The Accidental Landlords and Shadow Inventory
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CalculatedRisk on Wed, 09/02/2009 - 8:33pm (164 comments)
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re: oil, commodities
If it's based on the thesis of US debt monetization, then not only should you see those prices flat in unaffected currencies but you should see them lower with the much looser oil supply today (not an opinion, based on inventory building in crude and distillates to record levels, and lack of end demand). This has not been the case. Furthermore, you are not protecting yourself from a USD devaluation by buying a contract for oil in USD. If you want to short the USD, you have to exchange the dollars and place them in a foreign market. Anything less is pretend.
I could be wrong about equities going down and the USD going up, because I'm relying on past direct and indirect linkages that may no longer hold true, but I do know oil, copper, etc will go down. Producers will produce while the money is good, you make hay while the sun shines. The solution to high prices is high prices, and the solution for low prices is low prices. Even if the global economy does recover, there is so much inventory that would blunt any further rise in commodities.
re: Manufacturing
I believe it's near normal, and with the bias to increase production now because of do-or-die situations and optimistic outlooks for the coming quarter across the whole supply chain. However, I think if this is near the new normal, and at this new normal isn't enough profitability to prevent a second wave of closures and defaults. The strength of the USD from now to year end will play a very important role.
`
More important and immediate in my opinion is how the retail and restaurant sectors will fare.
Wait until these accidental landlords have their fantasy of OER stress tested by actually renting for a real price. We better get ready for a massive deflationary spike from that alone.
Good thing gold isn't really a commodity.
If you are gonna use the "G" word you should at least spell it right.
The rent vs. own thing should put additional downward pressure on prices.
Thanks for the permaculture analysis. I was too afid of saying the same thing. There's a reason botique farming went away. Labor costs approach parasitic where much of the food goes to feeding the crews.
While I've been
, I should note that there are always opportunities for all sizes and types of farm operations. There are certainly niches where some consumers will spend extra to have their produce come from something like permaculture, just like they've attempted to do with 'organic'.
However, the wild assumptions come when people extend that niche groups willingness to pay to the overall population, which is incorrect. Most people say they love to buy organic or non-conventional products, but far less are willing to spend the extra cost. Someone 'permaculturing' soybeans on a small labour intensive scale is competing, at the protein/commodity level, with a soybean operation in Brazil, harvesting 80,000 hectares 2 or 3 times a year. You'll never compete, so you move on to find something that hasn't been commoditized yet.
OOPS! Damn.
TJ and the Bear,
I can't trust a market, COMEX, where one player controls 80% of orders (JPM after they acquired Bear Sterns). I have better uses of my money than going to the effort of acquiring physical gold at this point. Furthermore as a young working man, the cost of that hedge to protect my life savings is not worth it
I am so glad I got out of the business in 2006. These amateurs are going to screw the cap rates for a decade. They aren't looking to make money, just lose less. And they won't be performing true cost analysis either. There's a deflationary spiral on the horizon and because it is oversupply driven no amount of Benny Bucks are going to break the cycle.
EHP,
To each his own. I hedged myself ages ago and haven't budged since, even more confident of the necessity.
"Shadow Inventory"....maybe that's why the green shoots can't grow....we've got too many of them hidden in the shadows.
Rents are dropping as the cash investors buy the low end units.
Normal cycle in the rental biz.
Owner/Landlords haven't figured that out yet. I see allot of for rent by owner signs and the rent they are asking is about 20% over market, And when they do lower the price, they can't cover the mortage, so at some point the property goes back to the bank anyway.
Also, most people don't know you can get a cram down for an investment property.
There's an FDA-approved drug for incessantly optimistic landlords.
(I hope it's late enough for this.)
"Furthermore as a young working man, the cost of that hedge to protect my life savings is not worth it "
Young man?
And here I was, thinking you were an old fart.
Like me.
That reminds me...good glod I wrote GLD Sept calls at 98. I guess I can reload. Or get physical.
We need a Rent Czar!
EHP - for restaurants there are may options to improve the top line and magins and possibility traffic:
"The owner of La Cabana restaurant at 9770 Main Street in Woodstock, Ga., has been involved with smuggling women from Central and South America into the United States and engaging them in prostitution to repay their smuggling debts, according to documents filed in federal magistrate court in Atlanta. The women -- some as young as 15 years old -- allegedly perform sex acts for money in a “sex room” at the restaurant and at the owner’s home on Jamie Way in Woodstock"
Restaurant investigated for prostitution, smuggling | ajc.com
btw - see all the volume on C today....mmm
Here is the new currancy.
I need to think about what this means going into the future.
China to buy up to $50 billion of first IMF bonds - MarketWatch
I think the perma culture supports, the bunker mentality.
My thinking being that if you have a 10-20 acres, allocate say 2-5 acres to the perma culture thinking.
The rest to a market economy.
So if the situation goes from market economy to bunker economy, you are ready.
yogi:
"Hennecke stressed that investors should go for physical forms of gold and other
precious metals rather than "paper gold investment scheme where there isn't full
backing, where the metal might be leased out or used for derivatives. That's
crucial because there is 80 times more paper gold in the market than actual
physical metal in existence in the planet."
Thanks I've been meaning to get the shovel out.
Board's quiet early tonight. Saving up energy for a long BFWeekend?
Gives me a chance to note something that is just a bit off topic, but it occured to me this afternoon. A few years ago we'd attend the random open house and, even though they are "staged" in this area there were a lot of things that were a bit "off." I saw kitchen cabinet doors that were missing hinges in a home that sold for $950k. The buying panic allowed for defects that the buyer was willing to deal with.
Now, any home that's going onto the market in this area (at least in the >$800k range) is being carefully prepped because it has to look it's best to be marketable. So not only are the values of the homes going down, it's taking a fair amount of $ to get them into saleble condition.
To bring this back to even more on topic, think of the work it's going to take to bring a house up to par after it's been rented for a couple of years.
The Chinese government has agreed to purchase up to $50 billion worth of IMF Bonds
Good bye US Dollar thanks for 200 years of service, rest well old girl
"think of the work it's going to take to bring a house up to par after it's been rented for a couple of years"
Yeah, but the folks renting those houses "know" that the price will go up a lot after a couple of years.
Barley,
You jest, but retail + restaurants are an unimaginably large part of the economy -- and not to mention service an important labor demand niche. They can hire and train anyone, regardless of education, age, and background. They employ enough people that I don't have to look it up to be awestruck. They are too big or too many to do a TARP or Cash for ____. They are nearest to end demand. They fill so much CRE space. They are less capital intensive, and have relatively higher labor costs (assuming rent is not negotiable quarterly) so they are flexible to demand by necessity. Retail at least depends on back to school and the winter holiday sales very much. If there is a miss for the 2nd year in a row -- unheard of in America -- then there won't be any hiding it. The loss of that marginal labor will then feed back into government unemployment strain with declining tax revenues, with some deflationary fear keeping Bernanke up at niht.
