American International Group Inc., the insurer whose bonuses and perks are under fire from U.S. lawmakers, offered cash awards to another 38 executives in a retention program with payments of as much as $4 million.
Only $4 million? What's the big deal? That's not even a milliTARP.
Where is the outrage?
I'm convinced that so many have reached the point of chronic mental helplessness. They don't believe there is anything that can be done to stop the madness. This is a dangerous state of mind . . . Without understanding and processing and constructively protesting what is happening, our society will slowly build pressures that will resolve themselves in terrible ways. Leaders are needed now to deal with this madness. Where are they?
Unbelievable. What chutzpah. Can't at least this affrontary come to an end? They obviously didn't need a bailout if they can still afford their management.
The unique physics with regards to time dilation in and around the gravity wells of black holes render them, and the companies that form them, particularly attractive vehicles for Hoopajoops, LTD. Our theoretical physicists and quantum accountants can take advantage of the time-dilation effects to produce truly unique and incomprehensible forward projections that rely upon uncertain relative time states depending upon one's location with relation to the company. As one knows, time stretches infinitely when entering a black hole, while passing at a fast relative speed outside the black hole. Thus, while we seem to be waiting forever for the entities within AIG to auction themselves off, and by our perception they are in fact not moving or doing anything, relative to their own time, they are working at lightning speed, furiously shoveling their assets into easily auctioned chunks. Taking account for this discrepancy in timespace and using it for financial arbitrage is one of our primary asset drivers at this time in Hoopajoops, LTD. This does not even take into account the types of arbitrage available when the recipient of a dollar is a supermassive gravity well whose exact state and, well, solvency, cannot be determined due to its ability to eat light and any other probative instruments we or the regulators might apply.
OK, I think I've got it. The government just needs to unwind all transactions from the past 2 years. That would restore tens of trillions in wealth (er, "wealth") and then we could try again to defuse the crisis.
They truly are blind. I thought they were just stupid. This goes far beyond stupid. Who the hell does their PR?
They should have announced each executive was giving 1/10 of their bonus to food banks or something. Shown up with one those huge Publishers Clearing House checks for $10,000. Then stiffed them for the rest.
Seriously considering not paying bills for the next month or two. Know some folks who have gotten down from full-on credit card rates to single digits. 90 days behind is what got it to "go."
I can't believe that works, let alone that it has come to this.
And still some corporations are sending me offers to give me enough credit to basically pay off my mortgage, only at a rate that we should say is inflated.
Where are we on Conjure's clock? I need a current baseline...
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
On another note, were these speculative bets made before or after the government bailout of the company?
On yet another note, if these bets were made after the gov't bailout, the Fed & Treasury may be approaching an "Oh Sh*t Moment". AIG takes bailout money and makes high risk investments which fail. Banks take bailout money from El Tarpo and place it in Treasuries, driving the yield negative. What strategy should the government be pushing?
..I do hope that every Senator and Congress women/men, when they voted for TARP,already knew that the greed will continue. Wait until the first disbursement to the Big 3...4 weeks later they will ask for more and pay nice bonuses...just like AIG. Those companies laughing their asses off...
I do wonder who/what defines "Too big to fail"
I suggest that, if we would have had failed AIG, and other Investment Banks - just like LEH - we would clear this mess much faster and come out with clear books. Still today...after so many bailouts...the confessions are still coming in...I'm a pissed off tax payer...
"Someone needs to parboil those suckers and smoke em."
That would be a start. First be sure to strip them of all assets, and those held by wives and children.
Call it a retention adjustment.
Then give them a fair trial and hang them from the lampposts.
That will come after the collapse of the treasury market and the dollar collapse leading to the revolution when the people will drag these bastards out in the street and hang them. It's gonna kinda suck.
That will come after the collapse of the treasury market and the dollar collapse leading to the revolution when the people will drag these bastards out in the street and hang them. It's gonna kinda suck.
No, tough to get into those gated communities. Especially when they can afford high dollar muscle. Plus, no one knows where they live.
People will just go out and burn down their own neighborhoods. Its when you get a new political party with the power of the state behind it. Thats when the real blue blood flows red.
"It's very simple we want the government to fall. This boy's death was the last straw for us," Petros Constantinou, an organizer with the Socialist Workers Party, said in Athens. "This government wants the poor to pay for all the country's problems never the rich and they keep those who protest in line using police oppression."
Does anyone even know how much exposure AIG has? I mean it's reasonable to expect all of it will need to be cleared by the taxpayer. TARP V2 right after NEW DEAL V2.
It really points out the need to drag the company through bankruptcy. These assholes are acting like they deserve bonuses. The attitude adjustment (and subsequent firings of management) would do this company a world of good.
I suggest that, if we would have had failed AIG, and other Investment Banks - just like LEH - we would clear this mess much faster and come out with clear books. ...
NAVSPECWARCOM | 12.09.08 - 10:12 pm | #
No, if back then, it was all allowed to come crashing down, we wouldn't have cleared the mess, we would be engaging in hand to hand combat in the streets a la death race 2000.
Dear Lord, please reach down from heaven and pulverize everyone involved in this financial atrocity. Crooked CEOs, pontificating politicians, and broke borrowers, let them all be consigned to the flames of Hell.
Dec. 10 (Bloomberg) -- U.S. biotechnology executives are lobbying Congress to change a tax law and provide millions of dollars in government money to small, cash-starved drugmakers that comprise most of the industry.
"In the year 2000 the United States has been destroyed by a financial crisis and a military coup. Political parties have collapsed into a single Bipartisan Party, which also fulfills the religious functions of a unified church and state. The resulting fascist police state, the United Provinces, is headed by the cult figure "Mr President" (Sandy McCallum). The people are kept satisfied through a stream of gory gladiatorial entertainment, which includes the bloody spectacle the Transcontinental Road Race, depicted as a symbol of American values and way of life."
Wow , the screenwriter predicted even better than Roubini or Taleb!
"Tom Stone writes:
My favorite gated community is on joy road.All 5,000 square foot and larger custom homes on acreage,beautiful views.No water.None.water is trucked in.
Tom Stone | 12.09.08 - 10:22 pm | # "
I once saw a great quote from Bono, the lead singer of U2. He said, "Do you want to know the difference between the United States and Ireland. In the United States, if you see a beautiful house on a hill, you say, 'Boy, I really want to be like the guy who owns that house'. In Ireland, we look at that house and say 'I really want to fucking kill the guy that owns that house.
I really hope all you people who've been following this blog that's been around since 2005 made some money betting against housing instead of just griping about the bonuses and unfairness of it all. Don't judge. Make dough.
"The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties"
Mr. Greyshades | 12.09.08 - 10:08 pm
"On another note, were these speculative bets made before or after the government bailout of the company"
bruiser | 12.09.08 - 10:09 pm
"Somebody hit the reset button on this country...agree, giving money to AIG is about saving Glodman Sucks and other Wall Street crooks!"
crispy&cole | Homepage | 12.09.08 - 10:16 pm
Well, there's a few comments that are (mostly) relevant.
Get this straight. Outrage against AIG is misdirection. The whole bailout of AIG was to keep pumping money into the investment banks that made the speculative trades.
And not one individual of our entire political leadership spoke to this central issue. Remember this, every time you listen to them speak...and when you pay your taxes.
Ed Liddy Chairman of the Board of Directors and Chief Executive Officer (American International Group)
Stephen F. Bollenback Former Co-Chairman and CEO, Hilton Hotels Corporation
Martin S. Feldstein Professor of Economics, Harvard University
George L. Miles President and Chief Executive Officer, WQED Multimedia
Morris W. Offit Chairman, Offit Capital Advisors LLC
Michael H. Sutton Consultant
Fred H. Langhammer Chairman, Global Affairs, and former CEO of The Estee Lauder Companies, Inc.
Virginia M. Rometty Senior Vice President, Global Business Services, IBM Corporation
James F. Orr, III Chairman of the Board of Trustees, The Rockefeller Foundation
Edmund S.W. Tse Senior Vice Chairman, Life Insurance, American International Group
Suzanne Nora Johnson
This underlines something that Jack Bogle has repeatedly pointed out - Corporate Boards composed of CEOs (and god help us, the CEO of the company itself) is a complete perversion of the check and balance system that is supposed to ensure ethical management of a corporation.
Not only should all of AIG senior management be Leavenworthed, so should the board.
ova cisterns only work if you have rain,and we are DRY.I expect some will install them.There never was much water in that acquifer,and it was highly mineralized,so some of the homoaners decided to drill deeper and what water there was went somewhere else.according to a man I know at a well driller's one of them drilled to 4,000 feet with no luck.This may change after the next earthquake,or not.I wonder if the trophy wives ask party guests to pee on the roses...
I can't believe my parents wanted to have a "born and bred dope" for a son, but with my tax dollars
going to support AIG and the rest, I sure feel like one.
American style "CORRALITO" (*) is no longer a far fetched scenario.
(*) CORRALITO = an Argentinian state-sponsored and imposed devaluation that brought, overnight, the Argentinan Peso from 1 to 1 parity with the "mighty" US Dollar to something like 3 to 1 US$.
Insurance is a scam. All insurance should be illegal. It is the most criminal of all enterprises.
Big fucking surprise.
Marty Feldstein a board member of AIG, huh?
What a fucking crook!! Where was Marty when house prices were shooting up? He was somewhere shooting the shit. (*bonus points for anyone who can recognize that line).
No wonder morale is low at Citigroup (C). In addition to layoffs, a cancelled Christmas party, a horrible year for its stock and disgusting bathrooms, there will not be a model train track installation in the lobby this year: No Model Train At Citi
BONO: No, ho--honestly, I--I've--I've often told this, but it's like, you know, in America, you look up at the house on
the hill, the mansion on the hill and say, 'One day I'm--that--that could be me.' In Ireland, they look up at the mansion
hill and go, 'One day I'm gonna get that bastard.' You know?
Mr. Greyshades(Unrated) writes:
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
Mr. Greyshades | 12.09.08 - 10:08 pm | #
Given the circumstances, I would expect that Treasuries would continue along this path a while longer before something dramatic happens. That is how bubbles go, eh? They continue for longer than you expect and then unwind faster than you'd expect.
Everyone seems to think the banks are just parking their (our?) money until year-end, at which point they may feel free to venture into other markets. I hope this is true for the sake of the muni market...
I have been meaning to get more sleep. I guess that is what weekends are for.
What blows me away is how discussions of "moral hazard" seem to be reserved for underwater homeowners walking away while trying to feed their families.
The extent of "moral corruption" in American business (exemplified by AIG), supported by the American government, makes me want to puke.
Bill Miller proves he was lucky! That is all! Moron!
"These losses have wiped away Value Trust's years of market-beating performance. The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar."
Mr. Greyshades(Unrated) writes:
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
Mr. Greyshades | 12.09.08 - 10:08 pm
Nothing more than that needs to be said. It is the truth.
I want to see those f**kers put in an incinerator, and "processed". I do not think that this will end in a civil manner. There are going to be many dead people before 'this' is over.
What blows me away is how discussions of "moral hazard" seem to be reserved for underwater homeowners walking away while trying to feed their families.
The extent of "moral corruption" in American business (exemplified by AIG), supported by the American government, makes me want to puke.
In the early summer of 2007, two Bear Stearns hedge funds that made big bets on low-quality mortgages imploded. The stock market whipsawed in July and August, as investors worried that housing-market troubles could spread.
Mr. Miller thought investors were too pessimistic about the housing and credit markets. In the third quarter, he bought Bear Stearns. In the fourth quarter, as financial stocks fell, he took positions in Merrill Lynch & Co., Washington Mutual, Wachovia and Freddie Mac.
Explaining his moves to his shareholders in a fourth-quarter update, he compared the period to 1989-90, when he had also bought beaten-down banks. "Sometimes market patterns recur that you believe you have seen before," he wrote. "Financials appear to have bottomed."
Bipartisan hard work has paid off and I understand an agreement has been reached, Senator Carl Levin of Michigan said in a statement. This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes.
Translation:
We've agreed on how to give the money to them. We haven't agreed what to pork will be required in addition to the bailout funds.
"In 2008, Mr. Miller continued to accumulate Bear Stearns. At a conference on Friday, March 14, he boasted that he had bought just that morning at a bargain price, north of $30 a share -- down from a recent high of $154."
I want to see those f**kers put in an incinerator, and "processed". I do not think that this will end in a civil manner. There are going to be many dead people before 'this' is over.
~~~~
Never underestimate the anger of someone who has lost their life savings due to thievery. They have nothing to lose.
AIG - too toxic and nooklear market potential to fail. Deliberate biz policy. I don't know how this works out, but it can't ignore knock-on risk, mincl IBRD capital adequacy
But he didn't abandon financials. During the second quarter, he added to Freddie Mac and insurer AIG. In an April letter to shareholders, he wrote that the rebounding stock and bond markets suggested a corner had been turned. "The credit panic ended with the collapse of Bear Stearns," he wrote. "By far the worst is behind us."
By the end of June, Mr. Miller's group held 53 million Freddie shares -- about 8% of the company.
Gene Rayburn, you owe me a new keyboard and monitor. Well done with the Matchgame with music reference. All we needed was CNR going off for five minutes about something vaguely gay and sexual.
You have received my first Tanta in memoriam wit and snarky post of the day.
Kudos - your prize an old school skinny microphone
The Invisible Hand is taking care of AIG, so please no whining.
The reason that Paulson & Bernanke have distributed 3.5 Trillion to Wall St. with few strings attached, is because derivatives are very complex, as you can see from AIG. Besides, any oversight of the Wall St bailout/windfall might scare the markets. Can't have that.
Automakers OTOH (and a couple of million taxpayer jobs), are merely manufacturers, so they had better come up with a detailed plan about how to resolve this predicament, or we'll let the Free Markets decide!
It is funny when these same f**kers complain about government regulations on free enterprise, and the moral hazard of european style universal health care.
