I know this may seem unrelated, but bear with me Look at the image accompanying this story on Germany owning 47% of Hypo Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
"Met a couple of people worth about 3-4 million dollars a couple years ago were going heavy into Multi-family structures in Sonoma."
I've spent a fair amount of time with East Bay multifamily landlords. The ones who consistently invested with the really cheap ones with good fundamentals are doing fine. The important thing to understand is that not all low-income tenants are the same.
Which version of the bank stress test speech gets loaded into the teleprompter this evening, given that it's likely Elmo will be in the audience heckling ?
these couple were leveraged up the wazoo. Probably 10 million dollars in mortgages between them with a 5 million dollar cash position. Really down to earth people though. Horrible tippers. I remember putting a dollar into the tip jar for them. It was embarrsing that they didn't even throw the change coins in.
I remember talking to two wall streeters a day or so before Bear Stearns crapped out. Their thinking was that Bear would be bought out for $80/share - book value at the time.
The mark to market rally assumes that assets values on the books of the big banks will recover soon. I question the underLYING assumption.
I did my own simple bank stress tests years ago and didn't like what I saw. As it turns out, I was an optimist as asset values, especially real estate, are lower than I thought they would be.
that was really tempting to many folks - a mortgage at 5% and a cap at 8% seems like big, easy money. those that bought with caps much lower and GRMs in the teens were just begging to lose money.
i think that game can still work, even in this climate, as long as your rents and assumptions about them are really cheap and your tennants are generally employed. but good luck refi-ing - banks have been giving multifam LLs the cold shoulder for well over a year now.
Really, really interesting. Notice the inverse relationship. As recession was dipping, green shoot rose, then they inverted, then inverted again. Also, notice that "recession" is close to breaking the low trend line.
Really interesting. I wish Google had a log graph to show the relationship better.
May 7 (Bloomberg) -- California’s cash shortage may swell to a record $23 billion by October if voters reject tax increases, borrowing and a spending cap Governor Arnold Schwarzenegger seeks, the state’s fiscal analyst said.
Even if the measures do pass, the state still might need to borrow $17 billion of so-called cash flow notes or warrants and that might not be publicly sellable, the state’s Legislative Analysts Office said in report released today.
HollywoodHack
"banks have been giving multifam LLs the cold shoulder for well over a year now. "
I expect that it's almost impossible to get any sort of loan on commercial property right now. And to Rob Dawg's wish about "cures rates", I can't see how they are much above zero. If the loans can't be rolled, they can't be cured unless Uncle Ben makes helicopter drops in the vicinity.
"Bernanke Says Fed Monitoring Liquidity of Banks on Daily Basis"
Well, since we find out today that they're solvent -- why does the fed have to monitor at all? Couldn't they just sell off some of their precious assets to cover whatever liquidity shortfalls they may have?
This is the only article from bloomberg-harvard cabal that is somewhat meaningful
Three Little Words Every Leader Needs to Learn - Bloomberg.com
Thursday May 07, 2009
By Rosabeth Moss Kanter
There are three little words that extraordinary leaders know how to say, and I'm not thinking of "I love you" (but those are pretty good). The magic words are "I was wrong." Husbands and wives know that saying those words to each other can be even more endearing than endearments. When leaders say them to their teams in a timely fashion, they build confidence and can move on to a better path.
The simple sentence "I was wrong" is the hardest for leaders to utter and the most necessary for them to learn.
Dawg- "I'm also the same idiot that thought the DJIA couldn't stay above 8000 for more than a few days/weeks so don't think I'm trying to sound smart or anything."
Dawg, I didn't think it would either, but it did. I still think it's a head fake. It's a traders market, nothing more. Having said that, rule one in my book is "Don't Lose Money." I'm risk-averse, don't trade, and make every move based on fundamentals. I'm not in the market now and haven't been for months, but that doesn't mean I don't follow the action.
I was criticized heavily by some of my associates when I shorted Bear Stearns. They said I was violating my own principles and had become a trader. I responded by saying that I didn't view it that way. It was, I said, a "no-brainer," based purely on an analysis of fundamentals. I don't pick up nickels in front of steam rollers.
Shadow
"Even if the measures do pass, the state still might need to borrow $17 billion of so-called cash flow notes or warrants and that might not be publicly sellable"
Isn't it "Saleable" oh well I'll give you 1 guess who will buy them
Goldman Sachs, Morgan Stanley and UBS on Thursday agreed to allow reciprocal access to each other’s dark pool block trading facilities for the first time in Europe.
The move is a sign that some of the big players that operate dark pools are trying to find ways around the increasing fragmentation of share trading liquidity across the region by joining forces in an attempt to aggregate liquidity in one place
Interestingly, the study said, the continuing financial crisis is beginning to show an impact on board rooms and directors, who have for too long followed the lead of top management. They are now gradually beginning to take greater role in corporate planning and in making top personnel changes.
Did Obama, BB, Giethner get this memo for top Wall St crooks that are still there and still asking for more bailout $$$ ?
In California, expect to see the circus start up this weekend to scare the voters into giving in. It will be interesting to see what tactics are chosen. My prediction is the selective closing of school districts across the state in those areas where the propositions are faring the worst.
Nothing spooks a market so much a state-sponsored fraud and deceit.
Any but dumb dentists know the desperate state we're in, despite funny and phony stats, trades, tickers.