TJ and The Bear,
I'm not kidding about JP Morgan and gold. 79.3% as of Q1. Look at Table 9 of the quarterly OCC report on derivatives, OCC: OCC's Quarterly Report on Bank Derivatives Activities
Between them, central banks, and the OTC market -- I don't stand a chance. I suppose I'm lucky that I don't have to think about how quickly and widespread precious metal bartering could become a reality.
National Keep-Your-Kids-Out-Of-School-Day
National Keep-Your-Kids-Out-Of-School-Day (Wizbang)
...Re homeowners turning their homes into rentals...in June, 2009 I was privy to the following chain of people moving:
a family from Minnesota moved to SanDiego, the family from San Diego moved to Ladera Ranch, CA and the Ladera Ranch family moved to Newport Coast, CA...
All the families rented out their home and moved into a rental.......
The Ladera Home was purchased for about $1.4 million three years ago....an identical home on the next street was listed on Redfin For Sale at $885,000.00, and two more homes within a block were also For Sale......
Our warehouse is filled....lots of folks in big homes in the pricey areas of OC are putting their furniture in storage as they try to figure out their next step.....
locally, there are very few concurrently closing escrows for local moves, which increases the need for storage.....
As occurred in 1991, most of the families are packing themselves, and having the mover only do the moving....every customer is extraordianrily price sensitive......
I do not foreesee anything positive happening until 2011.......
Re: " Owners should analyze the rent or sell decision based on current prices - and consider the probability that nominal prices will move lower or at best stay flat for several years."
My neighbors need to have this emailed to them....
shill,
Keep in mind that was part of a multi-lateral neo-proto-omerta agreement, Press Release: IMF Signs US$10 Billion Borrowing Agreement with Government of Canada
Canada is chipping in $10bn -- which is substantial given the $50bn deficit the Federal government has running
EHP,
I don't own any faux (paper) gold.
//// analyze the rent or sell decision ////
If the property is underwater there is no decision to make. You can't sell it. You might be able to slow the bleeding, until you lose your job or have a major illness, or something happens that you can't cover.
TJ and The Bear,
It scares me. The Department of Justice's anti-trust threshold is any one participant with more than 40% share of the market. Heck, you could even sue COMEX/NYSE on the validity of calling it a Gold Market.
I thought the IMF is in on dollar ponzi.
China's just switching printers if they don't watch out.
"Good bye US Dollar thanks for 200 years of service, rest well old girl"
Not quite, the first printed FRN notes were Series 1914.
Why would any foreign nation buy US bonds if they could buy IMF bonds which I assume would be safer. How can the Chinese go wrong, IMF bonds would help emerging economies grow, giving them more markets to sell into. They would be investing in producing economies, not a dying consumption economy.
America, we are screwed. American multinationals will be moving their operations elsewhere as GM is in the process of doing. They will work in partnerships with foreign corporations to survive and thrive leaving the rotting corpse of the US and it's people behind . As our living standard is decimated, the living standards of those that used to envy us will improve. We have outlived our usefulness to the corporations that off shored our jobs. We have been sold out by the soulless, bloodless,conscienceless corporation.
picosec, your comment is "spot on"...the only resale homes that I see selling are the perfectly fixed and ready to go home....if you have a home that needs fixing, even minor fixing, the buyer will walk away from the resale house and start looking at the REO's.....
this is my third up/ddown housing market and I can assure you that the retirees, who have to move, do not understand that they now have to do all the things they lived with for many years....if they fail to do this, the buyers will not buy.....
Another game which we will see more of is the buyer demanding many items fixed, replaced, etc. just before escrwo closes...since the Buyer is living in a month to month rental, and The SDeller really needs to leave the house, the Buyers will bargain hard, at the last minute for an extra $10-15,000 of stuff....The Buyer, who hasn't "fallen in love" with the house will do this....also, so will Buyers, who come from a Culture of Bargainers...........
BH thank you for the correction.
Remember the good ol' days?
"High-yielding junk bonds from the home building sector traded around 62 cents on the dollar at the end of last year and recently fetched 89 cents. Similarly, companies in the automotive industry saw their bonds rise from 46 cents on the dollar in December to a recent 89 cents."
Corporate Bonds Are Overpriced - Forbes.com
(never forget to add an icon)
One thought I had was that all the other countries are setting up to 'loot' America IMF style (the way the IMF has been doing to other countries for years). Throw in some kind of debt forgiveness for some assets, and debt at a high rate of interest in some new currency/scheme. The citizens will definitely get the raw end of the deal. It was just a thought though.
Hmmmm... what's the only real asset the IMF has?
It's a nice touch that they translated the USD into SDR!!!
This is getting even more interestinger.
IMF is broke with out our contributions... or the Chinese are being paid interest with their own money. Either option does not strike me as a particular threat to dollar dominance.
Been selling my too juicy corporate junk. Can't even wait for day 366.
Anecdote time:
I have a condo in a development with ~100 units. It's very close to a gigantic state university(ASU) and units go quickly when they're up for rent. The semester has already started and there are least 5 units still for rent. I've never seen that in over 20 years that my condo has been in our family.
There will not be a lasting dollar devaluation until the strategic-reserves Asian countries accept their own currency appreciation or induce a phenomenal domestic bubbles that leak profits to foreign countries via plain arbitrage. Let's use Canada as an example. In terms of trade we'd be fine with the USD going down quite far, if it meant that we could export to the Asian countries competitively while gaining the market share they sacrificed in the USA. As it is, a modestly weaker USD with no give at all from the Asian countries tends to induce significant pain even with the benefit of a naturally long commodities position.
Just wait until the German elections and see how the subsidized employee program shakes out into real layoffs, or causes 'unforeseen' budget problems. Similar problems in Japan. The Euro could never be too weak for the likes of Ireland, Spain, Portugal, Italy, and Greece right now. I don't see how the British will cope at all. They are massively short the dollar through guaranteed bond issuance, they'll face earlier concerns about debt ratings, their property crash is still in its early stages, there is considerable potential for political fiascos with a weak government, they have no robust auto-stabilizers in the form of manufactured exports at this time, the North Sea has been declining and they need to adjust to being a natgas importer, and a million other problems.
