Monday Reading
By Barry Ritholtz - October 19th, 2009, 4:39PM
Quick reads:
• FDIC Failed to Limit Commercial Real-Estate Loans, Reports Show (Bloomberg)
• Einhorn on gold, sovereign default, and more (Winkler)
• The Stock Market Has Never Been This (Intermediate-Term) Overbought (Hussman)
• Builder Confidence Slips in October (NAHB)
• Oil Hits 1 – Year High Above $79 (Reuters)
• Moody’s/REAL Commercial Property Price Indices Off 41% Since 07 Peak (Bloomberg)
• Apple Q4 Results: Big Q, More Macs And iPhones Sold Than Ever Before (TechCrunch)
Anything else worth reading?
October 19th, 2009 at 4:41 pm
AAPL and TXN rocking AH. Looks like a mega spike day tomorrow. More positive earnings – anyone still not believing this mini economic boom??
October 19th, 2009 at 4:59 pm
TXN- Sales fell 15 percent to $2.88 billion.
sounds like great news-
break out the Champagne
October 19th, 2009 at 5:01 pm
Apparently me and Hussman.
October 19th, 2009 at 5:02 pm
. . .and ahab.
October 19th, 2009 at 5:03 pm
http://www.ft.com/cms/s/0/07203ef2-ba8a-11de-9dd7-00144feab49a.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1
Central banks fuel risky assets
“The world is a liquidity junkie,” says Alan Ruskin, strategist at RBS Securities.
“Pretty much every trade is functioning off the fact that short-term financing costs across the G7 are about as close to zero as they ever will be. It creates an incentive to take on risk all over the map.”
There is a growing worry that this week’s convergence towards key levels means the risk trade may be approaching a point where some investors are tempted to cash in gains.
The S&P 500 closed at a 12-month peak of 1,096.56 on Thursday, shy of the 1,100 year-end target established by many analysts. To date, the S&P has rallied 60 per cent from its low in March. This bounce has characterised the performance of global equity markets in recent months.
“Broadly speaking, markets are moving together and you can’t rule out the possibility of a correction,” said Stuart Schweitzer, global markets strategist for JPMorgan’s Private Bank.
“I encounter a lot more pessimism than optimism about the outlook for equities from meetings with clients,” he added.
One source of concern is that the equities rally has been mainly an institutional affair, with retail investors staying on the sidelines. This, say some observers, suggests a “traders’ market” with the risk that at some point this year’s big rebound in risky assets – oil is up 120 per cent from its February low of about $34 a barrel, while US high-yield corporate bonds have generated returns in the region of 50 per cent year to date – will meet a wall of profit-taking.”
…Perzactly as we’ve been ruminating about for months…
…It seems to me that the MSM economics-wise comes to rooms like this for ideas…
and Barry, I saw what you did this morning..pretty slick…It did seem an awful lot like my usual post!…you are welcome to post under my alias anytime…
October 19th, 2009 at 5:04 pm
And B in T…
October 19th, 2009 at 5:04 pm
How the Servant Became a Predator: Finances Five Fatal Flaws
http://www.huffingtonpost.com/william-k-black/how-the-servant-became-a_b_318010.html
Good article on how the financial sector created the mess we are in. We’re screwed.
October 19th, 2009 at 5:04 pm
re the federal marijuana policy-
about time- ridiculous waste of resources to combat an almost harmless recreational drug-
it’s weed for crying out loud- why does anyone care that it is controlled at all- should be completely legalized-
this country is so awash w/ putitans- “just say no”-
makes me laugh- who cares
October 19th, 2009 at 5:16 pm
What do you mean by “boom”? “Boom” in free money making its way somewhere? Sure.
MegaMillions Bonuses for Wall Street. Food stamps for Main Street.
October 19th, 2009 at 5:21 pm
Pot legalization couldn’t come at a better time. Stoners don’t protest — do they? Keep them stoked with Cheetos and Wii. (Hey, if you compare that to previous generations, it isn’t so bad.)
October 19th, 2009 at 5:22 pm
Is their a connection between the economy and the stock market? Was their a connection between the economy and the housing bubble?
The economy during the housing boom wasn’t good… Lots of MEW, low rates and not much in the way of jobs except for those sectors inflated by the bubble… The indices have exploded since March 09… however I think that the MSM and most pundits are missing the big story, which are the individual stocks and commodities plays… In short, with global coordinated ZIRP and guarantees, the question isn’t what will be the next bubble, because this is the next bubble. There are so many individual stocks that are up 100%-400% and more since OCT 08 that its crazy…
This rally has little to do with the economy, its an asset bubble… For some reason, people assumed the governments would get religion after the crisis but they just inflated assets by offering free money…
October 19th, 2009 at 5:23 pm
Ahab, excatly although I do not myself abide in it, would rather have a beer then a bong, but there are far more harmful things in this country that are leagel…….. Like marriage……..
BTW saw a car insurance commercial this weekend – Capatain Ahab was looking for insurance, wasn’t you was it
October 19th, 2009 at 5:25 pm
Whoooaaaaa Wunsacon – I protest at your stoners being none protesters. ahhhh forget it dude your right, but hey we can split a mt dew and bag of doritos ok.
October 19th, 2009 at 5:28 pm
October 19th, 2009 at 5:32 pm
wunsacon-
many drugs during the hippy days- and mass demonstrations- coincidence? full disclosure i haven’t smoked herb since the early 80’s- just do not see it as a big deal to waste valuable resources on trying to combat-
silliness
420d- there are also more harmful things that are illegal like fraud- which i am waiting for the USG to get more vigilant about-
billionaire ponzi and insider trading schemes pretty much says it all
October 19th, 2009 at 5:34 pm
Harry Wanger,
“anyone still not believing this mini economic boom??”
