Oh boy, only nine more years to go. And yes sm_landlord you are first because everyone else is on youtube watching "What's Opera Doc" where Krugman is seen trying to control the forces of nature with his magic helmet.
I wonder if other charts could be constructed against different pieces of market history; leading the eye to expect a positive scenario from here out? Has there ever been a crash that lasted this long, that did not continue to get worse before it got better?
Being bearish and wrong at this point would be really discouraging.
"I guess the four of us are the only non-hungover commenters in the CR world?"
--JP
I started and stopped drinking early yesterday. A couple of snifters of good Scotch to toast the new year, five minutes of CNN to watch the ball drop in NY, then I was ready to be to be done with 2008.
Being bearish and wrong at this point would be really discouraging. sm_landlord | 01.01.09 - 10:27 am | # I think the next chapter is alreay written. A New Years raising cash several hundred point drop followed by an historic bear market rally. Then resume the grind. Strangely I don't see much market turmoil from either Obama or the impending bond crash.
Here's to a better 2009! sm_landlord | 01.01.09 - 10:33 am | # Hear, hear. And might I add the hope that the theory that things can't get any worse doesn't get tested.
I helped my daughter with a new years eve party for a dozen 12 and 13 year old boys. I got to wondering about their future while we watched Robby Kneivel jump the volcano at the Mirage in Vegas. Their lives are going to be so different than what we have seen in the last seventy years. And the people I voted for got us here. Boy are they going to be pissed at us when they figure out what we are leaving them.
Everywhere I look, I read or hear BAD NEWs...and 2009 does not sound like it will get any better...Even MSM (60 min) is talking about the 2nd wave of foreclosures...Please, someone give me some reason for hope...
Fired myself as an insurance broker, not producing sufficient income over expenses...Time to look for a real job...god, this is not, I suspect a good time for looking for a new job/career at 60+...
Please, someone give me some reason for hope... Anonymous | 01.01.09 - 10:50 am | #
You need to understand the reason we follow the bad news and even predict it. It isn't the nattering nabobs of negativism listening to themselves, it is people who have refused to drive in the rearview mirror making sure we don't drive off a cliff.
This can not be s good way to start out the new year...
Thousands of stores to disappear in '09
Experts say disastrous holiday sales will force many more merchants into bankruptcy - and ultimately into liquidation.
See all CNNMoney.com RSS FEEDS (close)
By Parija B. Kavilanz, CNNMoney.com senior writer
Last Updated: January 1, 2009: 7:51 AM ET
NEW YORK (CNNMoney.com) -- The ugly sales year that was 2008 will haunt U.S. retailers in 2009, with industry experts warning that disastrous holiday sales will spark a domino effect of store closures and bankruptcy filings.
And, with thousands of fewer stores, the "shop-'til-you-drop" mentality that has characterized American consumerism could be coming to an end.
"There's going to be a massive sea change in the retail landscape," said Nina Kampler, executive vice president with Hilco Real Estate, which advises retailers on their property management.
FFDIC never sleeps. From the article: The investors who control Abigail Adams National Bancorp, the parent company of the troubled Adams National Bank, have decided to merge it with a West Virginia bank that they also control in a deal designed to ensure Adams National can weather the financial crisis.
Yeah right, swallow your own tail and dissappear into the TARP with a pop and whiff of brimstone.
Anyway, FFDIC that Texas Ratio list has my two predictions way up top; Affinity Bank (small) and Security Pacific. What in the world is going on that Security is allowed to contiue to burn what is now inevitably taxpayer money?
Just a reminder ... HGTV carries the Rose Parade live and commercial-free. Unless you were looking forward to more desperate ads from Circuit City, Joseph A. Banks, and Chevy trucks.
"Wow! look at those option arm resets 2-3 years out..."
If we're still in a deflationary environment, those resets will be no big deal. But if the bond bubble bursts, and the Fed's printing of money brings us hyperinflation, and official interest rates are 75%, (i.e., Bolivia in 1985) ouch!
<i>Anonymous(Good) writes: \tHop in. There's room enough in the boat for both of us. Comrade Terry
You got room for me? Which one do we eat first if we drift for too long?</i>
We've figured out a way we can all eat without needing to kill anyone. What we'll do is securitize ourselves into a series of traunches which spreads out the risk that any particular person will be eaten so thinly, and everyone will be so thoroughly hedged, that after we're done with the meal we'll step back and find that we've all actually gained a modest, risk free 3% in calories. This is what the quants have told me, and my investigation into the numbers in this marketing presentation they handed me and the reputable name of my firm leads me to be very confident in this result. Shall we?
It would add a useful perspective to add to these graphs the time line it took to recover to the previous high.
If I remember correctly the dow reached the high it had on 9/3/29 somewhere in the 1952 to 1956 range, or over 20+ years.
I sold most of my stocks in early 2008, though I wish I could say I foresaw this collapse. My real motivation was due to the run-up in prices in emerging markets; I did not view it as sustainable (better to be lucky than smart).
I have been debating when to start moving back into the stock market but I keep thinking about what happened to the Dow in the years following the 1929 crash: almost nothing for a very long time.
Rob, what is all that empty office space ( lots of oak trees) along the south side of 101 near Camarillo?
Question to all; Friends bought in Ventura county in '05 with 20% down and a 5 yr ARM, they plan to stay and pay it off. Choices are now;
-wait till next year, see where their rate goes
-refi ARM now
-Refi 30 yr jumbo fixed now at 6-7%
I voted for wait as their current rate is low and, who knows, maybe treasury will help out those that can afford their mortgage (a little New Year humor)
Finance Minister Baqer Al-Zubaidi has called on Iraqis to reduce spending and save as much as they can.
The minister made the remarks in response to calls to slash public spending and a cabinet proposal to reduce salaries by up to 30%.
The proposal was made by the cabinets Economic Committee and sent to the finance ministry.
Amid high unemployment levels, government-salaried workers are currently almost the only people who can afford a decent living in Iraq.
They include teachers, civil servants, police, army personnel and pensioners.
Zubaidis 2009 budget which he has presented to the parliament was based on high oil prices and expectations that the average rate for a barrel of oil will not be less than 80 U.S. dollars.
But prices have sharply dropped from their highs on international markets and oil is now hovering at 40 U.S. dollars a barrel.
However, Zubaidi said slashing government workers salaries was the last thing for him to consider.
Zubaidi, in the meantime, has called on government departments to revise their budgets and spending in the light of the slump in oil prices which are almost the countrys sole hard cash earner.
KRYTEN: But the entire ship is running on emergency battery power only. With the oxygen recycler and minimal heating and lighting, I estimate that Lister and the Cat have approximately two months left. Without your drain on the power, they might last six. I'm sorry, Sir.
RIMMER: Sorry? Why are you sorry?
KRYTEN: Well, Space Corps Directive 195 clearly states that in an emergency power situation, a hologrammatic crewmember must lay down his life in order that the living crewmembers might survive.
RIMMER: Yes, but Rimmer Directive 271 states just as clearly, "No chance you metal bastard."
CAT: Come on, man, you gotta sacrifice your life! I'm not asking you to do anything *I* wouldn't do!
RIMMER: YOU? You'd sacrifice your life for the good of the crew?
CAT: No, I'd sacrifice YOUR life for the good of the crew.
--White Hole
Eat the real estate brokers first, then mortgage brokers, then financial analysts.
If that diet gets boring feel free to throw in some interior designers, life coaches, make-up artists, and lawyers. Remember not to try to discuss the fact that you are about to eat them with the lawyers. They might object.
Looking at the no. of days from the peak to down-about-50%, all I can say that this is the worst crash since 1929, considering the rate of decline, from peak to down-about-50%. Imagine a straight line from the peak to the down-about-50% point to see what I'm yammering about. Happy new year.
Economists and government officials these days seem to fashionably hold to the notion that the economy is driven by government and by banks. If, on the contrary, you think that the economy is fundamentally driven by business and the banks and government are dependents, then things look quite different. Right now I see a world with tremendous overcapacity in dozens of industries, with no technology drivers for new growth, with dozens more industries that borrowed their future markets back in 2003-2007 and still others that were only profitable in the headiest boom times of recent memory based on credit and equity withdrawal that was not sustainable. I see the 'bailouts' as simple looting by an elite economic class who had bought the US Congress and I see proposed stimulus spending as an attempt to reignite something that should never have been afire in the first place. Worse than all that, I see no recognition of the situation by most economists, who still believe this is a business cycle recession and that there is no such thing as a debt deflation.
Happy New Year to all!
BTW, my real estate knife catching attempt failed - I bid 65k on a lot previously priced at 270k, but the seller wasn't willing to go under 100k. I'll keep the nick, though - #$%@ short ETFs.
Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929
Rob, what is all that empty office space ( lots of oak trees) along the south side of 101 near Camarillo? Question to all; Friends bought in Ventura county in '05 with 20% down and a 5 yr ARM, they plan to stay and pay it off. Choices are now; -wait till next year, see where their rate goes -refi ARM now -Refi 30 yr jumbo fixed now at 6-7% I voted for wait as their current rate is low and, who knows, maybe treasury will help out those that can afford their mortgage (a little New Year humor) Uffish Thought | 01.01.09 - 11:16 am | #
Along the "south side?" I'm not sure where you mean. The north side at the base of the grade perhaps? We've discussed the 101 corridor in VenCo before. Absolute disaster in the making. Ventura, Oxnard and T.O. each have massive auto malls. Ventura's is dying first. Camarillo has useless space to burn. Great locations for escrow, title, insurance, office backroom, etc. You know the stuff we don't need anymore.
Your friends need to look at their situation from a different perspective. Do they have any equity? Will they have any equity in 3 years? They need to compare rent to own and nothing else. I know its hard to see a 20% down ($140k?)evaporate but it is time to move forward. With a few years at a low rate to work with I agree wait to see what bailouts might come. If they aren't protected when rates inevitably explode they can walk then. No need to jump the gun. In the greater picture however it might make sense to stop paying and live for free for a year at least and save the money, really save it and use that a new grub stake.
OT but I couldn't resist commenting on this NYT story about Citi execs foregoing 08 bonuses.
You realize how corrupt the system has become when this becomes news in a year when their acknowledged losses amount to $10 Billion!
Most here are proudly contrarians yet have joined msm in expecting gloom. I too see no good news on the horizon, but always bet against the crowd, the new year won't be so bad.
"Amid high unemployment levels, government-salaried workers are currently almost the only people who can afford a decent living in [the Unified States]."
Family bar business is up here yoy. MrsBSR found it surprisingly busy last night - tips were fine - less drunkenness, rowdiness, & boorishness. Stop by and the first drink's on me - tell Uncle Darrell I sent ya'.
MilkShake is expecting in February, the garden will be twice as large, and the greenhouse will be stacked with seedlings by the time MilkShake calves. Everything is all better now!
Happier New Year! THIS is the year I improve my eating habits
Presenter And now ... Cut to a lifeboat somewhere at sea miles from any land. In the lifeboat are five bedraggled sailors, at the end of their tether. First Sailor Still no sign of land ... How long is it? Second Sailor That's a rather personal question, sir. First Sailor You stupid git. I meant how long we've been in the lifeboat. You've spoilt the atmosphere now. Second Sailor I'm sorry. First Sailor Shut up! We'll have to start again ... Still no sign of land ... how long is it? Second Sailor Thirty-three days, sir. First Sailor Thirty-three days? Second Sailor I don't think we can hold out much longer. I don't think I did spoil the atmosphere. First Sailor Shut up! Second Sailor I'm sorry, I don't think I did. First Sailor Of course you did. Second Sailor (to third Sailor) Do you think I spoilt the atmosphere? Third Sailor Well, I think you ... First Sailor Look, shut up! SHUT UP! ... Still no sign of land ... how long is it? Second Sailor Thirty-three days. Fourth Sailor Have we started again? (he is kicked on the leg by the first sailor) Wagh! First Sailor Still no sign of land ... how long is it? Second Sailor Thirty-three days, sir. First Sailor Thirty-three days? Second Sailor Yes. We can't go hold out much longer, sir. We haven't had any food since the fifth day. Third Sailor We're done for, we're done for! First Sailor Shut up, Maudling. We've just got to keep hoping someone will find us. Fourth Sailor How are you feeling, captain? Fifth Sailor Not too good ... I ... feel ... so weak. Second Sailor We can't hold out much longer. Fifth Sailor Listen ... chaps ... there's one last chance. I'm done for, I've got a gammy leg, I'm going fast, I'll never get through ... but ... some of you might ... so you'd better eat me. First Sailor Eat you, sir? Fifth Sailor Yes. Eat me. Second Sailor Uuuuggghhh! With a gammy leg? Fifth Sailor You don't have to eat the leg, Thompson, there's still plenty of good meat ... look at that arm. Third Sailor It's not just the leg, sir. Fifth Sailor What do you mean? Third Sailor Well, sir ... it's just that ... Fifth Sailor Why don't you want to eat me? Third Sailor I'd rather eat Johnson, sir. (he points at fourth sailor) Second Sailor Oh, so would I, sir. Fifth Sailor I see. Fourth Sailor Well, that's settled then. Everyone eats me. First Sailor Well ... I ... er ... Third Sailor What, sir? First Sailor No, no, you go ahead, I won't ... Fourth Sailor Nonsense, nonsense, sir, you're starving. Tuck in! First Sailor No, no, it's not just that ... Second Sailor What's the matter with Johnson, sir? First Sailor Well, he's not kosher. Third Sailor That depends how we kill him, sir. First Sailor Yes, yes, I see that ... well to be quite frank, I like my meat a little more lean. I'd rather eat Hodges. Second Sailor (cheerfully) Oh well ... all right. Third Sailor No, I'd still prefer Johnson. Fifth Sailor I wish you'd all stop bickering and eat me. Second Sailor Look! I'll tell you what. Why don't those of us who want to, eat Johnson, then you, sir, can eat my leg and then we'll make a stock of the Captain and then after that we can eat the rest of Johnson cold for supper. First Sailor Good thinking, Hodges. Fourth Sailor And we'll finnish off with the peaches. (picks up a tin of peaches) Third Sailor And we can start off with the advocados. (picks up a two advocados) First Sailor Waitress! (a waitress walks in) We've decided now, we're going to have leg of Hodges ... Boos off-screen. Cut to a letter Voice Over Dear Sir, I am glad to hear that your studio audience disapproves of the last skit as strongly as I. As a naval officer I abhor the implication that the Royal Navy is a haven for cannibalism. It is well known that we have the problem relatively under control, and that it is the RAF who now suffer the largest casualties in this area. And what do you think the Argylls ate in Aden. Arabs? Yours etc. Captain B.J. Smethwick in a white wine sauce with shallots, mushrooms and garlic. ANIMATION: various nasty cannibalistic scenes from Terry Gilliam. Cut to man. Man Stop it, stop it. Stop this cannibalism. Let's have a sketch about clean, decent human beings.
What in the world is going on that Security is allowed to contiue to burn what is now inevitably taxpayer money?
Rob Dawg | Homepage | 01.01.09 - 11:05 am
One thing to remember about stock markets is that huge pension funds in western world are going to need funding for retiring baby boomers and that means selling their accumulated stocks more and more in coming years...constant pull to the downside.
It would be very interesting to see someone take the other side. The market seems to want to rally, and my SRS just broke 52-week lows. So someone, someone who knows what they're doing must be upbeat.
supafly,
But don't tell the young'ns! Everyone I know under 35 believes this is a great buying opportunity. Does this mean 401(k) is just another version of a ponzi scheme? We haven't even seen much of the needed sell-off as I believe those retiring now still might be the ones grandfathered into good pensions and social security (and anyone not is still holding onto their 401k and working or trying to work).
Bright news for 2009... even an unemployment rate of 30% means that 70% of folks who want to work can work!
Oh boy, only nine more years to go. And yes sm_landlord you are first because everyone else is on youtube watching "What's Opera Doc" where Krugman is seen trying to control the forces of nature with his magic helmet.
Rob Dawg | Homepage | 01.01.09 - 10:23 am | #
Unfortunately for Krugman, the Misean tinfoil collander has been substituted for the magic helmet...
This can not be s good way to start out the new year...
Thousands of stores to disappear in '09.
Experts say disastrous holiday sales will force many more merchants into bankruptcy - and ultimately into liquidation.
It is all a matter of your perspective. Yes, there will be fewer stores; and yes, consumers will shop less frequently - - However, if you are a general merchandiser and manage to survive, net-net, it's cheaper than buying out your competition - - and you end up with all the customers.
Re: Office space in Camarillo
You're talking about the area that is being built up right now right? Just north of the grade up to TO?
More bright news for 2009... USA is definitely too big to fail to the rest of the world. So they will pour their good money after bad. Think AIG but only on a bigger scale.
Hi guys, I'm new on this board. Met your fellow commentator HARM at a "housing bubble blog" New Year's Eve party last night. He pointed me to Calculated Risk. Looks like a fun group. (Hi, sm_landlord, I think you are from HBB too?)
As to the substance: I bought at the bottom in 1974 (Dow below 600, right, not 6000 but 600). I sold out in 1975 with a 50% profit. I'm not going to say that I never had ANY stocks after that, but they have always since then seemed quite expensive. For example, if we were to adjust that 600 for inflation between 12/74 and now, the Dow should bottom below FOUR thousand this time. Of course I realize the inflation adjustment is not an "appropriate" measure, and yet, and yet...
... or the crowd could be underestimating the extent of the decline.
"It's just a scratch, I'm okay"
"These are good companies caught up in the environment" (I'm sure there are some but is the environment turning around?)"
"Hey honey; why are people leaving the Titanic? This is the safest place to be, even after hitting an iceberg."
Russia's Gazprom cuts all gas supplies to Ukraine
MOSCOW Russia's gas monopoly Gazprom cut all natural gas supplies to Ukraine on Thursday morning after talks broke down over payments for past shipments and a new energy price contract for 2009.
Gazprom officials said the cuts began as planned at 10 a.m. (0700GMT and 2 a.m. EST) and the Ukrainian gas company Naftogaz confirmed a steady drop in supplies. Yahoo! 404 - Page Not Found
Global unrest, civil strife hasn't been factored into any bull/bear predictions I've read and I don't see how we avoid that.
China depending on 7% growth, Russia, Mid-east, S. America depending on $100 oil. However this breaks their will be losers. Protectionist like trade practices put into effect out of necessity, not to punish.
Israel turns Gaza into a ground war, many Arab nations will be faced with a tough decision.
As the resident bartender on CR, I proclaim it to be Bloody Mary time! Happy New Year! Comrade Kristina | 01.01.09 - 11:46 am | # Sheepishly admits to a mimosa. Had some cheap champagne left over. Happy New Year to you and yours.
It would be very interesting to see someone take the other side.
No chance of that but I will note Kunstler has predicted apocalypse steadily year in and year out. It would be interesting to graph his calls for everything from DOW 4,000 to NASCAR tracks that look like the Khmer Rouge visited against reality.
He'll be mighty sore if this isn't The Big One, at last.
Rob, my boss told me to take any of the cheap champagne we didn't give away home with me. Mimosa's sound pretty good being as I didn't drink last night...
The things I get tired of, People calling me negative. Reality is generally negative and I find the downside thinking the answer to moving ahead safely. "Hope" is for when all the hard work and thinking have been exhausted. In all of it I see people like me the bigger optimist if you do the work and thinking!
Work hard and think before you make a move. The best to all on a Happy new Year!
IIRC, total gas imports are around the 60% number, which includes LNG and the various pipes from North Africa - so Ivan is ballpark a quarter of European gas supply, mas o menos...
@ az_lender: Greets, I was also an avid reader and occasional commentator on HBB. I only have time for a few blogs these days, and this one is more general in economics, so I don't frequent back there much. I especially miss Txchik's amusing commentary.
@ therealjg: Denninger talks (types) like a crank, but hits the bulleye quite often.
CAIRO, Egypt -- The Israeli bombing campaign in the Gaza Strip has unleashed outrage across the Middle East _ but the anger is being vented as much against Egypt as it is at Israel.
Protesters have attacked Egyptian embassies, accusing Cairo of helping Israel's longtime blockade of the territory and even giving a green light for the offensive _ a sign of the gulf between an Arab public and some U.S.-allied governments that dislike Gaza's Hamas rulers.
Demonstrators broke into the Egyptian consulate in the Yemeni city of Aden on Tuesday, trashing the interior, throwing computers out windows and burning the Egyptian flag on the roof. More than 500 protesters massed outside Egypt's embassy in Syria, as others did days earlier in Lebanon.
During a demonstration in the Lebanese city of Sidon this week, people chanted slogans denouncing Egyptian President Hosni Mubarak as "a pig" and a "collaborator" with Israel.
Mubarak, whose nation is one of only two Arab states to have peace treaties with Israel, on Tuesday accused his critics of seeking "political profit" from the suffering of Palestinians in Gaza.
His government vehemently denied backing Israel's attack. And the foreign minister, Ahmed Aboul Gheit, announced that Egypt was working with Turkey, which has strong ties with Israel, on an initiative to stop the offensive, restore a truce and open Gaza's borders under international supervision.
Egypt already had angered many Arabs by largely closing its Rafah border crossing into Gaza since the Islamic militants of Hamas violently took over the territory in 2007. Rafah is the sole access to Gaza that does not go through Israel, which has imposed a suffocating economic blockade on the coastal strip.
Story continues below
Embarrassing for Egyptian officials, Mubarak met with Israeli Foreign Minister Tzipi Livni only a day before Israel launched its assault, and the foreign minister _ though he urged Israel to show restraint _ was photographed smiling and shaking hands with her at a news conference.