Bond markets is saying, "Pants on FIRE"
But why save a patient with amputation when you can kill him dead.
I know this may seem unrelated, but bear with me
Look at the image accompanying this story on Germany owning 47% of Hypo
Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
EHP:
Those walking men are leftovers from East Berlin. You can see a few of them walking down Unter den Linden from the Brandenburg Gate towards Humboldt University. It's a great walk, BTW.
The "green shoots" meme is interesting.
Clearly measurable change, yet I can't see anything about California budget issues.
I suspect that means CA is still in denial.
I might superimpose the "recession" and "green shoots" memes together at a pseudo-log graph just to show the relationship.
Did the Feds hire an advertising agency to change sentiment?
sm_landlord (profile) wrote on Thu, 5/7/2009 - 2:54 pm
It seems that the 30-year Treasury auction did not go well today.
You would think with the ECB cutting, but I guess that was priced in.
mp (profile) wrote on Thu, 5/7/2009 - 11:51 am reply Ignore user
I was criticized heavily by some of my associates when I shorted Bear Stearns. They said I was violating my own principles and had become a trader.
I'm with you. Shorting BS was a long term investment.
Much like the bond market, the stock market and even to some extent the housing and commodities markets have all stopped investing and replaced that with trading. Until these idiots get burned they won't learn to respect fire. Collectively we really really need to stop intervening when the pain lesson is about to be applied.
Chicago Dude (profile) wrote (in reply to...) on Thu, 5/7/2009 - 2:57 pm reply Ignore user I know this may seem unrelated, but bear with me
Look at the image accompanying this story on Germany owning 47% of Hypo
Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
Maybe it was a subtle hint from DDR higher-ups: Comrade! You don't need more food -- head is attached directly to hips! ...
mock turtle - yup outright coupon pass is basically welfare for the primary dealers to trade with or to address liquidity needs. It's permanent hot money (don't see much in the way of repo transactions any more ... it's all permanent LOL). Or at least that is my understanding. Historically, a lot of big coupon passes have been associated with big runups in the stock market ... e.g. dot com boom ... now they seem to have much less effect, even though they are larger and more frequent. I encourage other comments.
Dawg that guy looks like death warmed over. No wonder, with his job... Calif. only needs 20 billion - that doesnt sound like such a big number any more - and the Democrats got 75% of the vote last November... Maybe Arnold can work out a weed-for-cash program with DC....
I think California voters are so pissed off at this point that scare tactics just aren't going to work any more. They're fed up and they're not going to take it any more. I'm looking forward to seeing legalized marijuana to address the mother of all budget shortfalls.
# monitoring large or rapidly increasing exposures..."
So ICE Trust, just approved in March, as a special purpose bank by the NYFED, already guarantees 350 billion in CDS. The amount the member banks contribute to the the Guaranty Fund, and the amount of that fund, are not publicly disclosed. ("Trust us, we've run the numbers")
Second wave influenza may be worse variant as virus transmutes in S. Hemisphere cold season.
Second wave affluenza much worse as money printing and inflation takes hold without any growth potential; and as gov't manipulation becomes common knowledge.
Fed better realize that it is going to own the market completely. They've already begun the ridiculousness of buying and selling paper from one hand to the other, that they've crowded out all but superspeculators. Capital markets are deeply dysfunctional.
We may have zombie banks, but increasingly main street is zombified. Everyone going through the motions of business activity but without the confidence that present level will hold, let alone grow.
Without a wild orgy of RE/CRE construction, Bond/Bond derivative scam marketing, big ticket purchases, MEW and refi money--the ship is going down. Breaking down bulkheads to allow a more orderly settling doesn't fool any but insanely hopeful.
The momentary rise in this bark belies the longer truth: she is holed below waterline.
From that LA times article, budget analyst: "California has an unprecedented cash crisis and could run out of money at the end of next month if lawmakers and the governor do not act to stop the financial hemorrhaging, according to a new forecast by the Legislature's chief budget analyst."
Note that he did NOT say "unless voters approve proposition 1A" ... the state budget analyst sees where the problem is, and the solution.
Charles Schwab Bethlehem Steel - Died broke
Samuel Insull Commonwealth Edison Co - Died broke outside US
Howard Hopson Associated Gas and Electric Utility - Died with diagnosis of Clinically insane
Ivar Kruegar form. Pres Independent March Co -Died broke
I keep thinking of that scene in Robocop where the television news journalist interviews the scary homeless person on the eve of the police strike. You will certainly see variants on that theme, methinks.
energyecon (homepage, profile) wrote on Thu, 5/7/2009 - 12:17 pm reply Ignore user
Rob Dawg and dryfly,
had you seen this?
Boeing Loses Deal for 25 787s, Has Net Order Deficit for Year
Ummm, how to say this? IF (theoretically) I knew about this weeks ago I wouldn't be able to say anything. It's not like EADS is anything but a pure price/performance consideration now is it?
re: China, power generation Rolling 12 month output as reported by Ministry of Industry and Information Technology using State Grid's statistics, which must include China Southern Power Grid's data (I would think both Grid companies would just report to the ministry, but then again that could be the case and the misunderstanding in translation)
Seems the Fed and Treasury have used up all their bullets / ideas / credibility / trust just on round 1 of the crisis, not to mention all the current and future funds of generations of US taxpayers.
So if commercial RE crashes / non subprime foreclosures escalate / job losses continue, what will the Fed and Treasury do? Is there a plan besides kicking the can down the road past the next election?