As for Obama, Bernanke. I think of Hoover, who contrary to retrospective opinion, did proceed with unprecedented stimulus (ahem hoover dam). Here's a quote:
Praise for the President's intervention was widespread. "No one in his place could have done more," concluded the "New York Times" in the spring of 1930, by which time the Little Bull Market had restored a measure of confidence on Wall Street. "Very few of his predecessors could have done as much." On February 18 Hoover announced that the preliminary shock had passed, and that employment was again on the mend. In June, a delegation of bishops and bankers called at the White House to warn of spreading joblessness. Hoover reminded them of his successful conferences with business and labor, and the explosion of government activity and public works designed to alleviate suffering. "Gentlemen," he concluded, "you have come six weeks too late".
The Herbert Hoover Presidential Library and Museum
What NIF we are not broke?
The Renminbi as a Reserve Currency
The Renminbi as a Reserve Currency (Part 1) -- Seeking Alpha
We are currently renting from an accidental landlord. He bought a new house, both he and his wife lost their jobs, and they had to move to a new city. Rather than take his lumps (they actually own the house outright and are upper middle income dual professionals in their 50's), he is determined to hold on until "the market comes back." Pride cometh before the fall.
BUT his loss is our gain, we are renting for half of what it would cost to own this place (monthly expenses).
shill,
It's simple, the SDR is just a basket of currencies. The weightings of those currencies are negotiated. Back to square one of the problem. Even the US and China declaring they were transitioning to an SDR system wouldn't be enough. The small country with flexible and efficient exchange would have a competitive advantage and thus the stable outcome is not an SDR world.
Historical SDR Weights: Special Drawing Rights
Current SDR valuation: SDR Valuation
IMF is selling about 400 tons of glod. Mostly to China and India is my understanding.
Mineweb - GOLD NEWS - IMF gold sales clearance welcomed by World Gold Council
"btw - see all the volume on C today....mmm "
Crazy, and not as big as yesterday or Friday.
Josap they wish they had 400 toones old news.
Without getting all doomerish I just feel this is THE warning shot - no time to arrange the deck chairs now unless you are just trying to get a good view while the ship goes down.
/Please be assured that wall street and DC will NOT be going down with the ship - the Patriots though will be doing a search and NON rescue of wall street and dc after it sinks
If the world did end up in an SDR system as China desires, they would gain two benefits. One is the losses on their reserves would be shared amongst other member countries to China's presumable net gain. The second is that they would meaningfully weaken the US financial hegemony or at least gain some of their own, without having to bear the mantle themselves. Lil' Damocles thinks they can be king without sitting in the chair, alas not their game and not their rules
It seems to me that there has been no blood in the streets (yet)
Cbonds.Info - Jeffrey Lacker: The Economic Outlook, August 2009
Judging when to withdraw monetary stimulus by raising our policy interest rate is hard enough. But assessing the degree of stimulus provided by our expanded balance sheet poses special challenges. The rapid growth in the Fed’s assets and liabilities occurred during the exceptionally turbulent financial market conditions of last fall. In response to heightened creditor anxiety, many banks built up large buffers of highly liquid assets to protect themselves against a possible loss of investor confidence, some of which they held in reserve account balances at the Federal Reserve Banks. The increase in banks’ demand for reserve balances last fall was met in part by the reserves supplied via the Fed credit programs supporting the commercial paper market and money market mutual funds. The rest of the increase was met through banks’ borrowings from the Fed, either through the standard discount window facility, the Term Auction Facility or by borrowing dollars from foreign central banks. Usage of the commercial paper and money market programs has dropped off since last fall, but in the meantime the Federal Open Market Committee instituted a large-scale asset purchase program, which authorized purchases of up to $300 billion in U.S. Treasury securities, up to $200 billion in agency debt, and up to $1.25 trillion in agency mortgage-backed securities.
From Denninger's post today:
(From 1970 to now) population went from roughly 205 million to roughly 304 million during that time, a 50% increase.
Outstanding consumer credit went from $128 billion to $2,525 billion, or a 1,973% increase - and this is only consumer credit, ignoring mortgages, financial firm credit, business credit, commercial real estate and of course government debt!
Why are we not seeing "robust" economic growth when we exit recessions? Why is there no real hiring going on? Why can we not have a robust economic recovery? Why are we are replacing good jobs with "McJobs" that pay half as much - or less? And more importantly, where did all the "so-called prosperity" really come from, especially from 1994 on?
In each and every instance of recession from 1970 onward we have "pulled forward" more and more demand and created fake "prosperity" through the creation of ever more debt that we have goaded consumers to take on. By doing so we have crippled the ability of the economy to grow, redirecting as much money as possible to a handful of people and firms (commonly known as "banks" and other "financial companies") instead of directing that effort and money into productive enterprises such as building cars, television sets and similar items.
We are in this recession because consumer and business borrowing capacity hit the wall. We have removed almost none of that outstanding credit... The bad news folks is that we will get that contraction, and if The Government and Fed do not force it to happen "voluntarily" we'll get double that much - as much as a 50% decrease in outstanding credit - coupled with a deflationary credit collapse.
The Market Ticker
Yen jumps against dollar, sending Japan exporters down
I better get my BBQ sauce out for tomorrow.
There is going to be one heck of a party.
EHP,
That OCC gold deriv report is freaky. JPM has $68 trillion in gold derivs with maturity less than one year. Apparently they don't have to report what their net position is. Am I understanding that correctly?
Can the coming FDIC bailout cause a run on the banks?
Can the coming FDIC bailout cause a run on the banks?
ehp, in lieu of creating a foreign account, what normal fxe gld uso kind of etfs/cefs would you recommend to short the buck?
and, incidentally, do you think nat gas could go under 2/btu?
Blanchflower Sees `Slim' Chance for `V-Shaped' Recovery: Audio - Bloomberg.com
Former Bank of England policy maker David Blanchflower talks with Bloomberg's Tom Keene about the U.S. and U.K. economies, central banks' monetary policies and imposing the so-called Tobin tax on financial transactions. James Tobin proposed a tax in 1971 on currency trading to deter speculation in the wake of the collapse of the Bretton Woods system of pegging currencies.
I'm looking forward to the day that paper gold goes bust.
rosethorn,
OCC gets that data, but that pdf is what they publish. They list net positions across all derivatives somewhere in there.
Good news about transparency, CFTC will be breaking out Commitment Of Traders reports to list producer/merchant/processor/user, swaps dealers, managed money and other market participants. AND it hasn't been long since they included ICE Futures. It's not all evil bad news out there.