Tip report? Did you notice any recessionary influence? I didn't see it in the million man party in Times Square (on TV of course), also haven't seen it in ski reports. We're still partying. Unless you saw differently.
Outsider, tips were pretty good but it wasn't nearly as busy as it was last year. Folks showed up maybe an hour before midnight. My tips for the past few months have been down about 20-25% on average.
Not yet JP, have to whip up a batch of Shit on a Shingle for breakfast first to sop up the alcohol. Comrade Kristina | 01.01.09 - 12:03 pm | #
Splurged. Noah's Bagels (almost but not quite real bagels but the kids love 'em). Smoked salmon slices. Low fat Philly cream cheese. What's the point of sitting in Southern California, 72º watching the rosa Parade delude millions into wishing they were here and not taking a few guilty pleasures. Speaking of which, for therealjg, I always rip into Kunstler the Hustler and will post the annual discetion soon. Dow 4000? The end of suburbia again? Peak oil again? Broken Record Jim cannot help himself.
The speculation in '29 was in stocks themselves, through margin. So, a fairly immediate impact is to be expected in stock prices.
Here, the speculation was in leverage for mostly other things. There may ultimately be similar pain, but a pronounced bounce in stock prices may also be in order for at least part of this year. Then the ugly decline continues.
Meanwhile, a longer wavelength deflation in real estate, prices, wages, energy and other commodities should continue, and (duck for cover) even gold should eventually follow them down.
Government aid could save U.S. newspapers, spark debate
Wed Dec 31, 2008 6:50pm EST
By Robert MacMillan - Analysis
NEW YORK (Reuters) - Connecticut lawmaker Frank Nicastro sees saving the local newspaper as his duty. But others think he and his colleagues are setting a worrisome precedent for government involvement in the U.S. press.
From NYT: In regards to bonuses, one employee who identified himself as a third-year vice president said the banks decision was putting its employees in financial extremis and, in some cases, at risk of not making their mortgage payments.
And this guys a vice president of a bank? Pathetic. Counting on your bonus to make your mortgage payment is financial extremis.
Anonymous writes: Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929.
Good post, but I'd take out "At first blush, it would seem." The precariousness of our situation is surely complicated by our new debtor status and the global reach of the financial crisis, but the situation is also complicated by our increased and often indolent population, our reliance on fossil fuels, and our disregard for the possible effects of climate change on agriculture and other aspects of our economy.
I looked at the 1929 -47.9 spot on the graph, looked over at 2008's -51.9 low and then stared at the rises right after those lows. I'm no chartist, but the similarities bother me.
if this is the first thing i do on new years (after coffee)am i really a nerd? robert | 01.01.09 - 12:45 pm | # That's a calculated risk you have to be willing to accept.
Spent the last 3 weeks in Germany. Top news there: the Gaza situation, Gazprom, watermains breaking in the US. The economy, you ask? People are shopping. About as much as last year. People aren't inundated by crazy-making 30 minute shows masquerading as "news" trying to whip the hoi polloi into wild panic so they can be fleeced more submissively. It's a stunning difference, really, to what is going on in the US.
"So 2009 will be a painful year of global recession and further financial stresses, losses, and bankruptcies. Only aggressive, coordinated, and effective policy actions by advanced and emerging-market countries can ensure that the global economy recovers in 2010, rather than entering a more protracted period of economic stagnation."
"It would be very interesting to see someone take the other side."
Maybe... if those views have some substance such as facts, figures, charts or other valid basis for prediction. Most just are based on hope or what happened last time or what 'it always does'. 2008 was a good lesson about the validity of the economics profession and an even better one about the interconnected vested interests that suck up our money. They were very ugly lessons, but unmistakeable.
I expect the market to continue crashing, given that the PE ratio of the S&P 500 (trailing twelve month earnings) is currently at 20, according to the WSJ Market Data Center. Crashes don't end at that kind of valuation level.
On the other hand, it all hinges on whether the Fed can succeed in reflating with their massive money creation campaign. They might drive the price of everything up, and stocks might rise higher than other things. Who knows?
I just don't see them succeeding though. Consumers and businesses are too spooked. They don't want to spend or invest right now. Too scared to lose money. The authorities are ironically partly responsible, because they spooked the heck out of everybody in order to justify the massive bailouts with taxpayer money.
OT: Anecdotal
blonderengel writes:
"Spent the last 3 weeks in Germany. Top news there: the Gaza situation ... It's a stunning difference, really, to what is going on in the US."
Interesting, I had similar experience at party last night chatting with German (husband) American (wife) couple who have migrated back and forth between Germany and US buying and selling businesses. They are most recently back in US. While everyone else talked about the economy, the wife wanted to talk about Palestinians. Its not even on their radar.
Interesting perspective about different business cultures; they believe US is better climate to start and run business (less regs for starting family owned businesses), Americans are better at start-ups (more risk tolerant) while Germans are better business managers.
One of the local/regional chains is pushing back prices for a 90 day window.
I'm still trying to digest this, so to speak. Certainly deflationary but I thought that food prices were sticky downwards.
Their markets tend to be fairly empty of customers and have an older clientele. The only busy store of several in my area is in a poorer urban neighborhood with no nearby competition and a fair number of residents with no transportation of their own. The newer ones are generally sparsely shopped and most that I know go elsewhere for better deals.
But this is the first of any grocery chains putting a price freeze/rollback on that I've heard of.
January 01, 2009
Will Banks and Financial Markets Recover in 2009?
By Nouriel Roubini
As a result, the biggest asset and credit bubble in human history is now going bust, with overall credit losses likely to be close to a staggering $2 trillion. Thus, unless governments rapidly recapitalize financial institutions, the credit crunch will become even more severe as losses mount faster than recapitalization and banks are forced to contract credit and lending.
But the ZEW's assessment of the current economic situation in Germany further worsened in December, the group said. That indicator dropped 14.1 points to minus 64.5 points from minus 50.4 points a month ago.
The economic expectations for the euro zone improved by 7.9 points and now stands at minus 46.1 points. The indicator for the current economic situation in the euro zone worsened, however, dropping 12.3 points from November to minus 71.2 points in December.
The drivers behind the recovery in December should have been the continuing downward trend in energy prices and the increasing likelihood of massive fiscal stimulus packages around the globe. But apart from this, the economic fundamentals for the export world champion (Germany), have deteriorated further," Koch said.
az_lender writes:
"(Hi, sm_landlord, I think you are from HBB too?)"
The very same. Good to see you.
Any ideas about where the Max Income strategy might work this year? I don't see the dollar holding up much longer, but I don't have a candidate country with the implications of reduced trade kicking in. It doesn't seem likely that the mechanical strategy will work this time.
I'm off to clean up my library today, part of my strategy to lighten up for a possible move in a year or two. This will be my year for simplifying and dumping anchors.
From Roubini: Will Banks and Financial Markets Recover.......
But the worst is still ahead of us. In the next few months, the macroeconomic news and earnings/profits reports from around the world will be much worse than expected, putting further downward pressure on prices of risky assets, because equity analysts are still deluding themselves that the economic contraction will be mild and short.
Someone please identify an equity analyst who is currently saying the economic contraction will be mild and short. Therealjg found one source that was positive [posted above].
If we can export our deflation like we exported our inflation, we'll be okay. Although I'm not sure Germany would be willing to cut their prices, and cut their salaries and workforce, so US consumers can drive BMWs.
Black Star Ranch wrote at 12:03 pm
"Sorry for the drunks - I used to be one. So many years wasted. Good luck in '09 - and yes, BTW, you qualify as "nerd"
emtee replies
most of my money i spent on booze, women and gamblin
Tuesday, December 23, 2008
What Is The Level Of Deflation Risk In Germany?
Only one thing is really clear about the Germany economy at the present time, and that is that it is shrinking rapidly. In fact it contracted far more than most analysts and observers expected in the third quarter (although I, for one, was not especially surprised), entering what now appears to be its worst recession in at least 12 years as both exports and domestic spending continue to fall. German gross domestic product in Q3 dropped by a seasonally adjusted 0.5 percent from the second quarter, when it fell by a quarterly 0.4 percent, according to revised data from the Federal Statistics Office. The Germany economy last had a two quarter contraction of this magnitude back in 1996.
And all the signs are that the fourth quarter will be worse than the third one, so the situation may even surpass the 1996 recession.
What's more the 2009 outlook promises to be even worse. The International Monetary Fund are now forecasting outright GDP contractions for the U.S., Japan and the eurozone next year, with Germany's economy expected to shrink by at least 0.8 percent (this as we will see is one of the most optimistic forecasts currently on the table for German GDP next year). The European Commission declared the 15-nation eurozone to be in recession in November, and just over 40 percent of the exports from this highly export dependent economy go to other eurozone nations.
The only positive elements in the Q3 GDP data are to be found in the slight increases in both final household consumption and government expenditure. On a seasonal and calendar-adjusted basis, household consumption expenditure rose by a quarterly 0.3%, while government final consumption expenditure rose 0.8%. Gross fixed capital formation rose slightly (0.1%) due laregly to a sharp uptick in construction over the second quarter (+0.3%, following 3.4% in the second quarter and +5.5% in the first).
In addition there was a large increase in inventories, and inventories contributed a whopping 0.9 percentage points to Q3 growth (see chart below), and without this build-up the contraction would have been much sharper - so watch out since this inventory increase which will more than likely be unwound in the fourth quarter, with considerable downside impact. Imports were up significantly (largely due to the rise in oil prices - oil peaked around $147 a barrel in July), while exports dropped, as a consquence movements in the net trade balance had a negative impact on final GDP.
Capital formation in machinery and equipment (ie investment) was down sharply (0.5%), after increasing for seven quarters in a row. Thus the entire positive impact of domestic consumption and increased inventories was more than offset by a very rapid and sharp deterioration in the net export position. Between July and September exports were down by 0.4% over the previous quarter, whereas imports were up 3.8%. This meant that net exports contributed a whopping minus 1.7 percentage points to q-o-q GDP, and headline German GDP is extraordinarily sensitive to changes in the net trade position (see chart below).
Deteriorating Short Term Outlook
Looking forward into Q4, the signs, as I said, are for deterioration, as can be seen from the fact that (according to the latest flash PMI) German services contracted for the third consecutive month in December, even if the rate of contraction was slightly less than that in November.
Worse still, the contraction in manufacturing accelerated, and sharply so, clocking up its fifth consecutive month of contraction according to the flash estimate. The data released by Markit Economics showed German manufacturing registering its lowest reading for manufacturing since the survey was started in April 1996, with the indicator falling to 33.5, down 2.2 points from the November result and significantly exceeding the 1.3 point decline expected by the analysts. If we break the figures down we find that output tumbled all the way to 29.9 (from 32.3 in November), while new orders slipped 3.3 points to a record low of 25.8. Meanwhile, the employment component reached its worse level in the history of the index, coming in at 40.9 for the month from November's 43.6.
At least your pants weren't down around your ankles and you woke up with Ben and Hank on either side of you.
Mike in Long Island | 01.01.09 - 1:05 pm | #
omg
so thats what that thank you note from the hanky bernanke brothers was all about
Thanks for the tip. I was planning on being lazy and getting a yard or 2 of compost delivered and dumped so I can get the garden going and then I will set up a compost pile to refresh and renew as needed.
mock - sounds like you had a good night. I can't remember the last time I had a night I couldn't remember... 2 kids will do that to you I guess.
How long till you can't get certain goods ? Ones made in China ?: Trade finance is collapsing, said Victor K. Fung, the chairman of the Li & Fung Group, the giant supply chain management company that connects factories in China with retailers in the United States and Europe. Weve got orders we cant ship right now.
Mr. Fung estimates that 10,000 of the 60,000 factories in China owned by Hong Kong interests have closed or will close in the coming months. Other business leaders say the toll may be even higher and that factory closings are an even bigger problem among mainland Chinese businesses because these tend to be smaller and more poorly capitalized than those owned by Hong Kong businesses.http://www.nytimes.com/2009/01/01/business/01exports.html?_r=1&ref=business
I sincerely hope that this is not the best that we can rely upon going foreword...
So 2009 will be a painful year of global recession and further financial stresses, losses, and bankruptcies. Only aggressive, coordinated, and effective policy actions by advanced and emerging-market countries can ensure that the global economy recovers in 2010, rather than entering a more protracted period of economic stagnation.
Nouriel Roubini is Professor of Economics at the Stern School of Business, New York University and Chairman of RGE Monitor (http://www.rgemonitor.com) an economic and financial consultancy.
Haloscan ate my post
Camarillo CRE is actually Newbury (TO?) sorry.
The friends wife won't move, kids in school argument always wins. Down about $200k of funny money, used as a down payment from prior home sale. Can easily afford the mortgage even at 30yr rate.
They plan to stick it out long term, but if they have to sell in 5yrs, they will be toast, bring money to the closing.
I still vote wait and see. No reason to spend money on refi now.
Commodity Boom Turns Bust in 2008 as Worldwide Economy Crumbles
By Pham-Duy Nguyen
Jan. 1 (Bloomberg) -- Commodity prices in 2008 plunged the most in five decades as demand for energy, metals and grains tumbled in the second half because of the recession.
From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002.
Nah, AIG is not collecting the premiums from the state supervised insurance subsidiaries...They would not do that...would they?
Anonymous | 01.01.09 - 11:16 am |
Anonymous, report them to your state's insurance commissioner. Personal lines are supposed to be with "admitted" companies / paper. Admitted means protected by the states' insurance guarantee fund should the insurer go out of business, not have adequate funds to pay claims, etc. Non-admitted / surplus lines means they are not backed up by anything.
The AIG "story" has been that only the "deriviative trading rogues" on the investment side of the business are the only bad part, and that the insurance companies themselves are ok and a profitable.
It seems to me that a company that has been figuratively selling dollar bills for eighty cents (more coverage, cheaper premiums) on the underwriting side to undercut their competitiors for years to get the deals to bring in the cash to the alchemists on the investment side will have a day of reckoning when the alchemist magicians are no longer around, though of course they have the taxpayer suckers now kicking in about $150B to-date.
Let us know how any claims dealings you have with them turn out, too!
Not knowledgeable in the fine points of economics, finance or trading...however I some common sense and can smell a rat from a mile away...and I smell a rat...heck I smell a whole lot of rats...
My best wishes to you all for the new year. We can all use as many of those as we can get.
Sacked out early last night and woke up early. Set the rowing machine up in front of the TV and watched two over-made-up investment bimbos and a guy who looked like he had ulcers talk about market prospects for the New Year. This was ABC.
Ulcer guy told everyone to stay in cash until 2010. The other two gave him the stink eye; one said "it's probably time to start going back in cautiously," and the other declared literally that this was a great time to buy, because "The best time to buy is when there's blood in the streets."
"Unless there's more blood," Ulcer guy said. They just sniffed at him.
Welcome to more of the same for '09, the year of denial.
Haloscan ate my post Camarillo CRE is actually Newbury (TO?) sorry. The friends wife won't move, kids in school argument always wins. Down about $200k of funny money, used as a down payment from prior home sale. Can easily afford the mortgage even at 30yr rate. They plan to stick it out long term, but if they have to sell in 5yrs, they will be toast, bring money to the closing. I still vote wait and see. No reason to spend money on refi now. Uffish Thought | 01.01.09 - 1:31 pm | #
Newbury Park. That makes more sense. Yes, the business model in the area is seriously distorted. I don't know where to begin. The idea of cash flowing there was so last century. It didn't help that Amgen was exerting unsustainable demand on every square foot in the area. Not only too mnay square feet but extremely expensive suare feet. And thank the fantasy planners for some of that.
Regards your friends; stop paying, stay in situ and save like a demon. Just do the math. The Cold Equations is not just a science fiction story. They can reasonably expect to be $200k negative equity should the median merely retrace to 2001. If prices hold for 2 years and start rising at 6% they won't be back at no equity for a dozen years. Stop paying now and they are immediately back to no equity and can save payments for a year. Walk in a year, and I mean literally walk... into a house on the same block, with the same schools and same friends doing the same thing. The rent will be substantially lower and they'll have saved $60,000 over the past year. See? -$200k versus +$60k in a year. No brainer once the emotions are stripped away.
Perhaps the German citizens are not as concerned about their economy because they haven't started bailing yet. No big headlines about companies wanting access to free money, etc.
My favorite hangover medicine for years now is Glaceaus Vitamin Water the "Revive" kind. It's fruit punch flavored and packed with all the B vitamins and Potassium. Works like a charm...Coke bought them out a couple years ago so they're readily available in most stores now.
From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002.
lostcontrol... | 01.01.09 - 1:34 pm | #
and gold is once again knocking on the door of the $900 neighborhood
Times are tough all over, even Chief Justice of the SCOTUS is having a hard time with "inflation"...
Chief Justice John Roberts said Wednesday that Congress should be as generous to judges as it already has been to itself, by approving an inflation-related increase in their pay.
"I must renew the judiciary's modest petition: Simply provide cost-of-living increases that have been unfairly denied," Roberts said in his annual year-end report on the federal judiciary.
...
Federal trial judges are paid $169,300 a year. Appellate judges make more, ranging up to Roberts' salary of $217,400. The salaries pale in comparison to what top lawyers earn in private practice.
Federal trial judges are paid $169,300 a year. Appellate judges make more, ranging up to Roberts' salary of $217,400. The salaries pale in comparison to what top lawyers earn in private practice. Comrade Kristina | 01.01.09 - 2:01 pm | # Classic misdirection. It isn't that judges are overpaid.
Yes, lots of water afterward - though you will have to discharge it frequently, which will make for a restless night - and vitamin C in some form. It has worked for me, anyway, though I haven't drunk much for many years.
Also, eat while you drink, especially protein in some form - meat or fish. It will slow the absorption of alcohol into the bloodstream. Avoid if possible sweet carbonated alcoholic drinks, which do the opposite. Champagne goes straight and swiftly from the stomach to the brain.
Do not drink on an empty stomach.
Best of all, drink moderately, know your limit, and have a sober person drive you home.
If the amount of alcohol you drink makes you sick, what's the point of it?
Rob, I just have a hard time feeling much sympathy for someone that makes roughly six times what my husband and I make COMBINED. If I can get by, so can he...If not, he can always quit and find a new job, right?
Interesting overview article on the collapse of nearly all asset classes in the past year.
As for the causes, gives equal time to the easy credit explanation, but also to the notion that markets as currently structured are nothing but a vast Ponzi scheme. Strong stuff for the hoi polloi.
Rob, I just have a hard time feeling much sympathy for someone that makes roughly six times what my husband and I make COMBINED. If I can get by, so can he...If not, he can always quit and find a new job, right? Comrade Kristina | 01.01.09 - 2:06 pm | # It's the arrogance of his trying to claim judicial salary has any corellation with the total compensation package for a member of the SCOTUS.
"Perhaps the German citizens are not as concerned about their economy because they haven't started bailing yet. No big headlines about companies wanting access to free money, etc."
Actually, Germans are quite concerned, but unlike Americans, they don't worry about losing health care with their job, generally have more than adequate savings for months after the unemployment insurance (pays around 64% of your net income for a year, I believe) runs out, don't really use credit in general (the German consumer economy, in noted contrast to the American one, does not really run on debt).
But Germans are generally not panicking, and in part, it well may be due to either ignorance or a certain belief it can't happen here. (Which may be at least better justified than in the U.S. or the UK.)
Germans, broadly speaking, simply do not believe that their society will break down, unlike so many American posters here. That difference is truly noticeable, and one that will likely make a large difference in the future. Of course, many Germans only need to walk or bicycle to a local farmer to buy food if things turn really bad, which may be a source of confidence. The same applies to the local and well managed forests for heat, or the clean water supplies, or functioning public transportation, or doctors in walking distance, or local bakeries with local bakers, or....
Another non-hangover guy here. 16 years in a row...
It never occurred to me before, but after reading that Denninger article, isn't drinking just borrowing future production for current consumption? I guess Bush was more accurate than I thought when he said "Wall St. got drunk."
As for Kunstler, what's "funny" about him is that you can tell he wants TEOTWAWKI more than a kid wants candy.
Me, I liked being a bull (back in the 90's) much better than being a "bear". It was a lot less stressful and more fun. But I don't really consider myself a bear or a gloom and doomer - I think of myself as a realist. What's the most likely course of events in the next year, how do I best prepare/deal with them.
OT: Bringing CR up in Firefox 3.0.5 brings up a blank page for me. IE works. Adblock was off. Wasn't like this yesterday and I didn't change anything. Posting to see if I am the only one.
incazzata writes: And this guys a vice president of a bank? Pathetic. Counting on your bonus to make your mortgage payment is financial extremis.
Bank VPs are like associates at WalMart, dime a dozen. I once worked in the mail room of the largest bank in Minneapolis. Half the employees were VPs of something or another. When I started I asked for $5.00 per hour. They refused because the long time VP of the mail room was only making $4.80. I settled for $4.60.
OK, here is an argument for being a little bit bullish: Over at dshort.com where CR the graphs for this post, there is a long-term trend regression graph of the S&P with the prices adjusted for inflation per the ShadowStats numbers. By this measure, the S&P is at or near a trough.
This sort of resonates with me, as it looks like what the part that I have lived through felt like.
But sure, just walk away - it is the exurban motto for all of life's little problems.
rent_to_own
Being underwater $200k+ is not a little problem. I'd walk away from that pig too, after I lived there as long as I could w/o paying one dime. Call me Citi, GM, Cerberus, AIG. Just don't call me for your mortgage payment
Russell 2000 Statistics Note the 12.37 earnings multiple EXCLUDES companies with negative or no earnings.
