"The budget should be balanced, the Treasury should be refilled, public
debt should be reduced, the arrogance of officialdom should be
tempered and controlled, and the assistance to foreign lands should be
curtailed lest Rome become bankrupt. People must again learn to work,
instead of living on public assistance." - Cicero - 55 BC
It's real hard to complain seeing as every single aspect of these transactions have been vigorously defended as being responsible financial activities by these same bankers.
So, the banks paid $130m to (not technically) insure $27m max, certainly much less on a gross performance basis exposure. Either they were gambling and threfor acting illegally or they were insuring and thus subject to limits including not over-insuring. Pick your poison Mssrs. Banksters.
Sounds like only one of the parties realized they were in a hedged position.
This is consistent with what I have seen in bonds. Very few people read the entire set of bond documents. Personally, I have done pretty well as a result.
What if the people at Amherst dressed up like Robin Hood and the Merry Men, and took a few million of their proceeds and gave it to people who were about to enter payday loan shops or cash for car pinkslip operations?
"Hi, we got this money by screwing some bankers. We'd like to give it to you so these lenders don't screw you."
It's so good to see monetary stimulus making its way into the economy.
Stimulus seems to have made its way into the oil futures market as well. Yippee!
$130m of insurance on $27m in property. Kudos to Amherst, if they wrote the majority of those contracts.
Scone, fantastic!! Thank you. Not only did you answer my question your answer will probably help me get the job I'm interviewing for with a telecom/satellite company.
"Well at least Amherst didn't buy third world debt ..."
Obviously, you've never spent time in the places most relatively inflated by the housing bubble in California... or you would realize that this is exactly what they did.
""The budget should be balanced, the Treasury should be refilled, public
debt should be reduced, the arrogance of officialdom should be
tempered and controlled, and the assistance to foreign lands should be
curtailed lest Rome become bankrupt. People must again learn to work,
instead of living on public assistance." - Cicero - 55 BC"
Wow, I just had a thought. I bet the banks were already taking write offs against these loans defaulting. Now that they've paid off in full there will be tax consequences.
Please forgive this slightly OT post but can anyone recommend a good Economics textbook? I can't speak for others but I could use some remedial education.
Thank you in advance for your advice and suggestions.
An incessant and unlimited piling up of wealth at last becomes irrational and without purpose. If in the end our society is based on this and on momentary pleasure it too is irrational and without purpose.
THE STORM IS COMING…
The storm is coming
Can’t you see the gray tail curl above the house?
Those are not the clouds you see
But rumpled flesh and ivory
Down comes the wool and spindle
Wick and candle
I hear the words
The sounds are coming slowly through the earth
This is not the speech of thunder
But syllables that fire tinder
Earth and heaven will debate
And both reverberate
But all is peace and still
Great clouds slide indifferently above the hill
If you call having a sword rammed through the space between your clavicle and scapula all the way to your heart unnatural, then yes, he did die an unnatural death.
As song as you avoid anything resembling a currently used macroeconomic textbook, you're fine. Current macroeconomics is a bit like Phrenology circa 1910, Psychotherapy circa 1880, Astronomy circa 1400, etc... If you see a Greek symbol, run. Thankfully, most of this psuedoscience has been discarded in the past year by the reality of current events.
The boys and girls at Amherst can be happy for a while,this was like Cal beating USC in a football game...except that the big boys on Wall Street play a lot rougher than USC and there will be payback.
The real question is whether it was all part of a plan by Amherst guys or they got saved by the bell
Recall that the most of the trades was done last year, when the total outstanding ($335 Mil) was much higher the total trade notional ($130 Mil at the peak). So Amherst probably was deep in the red at the end of the last year.
It was only when they realized that the bond prices fell so much they can afford to buy the whole issue that they figured out a way to turn a huge loss into a big win.
Luck and quick wits, yes, but may not be much in terms of grand strategy...
Anybody selling CDS protection on bonds backed subprime California mortgages issued in 2005 strikes me as an ultimate all-or-nothing gambler, the sort that brought down the financial industry to its knees, and along with it the world economy
pavel.chichikov (homepage, profile) wrote on Thu, 6/11/2009 - 8:10 pm
An incessant and unlimited piling up of wealth at last becomes irrational and without purpose. If in the end our society is based on this and on momentary pleasure it too is irrational and without purpose.
And in the end it turns on itself in an act of self-destruction. The snake eating its own tail.
Contrary to popular belief, the Public-Private Investment Program, a centerpiece of the government's strategy to rescue the nation's banks, is not dead.
The PPIP may be in critical condition, but the FDIC is planning what it hopes will be a miracle cure--a new pilot program it will launch in July to unload toxic assets under the supervision of new advisers who will structure and oversee the sale to qualified investors, the agency told the Huffington Post.
The new pilot is similar to the original PPIP that failed so spectacularly earlier this month, when banks resoundingly refused to sell any toxic--or err, um, "legacy"--assets to private investors. But this time around, rather than the banks unloading toxic debt from their balance sheets, it will be the FDIC that sells its own hard-to-price assets, which it acquired when it seized failing banks.
The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value. This could have an impact on those banks that have till now avoided pricing these assets for fear the transparency will force further write-downs, rendering some of them insolvent.
Great story. There is something kind of similar going on with GM stock right now. Normally, after being delisted and sent to the pink sheets, a stock trades below 30 cents.
However, the open interest in the June $1 puts is insane, something like 400,000 contracts. Also rumor has it that a lot of speculators wrote naked calls thinking that they would never have to deliver the shares.
Well, for the past week the stock has been defying gravity. Today it sold off a bit to $1.29, but many of those calls may get exercised, and the put holders are sweating.
mmckinl (profile) wrote on Thu, 6/11/2009 - 9:22 pm reply Ignore user "The FDIC To Start Dumping Toxic Assets, Banks Could Feel The Pain"
..................
"The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value".
It is weird how these new bookmark organizer webware services only use dumb tags and not folder hierarchies created with user knowledge. Computer replacing synthesis is an impediment to the knowledge formation that occurs between abstraction and synthesis.
The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value. This could have an impact on those banks that have till now avoided pricing these assets for fear the transparency will force further write-downs, rendering some of them insolvent.
~~~~
So will the banks bid on these too so they can mark their own assets to "market"? Wonder how far the banks will go to keep the charade going.
"Reaching a singular point of maximum entropy, now the system feeds on its own substance."
But we can't speak of economic and social systems in isolation from their base, the natural productivity of the Earth and its systems. These are still a long way from reaching maximum entropy. If human systems disengage too radically from natural ones,, though...
There is something kind of similar going on with GM stock right now. Normally, after being delisted and sent to the pink sheets, a stock trades below 30 cents.
Check out GGP and Pilgrim's Pride (the poultry company).
pavel.chichikov (homepage, profile) wrote on Thu, 6/11/2009 - 8:32 pm
"Reaching a singular point of maximum entropy, now the system feeds on its own substance."
But we can't speak of economic and social systems in isolation from their base, the natural productivity of the Earth and its systems. These are still a long way from reaching maximum entropy. If human systems disengage too radically from natural ones,, though...
Exactly. I wasn't advocating this. Far from it, as should be self-evident from a majority of my posts here I suppose. Once you get the goose out of the bottle it's rather tough to put it back inside. We are reaching the summit, and perhaps the fundamental limit, of the Western ascent and its flight to escape the biogram unaided. Where is Lucifer when you need him?
GGP and GM are two opposite stories. It is possible for GGP to restructure without full wipe-out of the shareholders. GM already announced that all of its shareholders will be annihilated.
June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them.
“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”
In the struggle for power between Pompey, Mark Anthony, and the young Octavius that ensued after the murder of Julius Caeser, in which Cicero favored Octavius, thereby incurring the wrath of Antony, he was hunted down and murdered. It is said Antony ordered Cicero's head (and hands) fastened up over the rostra, where the orators spoke. Per Plutarch. Quite the story.
This is effective the same strategy as me buying a $1 million policy on my wife and hiring someone to make it look like an accident.
Not at all! This is precisely the opposite. This is like selling a bunch of criminals an insurance policy on your fatally ill wife, and then using the proceeds to save her life. (And pocketing the profit.)
from the post "In late April, traders at some banks were shocked to find out from monthly remittance reports that the bonds they had bet against had been paid off in full."
"June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them."
lol I wonder if this had anything to do with the 134.5Billion in bonds the japanese nationals were trying to smuggle into Switzerland. Or maybe the $8500 aid congress is trying to pass to get people to buy fuel-efficient (Japanese) cars
credit default swaps are indeed the realm of the absurd. What perverse accounting standards gave birth to these crazy financial instruments from OZ? One group of college educated, but real world ignorant, pinstriped suit wearing, concrete canyon living boneheads generates a 200 page contract to insure a bundle of notes on some real estate they have never seen, and they negotiate said contract with another group of college educated, pinstriped suit wearing, concrete canyon living boneheads... all for the purpose of gaming some accounting guideline. And the boneheads get paid seven figure bonuses for doing that, and the boneheads actually think they deserve the seven figure bonuses, but they are too obtuse to realize it is blood money.
Priceless! It is the same sort of scam that Mel Brooks used at the center of the plot to 'The Producers'--oversubscribe the show, and make off with all the investors proceeds.
Not a moment's sympathy for the banksters...
I just want to know, will ANYONE involved in buying that trash, after all the bleeding caused by CDS's, actually get FIRED?
I just got back from a trip this past weekend and have spent the time since catching up on work, then the news. RockyR, you won the oil bet as of last Friday when it had a premature spike, congrats. I'll try to explain my thinking on oil in a bit. I'm still busy busy and will mostly be lurking for a bit.
Lot of things have sailed through since I posted last.
The focus on employment instead of unemployment. I like it. Fewer hours worked, government/defense is the only sector with any growth. Things like initial claims not only exhibiting an embarrassing bias in revisions, but breaking down as benefits run dry. Non-Farm Payrolls assuming 200k new-small-business jobs a month despite rising bankruptcies and tightened lending. Basel Too is right to have been watching tax revenue data all along.
The treasury yield curve and futures thereof certainly have been interesting. As a side note, it was the yield curve inversion back in the fall of 2006 (??) which turned my attention up a notch.
The end of cliff diving in the second sense. On a general note, so much of recent market activity has been enormous dull large movements. Much of what is supporting the market are these simple leveraged trades that stampede onward oblivious to rain or shine. This goes for Treasury steepening and the equity/commodity rallies. This feedback process does have an upper limit, but that will not be important. What is important is that the further these dumb (I refer to the objective and strategy of the trade, not the entity behind it) trades propagate, the more vulnerable they become (I'm assuming the use of leverage from circumstance and the exhibited behaviour.) There are a lot of planned speed bumps and unexpected potholes in the road ahead.
Implied volatility from options is showing some contango. There is something to known unknowns arising in the next several months.
What will happen to the state and local bond market, when the inevitable support comes. Sure they'll extract a pound of flesh, like they have for the first 2 automakers, but they will come in once they can argue it is temporary support. This might be done overtly with FDIC insured issuance, or by sponsoring increased purchases by giving favorable repo terms in one of the existing alphabet soup facilities. Of course I don't think that is the story. The story will be the offsetting consequences. In the absence of a surplus of free cash, yields will only drop by attracting money away from somewhere else. ghostfaceinvestah can tell you about what government support for mortgages has meant
There is the issue of cash on the sidelines. I believe that cash is largely spoken for. The increase in the money supply has not been matched in the broad money supply. Banks are holding that cash on hand because they know of write downs in the pipeline. I should say the guys at the top know, managers and Federal Reserve board members interpret it as the illogical "they have cash for deals today, but are too afraid to lend because of uncertainty on new loans" rather than a reflection on certain losses for past investments. The pay structure clearly provides incentives for taking cash on hand and making current deals.