Yes, I am aware that geithner and his buddies are trying to bail out CDS and other assorted toxic obligations with 'real' money. I hope they are stopped before it is too late, or maybe it is already too late.
I really hope all you people who've been following this blog that's been around since 2005 made some money betting against housing instead of just griping about the bonuses and unfairness of it all.
Making money isn't the point of my life and won't become that way any time soon. I do, however, reserve the right to continue griping until somebody gets it right.
They do not have a whole lot of options at this point as far as instruments they can invest in. It does not bode well, no matter how you look at it.
Article on Illinois gov - apparently they are still moving forward with selling their notes on Thursday. Will be interesting to see how that plays out.
Y.T. writes:
I say we strand these bastards on a desert island with conjure and Jas. Daily physical maimings and insufferable lectures for all.
Y.T.
YT -- I can't imagine a worse fate than to be condemned to listen to Jas Jain's repetitive and boring lectures. I don't mind his insults, but at least his comments could be interesting or informative or, at minimum, amusing.
If anyone agrees with me regarding Mr Jain, I suggest you write CR directly.
Bear markets take no prisoners. Shorting is not for the faint of heart.
With all due defference to Jas, his deflation arguement hold no water. Speaking of water. The North Texas Municipal Water District just raised rates to my city by 8%. Campbell's white and wild rice soup has gone from $1.04 a can to $1.24 at Wally's in the space of 9 months.
Are taxes computed in the CPI? Why not? Ever try to talk down an appraisal...
Pensions are going to default or they too will be bailed out. Once turnover of money returns to the mean, hyperstagflation (tm) will be the game of the day.
I'll gladly buy 10 year T-Notes when they peak at 25% in the next decade.
Nothing that can't be fixed by running your own analysis proggie to make sure you stay "in bounds"
That's not my point. I haven't done it myself and it's only a theory, but with enough data, you should be able to dial into specific cities and determine the "propensity to riot".
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
Broward Horne | Homepage | 12.09.08
Good! They damn well better pick it up if they want to keep their cushy lifestyles. It might even motivate them to do something to quiet things down like, oh, for instance, stopping the giveaways to Wall Street.
Maybe AIG should hire Blagojevich's wife...she holds a Series 7 license according to the criminal indictment with a following excerpt (Page 66):
ROD BLAGOJEVICH asked
whether there is something that could be done with his wifes series 7" license in terms of
working out a deal for the Senate seat. ROD BLAGOJEVICH stated that he is struggling
financially and does not want to be Governor for the next two years.
c. ROD BLAGOJEVICH said that the consultants (Advisor B and another
consultant are believed to be on the call at that time) are telling him that he has to suck it
up for two years and do nothing and give this motherfucker [the President-elect] his
senator. Fuck him. For nothing? Fuck him. ROD BLAGOJEVICH states that he will put [Senate Candidate 4] in the Senate before I just give fucking [Senate Candidate 1] a
fucking Senate seat and I dont get anything. (Senate Candidate 4 is a Deputy Governor of
the State of Illinois). ROD BLAGOJEVICH stated that he needs to find a way to take the
financial stress off of his family and that his wife is as qualified or more qualified than
another specifically named individual to sit on corporate boards.
Interesting I guess we are all subprime now...even a Governor..
I have read that the automakers also have many "bet's placed on them (derivatives). If they were to fail, the bets would have to unwind, etc. So the effort to "bail out" continues...but at a lower effort it appears. Don't know why that is.
cloverfield writes: \tI think it's time for predictions . . . how will this all play out?
I grow more scared daily. None of this makes sense and I just don't understand how the FED can unwind the alphabet soup of programs. I wonder if they even know what they "own"?
LOL. Does this funny but true stuff just pour out of your brain? Or do you have to work at it?
Ha! I'm glad someone laughed! I was worried I have (Irritating) by my name by now!
Like any good salesman, I am capable of emitting a constant stream of ad-hoc, relevant sounding patter that is delivered in such a soothing and rhythmic manner as to subconsciously lull the recipient of my entreaties away from all reason and toward whatever graphs or other display materials I have suggestively laid out for him.
Where do all of you stand?
cloverfield | 12.09.08 - 11:07 pm |
cloverfield, I have a sense of your prior comments and believe I'd probably be standing on the same side as you, whichever side that might be.
As to what I think will happen, I think this will be a serious, i.e. deep, recession, but not a revolution.
In a very real way I also think Obama will be the key to keeping folks in line. I think he's up to it. I have to wait to see whether he pulls it off. I have my concerns.
"Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage."
Do you think it's true that social control in this country has been limited mostly to blunt instruments like television? In other countries they've brought people out in mass numbers to rallies and parades, appointed block and street wardens, constructed intricate webs of informers, trained the police to be intimidating if not terrifying.
The US is really very tame, relaxed and unwatched compared to some other countries.
I used the phrase "informational smart bomb" in one of our reviews and it went over well. The end result is that we needed about 1/2 as many resources to accomplish the same goals.
Should be able to do the same thing vis a vis martial law and military response. At least for awhile.
Weepstah, I read a couple of those articles and was amazed at his lack of understanding of markets. I didn't know he was just shilling for his livelyhood, AIG.
To those who think this is gonna end in a revolution... fogretaboutit.
When the "formerly big 3" traveled the first time begging for their bailout money, they were able to fly, no? And there was some guy willing to fly the plane and I'm sure some attendants willing to crew the plane, no? No one blocked their way from entering the capital, right?
As Congress has been selling ourselves up you-know-what-creek without a paddle; they've still been able to rely on staffers and aides to help everything get done. They've been protected by capital police. I bet not one capital police force has quite, nor has one Congressional staffer quit because of all the trillions being poured down the corporate black hole.
When the Federal Reserve has meetings, there are still flunkys around willing to get coffee for Professor Ben, and others willing to have at their piece of the little scraps.
Until all these little people stand up, tell their bosses, "I don't care that my livelyhood depends on you; you are evil, screw you, I quit!" and potentially beyond; the bailouts, and actions that bring disgust will continue.
Would think that those commenting were blowing off steam. Those lurking are more likely to act out. Seem like government repression would produce more 'professional' underground cabals.
Investing in U.K. government debt is almost twice as risky as buying bonds sold by McDonalds Corp., based on prices in the credit-default swap market.
I lived and invested through the 67-82 inflationary depression. Take the DJIA at 1000 in 66 and deflate it by the CPI through 1982. Your buy and hold would have been worth 30% in purchasing by 82.
We may be half way through this Bear ala 1974-75. You can make big bucks trading the cycles but the big big bucks were made using leverage on income producing real estate. I know it is not popular now but just wait. The ultimate contrary investment.
After the unsuspecting bank risk management supervisor has dreamily walked towards the easel, laminated board set, or other item I have specially baited with the jagged, upward arcing lines that his ilk interperet as a mating display, I flip a little switch and the display snaps shut around his head, suffocating him. I then release my young, at this pupil stage only analysts, and they feed from his quivering body. My kind are endangered; only a handfull of us remain in specially kept and preserved sanctuaries maintained by the FED. Through their dilligent support and protection we have been allowed to make somewhat of a comeback. Collar-tag data shows our increased presence in ecosystems which we had previously fled due to changing climates, such as the car industry, municipal school boards in need of complicated bond instruments...
You are correct. Americans are a bunch of pussycats compared to the tyrants of Slavic lands.
You are aware of course of the death of Alexy II. I kissed his hand once and he offered me his blessing. A very understated leader who did much behind the scenes to restore a measure of self respect to the masses. He will be missed.
"We may be half way through this Bear ala 1974-75."
I've been fixated on this being a 1974 redux for quite some time. Folks would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
"fried writes:
Biotech Lines Up for Government Bailout....
Dec. 10 (Bloomberg) -- U.S. biotechnology executives are lobbying Congress to change a tax law and provide millions of dollars in government money to small, cash-starved drugmakers that comprise most of the industry."
Woohoo, bio-engineered ponies for me and my wife. I bet with this bailout her biotech will last 6 months rather than just 4 months.
This is what happens when you deny reality and try to engineer your way out of reality. Better to have simply reorganized AIG and worked through the problems in a court controlled systematic manner. It could have been done.
Is there a lesson vis-a-vis Detroit auto companies here?
From Marty Feldstein's most recent article at the NBER site - his solution to falling housing prices:
The key to preventing further defaults and foreclosures among current negative-equity homeowners is to shift those mortgages into loans with full recourse, allowing the creditor to take other property or a fraction of wages. But the offer of a low-interest-rate loan is not enough to induce a homeowner with substantial negative equity to forego the opportunity to default and escape the existing debt. Substituting a full-recourse loan requires the inducement of a substantial write-down in the outstanding loan balance. Creditors have an incentive to accept some write-down in exchange for the much greater security of a full-recourse loan. The government can bridge the gap between the maximum write-down that the creditor would accept and the minimum write-down that the homeowner requires to give up his current right to walk away from his debt.
Here is an example of how that might work. Consider a homeowner with a $240,000 mortgage and a home that is worth only $200,000. The $40,000 gap between the mortgage and the appraised value could be divided with the government taking one-third, the creditor taking two-thirds, and the homeowner agreeing that the remaining $200,000 loan would have full recourse. The creditor would give up about $27,000 of potentially uncollectible debt but would avoid the extra loss of value that comes with selling a foreclosed property, and would achieve a much more secure loan. The homeowner would get to keep his house and would eliminate all of the excess debt.
"...the laws requiring banks to give money to people who can't afford to pay them back (Community Reinvestment Act) that sits at the root of the current problem."
A comment on another blog. Anyone want to comment on this comment?
Marty has obviously never been to Riverside or Contra Costa counties.
bgates | 12.09.08 - 11:41 pm |
bgates, I'd add the High Desert portion of San Bernardino County to that list. I'm actively looking because price drops have been insane, in some cases over 60% to 70%.
There's probably more to go, but I have to wonder how much of the drop is associated with (1) the credit crunch; and (2) lenders who want REO off the books at almost any reasonable number. What I mean is how much of the drop is transitory and how much is fundamental. Tough question.
It is interesting that McMansions (4 to 6000 sq ft built from 03-04) are now selling for 70% of true replacement cost. These are prices in Dallas which never went to extreme.
The loss mitigation officers are completely covered up. It takes 30 to 45 days to get a signed deal on a short sale or foreclosure.
If Tanta was still with us, I'll bet she would have a solution to this pig in a python. I miss her.
Committed to action? Only a nonviolent sitin. The most passive of actions.
It's the other stuff that could get a little scary and that I would like to see avoided.
Agreed.
And double agree with mock turtle. I, too, was trying to find a way to express the sentiment without exacerbating the potential for unfortunate things.
Though I'm currently net long, I still wouldn't argue with the possibility that we may be on a timetable more like Japan than we'd like to plan - with equities still falling 18 years later, and a dozen years of y-o-y housing price losses. the demographics seem to suggest it.
Won't be any revolutions UNLESS we see serious job loss - that is the one thing that could push mild mannered middle class Americans over the top in a big way.
It won't take much to blow up the cities - they are powder kegs in the best of times - but to get the suburbanites in the streets will require mass unemployment like they they never saw before nor ever expected they would see. Get a whole bunch of hopeless ex-toilers all out of work at home in their cul-de-sacs at the same time could do it.
But that's why we will see 'job creation' stimulus like nobodies business - AIG is just the tip of the iceberg.
"...the laws requiring banks to give money to people who can't afford to pay them back (Community Reinvestment Act) that sits at the root of the current problem."
~~~~
More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ...
The worst parts of the East Bay (Richmond) were actually showing y-o-y drops even greater than that.
I really wouldn't assume that these exurbs couldn't become true ghost towns, where even squatters don't bother due to the inaccessibility of water, stores, etc.
"More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ..."
mmckinl | 12.09.08 - 11:50 pm | #
you are right and bary rithhotz doccument that over and over at his blog "bigpicture"
bgates, on exurbs becoming ghost towns, we have both in my area, but the latter are 19th Century.
What may keep my exurb alive is transit. That seems counter-intuitive, but with a logistics airport (with a couple of the longest runways in the U.S.), a port of entry, an interstate linking L.A. to the rest of the country and a triple main line rail system doing the same thing, transit is big.
If transit stops completely, of course, those things mean nothing, but, should that happen, the country is in deep grease.
Meanwhile, I'll be heading to the Bay Area tomorrow just to check out what's happening there.
Why would any AIG executives get bonuses of any kind? The arrogance and kleptocracy is absolutely appalling.
This crap has to stop.
Why don't they just go to a casino and call black? If there is a closing of GM and Chrysler what will all those workers think this kind of support of overpaid executives? As long as Joe 6 Pack has NFL sports package, cold beer, and fast food is he numbed to the thievery?
"But that's why we will see 'job creation' stimulus like nobodies business - AIG is just the tip of the iceberg."
Yes, of course. No one is interested in permitting or provoking disorder.
Anyway, before there can be coordinated resistance, there has to be a tradition of social collaboration in large groups. That's been true only of peaceful demonstration in the US. Anything violent has always been carried out by extremely small and ultimately ineffective formations. 9-11 was an action by foreigners. The Oklahoma affair led nowhere.
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
I think I recently heard a news blurb that stated that LAX-palmdale air service was being discontinued. I love the idea of a high-speed link from San Jose to Union Station in LA, but think that if the bay area couldn't get Warm Springs done and connected to San Jose in the absolute best of times, we'll have a hard time convincing ourselves that spending tens of billions to give coalinga a modern train station is worth it in the worst of times.
On a similar note, if you're not familiar with it, check out the history of "California City". Note that the half-developed layout is easily visible on satellite photos.
. . .we'll have a hard time convincing ourselves that spending tens of billions to give coalinga a modern train station is worth it in the worst of times.
Coalinga seems middle of nowhere, but I've heard the light rail will be extended to Stockton. I'd actually like to see what's on the ground in Stockton after all the MSM stories.
Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD and other selfconfoozled folks has been the meme that the entire housing and credit crisis traces to the the Community Reinvestment Act (CRA) of 1977.
An alternative zombie myth is the credit crisis is due to Fannie Mae and Freddie Mac. A 1999 article from the New York Times about the GSE's role in subprime mortgages has been circulating as if its the rosetta stone of the credit crisis.
These memes have become a rallying cry -- cognitive dissonance writ large -- of those folks who have been pushing for greater and greater deregulation, and are now attempting to disown the results of their handiwork.
I feel compelled to set the record straight about this pseudo-intellectual detritus. As we have painstakingly discussed over the past few years, there were many direct and indirect causes of the current financial mess.
Let's clarify the causes of current circumstances.
Ask yourself the following questions about the impact of the Community Reinvestment Act and/or the role of Fannie & Freddie:
Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?
50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?
What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?
Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?"
dryfly(A CRCC Godfather) writes:
Won't be any revolutions UNLESS we see serious job loss
Agreed. Although, if my neighbors start flipping over their blue recyclable bins and setting them ablaze tonight based solely on negative outlook, I will let you guys know.
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
~~~~
You just haven't heard about them, except for the inner city riots. There were the WWI army bonus riots that MacArthur put down with many killings ... there are others ... NYC etc,etc ...
The world was coming to an end in 74. You had to be there to experience the GLOOM. Didn't happen then. Won't happen now.
I graduated from HS in '75... my father from HS in '40... sometimes it does happen and sometimes it doesn't and you don't know which one you are in 'til afterward.
I don't think this is the end of the world either but I don't KNOW that... not yet.
"More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ..."
Um, let's not get carried away. CRA still underperforms, but in terms of share of the market, it's a zit on the mortgage pig's ass.
Think of it this way: Conforming loans with 5-20% down are 2003-2006 Toyota Camrys. CRA loans are like 1995 Chevy Cavaliers. Subprime loans are 1982 Ford Pintos. Unfortunately, I-10 is bumper-to-bumper with Pintos at the moment.
mmckinl writes:
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
I do remember Los Angeles 1992...with Mr. King's assaulter's getting a free ride...just like AIG...
"You just haven't heard about them, except for the inner city riots. There were the WWI army bonus riots that MacArthur put down with many killings ... there are others ... NYC etc,etc ..."
These were not mass uprisings. It's not even a mass uprising when the Duma takes over the Belii Dom in Moscow, and the army shells it with tanks. A mass uprising is Budapest, 1956.
bgates, just to clarify, I should have said it's not my boat, but I have access to it and it is docked in the Bay right now, so it's "theoretically" possible.
In reality I suspect we'll stop in Stockton on the way up rather than motor back down to it. The main problem is, as CR has noted, that CRE has a ways to go and RRE just isn't that interesting.
I'm sure many of you have had your salary structured with bonuses, as have I. They aren't designed for "retention". They are supposed to incentivize good decisions on the behalf of the company, by giving you a vested interest in the success of the company (i.e. you get a bonus IF the company is profitable).
Paying bonuses when the company has bankrupted itself and taken down the countrie's financial systems is outrageous!
It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
Think of it this way: Conforming loans with 5-20% down are 2003-2006 Toyota Camrys. CRA loans are like 1995 Chevy Cavaliers. Subprime loans are 1982 Ford Pintos. Unfortunately, I-10 is bumper-to-bumper with Pintos at the moment.
Shnaps | Homepage | 12.10.08 - 12:17 am | #
A lot of those Pintos are already in flames... now its the rest of the cars turn to burn.
All the revolutionary rhetoric is downright hysterical.
Americans don't "rebel" anymore. They're not going to march through the gates of Rancho Santa Fe. No way, might miss Paris Hilton's BFF.
Sure, a few poor sods will go off the deep end. But Americans don't know who is actually screwing them. And the media won't report it. So look for some poor, innocent working stiff at an AIG office or Citi branch to get it in the noggin from some enraged yet clueless foreclosed homeowner.
The rest of us will sit around nodding agreement to talk radio warnings about "overregulation."
Very few of us have ever seen a mass uprising.
Pavel Chichikov | 12.10.08 - 12:19 am
True enough, Pavel, for we Americans, but we all know the story of Hungary 1956 and Czechoslovakia in 1968 and we have all seen the movie Network, so some day it's possible that Americans might have the guts to stand up and say:
"We're mad as hell and we're not going to take it any more."
I well remember the apprehension and gloom after WWII. Post wars always led to depressions. My Dad didn't even buy a house til 54 even though he had full veterans benefits.
It looks to me that we will experience a mega Marshall Plan with each country supplying their own stimulai. Could be wrong but all one needs is some ink and paper or a computer that adds digits with the stroke of a finger.
"These were not mass uprisings. It's not even a mass uprising when the Duma takes over the Belii Dom in Moscow, and the army shells it with tanks. A mass uprising is Budapest, 1956."
Last time I was in Budapest my dad walked me through a bit of the uprising.
Pointed out where he was when the first Russian tanks went into Budapest.
In one of the main square he pointed out a Church where snipers were shelled by a tank, and another place where a molotov cocktail blew the same tank up.
A side street where Hungarians would pull out an anti-aircraft gun every so often to blowup tanks.
Where turn-coats were hung from telephone polls.
The building where my Uncle had gone to pickup a loaf of bread minutes before it was blown up. Luckily after he left the building.
Sent shivers down my spine and made me appreciate what we have nowadays.
"It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
It looks to me that we will experience a mega Marshall Plan with each country supplying their own stimulai. Could be wrong but all one needs is some ink and paper or a computer that adds digits with the stroke of a finger.
Ross | 12.10.08 - 12:24 am | #
That is my bias too - too easy to do and too hard to stop.
@bgates...would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
Large ocean going ships make it to the port of Stockton.It is surreal to be driving on a country road and see a BIG ship apparently sailing through a cornfield.As far as the East Bay i was in Oakland and Alameda last week.In oakland asking prices in a working class area were off 60% in nominal dollars ( not the 'hood or the hills) but very few sales.Alameda and Montclair are holding up better,about 40% off.LOTS of condo's in oakland,and some parts of downtown oakland where they put in a lot of condo's should do fine long term because they are in a well defined neighborhood with nice amenities and excellent public transportation.I watched these condo's go in and they are much better built than most of the SFR's built during this boom.
in any case, all of this talk of uprising is a bit overwrought. if you are truly disgusted with congress' behavior, don't get angry, just drop out. work much less, have much less income. your dependents may not like the idea, but it is one approach.
My son went to school taught by expat Cistercian Hungarian Monks that fled the uprising and landed in Dallas of all places. Many of them recount that time with beautiful but poignient prose.
Look up their website. Great observations about how they thought the U.S would come to their aid.
The U.S has killed a lot of folks feigning support that never came. Think Bay Of Pigs.
"My son went to school taught by expat Cistercian Hungarian Monks that fled the uprising and landed in Dallas of all places. Many of them recount that time with beautiful but poignient prose."
I've been to Mass at that monastery. Went there when visiting a friend who lives in Irving. He's a real estate agent, and he forecast the disaster we have now when he visited us in DC in the fall of '07.
"McCain would have won it if he went against the bail outs. Even Joe the Plumber thinks he is a tool now."
imagine if the GOP powers that be had actually stopped laughing for a minute at dr paul and listened to his words. at dow 8000, ron paul would have been by far the best candidate.
@bgates...would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
RhodesianGreenbackinAZ | 12.10.08 - 12:28 am | #
Regarding the 'Apocalypse Now' era... In a certain respect you were 'freer' then... I mean no one I knew ever expected any of us would get real jobs or keep them for long so why sweat it? Result was we worked a little here and there & spent the rest of the time hitchhiking around the US (or as some of my buddies did - across Europe & N Africa).
And most of us were engineering majors and yet still expected to drive buses or wait tables at a resort. We knew engineers & architects doing EXACTLY that in 'Rust Belt'.
When we did get REAL JOBS - and KEPT THEM - no one was more surprised than we were. What did we do wrong?
When I see that level of 'negativism' from my kids & their SO's I will know we are near bottom. Right now they aren't that negative...which is surprising since two of the five are under-employed (my kids)... two are laid off NOW (their SO's) and one is still in HS. Give'm time - this recession is still early.
Hey Pav,
It is a wonderful monestary. Looks like it was built in the 13th century. I knew the architect and the Monks were adament that it be austere and genuine.
It is probably the best private boys school in the Southwest. Out of a class of maybe 40 seniors, 30+ are national merit candidates. No magic. Just educators that know what the hell they are doing.
1 currency soon [yogi] writes:
Hoopajoops I've been enjoying your updates for months now. When is the rollout? (Always assumed a hoopajoop could be rolled)
You are correct sir, that a hoopajoop may be rolled. However, unless it is pushed, it can only roll uphill.
in any case, all of this talk of uprising is a bit overwrought. if you are truly disgusted with congress' behavior, don't get angry, just drop out. work much less, have much less income. your dependents may not like the idea, but it is one approach.
bgates | 12.10.08 - 12:33 am | #
They pretend to pay us - we pretend to work.
I wasn't just in the Soviet Union either - it was common in many parts of the US in the '70s. I worked in some of those factories & offices.
BTW, I always thought the first Vietnamese born Congressman would come from Orange County. Instead it's Louisiana. Which reminds me of some theme music:
What's really great about it is that it's the same Gulf Coast and Americans have never been really good at differentiating among Asians.
At least we seem to have set aside the word Oriental, which, being a little racially sensitive, I always thought was a racist term, though most users of it seemed oblivious.
Ross, when you lived in Moscow did you visit Novodevichy?
First stanza of a poem I just wrote:
THE SWAN OF SAINT MICHAEL
The lake beside New Maidens Convent,
A huge white swan, both tame and noble
Strokes his webs toward faint reflections,
Wisdoms sunken tower of bells
I've been feeling lately that if there is going to be a sudden turn for the worse it's going to happen in Moscow, not anywhere in the States. I believe there is a certain fragility in the situation now.
Most of my social and professional acquaintances were born in the 70s and 80s. The casual attitude towards student debt in this group is mind-blowing. I saw SLM as a great short at 17, too bad I never bought the puts. That's about all you can do with that situation.
I'm not sure who has the authority to stop it. AIG shareholders, the congress, the FED? Whoever is giving away tarp funds should be able to include stipulations about bonuses. I'm going to call my senators/reps tomorrow and find out.
Those Bay of Pigs Cubans should never have expected JFK to get railroaded into bombing Cuba. They took their chances with violent revolution and lost. I have no sense of national guilt over that episode.
bgates, I'm awful at timing. 2x (i've been buying from 115 and down every $10 drop) SRS is about all I'm willing to do. I will slip through the slippage for months if necessary.
"*FEDERAL RESERVE CONSIDERING ISSUING OWN DEBT - WSJ
- According to the report, Fed officials have approached members of congress to discuss the plan to fund trillions of dollars of lending
- Untill now , all debt Federal debt has been issued by the Treasury dept"
We need a new tax aimed at the last 10 years of income and the property of these AIG geniuses. It's about time that everybody else stops paying for their gambling.
I'm as big of an inflationista as there is on this forum and I don't see deflationary pressure abating anytime soon. I still believe gov'ts will do whatever is necessary - including breaking their own rules - to 'reinflate' but it is going to take time.
Money creation is like a thunderstorm off in the distant mountains - seems to us standing in this sun baked dry gulch like it is having little or no effect... then later... whoooosh. Everyone & everything is washed away.
When it happens the inflation flood will come fast and furious - but I think it is a year or more away. Meanwhile it keeps raining off in the distance.
"I'm generally horrible at that too, we all are. I am good, however, at booking losses, which is a more valuable skill than good timing in a true bear."
bgate, don't you mean booking gains?
Anyways I only play on the short side with what I'm willing to lose 100%.
I'm in the 2x's and not too worried about slippage. When they take off, everyone jumps on board and they take off. Just make sure you don't forget to sell when you can. I nearly have gotten stopped out of EEV and QID.
If I don't make money on these trades than I say whatever causes that will be really entertaining and worth the loss from the trade. Global economics seems to be more than teetering and anything could set things off... especially with USA looking a bit wobbly....
I'm sure many of you have had your salary structured with bonuses, as have I. They aren't designed for "retention". They are supposed to incentivize good decisions on the behalf of the company, by giving you a vested interest in the success of the company (i.e. you get a bonus IF the company is profitable).
Paying bonuses when the company has bankrupted itself and taken down the countrie's financial systems is outrageous!
It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
This should be stopped.
bankerwannabe | 12.10.08 - 12:21 am | #
Bonuses paid in a bankruptcy/liquidation have a quite diffeent purpose than bonuses paid by a going concern. Every job in the busted company becomes a dead-end job and there's a strong incentive for workers to get out the door as quickly as they can. But there's a lot of work to be done as affairs are wound up, especially at a financial insittution, and if you don't want that work to be done by your most unemployable employees you have to do something to offset that incentive.
Retention bonuses are quite normal and rational. AIG's may or may not be--I have the impression they're focused at the high end of the pay scale, but I can't tell if that impression is accurate or due to biased reporting. Maybe this is retention, or maybe it's looting posing as retention.
So these people who get multimillion dollar bonuses must have multimillion dollar mansions. If they don't get their bonuses, they might have to foreclose. And then we're stuck with fewer and fewer people who can afford those $10,000,000 homes.
"Retention bonuses are quite normal and rational. AIG's may or may not be--I have the impression they're focused at the high end of the pay scale, but I can't tell if that impression is accurate or due to biased reporting. Maybe this is retention, or maybe it's looting posing as retention."
I got a bonus when my last company declared Chapter 11. It was called getting to come to work and collect a pay-check during the liquidation phase.
At least we seem to have set aside the word Oriental, which, being a little racially sensitive, I always thought was a racist term, though most users of it seemed oblivious.