Yes, and the EPS of the Russell 2000 over the next five years is projected at 13.76% per year.
And the odds of that happening are...about zero.
Can you see that P/E ratios based on forward earnings estimates or ex-negative earnings (or both) have become an exercise in fiction?
They are worth less than nothing.
It's never been harder for small public U.S. companies to turn a profit, let alone grow earnings.
That situation is not likely to change much over the next five years, either.
I am shorting Russell 2000 now with EUM (single short). At some point in the first half of 2009, I'll turn some or all of those EUMs into TWMs (double shorts).
EUM and TWM were two of my best investments in 2008. They did about equally well.
rich writes;
"It's never been harder for small public U.S. companies to turn a profit, let alone grow earnings."
Just the cost of "being public" is something between one and two million per year, so really small public companies are especially difficult.
"I am shorting Russell 2000 now with EUM (single short). At some point in the first half of 2009, I'll turn some or all of those EUMs into TWMs (double shorts)."
By shorting that index, you need most "small" public companies to tank, accounting for survivorship bias in the index. That would make for a very bad year in 2009, with employment numbers very very bad. Nothing personal, but I hope you're wrong. The economy will be a complete mess if you're right.
rich, what are your decision variables for converting from short to double short? There may be a bump (short term rally) in that road (a question not a statement)
Being underwater $200k+ is not a little problem. I'd walk away from that pig too, after I lived there as long as I could w/o paying one dime. Call me Citi, GM, Cerberus, AIG. Just don't call me for your mortgage payment Anonymous | 01.01.09 - 2:42 pm | # We've been taught by example that acting responsibly will be punished. Their housing option has expired worthless. Time to do something other than continuing to purchase deep out of the money positions month after month in the hopes the market turns.
I have this belief that the companies most likely to get crushed by tightening credit are small caps - lots of times these were companies that couldn't cash flow in the absence of cheap and easy credit. I don't see credit getting cheap and easy anytime soon for many companies.
I don't have an absolute target in mind other than I expect the Russell 2000 to lose another 10 to 15% in value without too much trouble.
We've been taught by example that acting responsibly will be punished. Their housing option has expired worthless. Time to do something other than continuing to purchase deep out of the money positions month after month in the hopes the market turns.
The goal here is to ensure that the markets are so fucked up that only those benefitting from government largesse are able to stay solvent. This way the government owns and directs the vital parts of the economy without needing to control them outright. What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime.
The Issues that Concern the Arab Citizen and "Their Issues"
Mohammad Salah Al-Hayat - 28/12/08//
Conditions are getting worse in the Arab world. They are experiencing no significant change, to the point where the Arab citizen only expects the worst. The Arab citizen no longer dreams that the crisis will be solved, or that the problems will come to an end. Prior to the US invasion of Iraq, some Arabs were promoting frustration, arguing that the situation in this Arab country had reached its worst point ever. Then came the US invasion and occupation, and brought something even worse; conditions there today speak for themselves.
The same impressions hold for the Palestinian issue. Before the Hamas Movement took over the Gaza Strip in June 2006, things were very bad. Israeli incursions were taking place more frequently...
Thus, an Arab citizen who is interested in the issues facing his nation can only expect the worst, and he has arrived at this awareness without politicians. He has become interested in his situation, life and livelihood without bothering to pay attention to the "luxury" of politics, even if politics affects his problems or lifestyle. The saying "Let me live today and kill me tomorrow" has become a type of folk wisdom that the Arab citizen tries to put into practice. This is because his "tomorrow," while not being unknown, will certainly bring more disasters and insoluble crises.
We cannot separate between what is taking place in the Arab political arena and what is taking place in specific Arab countries, with very few exceptions. The Arab citizen is no longer concerned with politics after seeing that politicians always act in the interest of certain groups, while the average citizen reaps no benefit. If such benefits are achieved, they are imperceptible and usually take place for the sake of a media "show." The Arab citizen has given up following this show because he is convinced that his issues are not "their issues." He has come to realize that he must solve his problems by himself without relying on politicians, because they have caused the nation's problems and do not solve them. Politicians have come to talk of reforming the situation but have ended up compounding these problems even further. So how can they now solve a problem for the Arab citizen and help him overcome the current predicaments? Thus, there has been a split between the Arab citizen and the elite, whether this elite is among the ruling group or the opposition. As a result, a citizen can only live for today, since he has lost hope that others will provide him with a secure, normal life for his Arab nation as a whole. He has chosen to live today, even if death comes tomorrow.
Kidbuck, I agree with you that most retail jobs are crap, but they ARE jobs. I sell high end furniture and during the housing boom i made 50k per year as a newbie. The designers with experience made 80k+ I finished 2008 with less than half of my former earnings. The aspirational rich are not buying now. There are very few jobs in our small city, even Nurses have been laid off. I expect to be unemployed by June. I guess I'll hang out with my unemployed master degree holding friends waiting for Obama to put us to work building infrastructure.
The FED built a makeshift dam in the market flood. It held back the rush...but for just a little while. Water is seeping from all the cracks and between the stones. There will be a continuous flow from said dam for some time to come. Don't bet on any improvements for 09'. The bright side is that most got used to feeling overly rich sitting atop the bubble inflated asset classes...now we all will equally get used to feeling poorer. Things will improve once all adjust to the new paradigm of poverty. Then, we may just all feel average. Happy New Year!
I have yet to hear from anyone why I should not take my investments and turn them into cash and stick them in my mattress or bury them in a can in the back yard (20'x 10')
As a newbe, I have no idea whats going on and reuse to pretend that I do...
One afraid chicken who knows that he is a chicken, and refuses to lose all his savings/retirement funds...
I pointed this out the last time this graph was put up...
The current bear market's "days since peak" (blue) line is wrong. It should be extended another 83 days to the right. It's actually further along in days than the graph makes it appear. Just a technical note.
More bright news for 2009... USA is definitely too big to fail to the rest of the world. So they will pour their good money after bad. Think AIG but only on a bigger scale. YLSP | 01.01.09 - 11:45 am | #
i know there has always been a guy on the corner with the "end is nigh" sandwich board- but did previous collapses have their doomers? were there any in rome, egypt, mayan mexico, etc. who saw the end coming and left any record?
Russia-Ukraine, Afghanistan likely to be two large maelstroms in the coming year. Pavel Chichikov | 01.01.09 - 1:47 pm | #
Don't forget Pakistan. It is NATO's main overland supply route to Afganistan. It should become even more important if Europe weighs in on Ukraine's side on the commercial dispute with Russia.
What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime. Hoopajoops, LTD | Homepage | 01.01.09 - 3:07 pm | #
"...finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime."
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
sm_landlord - even if we're at the bottom of the excursion against the slope of the second trendline, the chart argues that we could easily see underperformance now for a couple of decades to come. Not a happy thought.
bearly writes:
"I'm of the opinion that we have been importing deflation rather than exporting inflation over the past decade. Some of each maybe."
Yeah, the imports have been deflationary, unless you think Chinese imported goods have been pushing up the price level.
The economic theory behind is that by sourcing imports, you are adding in external capacity on top of domestic capacity. This creates excess capacity, pushing down inflation.
On the export side, by consuming a large portion of raw materials (oil in particular), the U.S. has been raising inflationary pressures elsewhere. But the big growth has been in the developing markets, so the U.S. has not been increasing its importance in that regard.
There is also the fact that many countries pag to the USD, which means they have inherited a too easy interest rate policy for their domestic economies. But that was ultimately the decision by foreign policymakers, not the U.S. ones.
lostcontrol...(Unrated) writes: I have yet to hear from anyone why I should not take my investments and turn them into cash and stick them in my mattress or bury them in a can in the back yard (20'x 10')
Inflation will get to your pile of money, even if you bury it deep and safe. It's kind of like that old joke, where a man creates the perfectly sealed room with no cracks or chinks where death might come in to take him, only to asphyxiate himself. Inflation is the death of money, and there's no seal that keeps it away.
Isn't this where we are now?
Things could be worse. You might need to bribe a local official for a building permit as in Russia, or an import permit or machine allotment as in China. Disney doesn't come and murder your family if you outcompete it... yet.
were there any in rome, egypt, mayan mexico, etc. who saw the end coming and left any record?
The peasants saw and understood, which is why they scattered to the four winds. Nobody listened to what peasants had to say then (and they never wrote it down) and no one listens to the peasants today. Thus was it ever so.
jeff writes:
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
jeff | 01.01.09 - 3:52 pm | #
You might need to bribe a local official for a building permit as in Russia, or an import permit or machine allotment as in China.
By the way, these kinds of effects happen where the real economy has irretrievably unhinged from the paper economy. Where the only way to "get things done" is to operate outside of the legitimate mechanisms that have been set up by the government. The government digs channels to direct and manage flows of capital and economic development which are unhinged from the actual market and thus totally bypassed by gray and black markets, which in contrast are in fidelity with the real economy. The government then becomes trapped; it must continue to dig useless ditches and channels of regulation far away from the real currents of commerce because to do otherwise would be to admit its failure and undermine its legitimacy.
But sure, just walk away - it is the exurban motto for all of life's little problems.
And before that, it was the suburban model for urban problems.
As students of the board are all too aware, there are many situations in which there are no good answers. If you're underwater by 200k in your house, and everyone else who ever touched your mortgage either got paid and kept the money or, when they lost money in similar circumstances, socialized their losses, what exactly is the point of your continuing to pay?
I will argue that the mortgage contract represents the entire contract between the parties. If the borrower doesn't pay, the lender gets the house, the right to report the borrower's default to the Credit Bureaus, and (in recourse states) the opton to sue for any shortfalls. That's it. There's no extra punishment of the stocks, scarlet letters or debtor's prisons. There used to be, but previous generations got rid of them. So if the borrower is willing to face those consequences, why shouldn't he?
One of the things which made America grow as fast as it has is an entrepreneurial culture fostered by comparatively lenient bankruptcy laws. I don't hear people say of failed business owners, if they kept some of their assets, that they were immoral and should be living in a barrel. What, exactly, is different about homeowners? That they were too dumb to incorporate and not offer presonal guarantees? Not too big to fail?
If you sentence people like these to lives of comparative penury, you virtually guarantee that none among them will start businesses which grow and create employment. They will remain wage slaves, tied to their current geographic location by an underwater house for a decade, at which time they'll likely be tied to their current job by pre-existing medical conditions. Isn't that precisely the inflexible labor market behaviour Americans ridicule when they speak of "Old Europe"?
I see a real estate bullrun coming up beginning this spring. txchick57 | 01.01.09 - 4:11 pm | # Is that bullrun as in "stampede" or as in Civil War battlefield? Or, is this a distinction without a difference?
"On the other hand, it all hinges on whether the Fed can succeed in reflating with their massive money creation campaign."
The thing I see about that is simple: you need wage or income increases or the idea will not work. We had higher incomes 2 years ago because we borrowed the future to supplement the present. That means we cannot go back to those price and turnover numbers now. So, if some of that 'massive money creation' ends up in the pockets of tens of millions of people, we might reflate. If it does not, we don't.
"Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium."
Charles Biderman, chief executive of TrimTabs Investment Research in Sausalito, has a different explanation.
He says that from the market's bottom in 2003 until its peak in 2007, the market value of all publicly traded stocks worldwide grew from about $20 trillion to $45 trillion.
During this period, only about $1.5 trillion in cash went into the market. Debt accounted for some of the remaining increase in market capitalization, but most of it existed only on paper.
Not related
"Market cap and money aren't necessarily related," he says.
Suppose a company has 1 million shares of stock priced at $100 each, giving it a market value of $100 million. Over the next few days, someone buys $5 million worth of stock. Speculation drives the share price to $140, and suddenly, the company has a market value of $140 million.
In this case, a $5 million investment has created a $40 million increase in market value.
Is the company really worth $140 million? Not if everyone tried to sell their stock at once. The first person might get $140, but everyone else would get less, probably much less.
"It's not any different than a Ponzi scheme, a legal one," Biderman says.
"What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime."
What has always happened before is turmoil, failure to meet internal and external challenges, disorder and anarchy, the end of a dynasty, the beginning of a new order. (See Arnold Toynbee, if anyone reads him any more).
In the present, contemporary case, there are possibilities of freezing the social dispensation in place through technical means. Orwell ( Eric Blair ) and Aldous Huxley expressed this possibility. They were prophets of a secular kind.
Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929 Anonymous | 01.01.09 - 11:27 am | #
I am getting more and more uncomfortable with these statements. The U.S. is still the third largest exporter and was the largest as late as 2004 AFIK.
The U.S. is also was also by far the largest manufacturing country with China trying to catch up.
As to creditor nation that is true. However, what I found quite interesting is that the U.S. ran a consistent trade deficit from 1929 through at least 1942 (see table at the end). Now foreign investments may have made a difference in favor of the current account however but the balance of trade was also negative at that time. I was actually surprised by this when I found out.
IMO too many commentators make these statements without checking the facts and really analyzing what actually is different between now and then. I doesn't look quite as simply to me at least.
Pavel: Please provide a clearer definition of "freezing the social dispensation in place by technical means". Do you mean "put something in the water"...? Soma?
I believe Pavel was referring to the process of breeding genetic clones designed to occupy certain social strata. Alphas rulers, Betas administrators, Gammas laborers, etc. It's a technical means of freezing a hierarchy and enforcing a caste system, and a way of critiquing our dynastic power transfer system here in america.
In case you hadn't read it, Brave New World by Huxley describes a future wherein all humans are bred as genetic clones destined to occupy a certain social role.
First know if your bank(s) or credit unions are FDIC/NCUA insured or not. Over the past 3 months, another 60 banks have lost their FDIC status. If not, get your money and close the account ASAP as it is a sign that the FDIC probably refused to insure it. If yes, you can read the FDIC rules here, the NCUA rules here, and see if any of the exceptions or limits apply to your family.
Second, consider moving your money to multiple banks or credit unions in the event one would fail. This is called diversification of risk. At any bank, you can request their financial statement and check out the status of their loans and deposits. You can check the financial statement of all federal credit unions here. In general, credit unions will be safer than larger banks, mainly since its loans are limited to only the union members, but please be careful. Large banks like Bank of America, Wells Fargo, Citibank, Wachovia, etc. loan out to a wide range of borrowers (both individual and commercial), which are subject to failure due to the housing crisis.
Third, withdraw enough currency to cover expenses for AT LEAST 6 months. This is roughly the time necessary to make it through the winter, and survive any financial system fallout. I also urge you to decide for yourself whether just removing it ALL is prudent and necessary. My reasoning for this is that even if all of your money is "deposit insured," if the bank fails, there is no guarantee you will get your money immediately. It may take months. If you decide to do this, it is best to also request small bills ($20 or smaller) as if a crisis develops larger denominations some vendors may have issues with handling $50 or $100 bills. Instead of paper money, I advise taking out nickels as the worth of the metal (75% copper and 25% nickel) is worth pretty close to face value, where the paper money has no intrinsic value. It's also fairly amusing and trust me, it will take a thief quite a while to lug out several thousand dollars in nickels.
Educate yourself and others on economics and that once-boring subject of monetary policy. For what is coming, the most up-to-date thinking on an inflationary outcome is here from Eric Janszen of iTulip. Mish Shedlock, a well-respected analyst and economist, supports a temporary but severe deflationary outcome. I want to add that both gentlemen are well aware of, but do not chose not to address in their latest pieces, the monetary role of gold in their articles. That, I fear, is a mistake, so I recommend checking out GATA's work on manipulation of the gold market, and Dr. Antal Fekete's views here. My personal outlook is a bit of a combination; in short, an inflationary tsunami on the way with deflationary riptides. Quite possibly hyperinflation as well, as I surmised here "Calling All Wheelbarrows: Hyperinflation in America? (Part 2/2)".
Try reading my Money Matrix series below. Decide for yourself what to do to protect your family's financial well-being. I also highly recommend the well-informed monetary policy articles from fellow Nolan Chart columnist Republicae. They take a little while to absorb and sometimes make my head hurt though
Take a solid look at changing your cash into physical gold and also silver. Some people will tell you this will make you rich as well; for gold I do not necessarily agree, but the idea is to survive and maintain purchasing power in case hyperinflation occurs. Most of the alarmists recommend holding 25-50% of your savings in gold. I also recommend holding physical silver, preferably in the form of "junk" silver or American Silver Eagles. Please do what you like after researching, but in my humble opinion holding none or
"CNN is running story on a one ton bomb on a apartment building to take out one guy.
I weep for our world,
tg is a born & bred dope in a | 01.01.09 - 3:10 pm | #:
TJ,
The apartment was notified as was the Hamas leader, prior to the bomb drop. He decided to stay. He died. You on the other hand are a self admitted born and bred dope.
You will wise up - when the guys you weep for plant bombs and aim missiles at you. Being that you are a an admitted born and bread dope, you should rent "Body of Lies" w Leonardo DiCaprio - its got Hollywood improbabilities all through it , but the muslim politics is spot on. I recommend it to you because it's at your level.
It's been so long since I've read it...I forgot. I'm old. Hub is reading aloud a little quote from Tainter (he loves to do this). The Roman citizens looked forward to the barbarian invasion in hopes it would relieve them from onerous taxes. Taxes were so bad they couldn't farm, live, etc. So, we have something to look forward to yet.
What exactly is the problem with walking away from a house on which you are under water by 200K? The difference between holding on to that house and renting the one next door is probably at least $500/month. That is cash that can be spent on so many things that are fundamentally more important than making good on a business arrangement between you and a bank.
Don't forget Pakistan. It is NATO's main overland supply route to Afganistan. It should become even more important if Europe weighs in on Ukraine's side on the commercial dispute with Russia.
NorkaWest | 01.01.09 - 3:41 pm | #
Pakistan closes US supply route into Afghanistan
Tue Dec 30, 2:51 pm ET
PESHAWAR, Pakistan Pakistan closed the main route used to ferry supplies to U.S. and allied troops in Afghanistan on Tuesday after launching a fresh offensive against militants in the area. While the length of the closure isn't clear, the U.S. already has started looking for supply line alternatives as it prepares to almost double its number of soldiers in Afghanistan next year. Yahoo! 404 - Page Not Found
Now we get TAXED to ensure we cannot rise to a higher place in the current caste system. America....the best days are behind ya' baby!
Money Man | 01.01.09 - 4:51 pm | #-------------------------------------------
Neocon rhetoric...Tax rates have been falling big time for the rich and look at the mess we are in now.
It is a common spectacle in these days of dissolution: zionists pretending to be true-blue Americans while promoting murder and genocide of goyim for the benefit and delight of Israel.
People aren't inundated by crazy-making 30 minute shows masquerading as "news" trying to whip the hoi polloi into wild panic so they can be fleeced more submissively. It's a stunning difference, really, to what is going on in the US. blonderengel | 01.01.09 - 12:54 pm | #
You might want to check out that most economic events that start in the U.S. hit Europe with a delay of 2 the 4 quarters. Europe will be hit just as hard as the U.S. The severity of this downturn has very little to do with consumer optimism.
The difference between holding on to that house and renting the one next door is probably at least $500/month. Ponyless in NJ | 01.01.09 - 4:59 pm | # In the area we are discussing it more like $1500/mo. craigslist | Page Not Found
Side note: this is like old home day from HBB circa Feb '07.
Money Man(Unrated) writes:
Now we get TAXED to ensure we cannot rise to a higher place in the current caste system. America....the best days are behind ya' baby!
I agree. Let's stop taxing the poor and middle class so much and start taxing the rich more, so that it's easier to accumulate wealth if you're at the lower social strata but harder to hold on to it (except through excellent management) if you're at the higher social strata.
What's that? You were about to say something about trickling down? You don't really believe that, do you?
" jeff writes:
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
jeff | 01.01.09 - 3:52 pm | # "
Augustine knew it was coming because "it" was invading Germans who'd taken Italy and were slowly heading his way; he lived in Africa province. We haven't anything that dire yet -- unless all the ice slides off Greenland in the near future.
As for how Romans felt about the fall; Augustine and his crowd down Africa way were in one of the richest parts of the empire, where discontent among the masses wasn't so high. (The Eastern Empire, even richer, didn't fall at all -- not for 1000 years, anyway.)
But the average folks up in Italy, Gaul, Spain -- they had nothing from Roman but crushing taxes and compulsory military service, which at that point was considered close to a death sentence.
unhappyCakeEater writes: "i know there has always been a guy on the corner with the "end is nigh" sandwich board- but did previous collapses have their doomers?:
Juvenal (satirist of ancient Rome): "For when was Vice more rampant? When did the maw of Avarice gape wider? When was gambling so reckless? Men come not now with purses to the hazard of the gaming table, but with a treasure-chest beside them. Is it a simple form of madness to lose a hundred thousand sesterces, and not have a shirt to give to a shivering slave? Which of our grandfathers built such numbers of villas, or dined by himself off seven courses? ... For no deity is held in such reverence amongst us as Wealth; though as yet, O baneful money, thou hast no temple of thine own; not yet have we reared altars to Money in like manner as we worship Peace and Honour, Victory and Virtue..."
Have any of you wondered why we don't replace the central bank mechanisms for driving inflation via the discount window with a more equitable system which introduces money into the system via the poor and middle class? Why print money for the benefit of bankers who will earn their dollars not through labor or legitimate economic enterprise, but by virtue of having (and then lending) dollars? These people do not add anything; they are the modern economic equivalent of the lazy feudal landlord, the person who does nothing but collect income by virtue of his placement in the hierarchy of ownership. Why not print the money and hand it to the little guys; that way the people needing to dance and shift and earn money in order to avoid the depredations of inflation are at the top of the pyramid rather than at the bottom. Trickle up tapdancing.
