Liquidation signs outside the Corral West Ranchwear store, which has been at the Greeley Mall for at least 20 years, are advertising the stores closure.
The closure comes a month after the Regency Hallmark owners Don and Connie Jetter announced they would close their store, which they had operated for 32 years just across the way. Dillards, which also was on that end of the mall, closed earlier this spring.
Since 2006, businesses have left the mall in a slow exodus, starting with The Gap in 2005, then American Eagle in 2006. Gart Sports, which operated a store on the mall property east of the main mall, closed in December 2004.
The crushing blow came this past spring when the owners of Dillards announced it would close both of its stores, also in the east end of the mall.
The departures are likely strong signs of the times.
General Growth Properties, which owns the Fort Collins Mall and was the No. 2 mall operator in the country, recently reported it was on the brink of bankruptcy, according to CNN Money*. The Fort Collins Mall, for example, is still reeling from the losses of Mervyns and JC Penney; B. Dalton and Hallmark both are closing in January, as well.
Mall vacancies have increased by the most since early 2002, CNN Money reported, as shoppers opted for bargain stores closer to home.
Concerned saver here. How will we know if/when we shift from deflation to (hyper-)inflation? And where's a good place to put money at that time? With equities, housing, and commodities all going bust, I've been happy to be mostly in cash this last year. But I don't know how long this will last.
A festival. Glutton's anarchy.
Come break the rules it's absolutely free.
Now see, there is a price in paradise.
Just close your eyes and metamorphosise.
You'll get cacooned tonight.
Then you'll be so soon, one of us.
And you're having a ball, oh yes,
You're doing it all
Your filthy world's complete.
Then your face it contorts
into that of a horse
And you've got no more hands and feet.
Watch your paradise turn into Hell.
You've got to buck it up.
You seek and you smell.
Oh well.
You'll get cacooned tonight.
Wear your festoon of frivolity
Make lampoon of dark criminality
It seeps, suckles, strips your personality. Undone
'At the Justice Department, a spokesman said that Attorney General Michael Mukasey had recused himself from the investigation into Madoff. Mukasey's son, Marc Mukasey, is representing Frank DiPascali, a top financial officer at Madoff's investment firm.'
You are much worse than Soviets and the collapse is coming. Sorry. one_timmy | 12.17.08 - 12:40 pm | # We need bread lines first. THEN comes worse-than-bread-lines.
Also an architect. I went to Yale in the late 1990s; the professors complained that the quality of students dropped due to the early 1990s slowdown. Wonder what it will be like now.
Spunkmeyer,
My own (biased) opinion is: throw the investment banks in the ocean; bail out the architects.
What we need is real-world stimulus (ie: things that pay money and that you can borrow against) not funny-money stimulus like we have gotten so far.
First, total mortgage debt outstanding. Its about $14 trillion dollars.
With the $7 trillion dollars we have committed we could have literally given every homeowner with a mortgage a fifty percent reduction in the principal outstanding.
This would have instantaneously stopped all of the foreclosures by putting all (essentially) homes into positive equity - overnight!
So why wasn't this done?
Because the goal was never saving homeowners or Main Street.
In point of fact the problem that the government is "trying to solve" is instead the unregulated bets that were made in the OTC CDS space which were backed by exactly nothing; there was no capital behind any of these bets!
There is no fix for this problem; your leverage is effectively infinite if you have no capital behind your positions. You are limited only by your testosterone level and there's been far too much of that on Wall Street over the last decade.
This was not an accident; in fact Henry Paulson himself lobbied for the removal of the previous leverage limits as I have noted when he was Chairman of Goldman Sachs. Between that and the complete refusal to regulate anything or anyone by the SEC, OTS, OCC, The Fed or anyone else we have built what amounts to a pyramid scheme based on nothing other than debt.
What Bernanke and Paulson are in fact trying to do - and what they have been trying to do since this crisis began - is paper over the bad bets that companies like Citibank, Lehman, Bear Stearns and AIG made with zero (or nearly so) capital behind them.
Not sure this time around will be the same as the past. Government still has not stepped into the student lending market like it did in the last few recessions. No money, no seat.
Will someone, please anyone, get the message to that idiot STEVE LEISMAN on CNBC..
That mortgage rate spreads should be at abnormally historic highs BECAUSE HOUSE PRICES ARE FALLING!!!!!!!!!!!!!!!!!!
People lending people money to buy a home are doing something that has not occurred before (since depression at least),
They are lending people money to buy a house when house prices are falling.
Given that spreads are a measure of risk...ie. the likely hood and subsequent cost of default, how in the world current spreads can be compared to historical trends is ludicrous!!
When house prices are rising and large down payments are required, then the likelyhood of default is low (they can always sell to repay loan), and the cost of default is low (banks will have few REO, can get it sold quickly in good condition in a rising market).
In the current market anyone who runs into trouble will have no choice but to default...and the cost of default will be very high...therefore the spread between mortgage rates and government debt should be HUGE!!!!!!
Goldman has set aside a multimillion-dollar bonus pool will still be shared by employees.The firms bonus pool stands at $6.56 billion or an average $218,193 per employee this year. Blankfein and six of his top deputies agreed to forgo their year-end bonuses this year, after the firm took $10 billion from the government's financial bailout fund. But many of the firm's top talent outside of management may still take home tens of millions of dollars.
I think, from what has been published so far elsewhere, that the new administration has decided to shore up some of those school, hospital and public building projects.
Takes a long time before the first spade of earth is turned, but architects may benefit early.
With the $7 trillion dollars we have committed we could have literally given every homeowner with a mortgage a fifty percent reduction in the principal outstanding.
Aren't the majority of the $8 trillion not actually cash (or cash equivalent) payments, but simply guarantees that would only be due if everything went to zero?
Billionaire Ford Shops for Banks as Government Welcomes Buyers - Bloomberg.com
(Dallas) Billionaire Ford Shops for Banks as Government Welcomes Buyers
U.S. regulators are loosening 50-year-old banking rules amid a financial crisis that has wiped out 25 banks this year and threatens at least 171 more, raising concern that traditional lenders may not be able to step in. Fords investment firms -- Hilltop Holdings Inc. and FlexpointFord LLC -- add to a growing list of non-banks, including securities firms, insurers and credit-card issuers that have been cleared to buy retail deposits and branches.
Welcome to the US shooting galleries, methadone and heroine for junkies. Drugs, drugs, and more drugs. Sobriety through dope.
This path has always led to success.
I'm an architect also. Almost all the firms in Houston are in a hiring freeze right now, and I can confirm that there will be massive layoffs after the first of the year when firms realize that this is not a 'temporary' downturn.
Commercial is almost completely dead, while there are greater and greater numbers of large firms chasing the same medical and school projects. I spoke to a principal from Perkins & Will a few weeks ago who said that their Hospital clients were beginning to have trouble with financing. Not good.
100% OT: Anyone ever look at the sitemeter link and see who's on CR at any given time? It's like a who's who. In about 3 minutes I saw the FDIC, FEMA, NASA, USDOJ, the Library of Congress, Citadel, Lehman, Union Bank, Wells Fargo, UBS, Apple, about 37 institute of higher education, and 50+ other fortune 500 companies.
This website, CR, Tanta, and a few of the posters here are important.
"The effective income tax rate was approximately 1% for 2008, down from 25.1% for the first nine months of 2008 and down from 34.1% for fiscal year 2007. The decreases in the effective income tax rate were primarily due to an increase in permanent benefits as a percentage of lower earnings and changes in geographic earnings mix."
A tax rate of 1 per cent, is after all, just $14m- a fraction of the $6bn it paid last year.
Bloomberg:
Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The companys effective income tax rate dropped to 1 percent from 34.1 percent The rate decline looks a little extreme, said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC. I was definitely taken aback, Willens said. Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions. U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.
10Q filing:
The firm is subject to examination by the U.S. Internal Revenue Service (IRS) and other taxing authorities in jurisdictions where the firm has significant business operations, such as the United Kingdom, Japan, Hong Kong, Korea and various states, such as New York. The tax years under examination vary by jurisdiction. During fiscal 2007, the IRS substantially concluded its examination of fiscal years 2003 and 2004. Tax audits that have been substantially concluded in other jurisdictions in which the firm has significant business operations include New York States examination of fiscal years through 2003, the United Kingdoms review of fiscal years through 2003 and Hong Kongs review of fiscal years through 2001. The firm does not expect that potential additional assessments from these examinations will be material to its results of operations The effective income tax rate for the first half of 2008 was 27.7%, down from 29.5% for the first quarter of 2008 and 34.1% for fiscal year 2007. The decreases in the effective tax rate were primarily due to changes in geographic earnings mix.
Translation:
Goldman's been transferring earnings to countries with lower taxes, shifting taxable income away from places like the UK, US and Japan.
Looks like The 30-Year Treasury will go under 2% with quantitative manipulation, which probably will be followed by lower mortgage rates, but gads, who the F will have anything to put into a house, now that money markets are breaking the buck, and another 700 point drop coming on the Dow?