When it comes to the savings rate, I think households are a lot like the banks. They are merely acting as if there has been a -permanent- negative wealth shock. Temporary impaired gains become legacy assets. Every time someone has a reduction in hours, pay, benefits or job(s) -- the impact hits their whole household, and to a lower degree their colleagues/friends/family. People are saving because they need liquid assets on hand to cover expected employment losses now that the credit of recent history is unavailable. It is rational if you set up the problem correctly, and jawboning will only increase the spending of government credibility. There is also the matter of extinguished liabilities counting as income/savings (which nets out with the corresponding writeoff in the GDP calculation)
Oil. Basic thesis is that oil and equities cannot increase 100% and 50% respectively, and either plateau or continue on rising. At this time they are contradicting trades. We have months to go before aggressive inflation can take root. Ironically increasing the price of oil right now only serves to marginally expedite deflation. Inflationary pressures will lag deflationary pressures until we get a deceleration of loans going bad. Rome wasn't built in a day, and it wasn't burned in one either. I've considered this system from multiple perspectives, and this thesis always holds if average leverage is at least maintained and we're not within 2 months of the most spectacular v-shaped moon-shot recovery. It is unlikely that they can hold their price without continued price velocity. It is likely that one of the two faltering will result in both falling. Incomes are falling, assets more so. Consider all these markets as a system of lakes. If housing is falling, withdrawals will be made from commodities instead. One aspect of the link between commodities and equities is that a big chunk of the money spent on oil represents a government surplus which is reinvested, invariably back into US equities. The feedback process can continue longer than if there weren't an automatic response susceptible to profitable abuse, as in a number of other cases. However there are frictions/losses/middlemen. Then there is the issue alluded to with raiding the 401k instead of the home equity. In a world thirsty for cash, the targets for redemption are the recent winners. The more oil goes up, the bigger the hit on incomes, the more overpriced equities are, the more natural it is to sell equities.
I don't know if it has been noticed but it seems a trade fight is brewing between Canada and the US. Despite the talk from the respective federal governments to the contrary, it seems to be growing. First there was the Buy America provision, then the language was toned tone, but state and local governments (not covered by NAFTA/WTO) followed through all the same and a number of direct examples showed up in the press up here (I remember one about sewage pumps of all things.) Then the federation of Canadian municipalities passed a motion to not spend any money on goods/services originating from countries that blocked purchases from Canada, and it would come into effect in 120 days. More recently there has been a proposal from the Canadian government to support pulp mills by giving $1bn in subsidies to fund environmental upgrades, which is in response to the American federal government haven given subsidies to American-based pulp mills for the burning of 'black liquor' under the aegis of it being a form of renewable energy which precipitated those mills cutting their prices which made a bad situation worse for the industry. None of these actions are too important alone. The story in my opinion is that nature of the actions though. Trade barriers organized from the bottom up instead of top down. The speed with which it has been organized. Taking the temperature of the voting public on each side has shown a majority willing to directly defend domestic jobs, even if it means a net reduction in the end. More than wallets, it's about taking control of the one area in their lives they can and maintaining pride.
Well, that post ended up being longer and more disorganized than I expected. At least I brought up some of the things that crossed my mind in the last week and a half. Didn't even get around to mentioning the people I met on my trip. All that typing has worked up my appetite
NH, with no income or sales tax, is trying some stupid (I think) things to patch the budget hole. Gambling proposal, as well as a possible tax on mortgage refinancing.
Isn't gambling faltering in most other areas?
When gambling is our last hope, we're doomed.
And who's gonna refinance anymore anyway? Not unless rates come back down.
Too bad that this sort of foolery is the only way we manage to maintain competitive advantage over third-word manufacturing wages since we have no way to compete with 1/10 to 1/20 labor costs. Production innovations tend to be gradual, not revolutionary, and pretty nontransferrable. It's a race we can't win. Was our economy forced into ponzification and financial obfuscation by folks who understood this many years ago? Our system - entitlements, pensions, and all the rest is perfectly sustainable, we just have to change our assumptions about reality!
If so it all reminds me of good old Q on ST:TNG
Q: "Simple: Change the gravitational constant of the universe."
G: "What?"
Q: "Change the gravitational constant of the universe, thereby altering the mass of the asteroid."
G: "Redefine gravity. And how the hell am I supposed to do that?"
Q: "You just DO it. GAHH! Where's that doctor, anyway?"
D: "Geordi is trying to say that changing the gravitational constant of the universe is beyond our capabilities."
Q: "Well, then... never mind."
So if say JPM's bets make Citi go broke, that means the taxpayers have to pay for the manipulation?
At SOME POINT people will wake up, sadly it will be when they have been eating dirt for 2 weeks.
Until then, remember to wake me!
Havard, Yale, MIT,Colgate, Princeton, Columbia, Brown,Northwestern,Standord and more I missed should be shut down asap. They are a threat to national security and have committed treason against the American nation.
NH,
is now controlled by a mass exodus of Mass residents. NH is now blue. I would ask you to look at thr Ritholtz map of foreclosures by county, it jibes well with democrat heavy areas. No connection implied.....
"I'll the the other side of as much as you got. Even with massive debt restructuring from their creditors they got nothing. Google "Natick Collection.""
Well, they got something. The question is on whose B/S sheet it will finally reside and in what forms. Usually, it's best to shuffle this stuff around until the last few remaining parties each have some fairly equal "loss upfront to potential profit later" ratio. It's tricky, though.
My vote to save retail is to establish a Retail Czar to produce concepts in bulk to fill all the spaces. Since money is no object, they wouldn't even have to be profitable. For instance, if your local mall is losing it's local L'Occitane, just plug in an outlet that only sells power steering pumps. Since the USG will own the auto suppliers soon, just market the parts directly.
Lots of birds can be killed at once if we'll only get creative.
is now controlled by a mass exodus of Mass residents. NH is now blue. I would ask you to look at thr Ritholtz map of foreclosures by county, it jibes well with democrat heavy areas. No connection implied
Because there is none. It was concentrated in high suburben squals and they have tended Democratic in recent years thanks to the Religious zionism that killed the Republican party.
EHP - pretty much. You got the memo on signal to noise ratio, presumably. Michael got banned. Or arrested in a shooting rampage, it wasn't clear which. There was some huff and puff about SDRs which is going nowhere since they're not tradable. It's rained non-stop in DC metro so it's probably the only part of the country with green shoots that don't have a flamethrower trained on them. Mr Bond got some attention, an outbreak of vapors yesterday faded overnight and the foreigns piled in today before the marbles were taken away. The screen-grab of TLT and TNX at 1:15 EST would make good art, like a black hole about to devour closing. Otherwise quite standard.
EconomicDisconnect (profile) wrote on Thu, 6/11/2009 - 10:38 pm replyIgnore userEras End,
connect huge globs of people with no control over their own lives and you arrive at the democrat voting base
Eh? No. They have control over their lives, you don't.
think,
the real ends of the far left and the far right are close, like a horseshoe not splayed out wide as polar opposites. far "anythings" drive me nuts. Well except far austrian econonomists!
Whatever,
so city dwelling people that rely on timely delivery of food and functioning services control the ones that can live by themselves for years. Delusion is usually induced by drugs, but some can get there regardless.
Excellent lake analogy EHP. Something's always gotta give. The interesting thing about "equilibrium" is that it is so illusory. As soon as it establishes itself, it's gone.
I'd suggest Mishkin's "Money and Banking" text - at least for what gets discussed here. I was a staff flunky almost twenty years ago in an Econ dept. where Robert King and Marvin Goodfriend (Richmond FRB) worked, and I'd suggest their papers make good reading in addition to a survey text.
Whatever,
so city dwelling people that rely on timely devery of food and functioning services control the ones that can live by themselves for years. Delusion is usually induced by drugs, but some can get there regardless.
Your a nice def. of the piece of crap losers like yourself that mentally masturbate to intellectualism and try to make feel real. You are a disgrace to your country and anti-freedom in every way.
Freedom is not the right to be a loser and have others pay for you: freedom is the right to be left alone. Bye Era, hope you and larry summers had a good time under the desk.
Freedom is not the right to be a loser and have others pay for you: freedom is the right to be left alone. Bye Era, hope you and larry summers had a good time under the desk
LOL. Larry Summers is neo-liberal scumbag, right up your ally. Freedom is what is considered "free" at the moment. Sadly, you sound like a marxist with your anti-social tendancies.
hong konger (profile) wrote on Thu, 6/11/2009 - 9:45 pm
Excellent lake analogy EHP. Something's always gotta give. The interesting thing about "equilibrium" is that it is so illusory. As soon as it establishes itself, it's gone.
'Equilibrium' is almost a mystical concept (not in a disparaging way)... the point towards which the system tends, but can never perfectly reach. Normal "equilibrium" is stasis, which would rather defeat the whole purpose of a dynamic system, collapsing the whole damn thing.
Scone, I'm curious about your opinion on the direction of the Oregon RE market. To me it seems like Portland and Seattle are two of the weakest metro areas on the West coast, if not the weakest of the top 20 nationwide as far as their recovery from the 2000 recession and their sharp plunge in employment during the current recession. I left Seattle a few years ago because I wasn't willing to live there through another economic period similar to the dot com bust. I'd like to move back to that area evenually, but I don't see why either will outperform the nation after lagging for nearly a decade.
This goes for Treasury steepening and the equity/commodity rallies.
If you think the same type of dynamics are driving Treasury steepening and the equity/commodity rallies, I feel sorry for you.
Treasury steepening is happening because of lack of confidence in U.S. debt, oversupply of refunding and new debt, and debasement of the currency through QE and other means. All those are real.
Commodities rally is being driven mainly by currency debasement. It's getting a little overbought but still may have legs long-term, because the currency has a long way to fall.
U.S. equities should lose value on currency debasement, and virtually all global equity valuations no longer make sense by any conventional measure.
The equity rally began with an oversold situation and perceptions of value but it long ago crossed into hype, smoke and mirrors.
You'll be writing your bloviator posts about Treasury steepening and commodities rally long after the equities rally is in your rear view mirror.
OT but wondering if you're seeing what I'm seeing here.
Area has always been big on public auctions, but noticed in last several Sunday RE supplements that auctioneers are taking out long listings showing houses that are going up for auction. Some with reserve but some absolute. In several cases, one auctioneer was listing 9 or 10 properties that were going on the block. This is a new format, apart from the typical auction notices that go into the Saturday morning editions (Sat is big auction day here); the Saturday notices ref property along with the affiliated personal property from estates being liquidated by the surviving children. These new notices are RE only.
Can speak with first hand knowledge that two of these homes are ones that couldn't sell via regular channels. One is nice older farmhouse with about three acres and barn (asking $450k+) and the other is opposite spectrum - small SFR in older suburban neighborhood asking approx $150k.
Seattle peaked in the mid-nineties when Microsoft was in full bloom, Starbucks made good coffee, and grunge ruled the radio. It all started to fall apart after the tragic death of Kurt Cobain.
"Commodities rally is being driven mainly by currency debasement"
Good grief, the currency has already been debased. Commodities are going up because of speculation and nothing more. Mercy. It is like talking to a blank wall.
The GM dealer in downtown Saratoga Springs closed overnight. Literally overnight. Yesterday, it was a fully functioning dealer with plenty of stock. Today, it is an empty lot and a couple of abandoned buildings. The only thing left is a handwritten sign saying :"Closed, out of business. Thanks." It is the swiftness that is shocking. A large parcel with limited alternative uses will quickly become blighted. I think we are on the cusp of a long period of reverse gentrification as much of the recent overbuilding molders and decays.
Michael J was the imaginary playmate of a kid that I know. He had wonderful adventures with Michael J, who was apparently barmy as a loon. Used to talk to the kid just to find out what Michael J was up to lately...
NYTimes piece just posted on the US economy "possibly" stabilizing, while Europe continues to spiral downward.
"the apparent divergence of fortunes between America and Europe highlighted the different approaches to solving the financial crisis, and why some economists say the more aggressive American strategy may be working better, at least for now."
It is shocking to see something like that happen so quickly. They probably left a handful of trade-ins with unpaid notes that will come back to bite the people that made recent purchases.
homedad43 (homepage, profile) wrote on Thu, 6/11/2009 - 10:11 pm
Same kid that I found out the other day was selling his lunch sandwiches to a fat kid for $5. Great, he's gonna be a banker.
If he were a real bankster he'd steal other kids' lunches and sell them to the fat kid for $5. When the theft is later discovered, he points out the sandwich bagholder and skates with the $5.
I think you are right about employment. I think the MSM is starting to get wise that the employment numbers aren't as rosy as they seem. For a really good analysis of the birth/death model, go to maxedoutmama's site: MaxedOutMama
The birth/death calculations are based on employment trends/patterns from last years (it takes about 6-12 months for the models to get updated). That accounts for the ridiculous job additions taking place when more businesses are clearly closing than opening. The lack of large rally's after release of the most recent stats seems to indicate people are getting wise.
Good grief, the currency has already been debased.
There's one true measure of how debased the currency is, beyond your opinion or mine.
That's the price of gold.
The price of gold is no higher today than it was this time last year, before the Fed began polluting its balance sheet, the U.S. deficit ballooned into never land, and Ben Bernanke created his QE frankenstein.
You'll know currency debasement is here when gold hits $1,200.
Great write up EHP.
My take away, overly simplistic at best, is that were still working down to the angle of repose.
Would you say that the foundation has stabilized for now and the top is experiencing the primary effects of deflation or are we all still tumbling, just at a slower then previously?
