-asswards German word order on the fly ... I'm rereading it, myself.
"I guess you need spans of 10.000 years to notice any change in human brain structure/capability) "
Have you see cave paintings made 20,000 years ago, and carvings made over 30,000 years ago?
If there have been changes, perhaps they've been for the worse. Maybe we were better at cooperation too, because it was more obvious that our lives depended on it.
When the Bank of Japan initiated quantitative monetary policy easing in March 2001, it expected portfolio-rebalancing effects to help spur the economy. But as stated by Governor Fukui (2003), the expected stimulus to the economy did not seem to materialize:
one of the effects expected from the introduction of quantitative easing was the so-called "portfolio rebalancing effect." The Bank thought that, even when the marginal value of liquidity services became zero, people would start to rebalance their portfolios by investing in assets with higher marginal values whether these were real or financial assets, if the Bank increased further its provision ofliquidity. The aim of this process was thus to generate positive economic momentum, acting, for example, to push up asset prices. So far, however, the effect has not been widely observed. (Fukui, 2003)
One reason why the portfolio-rebalancing effects were seen as ineffective was that the capital positions of the private-sector financial intermediaries had been impaired by an accumulation of nonperforming loans following a fall in asset prices and a prolonged recession. As a result, financial institutions may have become more reluctant to take on portfolio risk.
" Anonymous writes:
Where's Ipodius? I was promised a rate increased on FED rates..
Anonymous | 12.20.08 - 3:07 pm | # "
Off being dismissive of opposing opinions somewhere else.
"I also remember that the real "1984", when it came around was quite a dissapointing dud as opposed to the literary one! Another failed dire prediction !"
Patience, Werner.
Just got notice of my 2nd credit card cancelled for lack of use. First one had a $20,000+ credit line, this one I forget, probably about as much, maybe less.
They're catching the whiff of what's about to happen when people turn to their cards for income after all else fails. Can't blame them. (People or card companies)
Werner writes:
Dear RE,
First a minor point : If I remember correctly (maybe this time) I think Moore's law only dealt with the growth of density and speed of solid-state circuitry (the dumb hardware).
Werner,
I'm glad to see I wasn't the only one not following where the 'Moore's Law' point was leading.
Is RE here to clarify?
from TPM
"The Fed has set up something called the TALF, the Term Asset-backed Securities Loan Facility, which will offer "low-cost three-year funding to any US company investing in securitized consumer loans" including hedge funds.
Says the Financial Times (reg.req.), "Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."
" So, two or three dark decades."
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
"Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."
The FED and the politicans want the fraud, inflation and bubble back why not give'em the money.
Most of those laid-off jobs bank UAW members have plenty of hunting rifles and ammo...just saying, for the upcoming food riots. Maybe you should duck down in your Toyota's and Honda's?
fried writes:
" So, two or three dark decades."
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
Dammit fried!... I told you: you gotta invert the WORD ORDER!:
A READING FROM THE BOOK OF WERNER:
"So, this is your future predicament (if all goes well, i.e. absence of any calamity)..."
Thank you for the James Gang link. I just listened to about 30 mins of great music that I had forgotten. Man if I could go back to being 16 for just one damn day. Man oh man....
Dickeylee writes:
Most of those laid-off jobs bank UAW members have plenty of hunting rifles and ammo...just saying, for the upcoming food riots. Maybe you should duck down in your Toyota's and Honda's?
...Is this a not-too-thinly-veiled threat, Dickeylee?
We most certainly have 1984, it's just that social media needed 21st C computing power and marketing to broadband it and make it voluntary.
/tinfoil
C
The TARP(that never was) has now changed to the TALF.
No legislation required thanks to the crooks (Bush and Hank)
Now going to bailout the hedge funds.
Must be a few more ethical funds like Bernie Madoff's just discovered.
Cant have rich investors losing money
What a country.
I would rather have the money go anywhere but to the Hedge Funds.
Division of labour was hard enough to arrange properly (capitalism) but now we face even more challenging one: division of robots and automatic factories. At the same time the size of workforce is growing very rapidly, especially in the developing nations.
