Another Involuntary Landlord and Summary
Submitted by
CalculatedRisk on Thu, 07/02/2009 - 5:11pm (200 comments)
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Nemo?
Troubled banks could start hiding from the FDIC by moving their branches around all the empty CRE, like illegal rave clubs do.
The building in the image, 1201 15th st nw houses a lot of non profit orgs...
nova: false fronts for their work?
CR, do you ever get angry letters from unemployed news reporters? You do better work than the financial news staff of many whole papers. Content like yours is one of the reasons I usually don't bother with mainstream alleged news sites.
Content like this, here, is the last of the bastions. Soon, and I don't know when, they will come for him.
VV,
You mean like pirates, CIA, and closet republican love nests?
sm_landlord (profile) wrote on Fri, 7/3/2009 - 1:11 am
So I guess the FDIC hasn't been all that successful at staffing up. Still only enough field staff to handle one state at a time, with a small wing unit elsewhere.
FDIC has not learned "clear and hold" COIN strategy.
Now even the National Association of Home Builders is an unwilling landlord. That's funny on so many levels.
A Transwestern property, huh?
I see their signs all over spec CRE in PHX, wonder how long they'll last.
Man, where are all these pigs coming from?
Man, that job loss chart looks bad. CR, did you see the related COTD chart that I linked on the last thread?
How long until the phrase of the day becomes: "We're all unemployed now" ?
So I guess the FDIC hasn't been all that successful at staffing up. Still only enough field staff to handle one state at a time, with a small wing unit elsewhere.
One state at a time? They've barely got the staff to handle one family at a time.
I'll shut up after 7PM pacific.
Volker,
Is this you or Cat Cat?
It's good to be retired, because you can't be fired. Not so far.
The vacancy photo:
Old tenant or current landlord?= National Association of Home Builders
Addition added (dedicated) June 2002
Hyundai has been a big winner in the European cash-for-clunker sweepstakes, and they’re preparing their US dealers for another boom. Bloomberg reports that Hyundai is advancing cash to dealers to “cover new-vehicle credits for consumers until the federal government completes rules for the program later this month and begins paying dealers.” And despite NHTSA warnings that “If a dealer chooses to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule,” deals are already being done. A Virginia dealership has already sold the first vehicle under Hyundai’s offer, replacing a 1995 Ford Explorer with an Elantra Touring. With a $15,000 fine threatened for deals that don’t comply with the program’s final rules, this is being done without the approval of the National Automobile Dealers Association.
source:http://www.thetruthaboutcars.com/
so if California is going to have the first 3 fridays furloughed, then the state regulators will have to shut the banks down on the fourth friday?
some investor guy, just nice emails from employed journalists. I appreciate their work!
All, I don't know anything about this building, except I think the photo is funny.
best wishes
The whole "Cash for Clunkers" reminds me of Bushs foreclose program. They ended up actually "saving" 62 families
I know the area. At night someone lives under the sign
nova: the cat is a wily creature
The Nazi is having a difficult time keeping her off the computer.
Now we have another (Hemingway said, 'One cat leads to another.'), Thunder, a gray three month old runt of the litter that is making Kat Cat's life more fulfilled and also more complicated.
Hey guys it's NOT unemployment...it's FUNemployment. We are all out playing golf and having drinks with what little we saved from Goldman Sucks and Made-off. We will have fun until we absolutely HAVE to go on the Gov't dole. The rest of you suckers will just be ahead of us in the soup line. You will recognize us by our tan.
the only people Cash 4 Clunkers would really help are the parents whose teenage kid drives the 1995 explorer or 1989 BMW 3 series. Of course, there are about a billion of these families, but how many of them are still employed?
Wasn't wired all day. Seems like i missed something. I'm proud to be from Illinois. Maybe the FDIC is rounding up all the troops in Illinois and will go to Corus next week.
lol
American Oil & Gas Historical Society
American Resort Development Association
Barbara Bush Foundation
Data Net Systems Inc
Farmer Joseph W
Greater Washington Community Foundation
Independent Petroleum Association
Japan US Friendship Commission
National Association of Home Builders
National Association of State Units on Aging
National Association On Aging
National Center On Elder Abuse
National Club Association
Nonprofit Roundtable of Greater Washington
Scoggins Harold B +Jr
Steel Framing Alliance
Stokes & Co
Vinyl Siding Institute
ah, yes, all of those folks working so hard for the greater public good...
Corus may never fail.
I talked to a coworker today who just bought a van. Getting your old car to qualify is not as easy as most people think.
from the age of Horus to the age of Corus...
vinyl siding institute....
I thought the "Japan US Friendship Commission" was the US Navy.
Someone - maybe rich or 1currency yogi - was talking about MetLife's sale of Stuyvesant Town in NYC to Tishman Speyer a while ago.