I have seen other dealers go under in the area recently. It is usually a long, slow death. The number of cars on the lot slowly melts away until there is nothing but a "For Sale" sign and oil spots. This is the first time I have seen a dealer (or any retailer for that matter) just disappear overnight.
You'll know currency debasement is here when gold hits $1,200
Guessing isn't further currency debasement.
Oh, yeah, Bernanke's "QE" is a joke. There is none. It is more pr job that has fooled many. The deflation side has that over the inflation side, but they are blinded.
There have been a few Chrysler dealerships that were forced out of biz in the area. They had a few weeks to sell what they could and shut down.
There was also the case of a Lamborghini dealership that shut down overnight, but that was a case of fraud. Owners sold the cars at less than 50%, then declared BK and defaulted on the financing. I think they were later arrested. An overnight shut down without warning does sound suspicious.
You can have currency debasement and deflation at the same time.
In that case, the price of most goods and services will gradually decline when measured in gold.
The best surrogate for gold, as a currency valuation measure in the modern world, is crude oil.
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
Oh yeah, I gotta agree disagree with BR with his audio: This was a perfect storm. All other crashes and bubbles were MUCH smaller than this one. The size of it was amazing. It took alot of factors to get it to grow this big.
In the wake of the Ken Lewis saga on capital hill, oit begs the question that has never even been broached as to what Jamie dimon was saying thinking doing during those Sunday meetings. Recall that Jamie Dimon shared a board seat at the NY Fed with Dick Fuld. Why are those meeting s and conversations not a matter of public record. Not that anything would appear that would be meaningful anway. Dimon is the teflon don of wall street. His schtick coming out of Citi was that he was the M&A strategy guy at Citi. That worked out really well.
Who were probably working with ZOG and the NWO to put words into his mouth using ultra low frequency radio waves, directed from the black helicopters piloted by Bilderberg apparatchiks (!!!)
homedad43 (homepage, profile) wrote on Thu, 6/11/2009 - 10:11 pm
Same kid that I found out the other day was selling his lunch sandwiches to a fat kid for $5. Great, he's gonna be a banker.
If he were a real bankster he'd steal other kids' lunches and sell them to the fat kid for $5. When the theft is later discovered, he points out the sandwich bagholder and skates with the $5.
Resist is Feudal:
Damned brilliant.
Don't think that I'm gonna mention it to him, though.
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
I know where my money's at on that one. When Timmy gets together with his counterparts, you think that they're playing canasta?
Thank you splat! It was much scarier to think that this was out of control stupidity and greed,as long as it is part of a master plan everything will work out....
Michael's user name was banned because his posts were getting extremely vitriolic, to the point of explicitly inciting violence. Here's the post that put CR over the edge:
"The Supreme Court just paved the way to give BO full dictatorial power. Many someones who are true patriots might want to take matters into their own hands and start shooting public officials occupying high positions before they take our guns away."
This was one of many, and the timing, following the recent holocaust museum shooting in DC, only added to the heat.
We understand that people are beyond frustration, and that this blog can be a magnet for venting (frequently well justified) bitterness. But it's not a platform for revolution.
This from a bankrupt company iself playing for a bailout from their man ratner, a former NYTIMES reporter, Sad and pathetic. When the stock market pump dies and it would be an oppotune time to see latvia explode dollar flight. It would be an interesting test case to see just how well that age old formula is going to work. Bernanke is a filaure. The entire europe is worse meme is place setting for trying to pull the rug out. Create the problem and offer a solution is that the strategy. There is always North Korea as well.
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
I thought that overt coordination between central banks and mutual currency swap lines meant all currencies values were clearly orchestrated, at least within the limits of control.
Same goes for gold with explicit agreements on sales volumes, lease rates, etc. Of course, I think it is harder for central banks to control gold and if it ever breaks out, it might mean the end of the age of central banks.
Oil is even harder to control and a good proxy for gold, but unlike gold it is consumed when used.
kcoop (profile) wrote (in reply to...) on Thu, 6/11/2009 - 10:37 pm
We understand that people are beyond frustration, and that this blog can be a magnet for venting (frequently well justified) bitterness. But it's not a platform for revolution.
rhetorical - why is it that all revolutions seem to have to be violent and stupid before they accomplish anything?
Goodnight everybody. If hotels in downtown Saratoga Springs start closing, truly we will know the apocalypse is upon us (because real estate and lodging is different here). In all seriousness, despite all the happy talk the tourism industry here is hurting. Memorial day was not booked solid (as is usually the case), you can still find rooms downtown over the weekend (it is usually booked solid on weekends from May to September), and there are still seasonal rentals available for the horse racing season. If housing prices drop another 15% I will be tempted to buy.
Curious as to utilities. In PA, the electric utilities are losing rate caps in 2010 but the numbers who cannot pay are rising significantly as well. If demand were rising/paying customers also, then I'd be all in.
Coop:
Yeah, autorefresh is slick. I'm getting motion sickness with the comment window moving due to refresh while I'm typing.
Thanks for the link to Michael. Seriously, he needed to go.
Denying them in one space doesn't mean they disappear.
Sure. This isn't about denying reality. There are PLENTY of other places such discussions can take place. And the beauty of the net is that they're easy to find and memeify for the Important Persons of the world.
A set of criteria to establish if something is a conspiracy.
Like most people, I was raised with the idea that conspiracies are ridiculous.
But my model of the world didn't account for actions I saw and in the late 1990s, I tried to figure out why.
I worked out a test for a conspiracy -
1) A conspiracy must have two or more participants
2) The conspirators must control and share information
3) There must be a third party excluded from that information
4) The conspirators must benefit from the third party's ignorance
This is a broad definition, but it gave me insight into how I was culturally conditioned to dismiss "conspiracies". For instance:
a) A married man has a mistress and cheats on his wife.... according to the four bullet points, is this a conspiracy?
b) A manager hires his best friend into a position that the friend is unqualified for. Is it a conspiracy
broward (homepage, profile) wrote on Thu, 6/11/2009 - 10:49 pm
I worked out a test for a conspiracy -
1) A conspiracy must have two or more participants
2) The conspirators must control and share information
3) There must be a third party excluded from that information
4) The conspirators must benefit from the third party's ignorance
This is a broad definition, but it gave me insight into how I was culturally conditioned to dismiss "conspiracies". For instance:
The only force that is always moderating the formation, decisions and stability of conspiracies/collusion is the possibility of opportunistic self-interested behavior. i.e. the backstab/no honor among thieves. For a truly rational economic decision-maker there is almost always going to be a point where betrayal is a payoff versus a cooperative strategy.
Next you'll be claiming Lincoln was killed by a conspiracy....
Once you apply the quantified test to everyday situations, you might realize that conspiracies are everywhere.
And your model of the world works better.
You understand why Person A got hired into that position.
Why Person B knows about x, y, z.
Conspiracies are a function of information.
They explain why information shows up in one place but not another.
BTW, kCoop, Fantastic job.......where do I send the eggs, veggies, and relish?
Does it seem to others that there is an increase here in verbal "class warfare"? Many classes are blamed for supposed wrongs. Since when is someone owed a positive existence once they turn 21? If a country's direction changes, change with it or don't. Bitch or don't about the change, but don't blame your peer for the direction he/she has decided to take.
Could trades similar to this explain why so much money was shoveled at Wall Street, but so little got to main street?
Think about it. Wall Street shorts MBS through CDS. If Main Street was given a trillion or so to pay off their mortgages, all those premiums that Wall Street bought are now worthless.
Whether he had inside help is much murkier. On its face it doesn't smell right when the VP abruptly leaves town instead of going to the show, and the guy supposed to go kill him chickens out.
However, I have to give some respect to your general thesis. It appears to be consistent.
But the rules are per se negative because they attach to the word "conspiracy". My wife and I planning a surprise party for the daughter meets the same criteria.
Are you sure that that's the right word? Your general theory of society isn't the most pleasant, even if I tend to agree to it.
I tend to think that we're hardwired towards the egocentric and that while there might be "seeds" of altruistic tendencies, they only bloom when tended. Consider most children. Some can be nice and share, but that's why we constantly have to hammer the idea of "sharing"...because they naturally don't.
VP abruptly leaves town instead of going to the show, and the guy supposed to go kill him chickens out.
Functions of information.
in 2000, I worked at a company where I deduced that I'd been excluded from the "real decisions". I had fewer scheduled meetings, but when I checked calendars for other people, their meeting frequency was the same. Likewise, I noticed that certain conversations would stop when I walked by, etc, etc.
I deduced that the architect & manager decided to cut me out of the project but not inform me or anyone else. And I later had a confrontation with that manager (a couple of weeks before he was laid off).
Him: "Where were you today?
Me: "I went to a job interview"
Him: "What?! What about the work I assigned?!"
Me: "It's meaningless makework, you guys cut me out of the real project and we're getting laid off anyway"
Him: "I ...I I HAD TO! You would have ruined the project!"
He was stunned that I knew but his admission was satisfying.
The architect politicized me out of the project because he was threatened I'd take his position.
After a few times of this shit, you develop a well-tuned nose for it.
broward (homepage, profile) wrote on Thu, 6/11/2009 - 10:59 pm
I'll accept that claim, mostly because the "truly rational decision-maker" doesn't exist.
People are hard-wired with a sense of altruism.
That's why a lot of pure game theory doesn't accurately predict their actions.
Not everyone is wired with altruism. There are documented cases of extreme psychopaths. But more relevantly, some organizations use game theory extensively and LP to model real problems and policy actions - it was Rand Corporation's claim to fame in the early cold war days (I'm not being patronizing, not everyone knows this stuff). Their model assumptions may in some way embed preferences favoring altruism but the cold, hard math that's solving linear equations doesn't know or care. Not that the recommendations of a model are ALWAYS followed but they could be, and this would remove any sort of human emotional intervention that might otherwise bias the results.
I have read some people that say the Red Cross and Boy Scouts of America are part of the global cabal.
Red Cross with the humanitarian goals and helping folk cross international borders is CLEARLY part of the NWO ( new world order ) and the Boy Scouts with the pseudo militarism and colonial roots are CLEARLY part of the IMC ( Industrial Military Complex ).
The funny part is how many of them fail. We had an office conspiracy that ended with the putative ringleader leaving after committing career suicide over a leadership succession.
The funny part is now that I have observed that persons career since that crash, they have had another high profile crash and burn, and now are in position to do a magnificent one if they fail in the position they now have. Unfortunately, I will most likely be called in to do cleanup after this one, a position that will truly suck.
Such is life. Connections are wonderful, until you let down your friends who got you the job.
I absolutely refuse to play the political game. If they ask, I will talk to them and provide reasonable options and strategies, but they hate to hear reality based solutions.
Ideology is much more comfy in Arizona.
Bedtime folks. BTW- the guys in texas play a mean game of hearts- nice loner.
Someday this war's gonna end....
splat (profile) wrote (in reply to...) on Thu, 6/11/2009 - 11:27 pm
I have read some people that say the Red Cross and Boy Scouts of America are part of the global cabal.
Red Cross with the humanitarian goals and helping folk cross international borders is CLEARLY part of the NWO ( new world order ) and the Boy Scouts with the pseudo militarism and colonial roots are CLEARLY part of the IMC ( Industrial Military Complex ).
Yes, no question.
But even sociopaths often adopt altruistic behavior to better fit into a social structure.
I don't think being selfish and being altruistic are mutually exlusive, ie. Homedad's comment about kids.
Ethics are situational.
One set of conditions may lend themselves to selfishness and the change of even one element could elicit altruistic behavior.
That's another area that the Free Marketeers fail on. Most of their arguments assume a fixed ethical structure, not a structure that can vary by time, place and participants.
I read some convincing accusations against Sec. of War Stanton, written in the early 20th Century but echoing many suspicions at the time, not so convincingly refuted. The impeachment of Johnson is seen as related.
After reading the comments on gold as a fundamental valuation model for so long, it occurs to me that folks hope there is a iron rule in natural economics that will determine what something is worth. A "conspiracy of the invisible hands", if you will.
Instead of worrying about how to price something in absolute terms, how about just following the old capitalist methodology of picking a rate for your currently held standard of exchange (currency) and looking for assets that produce simple, compounded or some mixture of returns which revolve around that goal?
Perhaps there are too many choices these days, and investors are getting worn out. The "menu" has expanded beyond what a normal person can consume and compare, and fatigue has set in?
