The Fed’s purchases of mortgage-backed debt so far this year have dwarfed net issues of such securities by Fannie Mae, Freddie Mac and government-run mortgage-bond insurer Ginnie Mae, which totaled about $440 billion through the end of August, said Walt Schmidt, a mortgage-bond strategist in Chicago at FTN Financial.
Does Walt Schmidt = ghostfacedinvestah?
Props to ghostfaced for being on top of the magnitude of the MBS purchases...
We went on a bus tour of East Berlin before the wall fell. Went
to the Pergamum museum. Only partly open because of "labor shortages".
People were in line waiting to buy stuff because there was a holiday next
day, so were stocking up.
I doubt there were any real labor shortages. The Eastern Block was loaded with make work jobs, so if they'd really needed people to do work, there would have been the capacity. I'm certain that the real problem was poor production planning and poor allocation of resources, a problem that plagued all of those countries until the breakup of the USSR, and the conversion of China to what is effectively a capitalist system. I can't believe that some folks would actually like to see us go in that direction.
Well we know two things for sure, politically:
There will be an extension of the housing tax credit...the amt and terms may change or be different, and it may be a bad move foscally as per CRs points in earlier posts, but something will get bipartisan support.
No financing rule of thumb, based on the experience of co-ops
here vs condos, hypothesized by me years before the present
Depression, 25 cents on the dollar. And that was when we were
or thought we were prosperous, and well, well before the bubble.
housing is usually one of the key engines of recovery
I hear this meme over and over, and its just plain wrong.
Manufacturing is traditionally the enging of recovery. Its easy to be misled because for the past couple of generations we've chosen to manufacture housing.
Here in NC, we actually still do foreclosure sales "on the step of the county courthouse just like they did in the old movies.
. Im going to one in 2 days...with camera in tow.
We have enough houses. I fail to see why one more house should be
built, unless it is somebody's dream house. And the buyer can pretty
much pay cash for it.
dont you believe it (profile) wrote on Mon, 9/21/2009 - 9:07 am
housing is usually one of the key engines of recovery
I hear this meme over and over, and its just plain wrong.
Manufacturing is traditionally the enging of recovery. Its easy to be misled because for the past couple of generations we've chosen to manufacture housing.
You are correct, but it should be pointed out that one reason we've chosen to do this is that one can't export this business to China-
"housing is usually one of the key engines of recovery..."
You can see B.S.Bernutty and the rest of the Ebubblegnomitists push there little buttons, and twisting there little knobs on there ebbublegnomic models...trying to get organically produced statistical numbers to appear...inorganically...to make the model go. The snag is, that non-linear systems don't work like linear pen and paper models. Jerry-rigging them organic numbers is probably gonna do some odd things to the real system.
Anonymous Bosch (profile) wrote on Mon, 9/21/2009 - 9:13 am
Coffee + :croissant:? + :donut:? Good morning, Crs.
I've been wondering how long it will be before has enough consumers to replace the US consumers completely. They have 4X our population.
Is this even possible?
I'm going to assume you mean China. IMNSHO, India will beat them to it-
People pretended to work and the powers that be pretended to pay them...
It was more a world of social-status according to your ability, without monetary compensation, but certainly there were perks.
My aunt is a doctor, and her position got her a drab flat in a more 'chic' part of a beautiful town in which all the shelves of the drab stores were frequently bare, in a drab country full of interesting people that wondered, Is this is good as it gets?
When the wall came tumbling down, there was great optimism.
dont you believe it (profile) wrote on Mon, 9/21/2009 - 8:07 am
Manufacturing is traditionally the enging of recovery. Its easy to be misled because for the past couple of generations we've chosen to manufacture housing.
Actually I think our primary export is manufactured numbers. It's an incredibly efficient business model.
"John Brian Agdomar, 42, of Hackney, East London, got four and a half years for tax credit fraud, relating to the creation of identities for 1,400 imaginary children and the claiming of £1.2m in tax credits."
This is a great idea for a new stimulus package. And viagra isn't required.
What will be the mechanism for both China and India to convert 2.3 billion to middle-income consumers?
No one connects all the dots to pull that off...they just connect memes and tales.
My point is that it will not happen simply via linear extrapolation of today's trends, globally, cuz they are all sustainable...from financing assumptions, to mfg & service industry growth assumptions. It wont happen based on today's assumptions & trends.
EDIT:
More likely they will hit multiple plateaus and valleys before some equilibrium that wont resemble Western middle class at all.
For India & China, all the prosperity trends were based on the global asset valuation and debt bubble that just burst.
So why do we take trends from a bubble we know burst, data from the 1990s and 2000's, and then say that yes, the bubbles all burst and yes, these prosperity trends for China & India will continue.
Makes little sense. Without global bubbles, those trendlines are irrelevant.
Look at the gawdawful mess we off-shored to China?
Our waterways, lakes and land were horribly polluted from making all of that junk, and the brobdingnagians back then saw a win-win situation, we could clean-up our mess, and take advantage of Asian-rates of pay, with no EPA breathing down our necks, Yippee!
Friends that have been to China many times, tell me of the ecological horror all over the place, horribly polluted waterways, lakes and land. And the most interesting thing...
Animals and birds are rather scarce and seldom seen, compared to here.
There is no way that Chindia could ramp up production to the level necessary, to satisfy a few billion middle-class folks on the home-front, not a chance.
"one reason we've chosen to do this is that one can't export this business to China"
Kinda the same reason that the costs of education and health care have been increasing faster than wages. I have long been of the opinion that the price of this, that or anything else has more to do w/ money supply than demon doctors or bad teachers.
It's amazing how people pay McKinsey and other over-priced consultants to assume today's trends will go forever, without factoring assorted glass-ceilings in growth due to ecological disasters, unsustianble bubbles, debt-driven shrnkage in consumer spending in Eurozone and USA, and an enlightened dawning amongst some nations that they need to bring some mfg back home and protect "their own".
Maybe housing has been so important in recent recoveries because demand and building was severely depressed during the long period in the 70's and 80's when the Fed kept rates high. Certainly affordability (e.g. median income/mortgage rate /HPI index) was at a long-time high in the late 90's, just before the start of the recent bubble. Affordability is good again, but there is now a large oversupply.
@ Journeyman Kinda the same reason that the costs of education and health care have been increasing faster than wages.
Yup. Higher Ed tuition & costs increased proportionate to increases in SallieMae and govt increases in max loan amts and in guarantees and subsidies to private lenders to students.
Now that was linear relationship. Sadly, while this happenned, graduation rates plummeted...the feds dont bother asking for 4-yr grad rates cuz it's such a rarity, they ask for the 6-yr grad rate...and fewer than 50% of students even achieve that.
Avl Dao (profile) wrote on Mon, 9/21/2009 - 9:27 am
What will be the mechanism for both China and India to convert 2.3 billion to middle-income consumers?
India doesn't need to do so. I think their middle class is already in the neighborhood of 50,000,000. Double that, and it's close to ours already. Double it again, and they've passed us, especially considering where our middle class is heading now-
Good morning everyone,
Had an interesting discussion with a friend of the family this weekend. This friend has very good political connections, mostly with the last administration, but still quite a few with the current. He is a self described equal opportunity (read party) offender. Anyway his big talking point was that Obama knows the American good ship Prosperity is going down, and his ambitious agenda is a smoke screen for the failing economy. By not focusing solely on the economy, he is doing an ADD jaunt through the news cycles. He predicts this will only get worse through 2010. He also suggested that while the public discourse is pushing for various parts of this agenda to be passed swiftly, privately Democrats are hoping for a long drawn out battle to eat up news cycles. Not sure I agree with this point, but found it interesting. The man is quite wealthy, and I managed to ask him privately what he was doing to protect his wealth....the answer was surprising....he said we were in an Alamo moment. He wasn't about to go offshore, he was betting everything on America, and if he lost everything, least he went out fighting and could sleep at night. Very weird conversation. Thought I would share for a perspective.
Avl Dao (profile) wrote on Mon, 9/21/2009 - 8:42 am
It's amazing how people pay McKinsey and other over-priced consultants to assume today's trends will go forever, without factoring assorted glass-ceilings in growth due to ecological disasters, unsustianble bubbles, debt-driven shrnkage in consumer spending in Eurozone and USA, and an enlightened dawning amongst some nations that they need to bring some mfg back home and protect "their own".
There is and has always been profit in telling people what they wanted to hear and ignoring or artistically-interpreting facts that don't fit the theory. The sophists made a nice living by such means, and by fitting dialectical methods to become techniques of propaganda.
Journeyman (profile) wrote on Mon, 9/21/2009 - 9:42 am
"one reason we've chosen to do this is that one can't export this business to China"
Kinda the same reason that the costs of education and health care have been increasing faster than wages. I have long been of the opinion that the price of this, that or anything else has more to do w/ money supply than demon doctors or bad teachers.