This morning while riding the 4 train I saw an ad for Stuytown:
No Fee
No Security Deposit
2 Months Free Rent On Select Units
Stuyvesant Town : Luxury One, Two, Three, and Five Bedroom Residences in Manhattan
MetLife sold close to the top...$5.4 billion.
nova (homepage, profile) wrote on Fri, 7/3/2009 - 1:31 am
I talked to a coworker today who just bought a van. Getting your old car to qualify is not as easy as most people think.
Half the battle in retail is getting people in the door.
Even as homeowners continue to choose to side with vinyl, competing products perpetuate myths that often lead to restrictions on its use. To counteract these campaigns, we must get the facts about vinyl siding into the hands of decision-makers.
We need your help. As members of the vinyl siding industry, building products distributors, builders, remodelers, community planners, architects, designers, homeowners or concerned citizens, you can become an integral part of our effort. VSI has established the Vinyl Siding Grassroots Team to assist you in becoming better educated about vinyl siding.
Vinyl Siding Grassroots Team
Do they have a t-shirt and what is it made of ?
Early retirement seems so cool then I still have thoughts of running a business and then it hits me. Employees. I am done with adult day care! Then a smile comes over me. Options are great.
Not One Cent
Good point because they bought a car - Honda Van
OK, let's play: "Name That Tune"
No buyers on the road, No buyers on the beach
I feel it in the air, the price is out of reach
Open house, empty streets, the Realtor sits alone
I'm drivin' by your house, though I'm sure - no one's home
But I can see you- your sale signs shinin' in the sun
You got your hair combed back and your sign spinners on, baby
And I can tell you my need for you will not be strong -
after the prices of summer have gone
I never will forget those heights,I wonder if it was a dream
Remember how the price was crazy? Remember how it made me scream?
Now you don't understand what's happened to your sales,
But babe, I'm gonna get you back; I'll be watchin' as the market fails...
I can see you- your sale signs shinin' in the sun
I see you talkin' real slow and you're smilin' at everyone
I can tell you my need for you will not be strong
After the prices of summer have gone
Out on the road today I saw a Realtor sittin' on a stucco shack
A little voice inside my head said, "don't look back. you should never look back."
You thought you knew what homes cost, what did you know?
Those days are gone forever; you should just let them go but-
I can see you- your sale signs shinin' in the sun
You got that price pulled down and that push-up bra on baby
And I can tell you my need for you's completely gone
Now that the prices of summer have gone
I can see you- your crab grass dying in the sun
You got that hair slicked back and that smarmy smile on, baby
I can tell you my need for you's completely gone
Now that the prices of summer have gone
sm_landlord
Nice Mercedes in the video - boyz of summer
A study concluded that letting people hold an object briefly then inculcated a false sense of possession and made people more likely to overbid because they did not want to "lose" "their" object to someone else.
sm_landlord: the ending is weak and redundant, maybe rewrite the last strophe...
dumbest wheel of fortune contestants ever...
http://embed.break.com/589681
A study concluded that letting people hold an object briefly made people more likely to overbid
Bar girls have this down
Nova, We have a winner! And quickly, too!
I'll have to go for something more obscure next time.
"Early retirement seems so cool then I still have thoughts of running a business...."
You have to have something to do or you will likely go mad. It needn't involve making money, but it has to be something. I know a retired Air Force lt. colonel who's building his own airplane. He's making it take a long time.
I saw an Obama sticker on a cadillac.
okay sm
America, where are you now?
Don't you care about your sons and daughters?
Don't you know
A monster is on the loose
7 stars
7 angels
7 wonders
7 lives
Many faces, 7 failures.
You got me there - it can't be the Meat Loaf song.
YouTube - Monster - Steppenwolf
Bankers are thinking,
"How can I keep my bonus,
And still keep my skin?"
Steve Earle - Way Down In The Hole
pavel,
Business is like a game of poker for me, I like setting them up and make it work, money is the poker chips of proof it works.
I keep busy doing things like the Garden, Steel art fabrication is the current learning curve. I really can't go back to work,
mike campbell - more facets than he got through with TP
I should have known - from Virginia...
"Even as homeowners continue to choose to side with vinyl, competing products perpetuate myths...."
....one old boy here after moving from someplace back east re-sided his manufactured MDF home with vinyl. It ended up melting to the side. I guess it's too hot here. He sure was in love with its benefits back where it was a bit colder, though.
Vinil siding does do well with flaming BBQs either.
CR.....you trying to evacuate OC this weekend? It looks like the current thread is already one of those "seeya in the morning" threads.
"Vinil siding does do well with flaming BBQs either."
