And I thought I was President of Studly.

Any sufficiently advanced technology is indistinguishable from magic.

Off topic but I wasn''t going to leave it on a dead thread.

There are some bad cats on CNBC but Dennis Kneale takes the cake. Total boob.

Onto other news: DC1000 spoke recently of productivity deflation. He's onto a key factor in the next 20 years that will be very destructive to jobs AND OFFICE SPACE (there's a connection). The two main items that will affect productivity deflation will also correlate to jobs. Consider how many jobs are going away due to technological gains and outsourcing.

*Supermarkets have more kiosks, self checkouts, *no more music stores to grab your cds stores...get it online,
*dvds online while you still can, soon digital...no person involved in the transaction,
*banking...no one lends or borrows so no person involved here
*doing all of our benefits online right now during open enrollment, less people involved
*more electronics sales online vs big box; see Circuit City
*airports ticketing kiosks, parking payment kiosks
*all my media is iTunes or DVR
*no newspaper delivery, it's too old by then anyhow
*radio and tv under radical change affecting salaries and jobs as online push continues
*individuals uploading videos, stories. blogging...new jobs but less overall and more free content
*bookstores??? two still hanging on, push to online here as well
*walmart and target are replacing smaller/more personal touch stores
*financial products, insurance, stock brokers...not gone, but dramatically changing and under pressure
*software packages making historically mundane tasks by low skilled workers unnecessary

This list could go on. The point is that jobs/wages are running out the door due to overseas competition or technological change/advances. See UAW. This change is already underway and will build dramatically over the next 10 to 20 years. Many low skilled workers, including those with college education will be more frustrated in the job market than ever before. And it will be a core part of the decline in our collective standard of living.

Value creation on a company and individual level will be a key to survival.

Goodbye crackhouse, hello cracksuite!

MortgagePigwear LLC take note - Broadway beckons

fabricate the next quote after this paragraph contest:

Michael Colacino, the president of Studley, a real estate brokerage firm that specializes in representing office tenants, said the sublet space that had come onto the market recently was attractively priced.

"Michael Colacino, the president of Studley, a real estate brokerage firm"

I knew a guy from Studley who was your stereotypical, over aggressive office broker. Once he told me how he snuck into a potential client's Christmas party, because that was the best chance to talk to the company president about their office space needs. Needless to say, he did not get to represent the company, but he got some free drinks and food out of the deal.

Manhattan: Office Space for Lease Doubles

It's going to double again, and maybe even another time.

I don't know about this, the smarties at Boston Properties were saying earlier this year that office rents only go up in NYC. Of course they (and their partners who i believe go by the symbol GS and will be reporting losses of $2 billion partially due to stupid CRE investment) were saying that at the time they paid a record sum for an NYC office building.

the good news for them is that they are going to have that record for a while.

ok. my schadenfraude is back in full swing.

My company was looking to expand our NY office this year. I successfully petitioned execs to wait until mid '09 due to declining rents. Conditions are making me look smarter all the time.

Got VNO puts?

Football season starts in September. Coincidence? I think not.

I drive to work every day past a row of auto dealers. Sometimes inconvenient because car delivery rigs are always parked on one side of the street or another. For the last couple weeks, no rigs. At all. The dealerships are still open, but not taking deliveries.

"they" wanted to compete with the world

so now

there you have it

look at our competitors, and on a population (POPULATION) weighted basis look at their standards of living

average it out
and that is somewhere near where we are headed,,,if we are lucky

because pendulums swing past the bottom

the un official G20 after US

Japan
Germany \t
China
United Kingdom \t
France \t
Italy \t
Spain \t
Canada
Brazil \t
Russia \t
India \t
South Korea \t
Mexico
Australia
Netherlands
Turkey
Belgium
Sweden
Indonesia
Poland

just look at the average of the G10

are you ready to live at a level of austerity comparable (think energy and consumer goods) with the average of them?

think about russia brazil china japan germany italy

face it america...a sea change

I guess all the buildings of the complex collapsed, even those not struck by aircraft.
Strange, that.
Ben Frank'll Tank Bernanke |

Good to know who the nut cases are. Another one to skip.