Add to that the boomers which I'm really not seeing a lot of press on but it seems it is yet another elephant in the room. Some are starting to retire soon. Many were planning to sell homes to finance retirement and / or rely on their stock portfolios. Can they really keep working forever? It's not really fair to young people is it (as a boomer myself I'm pretty comfortable saying I ought to step aside soon and let a youngster have a go). If social security is pushed back to age 70 or 75 (consider the original intent of SS and it's not so far fetched) what will boomers do?
I don't really see a lot of long term planning going on. In fact I don't even see a proper plan for the next stage of this.
"I don't really see a lot of long term planning going on."
I'm planning around a long term decline until Joe Boomer (DOB 5/5/55) dies.
the events of the past year are remarkable, but, really, the key events leading to this were:
1995: Japan keeps zombie banks alive. Not a single american economist seems to notice.
1998: LTCM is bailed out by behind-the-scenes fed, market then spikes ridiculously from relatively sane equity valuations.
2003 (?) : AARP 'donut' bill passed as the sun comes up by delay, abramoff and friends.
the peak in boomer earnings and the positive feedback loop this created with equities and RE just papered over the real rot underneath - a rot exemplified by and exaggerated by boomer narcissism and anti-intellectualism.
sterlingerl (profile) wrote on Thu, 5/7/2009 - 12:23 pm reply Ignore user
Seems the Fed and Treasury have used up all their bullets
Yup. That's how it works. Remember when you were a kid and had a playball in the swimming pool? Remember how easy it was to lift it and hold it up? Remember how it was fairly simple to push it down a litte? Remember how very hard it was to actually send it underwater? Remember how it almost struggled to escape the deeper you tried to drive it? Remember how it wobbled and eventually pooped up? Remember the chaos when it did? The little kid is the Fed and the ball is interest rates.
Consumer credit falls at fastest pace in 18 years US consumer credit falls in March at fastest pace in over 18 years as recessions deepens
WASHINGTON (AP) -- Consumer borrowing plunged in March at the fastest pace in 18 years as Americans put away their credit cards and hoarded cash amid the worst recession in decades.
The Federal Reserve says consumer borrowing dropped 5.2 percent in March, the biggest decline since an 8.1 percent fall in December 1990.
actually, the kid has a ten-foot snorkle (the ability to print money). the real problem is that the water in the pool itself (economic activity from a private job base) is dropping quickly.
That particular movie ends with a lot of death and destruction.. often accompanied by many members of the elite losing their heads or dying of similar unnatural causes.
[I'm looking forward to seeing legalized marijuana to address the mother of all budget shortfalls]
I think prostituion should be legalized first. It would generate SS, Income and corp taxes and workers get medical care. We'd get unemployed (ugly) hookers lining up at benefits offices in their HOT outfits. Fun stuff!
Drop in consumer credit is bullish at a later date.... some of that drop is from people being cut off from their credit line.... Which reminds me - I read articles about people complaining that their credit card being cut off made their business fail because they used the credit card to fund the biz.... I dont see how anyone could make a profit paying credit card interest rates...
Angry Saver (profile) wrote on Thu, 5/7/2009 - 12:32 pm reply Ignore user
Fed just bought $25 billion in Agency MBS.
Your tax dollars at work.
Them ain't tax dollars.
The Treasury situation is butt ugly. If the yield is getting away from the Fed, and it sure seems to be, it's going to be game over for a lot of things. Suddenly there is no longer infinite demand for US dollars, and I think Timmeh and Benny have been counting on more or less infinite demand until we spent our way out of this.
A true american renaissance will occur only after various "institutes", "think tanks" and "study groups" are buried alive with their masters.
Housing affordability, Rents rise in Florida, homes more affordable in most cities: report
http://www.marketwatch.com/news/story/Homes-more-affordable-rents-rising/story.aspx?guid={1C5ACE3A-CD16-41DD-92E8-F353094C22C5}
By Amy Hoak, MarketWatch
Last update: 9:01 a.m. EDT May 7, 2009
CHICAGO (MarketWatch) -- Florida is a state hit hard by foreclosures, and now apartment rents there are on the rise, according to a new report released on Thursday.
The average two-bedroom apartment became less affordable in 2008, compared with 2007, in all of the Florida metropolitan areas studied in the report "Paycheck to Paycheck: Wages and the Cost of Housing in America," by the Center for Housing Policy.
They're not using the CC to long-term finance the business, but short term churns. I knew someone that literally would pay off the balance 5-6 times a month @ 20K.
Well Basel I agree if they pay it off in 30 days that could be ok - but the stories I read were people carrying the debt for months or even permanently...
I use my credit card for everything, but never carry a balance... I did have to pay one finance charge one month when I was on an extended trip and didnt get home in time to pay the bill - otherwise, no finance charges ever - all the way back to whenever cards came out - ?? dont remember - late 60's?
Dirk van Dijk (profile) wrote on Thu, 5/7/2009 - 12:45 pm reply Ignore user
mp, thanks
Dawg, good analogy of the ball in the pool, I may have to borrow it at some point (if you don't mind)
I'd be honored sir. Just remember, if you force the ball too low the pressure causes it to implode.
Since we're talking about credit cards, what happens to people who default? Do the credit card companies report charge-offs to the IRS? Are they reportable income?