Anyone still not believing in invisible, pink unicorns? In what exactly would I believe, if I believed in “this mini economy boom”, Harry? What is a “mini economic boom” supposed to be? Please explain.
Anyone, except Harry of course, who can’t back his believe, still believing this market is “undervalued”?
rc
October 19th, 2009 at 5:35 pm
After Obamunist the Communist (just made that one up all by myself!) launched his nationalization of the auto industry, healthcare (including legal drugs), and the financial industry, and got control of the press under way with his attacks on Fox News, he’s now turning to nationalization of the illegal drug industry.
Profit’s got to come from SOMEPLACE, right?
October 19th, 2009 at 5:36 pm
Singer,
You are absolutely correct about the bubble. But our Fed (now with the complicity of Treasury) is a one-trick pony. They don’t know any other way to generate economic growth.
It might go on for quite a while. What’s going to pop it? A dollar collapse? See Einhorn.
October 19th, 2009 at 5:38 pm
Mini-boom for existing housing, like me and some other folks (Mannwich?) remarked about recently:
http://www.calculatedriskblog.com/2009/10/campbell-surveys-mini-boom-in-existing.html
*What* will the government and the GSE’s — and by “GSE” I include the big banks — do about the huge inventory? We probably won’t find out until next year.
The question I have to ask myself (“punk”) is: Can “extend & pretend” keep enough inventory in check for so long (while new builds stay low) that they’ll never have to liquidate at lower price points? As a renter (aka prospective house buyer), that’s the $64,000 question. (And this whole charade is an attempt by the TPTB to make people like me conclude “yes”.) Honestly, in all the confusion, I’m not really sure of the answer. (But, I rarely feel lucky, so I’ll sit this out, thank you.)
October 19th, 2009 at 5:38 pm
rc Says-
“Anyone still not believing in invisible, pink unicorns”
rc- harry believes in those too-
there is a mini-boom in unicorns- especially of the invisible pink variety
October 19th, 2009 at 5:39 pm
Great numbers out of apple…Congrats, iSlaves!
October 19th, 2009 at 5:42 pm
I’m going to say it. I’ve missed Franklin, at least he lays out (semi) coherent arguments for his stances.
October 19th, 2009 at 5:45 pm
worth-
speaking of commies- the Republicans are trying to EXPAND the home buyer tax credit to everyone and making it $15,000
love that limited government- lol-
sure seems to be a benefit to . . .i don’t know . . . RE agents- home builders, mortgage companies
October 19th, 2009 at 5:50 pm
Thank you Franklin, although we prefer the terms iFollowers or iBrothers and iSisters. As Dear Leader has said, iSlaves is condescending and implies a blind faith and lack of choice which of course is not true. We have in fact the freedom to choose any of the Apple products available.
October 19th, 2009 at 5:50 pm
f411-
why you so anti-Apple???
you are the exact demographic they go after-
just curious
full disclosure- do not own an Apple product personally- so no bias here- just not necessarily anit-Apple either
October 19th, 2009 at 5:52 pm
greg-
do you have Apple radar?? everytime Apple is a topic-
you appear
October 19th, 2009 at 5:52 pm
ahab,
EVERYONE??? Holy crap – do you know what that means? I can get 10 people together. I buy a house for $150k, less the $15k credit. Then I sell it to the next guy for $135k less the $15k credit, and so on down the line, and at the end, we have a FREE $150k house, which we then sell for $300k (since that home credit will start a whole new housing bubble all over again).
yours truly,
Bernie Mad-oops, I mean, Tom Worth
October 19th, 2009 at 5:55 pm
call me ahab @ 5:04
“this country is so awash w/ puritans…”
It’s also about the entrenched interests… drug interdiction efforts by the DEA, or DEA agents looking for marijuana plants; lawyers who prosecute or defend drug offenders, etc. Lots of money being made off the status quo.
I’m no big fan of tax increases, but think of all the money the government could raise by legalizing weed and taxing it.
October 19th, 2009 at 6:06 pm
@ahab
Apple is kind of like the bad old days of PC, when if you had a Compaq computer you had to buy Compaq peripherals because it was proprietary. PC evolved without those fetters, but Apple did not.
And yet, Apple users still maintain that smugness that pretends that Apple isn’t a megacorporation that is just as profitable and just as “evil” as Microsoft (although I disagree that MS is evil…corporations are like most people…they’re neither good nor evil. They just do what they think they can get away with under the circumstances).
October 19th, 2009 at 6:06 pm
>> the Republicans are trying to EXPAND the home buyer tax credit to everyone and making it $15,000
First of all, “holy cow”.
Second, I wonder how high the credit will eventually go? Do you think in 1 year Congress will double it again to $30,000? How high can we go? Bwahahaha…
October 19th, 2009 at 6:07 pm
Ahab….
I’m actually using iRadar which is presently being tested by a few of the Apple faithful. It basically sends an automatic alert to my iMac whenever a blog such as this one has any mention of Apple, and we are then expected to engage and participate in the forum, in the hopes of converting those who have yet to see the many benefits of an Apple lifestyle. I can assure you though, it’s perfectly harmless. Honest.
October 19th, 2009 at 6:08 pm
wunsacon @ 6:06
So much for the party of fiscal restraint.
Why don’t we just put Bernie Sanders in charge.
October 19th, 2009 at 6:09 pm
>> I disagree that MS is evil
Once any company dominates its market enough, it likely stops innovating and becomes a rentier.