Israel is taking advantage of Bush's last 20 days knowing he will give them cover. Israel PM is a criminal, Tipzi wants his job as does Netanayhu. Tipzi's trying to show Israelis she's got big balls by bombing Palestine. A political power play
What's that? You were about to say something about trickling down? You don't really believe that, do you? Hoopajoops, LTD | Homepage | 01.01.09 - 5:07 pm | #
Sadly like all flawed oversimplifications this too has basis in fact. Giving more money (taking less) to the lower castes encourages consumption. Taking less from the upper strata encourages investment. More consumption is not exactly what we need now is it?
Israel is taking advantage of Bush's last 20 days knowing he will give them cover. Israel PM is a criminal, Tipzi wants his job as does Netanayhu. Tipzi's trying to show Israelis she's got big balls by bombing Palestine. A political power play
Ignore the Israelis and the Palestinians and their stupid, endless war. Pay attention to your own back yard. Children in America are hungry. Your poor labor for simple subsistence. The able among you are taxed for their aspirations and their productivity is crushed by student debt. Your health system is a shambles. Your elderly fear that they may be forced to pick through garbage in their years of infirmity. Your courts do not dispense justice. Your leaders are criminals. Your people are disillusioned. And still you worry about a stupid feud halfway across the world that does nothing to you? I'll bet you can't name the cabinet our president-elect has appointed, that you know nothing about the majority of these choices, that you cannot name your representative, that you've never contacted them, that you don't know most of your neighbors, that you don't know the fine print on the loan on your house, I'll bet you don't know where the money you deposit in the bank goes when you're not using it, you don't know what the money in your pocket is or represents, you know nearly nothing about the institution backing it, you know nothing about what you eat, the air you breathe, the world you leave your children. Maybe it's better to be distracted, to settle your gaze on the middle distance of the middle east, than to come to the shocking realization that you are no longer sovereign over your own life, that the world around you is rife with problems you can never know let alone solve, that the number of thieves plundering your wealth and the wealth of your children are countless, and that the ultimate labors of your life and the fruits arising therefrom will be taken and enjoyed by the greedy hands of others who hold you in contempt.
Rob Dawg writes:
Taking less from the upper strata encourages investment.
Investment... That's where you take money you have and instead of using it for consumption, you loan it to someone else who does something with it, and then you earn the right to take a piece of that other person's labor via interest payments?
Does this bear a similarity to feudal landlords, who earn wealth by virtue of having it, through the productivity of others?
Does it strike you that there might be a little too much "investing" going on in the upper strata of america, who really seem to operate on some sort of inter-generational auto-pilot as they effortlessly collect returns on their wealth?
What's that? You were about to say something about trickling down? You don't really believe that, do you?
Hoopajoops, LTD | Homepage | 01.01.09 - 5:07 pm | #
Calling it being pissed on would just be too obvious. Although we've also seen the results of a "bubble-up" economy. I wish I could disagree with your earlier post about the disconnection between the speculative "financial economy" and the real industrial economy... unfortunately I can't. And studied just enough history in college, including a course on the Roman Empire, that for the past several years, try as I might, I cannot stop finding parallels.
Outta loop for several days. Been working in Pasadena setting up merchandise for sale for the out of towners (Penn State folk), before the parade and football game.
Colorado Ave has SEVERAL boarded up storefronts - Linens n things, etc.
However, booth sales were brisk both on the Ave and by the bowl. Seems the 170 or so buses stuffed full of people still wanted paraphernalia (not the CSC kind, though).
Lots of stores looking kind of grim, though - small merchandise counts, discount signs, and desperate looking vendors.
Hoopajoops, alas, what may seem as a distraction in a faraway land is at the crux of US foreign entaglements and internal decay.
Please note that according to J. J. Goldberg (the current editor of the Forward) in his book Jewish Power he boasts that 45% of the fundraising for the Democratic party and 25% of the funding for the Republican party come from Jewish funded Political Action Committees. Richard Cohen of the Washington Post has recently updated this data to read 60% for democrats and 35% for republicans fundraising come from Jewish funded Political Action Committees.
The problem is discipline on all levels. Rich to poor. I favor trickle down and the bottom and middle class flat gave it away to the Banksters and Wall Street by buying stuff they flat did not earn yet.
I really think all wages should be taxed from ages of 16 to 65 no matter how little you make. Now is this not the reality of fair?
did some quick research on gold. all the gold ever mined amounts to about 7.5 ounces of gold per person living today. the data i'm using is probably inaccurate and my math is probably wrong but that is not going to stop me from getting my share.
anyone else have another number? not like this number is all that relevant anyways giving the massive differences in wealth across continents/countries/etc... but this seems like a fun new years resolution.
goal: to accumulate 7.5 oz of shiny, useless, ridiculously expensive metal per member of my immediate family.
The last thing someone should do is walk away from a recourse loan if they have capacity to pay.
It sure seems easy to lick a stamp and drop the keys in the mail but one day a judgement deficiency may soon arriuve in the same mail.
And then what?
You pay, that's what. Trying to BK out will not be an option to many walk-a-aways as their BK's will be dismissed in court due to their ability ot pay. Even if one is planning on leaving the U.S. for good, many countries allow international judgements to be enforced.
I suggest you do a lot more thinking and a lot less talking.
It sure seems easy to lick a stamp and drop the keys in the mail but one day a judgement deficiency may soon arriuve in the same mail.
And then what?
It gets returned to sender because you don't live there any more, and so many other people are taking similar action that it is impossible to pursue recourse against all of them, and furthermore the actual ownership of the loan is so obfuscated and parcelled out to various interests that no single one wishes to exert the effort required to ascertain actual ownership let alone undertake the expense of chasing down a few hundred thousand dollars?
They are decendants of the same father, and were both promised a nation by God. The Old Testament is the historical account of their history...as it is for Christians.
o atheist in foxholes...
lostcontrol... | 01.01.09 - 1:14 pm | #
Sort of a BS libelious statement, aside from having no relavence to the discussion. If you want a factual statement, try "no Quakers in Foxholes" or "No Jain's in Foxholes". As for Atheists, just how many of the Red Army died in WWII? Try more than the US, GB, Canada, Australia and France combined, some of them might have been closet orthodox, but an awful lot of them must have been atheists.
"the expense of chasing down a few hundred thousand?"
Show me a recourse loan I can purchase for 10k on 200k. If the debtor is a graduate-degreed professional with a wife and kid, no other debt and has no health problems being at a relatively young age, I will BUY that note.
And so will many other investors.
You guys talk like it's so easy because you're on the other side of the trade.
If you're a doctor and owe 200k on a recourse, you OWE it.
Walk away. Bring this corrupt, criminal enterprise of a nation to it's bloody knees:
These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.
In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.
Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.
Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
Nevada - note that the lender CAN get a deficiency judgment (See below)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington
West Virginia
These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:
Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming
I predicted this in 2006 based on rates of change in traffic at Google, Yahoo, etc.
I've been wondering if the microsoft layoff rumors of 17% are likely. MSN traffic is down something like 20% in the past year and if anyone at Microsoft is tracking the Internet inflection point, they'll know what that means for future growth.
Show me a recourse loan I can purchase for 10k on 200k. If the debtor is a graduate-degreed professional with a wife and kid, no other debt and has no health problems being at a relatively young age, I will BUY that note. Quincy k | 01.01.09 - 6:01 pm | # And the other 99 and 44/100ths percent of those loans? If I got handed a pink pony like that I'd buy it as well. Casey Serin has a non recourse loan with Countrywide for $50,000. Why don't you talk to BofA abou picking it up? Not that it matters. the originl issue was why pursue a few hundred thousand and your reply is to value those few hundred thousand at 5¢ on the dollar. You just explained why we don't see pursuit of these defaults.
Do you have any idea how silly it looks to be holding up a young graduate degreed professional with a wife and a kid and no other debt and no health problems as your idea of a loan worth 5¢ on the dollar as your example?
Sadly like all flawed oversimplifications this too has basis in fact. Giving more money (taking less) to the lower castes encourages consumption. Taking less from the upper strata encourages investment. More consumption is not exactly what we need now is it?
Rob Dawg
~~~~
How about Medicare for All ... underwrites all people with coverage that can't be used for useless consumption. Sure there will leakage, but not from the poor or the uninsured.
And, as we need less consumption we need less investment. Taxing the well to do could balance the budget and eventually pay down debt.
"Try more than the US, GB, Canada, Australia and France combined, some of them might have been closet orthodox, but an awful lot of them must have been atheists."
You know the mind-set of Soviet combat troops facing violent death in battle during 1941- 45?
Trader get your head outta' your arse. I am NO neocon. I am for the middle and little guy! Middle class Americans (which I am one) are footing the friggin' bill. The rich pay accountants to find loopholes and take other payments...like stock and bonuses to aviod paying income tax. What is it with people thinking tax breaks only benefit the BIG biz types. A middle class tax cut WOULD BE VERY WELCOME. I run a small business and get taxed to DEATH.
thanks for those comments re: historical doomers. i had read the bits from Tainter- (that will really put a guy in a bad mood)
My question was inspired by the thought that this time we are watching it in real time thanks to blogs, tv, et al, rather than hearing rumors from afar. rome is a well studied example- but did any of the others see it coming? or is this the first time in history that we've been able to hit that brick wall with eyes wide open?
The masses are still ignorant, hence their optimistic gullibility.
I'm sure there's always been an informed minority in each historical occurrence, and they (like us) end up watching the unfolding trainwreck and shaking their heads.
That's the height of useless consumption, since most of the money is spent on extending the dying process a few more months.
Comrade Bear (tj & the bear)
~~~~
Medicare for All would be used to bring our health care bill from 17% of GDP to 10% of GDP. Standardizing diagnosis, treatment and record keeping saves money as does getting rid of the 15% used for profit and the 15% used for overhead for private insurance.
It would also make our companies more competitive. All the other G7 countries subsidize their companies with single payer health care.
Just extrapolating from the charts, it sure looks like it could get worse.
Oh, and first?
\tJust extrapolating from the charts, it sure looks like it could get worse.
sm_landlord | 01.01.09 - 10:19 am | #
And a quick trip to the mortgage reset graph
will lay to rest any doubt that there's more pain.
Oh boy, only nine more years to go. And yes sm_landlord you are first because everyone else is on youtube watching "What's Opera Doc" where Krugman is seen trying to control the forces of nature with his magic helmet.
FDIC slaps Park Rapids bank with C&D - Minneapolis / St. Paul Business Journal:
FDIC slaps Park Rapids bank with C&D
citizen-times.com | Asheville | Asheville Citizen-Times
Federal regulators slam Blue Ridge Savings
Fannie in Talks With FDIC to Force IndyMac to Buy Back Loans - Bloomberg.com
Fannie in Talks With FDIC to Force IndyMac to Buy Back Loans
Business News
Biz BriefsLOCALFormer FDIC boss to discuss slump
I guess the four of us are the only non-hungover commenters in the CR world?
I wonder if other charts could be constructed against different pieces of market history; leading the eye to expect a positive scenario from here out? Has there ever been a crash that lasted this long, that did not continue to get worse before it got better?
Being bearish and wrong at this point would be really discouraging.
Texas Ratios for 8,196 Banks Equals 95 Bank Failures and $21.9 Billion in Bailouts? -- Seeking Alpha
Texas Ratios for 8,196 Banks Equals 95 Bank Failures and $21.9 Billion in Bailouts?
I guess the four of us are the only non-hungover commenters in the CR world?
JP | 01.01.09 - 10:26 am | #
Nah. I'm here too. Still have a couple of hours to kill before the bowl games/hockey game.
Anderson Cooper and Kathy Griffin talk to her mom and promote tonight's NY Eve show on CNN... - Out in Hollywood
I'm definitely hung over from Kathy Griffin.
I'm definitely hung over from Kathy Griffin.
FFDIC | 01.01.09 - 10:30 am | #
Was she worth it? Did you leave the lights on? (I hope not).
"I guess the four of us are the only non-hungover commenters in the CR world?"
--JP
I started and stopped drinking early yesterday. A couple of snifters of good Scotch to toast the new year, five minutes of CNN to watch the ball drop in NY, then I was ready to be to be done with 2008.
Here's to a better 2009!
Being bearish and wrong at this point would be really discouraging.
sm_landlord | 01.01.09 - 10:27 am | #
I think the next chapter is alreay written. A New Years raising cash several hundred point drop followed by an historic bear market rally. Then resume the grind. Strangely I don't see much market turmoil from either Obama or the impending bond crash.
then I was ready to be to be done with 2008.
Here's to a better 2009!
sm_landlord | 01.01.09 - 10:33 am | #
Amen. And I raise a glass (of milk) to the health of all of you.
Present and accounted for, not hungover SIR. I've decided I'm a nerd if this is the first thing I do on New Years morning...
Here's to a better 2009!
sm_landlord | 01.01.09 - 10:33 am | #
Hear, hear. And might I add the hope that the theory that things can't get any worse doesn't get tested.
I helped my daughter with a new years eve party for a dozen 12 and 13 year old boys. I got to wondering about their future while we watched Robby Kneivel jump the volcano at the Mirage in Vegas. Their lives are going to be so different than what we have seen in the last seventy years. And the people I voted for got us here. Boy are they going to be pissed at us when they figure out what we are leaving them.
Present and accounted for, not hungover SIR.
Comrade Kristina | 01.01.09 - 10:42 am | #
Enough with the holier than thou act. IIRC, you caused a number of hangovers last night.
And don't call me sir.
good Scotch
I ran out and had an old bottle of seagram 7. I must say I liked it better than much more expensive whiskeys.
And a quick trip to the mortgage reset graph will lay to rest any doubt that there's more pain.
JP
Wow! look at those option arm resets 2-3 years out. Interest rates 2-3 yrs. from now will still be 5% or maybe 15%?
JP, oh yeah, I caused some whoppers
The Rose Parade! The Rose Parade! 20 minutes to go. Something fun and happy to start the new year.
Best To All Who Provide Me With Entertainment
Everywhere I look, I read or hear BAD NEWs...and 2009 does not sound like it will get any better...Even MSM (60 min) is talking about the 2nd wave of foreclosures...Please, someone give me some reason for hope...
Fired myself as an insurance broker, not producing sufficient income over expenses...Time to look for a real job...god, this is not, I suspect a good time for looking for a new job/career at 60+...
someone give me some reason for hope...
IMO financially we are screwed. But you are much more than your finances.
...Please, someone give me some reason for hope...
Anonymous
We have the most qualified Prez, Treas. Sec., Fed chairman in the whole world on the job.
Anonymous writes: "Please, someone give me some reason for hope..."
Houses will be affordable?
Please, someone give me some reason for hope...
Anonymous | 01.01.09 - 10:50 am | #
You need to understand the reason we follow the bad news and even predict it. It isn't the nattering nabobs of negativism listening to themselves, it is people who have refused to drive in the rearview mirror making sure we don't drive off a cliff.
Adams National Will Merge With W.Va. Bank - washingtonpost.com
Adams National Will Merge With W.Va. Bank
Most qualified prez? Why do you say that?
-dk
This can not be s good way to start out the new year...
Thousands of stores to disappear in '09
Experts say disastrous holiday sales will force many more merchants into bankruptcy - and ultimately into liquidation.
See all CNNMoney.com RSS FEEDS (close)
By Parija B. Kavilanz, CNNMoney.com senior writer
Last Updated: January 1, 2009: 7:51 AM ET
NEW YORK (CNNMoney.com) -- The ugly sales year that was 2008 will haunt U.S. retailers in 2009, with industry experts warning that disastrous holiday sales will spark a domino effect of store closures and bankruptcy filings.
And, with thousands of fewer stores, the "shop-'til-you-drop" mentality that has characterized American consumerism could be coming to an end.
"There's going to be a massive sea change in the retail landscape," said Nina Kampler, executive vice president with Hilco Real Estate, which advises retailers on their property management.
Most qualified prez? Why do you say that?
Dick King | 01.01.09 - 10:59 am | #
I believe your sarcasm detectors are in need of adjustment.
FFDIC never sleeps. From the article:
The investors who control Abigail Adams National Bancorp, the parent company of the troubled Adams National Bank, have decided to merge it with a West Virginia bank that they also control in a deal designed to ensure Adams National can weather the financial crisis.
Yeah right, swallow your own tail and dissappear into the TARP with a pop and whiff of brimstone.
Anyway, FFDIC that Texas Ratio list has my two predictions way up top; Affinity Bank (small) and Security Pacific. What in the world is going on that Security is allowed to contiue to burn what is now inevitably taxpayer money?
this is not, I suspect a good time for looking for a new job/career at 60+...
Anonymous | 01.01.09 - 10:52 am | #
Hop in. There's room enough in the boat for both of us.
Just a reminder ... HGTV carries the Rose Parade live and commercial-free. Unless you were looking forward to more desperate ads from Circuit City, Joseph A. Banks, and Chevy trucks.
Hop in. There's room enough in the boat for both of us.
Comrade Terry
You got room for me? Which one do we eat first if we drift for too long?
"Wow! look at those option arm resets 2-3 years out..."
If we're still in a deflationary environment, those resets will be no big deal. But if the bond bubble bursts, and the Fed's printing of money brings us hyperinflation, and official interest rates are 75%, (i.e., Bolivia in 1985) ouch!
Unless you were looking forward to more desperate ads from Circuit City, Joseph A. Banks, and Chevy trucks.
threetorches | 01.01.09 - 11:07 am | #
I really really really wish Ford had enough balls to run ads "Buy from us, we didn't steal your tax dollars".
I'm sure someone in that corporation really wants to, but isn't allowed.
What in the world is going on that Security is allowed to contiue to burn what is now inevitably taxpayer money?
Rob Dawg
Seeking "price discovery", driving it's value down far enought to lure the buzzards in and save the day
<i>Anonymous(Good) writes:
\tHop in. There's room enough in the boat for both of us.
Comrade Terry
You got room for me? Which one do we eat first if we drift for too long?</i>
We've figured out a way we can all eat without needing to kill anyone. What we'll do is securitize ourselves into a series of traunches which spreads out the risk that any particular person will be eaten so thinly, and everyone will be so thoroughly hedged, that after we're done with the meal we'll step back and find that we've all actually gained a modest, risk free 3% in calories. This is what the quants have told me, and my investigation into the numbers in this marketing presentation they handed me and the reputable name of my firm leads me to be very confident in this result. Shall we?
It would add a useful perspective to add to these graphs the time line it took to recover to the previous high.
If I remember correctly the dow reached the high it had on 9/3/29 somewhere in the 1952 to 1956 range, or over 20+ years.
I sold most of my stocks in early 2008, though I wish I could say I foresaw this collapse. My real motivation was due to the run-up in prices in emerging markets; I did not view it as sustainable (better to be lucky than smart).
I have been debating when to start moving back into the stock market but I keep thinking about what happened to the Dow in the years following the 1929 crash: almost nothing for a very long time.
Rob, what is all that empty office space ( lots of oak trees) along the south side of 101 near Camarillo?
Question to all; Friends bought in Ventura county in '05 with 20% down and a 5 yr ARM, they plan to stay and pay it off. Choices are now;
-wait till next year, see where their rate goes
-refi ARM now
-Refi 30 yr jumbo fixed now at 6-7%
I voted for wait as their current rate is low and, who knows, maybe treasury will help out those that can afford their mortgage (a little New Year humor)
Just received and paid my 6mo. auto insurance bill...The policy shows 21 Century Ins...whereas the bill showed AIG...
Nah, AIG is not collecting the premiums from the state supervised insurance subsidiaries...They would not do that...would they?
Iraqis urged to tighten belts
By Mostafa al-Hashemi
Finance Minister Baqer Al-Zubaidi has called on Iraqis to reduce spending and save as much as they can.
The minister made the remarks in response to calls to slash public spending and a cabinet proposal to reduce salaries by up to 30%.
The proposal was made by the cabinets Economic Committee and sent to the finance ministry.
Amid high unemployment levels, government-salaried workers are currently almost the only people who can afford a decent living in Iraq.
They include teachers, civil servants, police, army personnel and pensioners.
Zubaidis 2009 budget which he has presented to the parliament was based on high oil prices and expectations that the average rate for a barrel of oil will not be less than 80 U.S. dollars.
But prices have sharply dropped from their highs on international markets and oil is now hovering at 40 U.S. dollars a barrel.
However, Zubaidi said slashing government workers salaries was the last thing for him to consider.
Zubaidi, in the meantime, has called on government departments to revise their budgets and spending in the light of the slump in oil prices which are almost the countrys sole hard cash earner.
Which one do we eat first if we drift for too long?
Anonymous | 01.01.09 - 11:09 am | #
I was thinking we could eat your pony.
You did get one, didn't you?
I was thinking we could eat your pony.
You did get one, didn't you?
Comrade Terry
Sorry, he's on the spit now.
Shall we?
KRYTEN: But the entire ship is running on emergency battery power only. With the oxygen recycler and minimal heating and lighting, I estimate that Lister and the Cat have approximately two months left. Without your drain on the power, they might last six. I'm sorry, Sir.
RIMMER: Sorry? Why are you sorry?
KRYTEN: Well, Space Corps Directive 195 clearly states that in an emergency power situation, a hologrammatic crewmember must lay down his life in order that the living crewmembers might survive.
RIMMER: Yes, but Rimmer Directive 271 states just as clearly, "No chance you metal bastard."
CAT: Come on, man, you gotta sacrifice your life! I'm not asking you to do anything *I* wouldn't do!
RIMMER: YOU? You'd sacrifice your life for the good of the crew?