It isn't just the money supply; it's government intervention in the markets. By providing lots of opportunity for guaranteed loans, grants, etc., they've driven up the demand for higher education. Unfortunately, the education has become watered down and the cost has gone way up. Again the Law of Unintended Consequences.
BTW, I went through college at night with a large portion of the cost paid by my employer, but some was paid for by Uncle Sam when I was in the service-
ResistanceIsFeudal (profile) wrote on Mon, 9/21/2009 - 9:51 am
There is and has always been profit in telling people what they wanted to hear and ignoring or artistically-interpreting facts that don't fit the theory. The sophists made a nice living by such means, and by fitting dialectical methods to become techniques of propaganda.
To which type of Sophist do you refer? Aristotle or Plato-
Avl Dao (profile) wrote on Mon, 9/21/2009 - 8:57 am
Resistance....ur right. As the Doobies sanged in 1979: "What A Fool Believes....he sees !!!"
Sadly, the more unbelievable and untenable the lie, the higher the price that must be paid (and the more authority that must be bought) to make people accept it as a revealed truth.
I'm certain that the real problem was poor production planning and poor allocation of resources, a problem that plagued all of those countries until the breakup of the USSR, and the conversion of China to what is effectively a capitalist system. I can't believe that some folks would actually like to see us go in that direction.
To what? A system of that is 'effectively' a capitalist system?
Two points:
Any organization as large as Microsoft, Exxon Mobile, BoA, GM is as bureaucratic and 'centrally controlled' as any state owned enterprise in communism. If you don't believe it work with them [I do].
Chinese SOEs are as state run now as they ever were - just better at it. It isn't capitalism unless we call our modern TBTF banking cartels capitalism also.
Not trying to raise hackles on a Monday morning - just tired of the old 'capitalism' 'socialism' argument that really doesn't apply UNLESS one consider the modern Mega-MNC as a pseudo arm of the state.
My son's soccer coach is a lawyer that frequently travels to his firm's office in another city. This week's business trip was canceled because of swine flu going through the host office. Has anybody heard similar stories? It will be interesting to see if hotel revpar numbers will correlate to flu cases.
The National — All Property Type Aggregate Index measured a 5.1% price decline in the month of July. The index now stands 38.7% below the peak measured in October 2007.
· Overall market transaction volume by count declined this month to a low not seen since 2001 following a slight uptick in the previous month. 74 repeat sales transactions totaling $1.2 billion were used in calculating this month’s index.
· Of the four property types, apartments are holding up the best in the eastern region with an annual drop of only 6.0%. In the same period, the national apartment index declined 24.4%.
· Southern apartments declined 44.2% in the past year. Apartment prices in this region are now at their lowest level ever recorded by the CPPI.
· Southern California saw large drops in the office and retail sector, with value declines of 25.8% and 24.2%, respectively. Both sectors are underperforming the nation.
· All three office markets saw prices fall more than 20% over the past year. San Francisco was the worst performer, declining 27.0%.
· Florida apartments, like the southern apartment market overall, saw a dramatic drop in prices over the past four quarters. With an annual decline of 39.8%, apartment prices in Florida have now fallen almost 50% from the peak.
Cinco-X (profile) wrote (in reply to...) on Mon, 9/21/2009 - 8:58 am
ResistanceIsFeudal (profile) wrote on Mon, 9/21/2009 - 9:51 am
There is and has always been profit in telling people what they wanted to hear and ignoring or artistically-interpreting facts that don't fit the theory. The sophists made a nice living by such means, and by fitting dialectical methods to become techniques of propaganda.
To which type of Sophist do you refer? Aristotle or Plato-
I was thinking of the Sophist pre-Socratics, actually... from which came the doctrine of the senses, or in modern form, logical positivism and scientific materialism. Interestingly the Sophists found their professional niche not as philosophers so much as educators.
*lama (profile) wrote (in reply to...) on Mon, 9/21/2009 - 10:02 am
Payment for services already rendered. IMO, you paid for your education even though Uncle Sam wrote the check.
*
Of course; 4 years at $395/mo was the price I paid. I wasn't paying a whole lot of tax out of that, though I actually did pay a little. I appreciate what Uncle Sam did for me, but I'm still glad I got the hell out of there. Especially since we started becoming more and more "adventurous" in the following years.
Dryfly, good points on the old capitalism/socialism meme.
But you know, folks hate to have a modern fact (SOE, BofA, etc) intrude on a re-telling a cherished favored meme.
I'm not sure how much cash for clunkers pushed forward demand. Car sales have been premised on financing assumptions that are no longer valid. Speaking for myself, we got rid of a car after consulting the board here. We are in the market for a replacement vehicle. We most likely won't get one before I have a job again though. If you picture the commissioned folks that have seen their salaries cut a 1/3 or even half, I imagine they have been pushed out of the market as well, at least for the time being.
For a lot of us financial savants, the path to where we are today, was the housing bubble, which was the whole enchilada for awhile, but now looks more like a player that hit a ground-rule double and got left on base.
We had to go through Point A to get to Plan B.
I feel like i'm on 3rd base now, no outs and the meat of the order coming up...
dryfly (profile) wrote (in reply to...) on Mon, 9/21/2009 - 10:02 am.
Not trying to raise hackles on a Monday morning - just tired of the old 'capitalism' 'socialism' argument that really doesn't apply UNLESS one consider the modern Mega-MNC as a pseudo arm of the state.
Nobody mentioned socialism, and many of the "socialist" countries of that era, e.g. France, Germany, are still around. If you hadn't reworked the statement to add socialism, you wouldn't have had to get yourself worked up on a Monday morning.
*Avl Dao (profile) wrote on Mon, 9/21/2009 - 10:06 am
Dryfly, good points on the old capitalism/socialism meme.
But you know, folks hate to have a modern fact (SOE, BofA, etc) intrude on a re-telling a cherished favored meme.
*
Except no one actually mentioned socialism. A minor detail
Anyway his big talking point was that Obama knows the American good ship Prosperity is going down, and his ambitious agenda is a smoke screen for the failing economy.
If I were president, and I knew the ship was going down, I'd open up the buffet and say free chips & salsa for everyone.
Vonbek, that's an interesting perspective from your family friend.
I have to say I hope he was subject to some kind of misunderstanding, since what he describes is nihilistic in the extreme. The Oval Office is usually inhabited by sterner stuff, whatever else you may say about past Presidents.
The Court of Arbitration of the Republic of Udmurtia registered a petition in bankruptcy of JSC Izhmash (Izhevsk Mechanical Works), the largest firearms maker in Russia [and maker of the Kalashnikov], Interfax reports. The court hearings to investigate the causes of the petition will be held on October 7, 2009.
That's why I decided to share it, it sort of shocked me, to be honest. This guy is an eternal optimist...and what he was channeling was a stoic resignation.
cinco-x
no they probably have gnats or something like them.
problem is cinco people forget one thing, we are not liked, we have an attitude! we are still upstarts. most people can tell an american a mile away.
Just more Ammo for Congresscritters to take money from savers and future generations to give to scum realtors and homebuilders (who are partially responsible for getting us in this mess) via an extended, increased homebuyer credit.
I dunno know about these generalizations.
I wonder what the Ford White House thought about the economy in Sept 1974, what the Carter White House thought in Feb 1977. There was a mix of people who still thought "their solution" would work...or buy time...and there may have been people who didnt.
we let our experiences of the 25-yr bubble shape too much of our broader thinking too often.
Administrations facing bad economies are not so unknown/unheard of.
hiker - was visiting my son who is a freshman at a midwestern college this weekend and they have had a few hundred cases and have turned one whole hall into a quarantine site - if you have the flu, they move you there for a week - you are excused from all classes and just rest and play video games and watch DVDs (BluRay - dating myself) all day.
The dems supporting the failout was probably the biggest political mistake in my lifetime. If the Dems has supported moral and economically sensible behavior - BK for the failing financial companies and Fed lending to the survivors to hold up the economy - the Republican party would be going the way of the Whigs. I find it hard to believe Obama knew what would happen to the economy (that there would be a depression anyway, on his watch) when he supported that.
now that the insurance is off for mm, what are those people doing to do with their money. to be totally truthful i really thought that was the reason paulson went ape.
i had this pic of hundreds of old blue-haired women at his office beating him with their canes ordering him to do something about their money. i still like that better than it was because of aig, something about blue-haired old women and canes.
why does now make me think about last year this time.? whats going on? somethings not right. really not right.
Housing is usually one of the key engines of recovery (along with consumer spending). The overall recovery will probably be sluggish because both housing and consumer spending will be under pressure for some time.
I talked with a manager at a large appliance OEM [made washing machines]... we had parts in with them and wanted them to forecast their expected demand since we had one part in each unit they produced... they provided a spreadsheet estimate... but then the manager said "It could all be wrong - our estimates are driven by a couple factors - replacements and new build."
