But I never thought the fed would be loaning trillions against crap assets or buying > $1.25 trillion in GSE debt and securities. The fed definitely saved the banks and the stock market - for now.
For now is the operative.
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
Overheard two 20-ish women leaving the neighbors' open house this past weekend...one of them said "I'm going to make an offer but first I need to find a job."
At least they count as traffic, right? And good, positive, confident consumer sentiment.
Good to know high end foreclosures and short sales are raising the median.
This is a classic statistics course example of how particular stats can be very misleading.
For anyone here who doesn't already know, the market prices of all kinds of homes are going down. It's just that the mix of what is selling is changing.
The Case Shiller numbers will show continued declines when released later this month.
As someone looking for a high end house, more distressed sales are a good thing.
UPDATE 1-US officials fear CIT situation has worsened-source
Wed Jul 15, 2009 5:01pm EDT
CIT stock halted, indicating news imminent (Adds CIT share trading halt, details on government discussion, Frank comments)
WASHINGTON, July 15 (Reuters) - U.S. officials are still exploring providing government assistance to CIT Group (CIT.N), but are increasingly concerned that conditions at the lender have deteriorated too far, according to a source familiar with government talks.
Reposting from yesterday, two houses in my California town came on the market yesterday at about $575K, both last sold for $500K around 1999-2000. That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money."
If a house's selling price isn't 25 percent higher right now than it would have been in the year 2000 -- its value has dropped. Put it that way to people.
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
and this is why they're winding up many buyback programs and FASB is allowing banks to claim UST at either present value or forwhat they cashflow at.
Chicago school playbook, left over from the last time they had a good football team.
They are currently mopping up liquidity, endgame on the financial crisis; increasing odds of triple dip recession.
I wonder what Joe 6 pack thinks of all this market action?
The market whipsawing up and down.
Can the Fed/govt/Goldman entice the regular Joes back into the market?
I took my marbles off the table after making a killing last year and early this year. But now there is no way to invest. it's all speculation. I'm sure the quants love it, but does anybody else? Can our economy survive if our markets are reduced to a bunch of computers trading algorithms?
I've been trying to think where Joe 6 pack will put his/her money?
specifically, I wonder if some people will just put it into a house.
Stocks are confusing. the markets are confusing. A house is simple. sure, you can lose a lot of money on it, but at least it makes sense.
reminds me of immigrant families who are afraid to use banks. maybe they're on to something?
(AP) Laid-off auto-parts workers huddled Thursday around gas canisters tied to an electrical cable, threatening to blow up a factory in the latest example of extreme French resistance to cost-cutting in the economic downturn.
Other French workerss have kidnapped their bosses, blocked ports and barricaded factories to try to save jobs in France's worst recession since the 1940s.
Anyone else having problems with CR site? The main site is killing my cpu to the point of over-heating. This has been happening off and on over the last few weeks. I'm running add-blocker and Firefox. Only one the main page and no other page on any other site I use.
But I never thought the fed would be loaning trillions against crap assets or buying > $1.25 trillion in GSE debt and securities. The fed definitely saved the banks and the stock market - for now.
For now is the operative.
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
Across the Curve had some insight as well... Linkie
:: :: The Federal Reserve released the minutes of the last FOMC meeting today. i found a couple of points interesting.
The Committee raised its central tendency forecast for the unemployment rate for each year. In particular, the Committee projects a jobless recovery as the central tendency forecast for the jobless rate in 2011 is 8.6 percent.
If that comes to pass I wonder how the solons of the political economy in Washington will confront that issue.
In a separate point the Committee has told us that it will not sell any of the long term assets (Treasuries,MBS and agencies) that it has been busily acquiring. At the outset of the minutes the there is a discussion regarding Federal Reserve net income projections under various scenarios. In most scenarios the System will earn tons of interest income. They pay virtually zero on reserve balance and buy assets yielding significantly more than that. it would be hard not to earn substantial income.
The Committee confronted the scenario in which short term rates rise sharply and they have mark to market losses. Here is the pertinent quote from the minutes:
However, while the Federal
Reserve would retain the option of selling securities
before they mature or are prepaid as a means of tightening
policy when appropriate, it was not expected to
have to do so. Changes in market valuations were thus
seen as unlikely to have significant implications for the
System’s net income.
The FOMC clearly states that they retain the option to sell securities but in their own words they do not expect to do so.
When the time comes to tighten they will do it via the funds rate and an increase in the interest which they pay on reserve balances.
And with the unemployment rate expected to hover in the middle 8 s through 2011 , dont hold your breath waiting for that to happen.
"i won't buy a house because i'm afraid of property taxes and utility fees. "
Basel, no joke!
The apartment I'm renting is taxed at a mid-1980s appraisal level (CA prop 13). If I were to go buy something not even nearly as nice, my prop taxes would be more than my current rent!!
I'd love to buy something, but at these prices I don't see it ever making sense. Plus the rent control laws in my town make it a no-brainer to rent.
"Probably just those pesky North Koreans messing with you."
Hmm could be. Sent the Chinese wife out to work today. Perhaps they picked up on that and are gunning for whatever's in the house. Gonna have to speak to the inlaws back on the mainland and have them ask lil Kim to stand down.
For what it's worth, the real estate market in my coastal SC neighborhood is still DEAD. Sellers are beginning to lower their listing prices, as they compete to win over the few remaining buyers before summer ends.
"Reposting from yesterday, two houses in my California town came on the market yesterday at about $575K, both last sold for $500K around 1999-2000. That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money.""
And it really, really sucks for the people who bought in 2006.
(AP) Laid-off auto-parts workers huddled Thursday around gas canisters tied to an electrical cable, threatening to blow up a factory in the latest example of extreme French resistance to cost-cutting in the economic downturn.
If it was in Flint MI - US officials would say "make my day"...
"That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money.""
And it really, really sucks for the people who bought in 2006. "
I still follow our old home to see what's going on in the neighborhood. It's one of those planned communities. In the last month the zestimate on my old home has gone up by 70k or almost 10%. Next door home is same square footage, same lot size almost 60k lower. Same thing with other houses on the block.
I did a little digging and all the homes that were sold in the last 4-5 years have suddenly jumped and the homes that haven't been resold havent. Looks like a bunch of people who bought between 2004 and 2007 asked for a re-assesment and got one that is atleast 100k below what they bought at but still higher than what zillow was estimating.
(AP) Laid-off auto-parts workers huddled Thursday around video games tied to an electrical cable, threatening to blow up an imaginary factory in the latest example of extreme America resistance to finding another job in the economic downturn.