The Fed: Low Rates as Far as Bernanke Can See - BusinessWeek
But David G. Blanchflower, a Darmouth College economist who was until June a member of the Bank of England's Monetary Policy Committee, says Bernanke is correct to believe the global financial crisis remains dangerous. "It ain't over, babes," says Blanchflower
I am sure a comex default is in play as we speak
"Mr Geithner said the finance ministers would not get into the details of capital changes but would set a timetable for changes and agree principles that “will put in place, once the crisis is behind us, a more conservative framework of constraints on leverage in the financial sector across the major globally active financial institutions”."
-FT, FT.com / UK / Politics & policy - FSA’s Turner backs living wills for banks
Or, try this abridged version:
Mr Geithner said the finance ministers will put in place, some time in the distant future
, a more conservative framework of constraints on leverage in the financial sector across the major globally active financial institutions.
So much chum in the water, what's a bear-shark to nibble on tonight?
Well, my brain is shot, but I want to toss in another morsel, one which I haven't seen discussed here in great detail. Evidently, in addition to every other form of credit suffering rampant defaults, the private equity types are looking at trying to roll some $430B in loans that were used to fund buyouts. By 2012. Loans which must be serviced by profits from companies which, on average, are now generating a lot less revenue. How much debt do we expect these guys to be able to roll into new loans? Because it doesn't sound like it's all getting paid off...
Source is Matthew Phillips at Newsweek:
Private-Equity Firms Face Turning Point - Wealth of Nations Blog - Newsweek.com
"Private-equity shops are also having a tough time raising cash--new fundraising for buyouts was down 78 percent in the first quarter compared with last year."
"Boston Consulting Group predicts that 20 to 40 percent of private-equity firms will go bust in the next two to three years."
But, not to worry -- the FDIC figures these will be the white horses that ride in to save their failing banks!!! ROFL... Sigh. Wish I could /snark but I can't...
David G. Blanchflower,-Mania__
Old & Dated crap, but ..... Interview and discussion with Prof. David Blanchflower of the Dartmouth College.
YouTube - In-Depth Look - Europe's Expansion - Bloomberg
JPM has $68 trillion in gold derivs with maturity less than one year.
It looks to me like $68 billion, but that is still a huge number and clearly about 80% of the total gold derivatives.
BTW, I never even considered the concept of gold derivatives. It's one step further removed from paper gold.
HollywoodHack
I'm an ETF-skeptic. If you hold more than $100k you get some additional benefits of ownership (for some of the prospectuses I have read, like choosing how to settle out and definitely on getting counterparty disclosures). I would generally be more comfortable shorting an ETF than owning one due to decay.
I don't have the experience of a big money mover, so I shouldn't be one advising you how to specifically short the buck. I would be inclined to get direct and indirect exposure at the same time. Direct would be to hold assets in a different currency, and indirect through an asset that itself would benefit from a world where the US is more a producer and exporter. The more a bet contradicts itself, the higher its costs will be
"the FDIC figures these will be the white horses that ride in to save their failing banks!!! ROFL..."
Well, I would laugh, but the sad truth is that a lot of taxpayer money will go into maunfacturing capital for these PE firms. They will benefit from the taxpayer-funded push to raise all sorts of asset prices, and they may even get more direct sources of money, like PPIP.
Well over half of the people I know who moved within the last 2 years have held onto their old homes, because they couldn't sell them for a big enough profit. They are convinced that home prices will go back to where they were at the peak, and beyond, within a couple of years.
ETF Reckoning Day?
ETF Reckoning Day?
Thread tune:
YouTube - clifton chenier/ay, ai ai (1964)
Hey EHP I'm still holding loonies, but there are rumors of their keeping up with the printing race. Got anything stronger on the shelf?
why would anybody in their right mind buy an IMF bond. What exactly are they supported by? Unless we got world government while I wasn't looking its not like they have any revenue source other than dead beat borrowers. You either need a sound economy or gold (or some easily fungible asset) backing your currency- everything else is garbage.
ehp, thanks. I don't see the appeal of any 'assets' in this economy which are not fungible or at least semi-abstract metrics of such (like gld, uso). I understand your bearishness on commodities. I feel the same way about all equities (and moreso for non-public small businesses).
yogi
I've been expecting a trifecta:
⬈ USD
⬂ Oil, Copper, inflation-hedge-commodities
⬂ US Equities
(which would also imply ⬈ Treasuries, ⬈ JPY, ⬂ GBP, ⬂ HY bonds, ... fill in the other blanks yourself)
Comes on with a step-shift shock and then decays exponentially, impact measured in weeks, doesn't necessarily return to prior state after -- especially if certain buffers are exhausted, eg: another country effectively going bankrupt.
Maybe by the time it ends there is a phase shift that happens. More new Treasuries than trade deficit, increasing demands for spending on politicians of strategic-reserves countries while they have less revenue, declining hope that the American consumer will appear with renewed vigor at any moment.,,, Which will cause Ben to engage the long term treasury yield cap, or cruise control for QE.
I'm partial to this near term scenario because it was basically what I was talking about last fall. 2009 is struggling to maintain the status quo, 2010 is aggressive action to secure demand markets to support domestic population with work
This story seems on topic on various levels:
Bear Attacks In Aspen, Problem Grows Worse - cbs4denver.com
And yet here in Central and West L.A., they just keep building. New apts. and condo's going up even now... Weird... :-/
Plosser’s Take
“We have to begin to pull back from our extraordinary programs,” Philadelphia Fed President Charles Plosser said yesterday while noting a risk of faster inflation in the future. Speaking in an interview with CNBC, he declined to say whether the Fed should begin raising the main interest rate next year.
Fed district bank presidents Jeffrey Lacker of Richmond and James Bullard of St. Louis last week said the central bank may not need to complete its purchases of mortgage securities. New York Fed President William Dudley by contrast stressed an exit is “premature,” citing “high unemployment” and weak growth.
Policy makers saw the economy recovering “slowly” in the second half of this year, and still “vulnerable to adverse shocks,” the Fed minutes said.
U.S. Treasury Secretary Timothy Geithner cautioned yesterday that it’s too early to remove policies aimed at reviving the economy.
“We’ve come a very long way but I think we have to be realistic, we’ve got a long way to go still,” Geithner told reporters in Washington as he prepared to leave for a meeting of Group of 20 finance ministers and central bankers on Sept. 4-5 in London.
re: GBP
From the July 2009 BIS Papers No 48 : An assessment of financial sector rescue programmes
http://img402.yfrog.com/img402/5039/picture1vzf.png
No way the UK can make good on those guarantees without a v-shape return to business as normal except there will be a magical solution to serve the role of housing in the prior economy
Yeah was in Aspen couple weeks ago to see Dickie Betts. Sign on side entrance to hotel said "don't leave door propped open, bears will come in."