He went on to explain that historically washing machines last about 15 years... and that about 80% plus of households have a washing machine in them or access to a washing machine [not quite one to one as some rentals don't have washing machines or share them]. Comes out to something like 150MM units...
So if you divide 150MM by 15 yrs you get replacement demand of about 10MM units a year... times about 80%... say 8MM units a year. That demand was split up among four major producers then [three now].
Now he also added that 'cost of money' & 'jobs' also played a role in WHEN those units were replaced... in recessions or when interest rates were high - folks were more likely to fix an old unit rather than replace. Or if a unit was worn but functional put off replacing until the timing was either critical [catastrophic failure] or family economics were more favorable.
Lastly he added that once you get replacement demand down [the key]... add to that new units... by that he meant units that were to go into new homes, condos & apartments. He said that was almost one to one - few new units come without appliances these days.
::::
So looking back you can see that TWO of the major drivers of appliance demand are running in reverse right now: [1] replacement demand - it is economically 'unfavorable' to replace and [2] fewer new housing units produced.
This demand model probably applies to all kinds of consumer products and services... so the point that CR made about housing as a key to recovery is more than just building... its all the other CONSUMER CONSUMPTION that is also driven by housing.
The dems supporting the failout was probably the biggest political mistake in my lifetime
F.E.,
When push comes to shove, the Banana Republicans and Banana Democrats are the same. They say different things, but their core actions are the same - they both always support the creditors.
I’m prepping for this week’s bank foreclosure sale on 7-Falls Golf Community on the “steps on the County Superior Courthouse” this week.
Bear in mind: At the PEAK of the bubble, 25% of all working adults in 4-county Metro Asheville, NC, were in jobs with a median income of $25,000.
OK, here more details:
Seven Falls was to be a North Carolina “gated mountain community” at 2,000 ft elevation with 1,600 acres (think 1,600 football fields with no endzones) “for 900 families billed as an instant-town built as a Golf & River Club and “the site of the world’s 1st Arnold Palmer Premier Golf Course and Arnold Palmer Golf Academy.
Lot Size 1.25 Acres avg. Lot pricing: $300,000 for sites with wooded views, to $450,000 for Golf Course views. There’s no time frame to build” on ur purchased lot. http://www.sevenfallsnc.com/ .
Available homes to buy: 3,100-3,726sf townhomes are $895K - $1.1 million. Also 2,659-3,068 sf Villas at Palmer Place, starting at $800K.
Developer admits lot sales dried up, with no closings this year. To-date, Seven Falls sold “just under about 170 lots worth $60 million sold between July 2007 and September 2008. Developer took out $17 million for the above townhouses, land acquisition and amenities, and completed the golf academy and 9-hole practice course, and 18-hole Arnold Palmer golf course should be finished Late 2010.
It seems the two 60+ acre parcels up for foreclosure on the courthouse steps this week are those pieces.
Earlier this year, Seven Falls contractors filed $6 million in liens against the project after work stopped in October 2008.
The developer believed that well-off retirees in Florida would forever sell their over-priced homes their “in a hot market” and take bring their lottery-winnings to Asheville. They never believed that Florida would go bust...along with Metro Asheville and elsewhere.
Ahhhhh, life in “Exceptional Asheville” where we are “immune to downturns” cuz “everyone wants to live here!”...and it’s a new paradigm. I’m just glad to be here and witness more history being made.
BTW, the developer claims late Sunday that he just found $17 million in financing.
i had this pic of hundreds of old blue-haired women at his office beating him with their canes ordering him to do something about their money.
By keeping the low end of the yield curve ridiculously, artificially low for so long, Bernanke is holding back the blue-haired economy.
Many people age 70+ have money and aren't interested in much beyond CDs and money market funds.
Their incomes have been cut in half, even including Social Security. So, they've had to cut back consumption. It's a bigger drag on the economy than you may think.
The ability to get 4-5% on a one-year CD is pretty healthy for the blue-haired economy. But it hasn't been there for more than a year, and it isn't looking good for the next year.
Such low rates rob money from older people and give it to banksters.
Fair Economist I completely agree and should have listened to Joseph Stiglitz
Let banks fail
http://bit.ly/10G4I
The Government should allow every distressed bank to go bankrupt and set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice, according to Joseph Stiglitz, the Nobel Prize-winning economist.
BTW, the developer claims late Sunday that he just found $17 million in financing.
I know some 'troubled' small mfgrs who are in similar situation... that are being pressured to sell by their primary debt holders [or file BK]... in the last month they have found 'new funding'. I asked who the H is gonna provide that - to them? Answer: regional banks. They haven't all gone zombie - not yet anyway.
Basel, at least Portland is a REAL city.....and it's the largest in its state.
Asheville just fell to #12 in population in its state and has a mere 77K people, even its Metro is only 360K.
Though both are over-hyped by my fellow progressives, Portland has accomplished a lot more and faces better prospects...Asheville simply over-reached via greed and naivete...and via all these consultants ape'ing what the consultants sold Portland on.
Housing is important, but local governments going bk, w/o a plan B, is more important.
Detroit is gonna lay off policemen and firemen, and I don't know about you, but the Motor City has always represented this odd coming attraction that i've never been to, but have been following, more out of a morbid curiosity than anything else.
Hamburg was rebuilt after WW2, but why was Hamtramck and surrounding areas just left to wither on the vine after business bombed?
The hub sez, and I agree, that the problem is just bigness.
When things get to a certain bigness, certain unpleasant behaviors
result in most cases.
Don't worry Liz, we will not be able to maintain this complexity for long, and some choices will need to be made,
Tainter was right----
1.) The housing credits will likely be extended. Until our foreign bagholders... I mean, debt holders... capitulate, there is no reason not to
2.) Why do we think the fed will stop buying agency debt. I just don't see this happening. Where is the incentive to support a strong dollar at this time?
Foreclosures are unavoidable. So, a single whammy. This charade will go for as long as it can go, until it doesn't.
Can u give us updates later this year on what pct found funding and who didnt? I discount oral claims until they materialize in reality.
Me too - I don't think they'll get the funding - I think it is a head fake claim to buy time so 'principals' do not have to sell at 'distressed levels'. The talk of green shoots has really fortified their resolve to get a better price. Fools.
I have a vested interest in the outcome so am watching closely - let you know what happens.
Oh and it has all the markings of a modern mess - hedge funds, leverage, TARPed banks, regional banks, screwed employees, angry customers & suppliers, pissed off local govs who have supported improvements - got it all right there.
Oh and it has all the markings of a modern mess - hedge funds, leverage, TARPed banks, regional banks, screwed employees, angry customers & suppliers, pissed off local govs who have supported improvements - got it all right there.
I may be showing my youth (age), but was there a time when those things weren't involved in such a transaction? /snark
.
Edit: ugh Why is my Yen moving back up? Who decided to intervene?
Morning all. A long (although technically normal-length) weekend, but somewhat productive.
Finally sat my parents down (with my wife) and went through their investments line by line. Of course, my suggestion for them to move it all out out into cash for the next year or two and sit on the sidelines was somewhat ignored, but at least they got some more practical advice from my investment advisor wife and will move some things around now. I think my parents were just more tickled that their kids care enough to have an investment intervention.
I've done what I can, so no more worrying about it.
Hopefully you all had an even more productive and fulfilling weekend.
3 years ago, my wife and I were on a backcountry tramp (hike) in NZ, going from hut to hut on the Abel Tasman, and one of days, the National Census was taking place. Every motel/hotel in the country, along with every person in charge of hundreds of huts spread far and wide across the country, gave out census forms for us to fill out, because they wanted to get an accurate count of visitors nation-wide on one given day. Try that here...
We all really only "know" a few hundred people @ most. What does a 305 million thread count security blanket really do for us, anyway?
Given what has occurred to date, Its human nature for Ben to be thinking he can now control markets. He is going to be in for one hell of a suprise soon and my feeling is he won't be able to recover from the shock he gets once the markets get away from him.
Asheville simply over-reached via greed and naivete...and via all these consultants ape'ing what the consultants sold Portland on.
Avl, I'll bet the natives (if they haven't all died off) are cheering the fall of the furriners - get rid of em once & for all. Keep us posted on how the auction goes.
We all really only "know" a few hundred people @ most. What does a 305 million thread count security blanket really do for us, anyway?
Oh I'm sure we could get into a philosophical discussion about this line (focussed on the word "know") for the rest of the thread, but I agree with your post. As long as we're not falling into the 'small tightly-knit communities made life better back in the old days' nostalgic trap, of course.
Noob, take a breath and remember in the bigger scheme of things...that was the easier of the various chats we eventually have to have with our aging parents. Count ur blessings.
To what degree is Canada resembling our mess down here.....are ur/their investments domestic? I know Canada's economy is what?...90% intertwined with the US?...so does that mean there's no escaping our situation here 'down south'?