If oil is going down, then so is gold - the long term correlation is pretty solid. Based on gold's current price, oil should probably be in the 60s. Dont see how anyone can be bullish gold without being bullish on oil. Eventually they move together over the long term.
Look at the history of Opec and non-Opec oil producers during oil crashes. They have NEVER kept to quotas during oil crashes. Everyone including Saudia Arabia has cheated on the way down.
Russia, Venezuela and others require oil above $85/bl to balance their budgets. They literally have to keep pumping to keep their social fabric together. Anyone who is trying to compare how oil should move to any other commodity simply doesn't understand the difference between different commodities.
I was thinking from previous post that maybe we should say Peak DOO DOO instead, but then something made stop and think , we are nowhere near peak when it comes to doo doo
Goldman has set aside a multimillion-dollar bonus pool will still be shared by employees.
In private industry, the more damage you do, the more money you get. In the political system, the more damage you do, the more control you get over the economy.
Bonus day at GS today and my neighbour seems to have got 600K...I think thats pretty cool in current environment.. (he is a VP Star performer ..with EMEA research)
Until Hedge Funds finish their liquidations; Another big liquidation should be coming after the start of the new year; you can throw every single historical correlation out the window.
If you have a deflationist bent you would probably be saying gold should be tracking oil and thus gold should be going down.
If you have an inflaitonist bent then you will be thinking oil should be tracking gold and thus oil should be going up.
If you simply follow the tape then you look at 10yr and 30yr long bond rates and simply think we are in big DOO DOO and who knows how it's going to turn out.
SEC filing from Bank United --- the largest regional bank in Florida-
We are not able to file a timely Form 10-K because we have not completed our financial statements for the fiscal year ended September 30, 2008. Continuing adverse market conditions and the complexity of accounting and disclosure issues has increased the need for additional review and analysis of our business including, without limitation, regulatory issues, liquidity and capital.
On September 19, 2008, the Company and BankUnited, FSB (the Bank), our wholly owned subsidiary, each entered into a Consent Order (the Order) with the Office of Thrift Supervision (the OTS). We continue to work closely with our federal banking regulators to address the adverse impact of the current condition of the housing market, the financial market, our losses and our capital position.
The Bank Order requires that the Bank (inter alia):
meet and maintain a minimum Tier I Core Capital ratio of 7% and a minimum Total Risk-Based Capital ratio of 14% on and after December 31, 2008;
not originate any new loans that provide for or may result in negative amortization loans (including payment option loans) or reduced documentation loans;
submit a detailed written plan to reduce the level of payment option loans;
review and revise where appropriate documents and forms being used to revise payment option loans;
enhance its monitoring and internal reporting, as well as reporting to regulators regarding liquidity, payment option loans, REO and mortgage insurance
submit a comprehensive business plan covering the last three months of calendar year 2008, all of calendar years 2009 and 2010, and the first three quarters of 2011;
restrict asset growth to an amount less than net interest credited on deposits during any quarter, until the business plan is approved by the OTS;
not pay dividends or make capital distributions without receiving the prior approval of the OTS;
notify, or in certain cases receive the approval or non-objection of, the OTS prior to (i) making certain changes to its directors or senior executive officers, (ii) making any golden parachute or prohibited indemnification payments, or (iii) entering into, renewing, extending or revising any contractual arrangement related to compensation or benefits with any director or senior officer of the Bank; and
appoint a regulatory compliance committee to monitor and coordinate compliance with the provisions of the Order and the 2008 examination.
And it gets worse:
At June 30, 2008, the Bank had Tier 1 Core Capital of 7.6% and Total Risk-Based Capital of 13.9%. Subsequent to June 30, 2008, the Company and the Bank have incurred substantial losses (see Part IV, Item 3 below), as a result we will be reporting a significant decrease in these ratios on our Annual Report on Form 10-K. The OTS Order requires us to increase those ratios so that the Bank has a minimum Tier 1 Core Capital ratio of 7% and a minimum Total Risk-Based Capital ratio of 14% on and after December 31, 2008. If we do not obtain additional capital prior to December 31, 2008, we do not expect to meet the ratios set forth in the Order. Failure to meet the minimum ratios set forth in the Order at December 31, 2008 could result in the regulators taking various enforcement actions regarding the Bank.
Even if we are successful in meeting the capital ratios mandated in the Order, we cannot assure you, given our current level of losses, that we will not need to raise additional capital in the future. We are in negotiations with a fund to raise capital and restructure our balance sheet. We cannot assure you that these negotiations will be successful. If such negotiations are not successful there is substantial doubt about our ability to continue as a going concern.
Eric -
Exactly. Thats why I wouldnt buy on margin or levered ETFs. I'm also not buying oil or shorting gold. Eventually they will move in the same direction - so if you're shorting oil and going long gold then you will eventually lose if you hold that trade for the long term. If you lever, you'll be wiped out sooner...
Anyone know how residential architecture firms have been doing in 2008? Is it beyond dead with layoffs or just slow? I have an old friend doing work in coastal Georgia but have been hesitant to see how things are since if not good, he may ask me for something that I can't afford to do right now to help....
NEW YORK Customers of New York City-based Citibank have lost access to much of their account information because of a computer outage.
Many of the troubled bank's clients haven't been able to retrieve account details online or by telephone since Tuesday afternoon. Others can access only parts of their account profiles.
Citibank telephone representatives say they don't know what caused the outage but technicians are working to fix it. They've been telling customers to call back after Wednesday morning.
I'ma an architect for a major international firm and the last three weeks have been the bloodiest since the early Ninties. By Spring 2009, it will be even worse than back then.
Since there's a lull here, let me resurrect that earlier exchange on ETFs for a moment.
I saw the assertion several times that they're appropriate only for extremely short-term strategies, but I fail to see any inherent quality which makes this correct or valid.
If, say, one were inclined to invest based on trends and, at the same time, were not the sort of person who relishes day trading, what's to prevent you from finding SRS (as an example) recent price something of an anomaly, given the midterm prospects for all classes of real estate?
In fact, I've purchased a quantity of it with no intent to churn. My last round with the fund paid 147%. I got in at about $80 in May, and sold in mid-November, when valuation appeared unsustainably high.
Have done similarly with SKF. Twice, so far. With returns of 106% and 118%.
I accept the mechanics of the fund's daily settlement, and am rather wary on the way into or out of a position. But don't tell me I always will lose, or that the funds are suitable only for day traders unless you can offer good reason this must be so.
Kevin de Bruxelles - Could you elaborate on "the bloodiest".... are people being laid off, who gets laid off first? I am not that familiar with architecture firms and how they operate so don't know what level gets cut first....the people with under 5 years experience, those not licensed yet, etc. Thanks.
Also, I would suspect the govt construction spending would benefit civil engineering companies much more so than architects (roads, bridges, sewer works, etc.)....
Customers of New York City-based Citibank have lost access to much of their account information because of a computer outage. UGA Dawg | Homepage | 12.17.08 - 1:32 pm | #
I finally broke down and picked up a little bit just now. The order went through at $57.45.
I've not been a fan SRS and have generally stayed away from it, but I figured I'd play with it a bit at this price. I'm not expecting much so I won't get too disappointed.
As an Architect, I expect 2009 to be downright miserable. My goal is to simply survive to see 2010 at this point.
On the plus side, I hope to finally clean my basement. Spunkmeyer | 12.17.08 - 12:42 pm | #
How old are you - I ask because my future Son in law is a recent arch grad. I've told him this bust is the best thing that has ever happened to him... every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [by the time it gets better they'll be so close to retirement and their old contacts so destroyed that they'll say 'screw it' - even though retirement will be awfully tough].
Worse age cohort? Probably age 35 to 40 - nearing what would be earning years and looking over the edge at the abyss below.
I saw a similar situation in mfg coming out of 'Rust Belt I' [The Stagflation Years]... the late 80s and all of the 90s were pretty much 'rock on' for industrial mfgrs [exept for Rob Dawg's So Cal aero & mil]. I see a similar situation happening in architecture - probably be a 'nucular winter' for the next five years... then it will be excellent for the few 'small mammals' that have survived. Small is beautiful!!
I think a lot of people make the mistake, when they are looking at our economy, of putting first importance upon the Federal Reserve, and the steps it is taking. In reality, you should look first at the US consumer, because the Fed's ability to influence the economy pales in comparison to the consumer's.
The reason this credit bubble has burst is the same reason that they always burst- the growth in production caused by excess credit is unable to be absorbed by the public's limited purchasing power. In our situation, it's even worse because not only is the US consumer maxed out on debt and suffering from stagnant wages; he is also panicked by the economic news.
Assume that a single consumer decides not to take a vacation this year, to keep driving an older car, and to stop eating out at restaurants. The Fed has no ability to undo the damage done to airlines, the hosptitality industry and the manufacturing sector by those simple decisions. Sure, the Fed can pump a lot of money into the reserve accounts of banks, but that won't undo the damage described above. Plus, Japan's example shows that this doesn't make banks any more eager to lend; the quantitative easing money just piled up in Japanese bank vaults.