I don't get why it's considered racist. Maybe egocentric, but a culture that comes from Middle Earth and calls foreigners demons shouldn't be too sensitive. FWIW- I know a lot of Asians, and I'm not aware that any of my family thought it mattered much if you called them oriental, just don't call them Japanese- we're Chinese dammit, can't you tell the difference?
"I don't get why it's considered racist. Maybe egocentric, but a culture that comes from Middle Earth and calls foreigners demons shouldn't be too sensitive. FWIW- I know a lot of Asians, and I'm not aware that any of my family thought it mattered much if you called them oriental, just don't call them Japanese- we're Chinese dammit, can't you tell the difference?"
I never had an issue with using the word Oriental on the east-coast. But apparently it's non-PC on the West Coast. Even if you're Chinese. Go figure.
I got a bonus when my last company declared Chapter 11. It was called getting to come to work and collect a pay-check during the liquidation phase.
Pissed Off In California | 12.10.08 - 1:13 am | #
I guess your bosses didn't take mp's course in Enlightened Thought.
"I guess your bosses didn't take mp's course in Enlightened Thought."
The funny thing was there were only about 5 main creditors. All the employees left, maybe 6 of us, were counted as creditors due to our vacation pay. Pretty funny if you ask me. We got 20 cents on the dollar for what we were owed.
Well atleast I improved my fooz-ball and ping-pong skills during that period. 3 hour lunches have a way of doing that.
To me, the usage of the word 'Oriental' seems about as innocuous as the word 'Occidental'; out of date, perhaps, but not derogatory. But then, I'm an 'occidental'.
I think you make a fair point about retention being an issue with insolvent companies, but isn't that argument a bit circular? How can you ever penalize failure, if you have to retain the people who caused the failure?
The bonuses are apparently being paid to the higher level executives, presumably those who had the authority to influence AIG's success or failure. I'm sure they were handsomely rewarded when AIG was doing well. Where is the downside?
second, think about how many lurkers drop on by this site and it only takes one very deranged, or wronged, or angry person to act on your intimations
think... you dont want any part of that mock turtle | 12.09.08 - 11:44 pm | #
What we need is a couple dozen wronged, angry persons with some military marksmanship experience. I don't want part of that...yet...but I sure would raise a mug of beer to anyone who could effect maybe the only sort of justice we may ever see for this crap.
Some things are worth dying for...and some things are worth killing for. Mere money, no, but the pigmens' coordinated attack on the future of the republic? Yeah, it might be worth it.
Something has to strike fear into the hearts of these bastards. And mere talk isn't going to do it.
"My parents are with AIG"
"Your parents are going to jail"
Yeah, I got your "retention program" RIGHT HERE
American International Group Inc., the insurer whose bonuses and perks are under fire from U.S. lawmakers, offered cash awards to another 38 executives in a retention program with payments of as much as $4 million.
Only $4 million? What's the big deal? That's not even a milliTARP.
I need to start blood pressure medication.
If their pay (bonuses) are tie to taking bigger risks, what do you expect these traders to do?
They're not losing any of these $10B...tax payers do.
Where is the outrage?
I'm convinced that so many have reached the point of chronic mental helplessness. They don't believe there is anything that can be done to stop the madness. This is a dangerous state of mind . . . Without understanding and processing and constructively protesting what is happening, our society will slowly build pressures that will resolve themselves in terrible ways. Leaders are needed now to deal with this madness. Where are they?
Unbelievable. What chutzpah. Can't at least this affrontary come to an end? They obviously didn't need a bailout if they can still afford their management.
Car makers , who actually make something, get totally trashed.
Meanwhile AIG goes on about its' business spending billions and billions.
The unique physics with regards to time dilation in and around the gravity wells of black holes render them, and the companies that form them, particularly attractive vehicles for Hoopajoops, LTD. Our theoretical physicists and quantum accountants can take advantage of the time-dilation effects to produce truly unique and incomprehensible forward projections that rely upon uncertain relative time states depending upon one's location with relation to the company. As one knows, time stretches infinitely when entering a black hole, while passing at a fast relative speed outside the black hole. Thus, while we seem to be waiting forever for the entities within AIG to auction themselves off, and by our perception they are in fact not moving or doing anything, relative to their own time, they are working at lightning speed, furiously shoveling their assets into easily auctioned chunks. Taking account for this discrepancy in timespace and using it for financial arbitrage is one of our primary asset drivers at this time in Hoopajoops, LTD. This does not even take into account the types of arbitrage available when the recipient of a dollar is a supermassive gravity well whose exact state and, well, solvency, cannot be determined due to its ability to eat light and any other probative instruments we or the regulators might apply.
I really wish they made cherry flavored Thorazine.
Someone needs to parboil those suckers and smoke em.
YouTube - Soundgarden - Black Hole Sun
Black Hole
Merry Christmas.
Your'e Fired.
Did Paulson say we would make money on the AIG deal? Do these jack-offs have even a shred of credibility at this point?
We are all Greece now.
sorry for the typo.
you're fired.
now, back to Christmas Bonus in the land of Debtor-stan.
In fact, $400 million is not even a milliTARP.
I'm starting to lose track of the zeroes.
OK, I think I've got it. The government just needs to unwind all transactions from the past 2 years. That would restore tens of trillions in wealth (er, "wealth") and then we could try again to defuse the crisis.
Match Game 2008
"Federal bailouts are like ( blank ). Once you start, you just can't stop."
wah wah wahhhwhahwhahwahhwahh etc.
Nipsy Rusell "Lays Potato Chips"
Bret Somers "Daiquiris"
Charles Nelson Reilly "Martinis"
Vicki Lawrence "Husbands"
Richard Dawson "Whoopie"
Fannie Flag "I wrote Potato Chips too Gene"
We Need an Insurance Czar !
They truly are blind. I thought they were just stupid. This goes far beyond stupid. Who the hell does their PR?
They should have announced each executive was giving 1/10 of their bonus to food banks or something. Shown up with one those huge Publishers Clearing House checks for $10,000. Then stiffed them for the rest.
Seriously considering not paying bills for the next month or two. Know some folks who have gotten down from full-on credit card rates to single digits. 90 days behind is what got it to "go."
I can't believe that works, let alone that it has come to this.
And still some corporations are sending me offers to give me enough credit to basically pay off my mortgage, only at a rate that we should say is inflated.
Where are we on Conjure's clock? I need a current baseline...
Is AIG hiring ?
I want a job there ...
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
Managers are getting payouts because they have clients who might be lost to the company. This is a desperation spiral....downwards.
They can't let that top talent get away!
On another note, were these speculative bets made before or after the government bailout of the company?
On yet another note, if these bets were made after the gov't bailout, the Fed & Treasury may be approaching an "Oh Sh*t Moment". AIG takes bailout money and makes high risk investments which fail. Banks take bailout money from El Tarpo and place it in Treasuries, driving the yield negative. What strategy should the government be pushing?
AIG is a nice preview of what bailing out the automakers will be like.
It's not AIG that owes anything. It's the US Taxpayer on behalf of the generosity of Hank and Ben. What's AIG into the TARP for, so far?
Where are we on Conjure's clock? I need a current baseline...
Maybe we're already there and we just don't know it.
With the downsizing of the financial industry, there is no justification for 'retention bonuses'.
These yahoos at AIG should accept salary cuts and not bonuses.
What strategy should the government be pushing?
~~~
FDR Bank Holiday for all financial institutions...
Let the chips fall where they may ( goodbye C, JPM)
..I do hope that every Senator and Congress women/men, when they voted for TARP,already knew that the greed will continue. Wait until the first disbursement to the Big 3...4 weeks later they will ask for more and pay nice bonuses...just like AIG. Those companies laughing their asses off...
I do wonder who/what defines "Too big to fail"
I suggest that, if we would have had failed AIG, and other Investment Banks - just like LEH - we would clear this mess much faster and come out with clear books. Still today...after so many bailouts...the confessions are still coming in...I'm a pissed off tax payer...
"Someone needs to parboil those suckers and smoke em."
That would be a start. First be sure to strip them of all assets, and those held by wives and children.
Call it a retention adjustment.
Then give them a fair trial and hang them from the lampposts.
Please make it stop ...
That will come after the collapse of the treasury market and the dollar collapse leading to the revolution when the people will drag these bastards out in the street and hang them. It's gonna kinda suck.
AIG probably got hosed in the market.
A black hole is right. This is just the tip of the iceberg. We will be pouring money down this one for years.
Somebody hit the reset button on this country...agree, giving money to AIG is about saving Glodman Sucks and other Wall Street crooks!
That will come after the collapse of the treasury market and the dollar collapse leading to the revolution when the people will drag these bastards out in the street and hang them. It's gonna kinda suck.
No, tough to get into those gated communities. Especially when they can afford high dollar muscle. Plus, no one knows where they live.
People will just go out and burn down their own neighborhoods. Its when you get a new political party with the power of the state behind it. Thats when the real blue blood flows red.
Completely OT: Just watched "Santa Claus is Coming To Town" on DVD....
it features......
Tanta Kringle.
I have AIG insurance.
Greece. Night 4
"It's very simple we want the government to fall. This boy's death was the last straw for us," Petros Constantinou, an organizer with the Socialist Workers Party, said in Athens. "This government wants the poor to pay for all the country's problems never the rich and they keep those who protest in line using police oppression."
hope u saw 3 month tbill yield going negative..
wat will result from here ?
mm funds can break the buck?
Does anyone even know how much exposure AIG has? I mean it's reasonable to expect all of it will need to be cleared by the taxpayer. TARP V2 right after NEW DEAL V2.
It really points out the need to drag the company through bankruptcy. These assholes are acting like they deserve bonuses.
The attitude adjustment (and subsequent firings of management) would do this company a world of good.
I do wonder who/what defines "Too big to fail"
I suggest that, if we would have had failed AIG, and other Investment Banks - just like LEH - we would clear this mess much faster and come out with clear books. ...
NAVSPECWARCOM | 12.09.08 - 10:12 pm | #
No, if back then, it was all allowed to come crashing down, we wouldn't have cleared the mess, we would be engaging in hand to hand combat in the streets a la death race 2000.
Oh yes, btw, I decide!
Dear Lord, please reach down from heaven and pulverize everyone involved in this financial atrocity. Crooked CEOs, pontificating politicians, and broke borrowers, let them all be consigned to the flames of Hell.
Thank you.
In upside down world of ecomonics and financce....this makes sense
"The Federal Reserve, which lent AIG billions of dollars to stay afloat, has no immediate plans to help AIG pay off the speculative trades."
We believe that, really.
I sometimes wonder if the Fed had any idea what AIG's real exposures were when this rescue was orchestrated.
We are all doomed. Start preparing. Save like crazy.
Why can't the government just let the free market work? What do they know that the free market doesn't?
My favorite gated community is on joy road.All 5,000 square foot and larger custom homes on acreage,beautiful views.No water.None.water is trucked in.
Where the bodies are buried.
I sometimes wonder if the Fed had any idea what AIG's real exposures were when this rescue was orchestrated.
Hank knew his buddies at Goldman had the other side.
What more does he need to know?
Who's on the other side of those "bets" ? GS ?
Who's on the other side of those "bets" ? GS ?
Jinx.
water.None.water is trucked in.
Tom Stone | 12.09.08 - 10:22 pm
Wow. Not even cisterns?
Hank knew his buddies at Goldman had the other side.
What more does he need to know?
~~~~ got that right , rope neck ties ?
Credit enima - thanks much for the Soundgarden post, fkn fabulous.
I still don't think we've turned around...
YouTube - We Haven't Turned Around - GOMEZ
So you wanna spin the world around? Maybe it's a trick of the light??
C
[Who's on the other side of those "bets" ? GS ?]
I'll bet JPM is right there too.
This is beyond ridiculous! Surreal?
Anyone following the Marc Drier story? It's coming to a law firm near you. Here's your link: Law.com - Dreier Arraigned on Two Charges; Receiver Named to Guard Firm Assets
just read the neg interest T-Bill post and comments. im scared, confused, and know for cetain that i dont have enough beans, water, or ammo. wow.
Comrade Peronista writes:
We are all doomed. Start preparing. Save like crazy.
Now if we could only figure out what we should be saving.
Biotech Lines Up for Government Bailout....
Dec. 10 (Bloomberg) -- U.S. biotechnology executives are lobbying Congress to change a tax law and provide millions of dollars in government money to small, cash-starved drugmakers that comprise most of the industry.
I'll bet JPM is right there too.
bearly
~~~~
Yep ...
We already know that the AIG deal saved GS 20 billion.
Death Race 2000 Plot from Wikipedia
"In the year 2000 the United States has been destroyed by a financial crisis and a military coup. Political parties have collapsed into a single Bipartisan Party, which also fulfills the religious functions of a unified church and state. The resulting fascist police state, the United Provinces, is headed by the cult figure "Mr President" (Sandy McCallum). The people are kept satisfied through a stream of gory gladiatorial entertainment, which includes the bloody spectacle the Transcontinental Road Race, depicted as a symbol of American values and way of life."
Wow , the screenwriter predicted even better than Roubini or Taleb!
"Please make it stop ..."
I've been saying that for about 7 years now. W's middle names should have be Louis. Then he would be L. L for loser.
Wow , the screenwriter predicted even better than Roubini or Taleb!
toobigtofail | 12.09.08 - 10:26 pm |
Jas wrote something like it in 1987
I say we strand these bastards on a desert island with conjure and Jas. Daily physical maimings and insufferable lectures for all.
"Tom Stone writes:
My favorite gated community is on joy road.All 5,000 square foot and larger custom homes on acreage,beautiful views.No water.None.water is trucked in.
Tom Stone | 12.09.08 - 10:22 pm | # "
I once saw a great quote from Bono, the lead singer of U2. He said, "Do you want to know the difference between the United States and Ireland. In the United States, if you see a beautiful house on a hill, you say, 'Boy, I really want to be like the guy who owns that house'. In Ireland, we look at that house and say 'I really want to fucking kill the guy that owns that house.