Here's a good RE story: Shaughnessy homeowner stunned by sale of possessions
- $600k third mortgage
- multiple properties owned, including a heritage mansion
- was playing the renovate and resell game
- now living in California
- unhappy in retrospect she got the 3rd mortgage from a cocaine trafficker
I wonder what Californian city she is now a resident of
dryfly (profile) wrote (in reply to...) on Mon, 9/21/2009 - 10:32 am
Except no one actually mentioned socialism. A minor detail
A rose by any other name...
A bogus argument-
Socialist Germany = demand economy
Communist Russia/China = command economy
Playing the Devils Advocate is one thing, but please do not play the part of the Cheshire Cat, and please don't misrepresent Shakespeare.
........seems we'll get more RRE funny-money tax credits.......kinda like a "going out of business sale" that never ends.....Bernanke will continue with what he's told........though hopefully it will be realized and understood by more that the Fed's and the Multi-National Corps' goals are not in OUR best interests. Most J6P get it already - once the global ship starts taking on water, it's time to keep the National rowboat as buoyant as possible.
Their incomes have been cut in half, even including Social Security.
Are you talking real SS income? The nominal value of my mom's SS checks have slightly increase over the past couple years. I'd think there would be a outcry if SS payments were halved.
To what degree is Canada resembling our mess down here.....are ur/their investments domestic? I know Canada's economy is what?...90% intertwined with the US?...so does that mean there's no escaping our situation here 'down south'?
So far we in Canada are skirting much of it. The downturn in automobiles affected southern Ontario manufacturing (which is a huge component of the Ontario and therefore national economy) significantly, but C4C really gave that sector a boost and most people I know who are working directly indirectly in manufacturing are back to work after being laid off. Those in forestry, resource extraction, etc have all been hit hard by the reversion in commodity markets since 2008, although they've started recovering (except timber, of course).
We're completely intertwined with USA. Our much vaunted export trade in commodities with other countries is helpful, and adds significantly to the trade surplus that we've generally enjoyed, but if you guys went dark or anything approaching that our trade with China and other countries wouldn't provide enough work to support one out of every 10 jobs, I'd bet.*
*I haven't run the labour/sector numbers, so no quoting this.
As for my parents, I do wish I had held this discussion a few years ago, as they really had a terrible investment advisor. Somehow, during the stock market boom of 03-07 they still managed to lose money quite frequently, and then finally only regained it when the commodity markets peaked in 08. A big hit when everyone else experienced the hit, but they should have never been that overweight in commodity-related funds and my wife and I would have changed that many years ago.
dryfly (profile) wrote (in reply to...) on Mon, 9/21/2009 - 7:53 am
Oh and it has all the markings of a modern mess - hedge funds, leverage, TARPed banks, regional banks, screwed employees, angry customers & suppliers, pissed off local govs who have supported improvements - got it all right there.
On that last; local govt "participation." Talk about the next shoe to drop. Misallocated "development subsidies"... excuse me, "community infrastructure investment" is the gift that keeps on taking. Let's call them "neutron municipalities." The tax base goes away but the bond obligations remain. Expect the local government equivalent of "swimming naked" to show up shortly.
Oh, you mean 'know' in the biblical sense. That does change things.
I'm talking about the few hundred people that you could pick out in the crowd, because you recognize their face or voice.
Half of them are public figures you've never met in person, and the other half are the ones you know in person.
Part of my job to go to receptions and events attended by a few hundred people and shake hands for hours on end. If I can remember their first name and one detail about their lives for the next time I meet them, I consider myself successful.
On that very shallow tepid scale, I would 'know' well over a thousand (probably closer to 1500) people. Some politicians that I've met have absolutely phenomenal memories for names, faces, and voices and would be in the thousands, I'm sure. I've seen them, unprompted, remember a housewives name they met for five minutes on the campaign trail four years prior. It's incredible.
He grabbed Russell Baker in a corridor at the Capitol and pulled him into his office:
You. I've been looking for you. Have a seat. We need to talk.
He spent the next minutes telling Baker how much he admired him as a newsman, how important he was to LBJ's take on the situation in Congress. Meanwhile, he scribbled a note and called his secretary in. She came back a minute later, and handed LBJ the note. He glanced at it, crumpled it, and threw it away.
Later, Baker found out that the note had said: "Who is this I'm talking to?"
noob goldberg (profile) wrote (in reply to...) on Mon, 9/21/2009 - 8:20 am
Expect the local government equivalent of "swimming naked" to show up shortly.
Having seen the members of my local government, that statement made me shiver involuntarily.
It ain't what's in their shorts that worries me so much as what's in their hearts and minds. If they resemble their constituencies then I expect some form of "well we can just default" attitude. Talk about systemic risk. If you think bailing out the banks was expensive...
I'd say you've maxed out on recognition, your brain can only hold so much you know.
Maybe I know 300 public figures, and 300 people.
Oh absolutely, and I'm probably over-estimating how many I know, but some people can remember volumes of baseball statistics, some can remember pi to 100 decimal places, some can remember all of the chess moves of some distant-passed grandmaster face-off. I suppose my point is that when it's part of your job description, faces are just another statistic, phone number, operation, or other occupational necessity. The brain's an amazing organ.
Noob, are saying that certain politicians are basically 'idiot savants' ....just with better social skillz?
Yes, I'm saying that almost all 'good' politicians, in the sense of being able to be re-elected with relative ease, are, absolutely. In fact, I would consider it almost a prerequisite, unless you're already famous for some other reason.
While I've never met him and tested him on this, apparently the past Prime Minister of Canada, Jean Chretien, was like this. I was talking to a Department of Defence officer one time, who had met Chretien for all of 30 seconds and during that time shook his hand and said his name. This officer (who dealt with terrorism-related concerns) ran into him again three years while providing support to the RCMP, and as Chretien walked out of the Parliament buildings, looked over, saw this guy, and said 'hey John, long time no see.'
No matter what your views on a specific policy may be, if a powerful politician looks over at you and remembers your name, he's probably got your vote, and maybe the vote of your entire family
"his demand model probably applies to all kinds of consumer products and services... so the point that CR made about housing as a key to recovery is more than just building... its all the other CONSUMER CONSUMPTION that is also driven by housing."
Carpet, furniture, miscellaneous home furnishings and linens, small appliances, drapes and blinds, lawn and garden equipment, storage systems, tile, bathroom fixtures, indoor and outdoor plants, tools for home repair, HVAC equipment (central or otherwise),. and on and on.
I think it's more of a "this is how we've always done it" & "what else we we supposed to do"......
NOT doing the school repair project, or the pot-hole filling, or the development aid, just is too hard, no matter what the numbers say.....especially if enough some-ones are willing to buy the debt.
Present optimism aside, I continue to believe that the Treasury and Fed's conclusion that they can buy their way out of trouble with other people's money is not, in the long run, a substitute for fixing problems. Victory laps now are exceedingly premature and are not justified by the facts.
"triple whammy"? Won't happen. Rising foreclosures? Few would argue against that. But as far as governmental "support," it ain't gonna end anytime soon. So long as BHO continues to rely on advisors such as Mark Zandi, there will be no end to the taxpayer dollars that the current administration will throw at the housing market. Even if the current, $8,000 tax credit does expire, D.C. will quickly replace it with another one. One which will cost the taxpayers even more than the current one will have cost. To those in D.C., the economy is all about housing, including partially re-inflating the bubble.
Numero uno-
Rats, second.
That is to say, chipmunks, second.
For a taste of what may happen in the housing market, look at the car sales projection for September by Edmunds:
Cash For Clunkers Hangover Is Here: Edmunds Predicts September SAAR Of 8.8 Million, 28 Year Low | zero hedge
Pulling demand forward only works in the short run.
we'll all pull back to the local and wait for the jubilee
Does Walt Schmidt = ghostfacedinvestah?
Props to ghostfaced for being on top of the magnitude of the MBS purchases...
Open bomb-bay doors and commence bombing run
YouTube - The B-52's - Whammy Kiss (Live)
From last thread:
I doubt there were any real labor shortages. The Eastern Block was loaded with make work jobs, so if they'd really needed people to do work, there would have been the capacity. I'm certain that the real problem was poor production planning and poor allocation of resources, a problem that plagued all of those countries until the breakup of the USSR, and the conversion of China to what is effectively a capitalist system. I can't believe that some folks would actually like to see us go in that direction.
Well we know two things for sure, politically:
There will be an extension of the housing tax credit...the amt and terms may change or be different, and it may be a bad move foscally as per CRs points in earlier posts, but something will get bipartisan support.
2ndly, UE bennnies will be extended again.
No financing rule of thumb, based on the experience of co-ops
here vs condos, hypothesized by me years before the present
Depression, 25 cents on the dollar. And that was when we were
or thought we were prosperous, and well, well before the bubble.