ILO (International Labour Organization) estimates that between 2010-2020 there will be additional 1000 million young people coming to working age. Traditional means can only employ roughly 300 million out of that. 700 million is left out to do whatever they can, like joining all kinds of extremists groups...
--
werner,
As much as I admire Teutonic thoroughness, keep blog posts short, dude. If you want to make three points, make three posts. Anyway, this is not criticism.
Jas
one_timmy writes:
...Asia with billions of people acts now like a giant sponge in the job markets; almost all the jobs will go there...
You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education ?
No, it is the ones who poor the stuff into the pill-making machines who get outsourced.
Can anyone here refute the logic of a mass die off in the worlds near future?
Does having emerging markets actually use their own resources for the betterment of their people not fly in the face of the past and it's colonialism and the current neocolonialism?
Breeders and eaters are seen as a liability in globalization. If you can't contribute to a balance sheet's credit side then what use are you?
I see tragedy and do not agree with the sentiment behind my questions.
Jas Jain writes:
werner,
As much as I admire Teutonic thoroughness, keep blog posts short, dude. If you want to make three points, make three posts. Anyway, this is not criticism.
With all due respect, Jas, cyber-RE is cheap, and if you don't want to read it--scroll down.
(If it's any consolation, I think Indian food is the best, yum ...)
the first week of December, luxury sales dropped 34.5 percent... overall apparel sales fell nearly 23 percent. Electronic sales fell 22 percent
foot traffic at 50,000 U.S. stores fell 18 percent for the week
Wow. These looks like Great Depression numbers to me.
We'll be lucky if the whole economy doesn't unravel in 2009.
Malthus lives, and his name is:
Huh?
Biden primed the pump with his "the economy is tanking" comments. Prepare for much worse news and "unprecedented" action by our government to "save" the economy.
You play the cards you are dealt. Not everyone can have aces.
Well, it may shock you but there is no mystery as to the principles of how a brain performs its "information processing" !
Werner | 12.20.08 - 2:48 pm | #
Maybe you should let these guys know they are spending a $1B on something that is already known.
You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education ?
Werner | 12.20.08 - 3:47 pm | #
Yes, even the research jobs are moving to Asia.
Huh? writes:
Biden primed the pump with his "the economy is tanking" comments. Prepare for much worse news and "unprecedented" action by our government to "save" the economy.
Have we come full circle? Back to the 'Paulson's warning of martial law'?
"I would rather have the money go anywhere but to the Hedge Funds."
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you?"
Gordon Gekko
Sorry couldn't resist.
The government has a new playbook with one page. Run it up the middle behind a strong front line.
Look out when they start getting tired and the progress is impeded by the reality of fundamental economic truths.
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you?"
Gordon Gekko
Sorry couldn't resist.
Democracy has been slipping away for thirty years.
Pace certainly accelerated under Bush and gang
All started with Ronnie Raygu
They're selling postcards at the hanging..
YouTube -
SamDog, brother-in-law is UAW, and the circle he runs in all vote straight Republican, and they can't believe that the Republican Senators sold them out. Sorta gives you an ideal of his intelligence. Should be real interesting come Thursday around my place fro Christmas!
--
"Division of labour was hard enough to arrange properly (capitalism)..."
one_timmy (English/Knuck/Oz?),
Division of labor is as old as civilization. One of the geniuses of the caste system in India was division of labor.
BTW, there is high correlation between ethnicity/caste and professions (various labor functions very much included) in the US of to-day. America has a lot of caste character, especially, at the ruling elite level. No?
In 2003, I took a business trip to NYC with an aristocratic American friend of Anglo-Dutch heritage and when we arrived there from LAX he commented about the very visible class system and I said it is more like a caste system and he immediately said, "YES!" There is a day-and-night difference between California cities (LA, SD) and NYC. You can't pay me to live in NYC.
Jas
Dirk- re your comment about piercing the corporate veil.