Aren't the fumes toxic when it burns?
negative! deposit rate
apologies for the astro-turfing, but I picked up on this outa the comments on mish this morning and trumpeted here at CR...
the fuse is lit...
fireworks will commence shortly...
*under NRML conditions another type of CRBOT would do this type of werk.
Probably, I saw a couple of rental houses over the years that had the siding melted on the patio side.
Aren't the fumes toxic when it burns?
The whole Stuytown transaction only made sense at that price if they could manage to convince the loyal long-term renters to either buy their places or leave, and then convert it to coop. The $5.4 billion price tag never made sense under rent regulated NYC prices. There was a lot of fear and loathing from the renters shortly after it happened.
Now, it's ironic that they can't even get those prices as rentals. Revenge of the renters!
bANK fAILURE (profile) wrote on Thu, 7/2/2009 - 5:33 am edit reply WAY OT, but this is real...
Sveriges Riksbank/Riksbanken - Repo rate cut to 0.25 per cent
The minutes from the Executive Board’s monetary policy discussion will be published on 16 July. The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent. A press conference with Deputy...
it appears as though Riksbank gonna charge the banks for reserves........could be inflationary or just downright devaluationary.
*I am a type of CRBOT that is incapabale of the "here" linky thingy...
Dioxin is good for you, right?
Swedish Central Bank is going to charge negative .25%
Interesting Times indeed.
From the NYTimes:
S.E.C. May Reinstate Rules for Short-Selling Stocks
....doesn't our President have enough on his plate without sticking his nose in another Country's business?
"[Honduran] Supreme Court Justice Rosalinda Cruz said in an interview yesterday that the military acted under judicial orders when it deposed [President] Zelaya, rejecting the view of President Barack Obama and other leaders that he was toppled in a coup."
I was thinking that maybe the problem with the Corus foot-dragging has nothing to do with the FDIC's traditional role in closing down and transitioning banks. Maybe it has to do with the fact that the FDIC has never dealt with anything like this before.
What do you do, as the FDIC, with a bunch of big empty see-through and some partially finished high-rise condos in downtown Tampa, Miami, Atlanta, etc.? As construction lender on properties that will never get takeout financing, Corus effectively owns them, so the FDIC would own them, too. It's a nightmare, because some of them may actually represent liabilities (worth less than zero), not assets. Awhile back, there was a report FDIC was talking to the Related Companies about Corus. It makes sense those negotiations would drag on, because Related is a good negotiator, and time works in their favor. Ultimately, FDIC may pay them to take over whatever Corus owns, aside from the depositor liabilities, with some contingencies maybe reverting to the FDIC upon successful workouts. In that case, my estimated of a $5 billion FDIC loss on Corus probably is on the low side.
*I am a type of CRBOT that is incapabale of the "here" linky thingy...
Link here
How exactly does negative interest work again? Especially for a central bank? I pay you to lend you my money? Isn't that kinda bad for credit markets?
RockyR - I have no idea. But we are going to find out soon.
Throw out all your textbooks and compasses.
It cannot happen here.. we are special.
Manhattan Apartment Prices Drop as Lehman Hits Home (Update1)
Bloomberg.com
By Oshrat Carmiel
July 2 (Bloomberg) -- Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.
The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.
I'm in Bangalore, India.
There is construction on every street. No kidding!
Some of the construction includes converting SFH to commercial buildings. It takes about $30 to build a sq feet of commercial space. Near where I’m staying the going rent for commercial is between $15 - $20/sq ft a year. Price of land is $100 a sq feet.The demolition company actually pays you $2/sq feet.
Steve Earle - Hillbilly Highway
Mish did not think it would happen but I warned people about the real possibility of negative nominal interest rates:
"Do not assume that 0% is a floor--Bernanke was hired to innovate, Obama loves conducting hastily and poorly designed "bold" experiments on you, and they might become desperate enough to rig a negative, nominal interest rate (Fed claims economy needs negative 5% interest rate) (Fail penalty creates negative interest rate in Treasury repurchase agreements (repos)) (Japan considers negative 4% interest rate by taxing cash)."
Not One Cent: Inflation or Deflation? Money Supply, Credit Supply
Now I will add the new link as an update to the prediction.
rich, good points.
Without something like the Resolution Trust Corp in place to manage properties, it's got to be a problem for the FDIC. And certainly someone like Related know what those things are worth, even if that worth is negative. It may have to be a group of buyers. Organizing that would be a nightmare.
WTF is the "National Club Foundation?"
(ref. Hollyhood Hack @ 6:31 PDT)
My summary - about 98% of Americans had better be recalibrating their dream and fast;)
How exactly does negative interest work again? Especially for a central bank?
It's negative for the member banks. The CB wants the member banks to lend out excess reserves and not have it sitting at the CB.