Douglas kass had Kudlow squirming in his seat tonight when he said he thought the consumer would lead the recovery in housing in late 09 rather than 2010.

September? Because the Democrats picked their candidate in late August, reality started to sink in that the GOP wasn't going to retain the White House, and it probably contributed to a chain reaction.

Smaller markets tend to get whipsawed by larger ones, and EEV returns 2x inverse of its reference index.

But only on any given day, not long term.

EEV correlates poorly with EEM over the long term because EEM is so volatile.

The prospectus explains the effect of volatility on these funds very clearly.

If I remember my financial engineering, volatility drives down expected return: mu_LT = mu_ST - sigma^2/2

Topher writes:
Another thing I heard that I found interesting was that CA government spent 95% compared to 71% the US government spent over the last eight years.
Topher | 12.02.08 - 9:49 pm | #
That was from the Governor from SC.

If I remember my financial engineering, volatility drives down expected return: mu_LT = mu_ST - sigma^2/2

The issue with the ProShares funds is purely mathematical.

If EEM goes down 20% one day and up 25% the next, EEM is unchanged after 2 days.

EEV on the other hand would go down 40% the first day and then up 50% the next. So EEV would be down 10% after two days even though EEM is unchanged.

Show me the tax dollars.

Tax collecting not allowed during recessions.

But only on any given day, not long term.

Definitely something to stay away from long-term. But I might discard my normal time horizon for this one, just because it does move so radically. A wee bet on the side...

Bush should say that he will back a bailout bill that promises two lumps of coal to every taxpayer.

Gavshire Hathaway writes:
You really think oil companies will need a bailout. That would disgust me to no end.
Gavshire Hathaway | 12.02.08 - 9:55 pm | #

And all the rest hasn’t?

Repost from GM thread:

Aren't shareholders members of a type of union?

In the final analysis, the failure of our large corps have been a combination of the laziness of both shareholders and the Boards that are designed to specifically protect them, and the union leaders who parasitically sponge off their wards.

Plenty of fiduciary failure on both ends.

Shareholders are losing wealth and labor is being priced down similarly.

I'm not sure who to blame. But, loose monetary policy might be a good place to start looking.

Elvis, perhaps we have just passed Peak Peak Oil?

The way things are going I see some of that office space as condos.

Between tax burdens and ballooning transit costs and infrastructure deficits and the soon to be front page explosion in crime the cenurbs are about to revisit the 1970s.

Don't forget the ebola outbreak and crop failures.

I think oil prices are to low for the countries that produce it. They want $75 oil.

Been a while since something geopolitical has moved the price like it used to. Even with what happened in India I have a bad feeling oil will not stay low for long.

Has anyone mentioned the unmentionable: we're gonna have to bail out the oil companies

XOM could fund the Detroit 3 bailout out of last year's profits and still have enough left over to buy HOG.

Speaking of decisive gov't actions - Repubs won the Senate seat in GA, which means Dems do not get a filibuster-proof majority

I gotta mow the lawn. Good night now.

Right on syvanen. Here in Chapel Hill we have a ton of them.
Diogenes |

I live in Davis Ca. Why are those nuts attracted to University towns?

Saddlebag, I know they're the same party... but most other people DON'T.

Ya know Lurker, I've noticed fewer trains here as well. I'm on the panhandle of Florida. Haven't been stopped by a train in over a month now.

I have said this since 140+ and will say it all the way to 20!

~ unless the dollar blows up ...

@ 8 dollar oil I am in.

So long as all you mean by "Peak Oil" is that world production will peak at some point then I am a believer. The price action over the past several years is not inconsistent with this.

marketwatch on npr is good..maybe you have missed some of the better reports

but agreed coming to CR is far more enlightening

i did it too

hahah marketplace

syvanen wrote: "Interview with Nial Ferguson. He was explaining to us that our money is not real, just assets that the banks can leverage into other investments. He also wanted us all to know that the credit problems were not caused by the financial industry. No, it was all of our fault. We should not have borrowed more than we could pay back. Yes, believe it or not, the banks were just innocently responding to consumer pressure to lend more money. Not their fault, they were just giving the customers what they were demanding. What about those of us who had paid off our debts and were now saving for retirement?