CAT: No, I'd sacrifice YOUR life for the good of the crew.
--White Hole
Eat the real estate brokers first, then mortgage brokers, then financial analysts.
If that diet gets boring feel free to throw in some interior designers, life coaches, make-up artists, and lawyers. Remember not to try to discuss the fact that you are about to eat them with the lawyers. They might object.
Don't forget to floss.
Looking at the no. of days from the peak to down-about-50%, all I can say that this is the worst crash since 1929, considering the rate of decline, from peak to down-about-50%. Imagine a straight line from the peak to the down-about-50% point to see what I'm yammering about. Happy new year.
Economists and government officials these days seem to fashionably hold to the notion that the economy is driven by government and by banks. If, on the contrary, you think that the economy is fundamentally driven by business and the banks and government are dependents, then things look quite different. Right now I see a world with tremendous overcapacity in dozens of industries, with no technology drivers for new growth, with dozens more industries that borrowed their future markets back in 2003-2007 and still others that were only profitable in the headiest boom times of recent memory based on credit and equity withdrawal that was not sustainable. I see the 'bailouts' as simple looting by an elite economic class who had bought the US Congress and I see proposed stimulus spending as an attempt to reignite something that should never have been afire in the first place. Worse than all that, I see no recognition of the situation by most economists, who still believe this is a business cycle recession and that there is no such thing as a debt deflation.
Happy New Year to all!
That's right: With more than three job seekers for every opening, more workers are having to take significant pay cuts to find employment. Unemployed workers accept pay cuts to find jobs - Dec. 31, 2008
Hoopajoops, that was freaking brilliant.
BTW, my real estate knife catching attempt failed - I bid 65k on a lot previously priced at 270k, but the seller wasn't willing to go under 100k. I'll keep the nick, though - #$%@ short ETFs.
Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929
Rob, what is all that empty office space ( lots of oak trees) along the south side of 101 near Camarillo?
Question to all; Friends bought in Ventura county in '05 with 20% down and a 5 yr ARM, they plan to stay and pay it off. Choices are now;
-wait till next year, see where their rate goes
-refi ARM now
-Refi 30 yr jumbo fixed now at 6-7%
I voted for wait as their current rate is low and, who knows, maybe treasury will help out those that can afford their mortgage (a little New Year humor)
Uffish Thought | 01.01.09 - 11:16 am | #
Along the "south side?" I'm not sure where you mean. The north side at the base of the grade perhaps? We've discussed the 101 corridor in VenCo before. Absolute disaster in the making. Ventura, Oxnard and T.O. each have massive auto malls. Ventura's is dying first. Camarillo has useless space to burn. Great locations for escrow, title, insurance, office backroom, etc. You know the stuff we don't need anymore.
Your friends need to look at their situation from a different perspective. Do they have any equity? Will they have any equity in 3 years? They need to compare rent to own and nothing else. I know its hard to see a 20% down ($140k?)evaporate but it is time to move forward. With a few years at a low rate to work with I agree wait to see what bailouts might come. If they aren't protected when rates inevitably explode they can walk then. No need to jump the gun. In the greater picture however it might make sense to stop paying and live for free for a year at least and save the money, really save it and use that a new grub stake.
OT but I couldn't resist commenting on this NYT story about Citi execs foregoing 08 bonuses.
You realize how corrupt the system has become when this becomes news in a year when their acknowledged losses amount to $10 Billion!
Citigroup's Top Officers To Decline '08 Bonuses - NY Times
Most here are proudly contrarians yet have joined msm in expecting gloom. I too see no good news on the horizon, but always bet against the crowd, the new year won't be so bad.
2009 we will see pain a 12 pack won't kill!
"Amid high unemployment levels, government-salaried workers are currently almost the only people who can afford a decent living in [the Unified States]."
Family bar business is up here yoy. MrsBSR found it surprisingly busy last night - tips were fine - less drunkenness, rowdiness, & boorishness. Stop by and the first drink's on me - tell Uncle Darrell I sent ya'.
MilkShake is expecting in February, the garden will be twice as large, and the greenhouse will be stacked with seedlings by the time MilkShake calves. Everything is all better now!
Happier New Year! THIS is the year I improve my eating habits
I would just like to wish all here and especially are fine host CR a very healthy and happy new year.
Presenter And now ...
Cut to a lifeboat somewhere at sea miles from any land. In the lifeboat are five bedraggled sailors, at the end of their tether. First Sailor Still no sign of land ... How long is it? Second Sailor That's a rather personal question, sir. First Sailor You stupid git. I meant how long we've been in the lifeboat. You've spoilt the atmosphere now. Second Sailor I'm sorry. First Sailor Shut up! We'll have to start again ... Still no sign of land ... how long is it? Second Sailor Thirty-three days, sir. First Sailor Thirty-three days? Second Sailor I don't think we can hold out much longer. I don't think I did spoil the atmosphere. First Sailor Shut up! Second Sailor I'm sorry, I don't think I did. First Sailor Of course you did. Second Sailor (to third Sailor) Do you think I spoilt the atmosphere? Third Sailor Well, I think you ... First Sailor Look, shut up! SHUT UP! ... Still no sign of land ... how long is it? Second Sailor Thirty-three days. Fourth Sailor Have we started again? (he is kicked on the leg by the first sailor) Wagh! First Sailor Still no sign of land ... how long is it? Second Sailor Thirty-three days, sir. First Sailor Thirty-three days? Second Sailor Yes. We can't go hold out much longer, sir. We haven't had any food since the fifth day. Third Sailor We're done for, we're done for! First Sailor Shut up, Maudling. We've just got to keep hoping someone will find us. Fourth Sailor How are you feeling, captain? Fifth Sailor Not too good ... I ... feel ... so weak. Second Sailor We can't hold out much longer. Fifth Sailor Listen ... chaps ... there's one last chance. I'm done for, I've got a gammy leg, I'm going fast, I'll never get through ... but ... some of you might ... so you'd better eat me. First Sailor Eat you, sir? Fifth Sailor Yes. Eat me. Second Sailor Uuuuggghhh! With a gammy leg? Fifth Sailor You don't have to eat the leg, Thompson, there's still plenty of good meat ... look at that arm. Third Sailor It's not just the leg, sir. Fifth Sailor What do you mean? Third Sailor Well, sir ... it's just that ... Fifth Sailor Why don't you want to eat me? Third Sailor I'd rather eat Johnson, sir. (he points at fourth sailor) Second Sailor Oh, so would I, sir. Fifth Sailor I see. Fourth Sailor Well, that's settled then. Everyone eats me. First Sailor Well ... I ... er ... Third Sailor What, sir? First Sailor No, no, you go ahead, I won't ... Fourth Sailor Nonsense, nonsense, sir, you're starving. Tuck in! First Sailor No, no, it's not just that ... Second Sailor What's the matter with Johnson, sir? First Sailor Well, he's not kosher. Third Sailor That depends how we kill him, sir. First Sailor Yes, yes, I see that ... well to be quite frank, I like my meat a little more lean. I'd rather eat Hodges. Second Sailor (cheerfully) Oh well ... all right. Third Sailor No, I'd still prefer Johnson. Fifth Sailor I wish you'd all stop bickering and eat me. Second Sailor Look! I'll tell you what. Why don't those of us who want to, eat Johnson, then you, sir, can eat my leg and then we'll make a stock of the Captain and then after that we can eat the rest of Johnson cold for supper. First Sailor Good thinking, Hodges. Fourth Sailor And we'll finnish off with the peaches. (picks up a tin of peaches) Third Sailor And we can start off with the advocados. (picks up a two advocados) First Sailor Waitress! (a waitress walks in) We've decided now, we're going to have leg of Hodges ...
Boos off-screen. Cut to a letter Voice Over Dear Sir, I am glad to hear that your studio audience disapproves of the last skit as strongly as I. As a naval officer I abhor the implication that the Royal Navy is a haven for cannibalism. It is well known that we have the problem relatively under control, and that it is the RAF who now suffer the largest casualties in this area. And what do you think the Argylls ate in Aden. Arabs? Yours etc. Captain B.J. Smethwick in a white wine sauce with shallots, mushrooms and garlic.
ANIMATION: various nasty cannibalistic scenes from Terry Gilliam.
Cut to man. Man Stop it, stop it. Stop this cannibalism. Let's have a sketch about clean, decent human beings.
What in the world is going on that Security is allowed to contiue to burn what is now inevitably taxpayer money?
Rob Dawg | Homepage | 01.01.09 - 11:05 am
Security Pacific was closed on November 7th.
FDIC: Failed Bank Information - Bank Closing Information for Security Pacific Bank, Los Angeles, CA
What is it the bank is continuing to do?
I don't drink anymore. Had some pretty good sex, though.
One thing to remember about stock markets is that huge pension funds in western world are going to need funding for retiring baby boomers and that means selling their accumulated stocks more and more in coming years...constant pull to the downside.
What could be more appropriate on January 1 than a review of '09 predictions? On the side of gloom and doom, here's Denninger:
The Market Ticker
Here's Kunstler:
Clusterfuck Nation by Jim Kunstler
It would be very interesting to see someone take the other side. The market seems to want to rally, and my SRS just broke 52-week lows. So someone, someone who knows what they're doing must be upbeat.
but always bet against the crowd,
My sense is the crowd has not moved yet but there is the acknowledgement of the possibility of doom & gloom.
supafly,
But don't tell the young'ns! Everyone I know under 35 believes this is a great buying opportunity. Does this mean 401(k) is just another version of a ponzi scheme? We haven't even seen much of the needed sell-off as I believe those retiring now still might be the ones grandfathered into good pensions and social security (and anyone not is still holding onto their 401k and working or trying to work).
Bright news for 2009... even an unemployment rate of 30% means that 70% of folks who want to work can work!
Oh boy, only nine more years to go. And yes sm_landlord you are first because everyone else is on youtube watching "What's Opera Doc" where Krugman is seen trying to control the forces of nature with his magic helmet.
Rob Dawg | Homepage | 01.01.09 - 10:23 am | #
Unfortunately for Krugman, the Misean tinfoil collander has been substituted for the magic helmet...
tg is a born & bred dope in a writes:
but always bet against the crowd,
My sense is the crowd has not moved yet but there is the acknowledgement of the possibility of doom & gloom.
The crowd says economic growth in the 3rd quarter, housing bottoms in '09, SP at 1100 to 1300.
This can not be s good way to start out the new year...
Thousands of stores to disappear in '09.
Experts say disastrous holiday sales will force many more merchants into bankruptcy - and ultimately into liquidation.
It is all a matter of your perspective. Yes, there will be fewer stores; and yes, consumers will shop less frequently - - However, if you are a general merchandiser and manage to survive, net-net, it's cheaper than buying out your competition - - and you end up with all the customers.
Re: Office space in Camarillo
You're talking about the area that is being built up right now right? Just north of the grade up to TO?
More bright news for 2009... USA is definitely too big to fail to the rest of the world. So they will pour their good money after bad. Think AIG but only on a bigger scale.
Hi guys, I'm new on this board. Met your fellow commentator HARM at a "housing bubble blog" New Year's Eve party last night. He pointed me to Calculated Risk. Looks like a fun group. (Hi, sm_landlord, I think you are from HBB too?)
As to the substance: I bought at the bottom in 1974 (Dow below 600, right, not 6000 but 600). I sold out in 1975 with a 50% profit. I'm not going to say that I never had ANY stocks after that, but they have always since then seemed quite expensive. For example, if we were to adjust that 600 for inflation between 12/74 and now, the Dow should bottom below FOUR thousand this time. Of course I realize the inflation adjustment is not an "appropriate" measure, and yet, and yet...
As the resident bartender on CR, I proclaim it to be Bloody Mary time! Happy New Year!
BSR, I had a decent night at the bar last night. I will say I've been having alot of rudeness and drunkeness lately though.
Ah, the good old Flying Circus. Hard to find much approaching its level of gallows humor these days, except maybe in the Onion:
Child Bankrupts Make-A-Wish Foundation With Wish For Unlimited Wishes | The Onion - America's Finest News Source
... or the crowd could be underestimating the extent of the decline.
"It's just a scratch, I'm okay"
"These are good companies caught up in the environment" (I'm sure there are some but is the environment turning around?)"
"Hey honey; why are people leaving the Titanic? This is the safest place to be, even after hitting an iceberg."
Yep, Happy 2009 to all...
Russia's Gazprom cuts all gas supplies to Ukraine
MOSCOW Russia's gas monopoly Gazprom cut all natural gas supplies to Ukraine on Thursday morning after talks broke down over payments for past shipments and a new energy price contract for 2009.
Gazprom officials said the cuts began as planned at 10 a.m. (0700GMT and 2 a.m. EST) and the Ukrainian gas company Naftogaz confirmed a steady drop in supplies.
Yahoo! 404 - Page Not Found
Global unrest, civil strife hasn't been factored into any bull/bear predictions I've read and I don't see how we avoid that.
China depending on 7% growth, Russia, Mid-east, S. America depending on $100 oil. However this breaks their will be losers. Protectionist like trade practices put into effect out of necessity, not to punish.
Israel turns Gaza into a ground war, many Arab nations will be faced with a tough decision.
It looks like there will be a bump before the next big drop, if history is any predictor.
Russia's Gazprom cuts all gas supplies to Ukraine
MOSCOW Russia's gas monopoly Gazprom cut all natural gas supplies to Ukraine
Got to give it to Putin, that's one ruthless bastard, plays for keeps. Doesn't Europe get 60% of Nat Gas from the pipeline that runs through Ukraine?
As the resident bartender on CR, I proclaim it to be Bloody Mary time! Happy New Year!
Comrade Kristina | 01.01.09 - 11:46 am | #
Sheepishly admits to a mimosa. Had some cheap champagne left over. Happy New Year to you and yours.
It would be very interesting to see someone take the other side.
No chance of that but I will note Kunstler has predicted apocalypse steadily year in and year out. It would be interesting to graph his calls for everything from DOW 4,000 to NASCAR tracks that look like the Khmer Rouge visited against reality.
He'll be mighty sore if this isn't The Big One, at last.
Rob, my boss told me to take any of the cheap champagne we didn't give away home with me. Mimosa's sound pretty good being as I didn't drink last night...
The things I get tired of, People calling me negative. Reality is generally negative and I find the downside thinking the answer to moving ahead safely. "Hope" is for when all the hard work and thinking have been exhausted. In all of it I see people like me the bigger optimist if you do the work and thinking!
Work hard and think before you make a move. The best to all on a Happy new Year!
Anonymous | 01.01.09 - 11:56 am | #
IIRC, total gas imports are around the 60% number, which includes LNG and the various pipes from North Africa - so Ivan is ballpark a quarter of European gas supply, mas o menos...
This can not be s good way to start out the new year...Thousands of stores to disappear in '09
If it forces these people to work harder and or retrain and get more productive jobs it's a good thing.
Doesn't look like retail was a real career at these wages anyhow. Too many employees chasing too few jobs?
PayScale - Retail Store Manager Wages, Hourly Wage Rate
@ az_lender: Greets, I was also an avid reader and occasional commentator on HBB. I only have time for a few blogs these days, and this one is more general in economics, so I don't frequent back there much. I especially miss Txchik's amusing commentary.
@ therealjg: Denninger talks (types) like a crank, but hits the bulleye quite often.
Uh oh. Comrade Kristina must have already dipped into the cheap champagne.
Not yet JP, have to whip up a batch of Shit on a Shingle for breakfast first to sop up the alcohol.
CK...
Sorry for the drunks - I used to be one. So many years wasted. Good luck in '09 - and yes, BTW, you qualify as "nerd"
as I just said:
CAIRO, Egypt -- The Israeli bombing campaign in the Gaza Strip has unleashed outrage across the Middle East _ but the anger is being vented as much against Egypt as it is at Israel.
Protesters have attacked Egyptian embassies, accusing Cairo of helping Israel's longtime blockade of the territory and even giving a green light for the offensive _ a sign of the gulf between an Arab public and some U.S.-allied governments that dislike Gaza's Hamas rulers.
Demonstrators broke into the Egyptian consulate in the Yemeni city of Aden on Tuesday, trashing the interior, throwing computers out windows and burning the Egyptian flag on the roof. More than 500 protesters massed outside Egypt's embassy in Syria, as others did days earlier in Lebanon.
During a demonstration in the Lebanese city of Sidon this week, people chanted slogans denouncing Egyptian President Hosni Mubarak as "a pig" and a "collaborator" with Israel.
Mubarak, whose nation is one of only two Arab states to have peace treaties with Israel, on Tuesday accused his critics of seeking "political profit" from the suffering of Palestinians in Gaza.
His government vehemently denied backing Israel's attack. And the foreign minister, Ahmed Aboul Gheit, announced that Egypt was working with Turkey, which has strong ties with Israel, on an initiative to stop the offensive, restore a truce and open Gaza's borders under international supervision.
Egypt already had angered many Arabs by largely closing its Rafah border crossing into Gaza since the Islamic militants of Hamas violently took over the territory in 2007. Rafah is the sole access to Gaza that does not go through Israel, which has imposed a suffocating economic blockade on the coastal strip.
Story continues below
Embarrassing for Egyptian officials, Mubarak met with Israeli Foreign Minister Tzipi Livni only a day before Israel launched its assault, and the foreign minister _ though he urged Israel to show restraint _ was photographed smiling and shaking hands with her at a news conference.
az_lender | 01.01.09 - 11:45 am |
I know that tag from along time ago. Your a hard money lender, have trailers, and write interesting stories about it. Hello Ma'm.
Comrade Kristina -
Tip report? Did you notice any recessionary influence? I didn't see it in the million man party in Times Square (on TV of course), also haven't seen it in ski reports. We're still partying. Unless you saw differently.
Comrade Kristina writes:
Not yet JP, have to whip up a batch of Shit on a Shingle for breakfast first to sop up the alcohol.
Aw, my fav...that wouldn't happen to be mushroom soup (Campell"s) on toast, would it...In the military, they added cooked ground round to the mix...
Black Star Ranch | 01.01.09 - 12:03 pm
I knew I liked you for a reason. I got a memory like swiss cheese from the very same misadventure.
Broward Horne writes:
I don't drink anymore. Had some pretty good sex, though.
BH - I have a request for a New Year's Resolution for you... has something to do with TMI.
Outsider, tips were pretty good but it wasn't nearly as busy as it was last year. Folks showed up maybe an hour before midnight. My tips for the past few months have been down about 20-25% on average.
Local bars around here had no New Years cover . Last years bars where getting 25$ to 75$ a head here .
Anononymous, nope, I make my own bechemal sauce and add spices and either pastrami or corned beef to it. Kind of a "gourmet" SOS.
ova... it seems all a person can do is learn from the mistakes they've made......the real morons keep repeating them...
Broward Horne writes:
I don't drink anymore. Had some pretty good sex, though. Was anyone else with you ...
Not yet JP, have to whip up a batch of Shit on a Shingle for breakfast first to sop up the alcohol.
Comrade Kristina | 01.01.09 - 12:03 pm | #
Splurged. Noah's Bagels (almost but not quite real bagels but the kids love 'em). Smoked salmon slices. Low fat Philly cream cheese. What's the point of sitting in Southern California, 72º watching the rosa Parade delude millions into wishing they were here and not taking a few guilty pleasures. Speaking of which, for therealjg, I always rip into Kunstler the Hustler and will post the annual discetion soon. Dow 4000? The end of suburbia again? Peak oil again? Broken Record Jim cannot help himself.
The speculation in '29 was in stocks themselves, through margin. So, a fairly immediate impact is to be expected in stock prices.
Here, the speculation was in leverage for mostly other things. There may ultimately be similar pain, but a pronounced bounce in stock prices may also be in order for at least part of this year. Then the ugly decline continues.
Meanwhile, a longer wavelength deflation in real estate, prices, wages, energy and other commodities should continue, and (duck for cover) even gold should eventually follow them down.
Okay, there's at least one upbeat assessment for '09:
Premium content | Economist.com
So, now we intend to bail-out the newspapers???
Government aid could save U.S. newspapers, spark debate
Wed Dec 31, 2008 6:50pm EST
By Robert MacMillan - Analysis
NEW YORK (Reuters) - Connecticut lawmaker Frank Nicastro sees saving the local newspaper as his duty. But others think he and his colleagues are setting a worrisome precedent for government involvement in the U.S. press.
"....lawmaker........sees saving the local newspaper as his duty."
Not IF, but WHEN that happens, it will be interesting to see "who" is chosen to be SAVED by the savior!
What a crock!....(Walking away muttering, "maybe I should triple the size of the garden this year")
Survived, if 2009 is worse, I just do not know how much longer I can take it...
What the H*ll, lets party like 1999!!!
From NYT: In regards to bonuses, one employee who identified himself as a third-year vice president said the banks decision was putting its employees in financial extremis and, in some cases, at risk of not making their mortgage payments.
And this guys a vice president of a bank? Pathetic. Counting on your bonus to make your mortgage payment is financial extremis.
"I guess the four of us are the only non-hungover commenters in the CR world?"
Add another. A few glasses of wine with friends who live in our neighborhood, then back home early.
Anonymous writes: Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929.
Good post, but I'd take out "At first blush, it would seem." The precariousness of our situation is surely complicated by our new debtor status and the global reach of the financial crisis, but the situation is also complicated by our increased and often indolent population, our reliance on fossil fuels, and our disregard for the possible effects of climate change on agriculture and other aspects of our economy.
I looked at the 1929 -47.9 spot on the graph, looked over at 2008's -51.9 low and then stared at the rises right after those lows. I'm no chartist, but the similarities bother me.