We are all doomed. Start preparing. Save like crazy.
Comrade Peronista | 12.09.08 - 10:21 pm | #
We also need an alternate/underground economy.
Comrade Peronista writes:
"We are all doomed. Start preparing. Save like crazy."
Why, what did like crazy do and why does he need saving?
I've been saying that for about 7 years now. W's middle names should have be Louis. Then he would be L. L for loser.
Elvis | 12.09.08 - 10:27 pm | #
W didn't make this decision. Unfortunately, the one who did is getting a promotion next year.
Yeah. And I saw Bonos house outside Dublin. He is on the hill now.
I really hope all you people who've been following this blog that's been around since 2005 made some money betting against housing instead of just griping about the bonuses and unfairness of it all. Don't judge. Make dough.
"The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties"
Mr. Greyshades | 12.09.08 - 10:08 pm
"On another note, were these speculative bets made before or after the government bailout of the company"
bruiser | 12.09.08 - 10:09 pm
"Somebody hit the reset button on this country...agree, giving money to AIG is about saving Glodman Sucks and other Wall Street crooks!"
crispy&cole | Homepage | 12.09.08 - 10:16 pm
Well, there's a few comments that are (mostly) relevant.
Get this straight. Outrage against AIG is misdirection. The whole bailout of AIG was to keep pumping money into the investment banks that made the speculative trades.
And not one individual of our entire political leadership spoke to this central issue. Remember this, every time you listen to them speak...and when you pay your taxes.
Ah Bond girl, thought you were long asleep.
Care to explicate the aftermaths of the negative yields on 3 month ?
My friend was prognosticating that 10 year could go lower than 2% in few weeks ?
From wiki on AIG:
"Corporate governance"
Board of directors
This underlines something that Jack Bogle has repeatedly pointed out - Corporate Boards composed of CEOs (and god help us, the CEO of the company itself) is a complete perversion of the check and balance system that is supposed to ensure ethical management of a corporation.
Not only should all of AIG senior management be Leavenworthed, so should the board.
"Wow. Not even cisterns?"
If you dig a shallow hole you can collect the condensation at sunrise.
psychodave is right.
AIG was nothing less than the big succubus that was ordained to soak up all that bad seed.
ova cisterns only work if you have rain,and we are DRY.I expect some will install them.There never was much water in that acquifer,and it was highly mineralized,so some of the homoaners decided to drill deeper and what water there was went somewhere else.according to a man I know at a well driller's one of them drilled to 4,000 feet with no luck.This may change after the next earthquake,or not.I wonder if the trophy wives ask party guests to pee on the roses...
I can't believe my parents wanted to have a "born and bred dope" for a son, but with my tax dollars
going to support AIG and the rest, I sure feel like one.
CR: Please make it stop ...
A born-and-bred American dope in dispair.
American style "CORRALITO" (*) is no longer a far fetched scenario.
(*) CORRALITO = an Argentinian state-sponsored and imposed devaluation that brought, overnight, the Argentinan Peso from 1 to 1 parity with the "mighty" US Dollar to something like 3 to 1 US$.
Insurance is a scam. All insurance should be illegal. It is the most criminal of all enterprises.
Big fucking surprise.
Marty Feldstein a board member of AIG, huh?
What a fucking crook!! Where was Marty when house prices were shooting up? He was somewhere shooting the shit. (*bonus points for anyone who can recognize that line).
I say we shoot him.
No wonder morale is low at Citigroup (C). In addition to layoffs, a cancelled Christmas party, a horrible year for its stock and disgusting bathrooms, there will not be a model train track installation in the lobby this year: No Model Train At Citi
Cloverfield - I've always liked that quote:
BONO: No, ho--honestly, I--I've--I've often told this, but it's like, you know, in America, you look up at the house on
the hill, the mansion on the hill and say, 'One day I'm--that--that could be me.' In Ireland, they look up at the mansion
hill and go, 'One day I'm gonna get that bastard.' You know?
I think that this is going to end badly. I mean not "fair and free trial" badly, but "lynch mob" badly.
"A born-and-bred American dope in dispair."
No, dispair is when you wear one black shoe and one brown shoe.
I mean not "fair and free trial" badly, but "lynch mob" badly.
~~~~
someone already attacked Fuld ...
there will be more ...
LOL!!!
THe letter was to Elijah Cummings...WHO IS THE CHUMP NOW Mr Cummings??
how come gm cant get bonuses, give up corporate jets, but AIG flaunts "retention "bonuses it .
As usual, its who you know and who you blow.
People need to gather their pitchforks and torches..
Mr. Greyshades(Unrated) writes:
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
Mr. Greyshades | 12.09.08 - 10:08 pm | #
:::Ding-Ding-Ding:::... we have a winner!
"deal is reached"...
- Bloomberg.com
how come gm cant get bonuses, give up corporate jets, but AIG flaunts "retention "bonuses it .
~~~~
good question ...
Thaksin,
Given the circumstances, I would expect that Treasuries would continue along this path a while longer before something dramatic happens. That is how bubbles go, eh? They continue for longer than you expect and then unwind faster than you'd expect.
Everyone seems to think the banks are just parking their (our?) money until year-end, at which point they may feel free to venture into other markets. I hope this is true for the sake of the muni market...
I have been meaning to get more sleep. I guess that is what weekends are for.
What blows me away is how discussions of "moral hazard" seem to be reserved for underwater homeowners walking away while trying to feed their families.
The extent of "moral corruption" in American business (exemplified by AIG), supported by the American government, makes me want to puke.
Bill Miller proves he was lucky! That is all! Moron!
"These losses have wiped away Value Trust's years of market-beating performance. The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar."
Stock Picker Bill Miller's Defeat - WSJ.com
Mr. Greyshades(Unrated) writes:
The AIG bailout has never been about AIG. It's just a conduit for bailing out the counterparties. As long as the IOUs are there to be paid, they've keep shoveling money rather than forcing bankruptcy (with pennies on the dollar for counterpary claims).
Mr. Greyshades | 12.09.08 - 10:08 pm
Nothing more than that needs to be said. It is the truth.
Mmckinl,
I want to see those f**kers put in an incinerator, and "processed". I do not think that this will end in a civil manner. There are going to be many dead people before 'this' is over.
What blows me away is how discussions of "moral hazard" seem to be reserved for underwater homeowners walking away while trying to feed their families.
The extent of "moral corruption" in American business (exemplified by AIG), supported by the American government, makes me want to puke.
~~~
Ditto
In the early summer of 2007, two Bear Stearns hedge funds that made big bets on low-quality mortgages imploded. The stock market whipsawed in July and August, as investors worried that housing-market troubles could spread.
Mr. Miller thought investors were too pessimistic about the housing and credit markets. In the third quarter, he bought Bear Stearns. In the fourth quarter, as financial stocks fell, he took positions in Merrill Lynch & Co., Washington Mutual, Wachovia and Freddie Mac.
Explaining his moves to his shareholders in a fourth-quarter update, he compared the period to 1989-90, when he had also bought beaten-down banks. "Sometimes market patterns recur that you believe you have seen before," he wrote. "Financials appear to have bottomed."
A trader with inside knowledge has been saying the buyers were not banks and mostly were MM funds ?
Why would they buy at these yields...shivers me timbers.
Bipartisan hard work has paid off and I understand an agreement has been reached, Senator Carl Levin of Michigan said in a statement. This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes.
Translation:
We've agreed on how to give the money to them. We haven't agreed what to pork will be required in addition to the bailout funds.
Sounds like AIG needs to go to Gamblers Anonymous.
"In 2008, Mr. Miller continued to accumulate Bear Stearns. At a conference on Friday, March 14, he boasted that he had bought just that morning at a bargain price, north of $30 a share -- down from a recent high of $154."
BAHAHHAHAHAHAHAHA...born and bred!
I want to see those f**kers put in an incinerator, and "processed". I do not think that this will end in a civil manner. There are going to be many dead people before 'this' is over.
~~~~
Never underestimate the anger of someone who has lost their life savings due to thievery. They have nothing to lose.
AIG - too toxic and nooklear market potential to fail. Deliberate biz policy. I don't know how this works out, but it can't ignore knock-on risk, mincl IBRD capital adequacy
C
But he didn't abandon financials. During the second quarter, he added to Freddie Mac and insurer AIG. In an April letter to shareholders, he wrote that the rebounding stock and bond markets suggested a corner had been turned. "The credit panic ended with the collapse of Bear Stearns," he wrote. "By far the worst is behind us."
By the end of June, Mr. Miller's group held 53 million Freddie shares -- about 8% of the company.
American dope!
Gene Rayburn, you owe me a new keyboard and monitor. Well done with the Matchgame with music reference. All we needed was CNR going off for five minutes about something vaguely gay and sexual.
You have received my first Tanta in memoriam wit and snarky post of the day.
Kudos - your prize an old school skinny microphone
AIG - too toxic and nooklear market potential to fail.
~~~~
Ya mean for GS ?
The Invisible Hand is taking care of AIG, so please no whining.
The reason that Paulson & Bernanke have distributed 3.5 Trillion to Wall St. with few strings attached, is because derivatives are very complex, as you can see from AIG. Besides, any oversight of the Wall St bailout/windfall might scare the markets. Can't have that.
Automakers OTOH (and a couple of million taxpayer jobs), are merely manufacturers, so they had better come up with a detailed plan about how to resolve this predicament, or we'll let the Free Markets decide!
It is funny when these same f**kers complain about government regulations on free enterprise, and the moral hazard of european style universal health care.
Yes, I am aware that geithner and his buddies are trying to bail out CDS and other assorted toxic obligations with 'real' money. I hope they are stopped before it is too late, or maybe it is already too late.
LOL. Does this funny but true stuff just pour out of your brain? Or do you have to work at it?
Hey C&C. Quit whipping Bill Miller. After all, he learned to read a balance sheet at ITT Tech!
The guy's performance started to go downhill when he took delivery of his 220' new Feadship yacht in I think 04 or 05.
Nemesis whacked his hubris right between his legs.
More Icons will eat humble pie before this is done...
My only concern is that widespread rage against these f**kers might bring a charismatic genocidal guy to power.
It has happened before..
AIG is part of the CIA. That's why it has to be saved. No joke. Think about it...
Ross writes:
Hey C&C. Quit whipping Bill Miller. After all, he learned to read a balance sheet at ITT Tech!
LOL!!!
Zell, Bill Miller...who is next? BUffet?
Then you're set. Stopy worrying.
I really hope all you people who've been following this blog that's been around since 2005 made some money betting against housing instead of just griping about the bonuses and unfairness of it all.
Making money isn't the point of my life and won't become that way any time soon. I do, however, reserve the right to continue griping until somebody gets it right.
AIG is part of the CIA. That's why it has to be saved. No joke. Think about it...
~~~~
We could buy our enemies for the money AIG is getting ...
How expensive could another front be ?
I say we strand these bastards on a desert island with conjure and Jas. Daily physical maimings and insufferable lectures for all
Wow.
Truly inhuman.
Never underestimate the anger of someone who has lost their life savings due to thievery. They have nothing to lose
One of my fears & expectations.
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
C&C: The name Miller reminds me of Cramer...don't give this douche back an audience....
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
~~~~
I'm sure plenty of those listening have been pummeled in this market as well.
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
Nothing that can't be fixed by running your own analysis proggie to make sure you stay "in bounds".
Thaksin,
They do not have a whole lot of options at this point as far as instruments they can invest in. It does not bode well, no matter how you look at it.
Article on Illinois gov - apparently they are still moving forward with selling their notes on Thursday. Will be interesting to see how that plays out.
Blagojevich Arrested As State Readies $1.4B - Bond Buyer Article
I think a popular revolt of some sort is inevitable. Every day we seem to move closer to the logical conclusion of this ponzi scheme.
Any ideas/ bets on what form it will take?
Marty Feldstein, board member of AIG, regularly contributes to WSJ - there's an archive of his articles here:
Martin Feldstein
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
I figured it out without any program. It's not that well hidden.
I think it's time for predictions . . . how will this all play out?
We have CR who originally predicted a medium level recession.
Then we have Satan who is predicting revolution.
Where do all of you stand?
Sounds like AIG needs to go to Gamblers Anonymous.
Ian, you get honorable mention in funniest and snarkiest post of the day.
Well done.
Where do all of you stand?
~~~~
No bank holiday ~ depression just short of '32 ...
Y.T. writes:
I say we strand these bastards on a desert island with conjure and Jas. Daily physical maimings and insufferable lectures for all.
Y.T.
YT -- I can't imagine a worse fate than to be condemned to listen to Jas Jain's repetitive and boring lectures. I don't mind his insults, but at least his comments could be interesting or informative or, at minimum, amusing.
If anyone agrees with me regarding Mr Jain, I suggest you write CR directly.
Ian from Austin writes:
Sounds like AIG needs to go to Gamblers Anonymous.
AIG? It's the Federal Reserve that has the problem.
I think that the few objective people left in our government already know that it not going to end well.
The biggest issue that we have never discussed here is-
How long can the government keep afloat and maintain stability with declining revenues (and increasing expenditures)?
Bear markets take no prisoners. Shorting is not for the faint of heart.
With all due defference to Jas, his deflation arguement hold no water. Speaking of water. The North Texas Municipal Water District just raised rates to my city by 8%. Campbell's white and wild rice soup has gone from $1.04 a can to $1.24 at Wally's in the space of 9 months.
Are taxes computed in the CPI? Why not? Ever try to talk down an appraisal...
Pensions are going to default or they too will be bailed out. Once turnover of money returns to the mean, hyperstagflation (tm) will be the game of the day.
I'll gladly buy 10 year T-Notes when they peak at 25% in the next decade.