What a jerk that man is....
syvanen | 12.02.08 - 10:32 pm | #"

syvanen, I heard that interview with Niall Ferguson, and I have to agree with him. Banks are intermediaries. Like any intermediary, they have some influence, but they are often not even the principal actors. In the case of an asset bubble driven by reckless credit, the people who are to blame primarily are those who:

a) continued to buy assets even after their price had risen well above long-term trend values, and

b) borrowed more than they could comfortable repay without relying on asset gains, and

c) loaned anything to overstretched borrowers, or loaned too much against overpriced assets for regular people to buy. (I am not referring to the lender's agents - the intermediaries, the banks and so on - I am talking about the people who actually had the money saved up and lent it out recklessly.)

Even some savers are partly responsible for the mess, and should suffer accordingly. If you saved and put the money into treasuries or money market funds, you'd be fine. But if you saved and bought stocks or other risky investments at the ridiculously high prices that prevailed over much of the last 10 years, then you participated in the bubble, and must bear the consequences. I did, and I am not blaming anyone else.

crispy&cole

please

what did research in motion say...i missed it

Crispy and Cole,

What about Peak Passenger Pigeons, Peak Right Whales or Peak Buffalo?

History is full examples of our habit of using up resources. Price is a function of both demand and supply. Just because both factors fluctuate, doesn't to my mind make physical supply constraints irrelevant. I'm in no position to personally evaluate the number of barrels left under Kuwait or Saudi. When reputable geologists suggest that there's a supply problem, I'm going to listen.

rant off.

Mostly Lurker, have you heard the NPR segments on mortgages done by Ira Glass, Adam Davidson, and Alex Blumberg?

If I were to recommend any NPR show, it would be the Planet Money podcast:

Planet Money Blog : NPR 

These guys are really trying to explain the crisis for the everyman. ~20 minutes per day, and about 6 months behind the understanding you'll find around here.

if you go to marketplace home page

America's Financial Crisis | Marketplace from American Public Media

and scroll thru the financial crisis program listings you can see NPR has covered the crisis going back two years and in the last year there have been stories on the subject almost every or every other day

some programs are excellent, some are average at best...but literally hundreds of stories on the subject with some excellent guests interviewed

crispy&cole

thanks

Big Three survival bailout requests rise to $34B

"GM, Chrysler say they need immediate loans to survive into 2009; bailout requests total $34B"

No Comment. Fsck 'em, Next. I'm going to bed. See y'all tamale.

Exactly right mal, although they seem to be awakening from their slumber slowly. Methinks the New Year will not be peaceful.

that bout sums it up Mal.

forked in much the same way as Irvine, CA is forked now, or Silicon valley comm RE was forked in 2001-2. If youve got a dominant industry built on the illusion of profits, eventually, you pay for it with see through buildings.

elephant in the paste - please make a summary bullet and link next time.

pr has had several excellent reports on the financial meltdown. If you're looking to come up to speed I suggest listening to "the giant poole of money" and "another frightening show about the economy."

This American Life

This American Life

MrM(Unrated) writes:
Speaking of decisive gov't actions - Repubs won the Senate seat in GA, which means Dems do not get a filibuster-proof majority
MrM | 12.02.08 - 10:09 pm | #

Coleman will probably hold on in Minnesota too - by a whisker - maybe less than 50 total votes in a state with almost five million people (obviously not all are voters).

GOP will force Dems to negotiate and that isn't a bad thing no matter what side you are on. At least in my opinion. Won't be pretty but won't be a bad thing to force them to talk t each other.

Oh, I forgot to add, Mostly Lurker, that Ira Glass and the other NPR journalists not involved in regular business shows are not captive to the business community (or that very specific Democratic segment of the business community that NPR people can bring themselves to get close to.)

I was surprised that they weren't captive to the hordes of NPR listeners who have bought into the idea that buying houses and stocks can be relied on to provide free money in retirement. I think this delusion is common to both Dems and Reps. It's as popular on NPR as on Fox.... well, almost.