Yup. That's how it works. Remember when you were a kid and had a playball in the swimming pool? Remember how easy it was to lift it and hold it up? Remember how it was fairly simple to push it down a litte? Remember how very hard it was to actually send it underwater? Remember how it almost struggled to escape the deeper you tried to drive it? Remember how it wobbled and eventually pooped up? Remember the chaos when it did? The little kid is the Fed and the ball is interest rates.
What is the poop in this analogy, which came from the ball after the fed wobbled it? Excellent analogy (pun intended), including perhaps some engineering associations... was this an intentional typo?
"Which version of the bank stress test speech gets loaded into the teleprompter this evening, given that it's likely Elmo will be in the audience heckling ? " - bearly
"Increase." That's a good word, right?
hmmm? anyone?
Nemo?
Oh! up there ... heh heh.
Here come the write-ups!
Seems like the market stopped rallying on bad news or good news. Hmmm. Exits could get very crowded with a bad jobs number tomorrow.
Met a couple of people worth about 3-4 million dollars a couple years ago were going heavy into Multi-family structures in Sonoma. Oh well.
A home down from my Grandmas I swear is a multi-family structure. At least 3 in there
I know this may seem unrelated, but bear with me
Look at the image accompanying this story on Germany owning 47% of Hypo
Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
Thank goodness we changed the mark to market rules.
Hey Nemo, maybe we'll see a huge spike in the CRVIX around 5 pm. Whatcha' think?
EHP - Way too much time on your hands... or is that a hand in the first pic ?
"Met a couple of people worth about 3-4 million dollars a couple years ago were going heavy into Multi-family structures in Sonoma."
I've spent a fair amount of time with East Bay multifamily landlords. The ones who consistently invested with the really cheap ones with good fundamentals are doing fine. The important thing to understand is that not all low-income tenants are the same.
More green shoots please.
I suppose the average German has no torso?
I would love to see the "cure rate" for CRE loans.
Which version of the bank stress test speech gets loaded into the teleprompter this evening, given that it's likely Elmo will be in the audience heckling ?
HH
these couple were leveraged up the wazoo. Probably 10 million dollars in mortgages between them with a 5 million dollar cash position. Really down to earth people though. Horrible tippers. I remember putting a dollar into the tip jar for them. It was embarrsing that they didn't even throw the change coins in.
and we, as well as the Canadians, should be wearing fedoras?
Interesting Times
All this talk of green shoots is suppressing the more newsworthy material
I think something funny (but not "ha ha" funny) is going on in the Treasury market.
Kudlow was positively beaming on CNBC this morning. "The recession is over." And then he starting singing "It's over".
I love that guy. Endless source of entertainment.
no worries, Zimbabwe Ben will print more dollars to take up all these loans as well.
It's like magic, isn't it? So easy to paper over all the cracks in the economy.
cocaine is a hell_of_a_drug
Bernanke Says Fed Monitoring Liquidity of Banks on Daily Basis
Bernanke Says Fed Monitoring Liquidity of Banks on Daily Basis - Bloomberg.com
Daily bailouts? You have to watch these guys they could go down like goldfish.
Book1 LOL Really Ben puff, puff, pass
Just tripped trade switch for buying first of three tranches of SDS.
I remember talking to two wall streeters a day or so before Bear Stearns crapped out. Their thinking was that Bear would be bought out for $80/share - book value at the time.
The mark to market rally assumes that assets values on the books of the big banks will recover soon. I question the underLYING assumption.
I did my own simple bank stress tests years ago and didn't like what I saw. As it turns out, I was an optimist as asset values, especially real estate, are lower than I thought they would be.
I still think the banking system is in trouble.
Angry Saver - All 19 banks of the US are insolvent. In fact the entire top 50 of the world are too.
"these couple were leveraged up the wazoo."
that was really tempting to many folks - a mortgage at 5% and a cap at 8% seems like big, easy money. those that bought with caps much lower and GRMs in the teens were just begging to lose money.
i think that game can still work, even in this climate, as long as your rents and assumptions about them are really cheap and your tennants are generally employed. but good luck refi-ing - banks have been giving multifam LLs the cold shoulder for well over a year now.
Spain is up to 88 cases. WHO won't be able to put off a level 6 alert for much longer.
How funny.
Here's your meme, Dawg.
Google Trends: green shoots
Google Trends: green shoots, recession
Really, really interesting. Notice the inverse relationship. As recession was dipping, green shoot rose, then they inverted, then inverted again. Also, notice that "recession" is close to breaking the low trend line.
Really interesting. I wish Google had a log graph to show the relationship better.
"Bernanke Says Fed Monitoring Liquidity of Banks on Daily Basis"
This really strikes me as a very confidence inspiring activity.
It is contained!
Green shoots at the blog level -
Trend Search
The breakout is almost coincident with Bernanke's announcement of QE.
Now I'm wondered if it's purposeful manipulation.
"For now, the "bottom" is in -- that is, the bottom of this society's ability to process reality."
More on topic for previous threads, but rather than cut and paste, here are the links:
Is the Recession Over?
Bernanke on Regulation
Another few posts that people may find interesting:
Treasury's Conditions for TARP Exit
GM Reports - Is Bankruptcy Near?
Volume is good today... for a change.
May 7 (Bloomberg) -- California’s cash shortage may swell to a record $23 billion by October if voters reject tax increases, borrowing and a spending cap Governor Arnold Schwarzenegger seeks, the state’s fiscal analyst said.