After the tragic events of July 5 in Xinjiang Uyghur autonomous region in China, it would be useful to look more closely into the actual role of the US Government's "independent" NGO, the National Endowment for Democracy (NED).
All indications are that the US Government, once more acting through its "private" Non-Governmental Organization, the NED, is massively intervening into the internal politics of China.
The reasons for Washington's intervention into Xinjiang affairs seems to have little to do with concerns over alleged human rights abuses by Beijing authorities against Uyghur people.
It seems rather to have very much to do with the strategic geopolitical location of Xinjiang on the Eurasian landmass and its strategic importance for China's future economic and energy cooperation with Russia
The salient question is what has the NED been actively doing that might have encouraged the unrest in Xinjiang Uyghur autonomous region, and what is the Obama Administration policy in terms of supporting or denouncing such NED-financed intervention into sovereign politics of states which Washington deems a target for pressure?
The guys I know who are still doing deals (New Mexico) are picking up foreclosed mobile homes on land which need work. They had sold everything they had but managed to pick up three this month. They buy, fix, and sell or rent (mostly sell).
One other guy looks for discouraged sellers with a lot of equity and a house that needs work. He arranges long term owner financing and typically sells with a 5% or so down and a note for the rest. He calls them "Bread and Butter" houses. Three bedroom, two bath, garage, 1,400 to 1,800 Sq Ft and payments no more than $1,300 per month.
You know I grew up in Canada, spent time in Europe and can attest to the fact that Canadians/Europeans are on the face of it more laid-back, more willing to take it up the backside with taxes, getting screwed over by the man etc..
And then I move to the US and live here for 10 years and see that everyone has a much more don't screw with me mentality.
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me.
"Renewable energy sounds good, but it cannot replace our existing sources. Inconvenient details -- such as the fact that we have no ability to distribute any energy created by wind and solar to the places that use the energy -- are completely ignored. Our transportation system depends on oil to provide 96% of its energy. I don’t think anyone will be commuting to work in a solar- or wind-powered car in the near future. A plug-in car will require electric power that comes from coal and nuclear plants. "
Backstop the losses, take a ownership stake of say just under 80%, inject a shit pile of money (again!), pay off the executives, then two months later do a GM/Chrysler ramrod filing and you get both failing and bailing.
At the very least they have another 3% cushion to work with as of today.
The way I read it in FT today was that if the liquidity is deep enough(UST) you can do both at the same time and reapportion easily to whatever suits the banks purposes.
I would hope CR or someone could compile info like this so wee can see the roadmap going forward without relying on Broken Clock Paul.
Because the Europeans are used to working together, in strikes, riots, etc. They've also seen governments collapse, in living memory. In America, it's more of an "every man for himself, I've got my ammo, screw you" attitude.
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me.
I don't think I would label it "passivity". It is more a mixture of fear, hope, and emergency planning in my neck of the woods. Actually, it may be better described as a Citigroup CEO's approach to a deteriorating situation: "As long as the music is playing, you keep dancing".
The basic question is: what do you do? If you have a job and benefits, do you risk it now, or do you wait until your number is called?
Right now, the water in the pot is simmering, but don't think that you can't get hurt messing with it.
I'm a plaintiff in a business foreclosure. Pharmacist filed bk for the 2nd time (you can do it every 180 days, if
you get dismissed. Today she was dismissed again, so the foreclosure is on again. We offered to
see if we couldn't do an arrangement where she stayed as pharmacist and someone else ran the
business, but no. Wouldn't speak to us. My clients are fed up and want her gone.
I don't see anything going anywhere but down in South Fla.
lawyerliz (profile) wrote on Wed, 7/15/2009 - 10:02 pm
I don't care if the market goes to 36,000, I refuse to invest in something
that is completely incomprehensible.
Nice strong community here for the most part.
Neighborhood watch group, block parties twice a year, monthly community meeting, etc.
Have a bunch of college kids renting the house across the street now though.
Ugg.
Is it really too much trouble to roll your garbage can in during the week rather than leave it lying on its side halfway in the street?
I would not like to make payments on 2 1/2 times our income; would have
no money for fun. 5 times we would be groaning and eating nothing
but cheese sandwiches. I just don't understand.
"
poic (profile) wrote on Wed, 7/15/2009 - 5:52 pm
......................
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me."
With 60% of the populace paying zero net taxes and another 20% deriving their income from Federal, State, or local government, why would you expect them to be upset?
I ran one a little while ago. It's not happening with IE only Firefox. And only on the main CR page where the ads are. I wonder whether my add-blocker is causing something to cycle over and over. I'm using just the hoocoodanode.org page and no problems for the last half hour.
If the unemployed burnt down a auto factory in Detroit would any body care. The company can't sell it and they would even the bank debt or AIG would pay up and then build a new in a foreign country !
lawyerliz (profile) wrote on Wed, 7/15/2009 - 3:07 pm
...5 times we would be groaning and eating nothing
but cheese sandwiches. I just don't understand.
I should explain that VenCo has a bifurcated household income distribution. It isn't gaussian around $73k but a sum of two gaussians $45k and $100k. the $45ks aren't buying houses. The $100ks are still paying 3.5x income.
Back in the '70's, inflation seemed to be a sort of self-perpetuating cycle. If you wanted something, it was 'buy now before the price goes up,' or 'buy now because your dollar will be worth less tomorrow.' But now, I'm seeing over 12% unemployment, and nearly universal underemployment in my area. Thus a demand crash. The only inflation I can see is in medical.
CIT is in big trouble because they do things that the too big to failers want to do.
can't get in the way of the TBTF crowd.
it's honestly ridiculous. One of the reasons why CIT is in such bad shape is because they must compete with a bunch of banks that have artificially low borrowing costs due to governmental support.
aarrrgggghhhh.
I'm not saying CIT shouldn't fail.
I'm saying it's ridiculous that CIT should have to "compete" with govt supported banks.
They sell everything and I hear they changed the Auto to something else. My Buddie with the body shop say the get real irritated when you call them AIG.
"One of the reasons why CIT is in such bad shape is because they must compete with a bunch of banks that have artificially low borrowing costs due to governmental support."
CIT is in bad shape because they got into sub-prime and student debt in a major way and were funding their day to day operations with CP. Once that froze up they were SOL. Now they're doubly screwed because of what you mentioned. But doesn't sound like that's why they got into trouble in the first place.
One thing I find interesting that's been discussed many times before.