@interesting
This pops a neuron or two. I thought the "solution" was to pile on more debt. Negative interest rates would seem to take the air our the room of ANY credit bonanza - at least one from the private sector.
Hmmmm... I guess it would confirm outright printing. Imagine what the means for the long bond! These idiots have no brains. This move just signals that they are still scared shitless.
picosec (profile) wrote on Fri, 7/3/2009 - 2:15 am
WTF is the "National Club Foundation?"
Maybe it is an older version of the National Rifle Association.
and the other 2% better watch their necks.
//My summary - about 98% of Americans had better be recalibrating their dream and fast;)//
Not One Cent;
"...but I warned people about the real possibility of negative nominal interest rates:"
Negative interest rates are uncomfortably close to a wealth tax.
I hate to think what would happen if that was tried in this country.
You probably would see "this sucker go down", and fast.
it's an association for associations...
The NCA Foundation seeks to prepare clubs and the club industry for the future by assessing significant developments in the world around them and providing effective solutions to help clubs and their leaders respond.
The NCA Foundation works to:
Analyze key trends that could shape clubs’ future success and anticipate member needs and expectations so club leaders can respond effectively
Support research and educational needs of the private club community
Develop and disseminate ideas for innovative programming to deliver value and create an overall sense of community within the club
Provide best practice examples to enhance management skills and ensure sound governance
Anticipate threats to the private club experience, whether from government intervention, legal threats or economic challenges, and determine the impact of those threats on the future success of clubs
Basel too, I'm obviously out of my depth on this one.
How can Sweden act unilaterally like this? Aren't they under the ECB?
RockyR - I know I would pull my cash out immediately.
Don't Panic. But if you have to Panic, Panic First.
Why were cynical bloggers and their peanut galleries so prescient about this problem.. among many other?
Cracked Houses: What the Boom Built
The Curse of Shoddy Home Construction - WSJ.com
By M.P. MCQUEEN
Robert and Kay Lynn lay in bed shortly after closing on their new home in the Blue Oaks subdivision in Rancho Murieta, Calif., abutting an 18-hole golf course. They were listening to the “pop, pop, pop” of what they thought were acorns falling onto the roof. The Lynns soon realized those were not acorns dropping on the roof.
“Little did we know it was the house cracking,” says Mrs. Lynn, 67 years old. Mr. Lynn, 68, says they bought the property in 2002 for $357,000 as a weekend home and an investment. The stucco house was moving and shifting, with part of it subtly pitching toward the golf course, resulting in cracks and fissures in the walls, ceiling and floors, the couple says.
Uh oh, if the Swedes are trying it then it's gone through the nordic logicogram, and the Fed will be studying hard. Just like BoE doing QE openly first. Gives a week or two of trial, market spook assessment, run some absurd scenarios, and hey presto, "y'know, maybe it's not so risky trying it with a reserve currency too?".
C
Not One Cent
Good that I swallowed my wine before reading that.
Rhetorical question. Humor me.
Lucifer;
"Why were cynical bloggers and their peanut galleries so prescient about this problem.. among many other?"
Some of us watched these places being built.
Never mind...
Keeping Finances Afloat During a Divorce
Keeping Finances Afloat During a Divorce - WSJ.com
By ANNA PRIOR
Jon and Kate calling it quits might be the news of the moment, but financial hardships brought on by the recession already have helped make separation or divorce a reality for couples across the country. Yet the recession also is causing some unhappy couples to rethink their marital situation, since a costly divorce would only further deplete already-shrunken assets.
"People are staying in poor marriages because this would be the worst time to file for a divorce since they would get a much smaller piece" of a smaller pie, says Bob Adelman, a Los Angeles-based attorney and certified family-law specialist.
do you know where your medical and other records are?
Abandoned business records can't be destroyed
Abandoned documents are a California problem.
The should just send them to Secretary of State Chang as abandoned property. It might give him another heart attack.
How can Sweden act unilaterally like this? Aren't they under the ECB?
They had a referendum on the Euro a few years ago (I think it was in '03). The voters turned it down and the government decided not to press the issue. When they joined the EC they agreed to enter the Eurozone at some point, but apparently the agreement wasn't so specific about the timeline and they seem to be staying out indefinitely.
Yes.. but if you had said that aloud prior to late 2007, you would have been ostracized.
//Some of us watched these places being built.//
although a member of the EU, Sweden hasn't fully adopted the EMU. so it has its own CB and currency (krona). From what i understand, the negative rate is not for retail customers, but the member banks' excess reserves.
Sweden is not part of euro currency zone, they can do whatever they want.
Trying to think what this means in regards to Latvia.
"do you know where your medical and other records are?"
Just wait until your medical records are loaded on Microsoft servers that are connected to the Internet.
I think we should create an entry for the concept "too Bernanke to fail".
