Sure this will work:
Paris launches smile campaign to woo tourists

China Bans Electroshock Therapy for Internet Addiction

Lots of off the wall stories out there in the news today, must be to match the insanity of Wall St.

I'll post it for the umpteenth time.

The E. F. Schumacher Society • Buddhist Economics

Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are as free from "metaphysics" or "values" as the law of gravitation. We need not, however, get involved in arguments of methodology. Instead, let us take some fundamentals and see what they look like when viewed by a modern economist and a Buddhist economist

I worked for a person who was so concerned with growing his sales thirty percent to get his bonus that he was actively destroying his existing accounts. In one quarter we lost an account worth 10X that bonus. Too much greed, too much ignorance, too much alpha.

As Ghost says, all these CMBS and CDO ratings are irrelevant as long as Ben will take them with US taxpayer support (indirect us taxpayer support of course) - nothing really matters as price discovery will occur long after most of us have died - lucifer being the exception

From previous:
" ghostfaceinvestah (profile) wrote on Tue, 7/14/2009 - 2:48 pm
"Would inflation be a flat tax?"
Inflation is effectively a consumption tax, which is regressive on income. "

Actually, it's a tax on assets, particularly money. If you have $100 in the bank and 100% inflation, $50 of your spending power has disappeared after a year. The tax portion comes in that your wages need to increase to compensate, and you eventually begin to experience bracket creep.

Not One Cent says it better than me:

"Inflation taxes consumption less than savings.

Inflation taxes, from most to least:
Savings
Consumption
Debt

The purpose of inflation from FDR to Bernanke is to make consumption a better bargain than savings to a rational actor."

Actually, there are a number of purposes, but too much to deal with here and now.............

Clever person = I know

Intelligent person = There is much that I do not know

unfortunately we confuse the more common 'clever' with the less common 'intelligent'.

Man, I am so glad we got rating agencies that can tell us things we already know.

Off-topic - looks like the Arizona legislature did do something last month besides allow concealed weapons in bars:

Governor Brewer has signed a change to Arizona’s anti-deficiency law in the trustee’s sale statute – A.R.S. Section 33-814(G).

The change will affect borrowers that did not live in the property for at least 6 consecutive months. The anti-deficiency rule that formerly prevented a lender from seeking a deficiency or suing directly on the note will no longer apply to many residential investment properties.

Vonbek777 (profile) wrote on Tue, 7/14/2009 - 6:57 pm
Sure this will work:
Paris launches smile campaign to woo tourists

Smiling with ennui doesn't do the trick.

Not One Cent,
Somehow I think smiling is the least of Paris' problem with tourism...could be wrong...

Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness...

I was reading some of Thomas De Quincey's stuff this weekend (ironically to get away from economics) and picked out the following quotes.

Apparently economics has not changed at all in 200 years:

"I had been led in 1811 to look into loads of books and pamphlets on many branches of economy; and, at my desire, M. sometimes read to me chapters from more recent works, or parts of parliamentary debates. I saw that these were generally the very dregs and rinsings of the human intellect; and that any man of sound head, and practised in wielding logic with a scholastic adroitness, might take up the whole academy of modern economists, and throttle them between heaven and earth with his finger and thumb, or bray their fungus-heads to powder with a lady's fan."

I think this quote captures, in a single sentence, the essence of the crisis we face today:

"How easily a man who has never been in any great distress may pass through life without knowing, in his own person at least, anything of the possible goodness of the human heart -- or, as I must add with a sigh, of its possible vileness."

This quote has a lot of personal significance to me:

"I can tell them to go, and they go ---, but sometimes they come when I don't tell them to come."

Looks like the rating agencies are as timely with CMBS as they were with RMBS.

Check out the returns on these "AAA" gems:

SCHWAB YIELDPLUS FUND SELECT SH Fund Chart - Yahoo! Finance

SWYSX: Holdings for SCHWAB YIELDPLUS FUND SELECT SH - Yahoo! Finance

Schwab marketed SWYSX as a near cash equivalent. The cash markets were raided by wall street. No bailouts for the widows and orphans though.

I hear Vegas is taking odds for which city of the world will be razed first this August or September...so someone fill me in, what is happening at the end of August that changes the current equation? Is it just the summer is ending, or are some numbers coming out that are too big to deny? I am joking about the razing of course, just keep hearing, especially from gold bugs that end of August, things come unglued. Don't understand why...