Even if the banks wanted to lend to good borrowers, that's largely beside the point because, once again, credit bubbles collapse because the consumer's purchasing power fails to keep up with credit-fueled production. Richard Duncan predicted this scenario precisely in his 2005 book "The Dollar Crisis" - he even predicted that the Fed, like Japan, would resort to quantitative easing to try to counteract it. But he correctly noted that it would not work any more than giving a drunk more alcohol.
The problem is not insufficient credit- the problem is that the consumer is broke, scared and is going to cut back drastically on spending. And there's nothing the Fed can do about that- the recession has to play itself out.
In our situation, it's even worse because not only is the US consumer maxed out on debt and suffering from stagnant wages; he is also panicked by the economic news.
Someone really needs to address the problem with having generations of college graduates getting a diploma in one hand and student loan shackles on the other.
I went through this last spring (i believe it was April). I made money every month this year except for that month. The market just kept going up in the face of relentless bad news every day. I finally capitulated and got out of a big SDS position and SRS and took my losses. If i'd hung in with those positions (especially the SDS) I would've had some ridiculous returns.
Perhaps this time is different but I'm hanging in there.
I went through this last spring (i believe it was April). I made money every month this year except for that month. The market just kept going up in the face of relentless bad news every day. I finally capitulated and got out of a big SDS position and SRS and took my losses. If i'd hung in with those positions (especially the SDS) I would've had some ridiculous returns."
Yeah, the same as me during my last purchase a few months back. Held it through MAX pain for a couple of months and dumped at a slight loss only to miss a big runup. This is starting to feel, marketwise, the same way. Unrelenting bad news and the market screams higher, the short sells capitulating daily.
Heh. If the daily stuff ruins your digestion, I don't know what to suggest. I looked at sad, red numbers for weeks at a time with no regret whatever. But perhaps I'm an odd one. Will hold the current lot well into next year unless there's some momentary spike on some ghastly, momentary news.
Currently challenging last Monday's high water mark. There's some room for this beast to run if that resistance breaks. Keep thyself in ultrashorts at thine own peril.
SRS closing rapidly on a 4 handle. Hoodathunk that two weeks ago?
This is backward reasoning but why do governments borrow?. Because they do not have the capital to finance existing payments. By driving interest rates down to zero they effectively have to borrow infinite capital in the system to finance that structure at low interest rates. So they are sucking all available capital by printing money leading to greater and greater depressive effect while attempting to inflate.
dryfly writes:
"As an Architect, I expect 2009 to be downright miserable. My goal is to simply survive to see 2010 at this point.
On the plus side, I hope to finally clean my basement." - Spunkmeyer
How old are you - I ask because my future Son in law is a recent arch grad. I've told him this bust is the best thing that has ever happened to him... every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [by the time it gets better they'll be so close to retirement and their old contacts so destroyed that they'll say 'screw it' - even though retirement will be awfully tough].
Amazing coincidences. My niece is a recent USC Arch grad now in Great America (aka flyover) after a stint in Pasadena. Exact same advice.
...I saw a similar situation in mfg coming out of 'Rust Belt I' [The Stagflation Years]... the late 80s and all of the 90s were pretty much 'rock on' for industrial mfgrs [exept for Rob Dawg's So Cal aero & mil].
Yeah, special case. Sadly this was IMO the greatest failing of American industry. I could have been building high performance all structural composite autos and motorcycles powered by cer-met adiabatic engines.
I see a similar situation happening in architecture - probably be a 'nucular winter' for the next five years... then it will be excellent for the few 'small mammals' that have survived. Small is beautiful!!
Architecture is being disintermediated unfortunately. Tilt-up buildings often include pre-packaged architectural services in the can.
I'm speculating that all the ultra stocks sink to very low levels. Look at UYG. When a particular flavor of ultra is out of favor, it gets clobbered. Also, if you look at skf going from 100 - 300, you would get the same % return going from 10 - 30. I think all these things might end up trading as perpetual options, and the base prices will be a lot lower. I obviously don't know for sure so I generally stay away.
I finally broke down and picked up a little bit just now. The order went through at $57.45.
I've not been a fan SRS and have generally stayed away from it, but I figured I'd play with it a bit at this price. I'm not expecting much so I won't get too disappointed.
ac
I wish I had just started playing with it. LOL! I am getting killed. Also bought a ton of calls when it got below $90.
SRS today -- all the more reason to put the stops in. comrade tinman | 12.17.08 - 1:58 pm | #
Every time I think about buying SRS and holding it more than 1 or 2 days, I look at the spreadsheet I ginned up to show the effect of the ultra-short due to volatility, and I stay away.
I'm glad my better judgment kept me away from the SRS third rail last week. Must really sting to be levered into it. You bought deep ITM calls as I recall, right, Scorcho? Ouch. If they're Jan 090s, at least you have some time for a correction to play out.
Yeah, special case. Sadly this was IMO the greatest failing of American industry. I could have been building high performance all structural composite autos and motorcycles powered by cer-met adiabatic engines. Rob Dawg | Homepage | 12.17.08 - 1:52 pm | #
What he said.
BTW - I had a talk a few minutes ago with a buddy who is looking to start a company producing high tech components similar to what you describe - except it won't be in a high cost area like So Cal. Probably in central Pennsylvania & dovetail with mat sci people from Penn State. I might sign on. Timing is perfect - you want to go into something like this on the front end of the disaster NOT the tail end - be too late if you wait for signs of a recovery.
The country needs this stuff to happen - get busy Dawg.
Pavel Chichikov writes:
Why are all these computer systems going down?
Because they're being retooled for the FED's secret plan to double everyone's savings balance when they retool for the new dollar. Hand in one old dollar, get two new dollars. All debts, housing loans, and other obligations denominated in old dollars are de facto new dollars. Boom, housing gulf instantly vaporized, all assets double in value, all debts halve. Problem solved.
17 December 2008
AIG Has Another $30 to $200 Billion in Uncovered Losses to be Bailed Out
Bloomberg
AIG Writedowns May Rise $30 Billion on Swaps Not in U.S. Rescue
By James Sterngold
Dec. 17 (Bloomberg) -- American International Group Inc., which already has suffered more than $60 billion in writedowns and losses, may have to absorb almost $30 billion more because of flaws in the way its holdings are valued.
An examination of AIGs credit-default swaps guaranteeing more than $300 billion of corporate loans, mortgages and other assets not covered by a $152.5 billion federal rescue shows the New York-based insurer may value some of its positions at levels that dont reflect distress in the markets, according to an analyst at Gradient Analytics Inc. and a tax consultant who teaches at Columbia University Business School in New York. Executives at two firms that have similar investments say they account for the securities differently than AIG does....
I'm glad my better judgment kept me away from the SRS third rail last week. Must really sting to be levered into it. You bought deep ITM calls as I recall, right, Scorcho? Ouch. If they're Jan 090s, at least you have some time for a correction to play out.
Assume Crash Positions!
I bought July ATM Calls (which at the money then was $100, and then $80)
Could you elaborate on "the bloodiest".... are people being laid off, who gets laid off first? I am not that familiar with architecture firms and how they operate so don't know what level gets cut first....the people with under 5 years experience, those not licensed yet, etc. Thanks.
By blood I mean layoffs of course roughly 33-60% of staff depending on the office. It is highly concentrated in the staff with less than 7 years experience (cad-monkeys)although some associates and especially project managers are getting the axe as well. The ratios of senior staff to junior is now way out of whack so I expect the upper levels to take their hits too in the coming months. Often the choice comes down to whether your project has just finished or not.
During recessions, two types of architectural offices flourish: those that concentrate on hospital work and those that do forensic architecture (litigation/expert witnesses).
dryfly, thanks. I'm in my late 30's so I lived through the early 90's problems when working during school and upon graduation. So, my hope is that I can survive again.
A lot of people in my generation of graduates went out from architecture school, couldn't get jobs, and left the profession altogether. Only a few years ago this shortage meant people could command pretty good salaries as there weren't many people in the 10-15 years experience area.
Honing the "green building" skills and polishing the portfolio drawings will make for good downtime activities for me. I have my own residential practice, established several years ago, so I've been living at ground zero for a little while now. I have low overhead costs so that'll help.
I have a confession to make in regards to my last SRS purchase. The only reason I bought it was to balance out the gains I had made this year. My plan has worked to perfection so far (:
During recessions, two types of architectural offices flourish: those that concentrate on hospital work and those that do forensic architecture (litigation/expert witnesses).
kevin de bruxelles,
Agreed especially the latter. I am just now sensing a vicious snapback in the former. Can you guess? Yup, donations. Gone.
Thanks. Being low cost is the key - overhead kills in this environment. Unfortunately what a lot of architects design can be looked at as 'somebody else's overhead' - figure out ways to minimize that while still preserving aesthetics & functionality and you survive if not thrive.