In the case of a large real estate transaction the banks have absolutely no basis for piercing the corporate veil. When they lent they knew who the developer was and whom they were lending and how much capital was invested. Now unless there was fraud (which the existing statutes already provide for) no basis for the lenders to want a do over.
All real estate loans are options written by the lender. It accounts for why prior to 1990 the wealthiest people were in real estate. The bought the cheap options sold by the banks. All great fortunes are built on cheap options.
Be Nice to the Countries That Lend You Money
The Atlantic Online | December 2008 | “Be Nice to the Countries That Lend You Money” | James Fallows
Excerpt:
The overall financial situation in the U.S. is changing, and thats what we dont know about. Its going to be changed fundamentally in many ways.
Think about the way weve been living the past 30 years. Thirty years ago, the leverage of the investment banks was like 4-to-1, 5-to-1. Today, its 30-to-1. This is not just a change of numbers. This is a change of fundamental thinking.
People, especially Americans, started believing that they can live on other peoples money. And more and more so. First other peoples money in your own country. And then the savings rate comes down, and you start living on other peoples money from outside. At first it was the Japanese. Now the Chinese and the Middle Easterners.
Wethe Chinese, the Middle Easterners, the Japanesewe can see this too. Okay, wed love to support you guysif its sustainable. But if its not, why should we be doing this? After we are gone, you cannot just go to the moon to get more money. So, forget it. Lets change the way of living. [By which he meant: less debt, lower rewards for financial wizardry, more attention to the real economy, etc.]
a generation educated in not anymore needed skills (financial) (lost generation !) and the genesis of a future generation educated in the fields carrying the future
I mentioned "information domains" a couple of days ago and I'm sure people thought I was nuts.
Okay, I am nuts, but the issue of efficient information domains is relevant to the depression.
As a participant in four different bachelor degrees (CE, EE, CS, CIS) I can say that there is a great deal of overlap in certain concepts.
There's some gain possible by restructuring the current college programs to include generic design pattern/transaction cost/quantitative analysis curriculem for several vocations.
For lack of an empirical measurement, we can assume the 80/20 rule in how we structure work, i.e. 80% of a job should be domain-specific knowledge, 20% should be contextual overlap, a set of vocabulary, morals and common concepts that all team members ahare.
Current system is ad hoc legacy, i.e. "market-driven". One project I'd like to do is a way to measure inefficiency of it.
If you want more efficiency, you need more specialization. But more specialization means greater fragility. A lot of the current system rans on politics, not on domain knowledge.
"You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education ?
No, it is the ones who poor the stuff into the pill-making machines who get outsourced."
China is already churning out doctors at record speed and other Asian nations are also doing the same. Even the intra-Asian competition for good quality education is fierce. Singapore, South Korea, Japan, China, India, Thailand, Vietnam and even Pakistan, are all improving their school systems big time.
There is no research area in which Europeans or Americans can continue saying "Come on, only the cheap stuff will be made in Asia".
The same kind of thinking was with cars back in the 70's but look what happened! Cars nowadays are one of the most complex things to manufacture and Asians are winning that race. If they can make cars, they can make anything.
I am not saying Asians are somehow superior but they are catching up fast. That is not even the point.
The point is there will be only very limited number of available jobs coming "online" anywhere worldwide, compared to this supertsunami of available candidates for the jobs. That will create huge problems in near future, also worldwide.
a nugget from article link above
About stock market derivatives and their role as source of evil:
If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.
Jas Jain writes:
"Division of labour was hard enough to arrange properly (capitalism)..."
one_timmy (English/Knuck/Oz?),
Division of labor is as old as civilization. One of the geniuses of the caste system in India was division of labor.
Jas ... please clarify:
... are you pro-caste system?
Rather unusual point of view, wouldn't you say?
Yes, even the research jobs are moving to Asia.
The current concept of outsourcing is another method for disassociating costs from benefits, just like the Federal gov't.
Unsustainable in the long run.
Pavel Chichikov writes:
...Have you see cave paintings made 20,000 years ago, and carvings made over 30,000 years ago?...