"
Vonbek777 (profile) wrote on Tue, 7/14/2009 - 3:14 pm

I hear Vegas is taking odds for which city of the world will be razed first this August or September...so someone fill me in, what is happening at the end of August that changes the current equation? Is it just the summer is ending, or are some numbers coming out that are too big to deny? I am joking about the razing of course, just keep hearing, especially from gold bugs that end of August, things come unglued. Don't understand why..."

If you'd been wearing your tin foil cap, you'd know. That said, some bloggers have been predicting market dislocations about that time.

Angry Saver (profile) wrote on Tue, 7/14/2009 - 7:13 pm
Looks like the rating agencies are as timely with CMBS as they were with RMBS.

S&P as Dr. McCoy: "He's dead, Jim."

" July 14, 2009

In a speech to the Chamber of Commerce in Jeddah, Saudi Arabia, U.S. Treasury Secretary Timothy Geithner said July 14 that U.S. government policies are consistent with a “strong dollar,” and he pledged that the United States would take steps to rein in its borrowing, Bloomberg reported. “The United States was on an unsustainable fiscal path before this crisis, and we will not succeed in establishing sustainable recovery without a credible commitment to address our long-term deficits,” Geithner said. After leaving Jeddah, he is scheduled to visit the city of Yanbu to attend an economic development event with King Abdullah."

//Governor Brewer has signed a change to Arizona’s anti-deficiency law in the trustee’s sale statute – A.R.S. Section 33-814(G).

The change will affect borrowers that did not live in the property for at least 6 consecutive months. The anti-deficiency rule that formerly prevented a lender from seeking a deficiency or suing directly on the note will no longer apply to many residential investment properties. //

Can they do that after the fact? What if the loan docs say nonrecourse?

The French will not raze Paris until after August vacation.

"Physical delivery, and the coming of the white buffalo"

Really!? Should I sell my shares in a buffalo ranch? How about the beefsteak mine?

"The French will not raze Paris until after August vacation."

Bien sur.

Just don't eat the White Buffalo. You will not make friends that way.

FROM THE HOLLOW FUTURE…

From the hollow future
Came something that would happen,
Concussion everywhere
That roared against a membrane

It was so long ago,
The hottest day of summer,
I never have forgotten
How violent the terror

Future and the past,
It tore the world apart,
The feared foretelling blast
Tore out the city’s heart

Will it now descend,
The bright destroying star?
It will not long delay
The future is not far

Yet perhaps a branch
That never bore a tree,
A crucifix to which
I never bent a knee

A crucifix that never
Held the corpus of
The Crucified of cities,
Annihilated love

Pavel
June 25, 2009

" nova (homepage, profile) wrote on Tue, 7/14/2009 - 3:22 pm
Just don't eat the White Buffalo. You will not make friends that way."

YouTube - Great White Buffalo

I don't read most of the gold news. That must be why I missed it. I sleep in my tinfoil hat though, so I was surprised that I was caught unaware on this one. Will have to snoot around sometime.

That way we will know who is a hater and who isn't.

Or the ability to assign icons to each others usernames. Rob Dawg would look like this:

http://getsbybuckner.files.wordpress.com/2007/07/underdog.jpg

"I think we need an American flag icon."

I've been wearing my 'tribute' baseball cap, with the American flag on the front.

Seriously, if there's to be a dislocation that isn't so much of a crap shoot, it's the coming of H1N1 this fall, and even that is not a certainty. If it happens, it will even shut Wall Street down.

CMBS analysis from Citi this afternon indicates non-S&P rated bonds are trading at s+300bps while S&P bonds are more like s+600. Yikes!

"...non-S&P watchlisted bonds have been trading inside of swaps plus 300bp in the past couple of days. Pretty amazing that S&P thinks similar dupers they rate should be rated A+ to BBB+ under their new methodology.

Unfortunately, this methodology with the implementation of TALF really will create a tiering of bonds by rating-agency. Again, as we discuss in the attached article, if they have changed their methodology in such a significant manner since they originally rated the pools, maybe they should investigate if they could offer to withdraw their ratings of the various affected pools."

edited: I forgot he was dead...

"Social safety nets and other stabilizers which provide a more perfect informational picture of the future to a rational consumer are a superior way of discouraging saving than the imperfect, unjust, and confiscatory tools of inflation."

Given sufficient social solidarity deflation is survivable. Inflation is the solvent of societies.

Hoop: Social safety nets and other stabilizers which provide a more perfect informational picture of the future to a rational consumer are a superior way of discouraging saving than the imperfect, unjust, and confiscatory tools of inflation.

The Global War on Savers uses both inflation and the welfare state to be extra sure.