"Before conducting the experiment, Milgram polled fourteen Yale University senior-year psychology majors as to what they thought would be the results. All of the poll respondents believed that only a few (average 1.2%) would be prepared to inflict the maximum voltage. Milgram also informally polled his colleagues and found that they, too, believed very few subjects would progress beyond a very strong shock.[1]
In Milgram's first set of experiments, 65 percent (26 of 40)[1] of experiment participants administered the experiment's final 450-volt shock, though many were very uncomfortable doing so; at some point, every participant paused and questioned the experiment, some said they would refund the money they were paid for participating in the experiment. Only one participant steadfastly refused to administer shocks before the 300-volt level.[1]"
Stanford prison experiment
The Stanford prison experiment was a study of the psychological effects of becoming a prisoner or prison guard. The experiment was conducted in 1971 by a team of researchers led by Psychology Professor Philip Zimbardo at Stanford University. Twenty-four undergraduates were selected out of 70 to play the roles of both guards and prisoners and live in a mock prison in the basement of the Stanford psychology building. Those selected were chosen for their lack of psychological issues, crime history, and medical disabilities, in order to obtain a representative sample. Roles were assigned based on a coin toss.[1]
Prisoners and guards rapidly adapted to their roles, stepping beyond the boundaries of what had been predicted and leading to dangerous and psychologically damaging situations. One-third of the guards were judged to have exhibited "genuine" sadistic tendencies, while many prisoners were emotionally traumatized and two had to be removed from the experiment early. After being confronted by Christina Maslach, a graduate student in psychology whom he was dating,[2] and realizing that he had been passively allowing unethical acts to be performed under his direct supervision, Zimbardo concluded that both prisoners and guards had become too grossly absorbed in their roles and terminated the experiment after six days ...
"The banks ... paid as much as 80 to 90 cents for every dollar of insurance, the going rate last fall according to dealer quotes, expecting to receive a dollar back when the securities became worthless ..."
broward (homepage, profile) wrote on Thu, 6/11/2009 - 11:31 pm
I don't think being selfish and being altruistic are mutually exlusive, ie. Homedad's comment about kids.
Ethics are situational.
One set of conditions may lend themselves to selfishness and the change of even one element could elicit altruistic behavior.
Yes. Most of us have a mixture of both qualities, luckily for the rest of us. One extreme or the other tends to be a pathological case deserving of institutionalization or at least psychiatric treatment (not to cure or 'fix' them so much as to help them function in a world full of people NOT like them). The psychopath fears discovery more than anything though. Emotions play an important role in keeping the balance (even though emotionality has exaggerated effects and can go out of control on feedbacks) in most 'normal' people. And even very selfish people will usually display altruistic behavior to someone, be it immediate family or a peer group, or whatever else.
mmckinl, re: The Milgram Experiment - This shows more about "individuals following orders of a superior" then anything else (based on my reading of the analysis, anyway). They were able to redirect the responsibility to the "superior" as they must have know what they were doing. Kinda like MSM and the plebs defer to the FED and Treasury as they must know what they are doing, and they must be doing it for the good of the people (bad assumptions).
As to the Stanford Prison Experiment, I think that fits more to your point. But this also plays into the themes discussed above regarding morality being based on the time place and individuals involved (or in this case, the "setting" of preconceived notions of how a prison "works").
Haven't been a vast number of chuckles in the economic sphere lately, so this one's greatly appreciated. Have sent it along to my stockbroker brother so he'll have it in time to spew coffee on his keyboard in the morning.
Bet there were more than a few WS Situation Commanders looking into their exposure yesterday.
Great story, CR! You have to wonder how many more "short squeezes (in reverse)" are out there and how much more TARP money will be lost. My WAG is that there are many more. It will be interesting to see if any traders panic...
The market just doesn't seem to care. No one cares about financial institution corruption, bad banks, recession, job loss, hyperinflation. It's just buy buy buy, Thanks to automation technology, outsourcing, in sourcing, free market capitalism/globalization, jobless recoveries are inevitable, sadly, for all future recessions. I predict baseline unemployment will rise from the historical average of 4-5& to 7-8% within the next decade, but the stock market & GDP will keep rising. Higher unemployment will be the new normal. Stocks that benefit from this phase shift are multinationals, high tech, and commodity. Politicians will do noting to impede this transition because they lack the power to restrain hypercapitalism, and because they are often paid off.
This is my favorite story of the week.
Well, except maybe the Chrysler thing.
Hands down the best story of the week
It's so good to see monetary stimulus making its way into the economy.
Cicero may have said it best in Rome in 55BC
"The budget should be balanced, the Treasury should be refilled, public
debt should be reduced, the arrogance of officialdom should be
tempered and controlled, and the assistance to foreign lands should be
curtailed lest Rome become bankrupt. People must again learn to work,
instead of living on public assistance." - Cicero - 55 BC
And that's why you shouldn't bet against the American Dream.
first to prosecute!
Some people lost their butts gambling on derivative crap. I'm SO upset!
Rome in 55BC
~~~~
Rome was just getting started in 55BC ...
But the Republic was gone within 6 years ...
Seems our Republic is gone as well ...
It's real hard to complain seeing as every single aspect of these transactions have been vigorously defended as being responsible financial activities by these same bankers.
So, the banks paid $130m to (not technically) insure $27m max, certainly much less on a gross performance basis exposure. Either they were gambling and threfor acting illegally or they were insuring and thus subject to limits including not over-insuring. Pick your poison Mssrs. Banksters.
Man bites dog!
Sounds like only one of the parties realized they were in a hedged position.
This is consistent with what I have seen in bonds. Very few people read the entire set of bond documents. Personally, I have done pretty well as a result.
No schadenfreude here, since the banksters always have the last laugh.
Rob,
The banks didn't pay for insurance. They were gambling legally.
Of course, this kind of a transaction doesn't have to be legal.
CR should've bought some swaps on his image server. A man needs insurance.
These Amherst guys play like Goldman and Microsoft - the biggest mistake you can make is to be their "partners".
What if the people at Amherst dressed up like Robin Hood and the Merry Men, and took a few million of their proceeds and gave it to people who were about to enter payday loan shops or cash for car pinkslip operations?
"Hi, we got this money by screwing some bankers. We'd like to give it to you so these lenders don't screw you."
Man, that would be great to have on film.
The Amherst people aren't exactly ashamed of themselves-- in fact they're braggin' on it a bit:
Media Coverage
Casino banking.
It's so good to see monetary stimulus making its way into the economy.
Stimulus seems to have made its way into the oil futures market as well. Yippee!
$130m of insurance on $27m in property. Kudos to Amherst, if they wrote the majority of those contracts.
Well at least Amherst didn't buy third world debt ...
and then foreclose like some funds have ...
They took it from some other greedy bastards ...
I'm sure the tax payer will end up with this bill as well.
Pigged on last thread-
"What does "signal to noise ratio" mean?"
Scone, fantastic!! Thank you. Not only did you answer my question your answer will probably help me get the job I'm interviewing for with a telecom/satellite company.
Cheers!!
Amherst was just selling insurance. Just selling a little peace of mind.
But God, people can be rude.
My pleasure. Got to go reheat the curry for dinner. Bye!
Speaking of Debt ... courtesy of Naked Capitalism
Guest Post: What De-leveraging?
Guest Post: What De-leveraging? « naked capitalism
Great charts !
http://1.bp.blogspot.com/_f-DE8LtHLC4/SjFGJTw8vdI/AAAAAAAAAVE/4XxEEnNhagc/s1600-h/Slide2.jpg
Debt to GDP !
"Well at least Amherst didn't buy third world debt ..."
Obviously, you've never spent time in the places most relatively inflated by the housing bubble in California... or you would realize that this is exactly what they did.
Hey, this was Max Bialystock's con from the Producers
""The budget should be balanced, the Treasury should be refilled, public
debt should be reduced, the arrogance of officialdom should be
tempered and controlled, and the assistance to foreign lands should be
curtailed lest Rome become bankrupt. People must again learn to work,
instead of living on public assistance." - Cicero - 55 BC"
Didn't he die an unnatural death?
Wow, I just had a thought. I bet the banks were already taking write offs against these loans defaulting. Now that they've paid off in full there will be tax consequences.
Please forgive this slightly OT post but can anyone recommend a good Economics textbook? I can't speak for others but I could use some remedial education.
Thank you in advance for your advice and suggestions.
Oh, and here's some possibly appropriate thread music: YouTube - Jethro Tull- Fallen on Hard Times
"No schadenfreude here, since the banksters always have the last laugh."
No, it's der Knochenmann.
Little Guy In Not Screwed Shocker!
C
Pavel,cicero's death was completely natural for a man of his kind,and time
An incessant and unlimited piling up of wealth at last becomes irrational and without purpose. If in the end our society is based on this and on momentary pleasure it too is irrational and without purpose.
THE STORM IS COMING…
The storm is coming
Can’t you see the gray tail curl above the house?
Those are not the clouds you see
But rumpled flesh and ivory
Down comes the wool and spindle
Wick and candle
I hear the words
The sounds are coming slowly through the earth
This is not the speech of thunder
But syllables that fire tinder
Earth and heaven will debate
And both reverberate
But all is peace and still
Great clouds slide indifferently above the hill
Pavel
June 11, 2009
Re: Cicero
Didn't he die an unnatural death?
If you call having a sword rammed through the space between your clavicle and scapula all the way to your heart unnatural, then yes, he did die an unnatural death.
Chart comparing the Japanese and US housing busts ... courtesy of Automatic Earth
http://2.bp.blogspot.com/_9ZzZquaXrR8/SjGWuBoe2JI/AAAAAAAAD8g/0ZivSAAcn80/s1600-h/TheUSHousingBust.gif
"Please forgive this slightly OT post but can anyone recommend a good Economics textbook?"
The Greenspan articles in this are a great foundation:
Amazon.com: Capitalism: The Unknown Ideal (9780451147950): Ayn Rand, Nathaniel Branden, Alan Greenspan, Robert Hessen: Books
This is a bit dry but full of some nice tidbits:
Amazon.com: A Monetary History of the United States, 1867-1960 (9780691003542): Milton Friedman, Anna Jacobson Schwartz: Books
As song as you avoid anything resembling a currently used macroeconomic textbook, you're fine. Current macroeconomics is a bit like Phrenology circa 1910, Psychotherapy circa 1880, Astronomy circa 1400, etc... If you see a Greek symbol, run. Thankfully, most of this psuedoscience has been discarded in the past year by the reality of current events.
The boys and girls at Amherst can be happy for a while,this was like Cal beating USC in a football game...except that the big boys on Wall Street play a lot rougher than USC and there will be payback.
The real question is whether it was all part of a plan by Amherst guys or they got saved by the bell
Recall that the most of the trades was done last year, when the total outstanding ($335 Mil) was much higher the total trade notional ($130 Mil at the peak). So Amherst probably was deep in the red at the end of the last year.
It was only when they realized that the bond prices fell so much they can afford to buy the whole issue that they figured out a way to turn a huge loss into a big win.
Luck and quick wits, yes, but may not be much in terms of grand strategy...
Anybody selling CDS protection on bonds backed subprime California mortgages issued in 2005 strikes me as an ultimate all-or-nothing gambler, the sort that brought down the financial industry to its knees, and along with it the world economy
pavel.chichikov (homepage, profile) wrote on Thu, 6/11/2009 - 8:10 pm
An incessant and unlimited piling up of wealth at last becomes irrational and without purpose. If in the end our society is based on this and on momentary pleasure it too is irrational and without purpose.
And in the end it turns on itself in an act of self-destruction. The snake eating its own tail.
Two or three years ago it was just another snake cult...
"The FDIC To Start Dumping Toxic Assets, Banks Could Feel The Pain"
The FDIC To Start Dumping Toxic Assets, Banks Could Feel The Pain
Contrary to popular belief, the Public-Private Investment Program, a centerpiece of the government's strategy to rescue the nation's banks, is not dead.
The PPIP may be in critical condition, but the FDIC is planning what it hopes will be a miracle cure--a new pilot program it will launch in July to unload toxic assets under the supervision of new advisers who will structure and oversee the sale to qualified investors, the agency told the Huffington Post.
The new pilot is similar to the original PPIP that failed so spectacularly earlier this month, when banks resoundingly refused to sell any toxic--or err, um, "legacy"--assets to private investors. But this time around, rather than the banks unloading toxic debt from their balance sheets, it will be the FDIC that sells its own hard-to-price assets, which it acquired when it seized failing banks.
The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value. This could have an impact on those banks that have till now avoided pricing these assets for fear the transparency will force further write-downs, rendering some of them insolvent.
~~~~
Wow! ... Is Bair going the way of Cicero ?
"And in the end it turns on itself in an act of self-destruction. The snake eating its own tail."
St. Paul says beginning in Romans 8: "...for creation was made subject to futility..." and he speaks of: "...slavery to corruption..."
