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I am not going to comment on this one...

Will the Next MBA Grads Take More Risks?
07:46 PM Tuesday March 24, 2009
By Stew Friedman

Who cares what games we choose...little to win, nothing to lose.

So goes the chorus of the Strawberry Alarm Clock's 1967 #1 hit song, Incense and Peppermints. This phrase — an iconic representation of '60s counterculture — came to mind the other day as I read what one of my Wharton MBA students wrote in response to this question I posed to them as we began the fourth quarter of their first year: How are you thinking about the future in light of how the economic context has changed since you first arrived at Wharton in August 2008? She said that now is a great chance "for my classmates and myself to find real opportunity in the market mostly because we are starting with so little and have so little to lose."

"I think it is more difficult to call CRE a "bubble", as compared to the residential housing market, but the impact of a shakeout could be significant with the extensive leverage of buyers, and the loan concentration of mid-size institutions in CRE." - CR 12/06/06

It is very possible - based on tighter lending standards that the decline in non-residential investment will be greater (on a percentage basis) than the previous two busts. However, based on commercial vacancy rates, it doesn't appear that some segments of commercial are as overbuilt as in the '90/'91 and '01 periods." - CR 05/13/08

Just keeping track of the evolution.

Forgot the"r"?

//Just keeping track of the evolution.//

Does it matter? The system is rigged and crumbling fast..

//A big part of this story is the continued confirmation of the unlimited Treasury/Fed reserve line available to "important banks" : when they find themselves in trouble, the government will always prop them up to ensure their creditors do not take any losses.//

asset liability swaps! that must be the new silver bullet!

butter (member) wrote on Sun, 04/19/2009 - 4:03pm.
"asset liability swaps! that must be the new silver bullet!"

Swaps of debt for equity, I assume.

We just came back from looking at a house. We were the 12th group of people through it today. The real estate agent mentioned that there was another one that just came on the market at 60k less. It is a short sale. One more for sale in the same area plus 1 under contract and 1 pending.

This is Oakton, a suburb of DC. They are selling for approx. 20% less than they did last year. My wife wants it. I would not mind it but we are going to wait another year. Funny, I saw people coming in as we were leaving and thought "My goblin! We need to move on this!" We don't have to do anything.

I read these posts, some books, actually sat and thought a bit which hurt, and there is no way this is over yet. If I am wrong, well it won't be the first time.

"Translation: "We're not going to be allowed to show the big inflation engines to the general public until we knock Volcker off the train... Almost there... Just one more push...."

Very disappointed in Krugman on that one. Everybody wants to punish the small saver to save the economy. Got to prod him along to get the economy going.

What you never hear a mainstream economist say is, "The first thing we have to do to get on track is reduce the concentration of half the wealth in .5 percent of the hands, and get the money moving again." The wealthy never have to give up anything for the good of the economy; that's for the poor people.

Oh, the poster Bob Dobbs. Click on his link. He can write. Well written as usual Bob.

nova,

Stay the course, man, stay the course.

OK, I live in Boise, Idaho and have been charged with a felony for posting on a blog (not this blog, but in the local paper, because they did not like what I wrote). All I have to say is don't move to Idaho it's a lot like China, except everyone's Caucasian (like me) and part of Mormon Mafia.(not like me) ...

felony for posting on a blog

norma, are you serious? is the felony simply "posting" or does the post have to be tied to something else (e.g. libel, hate speech, inducing a run on a bank, etc)?

I swear Krugman is a smug moron sometimes. Consider:

Matthew Yglesias notes that Tom DeLay is under the strange misapprehension that Texas is rich thanks to its low taxes and lack of regulation.

Just one minor issue: you really shouldn’t use median income, which can be distorted to the extent that inequality differs across states. You should instead use income per capita. As it happens, the comparison is even more striking. Texas, with its glorious free market regime and deeply incentive-creating 25 percent rate of health uninsurance, has a per capita income of $37,187; nanny-state New Jersey, with its oppressive taxes and regulation of everything (what it takes to get permission to cut down a dying tree … ), has a per capita income of $49,194.