Can't remember who recommended it -dryfly maybe? - anyway got my copy of the Squarefoot Garden 2 days ago. Makes a lot of sense to me.
Plan on putting together a few of these boxes and seeing if we can't grow some veggies and herbs this year.
Thanks again to whoever mentioned that book on one of the many comment threads.
does anyone have access to Roubini's 2009 forecast that they would like to share?
Happy new year
I read this from Roubini this morning:
RealClearPolitics - Articles - Will Banks and Financial Markets Recover in 2009?
if this is the first thing i do on new years (after coffee)am i really a nerd?
if this is the first thing i do on new years (after coffee)am i really a nerd?
robert | 01.01.09 - 12:45 pm | #
That's a calculated risk you have to be willing to accept.
Spent the last 3 weeks in Germany. Top news there: the Gaza situation, Gazprom, watermains breaking in the US. The economy, you ask? People are shopping. About as much as last year. People aren't inundated by crazy-making 30 minute shows masquerading as "news" trying to whip the hoi polloi into wild panic so they can be fleeced more submissively. It's a stunning difference, really, to what is going on in the US.
Anonymous--Thanks for the Roubini link.
The last paragraph widened my eyes:
"So 2009 will be a painful year of global recession and further financial stresses, losses, and bankruptcies. Only aggressive, coordinated, and effective policy actions by advanced and emerging-market countries can ensure that the global economy recovers in 2010, rather than entering a more protracted period of economic stagnation."
Aggressive, check.
Coordinated, uh, don't think so.
Effective, hahahahaha!
"It would be very interesting to see someone take the other side."
Maybe... if those views have some substance such as facts, figures, charts or other valid basis for prediction. Most just are based on hope or what happened last time or what 'it always does'. 2008 was a good lesson about the validity of the economics profession and an even better one about the interconnected vested interests that suck up our money. They were very ugly lessons, but unmistakeable.
I expect the market to continue crashing, given that the PE ratio of the S&P 500 (trailing twelve month earnings) is currently at 20, according to the WSJ Market Data Center. Crashes don't end at that kind of valuation level.
On the other hand, it all hinges on whether the Fed can succeed in reflating with their massive money creation campaign. They might drive the price of everything up, and stocks might rise higher than other things. Who knows?
I just don't see them succeeding though. Consumers and businesses are too spooked. They don't want to spend or invest right now. Too scared to lose money. The authorities are ironically partly responsible, because they spooked the heck out of everybody in order to justify the massive bailouts with taxpayer money.
i woke up this morning amidst piles of empty pizza boxes,
empty whiskey bottles,
overflowing ashtrays
piles of scratched CDs out of their cases lying on the floor
and this nasty hangover
guess that pretty much sums up 2008
OT: Anecdotal
blonderengel writes:
"Spent the last 3 weeks in Germany. Top news there: the Gaza situation ... It's a stunning difference, really, to what is going on in the US."
Interesting, I had similar experience at party last night chatting with German (husband) American (wife) couple who have migrated back and forth between Germany and US buying and selling businesses. They are most recently back in US. While everyone else talked about the economy, the wife wanted to talk about Palestinians. Its not even on their radar.
Interesting perspective about different business cultures; they believe US is better climate to start and run business (less regs for starting family owned businesses), Americans are better at start-ups (more risk tolerant) while Germans are better business managers.
Present and accounted for with no hangover.
Hope everyone had a good evening...I went alcohol free apart from a sip of champagne since the kids were present and I just can't do it anymore.
OT...
LancasterOnline.com:Local Business:Weis to lower, freeze food prices
One of the local/regional chains is pushing back prices for a 90 day window.
I'm still trying to digest this, so to speak. Certainly deflationary but I thought that food prices were sticky downwards.
Their markets tend to be fairly empty of customers and have an older clientele. The only busy store of several in my area is in a poorer urban neighborhood with no nearby competition and a fair number of residents with no transportation of their own. The newer ones are generally sparsely shopped and most that I know go elsewhere for better deals.
But this is the first of any grocery chains putting a price freeze/rollback on that I've heard of.
oo's is me...
January 01, 2009
Will Banks and Financial Markets Recover in 2009?
By Nouriel Roubini
As a result, the biggest asset and credit bubble in human history is now going bust, with overall credit losses likely to be close to a staggering $2 trillion. Thus, unless governments rapidly recapitalize financial institutions, the credit crunch will become even more severe as losses mount faster than recapitalization and banks are forced to contract credit and lending.
RealClearPolitics - Articles - Will Banks and Financial Markets Recover in 2009?
mock turtle writes:
i woke up this morning amidst piles of empty pizza boxes,
empty whiskey bottles,
overflowing ashtrays
piles of scratched CDs out of their cases lying on the floor
and this nasty hangover
guess that pretty much sums up 2008
At least your pants weren't down around your ankles and you woke up with Ben and Hank on either side of you.
But the ZEW's assessment of the current economic situation in Germany further worsened in December, the group said. That indicator dropped 14.1 points to minus 64.5 points from minus 50.4 points a month ago.
The economic expectations for the euro zone improved by 7.9 points and now stands at minus 46.1 points. The indicator for the current economic situation in the euro zone worsened, however, dropping 12.3 points from November to minus 71.2 points in December.
Mock:
I haven't seen a scene like that since college.
Yowza.
My question is, was Broward around?
The drivers behind the recovery in December should have been the continuing downward trend in energy prices and the increasing likelihood of massive fiscal stimulus packages around the globe. But apart from this, the economic fundamentals for the export world champion (Germany), have deteriorated further," Koch said.
az_lender writes:
"(Hi, sm_landlord, I think you are from HBB too?)"
The very same. Good to see you.
Any ideas about where the Max Income strategy might work this year? I don't see the dollar holding up much longer, but I don't have a candidate country with the implications of reduced trade kicking in. It doesn't seem likely that the mechanical strategy will work this time.
I'm off to clean up my library today, part of my strategy to lighten up for a possible move in a year or two. This will be my year for simplifying and dumping anchors.
From Roubini: Will Banks and Financial Markets Recover.......
But the worst is still ahead of us. In the next few months, the macroeconomic news and earnings/profits reports from around the world will be much worse than expected, putting further downward pressure on prices of risky assets, because equity analysts are still deluding themselves that the economic contraction will be mild and short.
Someone please identify an equity analyst who is currently saying the economic contraction will be mild and short. Therealjg found one source that was positive [posted above].
Just aski
If we can export our deflation like we exported our inflation, we'll be okay. Although I'm not sure Germany would be willing to cut their prices, and cut their salaries and workforce, so US consumers can drive BMWs.
But China might.
Black Star Ranch wrote at 12:03 pm
"Sorry for the drunks - I used to be one. So many years wasted. Good luck in '09 - and yes, BTW, you qualify as "nerd"
emtee replies
most of my money i spent on booze, women and gamblin
the rest i wasted
Please, anyone have any good news about 2009...Just wanted to know if I should get my flack jacket and helmet and head into the bunker...
The German CR:
Tuesday, December 23, 2008
What Is The Level Of Deflation Risk In Germany?
Only one thing is really clear about the Germany economy at the present time, and that is that it is shrinking rapidly. In fact it contracted far more than most analysts and observers expected in the third quarter (although I, for one, was not especially surprised), entering what now appears to be its worst recession in at least 12 years as both exports and domestic spending continue to fall. German gross domestic product in Q3 dropped by a seasonally adjusted 0.5 percent from the second quarter, when it fell by a quarterly 0.4 percent, according to revised data from the Federal Statistics Office. The Germany economy last had a two quarter contraction of this magnitude back in 1996.
And all the signs are that the fourth quarter will be worse than the third one, so the situation may even surpass the 1996 recession.
What's more the 2009 outlook promises to be even worse. The International Monetary Fund are now forecasting outright GDP contractions for the U.S., Japan and the eurozone next year, with Germany's economy expected to shrink by at least 0.8 percent (this as we will see is one of the most optimistic forecasts currently on the table for German GDP next year). The European Commission declared the 15-nation eurozone to be in recession in November, and just over 40 percent of the exports from this highly export dependent economy go to other eurozone nations.
The only positive elements in the Q3 GDP data are to be found in the slight increases in both final household consumption and government expenditure. On a seasonal and calendar-adjusted basis, household consumption expenditure rose by a quarterly 0.3%, while government final consumption expenditure rose 0.8%. Gross fixed capital formation rose slightly (0.1%) due laregly to a sharp uptick in construction over the second quarter (+0.3%, following 3.4% in the second quarter and +5.5% in the first).
In addition there was a large increase in inventories, and inventories contributed a whopping 0.9 percentage points to Q3 growth (see chart below), and without this build-up the contraction would have been much sharper - so watch out since this inventory increase which will more than likely be unwound in the fourth quarter, with considerable downside impact. Imports were up significantly (largely due to the rise in oil prices - oil peaked around $147 a barrel in July), while exports dropped, as a consquence movements in the net trade balance had a negative impact on final GDP.
Capital formation in machinery and equipment (ie investment) was down sharply (0.5%), after increasing for seven quarters in a row. Thus the entire positive impact of domestic consumption and increased inventories was more than offset by a very rapid and sharp deterioration in the net export position. Between July and September exports were down by 0.4% over the previous quarter, whereas imports were up 3.8%. This meant that net exports contributed a whopping minus 1.7 percentage points to q-o-q GDP, and headline German GDP is extraordinarily sensitive to changes in the net trade position (see chart below).
Deteriorating Short Term Outlook
Looking forward into Q4, the signs, as I said, are for deterioration, as can be seen from the fact that (according to the latest flash PMI) German services contracted for the third consecutive month in December, even if the rate of contraction was slightly less than that in November.
Worse still, the contraction in manufacturing accelerated, and sharply so, clocking up its fifth consecutive month of contraction according to the flash estimate. The data released by Markit Economics showed German manufacturing registering its lowest reading for manufacturing since the survey was started in April 1996, with the indicator falling to 33.5, down 2.2 points from the November result and significantly exceeding the 1.3 point decline expected by the analysts. If we break the figures down we find that output tumbled all the way to 29.9 (from 32.3 in November), while new orders slipped 3.3 points to a record low of 25.8. Meanwhile, the employment component reached its worse level in the history of the index, coming in at 40.9 for the month from November's 43.6.
o atheist in foxholes...
mike, squarefoot garden rocks!
started 1 on my bklyn rooftop last year. moderate success with harvest, mucho success with education.
if you haven't started already, get your compost goin now.
might be able to pull some out by early summer if you're lucky
(hint: add some soil to the food scraps to keep it warmer during the winter -- it will decompose faster)
cheers
homedad 43
up thread broward said he dint do any drinkin last night but had great sex
for me, it was the other way around
i think
actually i clearly remember the drinking part
the rest not so much
im sure the woman in my bed will update me on the rest, when she wakes up
(my wife)
In an effort to contribute in a positive manner to the thread some hopefully helpful links:
Russell 2000 Statistics Note the 12.37 earnings multiple EXCLUDES companies with negative or no earnings.
A link to various excle files containing S&P 500 earnings
An excel file containing historic actual S&P 500 earnings and estimates
Note still pretty high given the economic environment - personally don't think the e in p/e will make the ratio go down...
At least your pants weren't down around your ankles and you woke up with Ben and Hank on either side of you.
Mike in Long Island | 01.01.09 - 1:05 pm | #
omg
so thats what that thank you note from the hanky bernanke brothers was all about
tinman,
Thanks for the tip. I was planning on being lazy and getting a yard or 2 of compost delivered and dumped so I can get the garden going and then I will set up a compost pile to refresh and renew as needed.
mock - sounds like you had a good night. I can't remember the last time I had a night I couldn't remember... 2 kids will do that to you I guess.
How long till you can't get certain goods ? Ones made in China ?: Trade finance is collapsing, said Victor K. Fung, the chairman of the Li & Fung Group, the giant supply chain management company that connects factories in China with retailers in the United States and Europe. Weve got orders we cant ship right now.
Mr. Fung estimates that 10,000 of the 60,000 factories in China owned by Hong Kong interests have closed or will close in the coming months. Other business leaders say the toll may be even higher and that factory closings are an even bigger problem among mainland Chinese businesses because these tend to be smaller and more poorly capitalized than those owned by Hong Kong businesses.http://www.nytimes.com/2009/01/01/business/01exports.html?_r=1&ref=business
German CR provides links to this site:
German Economy Watch
Anonymous writes:
"The German CR:"
Is this an English language site (meine Deutsch ist schlecht) and do you have link? Thanks for more informed macro perspective.
Mike in Long Island
ya gotta remember i like to joke around
and best to use myself as the foil
although there is always some truth in most everything i say
for example, honest honey ten inches
(some truth umm at least a litle more than half true hahaha)
remember, we are in a deflationary environment
I sincerely hope that this is not the best that we can rely upon going foreword...
So 2009 will be a painful year of global recession and further financial stresses, losses, and bankruptcies. Only aggressive, coordinated, and effective policy actions by advanced and emerging-market countries can ensure that the global economy recovers in 2010, rather than entering a more protracted period of economic stagnation.
Nouriel Roubini is Professor of Economics at the Stern School of Business, New York University and Chairman of RGE Monitor (http://www.rgemonitor.com) an economic and financial consultancy.
for example, honest honey ten inches
(some truth umm at least a litle more than half true hahaha)
Good thing I finished my coffee already otherwise a screen cleaning would be in order.
Thanks for keeping it light.
And we are hearing this bad news and its only the first day of the new year?
Yeps...
Head for the bunkers...
Anonymous writes:
"German CR provides links to this site:"
Thanks for anticipating my request! Site bookmarked.
Please consider adopting a handle so we can watch for your posts.
Haloscan ate my post
Camarillo CRE is actually Newbury (TO?) sorry.
The friends wife won't move, kids in school argument always wins. Down about $200k of funny money, used as a down payment from prior home sale. Can easily afford the mortgage even at 30yr rate.
They plan to stick it out long term, but if they have to sell in 5yrs, they will be toast, bring money to the closing.
I still vote wait and see. No reason to spend money on refi now.
Link off above roubini link.
"My favorite line is an old joke about the Yugo: "Every car came with a rear defroster to keep your hands warm as you pushed it." "
RealClearPolitics - Articles - The Fraud of Government Intervention
Happy New Year, CR et al!
Wher is the next bubble///
Commodity Boom Turns Bust in 2008 as Worldwide Economy Crumbles
By Pham-Duy Nguyen
Jan. 1 (Bloomberg) -- Commodity prices in 2008 plunged the most in five decades as demand for energy, metals and grains tumbled in the second half because of the recession.
From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002.
Nah, AIG is not collecting the premiums from the state supervised insurance subsidiaries...They would not do that...would they?
Anonymous | 01.01.09 - 11:16 am |
Anonymous, report them to your state's insurance commissioner. Personal lines are supposed to be with "admitted" companies / paper. Admitted means protected by the states' insurance guarantee fund should the insurer go out of business, not have adequate funds to pay claims, etc. Non-admitted / surplus lines means they are not backed up by anything.
The AIG "story" has been that only the "deriviative trading rogues" on the investment side of the business are the only bad part, and that the insurance companies themselves are ok and a profitable.
It seems to me that a company that has been figuratively selling dollar bills for eighty cents (more coverage, cheaper premiums) on the underwriting side to undercut their competitiors for years to get the deals to bring in the cash to the alchemists on the investment side will have a day of reckoning when the alchemist magicians are no longer around, though of course they have the taxpayer suckers now kicking in about $150B to-date.
Let us know how any claims dealings you have with them turn out, too!
Thanks for the roubini Link Anony.
Not knowledgeable in the fine points of economics, finance or trading...however I some common sense and can smell a rat from a mile away...and I smell a rat...heck I smell a whole lot of rats...
Where is that bunker when I need it...
bartman,
I agree that something smells fishy...As a former insurance broker, I will notify the CA DOI...
Something in my bones does not seem right...
Thanks for your opinion of my worst fears...
I think you should title that "Goldilocks and the three bears". Who knew the Goldilocks economy would be eaten by a bear? Whocouldanode?
"Spent the last 3 weeks in Germany. Top news there: the Gaza situation, Gazprom, watermains breaking in the US.
Russia-Ukraine, Afghanistan likely to be two large maelstroms in the coming year.
for hangover prevention, three things: 1) L-cysteine (200 mg), 2) a multi-vitamin, and 3) water.
Learned that from my college daze (both u-grad and grad skool)...
My best wishes to you all for the new year. We can all use as many of those as we can get.
Sacked out early last night and woke up early. Set the rowing machine up in front of the TV and watched two over-made-up investment bimbos and a guy who looked like he had ulcers talk about market prospects for the New Year. This was ABC.
Ulcer guy told everyone to stay in cash until 2010. The other two gave him the stink eye; one said "it's probably time to start going back in cautiously," and the other declared literally that this was a great time to buy, because "The best time to buy is when there's blood in the streets."
"Unless there's more blood," Ulcer guy said. They just sniffed at him.
Welcome to more of the same for '09, the year of denial.
If the propaganda were removed, my skull would be empty.
hangover = dehydratio
Haloscan ate my post
Camarillo CRE is actually Newbury (TO?) sorry.
The friends wife won't move, kids in school argument always wins. Down about $200k of funny money, used as a down payment from prior home sale. Can easily afford the mortgage even at 30yr rate.
They plan to stick it out long term, but if they have to sell in 5yrs, they will be toast, bring money to the closing.
I still vote wait and see. No reason to spend money on refi now.
Uffish Thought | 01.01.09 - 1:31 pm | #
Newbury Park. That makes more sense. Yes, the business model in the area is seriously distorted. I don't know where to begin. The idea of cash flowing there was so last century. It didn't help that Amgen was exerting unsustainable demand on every square foot in the area. Not only too mnay square feet but extremely expensive suare feet. And thank the fantasy planners for some of that.
Regards your friends; stop paying, stay in situ and save like a demon. Just do the math. The Cold Equations is not just a science fiction story. They can reasonably expect to be $200k negative equity should the median merely retrace to 2001. If prices hold for 2 years and start rising at 6% they won't be back at no equity for a dozen years. Stop paying now and they are immediately back to no equity and can save payments for a year. Walk in a year, and I mean literally walk... into a house on the same block, with the same schools and same friends doing the same thing. The rent will be substantially lower and they'll have saved $60,000 over the past year. See? -$200k versus +$60k in a year. No brainer once the emotions are stripped away.
whats up with the australian dollar
am i seeing that right
dropped 15 percent day before ??
that cant be right
Perhaps the German citizens are not as concerned about their economy because they haven't started bailing yet. No big headlines about companies wanting access to free money, etc.
My favorite hangover medicine for years now is Glaceaus Vitamin Water the "Revive" kind. It's fruit punch flavored and packed with all the B vitamins and Potassium. Works like a charm...Coke bought them out a couple years ago so they're readily available in most stores now.
lost control noted, from bloomberg
From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002.
lostcontrol... | 01.01.09 - 1:34 pm | #
and gold is once again knocking on the door of the $900 neighborhood
Comrade Kristina
yeah good call
and esp potassium (electrolytes)
Times are tough all over, even Chief Justice of the SCOTUS is having a hard time with "inflation"...
Chief Justice John Roberts said Wednesday that Congress should be as generous to judges as it already has been to itself, by approving an inflation-related increase in their pay.
"I must renew the judiciary's modest petition: Simply provide cost-of-living increases that have been unfairly denied," Roberts said in his annual year-end report on the federal judiciary.
...
Federal trial judges are paid $169,300 a year. Appellate judges make more, ranging up to Roberts' salary of $217,400. The salaries pale in comparison to what top lawyers earn in private practice.
MT
don't know but gold got a pop in aus dollars
Kitco Gold/Currency Charts
Federal trial judges are paid $169,300 a year. Appellate judges make more, ranging up to Roberts' salary of $217,400. The salaries pale in comparison to what top lawyers earn in private practice.
Comrade Kristina | 01.01.09 - 2:01 pm | #
Classic misdirection. It isn't that judges are overpaid.
"...for hangover prevention..."
Yes, lots of water afterward - though you will have to discharge it frequently, which will make for a restless night - and vitamin C in some form. It has worked for me, anyway, though I haven't drunk much for many years.
Also, eat while you drink, especially protein in some form - meat or fish. It will slow the absorption of alcohol into the bloodstream. Avoid if possible sweet carbonated alcoholic drinks, which do the opposite. Champagne goes straight and swiftly from the stomach to the brain.
Do not drink on an empty stomach.
Best of all, drink moderately, know your limit, and have a sober person drive you home.
If the amount of alcohol you drink makes you sick, what's the point of it?
I finally figured out why oil prices quadrupled. Bin Laden has an uplink to the futures market and was buying oil contracts.
Rob, I just have a hard time feeling much sympathy for someone that makes roughly six times what my husband and I make COMBINED. If I can get by, so can he...If not, he can always quit and find a new job, right?
Market meltdown: Where did all the money go?
Interesting overview article on the collapse of nearly all asset classes in the past year.
As for the causes, gives equal time to the easy credit explanation, but also to the notion that markets as currently structured are nothing but a vast Ponzi scheme. Strong stuff for the hoi polloi.
Denninger link was great. Given his correct predictions for last year, it's a good read. Plus, this line:
"Perhaps there really is a unicorn that craps skittles even though I've yet to find it"
Rob, I just have a hard time feeling much sympathy for someone that makes roughly six times what my husband and I make COMBINED. If I can get by, so can he...If not, he can always quit and find a new job, right?
Comrade Kristina | 01.01.09 - 2:06 pm | #
It's the arrogance of his trying to claim judicial salary has any corellation with the total compensation package for a member of the SCOTUS.