He lived about a hundred years after Cicero.
Great story. There is something kind of similar going on with GM stock right now. Normally, after being delisted and sent to the pink sheets, a stock trades below 30 cents.
However, the open interest in the June $1 puts is insane, something like 400,000 contracts. Also rumor has it that a lot of speculators wrote naked calls thinking that they would never have to deliver the shares.
Well, for the past week the stock has been defying gravity. Today it sold off a bit to $1.29, but many of those calls may get exercised, and the put holders are sweating.
Sometimes if it sounds too easy, it is.
That is: Romans 8, 20.
pavel.chichikov (homepage, profile) wrote on Thu, 6/11/2009 - 8:22 pm
"And in the end it turns on itself in an act of self-destruction. The snake eating its own tail."
St. Paul says beginning in Romans 8: "...for creation was made subject to futility..." and he speaks of: "...slavery to corruption..."
He lived about a hundred years after Cicero.
Reaching a singular point of maximum entropy, now the system feeds on its own substance.
mmckinl (profile) wrote on Thu, 6/11/2009 - 9:22 pm reply Ignore user "The FDIC To Start Dumping Toxic Assets, Banks Could Feel The Pain"
..................
"The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value".
What a moron.
Thanks, HollywoodHack. I'll give those a try.
Here is a list of delicious links from threads sorted semi-weekly since approximately Sept -08.
Unfortunately, neither delicious nor Xmarks retains my folder hierarchy. Delicious comes closest by tagging links with folder names.
swamp_otis's CR_THrEADS_Beginning_Sept_09 Bookmarks on Delicious
xmarks:
/////OTIS\\\\\ (Xmarks shared folder)
It is weird how these new bookmark organizer webware services only use dumb tags and not folder hierarchies created with user knowledge. Computer replacing synthesis is an impediment to the knowledge formation that occurs between abstraction and synthesis.
The program could establish a price floor for illiquid toxic assets, which have so far been nearly impossible to value. This could have an impact on those banks that have till now avoided pricing these assets for fear the transparency will force further write-downs, rendering some of them insolvent.
~~~~
So will the banks bid on these too so they can mark their own assets to "market"? Wonder how far the banks will go to keep the charade going.
"Reaching a singular point of maximum entropy, now the system feeds on its own substance."
But we can't speak of economic and social systems in isolation from their base, the natural productivity of the Earth and its systems. These are still a long way from reaching maximum entropy. If human systems disengage too radically from natural ones,, though...
Lovely, Pavel.
"Empire of Debt" is not a textbook but required reading. "The [Two, in new edition] Trillion Dollar Meltdown" explains a lot.
There is something kind of similar going on with GM stock right now. Normally, after being delisted and sent to the pink sheets, a stock trades below 30 cents.
Check out GGP and Pilgrim's Pride (the poultry company).
If you mean "official" economics, you add production to consumption to arrive at production, and hope the public goes along, as usual.
GGP is a unique situation ... the company has a liquidity issue, but is otherwise solvent.
GMGMQ is totally worthless, the old stock is going to be cancelled and replaced with new stock when they emerge from BK. Not a good comparison ...
pavel.chichikov (homepage, profile) wrote on Thu, 6/11/2009 - 8:32 pm
"Reaching a singular point of maximum entropy, now the system feeds on its own substance."
But we can't speak of economic and social systems in isolation from their base, the natural productivity of the Earth and its systems. These are still a long way from reaching maximum entropy. If human systems disengage too radically from natural ones,, though...
Exactly. I wasn't advocating this. Far from it, as should be self-evident from a majority of my posts here I suppose. Once you get the goose out of the bottle it's rather tough to put it back inside. We are reaching the summit, and perhaps the fundamental limit, of the Western ascent and its flight to escape the biogram unaided. Where is Lucifer when you need him?
"the company has a liquidity issue, but is otherwise solvent."
...which, ironically, many folks attempt to explain to their landlord around the beginning of every month...
We had this discussion last week. Told you all I was buying GMGMQ at.57. Short squeeze or stupidity, but it almost always works. Took profit.
This is effective the same strategy as me buying a $1 million policy on my wife and hiring someone to make it look like an accident.
FD: I love my wife.
Thanks, 1 currency now -yogi. I'll add those to my reading list.
Interesting Times,sounds like you found the one in a million...
Check out GGP
GGP and GM are two opposite stories. It is possible for GGP to restructure without full wipe-out of the shareholders. GM already announced that all of its shareholders will be annihilated.
Thanks Tom. I agree.
June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them.
“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”
In the struggle for power between Pompey, Mark Anthony, and the young Octavius that ensued after the murder of Julius Caeser, in which Cicero favored Octavius, thereby incurring the wrath of Antony, he was hunted down and murdered. It is said Antony ordered Cicero's head (and hands) fastened up over the rostra, where the orators spoke. Per Plutarch. Quite the story.
Central_scrutinizer (profile) wrote on Thu, 6/11/2009 - 6:36 pm
GGP is a unique situation ... the company has a liquidity issue, but is otherwise solvent.
I'll the the other side of as much as you got. Even with massive debt restructuring from their creditors they got nothing. Google "Natick Collection."
Interesting Times --
This is effective the same strategy as me buying a $1 million policy on my wife and hiring someone to make it look like an accident.
Not at all! This is precisely the opposite. This is like selling a bunch of criminals an insurance policy on your fatally ill wife, and then using the proceeds to save her life. (And pocketing the profit.)
Nemo. It takes a mind like yours to come up with that
I'm a simple guy.
I did too,thankfully the divorce is final.
CitizenPither, if you want something textbookish for review of the basic concepts as currently taught, I ran across this some months back:
CyberEconomics: Table of Contents
As to the Cicero quote, it sounds suspiciously recent; Googling suggests it actually came from a fictional biography of Cicero around 1965.
Thank you requiem. I'll check it out.
from the post "In late April, traders at some banks were shocked to find out from monthly remittance reports that the bonds they had bet against had been paid off in full."
Were these bonds paid off with TARP money?
"June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them."
lol I wonder if this had anything to do with the 134.5Billion in bonds the japanese nationals were trying to smuggle into Switzerland. Or maybe the $8500 aid congress is trying to pass to get people to buy fuel-efficient (Japanese) cars
You can't cheat an honest man.
Nice to see the big banks get one shoved up their tail pipes.
credit default swaps are indeed the realm of the absurd. What perverse accounting standards gave birth to these crazy financial instruments from OZ? One group of college educated, but real world ignorant, pinstriped suit wearing, concrete canyon living boneheads generates a 200 page contract to insure a bundle of notes on some real estate they have never seen, and they negotiate said contract with another group of college educated, pinstriped suit wearing, concrete canyon living boneheads... all for the purpose of gaming some accounting guideline. And the boneheads get paid seven figure bonuses for doing that, and the boneheads actually think they deserve the seven figure bonuses, but they are too obtuse to realize it is blood money.
Priceless! It is the same sort of scam that Mel Brooks used at the center of the plot to 'The Producers'--oversubscribe the show, and make off with all the investors proceeds.
Not a moment's sympathy for the banksters...
I just want to know, will ANYONE involved in buying that trash, after all the bleeding caused by CDS's, actually get FIRED?
I'm not holding my breath.
What license is required to create and sell CDS?
Does it fall under "securities", "insurance" or "cow manure" ?
I just got back from a trip this past weekend and have spent the time since catching up on work, then the news. RockyR, you won the oil bet as of last Friday when it had a premature spike, congrats. I'll try to explain my thinking on oil in a bit. I'm still busy busy and will mostly be lurking for a bit.
Lot of things have sailed through since I posted last.
The focus on employment instead of unemployment. I like it. Fewer hours worked, government/defense is the only sector with any growth. Things like initial claims not only exhibiting an embarrassing bias in revisions, but breaking down as benefits run dry. Non-Farm Payrolls assuming 200k new-small-business jobs a month despite rising bankruptcies and tightened lending. Basel Too is right to have been watching tax revenue data all along.
The treasury yield curve and futures thereof certainly have been interesting. As a side note, it was the yield curve inversion back in the fall of 2006 (??) which turned my attention up a notch.
The end of cliff diving in the second sense. On a general note, so much of recent market activity has been enormous dull large movements. Much of what is supporting the market are these simple leveraged trades that stampede onward oblivious to rain or shine. This goes for Treasury steepening and the equity/commodity rallies. This feedback process does have an upper limit, but that will not be important. What is important is that the further these dumb (I refer to the objective and strategy of the trade, not the entity behind it) trades propagate, the more vulnerable they become (I'm assuming the use of leverage from circumstance and the exhibited behaviour.) There are a lot of planned speed bumps and unexpected potholes in the road ahead.
Implied volatility from options is showing some contango. There is something to known unknowns arising in the next several months.
What will happen to the state and local bond market, when the inevitable support comes. Sure they'll extract a pound of flesh, like they have for the first 2 automakers, but they will come in once they can argue it is temporary support. This might be done overtly with FDIC insured issuance, or by sponsoring increased purchases by giving favorable repo terms in one of the existing alphabet soup facilities. Of course I don't think that is the story. The story will be the offsetting consequences. In the absence of a surplus of free cash, yields will only drop by attracting money away from somewhere else. ghostfaceinvestah can tell you about what government support for mortgages has meant
There is the issue of cash on the sidelines. I believe that cash is largely spoken for. The increase in the money supply has not been matched in the broad money supply. Banks are holding that cash on hand because they know of write downs in the pipeline. I should say the guys at the top know, managers and Federal Reserve board members interpret it as the illogical "they have cash for deals today, but are too afraid to lend because of uncertainty on new loans" rather than a reflection on certain losses for past investments. The pay structure clearly provides incentives for taking cash on hand and making current deals.
When it comes to the savings rate, I think households are a lot like the banks. They are merely acting as if there has been a -permanent- negative wealth shock. Temporary impaired gains become legacy assets. Every time someone has a reduction in hours, pay, benefits or job(s) -- the impact hits their whole household, and to a lower degree their colleagues/friends/family. People are saving because they need liquid assets on hand to cover expected employment losses now that the credit of recent history is unavailable. It is rational if you set up the problem correctly, and jawboning will only increase the spending of government credibility. There is also the matter of extinguished liabilities counting as income/savings (which nets out with the corresponding writeoff in the GDP calculation)
Oil. Basic thesis is that oil and equities cannot increase 100% and 50% respectively, and either plateau or continue on rising. At this time they are contradicting trades. We have months to go before aggressive inflation can take root. Ironically increasing the price of oil right now only serves to marginally expedite deflation. Inflationary pressures will lag deflationary pressures until we get a deceleration of loans going bad. Rome wasn't built in a day, and it wasn't burned in one either. I've considered this system from multiple perspectives, and this thesis always holds if average leverage is at least maintained and we're not within 2 months of the most spectacular v-shaped moon-shot recovery. It is unlikely that they can hold their price without continued price velocity. It is likely that one of the two faltering will result in both falling. Incomes are falling, assets more so. Consider all these markets as a system of lakes. If housing is falling, withdrawals will be made from commodities instead. One aspect of the link between commodities and equities is that a big chunk of the money spent on oil represents a government surplus which is reinvested, invariably back into US equities. The feedback process can continue longer than if there weren't an automatic response susceptible to profitable abuse, as in a number of other cases. However there are frictions/losses/middlemen. Then there is the issue alluded to with raiding the 401k instead of the home equity. In a world thirsty for cash, the targets for redemption are the recent winners. The more oil goes up, the bigger the hit on incomes, the more overpriced equities are, the more natural it is to sell equities.
I don't know if it has been noticed but it seems a trade fight is brewing between Canada and the US. Despite the talk from the respective federal governments to the contrary, it seems to be growing. First there was the Buy America provision, then the language was toned tone, but state and local governments (not covered by NAFTA/WTO) followed through all the same and a number of direct examples showed up in the press up here (I remember one about sewage pumps of all things.) Then the federation of Canadian municipalities passed a motion to not spend any money on goods/services originating from countries that blocked purchases from Canada, and it would come into effect in 120 days. More recently there has been a proposal from the Canadian government to support pulp mills by giving $1bn in subsidies to fund environmental upgrades, which is in response to the American federal government haven given subsidies to American-based pulp mills for the burning of 'black liquor' under the aegis of it being a form of renewable energy which precipitated those mills cutting their prices which made a bad situation worse for the industry. None of these actions are too important alone. The story in my opinion is that nature of the actions though. Trade barriers organized from the bottom up instead of top down. The speed with which it has been organized. Taking the temperature of the voting public on each side has shown a majority willing to directly defend domestic jobs, even if it means a net reduction in the end. More than wallets, it's about taking control of the one area in their lives they can and maintaining pride.