I hear this meme over and over, and its just plain wrong.
Manufacturing is traditionally the enging of recovery. Its easy to be misled because for the past couple of generations we've chosen to manufacture housing.
Hmmm..... not much meat on a chipmunk, a.k.a. ground squirrel-
I meant to say, that's what the east German bus driver told us.
i think some of the tourists believed this.
Here in NC, we actually still do foreclosure sales "on the step of the county courthouse just like they did in the old movies.
. Im going to one in 2 days...with camera in tow.
We have enough houses. I fail to see why one more house should be
built, unless it is somebody's dream house. And the buyer can pretty
much pay cash for it.
We used to have them on the steps. Now they are indoors.
Sigh.
Some of you will enjoy this-
I've been wondering how long it will be before has enough consumers to replace the US consumers completely. They have 4X our population.
Is this even possible?
You are correct, but it should be pointed out that one reason we've chosen to do this is that one can't export this business to China-
At least he doesn't have a you-know-who mustache.
Close enough?
"housing is usually one of the key engines of recovery..."
You can see B.S.Bernutty and the rest of the Ebubblegnomitists push there little buttons, and twisting there little knobs on there ebbublegnomic models...trying to get organically produced statistical numbers to appear...inorganically...to make the model go. The snag is, that non-linear systems don't work like linear pen and paper models. Jerry-rigging them organic numbers is probably gonna do some odd things to the real system.
Hey Neil...got popcorn?
I'm going to assume you mean China. IMNSHO, India will beat them to it-
People pretended to work and the powers that be pretended to pay them...
It was more a world of social-status according to your ability, without monetary compensation, but certainly there were perks.
My aunt is a doctor, and her position got her a drab flat in a more 'chic' part of a beautiful town in which all the shelves of the drab stores were frequently bare, in a drab country full of interesting people that wondered, Is this is good as it gets?
When the wall came tumbling down, there was great optimism.
Compare and contrast to today...
Doing his part as a good party member
I'm going to assume you mean China.
Oops! Yeah, China. I have the flu so brain is running, (crawling) on 5 cylinders
Comrade Misean Long time no see! What's the haps?.
The gov't fails to grasp, that the map is not the territory.
dont you believe it (profile) wrote on Mon, 9/21/2009 - 8:07 am
Manufacturing is traditionally the enging of recovery. Its easy to be misled because for the past couple of generations we've chosen to manufacture housing.
Actually I think our primary export is manufactured numbers. It's an incredibly efficient business model.
I heard some local city governments were so hard up for money, they are thinking of doing a tax on all syntaxes.
Luckily for me, I live in an unincorporated area...
"John Brian Agdomar, 42, of Hackney, East London, got four and a half years for tax credit fraud, relating to the creation of identities for 1,400 imaginary children and the claiming of £1.2m in tax credits."
This is a great idea for a new stimulus package. And viagra isn't required.
What will be the mechanism for both China and India to convert 2.3 billion to middle-income consumers?
No one connects all the dots to pull that off...they just connect memes and tales.
My point is that it will not happen simply via linear extrapolation of today's trends, globally, cuz they are all sustainable...from financing assumptions, to mfg & service industry growth assumptions. It wont happen based on today's assumptions & trends.
EDIT:
More likely they will hit multiple plateaus and valleys before some equilibrium that wont resemble Western middle class at all.
Is extra volatility the analogy between triple whammy and triple witching?
Housing this year is C4C writ large. We pulled a lot of demand forward and, as these programs end, the payback will be a b*tch.
For India & China, all the prosperity trends were based on the global asset valuation and debt bubble that just burst.
So why do we take trends from a bubble we know burst, data from the 1990s and 2000's, and then say that yes, the bubbles all burst and yes, these prosperity trends for China & India will continue.
Makes little sense. Without global bubbles, those trendlines are irrelevant.
Look at the gawdawful mess we off-shored to China?
Our waterways, lakes and land were horribly polluted from making all of that junk, and the brobdingnagians back then saw a win-win situation, we could clean-up our mess, and take advantage of Asian-rates of pay, with no EPA breathing down our necks, Yippee!
Friends that have been to China many times, tell me of the ecological horror all over the place, horribly polluted waterways, lakes and land. And the most interesting thing...
Animals and birds are rather scarce and seldom seen, compared to here.
There is no way that Chindia could ramp up production to the level necessary, to satisfy a few billion middle-class folks on the home-front, not a chance.
Most G8 countries are now issuing debt in USD. Meaning they have to pay back in USD sometime in the future.
What if this is how the FED is kept in line? Or is is a ruse to kill the others' currency once the USD bounced back ?
"one reason we've chosen to do this is that one can't export this business to China"
Kinda the same reason that the costs of education and health care have been increasing faster than wages. I have long been of the opinion that the price of this, that or anything else has more to do w/ money supply than demon doctors or bad teachers.
It's amazing how people pay McKinsey and other over-priced consultants to assume today's trends will go forever, without factoring assorted glass-ceilings in growth due to ecological disasters, unsustianble bubbles, debt-driven shrnkage in consumer spending in Eurozone and USA, and an enlightened dawning amongst some nations that they need to bring some mfg back home and protect "their own".
"We're gonna need a bigger tax credit."
H1N1?
Maybe housing has been so important in recent recoveries because demand and building was severely depressed during the long period in the 70's and 80's when the Fed kept rates high. Certainly affordability (e.g. median income/mortgage rate /HPI index) was at a long-time high in the late 90's, just before the start of the recent bubble. Affordability is good again, but there is now a large oversupply.
@ Journeyman Kinda the same reason that the costs of education and health care have been increasing faster than wages.
Yup. Higher Ed tuition & costs increased proportionate to increases in SallieMae and govt increases in max loan amts and in guarantees and subsidies to private lenders to students.
Now that was linear relationship. Sadly, while this happenned, graduation rates plummeted...the feds dont bother asking for 4-yr grad rates cuz it's such a rarity, they ask for the 6-yr grad rate...and fewer than 50% of students even achieve that.
India doesn't need to do so. I think their middle class is already in the neighborhood of 50,000,000. Double that, and it's close to ours already. Double it again, and they've passed us, especially considering where our middle class is heading now-
H1N1?
I rather doubt it, Cinco, though it hasn't stopped me from threatening Mrs.AB with dieing on my Bday next week.
I feel like warmed-over chipmunk poop.
Gratified to see my question taken seriously.
Good morning everyone,
Had an interesting discussion with a friend of the family this weekend. This friend has very good political connections, mostly with the last administration, but still quite a few with the current. He is a self described equal opportunity (read party) offender. Anyway his big talking point was that Obama knows the American good ship Prosperity is going down, and his ambitious agenda is a smoke screen for the failing economy. By not focusing solely on the economy, he is doing an ADD jaunt through the news cycles. He predicts this will only get worse through 2010. He also suggested that while the public discourse is pushing for various parts of this agenda to be passed swiftly, privately Democrats are hoping for a long drawn out battle to eat up news cycles. Not sure I agree with this point, but found it interesting. The man is quite wealthy, and I managed to ask him privately what he was doing to protect his wealth....the answer was surprising....he said we were in an Alamo moment. He wasn't about to go offshore, he was betting everything on America, and if he lost everything, least he went out fighting and could sleep at night. Very weird conversation. Thought I would share for a perspective.
Avl Dao (profile) wrote on Mon, 9/21/2009 - 8:42 am
It's amazing how people pay McKinsey and other over-priced consultants to assume today's trends will go forever, without factoring assorted glass-ceilings in growth due to ecological disasters, unsustianble bubbles, debt-driven shrnkage in consumer spending in Eurozone and USA, and an enlightened dawning amongst some nations that they need to bring some mfg back home and protect "their own".
There is and has always been profit in telling people what they wanted to hear and ignoring or artistically-interpreting facts that don't fit the theory. The sophists made a nice living by such means, and by fitting dialectical methods to become techniques of propaganda.
If so he should drop a line to my profile contact.
It isn't just the money supply; it's government intervention in the markets. By providing lots of opportunity for guaranteed loans, grants, etc., they've driven up the demand for higher education. Unfortunately, the education has become watered down and the cost has gone way up. Again the Law of Unintended Consequences.
BTW, I went through college at night with a large portion of the cost paid by my employer, but some was paid for by Uncle Sam when I was in the service-
How would we react today?
If the Cuyahoga River was on fire because of all the crap we put into it, like it was 40 years ago...
YouTube - Lake Erie Pollution Problem 1970
The Current Status of the Dollar, Gold and the U.S. Stock Market
YouTube - The Dollar Carry Trade - Dollar Danger Zones
Juvenal, re: Cuyahoga River "What Would Glenn Beck Say?"
LOL
Resistance....ur right. As the Doobies sanged in 1979: "What A Fool Believes....he sees !!!"