The country needs this stuff to happen - get busy Dawg. - dryfly
You want sad? As you likely suspect there are several world manufacturers very close to my location with skunk works. The one that is interested? Black mit White. And boy do they have two awesome world changers in pre-production.
"Agreed especially the latter. I am just now sensing a vicious snapback in the former. Can you guess? Yup, donations. Gone.
Rob Dawg | Homepage | 12.17.08 - 2:16 pm | # "
DON'T SAY THAT! (sez he who works in university fundraising).
But yes, this quarter's going to suck. And probably quite a few after that.
DON'T SAY THAT! (sez he who works in university fundraising).- Bob Dobbs
If the Brandeis/Madoff affair is any indication were I you I'd be careful about signing agreements to get the bulk of an estate. You might end up with a bill instead of a check.
every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [.. they'll say 'screw it' - even though retirement will be awfully tough]
That's pretty much where I am in IT, in spite of my efforts. It's been increasingly clear for the past two years that I can't get anywhere career-wise, the age discrimination is huge and my interest in a coding position is low.
I'll probably give up around March or April and take a teaching job somewhere.
I thought skills would matter but past a certain point, they don't. It's all about telling people what they want to hear, which is what's wrong with so many things.
kevin de bruxelles - What are the prospects of a person just completing their third year working for an arch firm? Wonder if pay is good or is it still low?
Architectural salaries vary in function to the perceived status of the firm At the really top design firms (Zaha Hadid, Rem Koolhaus, etc) people literally work for free. The best paying firms are the aforementioned hospital or forensic firms due to their apparent low design status. There is a range in between, with the large corporate firms upping their salaries in recent years so they are now closer to the hospital firms than to the design-y ones.
Salaries in 2009 for new hires are headed south as there is now a whole slew of desperare young architects on the make looking for work. People who are still in a firm are not getting raises but I have not heard of people cutting salaries yet (though hours are being cut).
An architect with three years experience is in a sort of a professional sweet spot. The good ones are experienced enough to put a set of drawings together (working with a senior person of course) while at the same time they are relatively cheap. So while everyone is hurting, this level should do better than most.
I'll probably give up around March or April and take a teaching job somewhere.
I thought skills would matter but past a certain point, they don't. It's all about telling people what they want to hear, which is what's wrong with so many things.
Dogma is entrenched even more in teaching. The best advice I can give is to deal with the students as much as possible and meetings/supervisors/dept chairs as little as possible.
These new Federal Reserve Notes could certainly be a tool to "sop up the excess liquidity" after this period is over. That's the most parsimonious explanation.
If they were used by a devious and criminal government, they could, however, be used to devalue the domestic currency while leaving the international reserve currency intact.
That's how you could make your domestic currency nonconvertible as you start to go all Weimar.
" Rob Dawg writes:
DON'T SAY THAT! (sez he who works in university fundraising).- Bob Dobbs
If the Brandeis/Madoff affair is any indication were I you I'd be careful about signing agreements to get the bulk of an estate. You might end up with a bill instead of a check.
Rob Dawg | Homepage | 12.17.08 - 2:28 pm | # "
I just support the software. But they are very careful about the terms under which they accept estates, real estate, gifts in kind, etc.
That sounds like ford is attempting to become a Bank-hold-CO.
Didn't work for GMAC.
Doubt it'll work for Ford.
blackhat | Homepage | 12.17.08 - 1:01 pm | #
Ford is a huge donor to SMU in Dallas and the future Bush library there. I believe the new stadium there is named for him already. He will likely get most if not all of what he wants now or eventually. The FDIC's back is against the wall.
one example of whats happening to retail malls
Greeley Mall sees another loss with Corral West closing | Greeley Tribune
Liquidation signs outside the Corral West Ranchwear store, which has been at the Greeley Mall for at least 20 years, are advertising the stores closure.
The closure comes a month after the Regency Hallmark owners Don and Connie Jetter announced they would close their store, which they had operated for 32 years just across the way. Dillards, which also was on that end of the mall, closed earlier this spring.
Since 2006, businesses have left the mall in a slow exodus, starting with The Gap in 2005, then American Eagle in 2006. Gart Sports, which operated a store on the mall property east of the main mall, closed in December 2004.
The crushing blow came this past spring when the owners of Dillards announced it would close both of its stores, also in the east end of the mall.
The departures are likely strong signs of the times.
General Growth Properties, which owns the Fort Collins Mall and was the No. 2 mall operator in the country, recently reported it was on the brink of bankruptcy, according to CNN Money*. The Fort Collins Mall, for example, is still reeling from the losses of Mervyns and JC Penney; B. Dalton and Hallmark both are closing in January, as well.
Mall vacancies have increased by the most since early 2002, CNN Money reported, as shoppers opted for bargain stores closer to home.
Heading to a jobwalk for a hard bid. (General Contractor)
There will be 10 other GC!
Dios Mio
Bubble Brothers: 'We need much more spending.'
i think you meant "first!", comrade.
Concerned saver here. How will we know if/when we shift from deflation to (hyper-)inflation? And where's a good place to put money at that time? With equities, housing, and commodities all going bust, I've been happy to be mostly in cash this last year. But I don't know how long this will last.
energy,
Thanks for your reply two posts ago!
Pretty soon CR will run out of unique titles.
-
CR forgot his favorite term -- Cliff Diving.
Everyday things look worse than what CR's predictions would have suggested, no?
Jas
Donkey men
A festival. Glutton's anarchy.
Come break the rules it's absolutely free.
Now see, there is a price in paradise.
Just close your eyes and metamorphosise.
You'll get cacooned tonight.
Then you'll be so soon, one of us.
And you're having a ball, oh yes,
You're doing it all
Your filthy world's complete.
Then your face it contorts
into that of a horse
And you've got no more hands and feet.
Watch your paradise turn into Hell.
You've got to buck it up.
You seek and you smell.
Oh well.
You'll get cacooned tonight.
Wear your festoon of frivolity
Make lampoon of dark criminality
It seeps, suckles, strips your personality. Undone
See what I mean:
'At the Justice Department, a spokesman said that Attorney General Michael Mukasey had recused himself from the investigation into Madoff. Mukasey's son, Marc Mukasey, is representing Frank DiPascali, a top financial officer at Madoff's investment firm.'
Yahoo! 404 - Page Not Found
But I thought TARP and the Fed's moves were working... do you mean they aren't
/sarcasm
...ALL CITIZENS OF UNITED STATES OF AMERICA....HEAR THIS!....
THIS IS UNITED NATIONS POLICE....GIVE US YOUR NUKES VOLUNTARILY! YOU ARE UNSTABLE PIECE OF THE HUMAN RACE.....
...REASON: YOUR "RELIGIOUS WACKOOS AND REPUBLICANS". THIS IS THE FIRST WARNING OR ELSE...
PS. I am NOT joking. You are much worse than Soviets and the collapse is coming. Sorry.
4.5% at CU now...
CR, a word or two of appreciation.
I can't be the only one here who must make decisions for the near- and mid-term future. Purchases, investments - the life-timing sorts of things.
You and Tanta have been a Godsend.
You are much worse than Soviets and the collapse is coming. Sorry.
one_timmy | 12.17.08 - 12:40 pm | #
We need bread lines first. THEN comes worse-than-bread-lines.
As an Architect, I expect 2009 to be downright miserable. My goal is to simply survive to see 2010 at this point.
On the plus side, I hope to finally clean my basement.
Fun Yun from the NAR said this morning that CRE was dead...this jives with the billing index
Maria just had an orgasm on air.
10 year yield. 2.15%
(I think it got down to 2.1 or 2.09%)
i guess that's a good thing.
Somewhat OT but the TSX has been halted...Computer glitch allegedly.
Toronto Stock Exchange Trading Is Halted on Glitch (Update3) - Bloomberg.com
Also an architect. I went to Yale in the late 1990s; the professors complained that the quality of students dropped due to the early 1990s slowdown. Wonder what it will be like now.
The death of pensions coming soon to a plan near you.
Brought to you by ZIRP
Spunkmeyer,
My own (biased) opinion is: throw the investment banks in the ocean; bail out the architects.
What we need is real-world stimulus (ie: things that pay money and that you can borrow against) not funny-money stimulus like we have gotten so far.
Also, CR bloggers, there are other chicks out there besides your buddy Maria B. Please turn off the computer and go outside once in awhile.
India -
Auto parts: 200,000 may lose job; 4,000 units face closure
First, total mortgage debt outstanding. Its about $14 trillion dollars.
With the $7 trillion dollars we have committed we could have literally given every homeowner with a mortgage a fifty percent reduction in the principal outstanding.
This would have instantaneously stopped all of the foreclosures by putting all (essentially) homes into positive equity - overnight!
So why wasn't this done?
Because the goal was never saving homeowners or Main Street.