October 19th, 2009 at 6:09 pm
Apple is a consumer driven company. Supposedly said consumer is dead – at least that’s what the Failure Caucus here repeats daily. Well, guess what? A consumer driven company is putting up unbelievable sales numbers. TJX, another consumer discretionary ups their guidance after beating. Says October is looking amazingly strong. Other than the people on this forum, it seems like the consumer is out buying this year. None of my friends who has been laid off has failed to find a job. They’re all back to work. Of course, they’re white collar positions but those are the folks stimulating the economy anyway.
October 19th, 2009 at 6:14 pm
“Extend and pretend” is as stupid and obnoxious as “green shoots”. There is nothing pretend about it. You’ve all talked about the mini housing boom. I keep telling you the consumer is not even close to dead and today’s discretionary numbers show that.
BTW: Mannwich, I was in your town for business last week. Went to a huge pub/grill after meetings for happy hour. The place had to hold 200 plus people. Waiting list all night. Went to a neighborhood pasta bar, 2 hour wait we were told on the phone. Twin Cities looked pretty vibrant to me on the discretionary spending front.
October 19th, 2009 at 6:16 pm
greg-
DL-
no doubt- the whole pot thing is so silly- the feds can tax it all they want- instead of prosecuting all those dangerous “pot smokers” – which is a waste of time and resources-
so people like getting stoned- so what?
October 19th, 2009 at 6:20 pm
“Earth is passing through a stream of debris from Halley’s Comet, the source of the Orionids,” says Bill Cooke of NASA’s Meteoroid Environment Office. “Flakes of comet dust hitting the atmosphere should give us dozens of meteors per hour.”
The best time to look is before sunrise on Wednesday, Oct. 21st. That’s when Earth encounters the densest part of Halley’s debris stream. Observing is easy: Wake up a few hours before dawn, brew some hot chocolate, go outside and look up. No telescope is required to see Orionids shooting across the sky…”
http://science.nasa.gov/headlines/y2009/19oct_orionids.htm?list1012199
~~
Gerald Celente-Their is NO Economic Recovery-Its A COVERUP
http://eclipptv.com/viewVideo.php?video_id=7886
~~
“A Washington Post report published Sunday is drawing a wave of cheers across the Internet for revealing what is being hailed as “the truth” about Iran’s nuclear program.
Specifically, the report states that Iran is incapable of producing a nuclear bomb within the next six to eight years, turning on ear repeated claims in media that Iran is only a short time away from possessing such a weapon…”
http://rawstory.com/2009/10/report-iran-incapable-producing-nuke-years/
~~
While out spying the Show of Night Sky, reflect upon what Celente lays out, and know that the Iran-scare is, just, another distraction engineered to substract your attention from your own Accounts..
October 19th, 2009 at 6:22 pm
I can’t remember where I heard this quote from but…
“They’ll legalize marijuana when they figure out they can make more money taxing it than they can pretending to stop it.”
Just like how war profiteering is a major reason why we aren’t out of Iraq and Afghanistan yet, lots of money is made on our “prison-industrial complex” here domestically. We have 5% of the world’s population and 25% of it’s prisoners. Lots of those are for non-violent crime like possession of marijuana.
My two suggestions:
1) No corporate lobbying or campaign contributions. Only individual citizens. Government is for the people.
2) Congresspeople have to move all of their investments into a blind trust for the duration of their service.
Naive, I know. But did you know?
- Dick Cheney invested in funds that specialized in prison-related investments, like a company that set up snack bars in lethal injection chambers?
- Rumsfeld made (is making?) a killing off his Gilead Sciences investments when he was fearmongering about the bird flu and the government bought all that Tamiflu.
I can only assume a large majority of our elected representatives have similar conflicts of interest. Like Obama, Geithner, and Wall Street.
Our country is becoming a joke, thanks to our elite “leaders” and corporations, most of whom apparently view positions of power and responsibility solely as a way to maximize profits for their friends and the companies they are invested in, myopically damning the foundation of people that their power and wealth is built upon.
We, the People, WON’T STAND FOR IT AN…. oh wait, NFL is here! And look at that balloon boy hoax! Did you see Dancing with the Stars? And that actress I’ve never heard of got a DUI! Wait, what was I saying? Nevermind.
October 19th, 2009 at 6:25 pm
Pot is pretty much already legal here in CA. You can get a medical card for it in about 10 minutes. There are hundreds of dispensaries in LA alone, one right around the corner from where I live come to think of it.
Read an article on it the other day. Although they don’t tax the weed, the owners of the dispensary are required to pay taxes on their income, as well as income taxes for the people they employee. I’m not sure the state of California would want to give up that revenue, as little as it may be. If they were smart they’d slap a sales tax on it.
October 19th, 2009 at 6:29 pm
Harry Wanger,
“None of my friends who has been laid off has failed to find a job. They’re all back to work. Of course, they’re white collar positions but those are the folks stimulating the economy anyway.”
And industrial production is the best in four years.
And the stock market is undervalued.
And Harry Wanger gets many emails thanking him for his great investment advise.
rc
October 19th, 2009 at 6:29 pm
Hoff, nice link on the Iran situation. Did you see the comments the other week by El Baradei, stating that the greatest danger to the region isn’t Iran’s nukes, but Israel’s aggression?
Also, good post by Greenwald today on “why they hate us”…
http://www.salon.com/opinion/greenwald/2009/10/19/rohde/
Even with all that, I think another war would do wonders to distract our fellow citizens from their economic worries! Also, GE was down a bit this quarter, it’s our duty to order more weapons from them and their subsidiaries to support this fine American corporation who only has our best interests at heart. If you don’t believe me, go watch some of NBC’s analysis on the situation.