Nothing that can't be fixed by running your own analysis proggie to make sure you stay "in bounds"
That's not my point. I haven't done it myself and it's only a theory, but with enough data, you should be able to dial into specific cities and determine the "propensity to riot".
Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage.
Broward Horne | Homepage | 12.09.08
Good! They damn well better pick it up if they want to keep their cushy lifestyles. It might even motivate them to do something to quiet things down like, oh, for instance, stopping the giveaways to Wall Street.
Maybe AIG should hire Blagojevich's wife...she holds a Series 7 license according to the criminal indictment with a following excerpt (Page 66):
ROD BLAGOJEVICH asked
whether there is something that could be done with his wifes series 7" license in terms of
working out a deal for the Senate seat. ROD BLAGOJEVICH stated that he is struggling
financially and does not want to be Governor for the next two years.
c. ROD BLAGOJEVICH said that the consultants (Advisor B and another
consultant are believed to be on the call at that time) are telling him that he has to suck it
up for two years and do nothing and give this motherfucker [the President-elect] his
senator. Fuck him. For nothing? Fuck him. ROD BLAGOJEVICH states that he will put [Senate Candidate 4] in the Senate before I just give fucking [Senate Candidate 1] a
fucking Senate seat and I dont get anything. (Senate Candidate 4 is a Deputy Governor of
the State of Illinois). ROD BLAGOJEVICH stated that he needs to find a way to take the
financial stress off of his family and that his wife is as qualified or more qualified than
another specifically named individual to sit on corporate boards.
Interesting I guess we are all subprime now...even a Governor..
I have read that the automakers also have many "bet's placed on them (derivatives). If they were to fail, the bets would have to unwind, etc. So the effort to "bail out" continues...but at a lower effort it appears. Don't know why that is.
Jeez, and I thought Jim McGreevey was a crank....
cloverfield writes:
\tI think it's time for predictions . . . how will this all play out?
I grow more scared daily. None of this makes sense and I just don't understand how the FED can unwind the alphabet soup of programs. I wonder if they even know what they "own"?
you'd think with the tone here that SRS had gone from 280 to 600 instead of down to 90...
you should be able to dial into specific cities and determine the "propensity to riot".
~~~
most riots start spontaneously ... take Athens ...
and those that are the first rioters aren't blogging ...
rich(Very Good) writes:
LOL. Does this funny but true stuff just pour out of your brain? Or do you have to work at it?
Ha! I'm glad someone laughed! I was worried I have (Irritating) by my name by now!
Like any good salesman, I am capable of emitting a constant stream of ad-hoc, relevant sounding patter that is delivered in such a soothing and rhythmic manner as to subconsciously lull the recipient of my entreaties away from all reason and toward whatever graphs or other display materials I have suggestively laid out for him.
Where do all of you stand?
cloverfield | 12.09.08 - 11:07 pm |
cloverfield, I have a sense of your prior comments and believe I'd probably be standing on the same side as you, whichever side that might be.
As to what I think will happen, I think this will be a serious, i.e. deep, recession, but not a revolution.
In a very real way I also think Obama will be the key to keeping folks in line. I think he's up to it. I have to wait to see whether he pulls it off. I have my concerns.
.
I am shaking my gold and silver in anger!
.
"Y'all realize of course that the Feds can pick up a general mood swing towards violence by monitoring rate-of-change in keyword usage."
Do you think it's true that social control in this country has been limited mostly to blunt instruments like television? In other countries they've brought people out in mass numbers to rallies and parades, appointed block and street wardens, constructed intricate webs of informers, trained the police to be intimidating if not terrifying.
The US is really very tame, relaxed and unwatched compared to some other countries.
We complain, yet I'll bet 80% of us have the same US Congressman and Senator that we did 10 years ago. I do.
I say we shoot them all with wet banana hoopjaloops
My first project (1992) -
TSSC - Aspen
I used the phrase "informational smart bomb" in one of our reviews and it went over well. The end result is that we needed about 1/2 as many resources to accomplish the same goals.
Should be able to do the same thing vis a vis martial law and military response. At least for awhile.
Have a good night everyone!
Should be able to do the same thing vis a vis martial law and military response. At least for awhile.
~~~~
Until their families are starving and unsafe ...
weepstah | 12.09.08 - 11:06 pm |
Weepstah, I read a couple of those articles and was amazed at his lack of understanding of markets. I didn't know he was just shilling for his livelyhood, AIG.
To those who think this is gonna end in a revolution... fogretaboutit.
When the "formerly big 3" traveled the first time begging for their bailout money, they were able to fly, no? And there was some guy willing to fly the plane and I'm sure some attendants willing to crew the plane, no? No one blocked their way from entering the capital, right?
As Congress has been selling ourselves up you-know-what-creek without a paddle; they've still been able to rely on staffers and aides to help everything get done. They've been protected by capital police. I bet not one capital police force has quite, nor has one Congressional staffer quit because of all the trillions being poured down the corporate black hole.
When the Federal Reserve has meetings, there are still flunkys around willing to get coffee for Professor Ben, and others willing to have at their piece of the little scraps.
Until all these little people stand up, tell their bosses, "I don't care that my livelyhood depends on you; you are evil, screw you, I quit!" and potentially beyond; the bailouts, and actions that bring disgust will continue.
OT to Ross, good to see you here. I know I owe you an email.
Would think that those commenting were blowing off steam. Those lurking are more likely to act out. Seem like government repression would produce more 'professional' underground cabals.
I thought this was amusing:
‘McBritain’ Almost Twice as Risky as McDonald's: Chart of Day - Bloomberg.com
Investing in U.K. government debt is almost twice as risky as buying bonds sold by McDonalds Corp., based on prices in the credit-default swap market.
Predictions?
I lived and invested through the 67-82 inflationary depression. Take the DJIA at 1000 in 66 and deflate it by the CPI through 1982. Your buy and hold would have been worth 30% in purchasing by 82.
We may be half way through this Bear ala 1974-75. You can make big bucks trading the cycles but the big big bucks were made using leverage on income producing real estate. I know it is not popular now but just wait. The ultimate contrary investment.
YLSP writes:
To those who think this is gonna end in a revolution... fogretaboutit.
~~~~
Yep, probably more like Zimbabwe ...
After the unsuspecting bank risk management supervisor has dreamily walked towards the easel, laminated board set, or other item I have specially baited with the jagged, upward arcing lines that his ilk interperet as a mating display, I flip a little switch and the display snaps shut around his head, suffocating him. I then release my young, at this pupil stage only analysts, and they feed from his quivering body. My kind are endangered; only a handfull of us remain in specially kept and preserved sanctuaries maintained by the FED. Through their dilligent support and protection we have been allowed to make somewhat of a comeback. Collar-tag data shows our increased presence in ecosystems which we had previously fled due to changing climates, such as the car industry, municipal school boards in need of complicated bond instruments...
sdtfs writes:
Would think that those commenting were blowing off steam.
sdtfs, true perhaps, but the Republic workers occupying the factory were just "blowing off steam" too.
The problem comes when angry mobs want to blow off steam and, generally, I think that's something to be avoided.
I have a good friend at AIG. Strictly insurance, no trading/investing. His group continues to be profitable. He is pissed.
Ian from Austin | 12.09.08 - 11:07 P.M
Thanks
mmckinl,
I owe you an apology for a very rude post I sent in your direction, maybe a week ago?
Sorry... things were really getting under my skin, for some reason I was under the impression you were trolling for some reason...
Privet Pav,
You are correct. Americans are a bunch of pussycats compared to the tyrants of Slavic lands.
You are aware of course of the death of Alexy II. I kissed his hand once and he offered me his blessing. A very understated leader who did much behind the scenes to restore a measure of self respect to the masses. He will be missed.
YLSP
it's cool ...
We are all having days these days ...
but the Republic workers occupying the factory were just "blowing off steam" too.
I'd say they were already committed to action.
"We may be half way through this Bear ala 1974-75."
I've been fixated on this being a 1974 redux for quite some time. Folks would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
"fried writes:
Biotech Lines Up for Government Bailout....
Dec. 10 (Bloomberg) -- U.S. biotechnology executives are lobbying Congress to change a tax law and provide millions of dollars in government money to small, cash-starved drugmakers that comprise most of the industry."
Woohoo, bio-engineered ponies for me and my wife. I bet with this bailout her biotech will last 6 months rather than just 4 months.
This is what happens when you deny reality and try to engineer your way out of reality. Better to have simply reorganized AIG and worked through the problems in a court controlled systematic manner. It could have been done.
Is there a lesson vis-a-vis Detroit auto companies here?
"You are aware of course of the death of Alexy II. I kissed his hand once and he offered me his blessing."
God bless his soul. I'm very moved by what you say, Ross.
sdtfs,
Committed to action? Only a nonviolent sitin. The most passive of actions.
It's the other stuff that could get a little scary and that I would like to see avoided.
"This is what happens when you deny reality and try to engineer your way out of reality."
we've been trying to do that since we dumped bretton woods in '72
From Marty Feldstein's most recent article at the NBER site - his solution to falling housing prices:
The key to preventing further defaults and foreclosures among current negative-equity homeowners is to shift those mortgages into loans with full recourse, allowing the creditor to take other property or a fraction of wages. But the offer of a low-interest-rate loan is not enough to induce a homeowner with substantial negative equity to forego the opportunity to default and escape the existing debt. Substituting a full-recourse loan requires the inducement of a substantial write-down in the outstanding loan balance. Creditors have an incentive to accept some write-down in exchange for the much greater security of a full-recourse loan. The government can bridge the gap between the maximum write-down that the creditor would accept and the minimum write-down that the homeowner requires to give up his current right to walk away from his debt.
Here is an example of how that might work. Consider a homeowner with a $240,000 mortgage and a home that is worth only $200,000. The $40,000 gap between the mortgage and the appraised value could be divided with the government taking one-third, the creditor taking two-thirds, and the homeowner agreeing that the remaining $200,000 loan would have full recourse. The creditor would give up about $27,000 of potentially uncollectible debt but would avoid the extra loss of value that comes with selling a foreclosed property, and would achieve a much more secure loan. The homeowner would get to keep his house and would eliminate all of the excess debt.
At least we know whose side he's on.
. . . overwhelming negativity . . . .
Hard to be real positive given his situation.
"The $40,000 gap between the mortgage and the appraised value "
Marty has obviously never been to Riverside or Contra Costa counties.
The homeowner would get to keep his house and would eliminate all of the excess debt.
Until the next month when his home loses value again.
the posters upthread who are talking up the possibility of violence should think twice
first CSC is no longer with us...ever occur to you he has his own private room now at government expense...i dont know just wondrin
second, think about how many lurkers drop on by this site and it only takes one very deranged, or wronged, or angry person to act on your intimations
think... you dont want any part of that
criticize the banksters...im all for that
vote out the thieves, count me in
but hey keep calm we aint even half way into this shit...dont panic
Q Ratio Signals ‘Horrific’ Market Bottom, CLSA Says (Update4) - Bloomberg.com
Tobins Q Ratio Indicates Horrific Market Bottom, CLSA Says
(I believe this will prove correct.)
Apocalypse Now script by John Milius and Francis Ford Coppola
interestingly, the sheen character's letter home is actually a flashback to a posh yacht party in LA in the original Milius script...
CSC if you're reading this please post to assure us that you havent' been abducted by the feds for... smoking cannibus.
"We may be half way through this Bear ala 1974-75."
~~~
Not ... a... chance ...
Sorry for the Marty Feldstein fixation, here's a pic of my new favorite economist.
"...the laws requiring banks to give money to people who can't afford to pay them back (Community Reinvestment Act) that sits at the root of the current problem."
A comment on another blog. Anyone want to comment on this comment?
Marty has obviously never been to Riverside or Contra Costa counties.
bgates | 12.09.08 - 11:41 pm |
bgates, I'd add the High Desert portion of San Bernardino County to that list. I'm actively looking because price drops have been insane, in some cases over 60% to 70%.
There's probably more to go, but I have to wonder how much of the drop is associated with (1) the credit crunch; and (2) lenders who want REO off the books at almost any reasonable number. What I mean is how much of the drop is transitory and how much is fundamental. Tough question.
It is interesting that McMansions (4 to 6000 sq ft built from 03-04) are now selling for 70% of true replacement cost. These are prices in Dallas which never went to extreme.
The loss mitigation officers are completely covered up. It takes 30 to 45 days to get a signed deal on a short sale or foreclosure.
If Tanta was still with us, I'll bet she would have a solution to this pig in a python. I miss her.
Committed to action? Only a nonviolent sitin. The most passive of actions.
It's the other stuff that could get a little scary and that I would like to see avoided.
Agreed.
And double agree with mock turtle. I, too, was trying to find a way to express the sentiment without exacerbating the potential for unfortunate things.
Though I'm currently net long, I still wouldn't argue with the possibility that we may be on a timetable more like Japan than we'd like to plan - with equities still falling 18 years later, and a dozen years of y-o-y housing price losses. the demographics seem to suggest it.
Won't be any revolutions UNLESS we see serious job loss - that is the one thing that could push mild mannered middle class Americans over the top in a big way.
It won't take much to blow up the cities - they are powder kegs in the best of times - but to get the suburbanites in the streets will require mass unemployment like they they never saw before nor ever expected they would see. Get a whole bunch of hopeless ex-toilers all out of work at home in their cul-de-sacs at the same time could do it.
But that's why we will see 'job creation' stimulus like nobodies business - AIG is just the tip of the iceberg.
"...the laws requiring banks to give money to people who can't afford to pay them back (Community Reinvestment Act) that sits at the root of the current problem."
~~~~
More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ...
"in some cases over 60% to 70%. "
The worst parts of the East Bay (Richmond) were actually showing y-o-y drops even greater than that.
I really wouldn't assume that these exurbs couldn't become true ghost towns, where even squatters don't bother due to the inaccessibility of water, stores, etc.