In point of fact the problem that the government is "trying to solve" is instead the unregulated bets that were made in the OTC CDS space which were backed by exactly nothing; there was no capital behind any of these bets!
There is no fix for this problem; your leverage is effectively infinite if you have no capital behind your positions. You are limited only by your testosterone level and there's been far too much of that on Wall Street over the last decade.
This was not an accident; in fact Henry Paulson himself lobbied for the removal of the previous leverage limits as I have noted when he was Chairman of Goldman Sachs. Between that and the complete refusal to regulate anything or anyone by the SEC, OTS, OCC, The Fed or anyone else we have built what amounts to a pyramid scheme based on nothing other than debt.
What Bernanke and Paulson are in fact trying to do - and what they have been trying to do since this crisis began - is paper over the bad bets that companies like Citibank, Lehman, Bear Stearns and AIG made with zero (or nearly so) capital behind them.
----denninger
Liquidate,
Not sure this time around will be the same as the past. Government still has not stepped into the student lending market like it did in the last few recessions. No money, no seat.
Will someone, please anyone, get the message to that idiot STEVE LEISMAN on CNBC..
That mortgage rate spreads should be at abnormally historic highs BECAUSE HOUSE PRICES ARE FALLING!!!!!!!!!!!!!!!!!!
People lending people money to buy a home are doing something that has not occurred before (since depression at least),
They are lending people money to buy a house when house prices are falling.
Given that spreads are a measure of risk...ie. the likely hood and subsequent cost of default, how in the world current spreads can be compared to historical trends is ludicrous!!
When house prices are rising and large down payments are required, then the likelyhood of default is low (they can always sell to repay loan), and the cost of default is low (banks will have few REO, can get it sold quickly in good condition in a rising market).
In the current market anyone who runs into trouble will have no choice but to default...and the cost of default will be very high...therefore the spread between mortgage rates and government debt should be HUGE!!!!!!
STEVE LEISMAN use your head!!!
COOL: MAN OF THE YEAR!
DRUDGE REPORT 2010®
smoke and mirrors
oh, and what wally said. Productive endeavors/investments.
like"
Former Investment Bank Executives One-way Trip to Mars.
6 month trip, but only supply it with 4 months of food. Cameras in every room. Good reality t.v.
Your tax dollars at work.
This pisses me off:
Comp Day Comes To Goldman Sachs
Comp Day Comes To Goldman Sachs (GS)
Goldman has set aside a multimillion-dollar bonus pool will still be shared by employees.The firms bonus pool stands at $6.56 billion or an average $218,193 per employee this year. Blankfein and six of his top deputies agreed to forgo their year-end bonuses this year, after the firm took $10 billion from the government's financial bailout fund. But many of the firm's top talent outside of management may still take home tens of millions of dollars.
craigslist | Page Not Found
JOURNALIST'S SHOES USED IN ATTACK ON BUSH!!! - $50000 (Los Angeles)
here is what is happening in Sarasota Fl
Construction of the new University Town Center Mall featuring Neiman Marcus, Nordstrom and Macy's has been put on hold until the economy turns around.
Upscale mall will be late | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader
Luxury mall's delay may signal more woes ahead
Luxury mall's delay may signal more woes ahead | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader
ust 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
Trading halted on Toronto stock exchange due to tech problem
My comment was that lots of students in the early 90s picked something besides architecture to go into; the talent pool got pretty darn thin.
PSgirl,
Reminds me of the sticks and stones chant.
But where GS is going, there are no words. Just sticks. And stones.
I think, from what has been published so far elsewhere, that the new administration has decided to shore up some of those school, hospital and public building projects.
Takes a long time before the first spade of earth is turned, but architects may benefit early.
Liquidate,
I got your comment. same point. talent pool may be huge. lending pool, not so much.
With the $7 trillion dollars we have committed we could have literally given every homeowner with a mortgage a fifty percent reduction in the principal outstanding.
Aren't the majority of the $8 trillion not actually cash (or cash equivalent) payments, but simply guarantees that would only be due if everything went to zero?
Billionaire Ford Shops for Banks as Government Welcomes Buyers - Bloomberg.com
(Dallas) Billionaire Ford Shops for Banks as Government Welcomes Buyers
U.S. regulators are loosening 50-year-old banking rules amid a financial crisis that has wiped out 25 banks this year and threatens at least 171 more, raising concern that traditional lenders may not be able to step in. Fords investment firms -- Hilltop Holdings Inc. and FlexpointFord LLC -- add to a growing list of non-banks, including securities firms, insurers and credit-card issuers that have been cleared to buy retail deposits and branches.
Free Money
Mish's Global Economic Trend Analysis: Quantitative Easing American Style: Free Money
Welcome to the US shooting galleries, methadone and heroine for junkies. Drugs, drugs, and more drugs. Sobriety through dope.
This path has always led to success.
Yup.
I'm an architect also. Almost all the firms in Houston are in a hiring freeze right now, and I can confirm that there will be massive layoffs after the first of the year when firms realize that this is not a 'temporary' downturn.
Commercial is almost completely dead, while there are greater and greater numbers of large firms chasing the same medical and school projects. I spoke to a principal from Perkins & Will a few weeks ago who said that their Hospital clients were beginning to have trouble with financing. Not good.
someone tell George Costanza his aspirations are dashed....
It's (not) easy......
being green.....
The bright side of this is that it means they will be building far fewer ugly and irrelevant modernist buildings.
before the first spade of earth is turned
Planting the seeds of corruption and cronyism at levels that will make the current system seem quaint.
FFDIC,
That sounds like ford is attempting to become a Bank-hold-CO.
Didn't work for GMAC.
Doubt it'll work for Ford.
Funny how Opec cuts oil by 2.2 M bl/day, the dollar is in the gutter and YET oil is still down despite all protestations to the negative.
Everyone in Opec cheats on the way day. Supply much greater than demand. Oil will fall and stay down for a long time until it starts moving up again.
100% OT: Anyone ever look at the sitemeter link and see who's on CR at any given time? It's like a who's who. In about 3 minutes I saw the FDIC, FEMA, NASA, USDOJ, the Library of Congress, Citadel, Lehman, Union Bank, Wells Fargo, UBS, Apple, about 37 institute of higher education, and 50+ other fortune 500 companies.
This website, CR, Tanta, and a few of the posters here are important.
"As a leading economic indicator of construction activity, "
~~~~~~~
I always wanted to lead in something.
Note from Goldman:
"The effective income tax rate was approximately 1% for 2008, down from 25.1% for the first nine months of 2008 and down from 34.1% for fiscal year 2007. The decreases in the effective income tax rate were primarily due to an increase in permanent benefits as a percentage of lower earnings and changes in geographic earnings mix."
A tax rate of 1 per cent, is after all, just $14m- a fraction of the $6bn it paid last year.
Bloomberg:
Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The companys effective income tax rate dropped to 1 percent from 34.1 percent The rate decline looks a little extreme, said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC. I was definitely taken aback, Willens said. Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions. U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.
10Q filing:
The firm is subject to examination by the U.S. Internal Revenue Service (IRS) and other taxing authorities in jurisdictions where the firm has significant business operations, such as the United Kingdom, Japan, Hong Kong, Korea and various states, such as New York. The tax years under examination vary by jurisdiction. During fiscal 2007, the IRS substantially concluded its examination of fiscal years 2003 and 2004. Tax audits that have been substantially concluded in other jurisdictions in which the firm has significant business operations include New York States examination of fiscal years through 2003, the United Kingdoms review of fiscal years through 2003 and Hong Kongs review of fiscal years through 2001. The firm does not expect that potential additional assessments from these examinations will be material to its results of operations The effective income tax rate for the first half of 2008 was 27.7%, down from 29.5% for the first quarter of 2008 and 34.1% for fiscal year 2007. The decreases in the effective tax rate were primarily due to changes in geographic earnings mix.
Translation:
Goldman's been transferring earnings to countries with lower taxes, shifting taxable income away from places like the UK, US and Japan.
Screwing America 24/7
Looks like The 30-Year Treasury will go under 2% with quantitative manipulation, which probably will be followed by lower mortgage rates, but gads, who the F will have anything to put into a house, now that money markets are breaking the buck, and another 700 point drop coming on the Dow?
Everyone in Opec cheats on the way day.
I'm of the impression that if Russia joins OPEC, there's going to be a lot less cheating once some oil minister finds a horse's head in his bed.
Re Site Meter -- if Citadel is important then I am important too. But I'm not important. I'm just some guy who works for a big hedge fund.
"Oil will fall and stay down for a long time until it starts moving up again."
I understand your meaning, but that could almost be a Yogi-ism!
If oil is going down, then so is gold - the long term correlation is pretty solid. Based on gold's current price, oil should probably be in the 60s. Dont see how anyone can be bullish gold without being bullish on oil. Eventually they move together over the long term.
Look at the history of Opec and non-Opec oil producers during oil crashes. They have NEVER kept to quotas during oil crashes. Everyone including Saudia Arabia has cheated on the way down.