Poor Texas - Paul Krugman Blog - NYTimes.com

How can it be that a Nobel winning economist does not factor cost of living into his comparison? If you plug those very numbers into a calculator like Cost of Living comparison calculator
Texas actually comes out ahead. Note that he chose NJ, which has the highest (nominal) income per-capita. If he had chosen CA or NY, the comparison would have been even worse. For example, that $37,187 in Dallas is comparable to $87,109 in Manhattan or $67,590 in San Francisco.

I am really annoyed, I'm gonna make some squirrel soufle'.
The damn squirrels are not only eating the ripe peaches that I thought I'd get a decent
amount finally this year, they are eating the tiny green peaches.

I hope they get super duper squirrel tummy aches.

And yeah, we should care about what Larry thinks will happen in the economy because? ? ?

Only reason I can think of is fear he will do something awful and make it a lot worse.

But I am a mere woman and therefore not good at these things.

Anecdotally--Game Stop is busy. Clerk said they are doing just fine. We hypothesized that games==movies, for this depression. Barney's had customers. Mall otherwise pretty dead.
Thai restaurant we like has expanded into former offices next door.

Evil Walmart didn't have much of a selection of video cameras, so the hub didn't get one.

Thank God for our fearless gov. And BTW it was Suzy Pole the realtor and John (Lefty) Pimp the mortgage broker who got us into this mess.

Basel Too (member) wrote on Sun, 04/19/2009 - 4:32pm.
felony for posting on a blog
norma, are you serious?

DNFTT

Tupuli,

Isn't NJ a suburb of NY?

You have to want to live in Dallas to prefer Dallas in any category. Our money would no doubt go even further in Tonga than in Dallas, but I don't want to live in Tonga either.

anyone else think that the way theyve painted themselves into a box on this stress test result announcment May 4 pretty much means that ALL of the laggard banks will simultaneously announce deals with private capital just as they basically announce that they are the worst off of all the non-insolvent insolvent banks? I mean, how in heck can they say anything other than "all-clear!" otherwise? And then, what would the point of the whole thing been? A total sham will be exposed. So I just see this whole propaganda game as buying more time for the zombies. This gets us to May 4, the capital raising will be announced then, and then we have three more months to the next bank's earning report season, or so. At which point they are "hoping" (ie. executing their hope plan) that a natural and self sustaining recovery will have come about from the green sprouts of a ppt rigged one month mini bear market rally. It all stinks like an office with a dead fish above the suspended ceiling.

umm, that gets us us to my drop dead date--some time in the month of September.

However, Tonga is connected in my mind with something wonderful having to do with values and common sense. Years ago, when I watched television, I saw a documentary program about the visit of a young western woman - she may have been American, or may have been British - to Tonga, where at one point she met with a sort of council of Tongan notables, who tend to be very large, very dignified men. She prattled on and on about her accomplishments, and then, while strolling along a beach with an extremely large and dignified Tongan, who towered over her, she boasted about having single-handled a sailing ship around the world on the 40th parallel. The Tongan looked at her with a kind of thoughtful intensity for a moment, and then he said: "What a stupid thing to do."

I think it was the most wonderful moment of television, at least of the documentary sort, I ever saw.

I think our leaders (minus Volcker) think it's just a loss of confidence, and we just need to get back to ever-rising asset prices, and we have a decent chance of getting there if we can get everyone to believe it's already happening for a few months.

patientrenter, I have a somewhat different take.

There's some happy talk for sure and it looks like all the banks will pass, but I think this administration is trying to slow the rate of descent in the economy because they really do think it could get really ugly if they don't.

'Really ugly' is still on the table so far as I'm concerned.

Anecdotally--Game Stop is busy. Clerk said they are doing just fine. We hypothesized that games==movies, for this depression.

That's a widely held theory right now. Video games are by far the cheapest form of entertainment.

It floored me when non-metropolitan movie theaters crossed the $10/ticket mark. I wish them luck.