Hoopajoops LTD,
You're like the Ray Bradbury of financial science fiction.
Except it's sorta real. I really enjoy your stuff.
Aw, m-t- and sdtfs, can we at least tar and feather Bennie Boy and Hank?
Investors have definitely entered "The Veldt"
"More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ..."
mmckinl | 12.09.08 - 11:50 pm | #
you are right and bary rithhotz doccument that over and over at his blog "bigpicture"
ill see if i can thrash out a link
These are prices in Dallas which never went to extreme.
~~~~
All prices are extreme in a deflation ...
In this deteriorating, corrupt, cover-up, credit collapse environment, retention bonus is code for hush money.
bgates, on exurbs becoming ghost towns, we have both in my area, but the latter are 19th Century.
What may keep my exurb alive is transit. That seems counter-intuitive, but with a logistics airport (with a couple of the longest runways in the U.S.), a port of entry, an interstate linking L.A. to the rest of the country and a triple main line rail system doing the same thing, transit is big.
If transit stops completely, of course, those things mean nothing, but, should that happen, the country is in deep grease.
Meanwhile, I'll be heading to the Bay Area tomorrow just to check out what's happening there.
Predictions,
The S&P will probably recover to 1300 to 1500 over the next 3 years. Stocks can be a hedge against inflation during inventory up cycles.
The world was coming to an end in 74. You had to be there to experience the GLOOM. Didn't happen then. Won't happen now.
Cycles are cycles. They ..........cycle.
It's very big news in NYC.
It's possible all partners in the firm could lose their net worths and more...no?
I guess they're not too big to fail.
Why would any AIG executives get bonuses of any kind? The arrogance and kleptocracy is absolutely appalling.
This crap has to stop.
Why don't they just go to a casino and call black? If there is a closing of GM and Chrysler what will all those workers think this kind of support of overpaid executives? As long as Joe 6 Pack has NFL sports package, cold beer, and fast food is he numbed to the thievery?
"But that's why we will see 'job creation' stimulus like nobodies business - AIG is just the tip of the iceberg."
Yes, of course. No one is interested in permitting or provoking disorder.
Anyway, before there can be coordinated resistance, there has to be a tradition of social collaboration in large groups. That's been true only of peaceful demonstration in the US. Anything violent has always been carried out by extremely small and ultimately ineffective formations. 9-11 was an action by foreigners. The Oklahoma affair led nowhere.
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
"What may keep my exurb alive is transit. "
I think I recently heard a news blurb that stated that LAX-palmdale air service was being discontinued. I love the idea of a high-speed link from San Jose to Union Station in LA, but think that if the bay area couldn't get Warm Springs done and connected to San Jose in the absolute best of times, we'll have a hard time convincing ourselves that spending tens of billions to give coalinga a modern train station is worth it in the worst of times.
On a similar note, if you're not familiar with it, check out the history of "California City". Note that the half-developed layout is easily visible on satellite photos.
"...has always been carried out by extremely small and ultimately ineffective formations. "
I thought the Bush coup in 2000 was remarkably successful.
. . .we'll have a hard time convincing ourselves that spending tens of billions to give coalinga a modern train station is worth it in the worst of times.
Coalinga seems middle of nowhere, but I've heard the light rail will be extended to Stockton. I'd actually like to see what's on the ground in Stockton after all the MSM stories.
hey mmckinl
from rithhotz at bigpicture
Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD and other selfconfoozled folks has been the meme that the entire housing and credit crisis traces to the the Community Reinvestment Act (CRA) of 1977.
An alternative zombie myth is the credit crisis is due to Fannie Mae and Freddie Mac. A 1999 article from the New York Times about the GSE's role in subprime mortgages has been circulating as if its the rosetta stone of the credit crisis.
These memes have become a rallying cry -- cognitive dissonance writ large -- of those folks who have been pushing for greater and greater deregulation, and are now attempting to disown the results of their handiwork.
I feel compelled to set the record straight about this pseudo-intellectual detritus. As we have painstakingly discussed over the past few years, there were many direct and indirect causes of the current financial mess.
Let's clarify the causes of current circumstances.
Ask yourself the following questions about the impact of the Community Reinvestment Act and/or the role of Fannie & Freddie:
Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?
50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?
What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?
Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?"
and he goes on IN DEPTH!!!
find the rest at
The Big Picture
dryfly(A CRCC Godfather) writes:
Won't be any revolutions UNLESS we see serious job loss
Agreed. Although, if my neighbors start flipping over their blue recyclable bins and setting them ablaze tonight based solely on negative outlook, I will let you guys know.
that was me
" I'd actually like to see what's on the ground in Stockton after all the MSM stories."
speaking of "apocalypse now" - theoretically, you could take a small boat all the way from the golden gate into downtown stockton.
Cycles are cycles. They ..........cycle.
~~~~
We (the U.S.) are in aggregate debt of 50 trillion which Bernanke and Paulson are trying to salvage ...
It will end worse than '74 ... much worse ...
heres the acid test
ask yourself one question
CRA has been around since the 70s...why the huge wave now of blown-up mortgages that are 2,3,4 years from originatio
"Anyway, before there can be coordinated resistance, there has to be a tradition of social collaboration in large groups."
I meant large civilian groups.
Ross evidently has a philosophical outlook and expects no radical turns, only the usual cycles. That's reasonable, but there are no guarantees.
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
~~~~
You just haven't heard about them, except for the inner city riots. There were the WWI army bonus riots that MacArthur put down with many killings ... there are others ... NYC etc,etc ...
History has been sanitized for the masses.
Won't be any revolutions UNLESS we see serious job loss
Well, that's comforting. iTulip is saying 10 million jobs lost by the end of 2009:
Unemployment by industry: Recession or depression? - Eric Janszen - iTulip.com
theoretically, you could take a small boat all the way from the golden gate into downtown stockton.
Don't have a PBR, but would a 50' sportfisher drafting 5' or so make it?
Manias have multiple causes but the primary cause is greed and sloth. Essentially something for nothing and everyone is participating.
It comes down to a lack of dicipline both self and external.
It is useless to blame. All are guilty.
Dicipline will be restored by either by mandate of self reflection. Let's hope it is the latter.
mock turtle
thanks for the link, I believe it was Pavel that brought it up ...
"Don't have a PBR, but would a 50' sportfisher drafting 5' or so make it?"
no idea. i'm too stingy for boats, and generally think of the bay as a cold, toxic toilet. especially near candlestick.
theoretically, you could take a small boat all the way from the golden gate into downtown stockton.
~~~~
Stockton has a deep water port .. lotta cement outta there ... well a little while back.
The world was coming to an end in 74. You had to be there to experience the GLOOM. Didn't happen then. Won't happen now.
I graduated from HS in '75... my father from HS in '40... sometimes it does happen and sometimes it doesn't and you don't know which one you are in 'til afterward.
I don't think this is the end of the world either but I don't KNOW that... not yet.
"More Republican horse shit ... the mortgages under that program are doing far better than the mortgage market as a whole ..."
Um, let's not get carried away. CRA still underperforms, but in terms of share of the market, it's a zit on the mortgage pig's ass.
Think of it this way: Conforming loans with 5-20% down are 2003-2006 Toyota Camrys. CRA loans are like 1995 Chevy Cavaliers. Subprime loans are 1982 Ford Pintos. Unfortunately, I-10 is bumper-to-bumper with Pintos at the moment.
mmckinl writes:
There is no tradition of mass uprising in this country - at least the examples are scattered, few and short-lived, with no permanent consequences.
I do remember Los Angeles 1992...with Mr. King's assaulter's getting a free ride...just like AIG...
"You just haven't heard about them, except for the inner city riots. There were the WWI army bonus riots that MacArthur put down with many killings ... there are others ... NYC etc,etc ..."
These were not mass uprisings. It's not even a mass uprising when the Duma takes over the Belii Dom in Moscow, and the army shells it with tanks. A mass uprising is Budapest, 1956.
Very few of us have ever seen a mass uprising.
bgates, just to clarify, I should have said it's not my boat, but I have access to it and it is docked in the Bay right now, so it's "theoretically" possible.
In reality I suspect we'll stop in Stockton on the way up rather than motor back down to it. The main problem is, as CR has noted, that CRE has a ways to go and RRE just isn't that interesting.
I'm sure many of you have had your salary structured with bonuses, as have I. They aren't designed for "retention". They are supposed to incentivize good decisions on the behalf of the company, by giving you a vested interest in the success of the company (i.e. you get a bonus IF the company is profitable).
Paying bonuses when the company has bankrupted itself and taken down the countrie's financial systems is outrageous!
It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
This should be stopped.
Think of it this way: Conforming loans with 5-20% down are 2003-2006 Toyota Camrys. CRA loans are like 1995 Chevy Cavaliers. Subprime loans are 1982 Ford Pintos. Unfortunately, I-10 is bumper-to-bumper with Pintos at the moment.
Shnaps | Homepage | 12.10.08 - 12:17 am | #
A lot of those Pintos are already in flames... now its the rest of the cars turn to burn.
All the revolutionary rhetoric is downright hysterical.
Americans don't "rebel" anymore. They're not going to march through the gates of Rancho Santa Fe. No way, might miss Paris Hilton's BFF.
Sure, a few poor sods will go off the deep end. But Americans don't know who is actually screwing them. And the media won't report it. So look for some poor, innocent working stiff at an AIG office or Citi branch to get it in the noggin from some enraged yet clueless foreclosed homeowner.
The rest of us will sit around nodding agreement to talk radio warnings about "overregulation."
A mass uprising is Budapest, 1956.
Very few of us have ever seen a mass uprising.
Pavel Chichikov | 12.10.08 - 12:19 am
True enough, Pavel, for we Americans, but we all know the story of Hungary 1956 and Czechoslovakia in 1968 and we have all seen the movie Network, so some day it's possible that Americans might have the guts to stand up and say:
"We're mad as hell and we're not going to take it any more."
Very few of us have ever seen a mass uprising.
Pavel Chichikov | 12.10.08 - 12:19 am | #
Nor do we want to unless it's on TV far far away.
I well remember the apprehension and gloom after WWII. Post wars always led to depressions. My Dad didn't even buy a house til 54 even though he had full veterans benefits.
It looks to me that we will experience a mega Marshall Plan with each country supplying their own stimulai. Could be wrong but all one needs is some ink and paper or a computer that adds digits with the stroke of a finger.
"These were not mass uprisings. It's not even a mass uprising when the Duma takes over the Belii Dom in Moscow, and the army shells it with tanks. A mass uprising is Budapest, 1956."
Last time I was in Budapest my dad walked me through a bit of the uprising.
Pointed out where he was when the first Russian tanks went into Budapest.
In one of the main square he pointed out a Church where snipers were shelled by a tank, and another place where a molotov cocktail blew the same tank up.
A side street where Hungarians would pull out an anti-aircraft gun every so often to blowup tanks.
Where turn-coats were hung from telephone polls.
The building where my Uncle had gone to pickup a loaf of bread minutes before it was blown up. Luckily after he left the building.
Sent shivers down my spine and made me appreciate what we have nowadays.
"It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
This should be stopped."
By whom?
It looks to me that we will experience a mega Marshall Plan with each country supplying their own stimulai. Could be wrong but all one needs is some ink and paper or a computer that adds digits with the stroke of a finger.
Ross | 12.10.08 - 12:24 am | #
That is my bias too - too easy to do and too hard to stop.
Ross writes:
It looks to me that we will experience a mega Marshall Plan with each country supplying their own stimulai.
You know what they call it when a country stimulates itself
if the hole gets deep enuf for long enuf
maybe half of everything will become nonperforming...cra or not
You know what they call it when a country stimulates itself
Hoopajoops LTD | Homepage | 12.10.08 - 12:26 am | #
nationalbatio
a computer that adds digits with the stroke of a finger.
the middle finger
Martin Sheen, right?
@bgates...would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
Large ocean going ships make it to the port of Stockton.It is surreal to be driving on a country road and see a BIG ship apparently sailing through a cornfield.As far as the East Bay i was in Oakland and Alameda last week.In oakland asking prices in a working class area were off 60% in nominal dollars ( not the 'hood or the hills) but very few sales.Alameda and Montclair are holding up better,about 40% off.LOTS of condo's in oakland,and some parts of downtown oakland where they put in a lot of condo's should do fine long term because they are in a well defined neighborhood with nice amenities and excellent public transportation.I watched these condo's go in and they are much better built than most of the SFR's built during this boom.
I think revolution is needed..but people are sheeple..citizens are consumers...
Pacifists and crooks run amuck in the U.S.
Pacifists and crooks run amuck in the U.S.
Born and bred dopes!! I'm starting to think that Jas has a point. Help..
sorry, honest mistake with the sheens.
in any case, all of this talk of uprising is a bit overwrought. if you are truly disgusted with congress' behavior, don't get angry, just drop out. work much less, have much less income. your dependents may not like the idea, but it is one approach.
P Oed in Cali,
My son went to school taught by expat Cistercian Hungarian Monks that fled the uprising and landed in Dallas of all places. Many of them recount that time with beautiful but poignient prose.
Look up their website. Great observations about how they thought the U.S would come to their aid.
The U.S has killed a lot of folks feigning support that never came. Think Bay Of Pigs.
"Look up their website. Great observations about how they thought the U.S would come to their aid. "
Ross, my dad brought that up once. I don't think he ever forgave the lack of aid. Very sad.
Ross, yes, many of us realize that because we have actually read the history.
So what do we do with the Iraqis who have been helping us for years?
Serious question. I'm happy I don't have to answer it.
"My son went to school taught by expat Cistercian Hungarian Monks that fled the uprising and landed in Dallas of all places. Many of them recount that time with beautiful but poignient prose."
I've been to Mass at that monastery. Went there when visiting a friend who lives in Irving. He's a real estate agent, and he forecast the disaster we have now when he visited us in DC in the fall of '07.