Too Bernanke To Fail?
There is no practical solution to "too big to fail," and no alternative to the Fed's ability to print money to ease potentially destabilizing financial panics.
Too Bernanke To Fail? - WSJ.com
By HOLMAN W. JENKINS, JR.
Last week's show trial of Ben Bernanke, like all show trials, was less about convicting a man than about upholding a view of reality. An unspoken concordat authorized both parties to take refuge in their tropes. Republicans labored to portray Mr. Bernanke as a high-handed government bureaucrat, dictating terms to a private sector CEO.
Democrats wafted along on their preferred trope, the scheming businessman (Bank of America's Ken Lewis) extorting a bailout from the Federal Reserve.
Thank you Yalt, BT, commrade.
Just wait until your medical records are loaded on Microsoft servers that are connected to the Internet.
Just wait until your medical records are loaded on Microsoft servers that are connected to the Internet.
I'm sure that they will be super-duper secure.
From Lucifer's WSJ link:
"...a response the company’s attorneys filed with California Superior Court said time limits for some of the plaintiffs’ claims had run out."
"...homeowners are filing lawsuits mainly because home inspectors and attorneys are “prospecting” in new subdivisions."
Really strong arguements they bring there. "It stayed up for a while, didn't it?" and "That's not fair. They're actuall looking at the house."
Somehow reminds me of a Privacy Statement that I got recently. Something like 40 pages (small pages, but nonetheless...).
Seems to me a Privacy Statement should say, " We will keep all information about you private with the following exceptions."
"- just think of the efficiencies that will create, in hiring and firing. "
And blackmail, and credit ratings, and insurability, ...etc.
As opposed to? Alternatives?
Just wait until your medical records are loaded on Microsoft servers that are connected to the Internet.
I reiterate: scared shitless.
Night all.
deleted for stupidity.
"As opposed to? Alternatives?"
As opposed to well-designed, secure systems.
But no one will want to pay for that, so it will not be surprising to find passwords taped under keyboards, unpatched systems, no firewalls, no physical security, etc.
Just like the medical records systems at UCLA, where patient records regularly leak to the tabloids if the patients happen to be celebrities.
Basel Too - there is nothing stopping private banks charging -.25% on their customer's deposits after this decision.
Yup. Scared shitless is right. And clueless as Bush.
Channeling me again?
sm_landlord, maybe that's the solution to our whole problem. Transparency.
Interesting Times.... "Clueless as Bush." That'd be funny except the current clown-in-charge seems totally clueless too. He said today that unemployment might go to 10%. Not defending Bush, as he made tons of mistakes and put us on the path we on now (non market solutions to market problems). Just saying.
How does the diddy about the two-headed snake go again?
Elephants and asses,
Trampling the masses,
Does it really matter who is stealing from you?
Operated by people paid less than 20$/hr and no job security?
As opposed to well-designed, secure systems.
"Privacy is an illusion" (Larry Ellison)
"You have zero privacy, Get Over It" (Scott McNealy)
deanfv - just an expression... not playing politics tonight. And ya, I agree with ya.
This is nuts!
Only the Employed Need Apply
Only the Employed Need Apply, Companies Say - WSJ.com
By DANA MATTIOLI
With unemployment at 9.4% and rising, it’s a buyer’s market for employers that are hiring. But many employers are bypassing the jobless to target those still working, reasoning that these survivors are the top performers.
“If they’re employed in today’s economy, they have to be first string,” says Ryan Ross, a partner with Kaye/Bassman International Corp., an executive recruiting firm in Dallas. Mr. Ross says more clients recently have indicated that they would prefer to fill positions with “passive candidates” who are working elsewhere and not actively seeking a job.
"Operated by people paid less than 20$/hr and no job security?"
No Doubt. In India.
sm_landlord,
Stalin would have loved Ellison and McNealy!
Mike Taibbi’s TV interview about his article in the RollingStone about GoldmanSacks.
The Close : July 2, 2009
sm_landlord,
Unless you eliminate wage arbitrage, that is inevitable!
//No Doubt. In India.//
That'd be funny except the current clown-in-charge seems totally clueless too. He said today that unemployment might go to 10%.
In more totalitarian regimes he would died under mysterious circumstances.
//Mike Taibbi’s TV interview about his article in the RollingStone about GoldmanSacks.//
Non-seasonally adjusted U3 = 9.7% + those who benefits expired last month
He said today that unemployment might go to 10%.
its the Sovereign Wealth Fund that is driving the RIKsbanc
OIL
I added one more point:
"After all, a retail bank's monthly fees in excess of interest paid and a central bank's inflation is each a de facto negative interest rate but people accept it."