Even if the measures do pass, the state still might need to borrow $17 billion of so-called cash flow notes or warrants and that might not be publicly sellable, the state’s Legislative Analysts Office said in report released today.
HollywoodHack
"banks have been giving multifam LLs the cold shoulder for well over a year now. "
I expect that it's almost impossible to get any sort of loan on commercial property right now. And to Rob Dawg's wish about "cures rates", I can't see how they are much above zero. If the loans can't be rolled, they can't be cured unless Uncle Ben makes helicopter drops in the vicinity.
"Bernanke Says Fed Monitoring Liquidity of Banks on Daily Basis"
Well, since we find out today that they're solvent -- why does the fed have to monitor at all? Couldn't they just sell off some of their precious assets to cover whatever liquidity shortfalls they may have?
Might be time to look at DBO again----
This is the only article from bloomberg-harvard cabal that is somewhat meaningful
Three Little Words Every Leader Needs to Learn
- Bloomberg.com
Thursday May 07, 2009
By Rosabeth Moss Kanter
There are three little words that extraordinary leaders know how to say, and I'm not thinking of "I love you" (but those are pretty good). The magic words are "I was wrong." Husbands and wives know that saying those words to each other can be even more endearing than endearments. When leaders say them to their teams in a timely fashion, they build confidence and can move on to a better path.
The simple sentence "I was wrong" is the hardest for leaders to utter and the most necessary for them to learn.
From previous thread
Dawg- "I'm also the same idiot that thought the DJIA couldn't stay above 8000 for more than a few days/weeks so don't think I'm trying to sound smart or anything."
Dawg, I didn't think it would either, but it did. I still think it's a head fake. It's a traders market, nothing more. Having said that, rule one in my book is "Don't Lose Money." I'm risk-averse, don't trade, and make every move based on fundamentals. I'm not in the market now and haven't been for months, but that doesn't mean I don't follow the action.
I was criticized heavily by some of my associates when I shorted Bear Stearns. They said I was violating my own principles and had become a trader. I responded by saying that I didn't view it that way. It was, I said, a "no-brainer," based purely on an analysis of fundamentals. I don't pick up nickels in front of steam rollers.
I hope everyone has a good day.
here's a little warm up music
Tom Waits - Clap Hands
YouTube - Tom Waits - Clap Hands
Shadow
"Even if the measures do pass, the state still might need to borrow $17 billion of so-called cash flow notes or warrants and that might not be publicly sellable"
Isn't it "Saleable" oh well I'll give you 1 guess who will buy them
"I suppose the average German has no torso?"
Only the east Germans. West Germans can also be recognized by the absence of hat.
yup, sml. and this is why higher rates are really the phantom menace - many otherwise stable, cash-flowing arrangements are stuck in an ARM.
but i have faith that the nyfed can easily add another ten trillion to the balance sheet and hold the line on those rates.
Does anyone know how this movie ends?
Dark pool trio forms European alliance
By Jeremy Grant
FT.com / Equities - Dark pool trio forms European alliance
May 7 2009 18:42 | Last updated: May 7 2009 18:42
Goldman Sachs, Morgan Stanley and UBS on Thursday agreed to allow reciprocal access to each other’s dark pool block trading facilities for the first time in Europe.
The move is a sign that some of the big players that operate dark pools are trying to find ways around the increasing fragmentation of share trading liquidity across the region by joining forces in an attempt to aggregate liquidity in one place
anoddamoose (profile) wrote 11:28 am (previos thread)
Fed doing an agency coupon pass tomorrow.
ok please help me out here, me stupid
why would fed buy "agency" coupons from dealers when they could buy directly from the treasury???
is this just welfare for primary dealers or what?
Top executives remain immune to job-losses
Top executives remain immune to job-losses: Rediff.com Business
Interestingly, the study said, the continuing financial crisis is beginning to show an impact on board rooms and directors, who have for too long followed the lead of top management. They are now gradually beginning to take greater role in corporate planning and in making top personnel changes.
Did Obama, BB, Giethner get this memo for top Wall St crooks that are still there and still asking for more bailout $$$ ?
It seems that the 30-year Treasury auction did not go well today.
You would think with the ECB cutting, but I guess that was priced in.
In California, expect to see the circus start up this weekend to scare the voters into giving in. It will be interesting to see what tactics are chosen. My prediction is the selective closing of school districts across the state in those areas where the propositions are faring the worst.
Nothing spooks a market so much a state-sponsored fraud and deceit.
Any but dumb dentists know the desperate state we're in, despite funny and phony stats, trades, tickers.
Bond markets is saying, "Pants on FIRE"
But why save a patient with amputation when you can kill him dead.
I know this may seem unrelated, but bear with me
Look at the image accompanying this story on Germany owning 47% of Hypo
Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
EHP:
Those walking men are leftovers from East Berlin. You can see a few of them walking down Unter den Linden from the Brandenburg Gate towards Humboldt University. It's a great walk, BTW.
Rick Steves' Europe: Little Green (and Red) Men: In Search of Communist Berlin
Yancey Ward (profile) wrote;
"In California, expect to see the circus start up this weekend to scare the voters into giving in."
Ouch, time to unplug the TV sets. This could get very annoying.
California need to do some hard thinking about the future, but these measures don't cut it.
Long begging cups.
The WHO issued an updated set of guidelines for influenza pandemic preparedness and response today:
http://www.who.int/csr/disease/influenza/PIPGuidance09.pdf
The "green shoots" meme is interesting.
