Any word on the bids coming through?

“Yesterday, the FDIC held an auction for $1.3 billion of Alt-A loans, or liars loans, coming out of the failed Franklin Bank,” he said. “So that’s the first time FDIC has had an auction with them providing leverage to distressed investors. So we were bidders on it...I think it’s a good system that they’ve developed for getting rid of these assets.”

Man, we're feeding these banks to Ross. That means a lot more pain on the way for a lot more regular folks.

I predict big BFF for the Labor Day weekend. I'm going for 6.

However, if the Fed had released it's list of aid under the freedom of information act, I would have gone for something more like 15. Now I'm thinking the big weekend might be Columbus Day.

OT:

More bad news from the gaming industry:

http://www.saratogian.com/articles/2009/09/02/news/doc4a9dba30e5cd4438568735.txt

When does Mr. step up and give us a post about O.C. Register publisher files for Chapter 11 bankruptcy - Los Angeles Times ?

some investor guy (profile) wrote on Wed, 9/2/2009 - 5:32 pm

However, if the Fed had released it's list of aid under the freedom of information act, I would have gone for something more like 15. Now I'm thinking the big weekend might be Columbus Day.

Wouldn't it be a drag for the FDIC if they had to spend the entire Labor Day weekend taking done a big player? Corus anyone?

liars loans to lying buyers by lying lenders.

before this is over, the taxpayers are going to foot the bill (ouch!) for ALL of these financial debacles, while the banks are saying hoocoodanode and starting over again (see Pearlstein at WaPo).

Isn't it time for FIRE execs to be licensed and have the license taken away for say, one month per $100 M that they lost, and then only regain the license after that if they cough up the ill-gotten gains into the FDIC fund (or something, maybe Medicare trust fund)?

No cough up, then torches, forks and jails.

"We'd be better off printing money and chartering new banks than extending leverage to the same dingbats that caused this crisis."

Agree 100%. Unfortunately it is too late for that.

It's never to late to give up drugs, and financial tricks that don't work.

Ghost,

I thought of you when I read this article.

Life after foreclosure - Ron Nash (3) - CNNMoney.com

We'll no doubt be seeing and hearing more and more about this kind of self help. Check out the guys smile. he looks like a great burden has been lifted from his shoulders.

Cinco-X: yeah, there are exceptions.

The American Banker reported on a conference last week where the big consulting firms were estimating the the number of banks would go from 8,000+ to 4,000+ with failures and mergers.

So Ross is going into Vietnam while I spent my youth trying to stay out.

Times change.

Jim

Life after foreclosure - Stephanie Thomson (1) - CNNMoney.com

I like the byline:

"After losing their homes, these 4 families thought they'd never recover. They've found it difficult to rent and their credit is wrecked, but life is looking up."

And I would expect that as vacancies become more available as the vultures by places as rentals, credit won't become as much an issue, especially if you can put a couple months down (from the money you save not paying the mortgage for a year+).

Maybe we will be able to have a soveriegn bank failure friday. Look at the top 20 CDS reference entities. From our little US corner of the world, it seems odd that more people are concerned about a default of Portugal than General Electric or Morgan Stanley.

Following is a list of the 20 entities with the top notional value of derivatives outstanding:

Reference Entity Net Notional
REPUBLIC OF ITALY 21,622,003,716
KINGDOM OF SPAIN 11,690,805,410
FEDERAL REPUBLIC OF GERMANY 11,203,390,400
GENERAL ELECTRIC CAPITAL CORPORATION 11,136,106,008
FEDERATIVE REPUBLIC OF BRAZIL 10,157,723,798
FRENCH REPUBLIC 8,346,882,410
REPUBLIC OF AUSTRIA 8,072,886,541
HELLENIC REPUBLIC 7,831,178,460
PORTUGUESE REPUBLIC 7,359,649,652
BANK OF AMERICA CORPORATION 6,960,897,550
DEUTSCHE BANK AKTIENGESELLSCHAFT 6,802,741,031
UNITED MEXICAN STATES 6,515,910,605
JPMORGAN CHASE & CO. 6,069,814,652
MORGAN STANLEY 5,886,680,363
RUSSIAN FEDERATION 5,580,281,749
REPUBLIC OF TURKEY 5,510,555,950
THE GOLDMAN SACHS GROUP, INC. 5,505,903,984
KINGDOM OF BELGIUM 5,283,301,400
MERRILL LYNCH & CO., INC. 5,204,494,017
WELLS FARGO & COMPANY 4,932,920,063

The American Banker reported on a conference last week where the big consulting firms were estimating the the number of banks would go from 8,000+ to 4,000+ with failures and mergers.