It seems the govt can support stocks OR bonds, but not both
bonds rally big time when stocks fall. stocks surge and bonds show weakness.
this is a dumb question: but why can't the govt support both? it's not like any of this is real anyway.
is there some law they are constraining themselves with?
or is the end game when they do start propping both bonds and stocks.
I tell you what though: despite the "green shoots" boosterism I see the inverse relationship between stock and bond valuations troubling for the powers that be.
if stocks surge too much then bond prices tumble causing significantly increased bond yields which puts a hamper on our debt-laden economy, as we saw when the 10 year hit 4% recently.
Imagine how high the 10 year will go if we get to Dow 15k again!
OT--besides the CIT news, tomorrow the weekly unemployment claims come out. There was a debate last week whether the data was distorted or not by the holiday. So tomorrow's number, if worse than expected, along with the CIT news, could cause a halt to this week's rally..
"if stocks surge too much then bond prices tumble causing significantly increased bond yields which puts a hamper on our debt-laden economy, as we saw when the 10 year hit 4% recently.
Imagine how high the 10 year will go if we get to Dow 15k again! "
4% 10 year starts killing mortgage rates which kills housing which kills consumers. Of course they could just go Zimbabwe or what China is doing now and run stocks up infinitely but we all know where that ends. It's a balancing act.
CIT is in bad shape because they got into sub-prime and student debt in a major way and were funding their day to day operations with CP. Once that froze up they were SOL. Now they're doubly screwed because of what you mentioned. But doesn't sound like that's why they got into trouble in the first place.
I agree wholeheartedly. I'm sorry if it came off sounding like CIT is an angel or something.
However, one of the reasons they got into sub prime and student debt is because they "had" to compete with the TBTF banks. Not sure I see why CIT should fail when nobody else does.
The ONLY reason I would want CIT to "live":
1) because I don't want to concentrate yet more power into the #$%#(#@ biggest banks.
2) because in the past CIT lent to small businesses, at least until they ran into funding problems.
I care little/nothing for CIT, but would like the US govt to address increasing lending to small businesses in some manner. small businesses do employ a fair number of people, and small businesses don't outsource as much as the megacorps do IMO.
"So what was supposed to happen today in Cali? I guess it didn't."
From what I'm hearing, they're lashing together a solution that doesn't really solve anything but allows the whole sorry enterprise to stagger along for a few months. It'll work until it doesn't. I'm expecting a big reform push next year -- not necessarily the right reform, but a big push. And a population who may be ready for it.
4% 10 year starts killing mortgage rates which kills housing which kills consumers.
POIC: you're so "old economy" it's embarrassing. /snark.
I've been pondering of late what I should do if I start seeing increased bond prices AND increased equities valuations at the same time. Specifically, does that mean we've entered a time of increased monetization or "printing"?????
CIT was a political pissing contest, and Geithner lost.
CIT's bailout problem is that its only 2 options were the 23A exception or the TGLP, which would have required FRB or FDIC acquiescence, respectively. Bernanke has stated that the FRB can not be bailing out individual companies; it would take away from its macroeconomic priorities. To this end, it has done things like dump Maiden Lane onto the UST; also, AIG has been forced to repay FRB debt with proceeds from UST trust co assets. On the other side, Bair has already began phasing out TGLP. The one shot for Geithner to bailout CIT was via TARP, and it did it to the tune of $2B.
OT Talked to a tech component supplier the other day. They are seeing enterprise sales flat, and telecom sales up a bit. Hearing rumors of 2,000 RIF at one of the large tech companies out here (SV).
Governments like to layoff front-line workers (firefighters, teachers, garbage collectors) to annoy and frighten people into demanding return of big budgets, thus continuing the gravy train for all the unnecessary bureaucrats, pork, and graft.
I'm with Liz, nothing is moving to indicate its not still falling and I'm in the small loan business, with a group of Lawyers and exporters in the same building. Not one new business in my whole County in '09, while lots of beggers wanting econ. recovery money from the State and local government coming out of the woodwork.
This is what bothers me so much...if things really aren't getting better, except for GS...then why push this immaculate recovery...isn't it better to keep expectations low so we can be pleasantly surprised about some honest good news...this crap only makes sense in light of an impending negative event, and even that doesn't totally make sense. If we truly are grasping at straws here, I am disappointed...going out with a whimper and a bang?
isn't it better to keep expectations low so we can be pleasantly surprised about some honest good news...
There is a group of people that believe if you talk happy, then happiness will follow.
Picture the opposite for a moment: Let's say the Fed issued a statement that we are headed for 25% unemployment. What would that do to prices, forex, stocks, etc?
So naturally, happy talk will affect the world in positive ways. I have never met a politician who thought differently, fwiw.
Bob Dobbs (homepage, profile) wrote (in reply to...) on Wed, 7/15/2009 - 3:27 pm
"So what was supposed to happen today in Cali? I guess it didn't."
From what I'm hearing, they're lashing together a solution that doesn't really solve anything but allows the whole sorry enterprise to stagger along for a few months. It'll work until it doesn't. I'm expecting a big reform push next year -- not necessarily the right reform, but a big push. And a population who may be ready for it.
They keep running into a problem. There's nothing left to tax. That's not hyperbole. Two ideas; removing the home mortgage interest deduction and extending sales taxes to services. Both would work for a while but even the Dems know it would crash home values in the first gut the business community with the second. The Dems also fear for their party but not like you may imagine. The Gerrymandered districts keep party dominance safe but if they make the draconian (c. 2004 funding levels) cuts necessary the primary electoral system is likely to be swamped with even more extreme candidates.
I'm still hearing the whisper of a "temporary" VAT repayment mechanism in exchange for Federal bailouts now.
I thought the plan on CIT was to dump assets into the bank and then take the assets to the discount window, thus making it a Fed issue. Perhaps it was Bernanke who said no, as the assets weren't really "discountable?"
Well I know around the Southern Baptist campfire, tithes are down, church investment funds are down...seems God didn't let them know where to put their money...just another example of over-leverage...still have a hell of a lot of real estate though, not as much as the Pope of course. Don't know how the Catholic church is doing these days...
Eight years later and what do we have to show for it? July equals deadliest month of Afghan war
| Reuters
KABUL (Reuters) - The death toll for foreign troops in Afghanistan halfway through July equaled the highest for any month of the eight-year-old war, tallies showed on Wednesday, as a U.S. escalation has met unprecedented violence.
Authorities announced a U.S. soldier had been killed by a bomb and two Turks had died in a road accident, raising the toll of U.S. and allied foreign fatalities in the first half of July to 46, equal to full month highs set in August and June 2008.