Clearly measurable change, yet I can't see anything about California budget issues.
I suspect that means CA is still in denial.
I might superimpose the "recession" and "green shoots" memes together at a pseudo-log graph just to show the relationship.
Did the Feds hire an advertising agency to change sentiment?
sm_landlord (profile) wrote on Thu, 5/7/2009 - 2:54 pm
It seems that the 30-year Treasury auction did not go well today.
You would think with the ECB cutting, but I guess that was priced in.
Are you stating that as fact or speculation?
maybe the somali pirates have a point
mp (profile) wrote on Thu, 5/7/2009 - 11:51 am reply Ignore user
I was criticized heavily by some of my associates when I shorted Bear Stearns. They said I was violating my own principles and had become a trader.
I'm with you. Shorting BS was a long term investment.
Much like the bond market, the stock market and even to some extent the housing and commodities markets have all stopped investing and replaced that with trading. Until these idiots get burned they won't learn to respect fire. Collectively we really really need to stop intervening when the pain lesson is about to be applied.
EnergyEcon;
Swine and Bird Flu stocks
Get ready, let's see if the magicians can pull Kermit out of the hat...
Can I be the first to predict the next meme for the rest of 2009?
One word: Dislocation.
Chicago Dude (profile) wrote (in reply to...) on Thu, 5/7/2009 - 2:57 pm reply Ignore user I know this may seem unrelated, but bear with me
Look at the image accompanying this story on Germany owning 47% of Hypo
Then compare to those in this reference article
It's the biggest unexplained part of the whole story in my opinon
Maybe it was a subtle hint from DDR higher-ups: Comrade! You don't need more food -- head is attached directly to hips! ...
Thanks for entertaining my diversions Chicago Dude.
I can't seem to attach the video but I recommend the clip on this site called "Is anyone minding the store at the Federal Reserve?" You will like it.
Nathan's Economic Edge
The stress tests show that WFC is insolvent. Why is their stock down?
mock turtle - yup outright coupon pass is basically welfare for the primary dealers to trade with or to address liquidity needs. It's permanent hot money (don't see much in the way of repo transactions any more ... it's all permanent LOL). Or at least that is my understanding. Historically, a lot of big coupon passes have been associated with big runups in the stock market ... e.g. dot com boom ... now they seem to have much less effect, even though they are larger and more frequent. I encourage other comments.
Shaping up to be a good entry point into the S&P today.
Yancey Ward (profile) wrote;
"In California, expect to see the circus start up this weekend to scare the voters into giving in."
You mean like this?
From less than an hour ago.
"Shorting BS was a long term investment. "
small but sentimentally important detail - BS was bethlehem steel. I flipped it in its death throes out of a sense of solidarity with great-grandad.
Dawg that guy looks like death warmed over. No wonder, with his job... Calif. only needs 20 billion - that doesnt sound like such a big number any more - and the Democrats got 75% of the vote last November... Maybe Arnold can work out a weed-for-cash program with DC....
I think California voters are so pissed off at this point that scare tactics just aren't going to work any more. They're fed up and they're not going to take it any more. I'm looking forward to seeing legalized marijuana to address the mother of all budget shortfalls.
Bernanke from 2 threads ago:
"Elements of a macroprudential agenda include
# monitoring large or rapidly increasing exposures..."
So ICE Trust, just approved in March, as a special purpose bank by the NYFED, already guarantees 350 billion in CDS. The amount the member banks contribute to the the Guaranty Fund, and the amount of that fund, are not publicly disclosed. ("Trust us, we've run the numbers")
Watch what he does, his words too are worth shit.
What's the current yield on California GO's?
sterlingerl, thanks for the video. check out the whispering woman sitting behind the inspector general nodding like she's following a script.
Nathan's Economic Edge
Second wave influenza may be worse variant as virus transmutes in S. Hemisphere cold season.
Second wave affluenza much worse as money printing and inflation takes hold without any growth potential; and as gov't manipulation becomes common knowledge.
Fed better realize that it is going to own the market completely. They've already begun the ridiculousness of buying and selling paper from one hand to the other, that they've crowded out all but superspeculators. Capital markets are deeply dysfunctional.
We may have zombie banks, but increasingly main street is zombified. Everyone going through the motions of business activity but without the confidence that present level will hold, let alone grow.
Without a wild orgy of RE/CRE construction, Bond/Bond derivative scam marketing, big ticket purchases, MEW and refi money--the ship is going down. Breaking down bulkheads to allow a more orderly settling doesn't fool any but insanely hopeful.
The momentary rise in this bark belies the longer truth: she is holed below waterline.
In California, expect to see the circus start up
We're going to see the police-produced extortion videos saying that if we don't pay up.
"Nobody has to take a shot at you. they can just not be there when you need them."
From that LA times article, budget analyst: "California has an unprecedented cash crisis and could run out of money at the end of next month if lawmakers and the governor do not act to stop the financial hemorrhaging, according to a new forecast by the Legislature's chief budget analyst."
Note that he did NOT say "unless voters approve proposition 1A" ... the state budget analyst sees where the problem is, and the solution.
Rob Dawg and dryfly,
had you seen this?
Boeing Loses Deal for 25 787s, Has Net Order Deficit for Year
By Susanna Ray and Andrea Rothman
May 7 (Bloomberg) -- Boeing Co. suffered the biggest order cancellation yet for its delayed 787 Dreamliner plane and has now lost one more contract this year than it’s won.