Thought it was a joke. Until Pedro the bass player said he had to scare off a bear who had climbed onto his balcony.
Poor bears! They need to remove the people there, not the bears...
Berkshire Makes Capmark Deal as Lender Weighs Options (Update2) - Bloomberg.com
The default rate on commercial mortgages held by U.S. banks more than doubled in the second quarter from a year earlier amid falling rents and occupancies for malls, office buildings and warehouses. Loans that were 90 days or more past due climbed to 2.88 percent of outstanding balances in the second quarter, from 1.18 percent a year earlier, according to New York-based property research firm Real Estate Econometrics LLC.
Good evening!
I never make any momentum trades. Too many insiders, and smart guys like EHP.
US Forest Service should round up those bears and release them on WS and near Congress/WH.
(I take that back, the cops would have SWAT teams take them out real quick.)
But I like the thought.
Ok, one more; just wondering why that retarded Buffy rolled the dice again....
Banks are beginning to recognize that more past-due commercial property loans are unlikely to be paid in full. Nationwide, commercial mortgages labeled as “non-accrual” more than doubled in the second quarter from a year earlier, to $27.76 billion, according to New York-based property research firm Real Estate Econometrics LLC. The figure reflected a 31 percent increase from the previous three months.
Overdue Loans
Commercial mortgages that were 90 days or more past due at U.S. banks climbed to 2.88 percent of outstanding balances in the second quarter, from 1.18 percent a year earlier, according to Real Estate Econometrics. Defaults increased from 2.25 percent in the first quarter.
Commercial real estate loans made up almost 15 percent of all loans held by banks, according to Real Estate Econometrics. At least 84 lenders have failed so far this year.
Capmark May File for Bankruptcy After Quarterly Loss (Update3) - Bloomberg.com
The more I hear talk about a recovery, you know like when it is being beaten like a drum, the more worried I get that the risk for the next 4 months is being increased further. Whether it is the Fed easing off the gas pedal, politicians pursuing everything they've delayed during the crisis periods, or businesses overshooting production again. The animal spirits of the end demand consumer don't matter because of they don't have the choice to increase their budgets 10%, kind of like how a 10 year trailing average of a company's earnings doesn't reflect what they can earn today. Phase shift! Look at what is happening with lending. Did no one else look at that survey for the Reuters summit a few weeks ago? Or how about the charts for the lending that has already been withdrawn? It is different this time until that reverses
@EvilHenry and Hollywood...
"an asset that itself would benefit from a world where the US is more a producer and exporter"
Oddly enough, I was just running a little stock-screening exercise which goes much along those lines.
I start with my trusty Value Line list of 1476 stocks. I'm looking for stocks I might want to buy and hold if/when we get to a market bottom that I can believe in.
Step 1: I delete anything with a dividend yield of less than 2.25%. Because I figure if they can't bother to return capital to shareholders, the company's not being managed in my interests and I don't want to be a shareholder. Suddenly I have only 379 stocks.
Step 2: I eliminate anything in the FIRE sector, and ditto for nonessential services (restaurants, beverages, investment companies)... I'm down to around 200 "dateable" stocks... This is the part where my computer decided to go into slow-motion on me, though, so I'm going to shut down for the night (it's late here as well)... I'll try to follow up on this tomorrow.
But the bottom line is that if you want to invest in the productive sector of the economy, in a company which at least takes a minimal step towards rewarding ownership and not just management, the list of choices is not that long, so it's a solvable "what do I choose" issue!
P.S. Oddly enough, of the remaining list, the highest dividend yield is sported by "StoneMor Partners L.P. (STON)". I reckon a dividend yield of 14% says something's wrong with the company, but don't have time to investigate. But with a name that sounds like "Stone More Partners", the ticker STON, and being in the mortuary business, this one has to be worth a look-see this weekend!
ticker STON, and being in the mortuary business,
roflmao. Jessica Mitford (The American Way of Death) would say from her grave that the mortuary biz is a proven profit maker.
I'm surprised the divvy is only 14%. That 'industry' taught the Fed how to really print money.
FT Alphaville » Blog Archive » Judge rules against Morgan Stanley, agencies
Judge rules against Morgan Stanley, agencies
Posted by Gwen Robinson on Sep 03 05:02. Comment.
A US federal judge ruled that Morgan Stanley and two credit rating agencies must defend fraud charges in a class-action lawsuit accusing them of masking the risks of investments linked to subprime mortgages, and which eventually collapsed, reports Reuters. In a ruling that could affect other such lawsuits, the judge on Wednesday rejected efforts by Morgan Stanley, Moody’s and S&P to dismiss fraud claims brought by the plaintiffs, Abu Dhabi Commercial Bank and King County in Washington state. She dismissed claims against a fourth defendant, Bank of New York Mellon.
````
Looks like judges everywhere are much less diffident in financial cases these days. Must be the media exposure making them feel comfortable with the topic, or perhaps delighted to right a wrong
nope, just delighted to channel tarp/bailout money away from the robber baron bonus fund and towards biglaw tanks
So many retarded people out there....UNREAL!!!
http://www.alligator.org/articles/2009/09/02/opinion/editorials/090903_eddy1.txt
The state of Massachusetts, however, is taking the idea of encouraging people to stay home and stay hygienic a little too far. Currently making its way through the state legislature is the Pandemic Response Bill. If passed, the bill will allow the governor to declare a health emergency and allow law enforcement officials to forcibly enter the homes of citizens and quarantine or vaccinate them.
Whether this bill is a response to Barack Obama's team's report is unclear. However, if it is, the Obama team needs to issue another report that takes the Centers for Disease Control's findings into consideration. The people at the CDC know what they're talking about, and if its slightly less abysmal view of the coming school year will allay American's fears, it should be made common knowledge.
After Hurricane Katrina, it makes sense that lawmakers and politicians want to prevent any sort of comparable disaster; no one wants to take the blame for unnecessary suffering or death. However, H1N1 is not the bubonic plague, and it shouldn't be treated as such. Blowing things out of proportion with exaggerated predictions or with possible bills involving storm troopers is as irresponsible as taking no preventative measures at all.
Picosec,
I added data to the comments in this thread, I think that is what you wanted:
Effective Demand: Watching the can..
Earlier today there was some discussion sparked by the BP press release of GIANT OIL DISCOVERY, and while I wasn't around to join in, I probably wouldn't have bothered because any mention of peak oil is right up there with trying to discuss religion, politics, sexuality, or other emotionally charged topics; and the anonymity of the internet doesn't help.