Isn't it about time to have a CA recall election? I mean, it's been a good 8 years since the last recall.
Just think of the perks of being governor, dawg.
777....The biggest cash crop business's is religion and drugs, why not tax both. Mississippi had tax on alcohol while none was suppose to be consumed in the State. It was run by Czar Winter who become rich, then Governor of the State, then the ethics goroo of public education.
"They keep running into a problem. There's nothing left to tax. That's not hyperbole. Two ideas; removing the home mortgage interest deduction and extending sales taxes to services. Both would work for a while but even the Dems know it would crash home values in the first gut the business community with the second. The Dems also fear for their party but not like you may imagine. The Gerrymandered districts keep party dominance safe but if they make the draconian (c. 2004 funding levels) cuts necessary the primary electoral system is likely to be swamped with even more extreme candidates.
I'm still hearing the whisper of a "temporary" VAT repayment mechanism in exchange for Federal bailouts now. "
I'm really hoping that the gerrymander system starts to break down with the implementation of Prop 11 and the advent of more moderate candidates: Dems who don't worship the public unions, Repubs who don't think tax cuts are the only way and prisons are sacred. Such moderate political animals would be wilder and scarier to the powers that be than "extreme" candidates. I mean, the current district system encourages extreme, discourages moderation. After that, I'm really hoping for a two-top primary proposition in '10.
As for cutting spending, the problem is that not enough is on the table, because the extremists in charge now can't deviate from their bases:
Reduction of all redundancy in higher ed; does the UC system really need to teach English 1A, or basic history, or, or, when the CCs can do it as well? Should the CCs and high schools partner up on voc ed, and more.
Roll back all state pensions to no more than 90 percent of final base pay.
Substitute proven prison diversion programs for prison time; free nonviolent criminals or divert them to cheaper halfway houses; reexamine everyone put away for life on Three-Strikes for a misdemeanor. Close prisons.
At the very least, Immediate reassessment for any business property that hasn't been reassessed for more than 20 years; amend 13 to allow reassessments of business property at no less than 10-year intervals.
Allow no law to be passed in Sac that mandates extra duties to counties and cities without sufficient money allocated to pay for it.
Find a way to redirect revenue and control of revenue to localities and get Sacrmento out of the loop. If that means modifying Prop 13, so be it.
If you want to keep your Prop 13 limits on taxes increases, then accept a ban on tax cuts without a 70 percent vote of the legislature or populace.
These and others are all unthinkable under the current California political system. That's why that political system -- has to go.
A foreclosed upon Grizzly Bear (extinct) searches for a place to live, while just below "California Republic", a sea of Red Ink is threatening to bankrupt the Loan Star State.
California goes bk and home sales are up. We have left the reality dimension, boys.
Pigged from last hyper-pig.
But I never thought the fed would be loaning trillions against crap assets or buying > $1.25 trillion in GSE debt and securities. The fed definitely saved the banks and the stock market - for now.
For now is the operative.
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
Overheard two 20-ish women leaving the neighbors' open house this past weekend...one of them said "I'm going to make an offer but first I need to find a job."
At least they count as traffic, right? And good, positive, confident consumer sentiment.
Catching a falling knife is dangerous to your financial health.
Glengarry Glen Ross - Wikipedia, the free encyclopedia
"Cynical realism is the intelligent man's best excuse for doing nothing in an intolerable situation."
Aldous Huxley
motor vehicle green shoots in Michigan for June, mostly from the employee buyout vouchers. Everything else sucked.
http://www.senate.michigan.gov/sfa/Publications/MonthRev/mrrjun09.pdf
Good to know high end foreclosures and short sales are raising the median.
This is a classic statistics course example of how particular stats can be very misleading.
For anyone here who doesn't already know, the market prices of all kinds of homes are going down. It's just that the mix of what is selling is changing.
The Case Shiller numbers will show continued declines when released later this month.
As someone looking for a high end house, more distressed sales are a good thing.
I can't wait for the NAR commercial. "It's never been a better time to buy a house."
UPDATE 1-US officials fear CIT situation has worsened-source
Wed Jul 15, 2009 5:01pm EDT
WASHINGTON, July 15 (Reuters) - U.S. officials are still exploring providing government assistance to CIT Group (CIT.N), but are increasingly concerned that conditions at the lender have deteriorated too far, according to a source familiar with government talks.
The source said Treasury Department officials are concerned that CIT's liquidity crunch has worsened over the past few days and that government aid would not effectively put the lender on a path to recovery.
UPDATE 1-US officials fear CIT situation has worsened-source
| Reuters
Reposting from yesterday, two houses in my California town came on the market yesterday at about $575K, both last sold for $500K around 1999-2000. That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money."
If a house's selling price isn't 25 percent higher right now than it would have been in the year 2000 -- its value has dropped. Put it that way to people.
CIT
Bail or Fail?
energyecon - Wish someone would define "too far"
"...path to recovery"
Like junkies in rehab?
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
and this is why they're winding up many buyback programs and FASB is allowing banks to claim UST at either present value or forwhat they cashflow at.
Chicago school playbook, left over from the last time they had a good football team.
They are currently mopping up liquidity, endgame on the financial crisis; increasing odds of triple dip recession.
I wonder what Joe 6 pack thinks of all this market action?
The market whipsawing up and down.
Can the Fed/govt/Goldman entice the regular Joes back into the market?
I took my marbles off the table after making a killing last year and early this year. But now there is no way to invest. it's all speculation. I'm sure the quants love it, but does anybody else? Can our economy survive if our markets are reduced to a bunch of computers trading algorithms?
I've been trying to think where Joe 6 pack will put his/her money?
specifically, I wonder if some people will just put it into a house.
Stocks are confusing. the markets are confusing. A house is simple. sure, you can lose a lot of money on it, but at least it makes sense.
reminds me of immigrant families who are afraid to use banks. maybe they're on to something?
At least we're not French, yet...
(AP) Laid-off auto-parts workers huddled Thursday around gas canisters tied to an electrical cable, threatening to blow up a factory in the latest example of extreme French resistance to cost-cutting in the economic downturn.
Other French workerss have kidnapped their bosses, blocked ports and barricaded factories to try to save jobs in France's worst recession since the 1940s.
Hey J6P, where you goin' with that gun in your hand
Hey J6P, I said where you goin' with that gun in your hand?
i won't buy a house because i'm afraid of property taxes and utility fees. still too much overcapacity that someone's has to pay for.
plus, it's definitely a renter's market.