Boeing Loses $4.4 Billion Deal, Has Net Order Loss (Update2) - Bloomberg.com
Fortunes lost, Dreams Destroyed
Charles Schwab Bethlehem Steel - Died broke
Samuel Insull Commonwealth Edison Co - Died broke outside US
Howard Hopson Associated Gas and Electric Utility - Died with diagnosis of Clinically insane
Ivar Kruegar form. Pres Independent March Co -Died broke
Washington state has a budget deficit to deal with too, and it will be getting worse also... last I read was 8.3 billion short ...
Rob and Speed,
I keep thinking of that scene in Robocop where the television news journalist interviews the scary homeless person on the eve of the police strike. You will certainly see variants on that theme, methinks.
energy are any 787's flying yet??
Fed just bought $25 billion in Agency MBS.
Your tax dollars at work.
Shaping up to be a good entry point into the S&P today.
Welcome back Optimistic Joe - we've missed ya.
Anyone notice how these declines always start at the beginning of the month? After everyone gets their statements...
energyecon (homepage, profile) wrote on Thu, 5/7/2009 - 12:17 pm reply Ignore user
Rob Dawg and dryfly,
had you seen this?
Boeing Loses Deal for 25 787s, Has Net Order Deficit for Year
Ummm, how to say this? IF (theoretically) I knew about this weeks ago I wouldn't be able to say anything. It's not like EADS is anything but a pure price/performance consideration now is it?
King Country WA RRE came in with a remarkably stable April:
http://www.nwrealestate.com/nwrpub/common/mktg.cfm
Volume is nicely green, Y-o-y, too.
somebody just hit the buy-buy-buy button
re: China, power generation
Rolling 12 month output as reported by Ministry of Industry and Information Technology using State Grid's statistics, which must include China Southern Power Grid's data (I would think both Grid companies would just report to the ministry, but then again that could be the case and the misunderstanding in translation)
Seems the Fed and Treasury have used up all their bullets / ideas / credibility / trust just on round 1 of the crisis, not to mention all the current and future funds of generations of US taxpayers.
So if commercial RE crashes / non subprime foreclosures escalate / job losses continue, what will the Fed and Treasury do? Is there a plan besides kicking the can down the road past the next election?
Add to that the boomers which I'm really not seeing a lot of press on but it seems it is yet another elephant in the room. Some are starting to retire soon. Many were planning to sell homes to finance retirement and / or rely on their stock portfolios. Can they really keep working forever? It's not really fair to young people is it (as a boomer myself I'm pretty comfortable saying I ought to step aside soon and let a youngster have a go). If social security is pushed back to age 70 or 75 (consider the original intent of SS and it's not so far fetched) what will boomers do?
I don't really see a lot of long term planning going on. In fact I don't even see a proper plan for the next stage of this.
Well if the next stage is implosion...how do you plan for that?
sterlingerl
Agree what is plan B if spending doesn't work?
what makes today's decline any less scripted than the last month's rise?
@Dirk
Just wanted to pop in long enough to say that I read your piece on the recession.
Excellent write-up.
"I don't really see a lot of long term planning going on."
I'm planning around a long term decline until Joe Boomer (DOB 5/5/55) dies.
the events of the past year are remarkable, but, really, the key events leading to this were:
1995: Japan keeps zombie banks alive. Not a single american economist seems to notice.
1998: LTCM is bailed out by behind-the-scenes fed, market then spikes ridiculously from relatively sane equity valuations.
2003 (?) : AARP 'donut' bill passed as the sun comes up by delay, abramoff and friends.
the peak in boomer earnings and the positive feedback loop this created with equities and RE just papered over the real rot underneath - a rot exemplified by and exaggerated by boomer narcissism and anti-intellectualism.
sterlingerl (profile) wrote on Thu, 5/7/2009 - 12:23 pm reply Ignore user
Seems the Fed and Treasury have used up all their bullets
Yup. That's how it works. Remember when you were a kid and had a playball in the swimming pool? Remember how easy it was to lift it and hold it up? Remember how it was fairly simple to push it down a litte? Remember how very hard it was to actually send it underwater? Remember how it almost struggled to escape the deeper you tried to drive it? Remember how it wobbled and eventually pooped up? Remember the chaos when it did? The little kid is the Fed and the ball is interest rates.
Geither has already admitted there is no Plan B. Just have to try harder on Plan A is what he said when asked about Plan B.
This is bullish, right?
Consumer credit falls at fastest pace in 18 years
US consumer credit falls in March at fastest pace in over 18 years as recessions deepens
WASHINGTON (AP) -- Consumer borrowing plunged in March at the fastest pace in 18 years as Americans put away their credit cards and hoarded cash amid the worst recession in decades.
The Federal Reserve says consumer borrowing dropped 5.2 percent in March, the biggest decline since an 8.1 percent fall in December 1990.
Yahoo! 404 - Page Not Found
the market should just emulate the japanese today have a 4:00 sake.
Fed future policy will be more, more, more monetization.
Say it, "Why More?"
Now say it with an accent, " VAI MER", welcome to the Weimarican Republic
actually, the kid has a ten-foot snorkle (the ability to print money). the real problem is that the water in the pool itself (economic activity from a private job base) is dropping quickly.
say no more, say no more - a wink's as good as a nod
sterlingerl,
That particular movie ends with a lot of death and destruction.. often accompanied by many members of the elite losing their heads or dying of similar unnatural causes.