The only question regards unemployment is whether a) enough people run off the rolls to keep U-3 below 11% or b) no matter what happens with "a" whether an 11% UE will be allowed to be reported.
Rob Dawg,
It does not matter whether they tell the truth or not! We have passed the point where it mattered.
The Norway Lesson: The Benefits of Good Financial Behavior
-when
Thursday links: a nation of renters Abnormal Returns
-indicates that a large number of googles are tapping the data.
Delinquencies rises to 17% in consumer credit: Lending fell by 33% in the first quarter of the year
http://www.finanzas.com/noticias/economia/2009-07-01/180444_morosidad-eleva-hasta-creditos-consumo.html (translate with google)
One in three Spanish mortgage is struggling to pay fees within the time. Consumer credit fell by 33.7% in first quarter, to 5796.5 million euros, and delinquencies rose to 17.54%, according to the National Association of Financial Institutions Credit (Asnef) . Of this total, 4254.2 million euros was for the consumer goods, which fell by 23.9% and 1542.3 million euros at the automotive sector, which fell by 51%. Asnef stressed that the fall in the consumer sector has been due primarily to loss of personal loans, by the sharp decline in financing of consumer goods and by the contraction of the use of credit cards associated with revolving credit . Specifically, consumer goods fell by 30% to 882.9 million revolving credit cards by 14.5% to 3142.4 billion and personal loans by 65% to 227.9 million euros.
It's negative for the member banks. The CB wants the member banks to lend out excess reserves and not have it sitting at the CB.
If they're not lending it at zero, it's because they don't expect to be paid back. Because there isn't enough goodcredit risk out there and the good credit risk that's out there wants it cheap.
And in any event it prevents member banks from wanting EVEN MORE excess reserves so they'll discourage deposits.
And even if the member banks take no action, the -.25% eventually knocks reserves down to the point where there are no excess reserves.
Asking banks to become more leveraged when the entire world is deleveraging is just plain dumb. It's the impulse to "just do something" no matter how stupid it is because it looks better than doing nothing, even if doing nothing isn't stupid.
What is stopping them from charging -2.5% is the FDIC's guarantee of principal.
Could the FDIC change its rules? Sure. But it would cause a run on all banks.
There won't be any negative interest on insured banks deposits in the U.S.
Bank on it!
wawawa - Thanks for that link. He's my new hero (after CR of course).
Rich - thanks. That make sense in a sane world.
RD, just my personal opinion, buy I think "unemployment" has entered a new paradigm, where no one will be "dropped" summarily. I think the safety net will be maintained indefinitely, at whatever cost. It may be that recipients are routed to alternative programs, but the alternative is, for lack of a better term, unthinkable. Again, jmpo.
So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs?
It actually makes some sense for employers to be hiring from the ranks of the employed, in favor of the unemployed.
There's a whole class of people now who are very worried about their employers' survivability and job continuity. If you ran a competitor of those companies, and looked a little stronger and more permanent, you could basically accomplish two goals in one hiring -- weaken your competitor and steal his accounts/secrets.
I would certainly do this if I ran a U.S. company.
Welcome to capitalism in the dog-eat-dog phase of decline!
There won't be any negative interest on insured banks deposits in the U.S.
Put $100 in a checking account that has $15/month fee (de facto negative interest) and after 7 months your $100 is gone and you owe the bank $5 (negative balance).
"So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs?"
You'll see them standing at road crossings with no shoes and carrying signs saying "Will Work For Food."
Im obviously the bag guy,
smoking green shootz for the culture.
debit card chardez higher rates than credit usage fees.....
mp, hows conjure?
Not One Cent - put in a few million and those charges are negotiable
bank failure, Conjure is fine.
He thanks you for asking.
What is stopping them from charging -2.5% is the FDIC's guarantee of principal.
But they CAN charge an "account maintenance fee". That MAY cause some depositors to withdraw, but then they have to stop and think where they put their money. Equities? Not bloody likely. Commodities? And get caught in the next bubble. A safe? Gotta pay to protect/maintain it. Treasuries? Buy some more US debt!
I would like to get a true comparison to the early 80s. I remember it was bad but people were returning to the workforce faster then. I have 2 friends on their 3rd extension of UE (no longer in the headline stats) without prospects, both 6 figure earners and would be willing to take a serious cut.
Put $100 in a checking account that has $15/month fee (de facto negative interest) and after 7 months your $100 is gone and you owe the bank $5 (negative balance).
mp,
Looked at spain's mortgage default rate?
So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs?
NW: It is very dark, your sword is glowing a faint blue. You are likely to be eaten by a Grue.
ZORKED !!!
wouldnt negative interest rates be approximately equal to deflation.... yes apples and oranges but still both fruits....
Wrath of Grapes?
//So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs?//
Re Sweden.
Simply wow.