However, I heard a radio/podcast interview on the story. I cannot recommend listening to it strongly enough, especially if you don't have a geology background to draw upon whenever these stories come up.
McMahon Says BP Oil Find Will Be Tough to Access: Audio
Sept. 2 (Bloomberg) -- Neil McMahon, energy analyst at Sanford C. Bernstein in London, talks with Bloomberg's Ken Prewitt and Tom Keene about BP Plc's discovery of a large oil deposit in the Gulf of Mexico.
EHP, a good result:
"Where both the rating agencies and Morgan Stanley knew that the ratings process was flawed, knew that the portfolio was not a safe, stable investment, and knew that the rating agencies could not issue an objective rating because of the effect it would have on their compensation, it may be plausibly inferred that Morgan Stanley and the rating agencies knew they were disseminating false and misleading ratings," [U.S. District Judge Shira Scheindlin] wrote.
Could be that judges just don't like fraud, no matter who is perpetrating it.
$350 billion to zero is going to make those AAAs hard to explain.
WOW! Just WOW!
Thanks ED, that's exactly what I hoped for. I compared your August numbers with those that I got from reading the chart in July and August is a bit lower (with one exception). It's most likely in how I read the data rather than a real difference, but if it was as easy as I hope it was, can you do it for July as well? And, of course, future months
I'm not sure what would pop up, but this is a large enough data set that the noise should be rather low and any changes seen in or among any of these fields could prove interesting.
BTW - the big exception between July and August was the Active Average, most likely because there are some super high-end outliers that just show as >$2M on your chart.
Thanks.
EDIT: I just noticed that my July Pending numbers and your August Sold numbers are nearly equal so maybe my numbers were close after all.
. . . any mention of peak oil is right up there with trying to discuss religion, politics, sexuality, or other emotionally charged topics.
Only with complete fucking morons who believe there is an infinite supply of oil on this earth.
Rational individuals already know it will take close to a decade before any of that oil is sent to a refiner.
As to how much of the find is recoverable, a Ph.D. in Geology could only guess given current knowledge.
But It will be profitable a decade from now since its competition for supply will be Alberta's oil sands.
"Accidental landlords."
The term, to these ears, is pretty cloying. It's a pratfall of a phrase. Whoopsy-daisy. . .hey, I didn't ask to be no landlord or nuthin'! There's little accidental about what has happened in Real Estate Riches Land. But frankness about our failings isn't in the American character. It's been smoothed out like our wrinkles, collagened over.
We like soundbites with absolution built in.
B R E A K I N G F'ING N E W S
Bobcat Co., which makes loaders and light construction equipment, plans to close its Bismarck plant and shift the bulk of the 475 jobs there to its plant in Gwinner, in southeastern North Dakota.
Bobcat Americas President Rich Goldsbury told The Associated Press the move is due to a weak global economy and sluggish sales. He says the company is facing a huge economic challenge and add, "we need to adapt."
The company says 475 jobs at the Bismarck plant will be phased out by year's end, and about 390 of those jobs will be moved to Gwinner, southwest of Fargo.
"Accidental landlord" is just a nicer phrase for "foreclosure abortion".
Bobcat Co., which makes loaders and light construction equipment, plans to close its Bismarck plant and shift the bulk of the 475 jobs there to its plant in Gwinner, in southeastern North Dakota.
Well, that's understandable. Labor costs in big cities like Bismarck are just out of control.
Further on Effective Demand's Ventura County RRE stat.
In July the Pending Median was $40k less than the Sold Median; and sure enough, August's Sold median dropped $33k. August's Pending Median is $47k below August Sales median, so we may infer that in September, the Sales Median will drop around that amount. A cumulative ~$80k (20%) drop in two months!
Ain't NO high-end homes gettin' sold iin Ventura County!
Pico,
My bad those numbers I put on the comments section were for July, I opened the wrong spreadsheet, here is august:
Active Med 649000
Active Avg 1066387.893
Cont Med 339900
Cont Avg 393148.044
Pend Med 330000
Pend Avg 417138.0085
Sold Med 483030.8219
Sold Avg 389950
Sorry about the mixup
How long does it take to get a house from auction steps / investor cash purchase to in-rental condition?
I'm surprised CR puts up with our off-topic comments, its nearly noteworthy if there is something on topic.
I'm kind've pissed no one responded on my idea re: LLP and FHA loans. Buy the loans with FDIC money and then turn around and move them into gov't guaranteed loans... genius...
viva la tanta...
Well, as we soccer referees are fond of saying, "We get it right. Eventually."
Thanks, but I think I'll deal with it in the AM.
How long does it take to get a house from auction steps / investor cash purchase to in-rental condition?
If it is OO in CA, wait 15 days or less for the trustee deed to be recorded. If the owner ignores the 3 day notice to quit and CFK, then add 3-4 weeks for eviction. Add in rehab time of another month or so. So 2 to 3 months. For vacant home in ok condition and a quick trustee, under a month. For tenant occupied (who would have to pay market rent) add at least 90 days.
There are homes on the MLS right now taken back by the bank tenant occupied. The bank used to wait until the tenants were out, now they'll throw the house up with the tenants in it. Kind of interesting.
I'm amazed that anyone will still bet on a deflationary outcome after the C4C program.
EHP
you own the board at this time of night...
....
on a side note Susan Atkins, the terminally ill Charles Manson follower who admitted stabbing actress Sharon Tate 40 years ago, lost what was likely to be her last bid for freedom Wednesday.
Atkins, who suffers from brain cancer, slept through most of the four-hour hearing during which her husband-lawyer pleaded for her release and families of victims of the Sharon Tate-Labianca killings urged that she be kept behind bars until she dies.
it must be said that Atkins was by far the most ruthless and blood thirsty killer of the Family female members but given she has but a few months to live....
that said it's had to imagine what was going through that Scottish judge's mind when he released the Pan Am bomber... here in Atkin's case I think the families are demanding that last drop of blood but 40 years in prison is 2/3 of her life... I think Sirhan Sirhan has been in for that long also... wonder if he will ever get out?
EDI
The U.S. has a veto in the IMF. So nothing goes on there without the approval of Washington.
The bond sales are strictly about propping the decaying edifice of the IMF, which is basically broke. And now they are borrowing money rather then changing the voting quotas.
Scheindlin is a good judge.
Asia (apart from Japan) will not give money to the IMF after the humiliation of 1997. The only way it can raise cash is to borrow from them , i.e. bonds.