October 19th, 2009 at 6:30 pm
Hoffer: Regarding Gerald Celente:
“The crazed doom-and-gloom prophets of our world have this troubling ability to occupy the airwaves, becoming strangely confused with qualified experts. Gerald Celente is the latest soothsayer operating on his hunches — now being celebrated on Digg, Reddit, and just about every damn aggregator imaginable.”
Great article that supports The Failure Caucus first proposed months ago by Business Week. Please refrain from posting these “experts” as if they actually have credibility.
October 19th, 2009 at 6:35 pm
dogfish says-
“We, the People, WON’T STAND FOR IT AN…. oh wait, NFL is here!”
sadly dogfish- i hear ya- but i can’t stop from wasting my whole Sunday watching football and watching my fantasy picks-
sad
October 19th, 2009 at 6:36 pm
Wow. Some of this thread tops all. Hoffer and the cosmic shit storm. Dogfish and the veeps death ray candy machines – personally I think that was his plan for all of us. Another rendition of I’m Just Wild About Harry. Looks like the bud might have snuck under the wire early. Personally I’d love to grow a couple of plants along with the tomatoes just because they are so colorful these days and have such a relaxed posture. Gave up smoking decades ago.
October 19th, 2009 at 6:36 pm
Einhorn’s speech is good stuff.
October 19th, 2009 at 6:36 pm
rootless: You are correct on every point. Although I believe the DJIA will be fairly valued at 11,500 then over shoot to the upside on stronger GDP numbers.
October 19th, 2009 at 6:38 pm
I’m tired of this shit. America can go to hell. Let the revolution begin.
October 19th, 2009 at 6:45 pm
ahab, same here. i’m as much of a part of the problem as anyone else.
I struggle paycheck-to-paycheck these days (Current bank balance of negative $250) after getting laid off twice last year in downsizing moves, and now make almost 50% less than I did before. My expenses did not experience a similar cut. I do take the time to stay relatively informed, but barely have the resources to pay rent and put food on the table, much less go out and try to make a difference, if any could be made at all.
GO PANTHERS.
October 19th, 2009 at 6:47 pm
bsneath, I agree with your 1st and 3rd sentences. That 2nd one might get you punched in the face.
October 19th, 2009 at 6:47 pm
@Marcus: Count me in that group.
October 19th, 2009 at 6:56 pm
This is not a country to be proud of at the moment.
I repeat, America can go to hell.
October 19th, 2009 at 6:58 pm
I actually agree with franklin411 re: Apple. Makes me want to go out and get another blackberry or wait for something better. Android perhaps?
October 19th, 2009 at 6:59 pm
Blackberry – I just got a new one. Love it
October 19th, 2009 at 7:02 pm
@Thor: Which model?
October 19th, 2009 at 7:04 pm
@Wanger: Which pasta bar? Broders? That one’s right near my house and in an affluent neighborhood. Always busy. it’s family owned and in institution here. Very good. Not very big either.
Which pub? Britt’s? The Local? If so, either are probably the most popular bars in the city. They’re always busy too. That tells me nothing whatsoever.
October 19th, 2009 at 7:19 pm
From Hussman’s link above
-2.4 million foreclosures this year
- 8.1 MILLION foreclosesures over the next 4 years
“Several facts are worth noting. In September 2007, about a month before the stock market peaked and well before credit strains were obvious, the CRL testified to Congress about the wave of coming subprime foreclosures, encouraging Congress to act before the crisis escalated. “As it turned out,” the CRL noted in its latest testimony, “our predictions – dismissed by some as pessimistic – actually underestimated the dimensions of the crisis.”
This is important, because here is what the CRL is saying now. First, over 1.5 million homes have already been lost to foreclosure in the sub-prime category, and another 2 million subprime mortgages are currently delinquent.
But even this figure pales in relation to their data on projected foreclosures of all types. For 2009, total foreclosures are estimated to be 2.4 million. But coupling state-by-state delinquency rates and foreclosure starts (as reported by the Mortgage Bankers Association) with other data, the CRL projects that for most states, foreclosure totals will more than triple over the coming 4 years, for a total of 8.1 million foreclosures, with only about one in ten of these being saved thanks to court-supervised modifications. These figures are consistent with the reset data I’ve repeatedly presented – it appears to be wishful thinking to believe that the credit crisis is over. Most likely, what we’ve witnessed in recent months is little more than the combination of a lull in the reset schedule coupled with a wholly unsustainable burst of deficit spending amounting to over 7% of GDP. “
October 19th, 2009 at 7:19 pm
Yes it does Manny – it’s PROOF of the nations economic mini boom!
October 19th, 2009 at 7:21 pm
The blamegame starts.After he saved the world (Wall St anyway) now gentle ben is blaming the Dems for the cost of saving his cronies on WS. Extended unemployment is wasteful and mot required to deal with systemic risk!
http://www.cnbc.com/id/33381140?__source=CNBC%7Cnewsnow%7Cknow2%7C2009%7C
October 19th, 2009 at 7:33 pm
Mannwich: yes, it was Broder’s. I go whenever I’m in town. I wouldn’t exactly call that area affluent though. Nice middle class neighborhood but that’s as far as I’d go. The pub was called Cooper I believe. I spoke with the owner who owns a few other joints. All are doing very well. Also, went to MOA for a meeting there. It was extremely difficult to find parking on a Wednesday. Just observations from that trip. Next up is Detroit in a couple of weeks. The city is a waste but I’m more concerned with the suburbs and what is happening out there.