Russia, Venezuela and others require oil above $85/bl to balance their budgets. They literally have to keep pumping to keep their social fabric together. Anyone who is trying to compare how oil should move to any other commodity simply doesn't understand the difference between different commodities.
Eventually they move together over the long term.
Big Foot | 12.17.08 - 1:12 pm | #
Oldie but goodie: the market can remain irrational longer than you can remain solvent.
PO'd:
Yup.
I was thinking from previous post that maybe we should say Peak DOO DOO instead, but then something made stop and think , we are nowhere near peak when it comes to doo doo
Goldman has set aside a multimillion-dollar bonus pool will still be shared by employees.
In private industry, the more damage you do, the more money you get. In the political system, the more damage you do, the more control you get over the economy.
Bonus day at GS today and my neighbour seems to have got 600K...I think thats pretty cool in current environment.. (he is a VP Star performer ..with EMEA research)
SRS sporting a 5 handle.
Unreal.
Just got word a major Health Insurance provider is laying off a thousand employees...wonder who it is?
This is a record setting year.
In other news, it looks like the day trades at E-Trade are getting poorer.
Same thing with Citadel - they bought E-Trade if memory serves.
Until Hedge Funds finish their liquidations; Another big liquidation should be coming after the start of the new year; you can throw every single historical correlation out the window.
If you have a deflationist bent you would probably be saying gold should be tracking oil and thus gold should be going down.
If you have an inflaitonist bent then you will be thinking oil should be tracking gold and thus oil should be going up.
If you simply follow the tape then you look at 10yr and 30yr long bond rates and simply think we are in big DOO DOO and who knows how it's going to turn out.
Can't wait for Kidnapping in the First World Index.
Should be smashing all previous records in a few years.
/geesh
SEC filing from Bank United --- the largest regional bank in Florida-
We are not able to file a timely Form 10-K because we have not completed our financial statements for the fiscal year ended September 30, 2008. Continuing adverse market conditions and the complexity of accounting and disclosure issues has increased the need for additional review and analysis of our business including, without limitation, regulatory issues, liquidity and capital.
On September 19, 2008, the Company and BankUnited, FSB (the Bank), our wholly owned subsidiary, each entered into a Consent Order (the Order) with the Office of Thrift Supervision (the OTS). We continue to work closely with our federal banking regulators to address the adverse impact of the current condition of the housing market, the financial market, our losses and our capital position.
The Bank Order requires that the Bank (inter alia):
meet and maintain a minimum Tier I Core Capital ratio of 7% and a minimum Total Risk-Based Capital ratio of 14% on and after December 31, 2008;
not originate any new loans that provide for or may result in negative amortization loans (including payment option loans) or reduced documentation loans;
submit a detailed written plan to reduce the level of payment option loans;
review and revise where appropriate documents and forms being used to revise payment option loans;
enhance its monitoring and internal reporting, as well as reporting to regulators regarding liquidity, payment option loans, REO and mortgage insurance
submit a comprehensive business plan covering the last three months of calendar year 2008, all of calendar years 2009 and 2010, and the first three quarters of 2011;
restrict asset growth to an amount less than net interest credited on deposits during any quarter, until the business plan is approved by the OTS;
not pay dividends or make capital distributions without receiving the prior approval of the OTS;
notify, or in certain cases receive the approval or non-objection of, the OTS prior to (i) making certain changes to its directors or senior executive officers, (ii) making any golden parachute or prohibited indemnification payments, or (iii) entering into, renewing, extending or revising any contractual arrangement related to compensation or benefits with any director or senior officer of the Bank; and
appoint a regulatory compliance committee to monitor and coordinate compliance with the provisions of the Order and the 2008 examination.
And it gets worse:
At June 30, 2008, the Bank had Tier 1 Core Capital of 7.6% and Total Risk-Based Capital of 13.9%. Subsequent to June 30, 2008, the Company and the Bank have incurred substantial losses (see Part IV, Item 3 below), as a result we will be reporting a significant decrease in these ratios on our Annual Report on Form 10-K. The OTS Order requires us to increase those ratios so that the Bank has a minimum Tier 1 Core Capital ratio of 7% and a minimum Total Risk-Based Capital ratio of 14% on and after December 31, 2008. If we do not obtain additional capital prior to December 31, 2008, we do not expect to meet the ratios set forth in the Order. Failure to meet the minimum ratios set forth in the Order at December 31, 2008 could result in the regulators taking various enforcement actions regarding the Bank.
Even if we are successful in meeting the capital ratios mandated in the Order, we cannot assure you, given our current level of losses, that we will not need to raise additional capital in the future. We are in negotiations with a fund to raise capital and restructure our balance sheet. We cannot assure you that these negotiations will be successful. If such negotiations are not successful there is substantial doubt about our ability to continue as a going concern.
Eric -
Exactly. Thats why I wouldnt buy on margin or levered ETFs. I'm also not buying oil or shorting gold. Eventually they will move in the same direction - so if you're shorting oil and going long gold then you will eventually lose if you hold that trade for the long term. If you lever, you'll be wiped out sooner...
Anyone know how residential architecture firms have been doing in 2008? Is it beyond dead with layoffs or just slow? I have an old friend doing work in coastal Georgia but have been hesitant to see how things are since if not good, he may ask me for something that I can't afford to do right now to help....
Putting the "BK" in BKUNA?
Who cares..... just going up, sir!
Yahoo! 404 - Page Not Found
NEW YORK Customers of New York City-based Citibank have lost access to much of their account information because of a computer outage.
Many of the troubled bank's clients haven't been able to retrieve account details online or by telephone since Tuesday afternoon. Others can access only parts of their account profiles.
Citibank telephone representatives say they don't know what caused the outage but technicians are working to fix it. They've been telling customers to call back after Wednesday morning.
Hi ho.
The Madoff precedent:
The SEC will vigorously investigate every case in which the criminals confess.
I'ma an architect for a major international firm and the last three weeks have been the bloodiest since the early Ninties. By Spring 2009, it will be even worse than back then.
Citi reportedly called in Geek Squad but they demanded COD knowingthat Citi was 3T in off sheet debt.
Since there's a lull here, let me resurrect that earlier exchange on ETFs for a moment.
I saw the assertion several times that they're appropriate only for extremely short-term strategies, but I fail to see any inherent quality which makes this correct or valid.
If, say, one were inclined to invest based on trends and, at the same time, were not the sort of person who relishes day trading, what's to prevent you from finding SRS (as an example) recent price something of an anomaly, given the midterm prospects for all classes of real estate?
In fact, I've purchased a quantity of it with no intent to churn. My last round with the fund paid 147%. I got in at about $80 in May, and sold in mid-November, when valuation appeared unsustainably high.
Have done similarly with SKF. Twice, so far. With returns of 106% and 118%.
I accept the mechanics of the fund's daily settlement, and am rather wary on the way into or out of a position. But don't tell me I always will lose, or that the funds are suitable only for day traders unless you can offer good reason this must be so.
"We have no evidence of wrongdoing by any SEC staff" :Cox
Kevin de Bruxelles - Could you elaborate on "the bloodiest".... are people being laid off, who gets laid off first? I am not that familiar with architecture firms and how they operate so don't know what level gets cut first....the people with under 5 years experience, those not licensed yet, etc. Thanks.
Also, I would suspect the govt construction spending would benefit civil engineering companies much more so than architects (roads, bridges, sewer works, etc.)....
Customers of New York City-based Citibank have lost access to much of their account information because of a computer outage.
UGA Dawg | Homepage | 12.17.08 - 1:32 pm | #
Citi going all Madoff on us?
COX should be investigated and subsequently indicted.
SRS sporting a 5 handle.
Unreal.
El Scorcho
I finally broke down and picked up a little bit just now. The order went through at $57.45.
I've not been a fan SRS and have generally stayed away from it, but I figured I'd play with it a bit at this price. I'm not expecting much so I won't get too disappointed.
As an Architect, I expect 2009 to be downright miserable. My goal is to simply survive to see 2010 at this point.
On the plus side, I hope to finally clean my basement.
Spunkmeyer | 12.17.08 - 12:42 pm | #
How old are you - I ask because my future Son in law is a recent arch grad. I've told him this bust is the best thing that has ever happened to him... every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [by the time it gets better they'll be so close to retirement and their old contacts so destroyed that they'll say 'screw it' - even though retirement will be awfully tough].
Worse age cohort? Probably age 35 to 40 - nearing what would be earning years and looking over the edge at the abyss below.
I saw a similar situation in mfg coming out of 'Rust Belt I' [The Stagflation Years]... the late 80s and all of the 90s were pretty much 'rock on' for industrial mfgrs [exept for Rob Dawg's So Cal aero & mil]. I see a similar situation happening in architecture - probably be a 'nucular winter' for the next five years... then it will be excellent for the few 'small mammals' that have survived. Small is beautiful!!
Hope you are one of the survivors.
That's like the third big computer outage today.
TNX[?]