Well, that post ended up being longer and more disorganized than I expected. At least I brought up some of the things that crossed my mind in the last week and a half. Didn't even get around to mentioning the people I met on my trip. All that typing has worked up my appetite
EHP - Then I guess it wasn't exams, eh?
Outsider
No exams in my foreseeable future
NH, with no income or sales tax, is trying some stupid (I think) things to patch the budget hole. Gambling proposal, as well as a possible tax on mortgage refinancing.
Isn't gambling faltering in most other areas?
When gambling is our last hope, we're doomed.
And who's gonna refinance anymore anyway? Not unless rates come back down.
Well, EHP, we were rooting for you anyway. Scone thought maybe it was orals for a Ph.D. That's how clueless we are.
Too bad that this sort of foolery is the only way we manage to maintain competitive advantage over third-word manufacturing wages since we have no way to compete with 1/10 to 1/20 labor costs. Production innovations tend to be gradual, not revolutionary, and pretty nontransferrable. It's a race we can't win. Was our economy forced into ponzification and financial obfuscation by folks who understood this many years ago? Our system - entitlements, pensions, and all the rest is perfectly sustainable, we just have to change our assumptions about reality!
If so it all reminds me of good old Q on ST:TNG
Q: "Simple: Change the gravitational constant of the universe."
G: "What?"
Q: "Change the gravitational constant of the universe, thereby altering the mass of the asteroid."
G: "Redefine gravity. And how the hell am I supposed to do that?"
Q: "You just DO it. GAHH! Where's that doctor, anyway?"
D: "Geordi is trying to say that changing the gravitational constant of the universe is beyond our capabilities."
Q: "Well, then... never mind."
- Q, La Forge, and Data , "Deja Q"
So if say JPM's bets make Citi go broke, that means the taxpayers have to pay for the manipulation?
At SOME POINT people will wake up, sadly it will be when they have been eating dirt for 2 weeks.
Until then, remember to wake me!
Isn't NH's state motto "Live Free or Die"? I guess they get to see what that means
Havard, Yale, MIT,Colgate, Princeton, Columbia, Brown,Northwestern,Standord and more I missed should be shut down asap. They are a threat to national security and have committed treason against the American nation.
NH,
is now controlled by a mass exodus of Mass residents. NH is now blue. I would ask you to look at thr Ritholtz map of foreclosures by county, it jibes well with democrat heavy areas. No connection implied.....
Rob Dawg writes:
"I'll the the other side of as much as you got. Even with massive debt restructuring from their creditors they got nothing. Google "Natick Collection.""
Well, they got something. The question is on whose B/S sheet it will finally reside and in what forms. Usually, it's best to shuffle this stuff around until the last few remaining parties each have some fairly equal "loss upfront to potential profit later" ratio. It's tricky, though.
My vote to save retail is to establish a Retail Czar to produce concepts in bulk to fill all the spaces. Since money is no object, they wouldn't even have to be profitable. For instance, if your local mall is losing it's local L'Occitane, just plug in an outlet that only sells power steering pumps. Since the USG will own the auto suppliers soon, just market the parts directly.
Lots of birds can be killed at once if we'll only get creative.
is now controlled by a mass exodus of Mass residents. NH is now blue. I would ask you to look at thr Ritholtz map of foreclosures by county, it jibes well with democrat heavy areas. No connection implied
Because there is none. It was concentrated in high suburben squals and they have tended Democratic in recent years thanks to the Religious zionism that killed the Republican party.
I'll the the other side of as much as you got. Even with massive debt restructuring from their creditors they got nothing. Google "Natick Collection."
Nice looking web site. I particularly like the "Nouvelle at Natick" condos, complete with a "wetlands preserve view".
Where I come from, we call that a swamp.
Isn't NH's state motto "Live Free or Die"?
Rumor has it the original phrase was "Live, Freeze and Die"
I believe NH is the last state w/o an adult seatbelt law. When that gets changed, and it will, it's really over.
EHP - pretty much. You got the memo on signal to noise ratio, presumably. Michael got banned. Or arrested in a shooting rampage, it wasn't clear which. There was some huff and puff about SDRs which is going nowhere since they're not tradable. It's rained non-stop in DC metro so it's probably the only part of the country with green shoots that don't have a flamethrower trained on them. Mr Bond got some attention, an outbreak of vapors yesterday faded overnight and the foreigns piled in today before the marbles were taken away. The screen-grab of TLT and TNX at 1:15 EST would make good art, like a black hole about to devour closing. Otherwise quite standard.
C
Eras End,
connect huge globs of people with no control over their own lives and you arrive at the democrat voting base.
michael is back as "michael-j," but damping the noise.
Nice juicy post, EHP. Lots to digest.
EconomicDisconnect (profile) wrote on Thu, 6/11/2009 - 10:38 pm replyIgnore userEras End,
connect huge globs of people with no control over their own lives and you arrive at the democrat voting base
Eh? No. They have control over their lives, you don't.
think,
the real ends of the far left and the far right are close, like a horseshoe not splayed out wide as polar opposites. far "anythings" drive me nuts. Well except far austrian econonomists!
eras end,
stay on demo underground.
You have no idea.
Eh? No. They have control over their lives, you don't.
Actually, they have control over your life.
But I'm ducking out now. Sorry.
eras end,
stay on demo underground.
You have no idea.
Right back. Your a mumbling idiot that thinks he knows something. FWIW, never visit "demo" underground. Your brainwashed.
Whatever,
so city dwelling people that rely on timely delivery of food and functioning services control the ones that can live by themselves for years. Delusion is usually induced by drugs, but some can get there regardless.
Excellent lake analogy EHP. Something's always gotta give. The interesting thing about "equilibrium" is that it is so illusory. As soon as it establishes itself, it's gone.
Citizen Pither -
I'd suggest Mishkin's "Money and Banking" text - at least for what gets discussed here. I was a staff flunky almost twenty years ago in an Econ dept. where Robert King and Marvin Goodfriend (Richmond FRB) worked, and I'd suggest their papers make good reading in addition to a survey text.
Enjoy Barry Ritholtz audio.
The Housing Helix with Jonathan Miller · Unraveling the DNA of the housing market
Whatever,
so city dwelling people that rely on timely devery of food and functioning services control the ones that can live by themselves for years. Delusion is usually induced by drugs, but some can get there regardless.
Your a nice def. of the piece of crap losers like yourself that mentally masturbate to intellectualism and try to make feel real. You are a disgrace to your country and anti-freedom in every way.
Freedom is not the right to be a loser and have others pay for you: freedom is the right to be left alone. Bye Era, hope you and larry summers had a good time under the desk.
michael is back as "michael-j"
Why would he cast himself as a J person?
Freedom is not the right to be a loser and have others pay for you: freedom is the right to be left alone. Bye Era, hope you and larry summers had a good time under the desk
LOL. Larry Summers is neo-liberal scumbag, right up your ally. Freedom is what is considered "free" at the moment. Sadly, you sound like a marxist with your anti-social tendancies.
EHP - like the lake analogy too. Ever hear of the Moniac? Good educational tool. There's still one working in New Zealand.
C
nytol
Your != You are
You're == You are
I hate to be a grammar cop, but continued misuse suggests a lack of knowledge instead of a typo.
@C - nice synopsis...but geez, the S/N memo appears not to be working...I'm really sad to say.
The interesting thing about "equilibrium" is that it is so illusory. As soon as it establishes itself, it's gone.
Perhaps so but it's a good point of reference.
Return to the mean and all that.
Broward,the "J" is for Jagoff.Are ED and EE married to each other?
hong konger (profile) wrote on Thu, 6/11/2009 - 9:45 pm
Excellent lake analogy EHP. Something's always gotta give. The interesting thing about "equilibrium" is that it is so illusory. As soon as it establishes itself, it's gone.
'Equilibrium' is almost a mystical concept (not in a disparaging way)... the point towards which the system tends, but can never perfectly reach. Normal "equilibrium" is stasis, which would rather defeat the whole purpose of a dynamic system, collapsing the whole damn thing.
An MBA from a respected school makes you a business genius overnight !! or apparently not..
ERA,
if think i am a neo liberal you ar so far gone i recommend banning.
Scone, I'm curious about your opinion on the direction of the Oregon RE market. To me it seems like Portland and Seattle are two of the weakest metro areas on the West coast, if not the weakest of the top 20 nationwide as far as their recovery from the 2000 recession and their sharp plunge in employment during the current recession. I left Seattle a few years ago because I wasn't willing to live there through another economic period similar to the dot com bust. I'd like to move back to that area evenually, but I don't see why either will outperform the nation after lagging for nearly a decade.
Great story. Who in the world dabbles in MBS without understand what a cleanup call is? That is MBS 101.
I would say "fools and their money", but unfortunately, it was probably someone else's money.
if think i am a neo liberal you ar so far gone i recommend banning
It is what it is. I called you out on your bs and you couldn't handle it.
Are ED and EE married to each other?
I don't know anything about ED, my sausage inflates quite readily, thank you.
If you think the same type of dynamics are driving Treasury steepening and the equity/commodity rallies, I feel sorry for you.
Treasury steepening is happening because of lack of confidence in U.S. debt, oversupply of refunding and new debt, and debasement of the currency through QE and other means. All those are real.
Commodities rally is being driven mainly by currency debasement. It's getting a little overbought but still may have legs long-term, because the currency has a long way to fall.
U.S. equities should lose value on currency debasement, and virtually all global equity valuations no longer make sense by any conventional measure.
The equity rally began with an oversold situation and perceptions of value but it long ago crossed into hype, smoke and mirrors.
You'll be writing your bloviator posts about Treasury steepening and commodities rally long after the equities rally is in your rear view mirror.
Or maybe the $8500 aid congress is trying to pass to get people to buy fuel-efficient (Japanese) cars
The German's make some pretty good fuel efficient cars too !
Nice to catch you again, EHP.
OT but wondering if you're seeing what I'm seeing here.
Area has always been big on public auctions, but noticed in last several Sunday RE supplements that auctioneers are taking out long listings showing houses that are going up for auction. Some with reserve but some absolute. In several cases, one auctioneer was listing 9 or 10 properties that were going on the block. This is a new format, apart from the typical auction notices that go into the Saturday morning editions (Sat is big auction day here); the Saturday notices ref property along with the affiliated personal property from estates being liquidated by the surviving children. These new notices are RE only.
Can speak with first hand knowledge that two of these homes are ones that couldn't sell via regular channels. One is nice older farmhouse with about three acres and barn (asking $450k+) and the other is opposite spectrum - small SFR in older suburban neighborhood asking approx $150k.
I'm much obliged to you, Comrade Scott.
Mspeed,
Seattle peaked in the mid-nineties when Microsoft was in full bloom, Starbucks made good coffee, and grunge ruled the radio. It all started to fall apart after the tragic death of Kurt Cobain.
"Commodities rally is being driven mainly by currency debasement"
Good grief, the currency has already been debased. Commodities are going up because of speculation and nothing more. Mercy. It is like talking to a blank wall.
Broward,thanks for sharing.
The GM dealer in downtown Saratoga Springs closed overnight. Literally overnight. Yesterday, it was a fully functioning dealer with plenty of stock. Today, it is an empty lot and a couple of abandoned buildings. The only thing left is a handwritten sign saying :"Closed, out of business. Thanks." It is the swiftness that is shocking. A large parcel with limited alternative uses will quickly become blighted. I think we are on the cusp of a long period of reverse gentrification as much of the recent overbuilding molders and decays.
Wow, I missed Michael getting banned. Sweet.
But Michael J?
Michael J was the imaginary playmate of a kid that I know. He had wonderful adventures with Michael J, who was apparently barmy as a loon. Used to talk to the kid just to find out what Michael J was up to lately...
Who's Michael? Why was he banned?
CSC was talking about moving out of California before he disappeared.
Did he move to Texas?
If he was Andrew Lahde, as some here speculated, this deal fits his Modus Operandi.
Nuke:
Seeing same thing here in certain areas. Blight is going to spread.
Flip side is that my kid was wondering about property availability for pursuits like paintball, etc.
Same kid that I found out the other day was selling his lunch sandwiches to a fat kid for $5. Great, he's gonna be a banker.
The only thing left is a handwritten sign saying :"Closed, out of business. Thanks."
This was funny.
Like a band of Gypsies that left town in a hurry.
Michael was a poster with a heavy political rhetoric, sometimes very nasty. Usually conspiratorial.
Which is saying something since a lot here are conspiratorial to some degree or another.
Damned freemasons.
NYTimes piece just posted on the US economy "possibly" stabilizing, while Europe continues to spiral downward.