October 19th, 2009 at 7:35 pm
And I have friends too.
October 19th, 2009 at 7:40 pm
Marching Toward Zombieland
“When sober-minded individuals begin to regard an enterprise within a nation as “an enemy of the people” you can bet that some serious blood is going to flow.”
…
“The sense that Wall Street has pulled off a coup d’etat and taken over the machinery of the United States is the most powerful meme out there now, and its power is growing in magnitude every day among all classes of Americans. I can’t say how much it reflects reality. Even if it is a result of sheer happenstance – the tragic evolution of an industrial economy into a financial finagling economy – the citizens will still experience it as a stealing of their future. Whatever else one might say about American culture, it is keenly attuned to a sense of heroes and villains.”
http://kunstler.com/blog/2009/10/marching-toward-zombieland.html#more
October 19th, 2009 at 7:41 pm
@ahab 5:04 “why does anyone care that it is controlled at all”?
It would hurt the liquor industry’s bottom line.
Einhorn nailed this…
“….When I watch Chairman Bernanke, Secretary Geithner and Mr. Summers on TV, read speeches written by the Fed Governors, observe the “stimulus” black hole, and think about our short-termism and lack of fiscal discipline and political will, my instinct is to want to short the dollar. But then I look at the other major currencies. The Euro, the Yen, and the British Pound might be worse. So, I conclude that picking one these currencies is like choosing my favorite dental procedure. And I decide holding gold is better than holding cash, especially now, where both earn no yield.”
October 19th, 2009 at 7:41 pm
@Wanger: Right around the restaurant are upper middle class homes, for sure, but going closer a few blocks north to Lake Harriet and a few blocks over to the east, the homes are probably high 6 figures, low 7 figures, among the nicer locales in the City with the Lake of the Isles area being the best. The mayor of Minneapolis lives a few blocks east on Sheridan. Also, the most immediate suburb to the West is maybe the wealthiest town in the state, Edina. These are all neighborhoods that frequent Broders. It’s a small pasta bar and institution in the area. Look it up. I know I’ve only lived here for 4.5 years and you’d know better than me though. Feel free to instruct me on my neighborhood and city you stupid fuck. If that’s “middle class”, then now I know why you think we’re in a “mini economic-boom”. Like our elite, you are fucking delusional. Go away.
October 19th, 2009 at 7:49 pm
“Like our elite, you are fucking delusional. Go away.’
i wish i was delusional- just walking around believing all the bullshit being shoveled down my throat- like the wankster- too bad i have a brain-
manny- i can guarantee that the new bubble- stocks/commodities- will implode- and that the next bubble will be RE- and it will implode- then stocks/commodities- and will it implode- then . . .
all the while the middle class gets smaller and smaller- while they make every effort to strike it rich on the new “sure thing”
October 19th, 2009 at 7:49 pm
@Wanger: A little reality for you about that neighborhood, you know, cold hard data. Stick to topics you seem to know something about, say, maybe Apple?
The median household income in Linden Hills is well above the citywide median. In 1999, the dollar amount was $62,988 – $25,000 greater than in Minneapolis. The neighborhood’s median income increased in both 1989 and 1999.
http://www.ci.minneapolis.mn.us/neighborhoods/lindenhills_income.asp
October 19th, 2009 at 7:51 pm
@ahab: Totally agree. I’ve come to the conclusion that when the majority of the people around you believe, it pays to drink the kool aide and believe (for a while) too. Having a brain and using it can actually be counterproductive and a detriment to one’s health in many ways in a country as collectively delusional as ours.
October 19th, 2009 at 7:51 pm
Participate in peaceful protests during the annual meetings of the American Bankers Association on October 25 to 27. A coalition of community, labor, and consumer groups are organizing this “Showdown in Chicago.”
October 19th, 2009 at 7:53 pm
dogfish-
brutal- thanks for the insight- the new America- yes we’ll hire you at half the pay- all the while people like H Wanger look at the stock market and think all is well-
dude has no concept of anyone’s plight- just the mini-boom mantra-
whatever the fuck that means
October 19th, 2009 at 7:56 pm
@ahab: Wanger is a microcosm of what’s wrong with this country. A little paper wealth and making money in a market when everything goes up together while the dollar gets pounded, along with the middle class, and all is well according to HIS world. In the end, it’s all about “gettings yours” in this country. Who cares if your screw your neighbor in the process. Who cares about those little details in the process?
October 19th, 2009 at 7:56 pm
Mannwich: I’m not instructing you on your neighborhood – just telling you what I saw. You guys are so funny. If I said the place was empty, you’d be happier than shit. But, no, if it’s a two hour wait, it must be because of some outlying factor. FWIW: Go to Zillow. Other than the lake near by that has a perimeter of upper high 6 figures, everything around there is firmly middle class 350-500 for blocks and blocks.
Also, what about the other places I went to that were packed and mentioned above. Surely it must be because they too are in affluent neighborhoods. I’m sure everyone shopping at the packed MOA was a millionaire. Or the pub. Or the Vietnamese restaurant. Or just about any place I dined. Do you ever go out or just sit at the computer telling people who don’t live there that the city is in a depression. Give me a fucking break.
October 19th, 2009 at 8:02 pm
Hah, he uses Zillow for real estate prices. Why am I not surprised.
October 19th, 2009 at 8:03 pm
Mannwich said: “In the end, it’s all about “gettings yours” in this country.”
Yes, it is. That’s pretty much capitalism, my friend. What I don’t get is this “holier than thou” attitude by many here that making money in this market is somehow “wrong”. Believing in your country’s ability to correct its mistakes is somehow “wrong”. Improving economic numbers and earnings are somehow “rigged”.