Sorry, but this article is all about your assumptions and general facts, which you do cite, but provides no support to your opinion. As stated in the first quote in your post, "Hard data are scant on how many homeowners are renting out their homes", but your post makes it seem likes it's 100% true. I don't even see a estimated percentage to indicate the number of "accidental landlords." Just like the "waiting to sell" category, this category is meaningless to the true number of shadow inventory. I should write an article claiming that the number of rentals are going up because so many investors are capturing this once and lifetime opportunity and acquiring all the REOs and leasing them out. (just an exaggeration, not my belief)
This Tampa property was developed as condo, now leasing. 400 units, approximately 40% occupied after eight or nine months. The 'two free months' promotion is recent.
Element | It Becomes You
I'm rooting for Element because they've put squash courts in a lot of their developments, but...
yogi, they recycle the names into different kinds of structures, I note. I think the Atlanta Element is a mid-rise with some lofts. 'Twelve', which is an Atlanta hi-rise, was to have been a luxury hotel/condo tower in Tampa. Corus financing, though, so I don't expect to see that one rise any time soon. Or ever.
The floor plans are relentlessly similar, and exceptionally stingy. Granite, though. And stainless.
Here's the kind of thing I'd hoped they were attempting. But, no.
NYLS
"no amount of Benny Bucks are going to break the cycle."
Ben only has the tack hammer out right now. If he gets out the sledge hammer, he can break the cycle. Although, I'm not sure that will improve things.
Looked at apartments in a building called the Element on 59th, more West. Nice enough but asking too much still. Would only rent or buy in Midtown if it meant walking to work.
My American dream residence has always been a high-rise where several hundred people share a roof-top pool, basement squash courts, maybe a patch of grass. But then I grew up in Manhattan.
Didn't go for second look but my gut told me they put too much into selling materials and some flashy features, so maybe cut corners. The floor to ceiling windows views of the Hudson were nice but mostly dominated by a Con Ed smokestack.
"nope, just delighted to channel tarp/bailout money away from the robber baron bonus fund and towards biglaw tanks"
Kind of a cynical view given that it has been reported that Morgan Stanley, Moody’s and S&P never even examined the loans they were rating. The case has merit based on what I have heard. Some lawyers do not suck. There might even be a decent banker out there. But the ratings agency's are the Aurthur Andersons of this bubble.
Agreed, Bh. The legislative and executive branches have done nothing but enable the big banks to exploit the ratings agency fiasco in Hurricane Ponzi.
Lawyers deserve plenty of abuse, but no financial regulatory structure that I can imagine would function better without access to civil litigation built in for individual players.
PS: Even if I returned to law practice, I would never accept compensation higher than what a Supreme Court Justice gets.
if elected, I shall not serve!
If paid too well, I shall not spend!
that very nice @
no doubt by the rising of the house prices people are uncap able to lend or purchase any house so landlords are doing the business at the moment!
so, this post is well written done well managed so good work mate !
Reverse Mortgage Information
ack. imported
.
I have no problem with the quarterback making more than the team owner, who just sits on his ass in a luxury box (doesn't happen in football anyway). But a lawyer making more than a judge never made sense.
Of course it has made sense for some interests that judges mostly come from a class that doesn't need an hourly wage.
@yogi,
I've got a smattering of each in extended family - attorneys and judges. The ones on benches stepped away from lucrative practices for the interest, or challenges, and a sense of public service. Seriously. Just anecdotal, though.
I don't doubt it a bit. It is a public service, and I think we're well past the days of an aristocratic judiciary. Don't know about the English, whose common law we inherited and in some cases failed to modernize even when they have.
You can't pay a judge on the number of convictions, foreclosures, or dismissals he churns out. You can't hand out a bonus for decisions that are popular. I worked for a veteran judge who could have made more in law practice and who had a working class background. He did it for over 20 years (earning the same salary in year 20 as a rookie judge) but was pissed about his pay. On his salary, he could not have passed most Manhattan co-op boards.
You can't pay a judge on the number of convictions, foreclosures, or dismissals he churns out.
Why not?
You could "free market" it.
Think of the efficiency gains!
1 currency
you are not practicing law now? I was under the impression you were...
My guy was like this guy (Supreme Ct--trial level in NY-- make a little more):
"In a scathing 10-page decision, New York Supreme Court Justice Arthur M. Schack wrote that it would be improper for him, as a petitioner in an action against the Legislature seeking raises for judges, to adjudicate an action in which the firm has a stake.
"To avoid any potential appearance of impropriety in the instant case, since both Senator Craig M. Johnson and Assembly Member Marc S. Alessi are both of counsel to Jaspan Schelsinger Hoffman ... I must recuse myself," Schack wrote in JPMorgan Chase v. Bergen Plaza, 126/09.
"I hope that Mr. Johnson and Mr. Alessi would allow the judges of this state to receive their first pay raise in this century. Thanks to our legislators ... our New York State judges are the 'Rodney Dangerfields' of government. A pay raise would help to give us a little respect, instead of, as recently said by Chief Judge Kaye, 'the disdain with which we are treated.'"
Schack's recusal order is yet another salvo in the fight for pay increases for New York's approximately 1,300 trial judges, who have not received a raise since 1999, when the Legislature bumped their salaries to $136,700 a year. No state has gone longer without raising judicial pay; according to one study, New York ranks 48th in judicial pay when adjusted for the cost of living.
Last May, then-Chief Judge Judith S. Kaye, a leading advocate for judicial raises, e-mailed the entire state judiciary, advising her fellow judges that they may recuse themselves as a matter of "individual conscience," but that a "strategy" of recusals could "hurt our cause."
Two weeks later, the state Commission on Judicial Conduct warned that judges who recuse themselves to protest legislative inaction could face disciplinary actions."
someday when I'm in the mood I'll tell you about a certain pardon Mario Cuomo handed out for the convicted son - drug dealing
charges - of a big shot law professor and that son today practices law at a major firm in NYC .
$136k ain't peanuts, but some BK lawyers have had $1000/hour fees approved. Still nothing compared to banker bonus babies, naturally.
If a house is supposed to be 3x income, a judge might be able to afford a studio in a decent neighborhood, but probably in a walk-up.
Housing "judges" get $88,000, and their calendars have been full every day since Housing Court was created.
@yogi,
Well, yes, that's the stuff.
Against the general view of attorneys, and I imagine having relations in practice colors my view, the few times I've needed counsel have given me a strongly positive view of the profession. Former classmates now among the Florida judiciary are just the sort you'd hope were there.
But I think the public perception is very different.
A popular target is minority female judges, like Sotomayor, who many people assume got undeserved career breaks. Bullshit.