I've known guys who started banks and that was the planned exit strategy all along - make themselves enough of a nuisance to larger regional banks that they get bought out & 'merged in'. They forgo income during the start up for the one time cap gains rush at the end.

Of course they didn't plan on getting merged into the FDIC. That prolly doesn't pay out quite as well.

Irony is I was told that was the least expensive way for the larger regionals to get new customers - buy or merge with smaller banks... most folks stay put [at least half do].

Wonder how that's working out.

More bad news from the gaming industry:

Does anyone under 75 even bet ponies anymore?

WestSac_grrl (profile) wrote (in reply to...) on Wed, 9/2/2009 - 5:58 pm
I read down to here and got disgusted.
"The headhunter and motivational speaker couldn't afford that big a payment...."
Anyone watching the HBO series Hung where the motivational speaker drives a rented jag to the seminars and he is so broke he has to hold some meetings in members houses? .....

That's what happens when you line in a van down by the river -

Angry Saver (profile) wrote on Wed, 9/2/2009 - 6:00 pm
A wrecked credit score is a blessing in disguise too. It forces folks to live within their means.

That, or change their identity-

West Sac Grrl,

I happen to know a guy fitting that exact description. His businesses had crashed because he was an idiot who tried to cheat people. Then, he got into personal coaching and motivational speaking. Worked for a short period of time.

His new gig? Well into his 50s, somehow he is studying to become a doctor. This baffled me until I realized it would produce the longest time series of student loans. He could live on student loans for a decade or more. After that, I'm not so sure.

Ok I read all four of the profiles. Did anyone notice that only one person, the truckdriver, had a real job?

Ponzi banking: which one has the pile of crap? credit unions, state banks, small federal banks, regionals, the TBTF banks?

This ponzi scheme has a pea under each choice. They all are skrood and so are their depositors.

As property values have dropped and people start figuring out that they will NEVER get back to par, they will stop paying the mortgage. Why would they continue to make payments that take more and more of their take home pay to never see a break even?

That IMO will happen more in the age range of 50s and 60s. That age group thought they were building equity for retirement. Now they are underwater.

Terry (profile) wrote (in reply to...) on Wed, 9/2/2009 - 4:51 pm

The American Banker reported on a conference last week where the big consulting firms were estimating the the number of banks would go from 8,000+ to 4,000+ with failures and mergers.

The real question is - what will the big consulting firms do without nearly as many banks to skim the cream from?

They all are skrood and so are their depositors.

Depositors skrood? Only those w/ more than the FDIC limit.

I am waiting for the recasts on the option ARMs to kick in. These borrowers have been paying less than the accrued interest, and will continue to do so until the recast happens, then stay in the house for several months while work-outs, etc., wind through, then mail in the keys or take advantage of a Chater 13 cram-down, if Congress lets them,

The husband in the first couple was a "noted hair designer"

Check that--"Highly regarded hair designer."

then mail in the keys or take advantage of a Chater 13 cram-down, if Congress lets them,

Cram downs won't help 50-60 cohort [those are my peers I know]... cramdowns won't get them above water - only back to zero... they need beaucoup positive equity or its a lot of cat food.

dryfly:

Do you think the ISM rise is clunkers related, or a sustain recovery in the industrial sector?

Angry Saver:

This is often the case with empires in terminal decline. When was the last time the British invented anything useful? Easier to sit on Canary Wharf and trade, well, whatever. We are barrelling down the same highway. I know 3 nuclear trained engineers that recently left the service to attend business school. Too many people still aspire to be financiers.