To which type of Sophist do you refer? Aristotle or Plato-
"if we don't pay the ex-experts too much, somebody else will"
Unabanker refrain
"There is and has always been profit in telling people what they wanted to hear"
e.g. The Prince
Avl Dao (profile) wrote on Mon, 9/21/2009 - 8:57 am
Resistance....ur right. As the Doobies sanged in 1979: "What A Fool Believes....he sees !!!"
Sadly, the more unbelievable and untenable the lie, the higher the price that must be paid (and the more authority that must be bought) to make people accept it as a revealed truth.
Unfortunately, the education has become watered down and the cost has gone way up. Again the Law of Unintended Consequences.
Gresham's Law applied to "other" fields. Crap will always displace noncrap.
Sorry for the outbursts yesterday, i'm a defender of truth and honesty-not necessarily in that order.
"a large portion of the cost paid by my employer, but some was paid for by Uncle Sam when I was in the service- "
Payment for services already rendered. IMO, you paid for your education even though Uncle Sam wrote the check.
To what? A system of that is 'effectively' a capitalist system?
Two points:
Not trying to raise hackles on a Monday morning - just tired of the old 'capitalism' 'socialism' argument that really doesn't apply UNLESS one consider the modern Mega-MNC as a pseudo arm of the state.
Somewhat OT:
My son's soccer coach is a lawyer that frequently travels to his firm's office in another city. This week's business trip was canceled because of swine flu going through the host office. Has anybody heard similar stories? It will be interesting to see if hotel revpar numbers will correlate to flu cases.
Moody's REAL CPPI July
The National — All Property Type Aggregate Index measured a 5.1% price decline in the month of July. The index now stands 38.7% below the peak measured in October 2007.
· Overall market transaction volume by count declined this month to a low not seen since 2001 following a slight uptick in the previous month. 74 repeat sales transactions totaling $1.2 billion were used in calculating this month’s index.
· Of the four property types, apartments are holding up the best in the eastern region with an annual drop of only 6.0%. In the same period, the national apartment index declined 24.4%.
· Southern apartments declined 44.2% in the past year. Apartment prices in this region are now at their lowest level ever recorded by the CPPI.
· Southern California saw large drops in the office and retail sector, with value declines of 25.8% and 24.2%, respectively. Both sectors are underperforming the nation.
· All three office markets saw prices fall more than 20% over the past year. San Francisco was the worst performer, declining 27.0%.
· Florida apartments, like the southern apartment market overall, saw a dramatic drop in prices over the past four quarters. With an annual decline of 39.8%, apartment prices in Florida have now fallen almost 50% from the peak.
Cinco-X (profile) wrote (in reply to...) on Mon, 9/21/2009 - 8:58 am
ResistanceIsFeudal (profile) wrote on Mon, 9/21/2009 - 9:51 am
There is and has always been profit in telling people what they wanted to hear and ignoring or artistically-interpreting facts that don't fit the theory. The sophists made a nice living by such means, and by fitting dialectical methods to become techniques of propaganda.
To which type of Sophist do you refer? Aristotle or Plato-
I was thinking of the Sophist pre-Socratics, actually... from which came the doctrine of the senses, or in modern form, logical positivism and scientific materialism. Interestingly the Sophists found their professional niche not as philosophers so much as educators.
Of course; 4 years at $395/mo was the price I paid. I wasn't paying a whole lot of tax out of that, though I actually did pay a little. I appreciate what Uncle Sam did for me, but I'm still glad I got the hell out of there. Especially since we started becoming more and more "adventurous" in the following years.
Dryfly, good points on the old capitalism/socialism meme.
But you know, folks hate to have a modern fact (SOE, BofA, etc) intrude on a re-telling a cherished favored meme.
I'm not sure how much cash for clunkers pushed forward demand. Car sales have been premised on financing assumptions that are no longer valid. Speaking for myself, we got rid of a car after consulting the board here. We are in the market for a replacement vehicle. We most likely won't get one before I have a job again though. If you picture the commissioned folks that have seen their salaries cut a 1/3 or even half, I imagine they have been pushed out of the market as well, at least for the time being.
For a lot of us financial savants, the path to where we are today, was the housing bubble, which was the whole enchilada for awhile, but now looks more like a player that hit a ground-rule double and got left on base.
We had to go through Point A to get to Plan B.
I feel like i'm on 3rd base now, no outs and the meat of the order coming up...
Communism/Totalitarianism = command economy
Capitalism = demand economy
Nobody mentioned socialism, and many of the "socialist" countries of that era, e.g. France, Germany, are still around. If you hadn't reworked the statement to add socialism, you wouldn't have had to get yourself worked up on a Monday morning.
Except no one actually mentioned socialism. A minor detail
Anyway his big talking point was that Obama knows the American good ship Prosperity is going down, and his ambitious agenda is a smoke screen for the failing economy.
If I were president, and I knew the ship was going down, I'd open up the buffet and say free chips & salsa for everyone.
Might as well go down happy.
i agree with him on everything especially about leaving. no place to go really.
Hey! It's Spring in Antarctica
Vonbek, that's an interesting perspective from your family friend.
I have to say I hope he was subject to some kind of misunderstanding, since what he describes is nihilistic in the extreme. The Oval Office is usually inhabited by sterner stuff, whatever else you may say about past Presidents.
Why would that be true? I ex-patriated.
modern Mega-MNC as a pseudo arm of the state.
i think it's reversed. the states are arms of the mega-MNC. Goldman and Exxon own more than one government...
So much for stocking up on firearms.
The Court of Arbitration of the Republic of Udmurtia registered a petition in bankruptcy of JSC Izhmash (Izhevsk Mechanical Works), the largest firearms maker in Russia [and maker of the Kalashnikov], Interfax reports. The court hearings to investigate the causes of the petition will be held on October 7, 2009.
Kalashnikov Maker Files for Bankruptcy - Pravda.Ru
burnside,
That's why I decided to share it, it sort of shocked me, to be honest. This guy is an eternal optimist...and what he was channeling was a stoic resignation.
cinco-x
no they probably have gnats or something like them.
problem is cinco people forget one thing, we are not liked, we have an attitude! we are still upstarts. most people can tell an american a mile away.
I'd open up the buffet and say free chips & salsa for everyone.
This is my perception of the healthcare plan.
After trillions for the banksters, you have to throw out a little panem et circenses to the masses.
Just more Ammo for Congresscritters to take money from savers and future generations to give to scum realtors and homebuilders (who are partially responsible for getting us in this mess) via an extended, increased homebuyer credit.
Just say NO to money for the NAR.
I will not buy a house until the market is fair.
If you took all the resources we've wasted in speeded-up war, this past century...
I wonder how much we've used up
300 years worth?
And now it looks like even the arms merchants in Russia are biting the bullet... Broke
I dunno know about these generalizations.
I wonder what the Ford White House thought about the economy in Sept 1974, what the Carter White House thought in Feb 1977. There was a mix of people who still thought "their solution" would work...or buy time...and there may have been people who didnt.
we let our experiences of the 25-yr bubble shape too much of our broader thinking too often.
Administrations facing bad economies are not so unknown/unheard of.
hiker - was visiting my son who is a freshman at a midwestern college this weekend and they have had a few hundred cases and have turned one whole hall into a quarantine site - if you have the flu, they move you there for a week - you are excused from all classes and just rest and play video games and watch DVDs (BluRay - dating myself) all day.
The dems supporting the failout was probably the biggest political mistake in my lifetime. If the Dems has supported moral and economically sensible behavior - BK for the failing financial companies and Fed lending to the survivors to hold up the economy - the Republican party would be going the way of the Whigs. I find it hard to believe Obama knew what would happen to the economy (that there would be a depression anyway, on his watch) when he supported that.
More bad news for Bernanke.
Yahoo! 404 - Page Not Found
i got a question
now that the insurance is off for mm, what are those people doing to do with their money. to be totally truthful i really thought that was the reason paulson went ape.
i had this pic of hundreds of old blue-haired women at his office beating him with their canes ordering him to do something about their money. i still like that better than it was because of aig, something about blue-haired old women and canes.
why does now make me think about last year this time.? whats going on? somethings not right. really not right.
"The court hearings to investigate the causes of the petition will be held on October 7, 2009."
.....I would imagine a BK hearing in the Soviet Union takes on a whole different flavor than our BK "proceedings"......
To get back on topic... CR wrote this:
I talked with a manager at a large appliance OEM [made washing machines]... we had parts in with them and wanted them to forecast their expected demand since we had one part in each unit they produced... they provided a spreadsheet estimate... but then the manager said "It could all be wrong - our estimates are driven by a couple factors - replacements and new build."
He went on to explain that historically washing machines last about 15 years... and that about 80% plus of households have a washing machine in them or access to a washing machine [not quite one to one as some rentals don't have washing machines or share them]. Comes out to something like 150MM units...