Yields reach November highs after 30-year bond auction
Wow. PRU up 21%. Some news about looking for acquisitions...
Fed just bought $25 billion in Agency MBS.
Your tax dollars at work.
Them ain't tax dollars.
[I'm looking forward to seeing legalized marijuana to address the mother of all budget shortfalls]
I think prostituion should be legalized first. It would generate SS, Income and corp taxes and workers get medical care. We'd get unemployed (ugly) hookers lining up at benefits offices in their HOT outfits. Fun stuff!
Drop in consumer credit is bullish at a later date.... some of that drop is from people being cut off from their credit line.... Which reminds me - I read articles about people complaining that their credit card being cut off made their business fail because they used the credit card to fund the biz.... I dont see how anyone could make a profit paying credit card interest rates...
Agree with Shadow credit lines are cut before they can default.
I like this picture:
http://www.timesonline.co.uk/multimedia/archive/00543/Obama_543919a.JPG
Angry Saver (profile) wrote on Thu, 5/7/2009 - 12:32 pm reply Ignore user
Fed just bought $25 billion in Agency MBS.
Your tax dollars at work.
Them ain't tax dollars.
They will be. They will be.
The Treasury situation is butt ugly. If the yield is getting away from the Fed, and it sure seems to be, it's going to be game over for a lot of things. Suddenly there is no longer infinite demand for US dollars, and I think Timmeh and Benny have been counting on more or less infinite demand until we spent our way out of this.
A true american renaissance will occur only after various "institutes", "think tanks" and "study groups" are buried alive with their masters.
Housing affordability, Rents rise in Florida, homes more affordable in most cities: report
http://www.marketwatch.com/news/story/Homes-more-affordable-rents-rising/story.aspx?guid={1C5ACE3A-CD16-41DD-92E8-F353094C22C5}
By Amy Hoak, MarketWatch
Last update: 9:01 a.m. EDT May 7, 2009
CHICAGO (MarketWatch) -- Florida is a state hit hard by foreclosures, and now apartment rents there are on the rise, according to a new report released on Thursday.
The average two-bedroom apartment became less affordable in 2008, compared with 2007, in all of the Florida metropolitan areas studied in the report "Paycheck to Paycheck: Wages and the Cost of Housing in America," by the Center for Housing Policy.
DEAD Monkey
Elmo's coming for dinner... then he will stay for another year.
they used the credit card to fund the biz....
They're not using the CC to long-term finance the business, but short term churns. I knew someone that literally would pay off the balance 5-6 times a month @ 20K.
Fed needs to get some of those Brawny paper towels to sop up all the excess debt...
ShadowInventory,
The financial system has schizophrenia.
Well Basel I agree if they pay it off in 30 days that could be ok - but the stories I read were people carrying the debt for months or even permanently...
i sure hope cali is first with legal pot.
let them soak up all the dopey realtors who flock there like a new gold rush is on.
Lots of people use credit cards as bridge loans. When they come up short on the bills they put it on the card. This will not end well.
Looks like the fed might have bought some bonds today after the auction fiasco - charts look like somebody did...
As goes California, so goes the USA???
I use my credit card for everything, but never carry a balance... I did have to pay one finance charge one month when I was on an extended trip and didnt get home in time to pay the bill - otherwise, no finance charges ever - all the way back to whenever cards came out - ?? dont remember - late 60's?
Will Elmo punch his way through 900?
Talk about printing money... "Simon Property plans $1B stock offering"
Simon Property plans $1B stock offering - Austin Business Journal:
Re credit card funded business - our little outfit puts $10-15K/day on the corporate AMEX in GOOG AdWords alone.
mp, thanks
Dawg, good analogy of the ball in the pool, i may have to borrow it at some point (if you don't mind)
Dirk van Dijk (profile) wrote on Thu, 5/7/2009 - 12:45 pm reply Ignore user
mp, thanks
Dawg, good analogy of the ball in the pool, I may have to borrow it at some point (if you don't mind)
I'd be honored sir. Just remember, if you force the ball too low the pressure causes it to implode.
Think I might cancel my online $WSJ subscription....I can't find a single story re: the spike in long-term Treasury yields.
Since we're talking about credit cards, what happens to people who default? Do the credit card companies report charge-offs to the IRS? Are they reportable income?
Feckless,
Yes to both questions.
Yup. That's how it works. Remember when you were a kid and had a playball in the swimming pool? Remember how easy it was to lift it and hold it up? Remember how it was fairly simple to push it down a litte? Remember how very hard it was to actually send it underwater? Remember how it almost struggled to escape the deeper you tried to drive it? Remember how it wobbled and eventually pooped up? Remember the chaos when it did? The little kid is the Fed and the ball is interest rates.
What is the poop in this analogy, which came from the ball after the fed wobbled it? Excellent analogy (pun intended), including perhaps some engineering associations... was this an intentional typo?
"Horrible tippers. I remember putting a dollar into the tip jar for them. It was embarrsing that they didn't even throw the change coins in. "
"Which version of the bank stress test speech gets loaded into the teleprompter this evening, given that it's likely Elmo will be in the audience heckling ? " - bearly
Excellent analogy (pun intended), including perhaps some engineering associations... was this an intentional typo?
Yes. It started as a typo but I did keep it on purpose.