He's a billionaire who doesn't have the sack to bid without the FDIC holding his hand and guaranteeing his returns.

Funny, but it looks like nobody has a sack that big. Wonder why?

"I'd add that the guy with the real job is now living in a trailer home. Apparently real work just doesn't pay."

Ominous, if true.

MLM (profile) wrote (in reply to...) on Wed, 9/2/2009 - 6:19 pm

Funny, but it looks like nobody has a sack that big. Wonder why?

Who need a large sack when Uncle Sugar will backstop you?

"

"Apparently real work just doesn't pay. "

In America? Nope, real work doesn't pay."

As we all blog on CR at 3:30pm in the afternoon.

poic,

I got that irony too.

It could be if rates go down enough when the change date happens,
that the payment won't go up much at all. Depends on the note contract.
Some have a floor were rates can't go below a certain amount, and some
have high margins and some have low margins. Trust me, virtually nobody
who has an adjustible mortgage understands what a margin is.

The underwater thing is, of course true.

There are a certain percentage of people who don't understand even what their
principal balance is. I ask, how much do you owe, and I get how much their
monthly payment is. You have to know roughly what you owe and what your
house is worth to understand you are underwater.

However, word IS getting around.

Angry Saver (profile) wrote on Wed, 9/2/2009 - 6:22 pm

1777, Bass Ale!
The steam engine?

Ok, well 42 skidoo. Hi NSA!

Cinco-X:

That was my point. The UK had, until the 20th century, an amazing engineering tradition. Now they are a nation of bankers and real estate agents.

HomeGnome (homepage, profile) wrote on Wed, 9/2/2009 - 6:25 pm

Pigged
@ BSR
The numbers are just to give NSA something to do.
2-6-6!

If you weren't up to no good, then the NSA wouldn't need to be snooping on you-

. ... . ... .. . . . ..... . ..

12-1-23-25-5-18 12-9-26

Terry said recast not reset. He/she was talking about neg am loans for which no amount of decrease in the index will matter once 110 to 125 percent of orif loan balance has been breached.

Poic:

God has a sense of humor.

No cat food here, except for the catz.
Mtg paid off. Etc. Not that we could hold off an army of starving hordes.

And I can thank CR for teaching me the difference several months back

Not that we could hold off an army of starving hordes.

Just hide your stuff and pretend to be one of them.

Nuke (profile) wrote on Wed, 9/2/2009 - 6:31 pm

God has a sense of humor.

Ya'; too bad his greatest detractors and his most vocal advocates don't-

I tried to explain ARMS the first time around in the 80s. I discovered it to be impossible.

Luckily my mtg broker had clients who wanted fixed rate loans. So I closed only a couple of
neg am loans or even adjustible.

You know we talk about sheeple n' all but.

Those 6 pack persons try to
buy low.

Refi when rates go low.

are walking away when things get impossible.

Filing bk in droves. And mostly the smart?? bankers are the ones left holding
the bag.

Nuke (profile) wrote on Wed, 9/2/2009 - 5:28 pm

That was my point. The UK had, until the 20th century, an amazing engineering tradition. Now they are a nation of bankers and real estate agents.

Speculative intergenerational wealth making production decisions is the endgame of any civilization. Money transfer is so much more efficient than moving stuff or electrons it sucks up the money-motivated talent of the real economy who would otherwise have been motivated by money to become engineers, lawyers or doctors.

JBR (profile) wrote on Wed, 9/2/2009 - 6:36 pm

.... . .-.. .-.. --- / -. ... .- .-.-.- / -.-. .-. / .-. --- -.-. -.- ...

What he said-

lawyerliz (profile) wrote on Wed, 9/2/2009 - 6:36 pm
Filing bk in droves. And mostly the smart?? bankers are the ones left holding
the bag.

Are you trying to say that there IS justice in this world?

Cinco-X:

We are on the same path, sadly. You would think that the financial crisis would have discouraged folks from going into finance, but I think the bailouts have only taught people to look at banking/finance as secure (you will always get bailed out). I know lots of nuclear trained officers going on the get their MBAs. Front line engineering is starting to be looked down upon as a profession. I just hope the Chinese are a relatively benevolent hegemon.