McCain would have won it if he went against the bail outs. Even Joe the Plumber thinks he is a tool now.
AYFKM?????
"So what do we do with the Iraqis who have been helping us for years?"
Same thing we did with the Vietnamese who helped us, check out 'Little Saigon' in Orange County.
Little Baghdad, coming soon.
"McCain would have won it if he went against the bail outs. Even Joe the Plumber thinks he is a tool now."
imagine if the GOP powers that be had actually stopped laughing for a minute at dr paul and listened to his words. at dow 8000, ron paul would have been by far the best candidate.
Hoopajoops I've been enjoying your updates for months now. When is the rollout? (Always assumed a hoopajoop could be rolled)
On that note, CSC announced his retirement from comments after a nasty exchange with an idiot. I assumed and hope it was temporary.
@bgates...would do well do watch the opening 20 minutes of 'apocalypse now' and take notes on the overwhelming negativity in the charlie sheen letter home.
RhodesianGreenbackinAZ | 12.10.08 - 12:28 am | #
Regarding the 'Apocalypse Now' era... In a certain respect you were 'freer' then... I mean no one I knew ever expected any of us would get real jobs or keep them for long so why sweat it? Result was we worked a little here and there & spent the rest of the time hitchhiking around the US (or as some of my buddies did - across Europe & N Africa).
And most of us were engineering majors and yet still expected to drive buses or wait tables at a resort. We knew engineers & architects doing EXACTLY that in 'Rust Belt'.
When we did get REAL JOBS - and KEPT THEM - no one was more surprised than we were. What did we do wrong?
When I see that level of 'negativism' from my kids & their SO's I will know we are near bottom. Right now they aren't that negative...which is surprising since two of the five are under-employed (my kids)... two are laid off NOW (their SO's) and one is still in HS. Give'm time - this recession is still early.
Yeah, bgates. (And mock turtle upthread.)
The more one talks, the less I tend to believe them.. except if it's about hoopajoops. Holy moly. Gotta get me one of those jammies.
CSC did leave a comment when Tanta passed away.
Hey Pav,
It is a wonderful monestary. Looks like it was built in the 13th century. I knew the architect and the Monks were adament that it be austere and genuine.
It is probably the best private boys school in the Southwest. Out of a class of maybe 40 seniors, 30+ are national merit candidates. No magic. Just educators that know what the hell they are doing.
1 currency soon [yogi] writes:
Hoopajoops I've been enjoying your updates for months now. When is the rollout? (Always assumed a hoopajoop could be rolled)
You are correct sir, that a hoopajoop may be rolled. However, unless it is pushed, it can only roll uphill.
in any case, all of this talk of uprising is a bit overwrought. if you are truly disgusted with congress' behavior, don't get angry, just drop out. work much less, have much less income. your dependents may not like the idea, but it is one approach.
bgates | 12.10.08 - 12:33 am | #
They pretend to pay us - we pretend to work.
I wasn't just in the Soviet Union either - it was common in many parts of the US in the '70s. I worked in some of those factories & offices.
theoretically, you could take a small boat all the way from the golden gate into downtown stockton.
Don't have a PBR, but would a 50' sportfisher drafting 5' or so make it?
I bought a 30' sailboat drawing 5 ft in Stockton in the early 90s and brought it to Tomales Bay without any issues.
Beach Blvd, I can live with a Little Baghdad.
BTW, I always thought the first Vietnamese born Congressman would come from Orange County. Instead it's Louisiana. Which reminds me of some theme music:
YouTube - Doobie Brothers - China Grove 1973
What's really great about it is that it's the same Gulf Coast and Americans have never been really good at differentiating among Asians.
At least we seem to have set aside the word Oriental, which, being a little racially sensitive, I always thought was a racist term, though most users of it seemed oblivious.
Ross, when you lived in Moscow did you visit Novodevichy?
First stanza of a poem I just wrote:
THE SWAN OF SAINT MICHAEL
The lake beside New Maidens Convent,
A huge white swan, both tame and noble
Strokes his webs toward faint reflections,
Wisdoms sunken tower of bells
I've been feeling lately that if there is going to be a sudden turn for the worse it's going to happen in Moscow, not anywhere in the States. I believe there is a certain fragility in the situation now.
"Give'm time - this recession is still early."
Most of my social and professional acquaintances were born in the 70s and 80s. The casual attitude towards student debt in this group is mind-blowing. I saw SLM as a great short at 17, too bad I never bought the puts. That's about all you can do with that situation.
Pavel,
You ask by whom should this be stopped.
I'm not sure who has the authority to stop it. AIG shareholders, the congress, the FED? Whoever is giving away tarp funds should be able to include stipulations about bonuses. I'm going to call my senators/reps tomorrow and find out.
It's going to get worse before it gets worse.
Those Bay of Pigs Cubans should never have expected JFK to get railroaded into bombing Cuba. They took their chances with violent revolution and lost. I have no sense of national guilt over that episode.
@mock turtle | 12.10.08 - 12:04 am |
Excellent.
It's going to get worse before it gets worse.
~~~
and then some ...
I bought a 30' sailboat drawing 5 ft in Stockton in the early 90s and brought it to Tomales Bay without any issues.
RE | 12.10.08 - 12:48 am |
Okay, RE, I know from you and from Tom Stone that it can be done. By Monday, I'll say whether it was done.
Could be a rough morning for the deflationists - oil is perky, futures are downright jolly for the nas...
the weather outside is frightful...
Hey Pav,
Been there many many times. My favorite place along with the Tretchakov and Sergiev Posad.
We should exchange poems. Russia is a poets paradise and every plumber is a philosopher.
Nyet. Moscow will remain stable. We are in an era of good Czars.
Hoopajoops LTD writes:
You know what they call it when a country stimulates itself
Quanmastive-easturbation?
"Could be a rough morning for the deflationists - oil is perky, futures are downright jolly for the nas...
the weather outside is frightful..."
Time to add to my SRS then. I was worried I had maxed out my position. Seems not with bailout number what? 9,10 I forget that will save the world.
Could be a rough morning for the deflationists ...
~~~~
One morning does not an inflation make ...
I predicted a Santa Claus Rally ... I don't see much more than that ...
I'll be fading this rally shortly ...
"Time to add to my SRS then."
I was more thinking about buying refiners on strength and maybe picking up a tiny tiny bit of FAZ for some short salsa.
if VNQ retests 42, that means SRS goes to nearly the same levels.
bgates, I'm awful at timing. 2x (i've been buying from 115 and down every $10 drop) SRS is about all I'm willing to do. I will slip through the slippage for months if necessary.
Sell the news of latest too-big-to-fail bailout. Open up, then roll downhill with no push needed.
"bgates, I'm awful at timing."
I'm generally horrible at that too, we all are. I am good, however, at booking losses, which is a more valuable skill than good timing in a true bear.
"Beach Blvd, I can live with a Little Baghdad."
We got to do something.
I'm sure no one has attempted to count the number of Iraqis murdered for 'collaborating' with us or being related to someone who did.
And their treatment under the reign of Ayatollah Muqtada Sadr will probably make re-eduction camps look humane.
"*FEDERAL RESERVE CONSIDERING ISSUING OWN DEBT - WSJ
- According to the report, Fed officials have approached members of congress to discuss the plan to fund trillions of dollars of lending
- Untill now , all debt Federal debt has been issued by the Treasury dept"
This one should scare deflationists a bit.
We need a new tax aimed at the last 10 years of income and the property of these AIG geniuses. It's about time that everybody else stops paying for their gambling.
"This one should scare deflationists a bit."
i fantasize about waking up to TLT in the low 80s, it keeps falling... falling... 6% yield 7,8,9...
wouldn't an '87-equity-crash style event with treasuries be hilarious?
One morning does not an inflation make ...
I'm as big of an inflationista as there is on this forum and I don't see deflationary pressure abating anytime soon. I still believe gov'ts will do whatever is necessary - including breaking their own rules - to 'reinflate' but it is going to take time.
Money creation is like a thunderstorm off in the distant mountains - seems to us standing in this sun baked dry gulch like it is having little or no effect... then later... whoooosh. Everyone & everything is washed away.
When it happens the inflation flood will come fast and furious - but I think it is a year or more away. Meanwhile it keeps raining off in the distance.
"I'm generally horrible at that too, we all are. I am good, however, at booking losses, which is a more valuable skill than good timing in a true bear."
bgate, don't you mean booking gains?
Anyways I only play on the short side with what I'm willing to lose 100%.
I'm in the 2x's and not too worried about slippage. When they take off, everyone jumps on board and they take off. Just make sure you don't forget to sell when you can. I nearly have gotten stopped out of EEV and QID.
If I don't make money on these trades than I say whatever causes that will be really entertaining and worth the loss from the trade. Global economics seems to be more than teetering and anything could set things off... especially with USA looking a bit wobbly....
Nothing humane about reeducation camps. Doesn't matter who is doing the teachin'.
On that joyous note, I'll leave you good folks for the night (or the week, as it were).
New thread is up.
"*FEDERAL RESERVE CONSIDERING ISSUING OWN DEBT - WSJ
~~~
Now the banks want to issue their own money ! What next , they run the country ... we saw what they did already !
I'm sure many of you have had your salary structured with bonuses, as have I. They aren't designed for "retention". They are supposed to incentivize good decisions on the behalf of the company, by giving you a vested interest in the success of the company (i.e. you get a bonus IF the company is profitable).
Paying bonuses when the company has bankrupted itself and taken down the countrie's financial systems is outrageous!
It makes no sense and is exactly contrary to the purpose of bonuses. If there is only upside and no downside risk to decision making, you are incentivizing foolish risks.
This should be stopped.
bankerwannabe | 12.10.08 - 12:21 am | #
Bonuses paid in a bankruptcy/liquidation have a quite diffeent purpose than bonuses paid by a going concern. Every job in the busted company becomes a dead-end job and there's a strong incentive for workers to get out the door as quickly as they can. But there's a lot of work to be done as affairs are wound up, especially at a financial insittution, and if you don't want that work to be done by your most unemployable employees you have to do something to offset that incentive.
Retention bonuses are quite normal and rational. AIG's may or may not be--I have the impression they're focused at the high end of the pay scale, but I can't tell if that impression is accurate or due to biased reporting. Maybe this is retention, or maybe it's looting posing as retention.
I seem to remember that the Fed has always had the power to issue treasuries. Will check...
So these people who get multimillion dollar bonuses must have multimillion dollar mansions. If they don't get their bonuses, they might have to foreclose. And then we're stuck with fewer and fewer people who can afford those $10,000,000 homes.
We don't want that to happen, do we??
He ain't prez yet.
"Retention bonuses are quite normal and rational. AIG's may or may not be--I have the impression they're focused at the high end of the pay scale, but I can't tell if that impression is accurate or due to biased reporting. Maybe this is retention, or maybe it's looting posing as retention."
I got a bonus when my last company declared Chapter 11. It was called getting to come to work and collect a pay-check during the liquidation phase.
At least we seem to have set aside the word Oriental, which, being a little racially sensitive, I always thought was a racist term, though most users of it seemed oblivious.
I don't get why it's considered racist. Maybe egocentric, but a culture that comes from Middle Earth and calls foreigners demons shouldn't be too sensitive. FWIW- I know a lot of Asians, and I'm not aware that any of my family thought it mattered much if you called them oriental, just don't call them Japanese- we're Chinese dammit, can't you tell the difference?
They may be too polite to tell you, but the term Oriental is no longer neutral, just like Negro.
"I don't get why it's considered racist. Maybe egocentric, but a culture that comes from Middle Earth and calls foreigners demons shouldn't be too sensitive. FWIW- I know a lot of Asians, and I'm not aware that any of my family thought it mattered much if you called them oriental, just don't call them Japanese- we're Chinese dammit, can't you tell the difference?"
I never had an issue with using the word Oriental on the east-coast. But apparently it's non-PC on the West Coast. Even if you're Chinese. Go figure.
I got a bonus when my last company declared Chapter 11. It was called getting to come to work and collect a pay-check during the liquidation phase.
Pissed Off In California | 12.10.08 - 1:13 am | #
I guess your bosses didn't take mp's course in Enlightened Thought.
"I guess your bosses didn't take mp's course in Enlightened Thought."
The funny thing was there were only about 5 main creditors. All the employees left, maybe 6 of us, were counted as creditors due to our vacation pay. Pretty funny if you ask me. We got 20 cents on the dollar for what we were owed.
Well atleast I improved my fooz-ball and ping-pong skills during that period. 3 hour lunches have a way of doing that.
To me, the usage of the word 'Oriental' seems about as innocuous as the word 'Occidental'; out of date, perhaps, but not derogatory. But then, I'm an 'occidental'.
They may be too polite to tell you, but the term Oriental is no longer neutral, just like Negro.
Who cares? The people who are looking to use a derogatory term will just find another, shorter, epithet.
Yalt,
I think you make a fair point about retention being an issue with insolvent companies, but isn't that argument a bit circular? How can you ever penalize failure, if you have to retain the people who caused the failure?
The bonuses are apparently being paid to the higher level executives, presumably those who had the authority to influence AIG's success or failure. I'm sure they were handsomely rewarded when AIG was doing well. Where is the downside?
yogi - thank you for the heads-up. I didn't realize that. Certainly, Asian would be the preferred term today.
second, think about how many lurkers drop on by this site and it only takes one very deranged, or wronged, or angry person to act on your intimations
think... you dont want any part of that
mock turtle | 12.09.08 - 11:44 pm | #
What we need is a couple dozen wronged, angry persons with some military marksmanship experience. I don't want part of that...yet...but I sure would raise a mug of beer to anyone who could effect maybe the only sort of justice we may ever see for this crap.
Some things are worth dying for...and some things are worth killing for. Mere money, no, but the pigmens' coordinated attack on the future of the republic? Yeah, it might be worth it.
Something has to strike fear into the hearts of these bastards. And mere talk isn't going to do it.
cd