No, but is there noticable change ?
Anyway my answer was more ment as a reply to RE's ##humans don't "stand a chance to compete in the technology race"##, trying to say that with the quite disparate advancement speeds of human beings and technology it doesn't make much of a race. Relative non-advancement of the human races intelligence vs. the advancement of technology makes would wake it at best an extremely single sided race, so as to effectively being no race (against each other) at all.
...If there have been changes, perhaps they've been for the worse. Maybe we were better at cooperation too, because it was more obvious that our lives depended on it...
Well, yes and no: We have for instance much fewer wars in Europe since the Middle Ages. So, not all progress was bad.
--
Last year, I became aware of common schemes for motel owners to push all the risks to the banks and the creditors. They were expanding not for sound business reasons but to profit from laying risk at bankers' feet. Yeah, yeah, CR, I hear you, "CRE was not as overbuilt as RRE." Arent there more crooks in CRE than in RRE?!
If people were lending their own money none of it could happen.
Jas
How satire can you derive from the crash of Wall St?
These guys are testing:
Wonkette : A Children’s Treasury Of Evil Wall Street Failures’ Photos From This Good NYT Series About The Financial Crisis
Biting.
C
Duh, correction "how MUCH satire"..
C
The point is there will be only very limited number of available jobs coming "online" anywhere worldwide
"Work is finite" at any instant in time.
Lately I've been wondering about the complexity of products. For consumers, airplanes & ships are fairly complex but most of the really complex stuff isn't aimed at consumers.
It's for large corporations or governments, i.e. 10,000 user IT networks, nuclear weapons, etc.
In a consumer-driven world, how much complexity & domain knowledge do you really need?
Broward Horne:
What would you like to study the efficiency of? The markets? People have spent years trying to measure this and I'm not sure we any better off for it.
I'm not sure I'm following you. Please elaborate....
--
"Jas ... please clarify:... are you pro-caste system? Rather unusual point of view, wouldn't you say?"
I am a CRITIC and an observer. I am not pro anything as far as various human institutions are concerned. They arise in time and space based on conditions preceding them.
For example, I could be pro Swiss democracy of 100-200 years ago, but no way I am pro democracy of America and India today. Human institutions with the same labels could be radically different in practice. In general, monarchies are the best form of political system based on my read of history of East and West and in between.
Jas
citizen energyecon writes:
czar picosec | 12.20.08 - 2:03 pm | #
Count on it - the amount of time the internet is sales tax free is measured in months - with a new congress as the breadth of sales tax declines for brick and mortar becomes fully appearant...
wouldn't even take an act of Congress. All that a state need do is to ask people to attach their year end credit card summary statement. Five people audited and charged penalties for not reporting out of state purchases would be enough.
The banks never learn.
lawyerliz | 12.20.08 - 2:28 pm | #
Bankers suffer from institutional amnesia. That's a polite way of saying that they're stupid.
Counterpointer writes:
How satire can you derive from the crash of Wall St?
Thanks for the link--what a hoot!!!!!
Hahahahaha.........!
time for medication already.
andiron | 12.20.08 - 2:32 pm | #
Jas has been quite civil today, and he deserves kudos. I like Jas when he's not on his high horse (or whatever that is).
fried writes:
" So, two or three dark decades."
No way. The time frame is way off, Americans will not sit still for 20 or 30 years.
And your analysis wholly omits the human factor...resentment and anger from those on the downslope, resource fights, water shortages, food shortages, political instability amid crashing economies.
Yes, I see your point and said ""if all goes well, i.e. absence of any calamity"" , then it still needs one to two decades to do the (re-)education. Maybe three decades was too pesimistic.
So, burry your gunns and go studiyng!
Whiteout Friday
Whiteout Friday - BostonHerald.com
Already battered by a freeze in consumer spending that has sent their sales growth below zero, Massachusetts stores took another hit as a winter storm barreled through the state yesterday.