Speculative intergenerational wealth making production decisions is the endgame of any civilization. Money transfer is so much more efficient than moving stuff or electrons it sucks up the money-motivated talent of the real economy who would otherwise have been motivated by money to become engineers, lawyers or doctors.

Yeah, what he said.

"Friday before. They can get the word out to friends and family at holiday functions"

And then you don't have to give them a paid holiday.

That's cold.
Brrr.

HomeGnome (homepage, profile) wrote (in reply to...) on Wed, 9/2/2009 - 6:41 pm

That's cold.

Colder than bankers holding your bag?!

It doesn't help that the masses have been fear mongered into the belief that the things engineers do are harmful; i.e. build roads, power plants, manufacture things.

Nuke (profile) wrote on Wed, 9/2/2009 - 5:40 pm

Yeah, what he said.

LOL. Well, we were heading in roughly the same direction... But again, a majority of the folks who would otherwise have been engineers because it was (in earlier times) one of the best-paid and higher status jobs would now opt to get into finance because it is one of the best-paid and higher-status jobs.

yes

Oh, well, outta here.

"Poic:

God has a sense of humor.

Ya'; too bad his greatest detractors and his most vocal advocates don't- "

St. Teresa of Avila said something like: God save us from gloomy saints.

She was crossing a river on mule back, praying to Jesus to keep her from a dunking, when suddenly the mule lurched and she fell into the river. As she waded ashore she said to Him: No wonder you have so few friends.

God must have laughed heartily.

pavel,
You peaking over my shoulder...I've just been reading about St. Teresa today. Fascinating life.

I prefer Christina the Astonishing - Wikipedia, the free encyclopedia

Computer-related English inventions: mechanical decryption of Enigma during World War 2.

<

p>First public-key code, but they kept it classified until Diffie, Hellman, Rivest, Shamir Adleman independent discovery over 10 years later.

<

p>
C programming language was based on a british (I think) predecessor, BCPL

"pavel,
You peaking over my shoulder...I've just been reading about St. Teresa today. Fascinating life."

Vonbek777, that's been happening a lot to me lately.

A few weeks ago an Anglican friend of mine in New Zealand was hunting all over the place for a passage about prayer by John Donne, and without knowing she was looking for it I sent it to her by email.

Of course the English gave us soccer. The world wide economic and social impact has been tremendous.

pavel.chichikov (homepage, profile) wrote on Wed, 9/2/2009 - 6:09 pm

About people not wanting to work: Immigrants will save this country.

Foreigners will own it, immigrants may as well work in it. The rest of us can just come along for the (free) ride!

"if we are lucky, gently inflated away."

they only certainty is that the transition back from deflation to true inflation/devluation will be violent, unpredictable, and will punish the just far more than the unjust.

"And will punish the just far more than the unjust"

Agreed.

OT Caution OT

Also happened in Georgia

Stranger allegedly slaps crying child in store

By Gabriel Falcon

(CNN) -- A Georgia man allegedly slapped a toddler at a Walmart store because she wouldn't stop crying, authorities said.
Roger Stephens allegedly slapped a stranger's crying toddler in a Walmart store in Stone Mountain, Georgia.

Roger Stephens allegedly slapped a stranger's crying toddler in a Walmart store in Stone Mountain, Georgia.

Roger Stephens, 61, was arrested Monday and charged with first-degree cruelty to children. An incident report obtained from police in Gwinnett County indicates indicated Stephens did not know the 2-year-old girl he stands accused of hitting.

The confrontation happened shortly before noon at the Walmart in Stone Mountain, a suburb of Atlanta.

According to the arresting officer, the child's mother of the girl said her daughter was crying as they walked down one of the aisles.

The mother said a stranger later identified as Stephens approached them and said, "If you don't shut the baby up, I will shut her up for you." Video Watch what the stranger said »

A few moments later, while the mother and the crying child were in another aisle, Stephens allegedly grabbed the girl and slapped her across the face.