Synchronized cliff diving -- they should include it in the Olympics.
Bin Laden caused the housing bubble.
"...for hangover prevention..."
Oktoberfest in Munich really had/has the ultimate hangover prevention: Cheese with salt on top of it.
Rob, arrogance is the new black...Ha.
"Perhaps the German citizens are not as concerned about their economy because they haven't started bailing yet. No big headlines about companies wanting access to free money, etc."
Actually, Germans are quite concerned, but unlike Americans, they don't worry about losing health care with their job, generally have more than adequate savings for months after the unemployment insurance (pays around 64% of your net income for a year, I believe) runs out, don't really use credit in general (the German consumer economy, in noted contrast to the American one, does not really run on debt).
But Germans are generally not panicking, and in part, it well may be due to either ignorance or a certain belief it can't happen here. (Which may be at least better justified than in the U.S. or the UK.)
Germans, broadly speaking, simply do not believe that their society will break down, unlike so many American posters here. That difference is truly noticeable, and one that will likely make a large difference in the future. Of course, many Germans only need to walk or bicycle to a local farmer to buy food if things turn really bad, which may be a source of confidence. The same applies to the local and well managed forests for heat, or the clean water supplies, or functioning public transportation, or doctors in walking distance, or local bakeries with local bakers, or....
If you're not with us, you're against us.
best hangover remedy ever:
Alka-Seltzer Cold and Flu.
Another non-hangover guy here. 16 years in a row...
It never occurred to me before, but after reading that Denninger article, isn't drinking just borrowing future production for current consumption? I guess Bush was more accurate than I thought when he said "Wall St. got drunk."
As for Kunstler, what's "funny" about him is that you can tell he wants TEOTWAWKI more than a kid wants candy.
Me, I liked being a bull (back in the 90's) much better than being a "bear". It was a lot less stressful and more fun. But I don't really consider myself a bear or a gloom and doomer - I think of myself as a realist. What's the most likely course of events in the next year, how do I best prepare/deal with them.
Was anyone else with you ...
Yes, at least five people but I was too busy for an exact count.
I just realized that this was probably the wildest NYE I ever had although it seemed kind of tame.
.
OT: Bringing CR up in Firefox 3.0.5 brings up a blank page for me. IE works. Adblock was off. Wasn't like this yesterday and I didn't change anything. Posting to see if I am the only one.
"Posting to see if I am the only one."
--Anonymous
Works fine for me: same browser, same version.
incazzata writes: And this guys a vice president of a bank? Pathetic. Counting on your bonus to make your mortgage payment is financial extremis.
Bank VPs are like associates at WalMart, dime a dozen. I once worked in the mail room of the largest bank in Minneapolis. Half the employees were VPs of something or another. When I started I asked for $5.00 per hour. They refused because the long time VP of the mail room was only making $4.80. I settled for $4.60.
OK, here is an argument for being a little bit bullish: Over at dshort.com where CR the graphs for this post, there is a long-term trend regression graph of the S&P with the prices adjusted for inflation per the ShadowStats numbers. By this measure, the S&P is at or near a trough.
This sort of resonates with me, as it looks like what the part that I have lived through felt like.
See what you think:
dshort.com: Regression to Trend Update
But sure, just walk away - it is the exurban motto for all of life's little problems.
rent_to_own
Being underwater $200k+ is not a little problem. I'd walk away from that pig too, after I lived there as long as I could w/o paying one dime. Call me Citi, GM, Cerberus, AIG. Just don't call me for your mortgage payment
Yes, and the EPS of the Russell 2000 over the next five years is projected at 13.76% per year.
And the odds of that happening are...about zero.
Can you see that P/E ratios based on forward earnings estimates or ex-negative earnings (or both) have become an exercise in fiction?
They are worth less than nothing.
It's never been harder for small public U.S. companies to turn a profit, let alone grow earnings.
That situation is not likely to change much over the next five years, either.
I am shorting Russell 2000 now with EUM (single short). At some point in the first half of 2009, I'll turn some or all of those EUMs into TWMs (double shorts).
EUM and TWM were two of my best investments in 2008. They did about equally well.
Rich, did buy any SRS in the last week?
rich writes;
"It's never been harder for small public U.S. companies to turn a profit, let alone grow earnings."
Just the cost of "being public" is something between one and two million per year, so really small public companies are especially difficult.
"I am shorting Russell 2000 now with EUM (single short). At some point in the first half of 2009, I'll turn some or all of those EUMs into TWMs (double shorts)."
By shorting that index, you need most "small" public companies to tank, accounting for survivorship bias in the index. That would make for a very bad year in 2009, with employment numbers very very bad. Nothing personal, but I hope you're wrong. The economy will be a complete mess if you're right.
sm_landlord, thanks for link.
rich, what are your decision variables for converting from short to double short? There may be a bump (short term rally) in that road (a question not a statement)
rich,
I've been short the R2k via RWM. I have done quite well with it.
I think you meant to type RWM vs EUM. EUM is short the MSCI Emerging Markets.
Being underwater $200k+ is not a little problem. I'd walk away from that pig too, after I lived there as long as I could w/o paying one dime. Call me Citi, GM, Cerberus, AIG. Just don't call me for your mortgage payment
Anonymous | 01.01.09 - 2:42 pm | #
We've been taught by example that acting responsibly will be punished. Their housing option has expired worthless. Time to do something other than continuing to purchase deep out of the money positions month after month in the hopes the market turns.
[Speed writes:
If we can export our deflation like we exported our inflation, we'll be okay]
I'm of the opinion that we have been importing deflation rather than exporting inflation over the past decade. Some of each maybe.
sm landlord,
I have this belief that the companies most likely to get crushed by tightening credit are small caps - lots of times these were companies that couldn't cash flow in the absence of cheap and easy credit. I don't see credit getting cheap and easy anytime soon for many companies.
I don't have an absolute target in mind other than I expect the Russell 2000 to lose another 10 to 15% in value without too much trouble.
Re: The Economist.
Sure, it's among the world's most respected magazines. So is it just me, or are their predictions nearly ALWAYS wrong - often laughably so?
Don't get me wrong - I count the blessings. At least it ain't CNBC.
"We've been taught by example that acting responsibly will be punished"
And that will be one of the lead stories in 2009 as the American consumer unwinds and deleverages
We've been taught by example that acting responsibly will be punished. Their housing option has expired worthless. Time to do something other than continuing to purchase deep out of the money positions month after month in the hopes the market turns.
The goal here is to ensure that the markets are so fucked up that only those benefitting from government largesse are able to stay solvent. This way the government owns and directs the vital parts of the economy without needing to control them outright. What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime.
CNN is running story on a one ton bomb on a apartment building to take out one guy.
I weep for our world,
if this is the first thing i do on new years (after coffee)am i really a nerd?
robert | 01.01.09 - 12:45 pm | #
Yup. Remember, if the shoe fits, throw it.
hey mike, probably the best way at this point, a good compost takes at least 6 months to cook, depending on the temp.
there's probably several places out in LI that make solid compost...read SF gardening for what to look for before having it delivered.
but once you get started with making your own, you'll see that it's very rewarding to have your own 'closed-loop' cycle going (and cheaper too).
p.s. if you BBQ and you use wood charcoal, throw it your mix, it's turbo-charged fertilizer.
just thoughts to chew on while waiting for spring...
The Issues that Concern the Arab Citizen and "Their Issues"
Mohammad Salah Al-Hayat - 28/12/08//
Conditions are getting worse in the Arab world. They are experiencing no significant change, to the point where the Arab citizen only expects the worst. The Arab citizen no longer dreams that the crisis will be solved, or that the problems will come to an end. Prior to the US invasion of Iraq, some Arabs were promoting frustration, arguing that the situation in this Arab country had reached its worst point ever. Then came the US invasion and occupation, and brought something even worse; conditions there today speak for themselves.
The same impressions hold for the Palestinian issue. Before the Hamas Movement took over the Gaza Strip in June 2006, things were very bad. Israeli incursions were taking place more frequently...
Thus, an Arab citizen who is interested in the issues facing his nation can only expect the worst, and he has arrived at this awareness without politicians. He has become interested in his situation, life and livelihood without bothering to pay attention to the "luxury" of politics, even if politics affects his problems or lifestyle. The saying "Let me live today and kill me tomorrow" has become a type of folk wisdom that the Arab citizen tries to put into practice. This is because his "tomorrow," while not being unknown, will certainly bring more disasters and insoluble crises.
We cannot separate between what is taking place in the Arab political arena and what is taking place in specific Arab countries, with very few exceptions. The Arab citizen is no longer concerned with politics after seeing that politicians always act in the interest of certain groups, while the average citizen reaps no benefit. If such benefits are achieved, they are imperceptible and usually take place for the sake of a media "show." The Arab citizen has given up following this show because he is convinced that his issues are not "their issues." He has come to realize that he must solve his problems by himself without relying on politicians, because they have caused the nation's problems and do not solve them. Politicians have come to talk of reforming the situation but have ended up compounding these problems even further. So how can they now solve a problem for the Arab citizen and help him overcome the current predicaments? Thus, there has been a split between the Arab citizen and the elite, whether this elite is among the ruling group or the opposition. As a result, a citizen can only live for today, since he has lost hope that others will provide him with a secure, normal life for his Arab nation as a whole. He has chosen to live today, even if death comes tomorrow.
@tinman,
How many crops did you get to plant, harvest and replant? Did you grow anything over the winter or at least late into the fall?
I was hoping to do some leaf veggies for salads, peppers, beans, carrots, potatoes, onions and the like.
Kidbuck, I agree with you that most retail jobs are crap, but they ARE jobs. I sell high end furniture and during the housing boom i made 50k per year as a newbie. The designers with experience made 80k+ I finished 2008 with less than half of my former earnings. The aspirational rich are not buying now. There are very few jobs in our small city, even Nurses have been laid off. I expect to be unemployed by June. I guess I'll hang out with my unemployed master degree holding friends waiting for Obama to put us to work building infrastructure.
I expect to be unemployed by June
Best of luck to you but January may be a more reasonable time frame
mike, i did cauliflower, tomatoes, beets & soybeans. sort of haphazard based on whims more than anything planned.
cucumbers eggplants peppers & squash/pumpkins didn't do so well on the roof, strictly cuz it's hard to get bees up 4 stories.
actually the best successes i got were the legal psychoactives: morning glory, datura & salvia. beautiful flowers they have
harvested last cauliflower in november. have some beets & kale trying to stay warm up there now.
we'll see how it goes.
it's really fun stuff tho. makes one think differently about what 'wealth' really is...
The FED built a makeshift dam in the market flood. It held back the rush...but for just a little while. Water is seeping from all the cracks and between the stones. There will be a continuous flow from said dam for some time to come. Don't bet on any improvements for 09'. The bright side is that most got used to feeling overly rich sitting atop the bubble inflated asset classes...now we all will equally get used to feeling poorer. Things will improve once all adjust to the new paradigm of poverty. Then, we may just all feel average. Happy New Year!
I have yet to hear from anyone why I should not take my investments and turn them into cash and stick them in my mattress or bury them in a can in the back yard (20'x 10')
As a newbe, I have no idea whats going on and reuse to pretend that I do...
One afraid chicken who knows that he is a chicken, and refuses to lose all his savings/retirement funds...
Chicken there is a place in time where no one is safe and no place to store cash is safe. Welcome to that place....
Chicken there is a place in time where no one is safe and no place to store cash is safe. Welcome to that place....
Money Man | 01.01.09 - 3:33 pm |
And that place is always too far from IHOP
tinman,
Thanks. Now I just have to follow through. I think many will be redefining what "wealth" is in the years to come.
CR,
I pointed this out the last time this graph was put up...
The current bear market's "days since peak" (blue) line is wrong. It should be extended another 83 days to the right. It's actually further along in days than the graph makes it appear. Just a technical note.
More bright news for 2009... USA is definitely too big to fail to the rest of the world. So they will pour their good money after bad. Think AIG but only on a bigger scale.
YLSP | 01.01.09 - 11:45 am | #
Exac
i know there has always been a guy on the corner with the "end is nigh" sandwich board- but did previous collapses have their doomers? were there any in rome, egypt, mayan mexico, etc. who saw the end coming and left any record?
Russia-Ukraine, Afghanistan likely to be two large maelstroms in the coming year.
Pavel Chichikov | 01.01.09 - 1:47 pm | #
Don't forget Pakistan. It is NATO's main overland supply route to Afganistan. It should become even more important if Europe weighs in on Ukraine's side on the commercial dispute with Russia.
Firefox 3.0.5
Anonymous | 01.01.09 - 2:33 pm | #
Okay here.
What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime.
Hoopajoops, LTD | Homepage | 01.01.09 - 3:07 pm | #
Damn, HJ. Please stop channelling my nightmare.
"...finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime."
Isn't this where we are now?
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
sm_landlord - even if we're at the bottom of the excursion against the slope of the second trendline, the chart argues that we could easily see underperformance now for a couple of decades to come. Not a happy thought.
bearly writes:
"I'm of the opinion that we have been importing deflation rather than exporting inflation over the past decade. Some of each maybe."
Yeah, the imports have been deflationary, unless you think Chinese imported goods have been pushing up the price level.
The economic theory behind is that by sourcing imports, you are adding in external capacity on top of domestic capacity. This creates excess capacity, pushing down inflation.
On the export side, by consuming a large portion of raw materials (oil in particular), the U.S. has been raising inflationary pressures elsewhere. But the big growth has been in the developing markets, so the U.S. has not been increasing its importance in that regard.
There is also the fact that many countries pag to the USD, which means they have inherited a too easy interest rate policy for their domestic economies. But that was ultimately the decision by foreign policymakers, not the U.S. ones.
lostcontrol...(Unrated) writes:
I have yet to hear from anyone why I should not take my investments and turn them into cash and stick them in my mattress or bury them in a can in the back yard (20'x 10')
Inflation will get to your pile of money, even if you bury it deep and safe. It's kind of like that old joke, where a man creates the perfectly sealed room with no cracks or chinks where death might come in to take him, only to asphyxiate himself. Inflation is the death of money, and there's no seal that keeps it away.
Isn't this where we are now?
Things could be worse. You might need to bribe a local official for a building permit as in Russia, or an import permit or machine allotment as in China. Disney doesn't come and murder your family if you outcompete it... yet.
were there any in rome, egypt, mayan mexico, etc. who saw the end coming and left any record?
The peasants saw and understood, which is why they scattered to the four winds. Nobody listened to what peasants had to say then (and they never wrote it down) and no one listens to the peasants today. Thus was it ever so.
jeff writes:
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
jeff | 01.01.09 - 3:52 pm | #
They would have been awesome bloggers.
You might need to bribe a local official for a building permit as in Russia, or an import permit or machine allotment as in China.
By the way, these kinds of effects happen where the real economy has irretrievably unhinged from the paper economy. Where the only way to "get things done" is to operate outside of the legitimate mechanisms that have been set up by the government. The government digs channels to direct and manage flows of capital and economic development which are unhinged from the actual market and thus totally bypassed by gray and black markets, which in contrast are in fidelity with the real economy. The government then becomes trapped; it must continue to dig useless ditches and channels of regulation far away from the real currents of commerce because to do otherwise would be to admit its failure and undermine its legitimacy.
But sure, just walk away - it is the exurban motto for all of life's little problems.
And before that, it was the suburban model for urban problems.
As students of the board are all too aware, there are many situations in which there are no good answers. If you're underwater by 200k in your house, and everyone else who ever touched your mortgage either got paid and kept the money or, when they lost money in similar circumstances, socialized their losses, what exactly is the point of your continuing to pay?
I will argue that the mortgage contract represents the entire contract between the parties. If the borrower doesn't pay, the lender gets the house, the right to report the borrower's default to the Credit Bureaus, and (in recourse states) the opton to sue for any shortfalls. That's it. There's no extra punishment of the stocks, scarlet letters or debtor's prisons. There used to be, but previous generations got rid of them. So if the borrower is willing to face those consequences, why shouldn't he?
One of the things which made America grow as fast as it has is an entrepreneurial culture fostered by comparatively lenient bankruptcy laws. I don't hear people say of failed business owners, if they kept some of their assets, that they were immoral and should be living in a barrel. What, exactly, is different about homeowners? That they were too dumb to incorporate and not offer presonal guarantees? Not too big to fail?
If you sentence people like these to lives of comparative penury, you virtually guarantee that none among them will start businesses which grow and create employment. They will remain wage slaves, tied to their current geographic location by an underwater house for a decade, at which time they'll likely be tied to their current job by pre-existing medical conditions. Isn't that precisely the inflexible labor market behaviour Americans ridicule when they speak of "Old Europe"?
CT newspaper wants govt. bailout:
Government aid could save U.S. newspapers, spark debate
| Reuters
Put a TARP on my parper.
rent_to_own(Excellent) writes:
...I stand in awe
rent_to_own | 01.01.09 - 2:27 pm | #
r to o, not that you should care but your cr companion rating just went from "very good" to "excellent".
I see a real estate bullrun coming up beginning this spring.
YouTube - Dire Straits - Sultans Of Swing (Live)
crazy down spiral
It could be much much worse than this.
Thank god, gad bless.
I see a real estate bullrun coming up beginning this spring.
txchick57 | 01.01.09 - 4:11 pm | #
Is that bullrun as in "stampede" or as in Civil War battlefield? Or, is this a distinction without a difference?
All the fundamentals point to a rally in residential real estate that will make the bubble look like a blip.
Isn't the Nikkei data wrong?
last close: 8859
all time closing high: 38916
That means the N225 is currently down 77.2% from peak rather than the approx 64% shown on the graph.
Ralph Cramdown | 01.01.09 - 4:07 pm |
+1 on that commentary
Here, the speculation was in leverage for mostly other things
BreakOut | 01.01.09 - 12:15 pm | #
I disagree..... what do you think hedge fund were buying?
"On the other hand, it all hinges on whether the Fed can succeed in reflating with their massive money creation campaign."
The thing I see about that is simple: you need wage or income increases or the idea will not work. We had higher incomes 2 years ago because we borrowed the future to supplement the present. That means we cannot go back to those price and turnover numbers now. So, if some of that 'massive money creation' ends up in the pockets of tens of millions of people, we might reflate. If it does not, we don't.
TxChk57,
Nice to see that you have come over the Dark Side from HBB...
As a lawyer and day trader, what do you thing the US Market is going???
My Bad...
TxChk57 = txchick57
rent_to_own, that was a great post.
"Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium."
I know what they meant.
TxChk57,
Whatever you do, do not tell prof. Bear, of this site...He is such a jerk...and this crowd, not me, will eat him alive!!!
Market meltdown: Where did all the money go?
Market meltdown: Where did all the money go?
Kathleen Pender
Thursday, January 1, 2009
---- Excerpt follows
Charles Biderman, chief executive of TrimTabs Investment Research in Sausalito, has a different explanation.
He says that from the market's bottom in 2003 until its peak in 2007, the market value of all publicly traded stocks worldwide grew from about $20 trillion to $45 trillion.
During this period, only about $1.5 trillion in cash went into the market. Debt accounted for some of the remaining increase in market capitalization, but most of it existed only on paper.
Not related
"Market cap and money aren't necessarily related," he says.
Suppose a company has 1 million shares of stock priced at $100 each, giving it a market value of $100 million. Over the next few days, someone buys $5 million worth of stock. Speculation drives the share price to $140, and suddenly, the company has a market value of $140 million.
In this case, a $5 million investment has created a $40 million increase in market value.
Is the company really worth $140 million? Not if everyone tried to sell their stock at once. The first person might get $140, but everyone else would get less, probably much less.
"It's not any different than a Ponzi scheme, a legal one," Biderman says.
"What is never anticipated is the next step, where the government becomes captured by the very interests it nourished, creating a fusion of government and corporate interests, an oligarchy, and finally a corrupt mafia state, where enterprise produces nothing except the mere appearance of legitimacy, and functions not as an organ of creation but merely as the public face of a corrupt corporate government mafia regime."
What has always happened before is turmoil, failure to meet internal and external challenges, disorder and anarchy, the end of a dynasty, the beginning of a new order. (See Arnold Toynbee, if anyone reads him any more).
In the present, contemporary case, there are possibilities of freezing the social dispensation in place through technical means. Orwell ( Eric Blair ) and Aldous Huxley expressed this possibility. They were prophets of a secular kind.
Comparisons to 1929 confuse. Then the US was the world's largest creditor nation, exporter and manufacturer. Now we are the opposite of these. At first blush it would seem we are actually in a more precarious position today vs. the years following 1929
Anonymous | 01.01.09 - 11:27 am | #
I am getting more and more uncomfortable with these statements. The U.S. is still the third largest exporter and was the largest as late as 2004 AFIK.
The U.S. is also was also by far the largest manufacturing country with China trying to catch up.
As to creditor nation that is true. However, what I found quite interesting is that the U.S. ran a consistent trade deficit from 1929 through at least 1942 (see table at the end). Now foreign investments may have made a difference in favor of the current account however but the balance of trade was also negative at that time. I was actually surprised by this when I found out.
IMO too many commentators make these statements without checking the facts and really analyzing what actually is different between now and then. I doesn't look quite as simply to me at least.
Pavel: Please provide a clearer definition of "freezing the social dispensation in place by technical means". Do you mean "put something in the water"...? Soma?
I believe Pavel was referring to the process of breeding genetic clones designed to occupy certain social strata. Alphas rulers, Betas administrators, Gammas laborers, etc. It's a technical means of freezing a hierarchy and enforcing a caste system, and a way of critiquing our dynastic power transfer system here in america.