Canuck markets
City
Conversation, anecdotal, with my dentist this morning. Beloved small businesses here in DC closing for lack of credit. Home furnishing was one.
Burnside - I'm with you on this one.
there seems to be a group of people who just really don't like these products for some reason. Not sure why. Perhaps they own a mall or a hotel?
I think a lot of people make the mistake, when they are looking at our economy, of putting first importance upon the Federal Reserve, and the steps it is taking. In reality, you should look first at the US consumer, because the Fed's ability to influence the economy pales in comparison to the consumer's.
The reason this credit bubble has burst is the same reason that they always burst- the growth in production caused by excess credit is unable to be absorbed by the public's limited purchasing power. In our situation, it's even worse because not only is the US consumer maxed out on debt and suffering from stagnant wages; he is also panicked by the economic news.
Assume that a single consumer decides not to take a vacation this year, to keep driving an older car, and to stop eating out at restaurants. The Fed has no ability to undo the damage done to airlines, the hosptitality industry and the manufacturing sector by those simple decisions. Sure, the Fed can pump a lot of money into the reserve accounts of banks, but that won't undo the damage described above. Plus, Japan's example shows that this doesn't make banks any more eager to lend; the quantitative easing money just piled up in Japanese bank vaults.
Even if the banks wanted to lend to good borrowers, that's largely beside the point because, once again, credit bubbles collapse because the consumer's purchasing power fails to keep up with credit-fueled production. Richard Duncan predicted this scenario precisely in his 2005 book "The Dollar Crisis" - he even predicted that the Fed, like Japan, would resort to quantitative easing to try to counteract it. But he correctly noted that it would not work any more than giving a drunk more alcohol.
The problem is not insufficient credit- the problem is that the consumer is broke, scared and is going to cut back drastically on spending. And there's nothing the Fed can do about that- the recession has to play itself out.
Re: SRS. I've taken to wearing brown pants for my current purchase(s) so that the stain isn't noticeable. (:
Why are all these computer systems going down?
How much farther can SRS go down? I don't have any, but I'm certainly tempted to dip a toe in here.
The irrationality in the market lately seems to be reaching a crescendo.
When does the next down leg start? Can they really prop this up through the end of the year?
In our situation, it's even worse because not only is the US consumer maxed out on debt and suffering from stagnant wages; he is also panicked by the economic news.
Someone really needs to address the problem with having generations of college graduates getting a diploma in one hand and student loan shackles on the other.
This is a disaster waiting to happen.
On the bright side, all green!
Anyone...anyone.....with comments about residential architecture (like luxury homes)???? Much thanks.
POIC
I went through this last spring (i believe it was April). I made money every month this year except for that month. The market just kept going up in the face of relentless bad news every day. I finally capitulated and got out of a big SDS position and SRS and took my losses. If i'd hung in with those positions (especially the SDS) I would've had some ridiculous returns.
Perhaps this time is different but I'm hanging in there.
How much farther can SRS go down? I don't have any, but I'm certainly tempted to dip a toe in here.
Haha... well I think it's already down 2% since I bought it about 10 mins ago.
You gotta know what you're signing up for with this stuff...
Valero slows down refining[20%] capacity
Leading refiner losing money on gasoline business
"POIC
I went through this last spring (i believe it was April). I made money every month this year except for that month. The market just kept going up in the face of relentless bad news every day. I finally capitulated and got out of a big SDS position and SRS and took my losses. If i'd hung in with those positions (especially the SDS) I would've had some ridiculous returns."
Yeah, the same as me during my last purchase a few months back. Held it through MAX pain for a couple of months and dumped at a slight loss only to miss a big runup. This is starting to feel, marketwise, the same way. Unrelenting bad news and the market screams higher, the short sells capitulating daily.
I would love to know who is buying all the CREITs right now. Is this just a last ditch short squeeze?
Who is thinking the best use of their money is to get a piece of the mall owners?
Fascinating to watch, if not profitable.
Pavel Chichikov writes:
Why are all these computer systems going down?
Pavel Chichikov | 12.17.08 - 1:41 pm | #
A Giant Breach in Earth's Magnetic Field
NASA - A Giant Breach in Earth's Magnetic Field
?
- Ticker Tape of Doom
Looks like the big players are painting the tape again today.
PO'd in brown pants:
Heh. If the daily stuff ruins your digestion, I don't know what to suggest. I looked at sad, red numbers for weeks at a time with no regret whatever. But perhaps I'm an odd one. Will hold the current lot well into next year unless there's some momentary spike on some ghastly, momentary news.
Sangfroid, my friend.
SRS getting smoked...yikes
Currently challenging last Monday's high water mark. There's some room for this beast to run if that resistance breaks. Keep thyself in ultrashorts at thine own peril.
SRS closing rapidly on a 4 handle. Hoodathunk that two weeks ago?
This is backward reasoning but why do governments borrow?. Because they do not have the capital to finance existing payments. By driving interest rates down to zero they effectively have to borrow infinite capital in the system to finance that structure at low interest rates. So they are sucking all available capital by printing money leading to greater and greater depressive effect while attempting to inflate.
As an architect in California, all my professional friends are downsizing and hanging on with fingernails to current projects.
Glad, I went into public school teaching as a day job!
dryfly writes:
"As an Architect, I expect 2009 to be downright miserable. My goal is to simply survive to see 2010 at this point.
On the plus side, I hope to finally clean my basement." - Spunkmeyer
How old are you - I ask because my future Son in law is a recent arch grad. I've told him this bust is the best thing that has ever happened to him... every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [by the time it gets better they'll be so close to retirement and their old contacts so destroyed that they'll say 'screw it' - even though retirement will be awfully tough].
Amazing coincidences. My niece is a recent USC Arch grad now in Great America (aka flyover) after a stint in Pasadena. Exact same advice.
...I saw a similar situation in mfg coming out of 'Rust Belt I' [The Stagflation Years]... the late 80s and all of the 90s were pretty much 'rock on' for industrial mfgrs [exept for Rob Dawg's So Cal aero & mil].
Yeah, special case. Sadly this was IMO the greatest failing of American industry. I could have been building high performance all structural composite autos and motorcycles powered by cer-met adiabatic engines.
I see a similar situation happening in architecture - probably be a 'nucular winter' for the next five years... then it will be excellent for the few 'small mammals' that have survived. Small is beautiful!!
Architecture is being disintermediated unfortunately. Tilt-up buildings often include pre-packaged architectural services in the can.
Hope you are one of the survivors. - dryfly
Agreed.
I would love to know who is buying all the CREITs right now. Is this just a last ditch short squeeze?
Whenever the Federal Reserve cuts rates it basically subsidizes gambling, risk-taking, and dangerously irrational behavior.
It's probably a short-squeeze, but it's also probably yet another instance of easy money from the Fed being used to game the system.
I'm speculating that all the ultra stocks sink to very low levels. Look at UYG. When a particular flavor of ultra is out of favor, it gets clobbered. Also, if you look at skf going from 100 - 300, you would get the same % return going from 10 - 30. I think all these things might end up trading as perpetual options, and the base prices will be a lot lower. I obviously don't know for sure so I generally stay away.
BTW, thanks to whoever it was who suggested looking at the 20-cent UYG $6 calls on Friday. Winner winner, chicken dinner.
Assume Crash Positions,
That was me. Sitting pretty
Madoff for Treasury Sec!!
YouTube -
"That was me. Sitting pretty :)"
Kudos to you, sir!
TTOD -- gracias for that magnetic storm link...that's weirdly wicked...and just the beginning...
re: SRS today -- all the more reason to put the stops in...of course, this is a lesson i should've listened to as well
I finally broke down and picked up a little bit just now. The order went through at $57.45.
I've not been a fan SRS and have generally stayed away from it, but I figured I'd play with it a bit at this price. I'm not expecting much so I won't get too disappointed.
ac
I wish I had just started playing with it. LOL! I am getting killed. Also bought a ton of calls when it got below $90.
I'm buying more calls at this level.
SRS today -- all the more reason to put the stops in.
comrade tinman | 12.17.08 - 1:58 pm | #
Every time I think about buying SRS and holding it more than 1 or 2 days, I look at the spreadsheet I ginned up to show the effect of the ultra-short due to volatility, and I stay away.
Chrysler financing arm may halt dealer loans: reports
I'm glad my better judgment kept me away from the SRS third rail last week. Must really sting to be levered into it. You bought deep ITM calls as I recall, right, Scorcho? Ouch. If they're Jan 090s, at least you have some time for a correction to play out.
where's Bubba gonna get his big 4x4?
I guess this weekend we will see auto bailout.
Speaking of which . . . aren't we about due to hear something on the Detroit handouts?
REBear writes:
Chrysler financing arm may halt dealer loans: reports
REBear | 12.17.08 - 2:01 pm | #
LINK???? This huge
Yeah, special case. Sadly this was IMO the greatest failing of American industry. I could have been building high performance all structural composite autos and motorcycles powered by cer-met adiabatic engines.