Police said he hit her four or five times. "See, I told you I would shut her up," the suspect allegedly told the mother.
advertisement

Authorities described "slight redness" to the toddler's face. Before he was arrested, Stephens apologized to the mother for striking the girl, the incident report said.

Stephens, a Stone Mountain resident, is being held by the Gwinnett County Sheriff's Department.

pavel.chichikov (homepage, profile) wrote on Wed, 9/2/2009 - 6:19 pm

Possibly, but nothing is riskier than prophecy. I believe that our greatest struggle in the next decades will be with climate change. There will be opportunities and perhaps undreamed of catastrophes. But who knows for sure?

A shared catastrophe might be what brings us back together from our dissociated, narcissistic, present state. Of course is it not also what we are so desperately trying to avoid at the present time?

HomeGnome - You're taking me back to a grade school homework assignment that my daughter had (loong time ago). Assignment was to find words whose letters, valued by rank order, added up to exactly one hundred.

With the help of a computer we found two such words, which I shared here a few months ago.. If there is interest, I'll do so again.

2-25-5

Terry (profile) wrote (in reply to...) on Wed, 9/2/2009 - 6:26 pm

Saw where one of the BigLaw firms called a few associates on vacation and told them they were being let go - that has to suck.

That hurts. No doubt some high caliber talent will be lost. Of course, other areas of the economy and/or government will gain.
Risk and reward.

I always carry earplugs on Airplanes and Public transportaion. Lifesaver.

mhdoc-mobile homes-I bought and sold bank repos and new in 80s. the construction is so good now with 2xr4or6 frame, drywall, insulation from the factory, some triple wides are layed out nice, if they are set in foundation instead of skirted they are even better.....

As hack says, the parks make big difference. Some park owners are notorious down in orange country for hefty yearly cost of maintence increases space rent jacking up from 550 to 850 is over 30 %

an old neighbor just scored a nice little 14x56 for 7k in fremont 55 over park, 800 space rent was paying 1450 rent, awesome pool, commercial kitchen, hall location etc..
good deal from him..a little unknown deflation indicator..

What is real work in a post-manufacturing economy? Unless you're a farmer in fly-over country. Curious.

OT but Jesse hits another home run.

Jesse's Café Américain: Russian Professor Panarin Sees US Following the Russian Collapse Model

If that Russian guy is right Norfolk and San Diego will start looking a lot like Murmansk: rotting hulks of Aircraft carriers and submarines lining the piers.

Nuke,

I remember us talking about that. In San Diego you could once see the South Vietnamese navy doing the same thing.

Do you think the ISM rise is clunkers related, or a sustain recovery in the industrial sector?

Neither - just plain old fashioned inventory restocking - but demand is still at a much lower level.

JMHO.

I think it will be a slow collapse in the sense that the lights will gradually go out. Instead of being blown out.

@ nova (homepage, profile) wrote on Wed, 9/2/2009 - 4:59 pm
I think it will be a slow collapse in the sense that the lights will gradually go out.

You mean no 'down goes Frazier'

@nova - yes I agree

Waaay OT:
---God basically wanted me to commit adultery, ya'll.

Gov. Mark Sanford says he told "a little white lie" to his staff to conceal his secret trip to Argentina in June to visit his lover. The governor also says God is on his side, and he has no intentions of resigning.

Sanford, in an interview published Tuesday in The Washington Times, said he is disappointed no House Republicans offered to support his bid to save his job in a meeting last week in Myrtle Beach.

But Sanford also said he will fight to stick around, even as members of the General Assembly expect a bill to be filed to impeach Sanford when lawmakers reconvene in January.
Sanford told the Times he would continue to fight for conservative causes and for "what God wanted me to do with my life."
Sanford says he told 'a little white lie;' God is on his side - Breaking News - TheState.com

creditcriminal,
Thanks. I am about to crack open a wheat beer by Fat Tire. It's called Mothership Wit for those who might care.

"Would you announce layoffs on the Friday before, or the Tuesday after Labor Day ?"

Friday. My introduction to the world of layoffs in a corporate environment was watching some co-workers get laid off the Monday of Thanksgiving week.