/not really

"He would never compare US vs. China without adjusting for PP."

Yep. One of my entertainments is reading travel guides. My traveling days ar probably over, but I like to imagine myself in various places, and I often try to calculate if we could afford to live there. But I always end by thinking that we're best off where we are, even if DC is a lot more expensive than, say, Minot, ND, or Erie, Pa.

"...the USG is in a box here."

Yes, one wonders. There is a suggestion of a coming political turbulence here. There are obligations which may not by sloughed off without consequences.

But I always end by thinking that we're best off where we are, even if DC is a lot more expensive than, say, Minot, ND, or Erie, Pa.

Yes, but I do wonder how many people are going to begin questioning the American dream when they realize that they can't afford health care and that they'll never own a house. Many of the best parts of DC, NY, CA, etc. aren't accessible to such people.

"... , going and working with the private markets in a variety of, kind of, so-called asset liability swaps that would have the effect of perhaps diluting some shareholders but also fortifying the level of capital that those banks had."

Bond holders take shares?

I watched TV last night. Something I have not done since October or so. The ads were interesting. How to prepare a meal for your family under $10 (Campbells Soup). Stouffer had the same thing as did Popeye. Hyundai was in heavy rotation with the "Buy a car. Lose a job. We will still love you short time."

"Many of the best parts of DC, NY, CA, etc. aren't accessible to such people."

There are older people who are, in a manner of speaking, grandfathered into the best parts, and now they're having a hard time paying their taxes. People think that if they live in an affluent neighborhood they must be affluent, but they're not.

Yodel anecdotal: Know a pharm sales rep whose sales force went from Xk to Yk, at a haircut of about 70% of sales employees. Literally told me he's only hoping to hang on for 8-10 more years, get his kids through college, then figure it out from there. Lives in one of the most prosperous (or expensive, depending upon your view of things) zip codes in the country.

Spoke with a colleague at the part-time job yesterday who said he wants to sell his house but is underwater and can't get out. It is "killing him." He's living here in America thanks to his natural-born wife; he's not a citizen yet but working toward it, and took advantage of his athletic ability to get a university degree (bachelor's).

Colleague at real job hasn't paid one CC for six months, just missed mortgage last month. Husband unemployed with medical issues.

Me? All my savings (sans 201K) going to medical issue in 10 days. Not sure about job status, but if it goes, so does a mortgage and car loan to WFC.

The sorry-arse grifter I allow to live at my house is, yet again, behind on the paltry 2 hundred I ask for a month. 2007 Tahoe still sitting in my driveway, his cougar girlfriend is here and they're fooling around when both should be working; he couldn't get a 1 bedroom in the worst part of town for half his car payment.

Yeah, I'm a glutton for punishment and don't stick up for myself, but that day is coming and it's about 6 weeks from this one.

There are a lot of deadbeats here in the grand old USA, and I have no sympathy for any of them when they get called out, whether they are Wall Street or Main Street frauds.

Lotta people going to be dislocated both physically and financially and that pain IS going to come back to those who financed them.

Hello auto, credit card, and mortgage industry!!

"Would you rather be on the side of millions of retirees that control the ballot box, or somewhat fewer millions of workers that control the pitchforks?"

It will not further our national well-being if we fight one another. That would be another stupid thing to do.

That said, it may be that the era of the pitchfork as a decisive weapon is over. I'm not being literal, of course, but I think the meaning is clear.

Damn, Rott, here's hoping everything works out for you somehow.

Summers: "Well, the administration’s been, I think, consistent and clear in taking what I would guess almost everybody would agree is the right position."

The Washington echo chamber is an amazing thing.

In it, a fart sounds to its maker like Mozart.

Nova, you've been quite the doomer. If you turn, I'm going all in. Housing, equities, bonds... you name it

"There are older people who are................. having a hard time paying their [property] taxes."

.....welcome to the supporters of California's "Prop-13". (Older people who after continued reassessments could no longer afford to pay their property taxes and had to sell their property and move.)