I believe in capitalism and if that means “getting mine”, then I’ll get as much as I can with a nice smile on my face.
October 19th, 2009 at 8:03 pm
@Wanger: When did I ever say my city was “in a depression”? Please pull out the post on this blog when I said that? In fact, I admitted the other day that MY neighborhood seemed to be holding up just fine, but the country isn’t confined to MY NEIGHBORHOOD or even MY CITY or MY STATE. This site is called “The Big Picture” for a reason. Get a fucking clue already.
October 19th, 2009 at 8:07 pm
@Wanger: Again, many people here CARE more than just about about THEIR OWN situation. Laugh all you want but many here CARE about the long term direction of the country and we don’t like what we see. We care about The Big Picture. If life’s all about “getting yours” no matter how you do it, I almost feel sorry for you. Almost but your smugness and certitude keeps me in check in that regard.
October 19th, 2009 at 8:09 pm
Mannwich: I apologize. In another thread you posted:
“From what I’ve heard, the hotel business is basically in a depression here in the Twin Cities or very close to it.”
I remembered that you had said something about the Twin Cities and a depression. You were only referring to the hotel business.
October 19th, 2009 at 8:13 pm
@Wanger: The hotel business here IS in a depression. It’s one of five cities that hasn’t turned the corner yet on business travel, which is crucial for our hotels here. Look it up. I’ll find the link if you’re interested in facts.
October 19th, 2009 at 8:15 pm
Mannwich: If you have that link handy, I would like to see it for sure. Thank you.
October 19th, 2009 at 8:18 pm
http://www.freedom-to-tinker.com/blog/appel/intractability-financial-derivatives
Long-time lurker here- first post. Perhaps I missed it, but I’m surprised this hasn’t come up yet in the discussion on this site.
A couple of computer scientists authored a paper which strongly suggests (some have said “proves”, but the proof may apply to a narrower problem) that detecting fraud in certain types of complex derivatives such as some CDOs and CDSs may be a computationally intractable problem, and that the buyer is always at a disadvantage because the seller may “cut” the tranch being sold with riskier than expected securities, and it may not be possible for the buyer to prove fraud by analyzing the data itself.
The seller in this case has an advantage because they may have knowledge of risk that the buyer doesn’t, creating a potentially costly asymmetry in the transaction, creating what seems like a perfect vehicle for undetectable fraud.
Coupled with the recent article that loans which are securitized by the issuers are more likely to default, it would seem that the terms “rational” and “purchaser of these securities” are mutually exclusive. It would seem logical to conclude that anyone buying this stuff is either gambling, or has a whole lot of faith and trust in the seller.
October 19th, 2009 at 8:20 pm
wanger says-
“But, no, if it’s a two hour wait, it must be because of some outlying factor.”
it was packed because of you Wanger- you are a fucking rock star-
“any place i dined”
make sure you stuff the dinner napkin in your shirt collar- also-
this country has no place to go up but up- make sure you borrow as much as possible to put in the stock market- only place it can go is up-
you are a winner HW- keep up the good work-
we really respect you around here – LOL
October 19th, 2009 at 8:32 pm
Barry, that speech by David Einhorn was one of the better things I have read in a long time. (Not that it was a positive speech, but what he said needs repeating.)
Thanks for posting it.
October 19th, 2009 at 8:34 pm
Harry Wanger,
Your claim, industrial production was best in 4 years, reveals that you are delusional or plainly a liar.
You also have been asked already on what metric your statement is founded according to which the markets was undervalued, currently. Are you going to back your claim with hard data? Or did you just make this up?
As for the emails you allegedly get. Who is believing in invisible pink unicorns?
rc
October 19th, 2009 at 8:37 pm
HR – I agree.
On TBTF – I wonder if at some point people won’t just start suing to have some of these banks broken up. Would that even work?
October 19th, 2009 at 8:38 pm
I think this from today’s NYT is worth reading:
Site Lets Investors See and Copy Experts’ Trades
http://www.nytimes.com/2009/10/19/technology/start-ups/19kaching.html
Why don’t you join and create a public virtual portfolio?
Should be some good free publicity to show how good your stock picking is.
October 19th, 2009 at 8:38 pm
RC – everyone here knows that HW lies. Flat out.
October 19th, 2009 at 9:16 pm
rootless: Are you drunk? High? Or just plain stupid? How is my claim that Industrial Production being best in 4 years a lie?? CBS says, “Industrial output grows the most in four years”. They must be lying through their teeth.
I’ve told you and just about everybody over and over that the market based on historical p/e adjusted for inflation is just under fair value. You want me to say it again? I just did.
Yes, I get emails from people here. It’s not that difficult to figure out how. But then again, you can’t even seem to figure out how to read.
October 19th, 2009 at 10:01 pm
Thinking that all is well and capitalism is all about “getting yours” is both ignorant and myopic. But then I expect nothing less from some types of people. The same ones will also say it’s a “free market” whether or not they truly understand how much it isn’t. Kind of like saying our country is a “democracy”.
Saying it’s all about “getting yours” is some ignorant wannabe alpha-male fraternity punk crap.
It’s simple, really. Mass wealth depends upon mass production, which depends upon mass consumption, and that can only exist when there are lots of people that can afford to buy your product. Most of the country hasn’t seen an increase in wages while executive compensation has gone through the roof.
Cutting costs by firing employees or offshoring production improves the next quarter or fiscal year’s results, but it does so by taking money out of customer’s (aka, former employee’s) pockets that they could otherwise use to buy product. Henry Ford figured that out a long time ago, it isn’t rocket science. Unfortunately for us, too many MBAs think they ARE rocket scientists when instead their Daddy just has friends at some Ivy League applications office.