Anyone else having problems with CR site? The main site is killing my cpu to the point of over-heating. This has been happening off and on over the last few weeks. I'm running add-blocker and Firefox. Only one the main page and no other page on any other site I use.
Probably just those pesky North Koreans messing with you.
When I post out of Merritt Island, sometimes I inexplicably can't post on a thread.
the old one is ok, next one not, next one ok.
It's despotrate situation, in that Kim Ill.
My mom has got to make some investment decisions.
Haven't the faintest idea of what to do.
But I never thought the fed would be loaning trillions against crap assets or buying > $1.25 trillion in GSE debt and securities. The fed definitely saved the banks and the stock market - for now.
For now is the operative.
There were some faint whiffs of inflation in the CPI numbers today. The Fed may have cooked up a nice feast of stagflation.
Capacity utilization down, unemployment up, state and fed tax revenues down, inflation up.
And good luck unwinding those crap Fed assets or raising interest rates to 15% in this environment to contain inflation.
Across the Curve had some insight as well... Linkie
:: ::
The Federal Reserve released the minutes of the last FOMC meeting today. i found a couple of points interesting.
The Committee raised its central tendency forecast for the unemployment rate for each year. In particular, the Committee projects a jobless recovery as the central tendency forecast for the jobless rate in 2011 is 8.6 percent.
If that comes to pass I wonder how the solons of the political economy in Washington will confront that issue.
In a separate point the Committee has told us that it will not sell any of the long term assets (Treasuries,MBS and agencies) that it has been busily acquiring. At the outset of the minutes the there is a discussion regarding Federal Reserve net income projections under various scenarios. In most scenarios the System will earn tons of interest income. They pay virtually zero on reserve balance and buy assets yielding significantly more than that. it would be hard not to earn substantial income.
The Committee confronted the scenario in which short term rates rise sharply and they have mark to market losses. Here is the pertinent quote from the minutes:
However, while the Federal
Reserve would retain the option of selling securities
before they mature or are prepaid as a means of tightening
policy when appropriate, it was not expected to
have to do so. Changes in market valuations were thus
seen as unlikely to have significant implications for the
System’s net income.
The FOMC clearly states that they retain the option to sell securities but in their own words they do not expect to do so.
When the time comes to tighten they will do it via the funds rate and an increase in the interest which they pay on reserve balances.
And with the unemployment rate expected to hover in the middle 8 s through 2011 , dont hold your breath waiting for that to happen.
"i won't buy a house because i'm afraid of property taxes and utility fees. "
Basel, no joke!
The apartment I'm renting is taxed at a mid-1980s appraisal level (CA prop 13). If I were to go buy something not even nearly as nice, my prop taxes would be more than my current rent!!
I'd love to buy something, but at these prices I don't see it ever making sense. Plus the rent control laws in my town make it a no-brainer to rent.
and FASB is allowing banks to claim UST at either present value or forwhat they cashflow at.
I think that FASB interpretation has always existed. The FASB 157 flip flop is the big sham.
Place it all on Lucky Dan...
"Probably just those pesky North Koreans messing with you."
Hmm could be. Sent the Chinese wife out to work today. Perhaps they picked up on that and are gunning for whatever's in the house. Gonna have to speak to the inlaws back on the mainland and have them ask lil Kim to stand down.
For what it's worth, the real estate market in my coastal SC neighborhood is still DEAD. Sellers are beginning to lower their listing prices, as they compete to win over the few remaining buyers before summer ends.
"Reposting from yesterday, two houses in my California town came on the market yesterday at about $575K, both last sold for $500K around 1999-2000. That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money.""
And it really, really sucks for the people who bought in 2006.
Would that be a horse or a dog?
(AP) Laid-off auto-parts workers huddled Thursday around gas canisters tied to an electrical cable, threatening to blow up a factory in the latest example of extreme French resistance to cost-cutting in the economic downturn.
If it was in Flint MI - US officials would say "make my day"...
edit
That will encourage factories to move to France.
Not that being a sheeple is the answer either.
Yep, already would have sent in the SWAT team...
and FBI
and Homeland Security
and Local cops
and state cops
and....
I wonder if investors are blowing their wad on crap/subprime/REO props... and will miss out when the good stuff goes on blue-light special later on.
"That's a net loss in real dollars -- but it doesn't sink in for people. They think, "oh they didn't make very much money.""
And it really, really sucks for the people who bought in 2006. "
I still follow our old home to see what's going on in the neighborhood. It's one of those planned communities. In the last month the zestimate on my old home has gone up by 70k or almost 10%. Next door home is same square footage, same lot size almost 60k lower. Same thing with other houses on the block.
I did a little digging and all the homes that were sold in the last 4-5 years have suddenly jumped and the homes that haven't been resold havent. Looks like a bunch of people who bought between 2004 and 2007 asked for a re-assesment and got one that is atleast 100k below what they bought at but still higher than what zillow was estimating.
you're right about that, Bob.
$500,000 1999 dollars = $635,534 2009 dollars
- Wolfram|Alpha
(AP) Laid-off auto-parts workers huddled Thursday around video games tied to an electrical cable, threatening to blow up an imaginary factory in the latest example of extreme America resistance to finding another job in the economic downturn.
Hell they'd just let them blow it up... save them the demo cost!
Reuters:
Shooting incident has taken place outside U.S. Capitol in Washington, Capitol police say 5:43pm EDT
$500,000 1999 dollars = $635,534 2009 dollars barfly
Depends on who you knew and how well they were connected to WS...
Ohhh you were talking about CPI inflation and not asset growth...
"Yep, already would have sent in the SWAT team...
and FBI
and Homeland Security
and Local cops
and state cops
and.... "
Then it would be a feeding frenzy for every 2-bit assistant DA looking to make a name for him/herself.
bankerwannabee, to which town are you referring?
$500,000 1999 dollars = $635,534 2009 dollars
Barfly,
The loss was much larger if you consider the cost of renting vs. owning. I'd guess 4%/year.
After the tragic events of July 5 in Xinjiang Uyghur autonomous region in China, it would be useful to look more closely into the actual role of the US Government's "independent" NGO, the National Endowment for Democracy (NED).
All indications are that the US Government, once more acting through its "private" Non-Governmental Organization, the NED, is massively intervening into the internal politics of China.
The reasons for Washington's intervention into Xinjiang affairs seems to have little to do with concerns over alleged human rights abuses by Beijing authorities against Uyghur people.