Rob Dawg | Homepage | 12.17.08 - 1:52 pm | #
What he said.
BTW - I had a talk a few minutes ago with a buddy who is looking to start a company producing high tech components similar to what you describe - except it won't be in a high cost area like So Cal. Probably in central Pennsylvania & dovetail with mat sci people from Penn State. I might sign on. Timing is perfect - you want to go into something like this on the front end of the disaster NOT the tail end - be too late if you wait for signs of a recovery.
The country needs this stuff to happen - get busy Dawg.
*cut off
This is huge...GMAC has so far failed in their debt/equity swap
cc,
MW. No link yet.
I think this is posturing.
Chrysler Financial May Curb Loans as Dealers Tap Cash
Chrysler Financial May Curb Loans as Dealers Tap Cash (Update2) - Bloomberg.com
I guess this weekend we will see auto bailout.
REBear | 12.17.08 - 2:02 pm | #
Or BK's
Pavel Chichikov writes:
Why are all these computer systems going down?
Because they're being retooled for the FED's secret plan to double everyone's savings balance when they retool for the new dollar. Hand in one old dollar, get two new dollars. All debts, housing loans, and other obligations denominated in old dollars are de facto new dollars. Boom, housing gulf instantly vaporized, all assets double in value, all debts halve. Problem solved.
Never would have seen this coming.....
17 December 2008
AIG Has Another $30 to $200 Billion in Uncovered Losses to be Bailed Out
Bloomberg
AIG Writedowns May Rise $30 Billion on Swaps Not in U.S. Rescue
By James Sterngold
Dec. 17 (Bloomberg) -- American International Group Inc., which already has suffered more than $60 billion in writedowns and losses, may have to absorb almost $30 billion more because of flaws in the way its holdings are valued.
An examination of AIGs credit-default swaps guaranteeing more than $300 billion of corporate loans, mortgages and other assets not covered by a $152.5 billion federal rescue shows the New York-based insurer may value some of its positions at levels that dont reflect distress in the markets, according to an analyst at Gradient Analytics Inc. and a tax consultant who teaches at Columbia University Business School in New York. Executives at two firms that have similar investments say they account for the securities differently than AIG does....
I'm glad my better judgment kept me away from the SRS third rail last week. Must really sting to be levered into it. You bought deep ITM calls as I recall, right, Scorcho? Ouch. If they're Jan 090s, at least you have some time for a correction to play out.
Assume Crash Positions!
I bought July ATM Calls (which at the money then was $100, and then $80)
lesson i learned today on the ultrashorts today -- never buy a tick above the closing NAV of the previous day.
NAV for SRS at close yesterday was 58.75
I read that GMAC has pushed back the dead-line for it's bond conversion offer to mid-February.
Comrade Kristina
Aetna cutting 1,000 jobs, or less than 3% of workforce
Could you elaborate on "the bloodiest".... are people being laid off, who gets laid off first? I am not that familiar with architecture firms and how they operate so don't know what level gets cut first....the people with under 5 years experience, those not licensed yet, etc. Thanks.
By blood I mean layoffs of course roughly 33-60% of staff depending on the office. It is highly concentrated in the staff with less than 7 years experience (cad-monkeys)although some associates and especially project managers are getting the axe as well. The ratios of senior staff to junior is now way out of whack so I expect the upper levels to take their hits too in the coming months. Often the choice comes down to whether your project has just finished or not.
During recessions, two types of architectural offices flourish: those that concentrate on hospital work and those that do forensic architecture (litigation/expert witnesses).
ontopic -- my friend just got laid off from an architectual firm in NYC last friday on the 3rd ROUND of layoffs.
dryfly, thanks. I'm in my late 30's so I lived through the early 90's problems when working during school and upon graduation. So, my hope is that I can survive again.
A lot of people in my generation of graduates went out from architecture school, couldn't get jobs, and left the profession altogether. Only a few years ago this shortage meant people could command pretty good salaries as there weren't many people in the 10-15 years experience area.
Honing the "green building" skills and polishing the portfolio drawings will make for good downtime activities for me. I have my own residential practice, established several years ago, so I've been living at ground zero for a little while now. I have low overhead costs so that'll help.
zombie thread alert.
Altair well put. But in the meantime...
I have a confession to make in regards to my last SRS purchase. The only reason I bought it was to balance out the gains I had made this year. My plan has worked to perfection so far (:
During recessions, two types of architectural offices flourish: those that concentrate on hospital work and those that do forensic architecture (litigation/expert witnesses).
kevin de bruxelles,
Agreed especially the latter. I am just now sensing a vicious snapback in the former. Can you guess? Yup, donations. Gone.
@ Spunkmeyer | \t \t \t \t12.17.08 - 2:11 pm |
Thanks. Being low cost is the key - overhead kills in this environment. Unfortunately what a lot of architects design can be looked at as 'somebody else's overhead' - figure out ways to minimize that while still preserving aesthetics & functionality and you survive if not thrive.
Keep us posted.
"The SEC is investigating _______" About as effective as rearranging the deck chairs on the Titanic.....
The country needs this stuff to happen - get busy Dawg. - dryfly
You want sad? As you likely suspect there are several world manufacturers very close to my location with skunk works. The one that is interested? Black mit White. And boy do they have two awesome world changers in pre-production.
"Agreed especially the latter. I am just now sensing a vicious snapback in the former. Can you guess? Yup, donations. Gone.
Rob Dawg | Homepage | 12.17.08 - 2:16 pm | # "
DON'T SAY THAT! (sez he who works in university fundraising).
But yes, this quarter's going to suck. And probably quite a few after that.
kevin de bruxelles - Thanks for the in the trenches report...and best wishes.
DON'T SAY THAT! (sez he who works in university fundraising).- Bob Dobbs
If the Brandeis/Madoff affair is any indication were I you I'd be careful about signing agreements to get the bulk of an estate. You might end up with a bill instead of a check.
every architect age 50 to 55 and older will be wiped out by this and most will never return to the profession [.. they'll say 'screw it' - even though retirement will be awfully tough]
That's pretty much where I am in IT, in spite of my efforts. It's been increasingly clear for the past two years that I can't get anywhere career-wise, the age discrimination is huge and my interest in a coding position is low.
I'll probably give up around March or April and take a teaching job somewhere.
I thought skills would matter but past a certain point, they don't. It's all about telling people what they want to hear, which is what's wrong with so many things.
But that's how it is.
kevin de bruxelles - What are the prospects of a person just completing their third year working for an arch firm? Wonder if pay is good or is it still low?
Reilly2
Architectural salaries vary in function to the perceived status of the firm At the really top design firms (Zaha Hadid, Rem Koolhaus, etc) people literally work for free. The best paying firms are the aforementioned hospital or forensic firms due to their apparent low design status. There is a range in between, with the large corporate firms upping their salaries in recent years so they are now closer to the hospital firms than to the design-y ones.
Salaries in 2009 for new hires are headed south as there is now a whole slew of desperare young architects on the make looking for work. People who are still in a firm are not getting raises but I have not heard of people cutting salaries yet (though hours are being cut).
An architect with three years experience is in a sort of a professional sweet spot. The good ones are experienced enough to put a set of drawings together (working with a senior person of course) while at the same time they are relatively cheap. So while everyone is hurting, this level should do better than most.
I'll probably give up around March or April and take a teaching job somewhere.
I thought skills would matter but past a certain point, they don't. It's all about telling people what they want to hear, which is what's wrong with so many things.
Dogma is entrenched even more in teaching. The best advice I can give is to deal with the students as much as possible and meetings/supervisors/dept chairs as little as possible.
Re: SRS... I see nothing in that chart to suggest it's a good idea to get long here.
Hand in one old dollar, get two new dollars
These new Federal Reserve Notes could certainly be a tool to "sop up the excess liquidity" after this period is over. That's the most parsimonious explanation.
If they were used by a devious and criminal government, they could, however, be used to devalue the domestic currency while leaving the international reserve currency intact.
That's how you could make your domestic currency nonconvertible as you start to go all Weimar.
" Rob Dawg writes:
DON'T SAY THAT! (sez he who works in university fundraising).- Bob Dobbs
If the Brandeis/Madoff affair is any indication were I you I'd be careful about signing agreements to get the bulk of an estate. You might end up with a bill instead of a check.
Rob Dawg | Homepage | 12.17.08 - 2:28 pm | # "
I just support the software. But they are very careful about the terms under which they accept estates, real estate, gifts in kind, etc.
FFDIC,
That sounds like ford is attempting to become a Bank-hold-CO.
Didn't work for GMAC.
Doubt it'll work for Ford.
blackhat | Homepage | 12.17.08 - 1:01 pm | #
Ford is a huge donor to SMU in Dallas and the future Bush library there. I believe the new stadium there is named for him already. He will likely get most if not all of what he wants now or eventually. The FDIC's back is against the wall.
Hey, no problem. Obama will get them going with his infrastructure programs!