Security showing up with boxes for personal items before people had been told was kind of shitty as well.

They were given maybe 15 minutes to pack their stuff - which is longer than what you'd get on a trading desk where someone gets to pack your crap for you.

Not unusual for the tech guys to blow it and disable your pc and/or phone before you get the official word...

Frazier was the USSR. We are an increasingly punch drunk Ali.

Mike,

I remember us standing around and scanning the new office phone directory to see if we were still on it.

Nova:

We peaked in the late 1960's, just like Ali. Interesting metaphor.

Jeebus. Anything involved with moving stuff from Point A to Point B must be getting killed.

I'm not sure what is worse - knowing or not knowing.

By knowing I am referring to knowing which one of the folks in your dept is getting whacked before they do.

Twice I was asked to list everyone in my dept - self included - in order of least to most important in terms of keeping the business going along with what we would do with each persons functions/duties if they were no longer around.

Yeah that sucked.

HomeGnome - the Fat Tire is proving to be a VERY good beer.

Jimmmmay!

James Traficant, Former Ohio Congressman, Released From Prison - ABC News

I'm not a big fan of wheat beers; but I knew you'd enjoy that one.
I prefer GnomeBrew'd American Honey Pale Ale (Buzz for short) 8+% ABV!

When I was 14 we fermented welchs grape juice in my best friends closet.

I'm not sure what is worse - knowing or not knowing.

The absolute WORST is being a manager & preparing the layoff list for your dept... then being asked to come in early on the big day to 'review' w/ HR prior to sacrificing your lambs and finding out the bosses above you are waiting to 'sacrifice' you too - first.

I know a guy who had that pleasant experience. And ya wonder why workers hate employers.

I was tempted trust me. And I actually did not list myself last or least important - I have some humility and in all seriousness when you got that far down the list we were out of business anyway and all out of work.

After 2 such layoffs we did get acquired and headcount was reduced from around 500 to less than 100 - ah the power of synergies.

And here I am almost 1 year after the deal closed still with a job - go figure.

Mike,

That would be hard. I don't know what I would do. You got to come home and think about the family. Then again, if you are really good you know you can be replaced. Heck, if you are good you should be training people to do your job

Gordon Brown's $1.1 Trillion G20 Consensus Unraveling

Were you smoking dried banana peels too?

its like outouching Phelps.

I probably would have.

Nice. I have a 16' skiff I bang around the bay in.

Stur-Dee Boat Co.

25hp and it's easy on the gas.

I used to have a 28' Rampage express w/twin Chrysler 360's (265hp). It was great except for fuel ups (256 gallons), storage, upkeep, oh yeah fuel ups.

I sold it going on 3 years ago when it felt like things were unraveling and couldn't be happier. I fish on a friends boat offshore and glady fork over the $150 for fuel and bait - way cheaper than owning my own.

Pike sure - and they have them in the river.

I've caught plenty of pike in N Minnesota & Canada - big ones too [in the 15-20 lbs range on fly tackle mere 8 weight set up]... never a muskie. Thought about it & know where they are [near my wife's cabin in Wis] - just haven't done it. Its a real commitment to go after muskies - usually takes thousands of casts to land a single fish.

I assume as an older engine its a 2 stroke. If it has been run at real slow speeds like trolling for a long time it's likely there are some nice carbon deposits. Get yourself a can of Seafoam and a portable gas tank - mix it according to the directions and run it through the engine. It will smoke enough so that your neighbors will call the fire dept.

When you're done replace the plugs and you'll be good to go.

I assume as an older engine its a 2 stroke.

9.9 Merc - I had it torn down & cleaned. It appears to be in pretty good shape.

Ironically - I didn't use it much - I prefer to use canoes to fish. Then portage lake to lake in Canada & N Minnesota. We got the Lund & Merc when my father got too old to easily portage in w/ me [he was in his 70s by then]. After he got too old for even that the boat just sat until my buddy nagged me to get it going again this summer. We are just now becoming empty nesters and have time to do stuff like that - my kids were athletes & it was a year around cross country, swimming & track meets for YEARS. Now I have a little time to do other stuff - like fish.