It seems rather to have very much to do with the strategic geopolitical location of Xinjiang on the Eurasian landmass and its strategic importance for China's future economic and energy cooperation with Russia
The salient question is what has the NED been actively doing that might have encouraged the unrest in Xinjiang Uyghur autonomous region, and what is the Obama Administration policy in terms of supporting or denouncing such NED-financed intervention into sovereign politics of states which Washington deems a target for pressure?
Is Washington playing a deeper game with China?
The guys I know who are still doing deals (New Mexico) are picking up foreclosed mobile homes on land which need work. They had sold everything they had but managed to pick up three this month. They buy, fix, and sell or rent (mostly sell).
One other guy looks for discouraged sellers with a lot of equity and a house that needs work. He arranges long term owner financing and typically sells with a 5% or so down and a note for the rest. He calls them "Bread and Butter" houses. Three bedroom, two bath, garage, 1,400 to 1,800 Sq Ft and payments no more than $1,300 per month.
Both have been doing this for a long time.
Hell they'd just let them blow it up... save them the demo cost!
I'd wonder how down and out UAW workers could afford the materials and logistics. Surely the money had a better use as a kickback or something, right?
"Technological progress has merely provided us with more efficient means for going backwards."
Aldous Huxley
You know I grew up in Canada, spent time in Europe and can attest to the fact that Canadians/Europeans are on the face of it more laid-back, more willing to take it up the backside with taxes, getting screwed over by the man etc..
And then I move to the US and live here for 10 years and see that everyone has a much more don't screw with me mentality.
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me.
OT: The New Energy Crisis
The New Energy Crisis-Minyanville
"Renewable energy sounds good, but it cannot replace our existing sources. Inconvenient details -- such as the fact that we have no ability to distribute any energy created by wind and solar to the places that use the energy -- are completely ignored. Our transportation system depends on oil to provide 96% of its energy. I don’t think anyone will be commuting to work in a solar- or wind-powered car in the near future. A plug-in car will require electric power that comes from coal and nuclear plants. "
"CIT bail or fail"
Why not both?
Backstop the losses, take a ownership stake of say just under 80%, inject a shit pile of money (again!), pay off the executives, then two months later do a GM/Chrysler ramrod filing and you get both failing and bailing.
At the very least they have another 3% cushion to work with as of today.
Ciao
MS
Basel, Palos Verdes Estates.
Thanks for the feedback, MS.
The way I read it in FT today was that if the liquidity is deep enough(UST) you can do both at the same time and reapportion easily to whatever suits the banks purposes.
I would hope CR or someone could compile info like this so wee can see the roadmap going forward without relying on Broken Clock Paul.
Going swimming w/ the fishes...
AMF
It's very weird if you ask me. - poic
Because the Europeans are used to working together, in strikes, riots, etc. They've also seen governments collapse, in living memory. In America, it's more of an "every man for himself, I've got my ammo, screw you" attitude.
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me.
I don't think I would label it "passivity". It is more a mixture of fear, hope, and emergency planning in my neck of the woods. Actually, it may be better described as a Citigroup CEO's approach to a deteriorating situation: "As long as the music is playing, you keep dancing".
The basic question is: what do you do? If you have a job and benefits, do you risk it now, or do you wait until your number is called?
Right now, the water in the pot is simmering, but don't think that you can't get hurt messing with it.
I'm a plaintiff in a business foreclosure. Pharmacist filed bk for the 2nd time (you can do it every 180 days, if
you get dismissed. Today she was dismissed again, so the foreclosure is on again. We offered to
see if we couldn't do an arrangement where she stayed as pharmacist and someone else ran the
business, but no. Wouldn't speak to us. My clients are fed up and want her gone.
I don't see anything going anywhere but down in South Fla.
CIT seems to be trading after hours. back up to 1.60ish
I don't care if the market goes to 36,000, I refuse to invest in something
that is completely incomprehensible.
How many of you don't know your neighbors a few doors down from where you live?
Alas, I don't. But I'm only there on the weekends.
Poic,
I think most in America still believe that the USG is too big to fail.
Doyle Lonnegan: I put it all on Lucky Dan; half a million dollars to win.
Dog or horse?
VenCo median household $73k.
Median house $365,000.
Ratio 5:1.
This ain't over.
lawyerliz (profile) wrote on Wed, 7/15/2009 - 10:02 pm
I don't care if the market goes to 36,000, I refuse to invest in something
that is completely incomprehensible.
Someone hasn't been taking her hopium.
Nice strong community here for the most part.
Neighborhood watch group, block parties twice a year, monthly community meeting, etc.
Have a bunch of college kids renting the house across the street now though.
Ugg.
Is it really too much trouble to roll your garbage can in during the week rather than leave it lying on its side halfway in the street?
poic - run a spyware scan recently?
I would not like to make payments on 2 1/2 times our income; would have
no money for fun. 5 times we would be groaning and eating nothing
but cheese sandwiches. I just don't understand.
"
poic (profile) wrote on Wed, 7/15/2009 - 5:52 pm
......................
And yet I see everywhere in the US an almost passivity about what is happening and much more anger and willingness to demonstrate in the streets and not take this s***t lying down elsewhere in the world. It's very weird if you ask me."
With 60% of the populace paying zero net taxes and another 20% deriving their income from Federal, State, or local government, why would you expect them to be upset?
CIT Group Says No Predictable Likelihood of Added U.S. Help
CIT Group Inc. says it probably won’t get additional U.S. government support in the near term.
The Bair-Geithner duel is definitely heating up. Her term expires in 2011...
OT---CIT "No appreciable likelihhod of additional government support"
Where is this inflation supposed to come from if none of us have any money???
In the 80s, everybody got raises.
OT CIT---"announces that discussions with gov. agencies have ceased"
So what was supposed to happen today in Cali?
I guess it didn't.
Hey Liz,
The Shuttle final got lift off!
"poic - run a spyware scan recently? "
I ran one a little while ago. It's not happening with IE only Firefox. And only on the main CR page where the ads are. I wonder whether my add-blocker is causing something to cycle over and over. I'm using just the hoocoodanode.org page and no problems for the last half hour.
Oh, good, haven't heard from the hub.
He was getting pretty sick of going in time after time with no
launch.
If the unemployed burnt down a auto factory in Detroit would any body care. The company can't sell it and they would even the bank debt or AIG would pay up and then build a new in a foreign country !
Market Reaction to CIT implosion tomorrow?
another up-3% day?
AIG fire insurance??
"
Market Reaction to CIT implosion tomorrow?
another up-3% day?"