But while the storm certainly wont help retailers, chances for a successful season already have been wrecked and cant be salvaged, according to retail expert Howard Davidowitz.
Winter storms hammer Wash. state, retail sales
Local News | Winter storms hammer Wash. state, retail sales
| Seattle Times Newspaper
Yet another winter storm forecast to hit Washington state this weekend couldn't come at a worse time for retailers already facing sluggish holiday sales.
"It's just a bummer all around," said Shultzie Fay, owner of The Paperdoll specialty boutique in Bellingham. "We're in an economic slump and all of a sudden you factor in weather conditions."
Storms this week kept so many customers away that Fay started offering to deliver purchases to customers unable to make it to her store.
It's only going to get worse. The National Weather Service issued a winter storm warning for much of Western Washington for this weekend. It also predicted heavy snow in Eastern Washington.
I'm not sure I'm following you. Please elaborate
Schramm.
If I have a team of 5 members who all possess the exact same set of knowledge, that has X value.
If I have a team of 5 members, and each member has 50% of his own knowledge, but 50% of a common base for all members, that has X++ value.
If I have a team of 5 members with complete specialization and no common knowledge, that has no value for creating a complex product.
There's an optimum way to structure knowledg domains and specialization for society in general.
I havent' given it a lot of thought because I don't believe I have the power to change it. However, the people who run universities do.
But what i really believe will happen is that the world will devolve into many, many small sets of localized interpretations of the same base designs. Employment will be filled by "moderators" who serve as local communication domains.
I.e. there's no real long-term value in globalization because people work to defeat it by demanding ever-more intricate minor differentation in products & services.
I could be wrong but that's what the IT world looks like to me now. Lots of localized politics and minor differentation to preserve jobs.
Whoa! ... Jas ...
now you're gettin' scary ...!
Whatever it means, the term Aggressive Supervision makes us want to drink poison.
nice lol
OT @ Werner:
Would you have some nice German-language economic/political blogs you might recommend? Thx in advance.
"Well, yes and no: We have for instance much fewer wars in Europe since the Middle Ages. So, not all progress was bad."
The Thirty Years War of the 17th century was the first modern European war in terms of large scale atrocity, anarchy and slaughter. But nothing can compare with the 20th century for military horror.
"...with the quite disparate advancement speeds of human beings and technology it doesn't make much of a race."
I agree with you there.
--
"You really think the jobs in e.g. pharmaceutical research are outsorced to Asia? Do they have the education? No, it is the ones who poor the stuff into the pill-making machines who get outsourced."
Werner,
You are sadly mistaken. What do you know about the Japanese pharma industry?
Just wait for 20 years and lot of pharma research would move to Asia. Whites and blacks might dominate the sports and entertainment industry, I suppose.
I am not very optimistic about South Asia, but East Asians will dominate, economically. In finance, Jews of the East (a term used by king of Thailand) would give Jews of the West run for their money!
Jas
--
Clarification...
Jews of the East was used for the Chinese business owners.
Jas
Jas Jain writes:
...keep blog posts short, dude...
Was meant as an summary answer to several of RE's posts yesterday.
But, thanks.
Re: Whites and blacks might dominate the sports and entertainment industry,
No, Asians will take that over as well!
Wow.
Jas sez "It's good to be king".
This blog gets scarier every day.
.
Just another dog bites man story.
Jas sez "It's good to be king".
So does Tom Petty.
YouTube -
And they're right.
Off-topic antecdote. Drove past Best Buy today
Comrade Tech Sargent Chen | 12.20.08 - 2:24 pm | #
Regrettably I went to shop in one. While a depression is coming, you could never guess by the traffic jams in Northern Virginia today. I was so happy eventually to escape.
--
"Jas sez "It's good to be king". This blog gets scarier every day. :)"
.
Broward Horne,
No, sir, it is nice to live UNDER a king!
Please, God, give me a choice between a king and Clinton/Bush/Obama/...
I bet that like my ancestors many of your ancestors did good under kings.
Born-and-bred prejudice is a terrible affliction.
Jas