So if you divide 150MM by 15 yrs you get replacement demand of about 10MM units a year... times about 80%... say 8MM units a year. That demand was split up among four major producers then [three now].
Now he also added that 'cost of money' & 'jobs' also played a role in WHEN those units were replaced... in recessions or when interest rates were high - folks were more likely to fix an old unit rather than replace. Or if a unit was worn but functional put off replacing until the timing was either critical [catastrophic failure] or family economics were more favorable.
Lastly he added that once you get replacement demand down [the key]... add to that new units... by that he meant units that were to go into new homes, condos & apartments. He said that was almost one to one - few new units come without appliances these days.
::::
So looking back you can see that TWO of the major drivers of appliance demand are running in reverse right now: [1] replacement demand - it is economically 'unfavorable' to replace and [2] fewer new housing units produced.
This demand model probably applies to all kinds of consumer products and services... so the point that CR made about housing as a key to recovery is more than just building... its all the other CONSUMER CONSUMPTION that is also driven by housing.
Gonna be a long dig out from this mess.
The dems supporting the failout was probably the biggest political mistake in my lifetime
F.E.,
When push comes to shove, the Banana Republicans and Banana Democrats are the same. They say different things, but their core actions are the same - they both always support the creditors.
The unholy alliance of finance and politics.
Except no one actually mentioned socialism. A minor detail
A rose by any other name...
kcoop,
Love that quote feature. It's like the "Cone of Silence", except it works.
YouTube - Get Smart - The Cone Of Silence
CR: The spread between Mortgage rates and treasuries will increase when the Fed stops buying MBS (my guess is about 35 bps)
I hope you are correct. My guess is 60 bps for o/o. No change for NOO.
I’m prepping for this week’s bank foreclosure sale on 7-Falls Golf Community on the “steps on the County Superior Courthouse” this week.
Bear in mind: At the PEAK of the bubble, 25% of all working adults in 4-county Metro Asheville, NC, were in jobs with a median income of $25,000.
OK, here more details:
Seven Falls was to be a North Carolina “gated mountain community” at 2,000 ft elevation with 1,600 acres (think 1,600 football fields with no endzones) “for 900 families billed as an instant-town built as a Golf & River Club and “the site of the world’s 1st Arnold Palmer Premier Golf Course and Arnold Palmer Golf Academy.
Lot Size 1.25 Acres avg. Lot pricing: $300,000 for sites with wooded views, to $450,000 for Golf Course views. There’s no time frame to build” on ur purchased lot. http://www.sevenfallsnc.com/ .
Available homes to buy: 3,100-3,726sf townhomes are $895K - $1.1 million. Also 2,659-3,068 sf Villas at Palmer Place, starting at $800K.
Developer admits lot sales dried up, with no closings this year. To-date, Seven Falls sold “just under about 170 lots worth $60 million sold between July 2007 and September 2008. Developer took out $17 million for the above townhouses, land acquisition and amenities, and completed the golf academy and 9-hole practice course, and 18-hole Arnold Palmer golf course should be finished Late 2010.
It seems the two 60+ acre parcels up for foreclosure on the courthouse steps this week are those pieces.
Earlier this year, Seven Falls contractors filed $6 million in liens against the project after work stopped in October 2008.
The developer believed that well-off retirees in Florida would forever sell their over-priced homes their “in a hot market” and take bring their lottery-winnings to Asheville. They never believed that Florida would go bust...along with Metro Asheville and elsewhere.
Ahhhhh, life in “Exceptional Asheville” where we are “immune to downturns” cuz “everyone wants to live here!”...and it’s a new paradigm. I’m just glad to be here and witness more history being made.
BTW, the developer claims late Sunday that he just found $17 million in financing.
Some of my favorite negative icons.
Too many straight lines to consider for this headline...
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Report: 35 million-plus worldwide have dementia
Yahoo! 404 - Page Not Found
asheville is portland east
Thanks.....I was tempted, but much better that you with your experience points that out.......
Fair, while I'm generally in agreement, I put the flashpoint somewhat earlier - beginning with the weekend of September 12 of last year.
With popular sentiment strongly against Paulson's proposals, the Democrats of both houses abandoned their future. Or so it seems to me.
The hub sez, and I agree, that the problem is just bigness.
When things get to a certain bigness, certain unpleasant behaviors
result in most cases.
By keeping the low end of the yield curve ridiculously, artificially low for so long, Bernanke is holding back the blue-haired economy.
Many people age 70+ have money and aren't interested in much beyond CDs and money market funds.
Their incomes have been cut in half, even including Social Security. So, they've had to cut back consumption. It's a bigger drag on the economy than you may think.
The ability to get 4-5% on a one-year CD is pretty healthy for the blue-haired economy. But it hasn't been there for more than a year, and it isn't looking good for the next year.
Such low rates rob money from older people and give it to banksters.
Fair Economist I completely agree and should have listened to Joseph Stiglitz
Let banks fail
http://bit.ly/10G4I
The Government should allow every distressed bank to go bankrupt and set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice, according to Joseph Stiglitz, the Nobel Prize-winning economist.
May the gods bless dryfly for he is a Herald of Truth for that statement alone. +1 for you!
Off to save the world by looking at (and perhaps buying)
walkin handicapped bathtubs.
BTW, the developer claims late Sunday that he just found $17 million in financing.
I know some 'troubled' small mfgrs who are in similar situation... that are being pressured to sell by their primary debt holders [or file BK]... in the last month they have found 'new funding'. I asked who the H is gonna provide that - to them? Answer: regional banks. They haven't all gone zombie - not yet anyway.
How bout some music this morning, maybe a little Jimmie Rodgers:
Mule Skinner Blues
Basel, at least Portland is a REAL city.....and it's the largest in its state.
Asheville just fell to #12 in population in its state and has a mere 77K people, even its Metro is only 360K.
Though both are over-hyped by my fellow progressives, Portland has accomplished a lot more and faces better prospects...Asheville simply over-reached via greed and naivete...and via all these consultants ape'ing what the consultants sold Portland on.
Housing is important, but local governments going bk, w/o a plan B, is more important.
Detroit is gonna lay off policemen and firemen, and I don't know about you, but the Motor City has always represented this odd coming attraction that i've never been to, but have been following, more out of a morbid curiosity than anything else.
Hamburg was rebuilt after WW2, but why was Hamtramck and surrounding areas just left to wither on the vine after business bombed?
dry, I like ur posts...I have a mfg background as well.
Can u give us updates later this year on what pct found funding and who didnt?
I discount oral claims until they materialize in reality.
Got work to do - catch up later.
You Cannot Be Serious: US Strategy for the G20
You Cannot Be Serious: US Strategy for the G20 « The Baseline Scenario
got to go to the store and spend money,
Oddly, I'm starting to understand why people like Confucius spoke so poorly of the merchant class...
The hub sez, and I agree, that the problem is just bigness.
When things get to a certain bigness, certain unpleasant behaviors
result in most cases.
Don't worry Liz, we will not be able to maintain this complexity for long, and some choices will need to be made,
Tainter was right----
Here are my thoughts:
1.) The housing credits will likely be extended. Until our foreign bagholders... I mean, debt holders... capitulate, there is no reason not to
2.) Why do we think the fed will stop buying agency debt. I just don't see this happening. Where is the incentive to support a strong dollar at this time?
Foreclosures are unavoidable. So, a single whammy. This charade will go for as long as it can go, until it doesn't.
Can u give us updates later this year on what pct found funding and who didnt? I discount oral claims until they materialize in reality.
Me too - I don't think they'll get the funding - I think it is a head fake claim to buy time so 'principals' do not have to sell at 'distressed levels'. The talk of green shoots has really fortified their resolve to get a better price. Fools.
I have a vested interest in the outcome so am watching closely - let you know what happens.
Oh and it has all the markings of a modern mess - hedge funds, leverage, TARPed banks, regional banks, screwed employees, angry customers & suppliers, pissed off local govs who have supported improvements - got it all right there.
See you all later.
I may be showing my youth (age), but was there a time when those things weren't involved in such a transaction? /snark
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Edit: ugh Why is my Yen moving back up? Who decided to intervene?
Morning all. A long (although technically normal-length) weekend, but somewhat productive.
Finally sat my parents down (with my wife) and went through their investments line by line. Of course, my suggestion for them to move it all out out into cash for the next year or two and sit on the sidelines was somewhat ignored, but at least they got some more practical advice from my investment advisor wife and will move some things around now. I think my parents were just more tickled that their kids care enough to have an investment intervention.
I've done what I can, so no more worrying about it.
Hopefully you all had an even more productive and fulfilling weekend.
Small is beautiful.
3 years ago, my wife and I were on a backcountry tramp (hike) in NZ, going from hut to hut on the Abel Tasman, and one of days, the National Census was taking place. Every motel/hotel in the country, along with every person in charge of hundreds of huts spread far and wide across the country, gave out census forms for us to fill out, because they wanted to get an accurate count of visitors nation-wide on one given day. Try that here...