There might not be any overt shift to a negative retail deposit rate, but I could see that banks will pile on more fees/costs that would in practical terms wipe out any interest paid.
They might be stupid, but they ain't dumb.
Monthly fees are common, people do think "negative interest rate" when they see $ instead of %, and people do not notice the de facto negative interest rate because they are making withdrawals and adding paychecks.
"Looked at spain's mortgage default rate? "
We knew it would be bad. Not good.
So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs? <?i>
Lots of Obamavilles spring up while the unemployment rate drops to 5%. Millions go hungry and fight for garbage and minimum wage jobs while the unemployment rate stays at 5%.
“The markets are getting a dose of reality after becoming over-optimistic on the worldwide rebound,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “Risk aversion is back, and the bias is for the yen and the dollar to be bought.”
Just in time for my late summer Swedish vacation.
Think it won't happen in USA?
//We knew it would be bad. Not good.//
NOC, if you sign up for a "premium" checking account that charges $15/mo. for its services, and then deposit $100, and just leave it, then yes, you will lose your money. Point conceded.
A central bank's negative interest rate on bank reserves could be deflationary in isolation but the purpose is to threaten the money into fractional-reserve lending, which is inflationary.
"Think it won't happen in USA?"
It's problematic. We should know in a few more months.
spain and ireland were the only RE markets that were more obvious than the US. my finance teacher was the chief economist for fannie years ago and he said nothing would happen in the US. (this was in san diego in 2006) still he chuckled at spain...
The real fun begins when you see the same % in credit cards.
/It's problematic. We should know in a few more months.//
Im leaving now, and Im taking my brocoli with me...
YU duznt CARE.
NOC - i concur...
That should say "do not think."
What a great night to check in.
Y'know what all of this has in common with my pneumonia?
It just sucks wind.
Spent little too much time in front of CNBC today.
Utter bullshit.
Rob, a grue, is that the monster hiding under my bed?
looking at erin?
//Spent little too much time in front of CNBC today.//
Pneumonia definitely sucks wind.
My condolences.
About 10,000 K-12 educators fell off the Titanic into the water yesterday as school districts around the state of California finalized their budgets and layoffs.
Those will show up in the July unemployment numbers.
Over the next 3-6 months, at least 10,000 Cali state workers will fall into the water.
Since we did not make it into a banker lifeboat, my family and I are clinging tightly to the stern railing trying to be the last in the water.
homedad43 - take more vitamin D for that pneumonia. It's one of the best immune boosting vitamins.
Saved me a few times over.
CC - good luck....
@nades,
Thanks, we are going to be fine for at least another year. After that, who knows.
edit: I just know a lot of people in the water now and have a lot of empathy for them. It kills me.
Rob, a grue, is that the monster hiding under my bed?
Ref to a grue just proves that Dawg is a geek at heart..
Good thing I'm FAR above all that.
Thanks mp. Picked it up from youngest, who's recovered nicely.
he now gets to go out and play.
I did learn a bitter lesson about how our youngsters are tied in to spending. My Middle was shocked - like come in and announce - that Billy Mays died. Hasn't got a clue about most anybody else.
And no, I don't watch Erin. If I want econ porn, I come here.
G'night folks.
Sorry for shilling.. but Doom Resurrection on the iPhone is great! A rail shooter.. but the graphics are good! Well designed for the iPhone platform.
The rail shooter aspect makes it easier to control without mechanical feedback.
PS- I downloaded it today.
What kind of checking account is that? Who would do such a thing?
People who use currency exchanges, aka working poor, already do such a thing.
People do the same thing when they accept ATM fees.
I remember when Bank One started charging $2 for teller transactions.
I got charged a "dormant account fee" last year.
A check itself costs 20 cents. No reason it can't be 35 cents. "Sign up for on-line bill-pay! Only $3.95 a month!"
Custodial services don't grow on trees.
And hang in there Coinz.
Good luck.
homedad43.
It is likely not bacterial pneumonia.
//Picked it up from youngest, who's recovered nicely//
Aww homedad, speedy recovery to you, you are in my prayers buddy.
lmao: Grue Rap
YouTube - MC Frontalot - It Is Pitch Dark
Thank you homedad43, please get well soon.
The grue is a sinister, lurking presence in the dark places of the earth. Its favorite diet is adventurers, but its insatiable appetite is tempered by its fear of light. No grue has ever been seen by the light of day, and few have survived its fearsome jaws to tell the tale.
Addendum: These characteristics have made them favored pets among upper echelon Goldman employees.
Charles Kiting - agreed to all your points. But depositing $100 dollars in a $15/mo. premium account, and then just leaving it there defies credulity.
DC1000 - was this your photo?
.......................
homedad43 - hope you're back on your feet soon....
.............................
nytol (were has misean been?)