Oil production peaked in 2005. Take it from there.

No, it was all of our fault. We should not have borrowed more than we could pay back.

I accept my responsibility for this mess. Give me a billion dollars and I promise I won't do it again. (And if I don't get that money,...look for more financial turmoil,...not a threat, just sayin')

"I think this NYC article could be cut and paste to the Latimes. . ."

Well, if this is happening in LA we sure ain't bein' told about it. I do see more "for lease" signs, but from what i hear, LL's aren't lowering rents just yet.

Metal prices fall further than during Great Depression - Telegraph 
Metal prices fall further than during Great Depression
The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.
(Isn't it correct that the US does not have a measurement for Depression now?)

100-year Treasuries
Treasury Should Consider 100-Year Debt, BlackRock’s Fisher Says

Anecdote about trying to buy a new car. I e-mailed multiple dealerships in the area expressing my interest on Sunday. Most of them responded back with interest. I responded back with what I thought the fair price was for the car I was looking at. None of the dealers so eager to respond on Monday to having an interest buyer have responded yet. My asking price was about 10% less than the lowest price others have reported on the Internet. I'd be happy to get that lowest price but I know I have to start out lower and negotiate up.

Also, I am a cash buyer.

If I don't hear anything tomorrow than Thursday I will fax the dealership managers directly and deal with them. You'd think these folks would want to move some of their '08 inventory so they can start selling the '09s...

"dryfly writes:
GOP will force Dems to negotiate and that isn't a bad thing no matter what side you are on. At least in my opinion. Won't be pretty but won't be a bad thing to force them to talk t each other."

Dems don't need 60. There are a number of Goopers like Specter in Penn who are 1) up for reelection and 2) in a state Obama won.

These Senators will have to be very, very careful.

YLSP- probably hungrier near the end of the month (and in this case, year.) You wouldn't think time of the month would matter, but it does.

Let me repeat it back to see if I got it because this is how I understood it to work.

The car dealership has already bought and paid for all of the new cars on the lot from the manufacturer. In order to make a profit they have to sell the car for more than they bought it for (kind've like flipping a house?). I think this is what is termed by the invoice price. Hence, the dealer is working to try to get the invoice price.

Of course the conundrum, just like in housing is that if they don't sell any cars, they lose any more money, because they have bought all of these cars. Furthermore, when there are '09 models on the lot, why would anyone buy the '09s, which are priced a bit higher, and in this case identical to the '08 models.

I guess they are just trying to "hold to maturity". I've been watching these cars for the past week, which includes end of November and none of them have moved. I just find it hard to believe a business that is having a hard time selling will not try to work with me to sell their merchandise.

Of course they have probably identified me as a "smart internet buyer" who is fully aware of what these cars are going for and therefore will be less responsive since I'm not a sucker.

The car dealership has already bought and paid for all of the new cars on the lot from the manufacturer.

Without knowing anything about the car dealership business, I'm 99% sure that no dealer ties that much cash into inventory that sits around idly even during brisk times. My guess is that the inventory is financed through a Detroit sub (e.g. Ford Motor Credit). If they are being financed, then there would be a PMSI on the inventory. So if the dealer sells the car below the price owed, the dealer would have to supply the difference; as such, some dealers would rather pay the interest than have a short sale.

After all, there's gonna be a second half recovery.

Yeah, flooring company threw me off.

Thanks for the explanation. I'm gonna watch the inventory and see how fast it is moving....

Fair Economist | Homepage | 12.02.08 - 11:12 pm | #
NYC is *ed, of course, with its primary industry facing catastrophe. But that's specific to NYC, not a general urban problem.

My opinion is that its true of any city, town village anywhere in the world. For US perspective, think Philadelphia and Camden, NJ.
Personal perspective, NYC=Philadelphia in a couple of years.

I love NYC, beautiful location, water etc. Can the future support a concentrated population without the only/main industry Finance. Lets see.
I will be around.

ADP numbers out:

Total Private: MINUS 250k
October (revised) MINUS 179K

Nonfarm Parolls Est. (govt plus private) MINUS 320k

wow. it's worsening much more than people thought