One problem is that judges are limited in what they can say and advocate in public, even in response to criticism. Look at the warning above.
If a judge does a great job, one side still loses. The other side feels the judge just did the obvious right thing. Either way it doesn't sell headlines.
That's only when a judge does something considered stupid and outrageous.
Back for a moment to NYC and apartments - yogi, apart from the professional photography and of-the-moment furnishings, isn't this pretty reasonable for midtown west? Or am I imagining a drop in asking rents?
craigslist | Page Not Found
It's reasonable in light of the recent past. With rents and real wages coming down, employment and new buildings still going up, who knows? I wouldn't want to live in that location unless I had never lived in Manhattan, and I would take the shortest available lease.
England's in:
Brown Joins Merkel, Sarkozy to Urge Rules on Bonuses (Update3) - Bloomberg.com
[Sweden too]
They talk like they actually mean it this time...
Who will speak for the downtrodden, lowly bankster? Timmy will have their backs, for sure. Obama will stay 'above' the fray.
Sixth Time is a charm?
Nope, he confessed.
BOSTON/NEW YORK (Reuters) - U.S. securities regulators missed "numerous" red flags that may have led to Bernard Madoff's $65 billion Ponzi scheme and never did a "thorough and competent" probe despite complaints dating to 1992, a federal watchdog has concluded.
The U.S. Securities and Exchange Commission's inspector general said in a blistering report that despite five probes and having caught Madoff in "lies and misrepresentations," the SEC failed to follow up on inconsistencies.
"Despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madoff's trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme," Inspector General David Kotz wrote.
Blistering report faults SEC for Madoff misses
| Reuters
---SO who at SEC has been fired over this?
NO ONE!
Here is more evidense in the extreme!
Greenwich Homeowners Push $40,000 Rentals in Worst Sales Market - Bloomberg.com
Deficits Will Matter by Gary North
Burnside, remember craigslist realtors are known for bait-and-switch. Check NYT and others, and always threaten to report false advertising. The nice thing about these times is that tenants can finally exert leverage. The Element on 59th had a residents' blog with some great info, as do all manner of renter groups.
It's still on my radar, but not to buy.
Chairman Cox resigned. He joined a securities law firm as partner. Don't believe that was a pay cut. Actually, I'd bet that he gets at least triple what any US judge makes.
7:45am
MarketWatch
European Central Bank holds interest rates at 1%
looks like a big rally day coming up
"The [Greenwich] house MacCluskey built on less than one acre near the town’s central business district costs more than $15,000 each month to carry, including taxes and the mortgage [rented for 13,000]. It has four fireplaces, a library and six bathrooms. She plans to put it back on the market in March..."
Who wants to bet me she didn't tell the new tenants it was going to be listed in March?
Around here, it depends on the court. Federal District Court judges have pretty good reputations and usually had pretty good practices. As for the state District Court and County Court judges, they are usually seen as middle of the law class, middle of the practice types of lawyers who are looking for steady paychecks and benefits they don't have in private practice. Coming up on the 25th reunion of my class and looking at the judges in the class, I woud not have hired many of them at my firm.
good morning, happy bff eve.
SAN FRANCISCO (MarketWatch) -- When the agency that insures traditional pension plans is running a $33.5 billion deficit -- the largest in its 35-year history -- should you be worried? If you're a worker or retiree counting on a traditional pension, the answer is probably not. But if you're a taxpayer, start worrying.
Though it will likely take years, it's all but inevitable that at some point the Pension Benefit Guaranty Corp., the agency responsible for guaranteeing pension benefits for some 44 million Americans, will need to either cut those benefits or raise a lot of cash, experts say.
Pension crisis likely to hit taxpayers eventually - MarketWatch
Too bad we can't move to Switzerland and avoid the US taxes - the rest of the world is doing it.
Federal Judges tend to be paid more, have a smaller caseload, and are appointed for life.
Terry, would you then agree that it makes sense to pay judges a more competitive salary?
After all, what good is advice from a high-paid attorney at your firm if a judge can't see the brilliance.
I am not the right one to answer - I have seen three courtrooms in 25 years of practice, once as a 2nd year lawyer, once as a witness and once as a juror. We need to have competent judges who know how to run a trial, but they do not need to be Clarence Darrows.
Of course the skills are different. The highest paid lawyers are the ones most skilled at signing clients up for the highest fees.
Trial lawyers wouldn't necessarily make good judges. Federal judges don't even have to be lawyers under the Constitution, and I would never criticize a nominee solely because he was not a lawyer. But I don't want to settle for "competent".
Even if you never litigate, the advice you give, or whatever you do to score the big bucks, depends heavily on how judges have interpreted legislation, and are likely to decide a new issue.
OT - look at the August same store sales table in this article: August Retail Sales - Retail Sales Mixed as Consumers Hunt for Value - Retail * US * News * Story - CNBC.com
Looks like back to school was a bust.
It is a convenient excuse to tell a client after you've lost a motion, "The Judge didn't understand my argument, as I make five times what he does."
In a business practice like ours, even when lawsuits get filed, over 90% of them get resolved before trial. I would rather see the money spent on good lawyering and counseling by the parties' legal counsel prior to the actual trial. Maybe it is different on the criminal side.
Costco and Target up 4%, less bad than expected.
One area where I have seen a huge increase in litigation is with the regulators, especially the FTC. Those cases, you do want a good judge.
Can't believe we're still bleeding out 575,000 jobs a week
One last comment on judges before heading to the office - I have seen what a bad judge can do - I had a few clients hauled into the judicial hell-hole in Southern Illinois, across the river from St. Louis - what a racket! Also on IP litigation in the plaintiff friendly federal judge in East Texas, where it seems all the patent infringement suits get filed these days.
Can't believe we're still bleeding out 575,000 jobs a week
Don't confuse claims with job losses.
They are correlated, but not identical.
I worked in civil court. About half of my job was to hold those pre-trial settlement conferences, to see whether a settlement could be worked out to the satisfaction of the parties. I took the job seriously, even taking a week-long mediation seminar at Harvard Law School partly on the State's dime.
Although I felt a settlement was usually preferable and I took pride in helping one get worked out, I was careful never to use the threat of a trial backlog as leverage. [It was my responsibility to point out the imperfections of the trial process]. Confidential info never got to the judge.
If the State ever tried to keep a tally of how many settlements I or the Judge made, or the percentage, even if it was not tied to any reward, there would have been a wild uproar.
As I said, great judges don't get noticed. As you point out, but the bad ones cause tremendous harm.
Who will play FDR to O's HH?