......................................
I'll buy an iPhone when it has a built-in hot tub and wine cooler.
Account activity obscures the negative interest rate but does not eliminate the negative interest rate (it still costs you).
It is like people who talk about their house appreciation over purchase price (initial investment) but ignore all the new cash infusions for house maintenance to counteract depreciation.
mp (profile) wrote on Thu, 7/2/2009 - 8:42 pm
I'll buy an iPhone when it has a built-in hot tub and wine cooler.
You'd be surprised the places an iPhone can take you on cool factor alone.
You can certainly watch babes in hot tubs on that one.. some streaming porn sites have iphone optimized streams..
//I'll buy an iPhone when it has a built-in hot tub and wine cooler.//
mp,
How ate those walk in fridges/freezers?
but the purpose is to threaten the money into fractional-reserve lending, which is inflationary.
But only if they expect the money lent to be repaid. If it doesn't get repaid, the .25% charge would have been a better deal than making a million in loans that don't get paid back.
Note that the charge is only on excess reserves. Well, you're either solvent (most likely reserves in slight excess) or insolvent (not enough reserves). The neg interest could force some "solvent" banks to write down more of their assets so that they suddenly are less solvent and avoid the neg interest. Maybe it helps price discovery, nmaybe it doesn't.
That's just it - no one really knows what its going to do, but it certainly is a disincentive to save at the individual level - and with the CB attitude of "too much savings" I'm leaning towards the idea that people who save and have no CC debt are getting pushed into a spend spend spend program by the CB. Once the CB finds that people are merely putting the cash in a safe, they'll start monetizing.
"How ate [are?] those walk in fridges/freezers?"
Full, thank you, and functioning fine.
Charles Kiting - agreed to all your points. But depositing $100 dollars in a $15/mo. premium account, and then just leaving it there defies credulity.
Well, his example was an exaggeration, but it made the point obvious. But even charging $1.50 is a $1.50 spent instead of a $1.50 saved.
Charles Kiting: But only if they expect the money lent to be repaid. If it doesn't get repaid, the .25% charge would have been a better deal than making a million in loans that don't get paid back.
That is a factor for bank profits and long-term sustainability but not for short-term stimulus, where the defaulted loan money is still running around the economy in the form of Elkhart RVs.
The silly thing about neg interest is that a repaid loan is punished by .25% It could be a kick in the pants to get the banks to write down bad loans faster, but who knows.
-
I couldn't sleep.
I'm a passive candidate who would give small body parts for a new co. Where do I sign up?
Interesting stats on Spain.
One of the people whom I assist managing their money has two Wells-Fargo Checking Accounts and linked Savings accounts. Counting all four, the total balances typically fluctuate between $500 and $1500 through each month.
Currently, W-F fees on these accounts come to $19/month or $228/year. That's about 20% annually of the average balance.
She had been paying only $8/mo on one checking account, then W-F convinced her to change some things around resulting in an additional $11 in fees on other accounts.
A couple of years ago I looked at W-F annual report and they had revenue of $1550/customer and profit of $370/customer. How do you think they did that?
[Yes, I am going to get her into a better situation, but she's in a wheelchair and I have no legal authority over her account.]
quite a few of my friends are on heavily weighted commission/bonus compensation. They are hurtin'
So, does anyone have guess as to what's going to happen once the unemployed are no longer counted and don't have jobs?
No justice. No peace: YouTube - The Rolling Stones "Street Fighting Man" -LDG Video Edition
Jesse Green Fungus
thanks barfly...ran outa time last night...
linky still no worky....
AHHHH LEARNING.....
Lucifer (profile) wrote on Thu, 7/2/2009 - 7:34 pm
*
As opposed to? Alternatives?
Just wait until your medical records are loaded on Microsoft servers that are connected to the Internet.
Well, since you asked, how about an OS that has a track record of being more secure and stable, and can carry heavier loads more efficiently? Linux.
According to Microsoft's Steve Balmer, Linux has a larger share of the Desktop than Apple does, and Apple is at 10%.
Because of Microsoft's continuing security problems and high cost of purchase and maintenance, there is a mass migration toward Linux by governments and their military. Most of the Entertainment industry is now served by Linux and a large segment of the financial services is also now being served. About the only ones who cannot move are those whose prior poor choices put them into vendor lock-in, for which they are now paying dearly.
Linux and FOSS already powers 70% of the Internet. All of the spam and malware is coming from the 27% of the Internet powered by Microsoft servers. The gigantic 1.5M PC bot farms that crooks created to spawn spam are composed of almost 100% Microsoft powered PCs. That's how easy they are to hijack.
Being unaware of Linux it is understandable you would also be unaware of the support models surrounding it, including paid support, if you are so inclined to give your money away.