"the apparent divergence of fortunes between America and Europe highlighted the different approaches to solving the financial crisis, and why some economists say the more aggressive American strategy may be working better, at least for now."
For what it's worth.
U.S. Recovery Could Outstrip Europe's Pace - NY Times
@Nuke,
It is shocking to see something like that happen so quickly. They probably left a handful of trade-ins with unpaid notes that will come back to bite the people that made recent purchases.
homedad43 (homepage, profile) wrote on Thu, 6/11/2009 - 10:11 pm
Same kid that I found out the other day was selling his lunch sandwiches to a fat kid for $5. Great, he's gonna be a banker.
If he were a real bankster he'd steal other kids' lunches and sell them to the fat kid for $5. When the theft is later discovered, he points out the sandwich bagholder and skates with the $5.
EHP:
I think you are right about employment. I think the MSM is starting to get wise that the employment numbers aren't as rosy as they seem. For a really good analysis of the birth/death model, go to maxedoutmama's site: MaxedOutMama
The birth/death calculations are based on employment trends/patterns from last years (it takes about 6-12 months for the models to get updated). That accounts for the ridiculous job additions taking place when more businesses are clearly closing than opening. The lack of large rally's after release of the most recent stats seems to indicate people are getting wise.
Or not. I am a terrible prognosticator.
There's one true measure of how debased the currency is, beyond your opinion or mine.
That's the price of gold.
The price of gold is no higher today than it was this time last year, before the Fed began polluting its balance sheet, the U.S. deficit ballooned into never land, and Ben Bernanke created his QE frankenstein.
You'll know currency debasement is here when gold hits $1,200.
Great write up EHP.
My take away, overly simplistic at best, is that were still working down to the angle of repose.
Would you say that the foundation has stabilized for now and the top is experiencing the primary effects of deflation or are we all still tumbling, just at a slower then previously?
Comrade:
I have seen other dealers go under in the area recently. It is usually a long, slow death. The number of cars on the lot slowly melts away until there is nothing but a "For Sale" sign and oil spots. This is the first time I have seen a dealer (or any retailer for that matter) just disappear overnight.
You'll know currency debasement is here when gold hits $1,200
Guessing isn't further currency debasement.
Oh, yeah, Bernanke's "QE" is a joke. There is none. It is more pr job that has fooled many. The deflation side has that over the inflation side, but they are blinded.
@Nuke,
There have been a few Chrysler dealerships that were forced out of biz in the area. They had a few weeks to sell what they could and shut down.
There was also the case of a Lamborghini dealership that shut down overnight, but that was a case of fraud. Owners sold the cars at less than 50%, then declared BK and defaulted on the financing. I think they were later arrested. An overnight shut down without warning does sound suspicious.
You can have currency debasement and deflation at the same time.
In that case, the price of most goods and services will gradually decline when measured in gold.
The best surrogate for gold, as a currency valuation measure in the modern world, is crude oil.
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
"An overnight shut down without warning does sound suspicious"
Yet a bank that continues to operate with a bad balance sheet does not?
..now moved into Consumer Durables..still wonder if the moce out of commodities was wise - time will tell
rich I hear ya...but rotated out anyways
Oh yeah, I gotta agree disagree with BR with his audio: This was a perfect storm. All other crashes and bubbles were MUCH smaller than this one. The size of it was amazing. It took alot of factors to get it to grow this big.
Amazing times.
In the wake of the Ken Lewis saga on capital hill, oit begs the question that has never even been broached as to what Jamie dimon was saying thinking doing during those Sunday meetings. Recall that Jamie Dimon shared a board seat at the NY Fed with Dick Fuld. Why are those meeting s and conversations not a matter of public record. Not that anything would appear that would be meaningful anway. Dimon is the teflon don of wall street. His schtick coming out of Citi was that he was the M&A strategy guy at Citi. That worked out really well.
Damned freemasons.
Who were probably working with ZOG and the NWO to put words into his mouth using ultra low frequency radio waves, directed from the black helicopters piloted by Bilderberg apparatchiks (!!!)
homedad43 (homepage, profile) wrote on Thu, 6/11/2009 - 10:11 pm
Same kid that I found out the other day was selling his lunch sandwiches to a fat kid for $5. Great, he's gonna be a banker.
If he were a real bankster he'd steal other kids' lunches and sell them to the fat kid for $5. When the theft is later discovered, he points out the sandwich bagholder and skates with the $5.
Resist is Feudal:
Damned brilliant.
Don't think that I'm gonna mention it to him, though.
In that case, the price of most goods and services will gradually decline when measured in gold.
Stop measuring in gold. All goods and services will decline when measured against a country's production.
"Stop measuring in gold. "
+1
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
I know where my money's at on that one. When Timmy gets together with his counterparts, you think that they're playing canasta?
Future banker kid should have sold the same sandwich many times over and then applied to the lunch lady for a bailout.
North Americans make fuel efficient cars too, in Toyota and Honda plants.
rich - now piling into utilities...
Thank you splat! It was much scarier to think that this was out of control stupidity and greed,as long as it is part of a master plan everything will work out....
Who's Michael? Why was he banned?
Michael's user name was banned because his posts were getting extremely vitriolic, to the point of explicitly inciting violence. Here's the post that put CR over the edge:
Michael (profile) wrote on Tue, 6/9/2009 - 5:23 pm Comment by Michael from thread 'Supreme Court Lifts Stay on Chrysler Deal'
"The Supreme Court just paved the way to give BO full dictatorial power. Many someones who are true patriots might want to take matters into their own hands and start shooting public officials occupying high positions before they take our guns away."
This was one of many, and the timing, following the recent holocaust museum shooting in DC, only added to the heat.
We understand that people are beyond frustration, and that this blog can be a magnet for venting (frequently well justified) bitterness. But it's not a platform for revolution.
@fried
This from a bankrupt company iself playing for a bailout from their man ratner, a former NYTIMES reporter, Sad and pathetic. When the stock market pump dies and it would be an oppotune time to see latvia explode dollar flight. It would be an interesting test case to see just how well that age old formula is going to work. Bernanke is a filaure. The entire europe is worse meme is place setting for trying to pull the rug out. Create the problem and offer a solution is that the strategy. There is always North Korea as well.
The auto dealers must all close when the manufacturer's tort liability gets reset.
They are still on the hook. Corporate BK is pure Ponzi.
rich wrote:
Stop measuring the rise or fall of the dollar against other major currencies. All major currencies are falling, and we still don't know whether or not it's orchestrated.
I thought that overt coordination between central banks and mutual currency swap lines meant all currencies values were clearly orchestrated, at least within the limits of control.
Same goes for gold with explicit agreements on sales volumes, lease rates, etc. Of course, I think it is harder for central banks to control gold and if it ever breaks out, it might mean the end of the age of central banks.
Oil is even harder to control and a good proxy for gold, but unlike gold it is consumed when used.
homedad - teach deconstruction!
a piece bread is 35 cents
with mayo add 42 cents
with Cheeze wizz and mayo add 54 cents
with ham add $1.45
homedad43 (homepage, profile) wrote on Thu, 6/11/2009 - 10:31 pm
Resist is Feudal:
Damned brilliant.
Don't think that I'm gonna mention it to him, though.
Good idea. If he plays with FIRE he might get burned (or at least beaten up).
Ken - don't quote it
kcoop - I had to lok up vitriolic. Nice word!
Nothing wrong with revolution, Kcoop, it's the violence you don't need, not to mention the bigotry.
When Timmy gets together with his counterparts, you think that they're playing canasta?
And you make fun of Michael's conspiracies?
Conspiracies are a function of information.
If you build a quantified test to test for a conspiracy, you might be surprised at what falls out.
kcoop wrote:
this blog can be a magnet for venting (frequently well justified) bitterness. But it's not a platform for revolution.
"he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." -- Adam Smith
kcoop (profile) wrote (in reply to...) on Thu, 6/11/2009 - 10:37 pm
We understand that people are beyond frustration, and that this blog can be a magnet for venting (frequently well justified) bitterness. But it's not a platform for revolution.
rhetorical - why is it that all revolutions seem to have to be violent and stupid before they accomplish anything?
If you build a quantified test
what's that?
Goodnight everybody. If hotels in downtown Saratoga Springs start closing, truly we will know the apocalypse is upon us (because real estate and lodging is different here). In all seriousness, despite all the happy talk the tourism industry here is hurting. Memorial day was not booked solid (as is usually the case), you can still find rooms downtown over the weekend (it is usually booked solid on weekends from May to September), and there are still seasonal rentals available for the horse racing season. If housing prices drop another 15% I will be tempted to buy.
Well, hell.
It's CR's blog but if I was an Important Person, I think I'd want to know when a "revolution meme" was building up.
True, there's other mechanisms for that but the memes are a force unto themselves.
Denying them in one space doesn't mean they disappear.
Barley:
Curious as to utilities. In PA, the electric utilities are losing rate caps in 2010 but the numbers who cannot pay are rising significantly as well. If demand were rising/paying customers also, then I'd be all in.
Coop:
Yeah, autorefresh is slick. I'm getting motion sickness with the comment window moving due to refresh while I'm typing.
Thanks for the link to Michael. Seriously, he needed to go.
1 currency now -yogi (profile) wrote on Thu, 6/11/2009 - 10:40 pm
Nothing wrong with revolution, Kcoop, it's the violence you don't need, not to mention the bigotry.
+1 ... sorry, didn't realize I was restating you a minute later.
BTW, which moniker is Krugman?
Very little evidence of the recessions where I live believe it or not. Though with gas prices back up a bit, less driving at night, which I like.
Post-Automobile revolution=depression
Post-Tech revolution=recession or depression?
Denying them in one space doesn't mean they disappear.
Sure. This isn't about denying reality. There are PLENTY of other places such discussions can take place. And the beauty of the net is that they're easy to find and memeify for the Important Persons of the world.
If you build a quantified test
what's that?
A set of criteria to establish if something is a conspiracy.
Like most people, I was raised with the idea that conspiracies are ridiculous.
But my model of the world didn't account for actions I saw and in the late 1990s, I tried to figure out why.
I worked out a test for a conspiracy -
1) A conspiracy must have two or more participants
2) The conspirators must control and share information
3) There must be a third party excluded from that information
4) The conspirators must benefit from the third party's ignorance
This is a broad definition, but it gave me insight into how I was culturally conditioned to dismiss "conspiracies". For instance:
a) A married man has a mistress and cheats on his wife.... according to the four bullet points, is this a conspiracy?
b) A manager hires his best friend into a position that the friend is unqualified for. Is it a conspiracy
Not only does your post have a different twist, but the "jimx" repeats have even more force.
I'm getting motion sickness with the comment window moving due to refresh while I'm typing.
Yeah, I've been experiencing this myself. I should disable autorefresh while typing is taking place.
'homedad - teach deconstruction!'
LOL!
my first thought was "you want him to become Frank Gerhy?"
The GM dealer in downtown Saratoga Springs closed overnight
Wait till Jim Kunstler hears about this.
Next you'll be claiming Lincoln was killed by a conspiracy....
broward (homepage, profile) wrote on Thu, 6/11/2009 - 10:49 pm
I worked out a test for a conspiracy -
1) A conspiracy must have two or more participants
2) The conspirators must control and share information
3) There must be a third party excluded from that information
4) The conspirators must benefit from the third party's ignorance
This is a broad definition, but it gave me insight into how I was culturally conditioned to dismiss "conspiracies". For instance:
The only force that is always moderating the formation, decisions and stability of conspiracies/collusion is the possibility of opportunistic self-interested behavior. i.e. the backstab/no honor among thieves. For a truly rational economic decision-maker there is almost always going to be a point where betrayal is a payoff versus a cooperative strategy.
Nytol
1 currency now -yogi (profile) wrote on Thu, 6/11/2009 - 10:52 pm
Next you'll be claiming Lincoln was killed by a conspiracy....
I claim Lincoln was killed by a bullet.
Next you'll be claiming Lincoln was killed by a conspiracy....
Once you apply the quantified test to everyday situations, you might realize that conspiracies are everywhere.
And your model of the world works better.
You understand why Person A got hired into that position.
Why Person B knows about x, y, z.
Conspiracies are a function of information.
They explain why information shows up in one place but not another.
"Next you'll be claiming Lincoln was killed by a conspiracy...."
Lafayette Baker said he was killed by a conspiracy.
They were his "friends."
Broward:
Not dismissing conspiracies per se. Like I said, a fair number here will sign up for some level of conspiracy - me included.
But Michael takes it to the Unknown Gunman level, which is paranoid.
For a truly rational economic decision-maker there is almost always going to be a point where betrayal is a payoff versus a cooperative strategy.