Using the short-term gains to gain a leg up on competitors, and in that race to the bottom we all end up losing.
Our country has too many incentives geared around short-term results, long-term solvency be damned. But then, you gotta get yours right? Too bad “getting yours” (and the aggregate actions of thousands of similar ilk) is going to crash our economy, cause a violent revolution, and (in that scenario, hopefully) end up with you “getting yours” in the end, just not the thing you initially envisioned.
Keep pushing, elites. Our country needs change and your actions and attitudes are the catalyst that is making it happen. Shooting yourselves in the foot several different ways. I don’t think your money will do much good when there are thousands of pitchforks and torches gathered outside your McMansion demanding your head on a stake. Parasites.
October 19th, 2009 at 10:04 pm
Hurray for capitalism. Meanwhile, we have dozens of people pumping bullets into their toddlers because they have lost hope and their grip.
Party on dude….unless of course the pot has made you too apathetic to care
October 19th, 2009 at 10:13 pm
I am currently reading the book, This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff and highly recommend it.
Also very much liked the Monday Reading article by Einhorn on gold, sovereign default, and more. Very, very sobering. Currently I have about 3% of my portfolio in GLD but am thinking about increasing that to about 10% to 15% as a form insurance against a currency crisis.
This quote stood out to me from the article:
“When I watch Chairman Bernanke, Secretary Geithner and Mr. Summers on TV, read
speeches written by the Fed Governors, observe the “stimulus” black hole, and think about
our short-termism and lack of fiscal discipline and political will, my instinct is to want to
short the dollar. But then I look at the other major currencies. The Euro, the Yen, and the
British Pound might be worse. So, I conclude that picking one these currencies is like
choosing my favorite dental procedure. And I decide holding gold is better than holding cash,
especially now, where both earn no yield.
Along these same lines, we have bought long-dated options on much higher U.S. and
Japanese interest rates. The options in Japan are particularly cheap because the historical
volatility is so low. I prefer options to simply shorting government bonds, because there
remains a possibility of a further government bond rally in response to the economy rolling
over again. With options, I can clearly limit how much I am willing to lose, while creating a
lot of leverage to a possible rate spiral.
October 19th, 2009 at 10:26 pm
Harry Wanger,
“Are you drunk? High? Or just plain stupid? How is my claim that Industrial Production being best in 4 years a lie?? CBS says, ‘Industrial output grows the most in four years’. They must be lying through their teeth.”
Please find someone who explains to you the semantic difference between the statement that a variable was best (highest, greatest, strongest etc.) and the statement that the change in the variable was best (highest, greatest, strongest etc.). But it doesn’t even matter. The increase in industrial production from August to September was 0.7%. It was already higher from July to August with 1.2%, and June to July with 0.9%. The month-to-month increase was higher in October 2008 (1.3%) or February 2007 (0.8%) as well. The data can be found here:
http://research.stlouisfed.org/fred2/series/INDPRO?cid=3
But what are officially released data compared to what you say you have heard on TV. I guess I just can’t keep up with that.
“I’ve told you and just about everybody over and over that the market based on historical p/e adjusted for inflation is just under fair value. You want me to say it again? I just did.”
Argumentum ad nauseam. Just repeating a claim over and over doesn’t make it true. You have said a log of things here. See our BS about industrial production. Why would anyone trust your word? Back your claim up with data and disclose your sources.
rc
October 19th, 2009 at 10:52 pm
The reported NAHB Housing Mkt Index (HMI) of 18 doesn’t do much for me unless I can see a bigger picture.
The HMI was around 70 in 2004 and 2005.
The NAHB Housing Market Index chart with components from 1995:
http://www.nahb.org/fileUpload_details.aspx?contentID=57939
October 20th, 2009 at 12:02 am
“I define a bureaucrat as a person who makes decisions affecting other people, but who has no personal stake in the outcome.
Some bureaucrat has decided that squirting an active virus up a child’s nose is a vaccination. That child will be infected, and will shed the active virus for several days everywhere the child goes. This guarantees the spread of the virus. We are told that this is a good idea. That is a lie.
Bureaucrats are in the habit of lying. Why not? They have job security, and they can’t lose. When the CDC was threatened with irrelevance during the ‘80s, they jumped on the news that a few gay men in San Francisco had died of exotic diseases. I was working in a small rural hospital at the time, and I wondered about the sudden hyperventilating in the press about this event. My best friend worked in a teaching hospital in Oakland and he started sending me local Berkeley papers with articles written by Peter Duesberg. As time passed, I handed copies of these articles to AIDS patients who began to trickle in. Those who stopped taking the toxic AIDS drugs and adopted a healthier lifestyle survived…”
by Robert Klassen
Recently by Robert Klassen: MRSA Update
http://www.lewrockwell.com/klassen/klassen114.html#
~~
http://www.lewrockwell.com/celente/Future-Trends-2012-Celente.pdf
~~
“…What I have found interesting about the Obama Administration is just how candid it is about controlling our lives. He and his minions are true progressives. The progressives of the early 1900s were very frank about their goals to use the power of the State and force people to live as the progressives thought they should…”
http://bothwell.typepad.com/whos_your_nanny/2009/10/the-obama-administration-continues-its-destruction-of-the-us-economy.html
Wang-dude,
remember, “Differin’ opines, make’m Run the Equuines.”
past that, your fact set seems that of fancy..
fan·cy
1. The mental faculty through which whims, visions, and fantasies are summoned up; imagination, especially of a whimsical or fantastic nature.