Atleast, throw in a couple of bad earnings results and bad consumer numbers somewhere in the universe and we could have a 5% up day.
lawyerliz (profile) wrote on Wed, 7/15/2009 - 3:07 pm
...5 times we would be groaning and eating nothing
but cheese sandwiches. I just don't understand.
I should explain that VenCo has a bifurcated household income distribution. It isn't gaussian around $73k but a sum of two gaussians $45k and $100k. the $45ks aren't buying houses. The $100ks are still paying 3.5x income.
Good is good.
Bad is good.
Medium is good.
Everything's good, all's right with the world.
Back in the '70's, inflation seemed to be a sort of self-perpetuating cycle. If you wanted something, it was 'buy now before the price goes up,' or 'buy now because your dollar will be worth less tomorrow.' But now, I'm seeing over 12% unemployment, and nearly universal underemployment in my area. Thus a demand crash. The only inflation I can see is in medical.
OT: Here is a google search of layoffs limited to pages created in the last 24 hours. 77,000 hits. Look how many are state/local gubmit workers
layoffs - Google Search
CIT is in big trouble because they do things that the too big to failers want to do.
can't get in the way of the TBTF crowd.
it's honestly ridiculous. One of the reasons why CIT is in such bad shape is because they must compete with a bunch of banks that have artificially low borrowing costs due to governmental support.
aarrrgggghhhh.
I'm not saying CIT shouldn't fail.
I'm saying it's ridiculous that CIT should have to "compete" with govt supported banks.
retarded.
We are in the 2nd category, and I tell you it would be cheese sandwiches.
the most we ever borrowed was 95k.
They sell everything and I hear they changed the Auto to something else. My Buddie with the body shop say the get real irritated when you call them AIG.
"hopium..."
Thanks. Gave me maybe my only laugh today.
"One of the reasons why CIT is in such bad shape is because they must compete with a bunch of banks that have artificially low borrowing costs due to governmental support."
CIT is in bad shape because they got into sub-prime and student debt in a major way and were funding their day to day operations with CP. Once that froze up they were SOL. Now they're doubly screwed because of what you mentioned. But doesn't sound like that's why they got into trouble in the first place.
One thing I find interesting that's been discussed many times before.
It seems the govt can support stocks OR bonds, but not both
bonds rally big time when stocks fall. stocks surge and bonds show weakness.
this is a dumb question: but why can't the govt support both? it's not like any of this is real anyway.
is there some law they are constraining themselves with?
or is the end game when they do start propping both bonds and stocks.
I tell you what though: despite the "green shoots" boosterism I see the inverse relationship between stock and bond valuations troubling for the powers that be.
if stocks surge too much then bond prices tumble causing significantly increased bond yields which puts a hamper on our debt-laden economy, as we saw when the 10 year hit 4% recently.
Imagine how high the 10 year will go if we get to Dow 15k again!
OT--besides the CIT news, tomorrow the weekly unemployment claims come out. There was a debate last week whether the data was distorted or not by the holiday. So tomorrow's number, if worse than expected, along with the CIT news, could cause a halt to this week's rally..
I see nothing, nothing to indicate any kind of recovery.
I think Merrill and FOMC are nutz, just nutz.
I guess we aren't supposed to believe our lying eyes.
"if stocks surge too much then bond prices tumble causing significantly increased bond yields which puts a hamper on our debt-laden economy, as we saw when the 10 year hit 4% recently.
Imagine how high the 10 year will go if we get to Dow 15k again! "
4% 10 year starts killing mortgage rates which kills housing which kills consumers. Of course they could just go Zimbabwe or what China is doing now and run stocks up infinitely but we all know where that ends. It's a balancing act.
CIT is in bad shape because they got into sub-prime and student debt in a major way and were funding their day to day operations with CP. Once that froze up they were SOL. Now they're doubly screwed because of what you mentioned. But doesn't sound like that's why they got into trouble in the first place.
I agree wholeheartedly. I'm sorry if it came off sounding like CIT is an angel or something.
However, one of the reasons they got into sub prime and student debt is because they "had" to compete with the TBTF banks. Not sure I see why CIT should fail when nobody else does.
The ONLY reason I would want CIT to "live":
1) because I don't want to concentrate yet more power into the #$%#(#@ biggest banks.
2) because in the past CIT lent to small businesses, at least until they ran into funding problems.
I care little/nothing for CIT, but would like the US govt to address increasing lending to small businesses in some manner. small businesses do employ a fair number of people, and small businesses don't outsource as much as the megacorps do IMO.
"I see nothing, nothing to indicate any kind of recovery."
[sarcasm]
You will be priced out forever. It is a new paradigm. Those that buy now will be rewarded with a lifetime of riches.
[/sarcasm]
Yearning to Learn,
Yep I fully agree with you.
"So what was supposed to happen today in Cali? I guess it didn't."
From what I'm hearing, they're lashing together a solution that doesn't really solve anything but allows the whole sorry enterprise to stagger along for a few months. It'll work until it doesn't. I'm expecting a big reform push next year -- not necessarily the right reform, but a big push. And a population who may be ready for it.
4% 10 year starts killing mortgage rates which kills housing which kills consumers.
POIC: you're so "old economy" it's embarrassing. /snark.
I've been pondering of late what I should do if I start seeing increased bond prices AND increased equities valuations at the same time. Specifically, does that mean we've entered a time of increased monetization or "printing"?????
CIT was a political pissing contest, and Geithner lost.
CIT's bailout problem is that its only 2 options were the 23A exception or the TGLP, which would have required FRB or FDIC acquiescence, respectively. Bernanke has stated that the FRB can not be bailing out individual companies; it would take away from its macroeconomic priorities. To this end, it has done things like dump Maiden Lane onto the UST; also, AIG has been forced to repay FRB debt with proceeds from UST trust co assets. On the other side, Bair has already began phasing out TGLP. The one shot for Geithner to bailout CIT was via TARP, and it did it to the tune of $2B.
OT Talked to a tech component supplier the other day. They are seeing enterprise sales flat, and telecom sales up a bit. Hearing rumors of 2,000 RIF at one of the large tech companies out here (SV).
Anecdotally, the mall parking lot across the street is pretty empty.
But the restaurant I ate lunch at had a waiting line for the first time
in a long time.
House sales are dead now. Only FHAs and all cash in South Florida.
You can't get deader than dead.
Governments like to layoff front-line workers (firefighters, teachers, garbage collectors) to annoy and frighten people into demanding return of big budgets, thus continuing the gravy train for all the unnecessary bureaucrats, pork, and graft.