I'll accept that claim, mostly because the "truly rational decision-maker" doesn't exist.
People are hard-wired with a sense of altruism.
That's why a lot of pure game theory doesn't accurately predict their actions.
BTW, kCoop, Fantastic job.......where do I send the eggs, veggies, and relish?
Does it seem to others that there is an increase here in verbal "class warfare"? Many classes are blamed for supposed wrongs. Since when is someone owed a positive existence once they turn 21? If a country's direction changes, change with it or don't. Bitch or don't about the change, but don't blame your peer for the direction he/she has decided to take.
It really doesn't matter, Aliens are coming back to earth, landing during the 21st of December 2012.
They will get us back into shape and everything will be booming again. .
Could trades similar to this explain why so much money was shoveled at Wall Street, but so little got to main street?
Think about it. Wall Street shorts MBS through CDS. If Main Street was given a trillion or so to pay off their mortgages, all those premiums that Wall Street bought are now worthless.
I'm sold that Booth was a confederate agent.
Whether he had inside help is much murkier. On its face it doesn't smell right when the VP abruptly leaves town instead of going to the show, and the guy supposed to go kill him chickens out.
However, I have to give some respect to your general thesis. It appears to be consistent.
But the rules are per se negative because they attach to the word "conspiracy". My wife and I planning a surprise party for the daughter meets the same criteria.
People are hard-wired with a sense of altruism.
Broward:
Are you sure that that's the right word? Your general theory of society isn't the most pleasant, even if I tend to agree to it.
I tend to think that we're hardwired towards the egocentric and that while there might be "seeds" of altruistic tendencies, they only bloom when tended. Consider most children. Some can be nice and share, but that's why we constantly have to hammer the idea of "sharing"...because they naturally don't.
Conspiracy: Kennedy assasination, Rothschilds/Morgan, Lincoln assasination on and on we go.
I have read some people that say the Red Cross and Boy Scouts of America are part of the global cabal.
Hinckley and/or Sirhan as Manchurians? More likely than not. Wallace was a wacky one.
The Lincoln assassination was most definitely a conspiracy, and included an attack on Secretary of State Seward.
The controversy arises from the fact that not all of the conspirators were identified.
VP abruptly leaves town instead of going to the show, and the guy supposed to go kill him chickens out.
Functions of information.
in 2000, I worked at a company where I deduced that I'd been excluded from the "real decisions". I had fewer scheduled meetings, but when I checked calendars for other people, their meeting frequency was the same. Likewise, I noticed that certain conversations would stop when I walked by, etc, etc.
I deduced that the architect & manager decided to cut me out of the project but not inform me or anyone else. And I later had a confrontation with that manager (a couple of weeks before he was laid off).
Him: "Where were you today?
Me: "I went to a job interview"
Him: "What?! What about the work I assigned?!"
Me: "It's meaningless makework, you guys cut me out of the real project and we're getting laid off anyway"
Him: "I ...I I HAD TO! You would have ruined the project!"
He was stunned that I knew but his admission was satisfying.
The architect politicized me out of the project because he was threatened I'd take his position.
After a few times of this shit, you develop a well-tuned nose for it.
Don't forget about General Electric and Standard Oil concerning the Russian/German plant building they did which led to WWII and the Cold War.
What should we do fine them 10 billion now that we "know"? Profit smells good.
It's a great tell when someone scoffs after you announce that the Lincoln assassination was a conspiracy as if it were news.
broward (homepage, profile) wrote on Thu, 6/11/2009 - 10:59 pm
I'll accept that claim, mostly because the "truly rational decision-maker" doesn't exist.
People are hard-wired with a sense of altruism.
That's why a lot of pure game theory doesn't accurately predict their actions.
Not everyone is wired with altruism. There are documented cases of extreme psychopaths. But more relevantly, some organizations use game theory extensively and LP to model real problems and policy actions - it was Rand Corporation's claim to fame in the early cold war days (I'm not being patronizing, not everyone knows this stuff). Their model assumptions may in some way embed preferences favoring altruism but the cold, hard math that's solving linear equations doesn't know or care. Not that the recommendations of a model are ALWAYS followed but they could be, and this would remove any sort of human emotional intervention that might otherwise bias the results.
That's an idea for an article.
"Are Children Altruistic?"
Er, no.
"Are Children Altruistic?"
Er, no.
Maybe not your kids.
Disagree.
They're empathic, which leads to altruism.
George Lakoff - George Lakoff - Wikipedia, the free encyclopedia
Not about children specifically but about formation of language which he uses a proxy to show empathy.
Hey broward.
Take your 4 points of life and do a little research into your false world you are choosing to live in.
Many people don't buy your 4 point misdirected BS.
Enjoy it.
The 2 party game is over and this is the worst comments won't load. Whata figjoke
I have read some people that say the Red Cross and Boy Scouts of America are part of the global cabal.
Red Cross with the humanitarian goals and helping folk cross international borders is CLEARLY part of the NWO ( new world order ) and the Boy Scouts with the pseudo militarism and colonial roots are CLEARLY part of the IMC ( Industrial Military Complex ).
Broward, conspiracies exist.
The funny part is how many of them fail. We had an office conspiracy that ended with the putative ringleader leaving after committing career suicide over a leadership succession.
The funny part is now that I have observed that persons career since that crash, they have had another high profile crash and burn, and now are in position to do a magnificent one if they fail in the position they now have. Unfortunately, I will most likely be called in to do cleanup after this one, a position that will truly suck.
Such is life. Connections are wonderful, until you let down your friends who got you the job.
I absolutely refuse to play the political game. If they ask, I will talk to them and provide reasonable options and strategies, but they hate to hear reality based solutions.
Ideology is much more comfy in Arizona.
Bedtime folks. BTW- the guys in texas play a mean game of hearts- nice loner.
Someday this war's gonna end....
splat (profile) wrote (in reply to...) on Thu, 6/11/2009 - 11:27 pm
I have read some people that say the Red Cross and Boy Scouts of America are part of the global cabal.
Red Cross with the humanitarian goals and helping folk cross international borders is CLEARLY part of the NWO ( new world order ) and the Boy Scouts with the pseudo militarism and colonial roots are CLEARLY part of the IMC ( Industrial Military Complex ).
/me runs off to get his INWO cards
Not everyone is wired with altruism
Yes, no question.
But even sociopaths often adopt altruistic behavior to better fit into a social structure.
I don't think being selfish and being altruistic are mutually exlusive, ie. Homedad's comment about kids.
Ethics are situational.
One set of conditions may lend themselves to selfishness and the change of even one element could elicit altruistic behavior.
That's another area that the Free Marketeers fail on. Most of their arguments assume a fixed ethical structure, not a structure that can vary by time, place and participants.
splat, what should be done with the Red Cross then. Bleed them to death?
I read some convincing accusations against Sec. of War Stanton, written in the early 20th Century but echoing many suspicions at the time, not so convincingly refuted. The impeachment of Johnson is seen as related.
After reading the comments on gold as a fundamental valuation model for so long, it occurs to me that folks hope there is a iron rule in natural economics that will determine what something is worth. A "conspiracy of the invisible hands", if you will.
Instead of worrying about how to price something in absolute terms, how about just following the old capitalist methodology of picking a rate for your currently held standard of exchange (currency) and looking for assets that produce simple, compounded or some mixture of returns which revolve around that goal?
Perhaps there are too many choices these days, and investors are getting worn out. The "menu" has expanded beyond what a normal person can consume and compare, and fatigue has set in?
"Not everyone is wired with altruism. "
The Milgram Experiment
"Before conducting the experiment, Milgram polled fourteen Yale University senior-year psychology majors as to what they thought would be the results. All of the poll respondents believed that only a few (average 1.2%) would be prepared to inflict the maximum voltage. Milgram also informally polled his colleagues and found that they, too, believed very few subjects would progress beyond a very strong shock.[1]
In Milgram's first set of experiments, 65 percent (26 of 40)[1] of experiment participants administered the experiment's final 450-volt shock, though many were very uncomfortable doing so; at some point, every participant paused and questioned the experiment, some said they would refund the money they were paid for participating in the experiment. Only one participant steadfastly refused to administer shocks before the 300-volt level.[1]"
Stanford prison experiment
The Stanford prison experiment was a study of the psychological effects of becoming a prisoner or prison guard. The experiment was conducted in 1971 by a team of researchers led by Psychology Professor Philip Zimbardo at Stanford University. Twenty-four undergraduates were selected out of 70 to play the roles of both guards and prisoners and live in a mock prison in the basement of the Stanford psychology building. Those selected were chosen for their lack of psychological issues, crime history, and medical disabilities, in order to obtain a representative sample. Roles were assigned based on a coin toss.[1]
Prisoners and guards rapidly adapted to their roles, stepping beyond the boundaries of what had been predicted and leading to dangerous and psychologically damaging situations. One-third of the guards were judged to have exhibited "genuine" sadistic tendencies, while many prisoners were emotionally traumatized and two had to be removed from the experiment early. After being confronted by Christina Maslach, a graduate student in psychology whom he was dating,[2] and realizing that he had been passively allowing unethical acts to be performed under his direct supervision, Zimbardo concluded that both prisoners and guards had become too grossly absorbed in their roles and terminated the experiment after six days ...
Many people don't buy your 4 point misdirected BS.
Patience, Green Green.
Patience, Gringrin-tharl.
Patience.
In but a few days, I will be with you for a short time.
And for a short time only.
"The banks ... paid as much as 80 to 90 cents for every dollar of insurance, the going rate last fall according to dealer quotes, expecting to receive a dollar back when the securities became worthless ..."
counterparty risk is a real bitch.
broward (homepage, profile) wrote on Thu, 6/11/2009 - 11:31 pm
I don't think being selfish and being altruistic are mutually exlusive, ie. Homedad's comment about kids.
Ethics are situational.
One set of conditions may lend themselves to selfishness and the change of even one element could elicit altruistic behavior.
Yes. Most of us have a mixture of both qualities, luckily for the rest of us. One extreme or the other tends to be a pathological case deserving of institutionalization or at least psychiatric treatment (not to cure or 'fix' them so much as to help them function in a world full of people NOT like them). The psychopath fears discovery more than anything though. Emotions play an important role in keeping the balance (even though emotionality has exaggerated effects and can go out of control on feedbacks) in most 'normal' people. And even very selfish people will usually display altruistic behavior to someone, be it immediate family or a peer group, or whatever else.
Re: the Milgram Experiment
Could be an argument FOR empathy, just that the empathy is aligned with the immediate browbeater instead of a distant victim behind a glass window.
I gotta go play pool, i can only handle so much of this.
Great story. Now get all those lawyers involved and throw some good money after your own stupidity.
The boys and girls at Amherst can be happy for a while,this was like Cal beating USC in a football game
Hey, this is our year. SC at home and rebuilding, Javid leading the way...
Now or never Bears. Let's do this thing.
Cheers,
prat
mmckinl, re: The Milgram Experiment - This shows more about "individuals following orders of a superior" then anything else (based on my reading of the analysis, anyway). They were able to redirect the responsibility to the "superior" as they must have know what they were doing. Kinda like MSM and the plebs defer to the FED and Treasury as they must know what they are doing, and they must be doing it for the good of the people (bad assumptions).
As to the Stanford Prison Experiment, I think that fits more to your point. But this also plays into the themes discussed above regarding morality being based on the time place and individuals involved (or in this case, the "setting" of preconceived notions of how a prison "works").
Anyway... good points =)
Cn
Edit, fixed "thin" to "in" in last sentence.
Haven't been a vast number of chuckles in the economic sphere lately, so this one's greatly appreciated. Have sent it along to my stockbroker brother so he'll have it in time to spew coffee on his keyboard in the morning.
Bet there were more than a few WS Situation Commanders looking into their exposure yesterday.
Great story, CR! You have to wonder how many more "short squeezes (in reverse)" are out there and how much more TARP money will be lost. My WAG is that there are many more. It will be interesting to see if any traders panic...
The market just doesn't seem to care. No one cares about financial institution corruption, bad banks, recession, job loss, hyperinflation. It's just buy buy buy, Thanks to automation technology, outsourcing, in sourcing, free market capitalism/globalization, jobless recoveries are inevitable, sadly, for all future recessions. I predict baseline unemployment will rise from the historical average of 4-5& to 7-8% within the next decade, but the stock market & GDP will keep rising. Higher unemployment will be the new normal. Stocks that benefit from this phase shift are multinationals, high tech, and commodity. Politicians will do noting to impede this transition because they lack the power to restrain hypercapitalism, and because they are often paid off.
Good reading, folks interesting finance articles