We all really only "know" a few hundred people @ most. What does a 305 million thread count security blanket really do for us, anyway?
Given what has occurred to date, Its human nature for Ben to be thinking he can now control markets. He is going to be in for one hell of a suprise soon and my feeling is he won't be able to recover from the shock he gets once the markets get away from him.
Asheville simply over-reached via greed and naivete...and via all these consultants ape'ing what the consultants sold Portland on.
Avl, I'll bet the natives (if they haven't all died off) are cheering the fall of the furriners - get rid of em once & for all. Keep us posted on how the auction goes.
Oh I'm sure we could get into a philosophical discussion about this line (focussed on the word "know") for the rest of the thread, but I agree with your post. As long as we're not falling into the 'small tightly-knit communities made life better back in the old days' nostalgic trap, of course.
Noob, take a breath and remember in the bigger scheme of things...that was the easier of the various chats we eventually have to have with our aging parents. Count ur blessings.
To what degree is Canada resembling our mess down here.....are ur/their investments domestic? I know Canada's economy is what?...90% intertwined with the US?...so does that mean there's no escaping our situation here 'down south'?
When I say "know", I mean it.
ha ha
I'm talking about the few hundred people that you could pick out in the crowd, because you recognize their face or voice.
Half of them are public figures you've never met in person, and the other half are the ones you know in person.
Here's a good RE story: Shaughnessy homeowner stunned by sale of possessions
- $600k third mortgage
- multiple properties owned, including a heritage mansion
- was playing the renovate and resell game
- now living in California
- unhappy in retrospect she got the 3rd mortgage from a cocaine trafficker
I wonder what Californian city she is now a resident of
A bogus argument-
Socialist Germany = demand economy
Communist Russia/China = command economy
Playing the Devils Advocate is one thing, but please do not play the part of the Cheshire Cat, and please don't misrepresent Shakespeare.
........seems we'll get more RRE funny-money tax credits.......kinda like a "going out of business sale" that never ends.....Bernanke will continue with what he's told........though hopefully it will be realized and understood by more that the Fed's and the Multi-National Corps' goals are not in OUR best interests. Most J6P get it already - once the global ship starts taking on water, it's time to keep the National rowboat as buoyant as possible.
Are you talking real SS income? The nominal value of my mom's SS checks have slightly increase over the past couple years. I'd think there would be a outcry if SS payments were halved.
So far we in Canada are skirting much of it. The downturn in automobiles affected southern Ontario manufacturing (which is a huge component of the Ontario and therefore national economy) significantly, but C4C really gave that sector a boost and most people I know who are working directly indirectly in manufacturing are back to work after being laid off. Those in forestry, resource extraction, etc have all been hit hard by the reversion in commodity markets since 2008, although they've started recovering (except timber, of course).
We're completely intertwined with USA. Our much vaunted export trade in commodities with other countries is helpful, and adds significantly to the trade surplus that we've generally enjoyed, but if you guys went dark or anything approaching that our trade with China and other countries wouldn't provide enough work to support one out of every 10 jobs, I'd bet.*
*I haven't run the labour/sector numbers, so no quoting this.
As for my parents, I do wish I had held this discussion a few years ago, as they really had a terrible investment advisor. Somehow, during the stock market boom of 03-07 they still managed to lose money quite frequently, and then finally only regained it when the commodity markets peaked in 08. A big hit when everyone else experienced the hit, but they should have never been that overweight in commodity-related funds and my wife and I would have changed that many years ago.
I like a bathtub that stays where I put it
or did you mean walk-in?
dryfly (profile) wrote (in reply to...) on Mon, 9/21/2009 - 7:53 am
Oh and it has all the markings of a modern mess - hedge funds, leverage, TARPed banks, regional banks, screwed employees, angry customers & suppliers, pissed off local govs who have supported improvements - got it all right there.
On that last; local govt "participation." Talk about the next shoe to drop. Misallocated "development subsidies"... excuse me, "community infrastructure investment" is the gift that keeps on taking. Let's call them "neutron municipalities." The tax base goes away but the bond obligations remain. Expect the local government equivalent of "swimming naked" to show up shortly.
I tend to think the the problem is cowardice. That and sloth.
Gotta stay in the comfort zone.
Oh, you mean 'know' in the biblical sense. That does change things.
Part of my job to go to receptions and events attended by a few hundred people and shake hands for hours on end. If I can remember their first name and one detail about their lives for the next time I meet them, I consider myself successful.
On that very shallow tepid scale, I would 'know' well over a thousand (probably closer to 1500) people. Some politicians that I've met have absolutely phenomenal memories for names, faces, and voices and would be in the thousands, I'm sure. I've seen them, unprompted, remember a housewives name they met for five minutes on the campaign trail four years prior. It's incredible.
noob,
I'd say you've maxed out on recognition, your brain can only hold so much you know.
Maybe I know 300 public figures, and 300 people.
That's my world.
Having seen the members of my local government, that statement made me shiver involuntarily.
LBJ story:
He grabbed Russell Baker in a corridor at the Capitol and pulled him into his office:
You. I've been looking for you. Have a seat. We need to talk.
He spent the next minutes telling Baker how much he admired him as a newsman, how important he was to LBJ's take on the situation in Congress. Meanwhile, he scribbled a note and called his secretary in. She came back a minute later, and handed LBJ the note. He glanced at it, crumpled it, and threw it away.
Later, Baker found out that the note had said: "Who is this I'm talking to?"
Noob, are saying that certain politicians are basically 'idiot savants' ....just with better social skillz?
'polyscivants'
noob goldberg (profile) wrote (in reply to...) on Mon, 9/21/2009 - 8:20 am
Expect the local government equivalent of "swimming naked" to show up shortly.
Having seen the members of my local government, that statement made me shiver involuntarily.
It ain't what's in their shorts that worries me so much as what's in their hearts and minds. If they resemble their constituencies then I expect some form of "well we can just default" attitude. Talk about systemic risk. If you think bailing out the banks was expensive...
Denninger is on-board with this outlook on housing-
Oh absolutely, and I'm probably over-estimating how many I know, but some people can remember volumes of baseball statistics, some can remember pi to 100 decimal places, some can remember all of the chess moves of some distant-passed grandmaster face-off. I suppose my point is that when it's part of your job description, faces are just another statistic, phone number, operation, or other occupational necessity. The brain's an amazing organ.
Yes, I'm saying that almost all 'good' politicians, in the sense of being able to be re-elected with relative ease, are, absolutely. In fact, I would consider it almost a prerequisite, unless you're already famous for some other reason.
While I've never met him and tested him on this, apparently the past Prime Minister of Canada, Jean Chretien, was like this. I was talking to a Department of Defence officer one time, who had met Chretien for all of 30 seconds and during that time shook his hand and said his name. This officer (who dealt with terrorism-related concerns) ran into him again three years while providing support to the RCMP, and as Chretien walked out of the Parliament buildings, looked over, saw this guy, and said 'hey John, long time no see.'
No matter what your views on a specific policy may be, if a powerful politician looks over at you and remembers your name, he's probably got your vote, and maybe the vote of your entire family
Spot on, and scary, IMHO
NYS Empire Zone.......
US Empire Zone.....
"his demand model probably applies to all kinds of consumer products and services... so the point that CR made about housing as a key to recovery is more than just building... its all the other CONSUMER CONSUMPTION that is also driven by housing."
Carpet, furniture, miscellaneous home furnishings and linens, small appliances, drapes and blinds, lawn and garden equipment, storage systems, tile, bathroom fixtures, indoor and outdoor plants, tools for home repair, HVAC equipment (central or otherwise),. and on and on.
I think it's more of a "this is how we've always done it" & "what else we we supposed to do"......
NOT doing the school repair project, or the pot-hole filling, or the development aid, just is too hard, no matter what the numbers say.....especially if enough some-ones are willing to buy the debt.
"Housing Suffering Relapse Confronts Bernanke Credit Conundrum"
Present optimism aside, I continue to believe that the Treasury and Fed's conclusion that they can buy their way out of trouble with other people's money is not, in the long run, a substitute for fixing problems. Victory laps now are exceedingly premature and are not justified by the facts.
"I see you shiver, with ( ... wait for it ...) anticipation !"
"triple whammy"? Won't happen. Rising foreclosures? Few would argue against that. But as far as governmental "support," it ain't gonna end anytime soon. So long as BHO continues to rely on advisors such as Mark Zandi, there will be no end to the taxpayer dollars that the current administration will throw at the housing market. Even if the current, $8,000 tax credit does expire, D.C. will quickly replace it with another one. One which will cost the taxpayers even more than the current one will have cost. To those in D.C., the economy is all about housing, including partially re-inflating the bubble.