The Protestant work ethic wins again.

Social safety nets and other stabilizers which provide a more perfect informational picture of the future to a rational consumer are a superior way of discouraging saving than the imperfect, unjust, and confiscatory tools of inflation.

With what is going on in places like CA now, I think we're increasingly getting to the point where nobody is going to believe that the government can effectively provide "social safety nets".

A side of to much social safety nets creates a false sense of risk and laziness. How much can we cover before it becomes enabling? I think we have well passed the line.

The Global War on Savers uses both inflation and the welfare state to be extra sure.

I can't imagine why anybody would start a business in the US now. I'm dead serious about this.

Now that I'm finally getting to the point where I have the financial means to employ other people and create a wealth-producing business, I've completely lost interest in doing so. This is something I've wanted to do all my life. No more.

Why would anybody work hard and take extreme risks to give away all the rewards?

Best to stay at home and do nothing, or relocate to a different country.

I have a very basic question - is a mortgage-based security (in principle as opposed to reality) based on the anticipated appreciation in value of the property, on the supposed revenue stream it will generate, or both, or one or the other, or neither?

If neither is the answer, what the hell does generate the return for an MBS?

ac-

Federal government will have to be the safety net.

This statement seems to assume that the Federal government is all powerful and can do whatever it wishes.

History seems to suggest otherwise - large governments can in fact be quite brittle and quickly lose power when things go wrong.

" ac (profile) wrote on Tue, 7/14/2009 - 3:43 pm

The Global War on Savers uses both inflation and the welfare state to be extra sure.

I can't imagine why anybody would start a business in the US now. I'm dead serious about this."

Have you never heard of a "paper loss" One way to get around higher taxes, if only for awhile...

Unwind of FRB support to Euro banking system

Per ZH, the FRB has yanked down the swap lines from $600B to $100B. I think the AIG payouts allowed this to happen. Otherwise Deutsche Bank, UBS, and others would have collapsed.

As Foreclosure Activity Surges, Obama Considers Rental Option

That is why when I started up my business again I set it up to have no employees and stay small. I am much happier now.

Hoopajoops LTD (homepage, profile) wrote on Tue, 7/14/2009 - 3:35 pm

Savings is a form of decision deferment - you defer your consumption decisions to some future time. The reason you do this is because the information you have about what your needs will be in that future time is limited. If you had a perfect, clairvoyant understanding of your life from the moment of your birth, .......

Social safety nets and other stabilizers which provide a more perfect informational picture of the future to a rational consumer are a superior way of discouraging saving than the imperfect, unjust, and confiscatory tools of inflation."

Nice exposition.

The states can not afford it. I suppose the gov could make grants to states to help keep the safety net functioning somewhat. Something like this:

Fairfax County, VA July 13, 2009

Today the county board approved funding for the "Cone" program. People who previously would have been housed at county homeless shelters will now be issued a red plastic traffic cone. County Supervisor Mark Delantis, spoke about this program at a news conference today.

"These cones will be important to homeless of any kind. People who sleep in their cars will now be able to reserve popular parking spots near the mall. Those with out a vehicle will find them extremely handy for reserving the right tree."

Also announced was the closing of all shelters due to lack of funding.

To be honest, S&P should get some credit for finally trying to be current (not ahead) with reality. They are still largely behind on RMBS and Subprime, but this move is actually ahead of losses (behind on expectations), as the losses are unlikely to hit these super senior classes for 5-7 years.

Not only that, but S&P's assumptions are pretty severe, even by my standards, and I'm a super CRE bear.

"Social safety nets and other stabilizers which provide a more perfect informational picture of the future to a rational consumer are a superior way of discouraging saving than the imperfect, unjust, and confiscatory tools of inflation."

Well said. There's a puritan backlash to such thought in the U.S. -- encourages laziness, etc. -- but don't recent articles hold that the Euros are as productive as we are? And even Taiwan and Japan were able to handle nation health care.

If we had educational costs, health care costs, and a certain view of what retirement benefits in this country will handle in the future, all bets would be off. It wouldn't just be about spending freely or sitting on your duff. It'd also be about the freedom to take risks. To start a new business and know that failure wouldn't hurt your kids' health care or educational prospects. It'd be huge.

@ Pellice - the bond collects monthly fixed income payments from borrowers of the commercial real estate. If the borrower stops paying the fixed amount, the bond holders take and sell the property.

It is only slightly more complicated taking into account the way investors structure and trade the investments, but the basic concept is very simple. I would not classify it as a betting game exactly, though there is certainly risk.