In case you hadn't read it, Brave New World by Huxley describes a future wherein all humans are bred as genetic clones destined to occupy a certain social role.
lostcontrol: This is the best advice that I can find...
Rioting at the Gates of Thermopylae: The Ramparts of the FED & Central Banks Shudder
First know if your bank(s) or credit unions are FDIC/NCUA insured or not. Over the past 3 months, another 60 banks have lost their FDIC status. If not, get your money and close the account ASAP as it is a sign that the FDIC probably refused to insure it. If yes, you can read the FDIC rules here, the NCUA rules here, and see if any of the exceptions or limits apply to your family.
Second, consider moving your money to multiple banks or credit unions in the event one would fail. This is called diversification of risk. At any bank, you can request their financial statement and check out the status of their loans and deposits. You can check the financial statement of all federal credit unions here. In general, credit unions will be safer than larger banks, mainly since its loans are limited to only the union members, but please be careful. Large banks like Bank of America, Wells Fargo, Citibank, Wachovia, etc. loan out to a wide range of borrowers (both individual and commercial), which are subject to failure due to the housing crisis.
Third, withdraw enough currency to cover expenses for AT LEAST 6 months. This is roughly the time necessary to make it through the winter, and survive any financial system fallout. I also urge you to decide for yourself whether just removing it ALL is prudent and necessary. My reasoning for this is that even if all of your money is "deposit insured," if the bank fails, there is no guarantee you will get your money immediately. It may take months. If you decide to do this, it is best to also request small bills ($20 or smaller) as if a crisis develops larger denominations some vendors may have issues with handling $50 or $100 bills. Instead of paper money, I advise taking out nickels as the worth of the metal (75% copper and 25% nickel) is worth pretty close to face value, where the paper money has no intrinsic value. It's also fairly amusing and trust me, it will take a thief quite a while to lug out several thousand dollars in nickels.
Educate yourself and others on economics and that once-boring subject of monetary policy. For what is coming, the most up-to-date thinking on an inflationary outcome is here from Eric Janszen of iTulip. Mish Shedlock, a well-respected analyst and economist, supports a temporary but severe deflationary outcome. I want to add that both gentlemen are well aware of, but do not chose not to address in their latest pieces, the monetary role of gold in their articles. That, I fear, is a mistake, so I recommend checking out GATA's work on manipulation of the gold market, and Dr. Antal Fekete's views here. My personal outlook is a bit of a combination; in short, an inflationary tsunami on the way with deflationary riptides. Quite possibly hyperinflation as well, as I surmised here "Calling All Wheelbarrows: Hyperinflation in America? (Part 2/2)".
Try reading my Money Matrix series below. Decide for yourself what to do to protect your family's financial well-being. I also highly recommend the well-informed monetary policy articles from fellow Nolan Chart columnist Republicae. They take a little while to absorb and sometimes make my head hurt though
Take a solid look at changing your cash into physical gold and also silver. Some people will tell you this will make you rich as well; for gold I do not necessarily agree, but the idea is to survive and maintain purchasing power in case hyperinflation occurs. Most of the alarmists recommend holding 25-50% of your savings in gold. I also recommend holding physical silver, preferably in the form of "junk" silver or American Silver Eagles. Please do what you like after researching, but in my humble opinion holding none or
Re:
"CNN is running story on a one ton bomb on a apartment building to take out one guy.
I weep for our world,
tg is a born & bred dope in a | 01.01.09 - 3:10 pm | #:
TJ,
The apartment was notified as was the Hamas leader, prior to the bomb drop. He decided to stay. He died. You on the other hand are a self admitted born and bred dope.
You will wise up - when the guys you weep for plant bombs and aim missiles at you. Being that you are a an admitted born and bread dope, you should rent "Body of Lies" w Leonardo DiCaprio - its got Hollywood improbabilities all through it , but the muslim politics is spot on. I recommend it to you because it's at your level.
FZ
Now we get TAXED to ensure we cannot rise to a higher place in the current caste system. America....the best days are behind ya' baby!
It's been so long since I've read it...I forgot. I'm old. Hub is reading aloud a little quote from Tainter (he loves to do this). The Roman citizens looked forward to the barbarian invasion in hopes it would relieve them from onerous taxes. Taxes were so bad they couldn't farm, live, etc. So, we have something to look forward to yet.
Why do know-nothings and dumb people still use the terrorist hobgoblin?
What exactly is the problem with walking away from a house on which you are under water by 200K? The difference between holding on to that house and renting the one next door is probably at least $500/month. That is cash that can be spent on so many things that are fundamentally more important than making good on a business arrangement between you and a bank.
Was.
Don't forget Pakistan. It is NATO's main overland supply route to Afganistan. It should become even more important if Europe weighs in on Ukraine's side on the commercial dispute with Russia.
NorkaWest | 01.01.09 - 3:41 pm | #
Pakistan closes US supply route into Afghanistan
Tue Dec 30, 2:51 pm ET
PESHAWAR, Pakistan Pakistan closed the main route used to ferry supplies to U.S. and allied troops in Afghanistan on Tuesday after launching a fresh offensive against militants in the area. While the length of the closure isn't clear, the U.S. already has started looking for supply line alternatives as it prepares to almost double its number of soldiers in Afghanistan next year.
Yahoo! 404 - Page Not Found
Now we get TAXED to ensure we cannot rise to a higher place in the current caste system. America....the best days are behind ya' baby!
Money Man | 01.01.09 - 4:51 pm | #-------------------------------------------
Neocon rhetoric...Tax rates have been falling big time for the rich and look at the mess we are in now.
FZ | 01.01.09 - 4:51 pm | #
It is a common spectacle in these days of dissolution: zionists pretending to be true-blue Americans while promoting murder and genocide of goyim for the benefit and delight of Israel.
Sorry, FZ, imposture time is up.
People aren't inundated by crazy-making 30 minute shows masquerading as "news" trying to whip the hoi polloi into wild panic so they can be fleeced more submissively. It's a stunning difference, really, to what is going on in the US.
blonderengel | 01.01.09 - 12:54 pm | #
You might want to check out that most economic events that start in the U.S. hit Europe with a delay of 2 the 4 quarters. Europe will be hit just as hard as the U.S. The severity of this downturn has very little to do with consumer optimism.
The difference between holding on to that house and renting the one next door is probably at least $500/month.
Ponyless in NJ | 01.01.09 - 4:59 pm | #
In the area we are discussing it more like $1500/mo.
craigslist | Page Not Found
Side note: this is like old home day from HBB circa Feb '07.
Money Man(Unrated) writes:
Now we get TAXED to ensure we cannot rise to a higher place in the current caste system. America....the best days are behind ya' baby!
I agree. Let's stop taxing the poor and middle class so much and start taxing the rich more, so that it's easier to accumulate wealth if you're at the lower social strata but harder to hold on to it (except through excellent management) if you're at the higher social strata.
What's that? You were about to say something about trickling down? You don't really believe that, do you?
The apartment was notified as was the Hamas leader, prior to the bomb drop. He decided to stay.
FZ | 01.01.09 - 4:51 pm | #
NOTICE to residents: Please remember to vacate you apartment block between the hours 3am and 5am for daily aerial bombardment.
Sent from BlackBerry Wireless Handheld
" jeff writes:
Re: Rome...people knew damned well the end was nigh. St. Augustine, Boethius, etc., talk about just trying to preserve culture in "cold storage" for a later millenium.
jeff | 01.01.09 - 3:52 pm | # "
Augustine knew it was coming because "it" was invading Germans who'd taken Italy and were slowly heading his way; he lived in Africa province. We haven't anything that dire yet -- unless all the ice slides off Greenland in the near future.
As for how Romans felt about the fall; Augustine and his crowd down Africa way were in one of the richest parts of the empire, where discontent among the masses wasn't so high. (The Eastern Empire, even richer, didn't fall at all -- not for 1000 years, anyway.)
But the average folks up in Italy, Gaul, Spain -- they had nothing from Roman but crushing taxes and compulsory military service, which at that point was considered close to a death sentence.
unhappyCakeEater writes: "i know there has always been a guy on the corner with the "end is nigh" sandwich board- but did previous collapses have their doomers?:
Juvenal (satirist of ancient Rome): "For when was Vice more rampant? When did the maw of Avarice gape wider? When was gambling so reckless? Men come not now with purses to the hazard of the gaming table, but with a treasure-chest beside them. Is it a simple form of madness to lose a hundred thousand sesterces, and not have a shirt to give to a shivering slave? Which of our grandfathers built such numbers of villas, or dined by himself off seven courses? ... For no deity is held in such reverence amongst us as Wealth; though as yet, O baneful money, thou hast no temple of thine own; not yet have we reared altars to Money in like manner as we worship Peace and Honour, Victory and Virtue..."
I expect he was derided as a Liberal.
Have any of you wondered why we don't replace the central bank mechanisms for driving inflation via the discount window with a more equitable system which introduces money into the system via the poor and middle class? Why print money for the benefit of bankers who will earn their dollars not through labor or legitimate economic enterprise, but by virtue of having (and then lending) dollars? These people do not add anything; they are the modern economic equivalent of the lazy feudal landlord, the person who does nothing but collect income by virtue of his placement in the hierarchy of ownership. Why not print the money and hand it to the little guys; that way the people needing to dance and shift and earn money in order to avoid the depredations of inflation are at the top of the pyramid rather than at the bottom. Trickle up tapdancing.
Israel is taking advantage of Bush's last 20 days knowing he will give them cover. Israel PM is a criminal, Tipzi wants his job as does Netanayhu. Tipzi's trying to show Israelis she's got big balls by bombing Palestine. A political power play
she does
What's that? You were about to say something about trickling down? You don't really believe that, do you?
Hoopajoops, LTD | Homepage | 01.01.09 - 5:07 pm | #
Sadly like all flawed oversimplifications this too has basis in fact. Giving more money (taking less) to the lower castes encourages consumption. Taking less from the upper strata encourages investment. More consumption is not exactly what we need now is it?
Israel is taking advantage of Bush's last 20 days knowing he will give them cover. Israel PM is a criminal, Tipzi wants his job as does Netanayhu. Tipzi's trying to show Israelis she's got big balls by bombing Palestine. A political power play
Ignore the Israelis and the Palestinians and their stupid, endless war. Pay attention to your own back yard. Children in America are hungry. Your poor labor for simple subsistence. The able among you are taxed for their aspirations and their productivity is crushed by student debt. Your health system is a shambles. Your elderly fear that they may be forced to pick through garbage in their years of infirmity. Your courts do not dispense justice. Your leaders are criminals. Your people are disillusioned. And still you worry about a stupid feud halfway across the world that does nothing to you? I'll bet you can't name the cabinet our president-elect has appointed, that you know nothing about the majority of these choices, that you cannot name your representative, that you've never contacted them, that you don't know most of your neighbors, that you don't know the fine print on the loan on your house, I'll bet you don't know where the money you deposit in the bank goes when you're not using it, you don't know what the money in your pocket is or represents, you know nearly nothing about the institution backing it, you know nothing about what you eat, the air you breathe, the world you leave your children. Maybe it's better to be distracted, to settle your gaze on the middle distance of the middle east, than to come to the shocking realization that you are no longer sovereign over your own life, that the world around you is rife with problems you can never know let alone solve, that the number of thieves plundering your wealth and the wealth of your children are countless, and that the ultimate labors of your life and the fruits arising therefrom will be taken and enjoyed by the greedy hands of others who hold you in contempt.
Rob Dawg writes:
Taking less from the upper strata encourages investment.
Investment... That's where you take money you have and instead of using it for consumption, you loan it to someone else who does something with it, and then you earn the right to take a piece of that other person's labor via interest payments?
Does this bear a similarity to feudal landlords, who earn wealth by virtue of having it, through the productivity of others?
Does it strike you that there might be a little too much "investing" going on in the upper strata of america, who really seem to operate on some sort of inter-generational auto-pilot as they effortlessly collect returns on their wealth?
What's that? You were about to say something about trickling down? You don't really believe that, do you?
Hoopajoops, LTD | Homepage | 01.01.09 - 5:07 pm | #
Calling it being pissed on would just be too obvious. Although we've also seen the results of a "bubble-up" economy. I wish I could disagree with your earlier post about the disconnection between the speculative "financial economy" and the real industrial economy... unfortunately I can't. And studied just enough history in college, including a course on the Roman Empire, that for the past several years, try as I might, I cannot stop finding parallels.
Unfortunately the upper strata invested and created jobs overseas.
Outta loop for several days. Been working in Pasadena setting up merchandise for sale for the out of towners (Penn State folk), before the parade and football game.
Colorado Ave has SEVERAL boarded up storefronts - Linens n things, etc.
However, booth sales were brisk both on the Ave and by the bowl. Seems the 170 or so buses stuffed full of people still wanted paraphernalia (not the CSC kind, though).
Lots of stores looking kind of grim, though - small merchandise counts, discount signs, and desperate looking vendors.
Happy New year....
Hoopajoops, LTD |
Clinton Sec. State
Gates Sec, Defense
Geitner Sec Treaus
Holder Atty. General
John Lewis is my rep. who I have contacted.
I don't know my neighbors and don't want to.
I rent and have read my lease
I don't care what my bank or MM acct. does with my money, it's FDIC insured.
The world I leave my children is a bigger shithole closer to extinction.
I know thieves and the wealthiest are ripping me off
I hate bullies like Bush and that's how I see Israel as bullies, Bush mini-me's. Of course I don't know or see all, maybe in my next life
Hoopajoops, alas, what may seem as a distraction in a faraway land is at the crux of US foreign entaglements and internal decay.
Please note that according to J. J. Goldberg (the current editor of the Forward) in his book Jewish Power he boasts that 45% of the fundraising for the Democratic party and 25% of the funding for the Republican party come from Jewish funded Political Action Committees. Richard Cohen of the Washington Post has recently updated this data to read 60% for democrats and 35% for republicans fundraising come from Jewish funded Political Action Committees.
The problem is discipline on all levels. Rich to poor. I favor trickle down and the bottom and middle class flat gave it away to the Banksters and Wall Street by buying stuff they flat did not earn yet.
I really think all wages should be taxed from ages of 16 to 65 no matter how little you make. Now is this not the reality of fair?
did some quick research on gold. all the gold ever mined amounts to about 7.5 ounces of gold per person living today. the data i'm using is probably inaccurate and my math is probably wrong but that is not going to stop me from getting my share.
anyone else have another number? not like this number is all that relevant anyways giving the massive differences in wealth across continents/countries/etc... but this seems like a fun new years resolution.
goal: to accumulate 7.5 oz of shiny, useless, ridiculously expensive metal per member of my immediate family.
Rob Dawg-
The last thing someone should do is walk away from a recourse loan if they have capacity to pay.
It sure seems easy to lick a stamp and drop the keys in the mail but one day a judgement deficiency may soon arriuve in the same mail.
And then what?
You pay, that's what. Trying to BK out will not be an option to many walk-a-aways as their BK's will be dismissed in court due to their ability ot pay. Even if one is planning on leaving the U.S. for good, many countries allow international judgements to be enforced.
I suggest you do a lot more thinking and a lot less talking.
I suggest you do a lot more thinking and a lot less talking.
Quincy k | 01.01.09 - 5:45 pm | #
Casey Serin.
It sure seems easy to lick a stamp and drop the keys in the mail but one day a judgement deficiency may soon arriuve in the same mail.
And then what?
It gets returned to sender because you don't live there any more, and so many other people are taking similar action that it is impossible to pursue recourse against all of them, and furthermore the actual ownership of the loan is so obfuscated and parcelled out to various interests that no single one wishes to exert the effort required to ascertain actual ownership let alone undertake the expense of chasing down a few hundred thousand dollars?
They are decendants of the same father, and were both promised a nation by God. The Old Testament is the historical account of their history...as it is for Christians.
The stupidity is not having faith.
o atheist in foxholes...
lostcontrol... | 01.01.09 - 1:14 pm | #
Sort of a BS libelious statement, aside from having no relavence to the discussion. If you want a factual statement, try "no Quakers in Foxholes" or "No Jain's in Foxholes". As for Atheists, just how many of the Red Army died in WWII? Try more than the US, GB, Canada, Australia and France combined, some of them might have been closet orthodox, but an awful lot of them must have been atheists.
"the expense of chasing down a few hundred thousand?"
Show me a recourse loan I can purchase for 10k on 200k. If the debtor is a graduate-degreed professional with a wife and kid, no other debt and has no health problems being at a relatively young age, I will BUY that note.
And so will many other investors.
You guys talk like it's so easy because you're on the other side of the trade.
If you're a doctor and owe 200k on a recourse, you OWE it.
Period.
End of conversation.
Anonymous writes:
German CR provides links to this site:
German Economy Watch
Interesting , but why can't I find anny impressum on this side.
It sure contains a lot of data about Germans economy, but it does not look German to me!
Besides, it also features links to "French Economy Watch, German Economy Watch, Greece Economy Watch, Italy Economy Watch, Spain Economy Watch"
It's probably an american concoction.
Nix German.
Walk away. Bring this corrupt, criminal enterprise of a nation to it's bloody knees:
These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.
In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.
Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.
Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
Nevada - note that the lender CAN get a deficiency judgment (See below)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington
West Virginia
These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:
Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming
Internet inflection point -
ttp://news.netcraft.com/archives/2008/12/site_count_history.gif
There it is.
Inflected in winter of 2007.
I predicted this in 2006 based on rates of change in traffic at Google, Yahoo, etc.
I've been wondering if the microsoft layoff rumors of 17% are likely. MSN traffic is down something like 20% in the past year and if anyone at Microsoft is tracking the Internet inflection point, they'll know what that means for future growth.
Bad link BH. Loosen the belt on those leather britches
I see a real estate bullrun coming up beginning this spring.
txchick57 | 01.01.09 - 4:11 pm | #
Now THERE's a contrarian viewpoint! Don't know from whence the money will come...
p.s.: Welcome, AZ_LENDER!
Show me a recourse loan I can purchase for 10k on 200k. If the debtor is a graduate-degreed professional with a wife and kid, no other debt and has no health problems being at a relatively young age, I will BUY that note.
Quincy k | 01.01.09 - 6:01 pm | #
And the other 99 and 44/100ths percent of those loans? If I got handed a pink pony like that I'd buy it as well. Casey Serin has a non recourse loan with Countrywide for $50,000. Why don't you talk to BofA abou picking it up? Not that it matters. the originl issue was why pursue a few hundred thousand and your reply is to value those few hundred thousand at 5¢ on the dollar. You just explained why we don't see pursuit of these defaults.
Do you have any idea how silly it looks to be holding up a young graduate degreed professional with a wife and a kid and no other debt and no health problems as your idea of a loan worth 5¢ on the dollar as your example?
Side note: TJ, you were at HBB in early '07 no?
Sadly like all flawed oversimplifications this too has basis in fact. Giving more money (taking less) to the lower castes encourages consumption. Taking less from the upper strata encourages investment. More consumption is not exactly what we need now is it?
Rob Dawg
~~~~
How about Medicare for All ... underwrites all people with coverage that can't be used for useless consumption. Sure there will leakage, but not from the poor or the uninsured.
And, as we need less consumption we need less investment. Taxing the well to do could balance the budget and eventually pay down debt.
Rob,
I was at HBB from '05 forward, but haven't been there in quite a while. Miss a lot of folks from there, though.
"Try more than the US, GB, Canada, Australia and France combined, some of them might have been closet orthodox, but an awful lot of them must have been atheists."
You know the mind-set of Soviet combat troops facing violent death in battle during 1941- 45?
Trader get your head outta' your arse. I am NO neocon. I am for the middle and little guy! Middle class Americans (which I am one) are footing the friggin' bill. The rich pay accountants to find loopholes and take other payments...like stock and bonuses to aviod paying income tax. What is it with people thinking tax breaks only benefit the BIG biz types. A middle class tax cut WOULD BE VERY WELCOME. I run a small business and get taxed to DEATH.
Isn't the Nikkei data wrong?
Myr | 01.01.09 - 4:16 pm | #
The crash on the graph is only around 10 years from 12/29/89-12/29/00, not through the present. The N225 has slid further since then.
How about Medicare for All
mmckinl | 01.01.09 - 6:17 pm | #
That's the height of useless consumption, since most of the money is spent on extending the dying process a few more months.
How many Soviet combat soldiers during the conflict of 1941-45 were baptized Orthodox Christians or Muslims?
thanks for those comments re: historical doomers. i had read the bits from Tainter- (that will really put a guy in a bad mood)
My question was inspired by the thought that this time we are watching it in real time thanks to blogs, tv, et al, rather than hearing rumors from afar. rome is a well studied example- but did any of the others see it coming? or is this the first time in history that we've been able to hit that brick wall with eyes wide open?
or is this the first time in history that we've been able to hit that brick wall with eyes wide open?
unhappyCakeEater
Why you think the MSM hates bloggers so much? Could it be their propaganda machine is losing effectiveness?
unhappycakeeater,
The masses are still ignorant, hence their optimistic gullibility.
I'm sure there's always been an informed minority in each historical occurrence, and they (like us) end up watching the unfolding trainwreck and shaking their heads.
That's the height of useless consumption, since most of the money is spent on extending the dying process a few more months.
Comrade Bear (tj & the bear)
~~~~
Medicare for All would be used to bring our health care bill from 17% of GDP to 10% of GDP. Standardizing diagnosis, treatment and record keeping saves money as does getting rid of the 15% used for profit and the 15% used for overhead for private insurance.
It would also make our companies more competitive. All the other G7 countries subsidize their companies with single payer health care.