I'm with Liz, nothing is moving to indicate its not still falling and I'm in the small loan business, with a group of Lawyers and exporters in the same building. Not one new business in my whole County in '09, while lots of beggers wanting econ. recovery money from the State and local government coming out of the woodwork.
May I ask where you are, MaryAnn?
If the unemployment claims a just a little higher than anticipated, that
will be a really good thing.
That would explain Stifel's housing bottom call today, and their upgrades on Toll and Horton.
If they are a lot higher than anticipated, that will be a really good thing too.
This is what bothers me so much...if things really aren't getting better, except for GS...then why push this immaculate recovery...isn't it better to keep expectations low so we can be pleasantly surprised about some honest good news...this crap only makes sense in light of an impending negative event, and even that doesn't totally make sense. If we truly are grasping at straws here, I am disappointed...going out with a whimper and a bang?
Pig malfunction.
Please move along to the next thread.
spinning faster and faster today.
Excuse me, why should anybody be building even one more house for the
next couple of years, unless it's somebody's dream house, paid for in
advance?
Liz, I'm in the beautiful hill country of Mississippi where clear water still runs freely out of the hills, but don't tell anyone.
I won't!!
isn't it better to keep expectations low so we can be pleasantly surprised about some honest good news...
There is a group of people that believe if you talk happy, then happiness will follow.
Picture the opposite for a moment: Let's say the Fed issued a statement that we are headed for 25% unemployment. What would that do to prices, forex, stocks, etc?
So naturally, happy talk will affect the world in positive ways. I have never met a politician who thought differently, fwiw.
Bob Dobbs (homepage, profile) wrote (in reply to...) on Wed, 7/15/2009 - 3:27 pm
"So what was supposed to happen today in Cali? I guess it didn't."
From what I'm hearing, they're lashing together a solution that doesn't really solve anything but allows the whole sorry enterprise to stagger along for a few months. It'll work until it doesn't. I'm expecting a big reform push next year -- not necessarily the right reform, but a big push. And a population who may be ready for it.
They keep running into a problem. There's nothing left to tax. That's not hyperbole. Two ideas; removing the home mortgage interest deduction and extending sales taxes to services. Both would work for a while but even the Dems know it would crash home values in the first gut the business community with the second. The Dems also fear for their party but not like you may imagine. The Gerrymandered districts keep party dominance safe but if they make the draconian (c. 2004 funding levels) cuts necessary the primary electoral system is likely to be swamped with even more extreme candidates.
I'm still hearing the whisper of a "temporary" VAT repayment mechanism in exchange for Federal bailouts now.
Somber talk. I don't think many believe the happy talk; and I think the disillusionment
will ultimately be worse.
I am thinking of chocolate. Is anyone else thinking of chocolate?
I thought the plan on CIT was to dump assets into the bank and then take the assets to the discount window, thus making it a Fed issue. Perhaps it was Bernanke who said no, as the assets weren't really "discountable?"
Isn't a VAT a sales tax by another name? I thought you guys already had fantastically
high sales taxes?
How about we start taxing churches?
There is one thing I have learned over my forty five years in business, beware of those asking for money while telling you how great their life is.
Well I know around the Southern Baptist campfire, tithes are down, church investment funds are down...seems God didn't let them know where to put their money...just another example of over-leverage...still have a hell of a lot of real estate though, not as much as the Pope of course. Don't know how the Catholic church is doing these days...
Eight years later and what do we have to show for it?
July equals deadliest month of Afghan war
| Reuters
KABUL (Reuters) - The death toll for foreign troops in Afghanistan halfway through July equaled the highest for any month of the eight-year-old war, tallies showed on Wednesday, as a U.S. escalation has met unprecedented violence.
Authorities announced a U.S. soldier had been killed by a bomb and two Turks had died in a road accident, raising the toll of U.S. and allied foreign fatalities in the first half of July to 46, equal to full month highs set in August and June 2008.
Ok with me. Or, if they start making political statements. . . nah, tax 'em all!
Isn't it about time to have a CA recall election? I mean, it's been a good 8 years since the last recall.
Just think of the perks of being governor, dawg.
I think the Pope calling for a "world political authority" to deal with the financial "crises" was a bit over-the-top.
Even for his Pope-i-ness.
And the fact that he rides around in a bullet proof Pope-mobile reveals the level of his "faith" to me.
The pope mobile is nothing new.
I think that donations from the US are down.
But I'm not sure.
Better watch it, or Pavel will getcha for being mean to
Ratzinger.
777....The biggest cash crop business's is religion and drugs, why not tax both. Mississippi had tax on alcohol while none was suppose to be consumed in the State. It was run by Czar Winter who become rich, then Governor of the State, then the ethics goroo of public education.
Tax hopium!
PIG
Apparently our pig is sleeping it off somewhere.
Good one, Liz.
:wineglassicon:
It's been fun, but I need to leave. I have a foreclosure
mediation tomorrow. Wonder how that will turn out.
Have done lots of mediations, but never a foreclosure one.
Toodles.
Happy Talk - South Pacific (1958)
CIT and government talks end
"They keep running into a problem. There's nothing left to tax. That's not hyperbole. Two ideas; removing the home mortgage interest deduction and extending sales taxes to services. Both would work for a while but even the Dems know it would crash home values in the first gut the business community with the second. The Dems also fear for their party but not like you may imagine. The Gerrymandered districts keep party dominance safe but if they make the draconian (c. 2004 funding levels) cuts necessary the primary electoral system is likely to be swamped with even more extreme candidates.
I'm still hearing the whisper of a "temporary" VAT repayment mechanism in exchange for Federal bailouts now. "
I'm really hoping that the gerrymander system starts to break down with the implementation of Prop 11 and the advent of more moderate candidates: Dems who don't worship the public unions, Repubs who don't think tax cuts are the only way and prisons are sacred. Such moderate political animals would be wilder and scarier to the powers that be than "extreme" candidates. I mean, the current district system encourages extreme, discourages moderation. After that, I'm really hoping for a two-top primary proposition in '10.
As for cutting spending, the problem is that not enough is on the table, because the extremists in charge now can't deviate from their bases:
These and others are all unthinkable under the current California political system. That's why that political system -- has to go.
The California Flag is quite descriptive...
http://microrosa.files.wordpress.com/2009/02/california_state_flag.jpg
A foreclosed upon Grizzly Bear (extinct) searches for a place to live, while just below "California Republic", a sea of Red Ink is threatening to bankrupt the Loan Star State.