October 20th, 2009 at 1:11 am
420 fun with Einhorn
call me ahab Says:
420d- there are also more harmful things that are illegal like fraud- which i am waiting for the USG to get more vigilant about-
Ahab,
USG get more vigilant? Does the ceiling tile in your office hold in the smell of your Grunk? Causing the cleaning crew to find your stash?
He…He..
Sorry, that buy near the top of housing was one of the first things that made me start to reconsider my BRK position. I didn’t think the price fully discounted future energy prices properly. Takes a lot of juice to bake board but I digress.
DL Says:
I’m no big fan of tax increases, but think of all the money the government could raise by legalizing weed and taxing it.
DL
Lets get this cleared up.
IT’S A WEED!
If it’s legal there is no tax base. Toss a couple of clones in the back yard and your worst problem is keeping out the neighborhood scamps each fall. Didn’t you ever raid someones garden when you were a kid?
After fighting off the kids you clean out the corner in your garage where all the kids old bikes are with the clubs you don’t use anymore and put up a growlight.
Oh yeah then you declare the trade value on your 1040 for the bag you toss the guy that mows your lawn.
Not a smoker but last year I got some info that made me look into the medical marijuana biz. I’ve been doing some pretty serious work the last 6 months on it.
A little inside info for TBP crew:
Everyone thinks it’s “Boomtime” or a “gold rush”
Wait for it……………………….
It’s a race to the bottom.
Einhorn was great.
BARRY!!!! Give that boy posting power on the Think Tank PLEASE!!!!!!
Just give him access and send him a bottle of McCarthy’s single malt on a Saturday.
Envision him getting a single malt from Portland, code attached, delivered by a blond in a Z car.
I insist Ms. BP spray a bit of gravel as she speeds away.
Good night, Barry. Good work. Sleep well. I’ll most likely kill you in the morning.”
October 20th, 2009 at 7:43 am
The Very Separate World of Conservative Republicans
http://www.democracycorps.com/focus/2009/10/the-very-separate-world-of-conservative-republicans/
“The self-identifying conservative Republicans who make up the base of the Republican Party stand a world apart from the rest of America, according to focus groups conducted by Democracy Corps. These base Republican voters dislike Barack Obama to be sure – which is not very surprising as base Democrats had few positive things to say about George Bush – but these voters identify themselves as part of a ‘mocked’ minority with a set of shared beliefs and knowledge, and commitment to oppose Obama that sets them apart from the majority in the country. They believe Obama is ruthlessly advancing a ‘secret agenda’ to bankrupt the United States and dramatically expand government control to an extent nothing short of socialism. They overwhelmingly view a successful Obama presidency as the destruction of this country’s founding principles and are committed to seeing the president fail.”
Looks like the GOP is becoming the Tin Foil Hat Party.
October 20th, 2009 at 12:05 pm
And I decide holding gold is better than holding cash,
especially now, where both earn no yield
I nominate this line as being the single best line of the crisis
October 20th, 2009 at 3:03 pm
Dogfish,
missed your post in all the Wang-dude back ‘n forth..
“Did you see the comments the other week by El Baradei, stating that the greatest danger to the region isn’t Iran’s nukes, but Israel’s aggression?
Also, good post by Greenwald today on “why they hate us”…
ht tp://www.salon.com/opinion/greenwald/2009/10/19/rohde/
Even with all that, I think another war would do wonders to distract our fellow citizens from their economic worries! Also, GE was down a bit this quarter, it’s our duty to order more weapons from them and their subsidiaries to support this fine American corporation who only has our best interests at heart. If you don’t believe me, go watch some of NBC’s analysis on the situation.”
to me, El Baradei is correct. We’d do well to wonder what We, really, get in return for our support of Israel. They should learn to play nice with others, at the minimum.
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=AIPAC+spying
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Mearsheimer+Walt might be good places to start..
Greenwald, as well, is a sharp cat. I, too, find his stuff worth reading.
And, re: the GE set piece, it’s, too much, like that..
October 20th, 2009 at 3:22 pm
I didn’t even need to click on the clusty links after I saw what the query variables contained…
I would add Lavon Affair and USS Liberty to the list. And Iraq War, and (possibly, controversially) 9/11. They have been caught numerous times doing false flags… as to 9/11, check out Odigo, Urban Moving Systems, and the companies who took over security for the airports involved in 9/11 and London on 7/7. It all points to Mossad/Israel, and they’ve done it before (aforementioned Lavon and USS Liberty).
I think a good first step would be to withhold all foreign aid to them until they properly address all the UN Resolutions against them for their treatment of the Palestinians. Or at least until they stop building more settlements (Which would address several of the resolutions).
Its ironic to me how we used one UN Resolution to justify invading Iraq and overthrowing Saddam (really at their request), yet continue to give favored status and guaranteed security council veto votes to a country that has dozens of resolutions against it, the only country in the region that has nukes, and they are not a signatory of the NPT while having those nukes (Since they won’t admit although everyone knows it).
Which is why the whole Iran thing is bogus. Israel can defend herself and turn all of Iran into green glass if necessary. It’s not about security, it’s about expansion and destabilizing any other country in the region that might stand in the way.
October 20th, 2009 at 3:58 pm
Dogfish,
w/ http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Lavon+Affair+USS+Liberty
and http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Odigo+Zim+Trading+WTC+Security
I find it amazing that there’s been so little interest in the, actual, events of that day..
and to your point about Israel being able to take care of herself http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Israel+Dimona+NPT they, certainly, have the means..
We’ve mishandle our relationship with Israel, and, as we’re learning, it isn’t doing us much good..